Opinion of the Advocate General — ECLI:EU:C:1997:54
Date: 1997-02-06
Language of the case: French
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices;Dominant position
Procedure: Action for annulment - successful
Origin: France

Summary 
The regulation: background and content I - 1383 
The procedure and the decision I - 1387 
The two actions: terms of the problem and level of submissions I - 1391 
I — Admissibility (Case C-30/95) I - 1 3 9 4 
A — Partial annulment I - 1395 
B — Right to bring proceedings I - 1396 
C — Possibility of contesting the paragraph relating to Potacan I - 1399 
D — N o legal interest in bringing proceedings I - 1400 
II — Substance I - 1401 
A — Failure to comply with the obligation to act in liaison with the national 
authorities (Case C-68/94) I - 1401 
B — Effects of the concentration on the German market (Case C-68/94) I - 1404 
C — Effects of the concentration on the Community market apart from Ger­
many (Cases C-68/94 and C-30/95) I - 1410 
(1) Definition of the relevant geographical market I - 1 4 1 0 
(2) Possibility of using the regulation as the basis for action in relation to 
collective dominant positions I - 1417 
— The wording I - 1419 
— Legal bases and intention of the legislature I - 1420 
— Procedural guarantees I - 1422 
— Economic considerations and objectives of the regulation I - 1425 
(3) Mistaken reliance in this case on the concept of collective dominant 
position I - 1428 
— Degree of market concentration I - 1431 
— Structural links between K+S and SCPA I - 1432 
* Original language: Italian. 
I - 1 3 8 1 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
— Characteristics of the eliminated competitor I - 1436 
— Position of the competitors I - 1437 
— Comparison between the position of K+S/MdK and that of SCPA ... I - 1438 
— Economic power of the customers I - 1440 
— Barriers to entry I - 1441 
— Characteristics of the market and the product I - 1442 
— Existence of parallel conduct I - 1442 
D — Imposition of conditions and obligations affecting third parties not involved 
in the concentration (Cases C-68/94 and C-30/95) I - 1444 
(1) Possibility of applying Article 8(2) to undertakings which are not par­
ties to the concentration I - 1445 
(2) Whether the conditions imposed in this case for the purpose of main­
taining effective competition are appropriate I - 1446 
— Condition concerning the withdrawal of K+S from the Kali-Export 
cartel I - 1447 
— Condition relating to termination of the distribution contracts 
between K+S and SCPA I - 1448 
Conclusions I - 1449 
1. Is it possible to apply the provisions of 
Council Regulation (EEC) N o 4064/89 of 21 
December 1989 on the control of concentra­
tions between undertakings 1 (hereinafter 
'the regulation') to oligopolies? And what, in 
the light of the provisions of the regulation, 
are the limits to which the Commission is 
subject in appraising the lawfulness of con­
centrations? 
Cases C-68/94 and C-30/95 provide the 
Court with an opportunity to answer those 
questions, among others, which are 
undoubtedly relevant for the purposes of 
applying the regulation. Those actions (one 
brought by the French Government and the 
other by the Société Commerciale des 
Potasses et de l'Azote (hereinafter 'SCPA') 
and the Entreprise Minière et Chimique 
(hereinafter 'EMC')) raise the issue, although 
from partially different perspectives, of 
whether Commission Decision 94/449/EC 
of 14 December 1993 2 (hereinafter 'the 
decision') is lawful. 
2. In that decision, the Commission autho­
rised a joint venture between Kali und Salz 
1 — OJ 1990 L 257, p. 14. 
2 — Commission Decision relating to a proceeding pursuant to 
Council Regulation (EEC) No 4064/89 (Case No IV/M.308 
— Kali + Salz/MdK/Treuhand), published in OJ 1994 L 186, 
p. 38. 
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FRANCE AND OTHERS v COMMISSION 
AG (hereinafter 'K+S') and the Treuhandan-
stalt (hereinafter 'Treuhand') aimed at com­
bining the potash and rock-salt activities of 
K+S and Mitteldeutsche Kali AG (hereinaf­
ter 'MdK'). The declaration of compatibility 
was, however, subject to compliance by 
those undertakings with certain conditions 
which consisted essentially in discontinuing 
their commercial links with SCPA and EMC. 
The action brought by SCPA and EMC 
(Case C-30/95) specifically seeks the annul­
ment of that part of the decision in which it 
imposes those conditions; the action brought 
by the French Government (Case C-68/94), 
on the other hand, also deals with other 
aspects and therefore has wider implications. 
Nevertheless, since the objectives of the two 
actions are only partially different and a 
number of the pleas and arguments put for­
ward are largely identical, I consider it pos­
sible and indeed preferable, subject to the 
necessary distinctions, to deal with them 
together. 
3. However, before recalling the terms in 
which the decision is couched and thus 
examining a dispute which, because of the 
issues of principle which it raises, may rep­
resent an important stage in competition 
case-law, I consider it appropriate to recall 
the background to the regulation, its essen­
tial features and the procedural framework 
within which control of concentrations is 
achieved. It will thus be easier to focus on 
certain general aspects which will then be 
referred to when the various issues of admis­
sibility and substance raised by the actions in 
question are examined. 
The regulation: background and content 
4. Unlike the ECSC Treaty (Article 66), the 
EC Treaty does not contain any specific pro­
visions on the subject of concentrations 
between undertakings. That gap is the result 
of a specific political determination to 
encourage the strengthening, even through 
concentrations, of Community undertakings. 
The Commission itself, in a memorandum of 
1 December 1965, stated that it was, in prin­
ciple, in favour of concentrations since it 
considered them expedient for strengthening 
European industry which was still too weak 
to compete on the international markets. In 
the same memorandum, it also made clear its 
intention to apply Article 86 rather than 
Article 85 to concentrations. That approach 
was endorsed by the Court which, in its 
judgment in the 'Continental Can' case, rec­
ognised the existence of an abuse within the 
meaning of Article 86 when an undertaking, 
already in a dominant position, reinforced 
that position, for example through a merger, 
'in such a way that the degree of dominance 
reached substantially fetters competition'. 3 
3 — Judgment in Case 6/72 [1973] ECR 215, paragraph 26. 
I - 1383 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
However, the application of Article 86 could 
not represent an entirely satisfactory solu­
tion, if only because that provision allows 
action to be taken only retrospectively, and 
therefore only in relation to pre-existing 
dominant positions, whereas a system for 
controlling concentrations should, above all, 
prevent any anticompetitive effects. The 
Commission, therefore, not long after the 
judgment in the 'Continental Can' case, sub­
mitted to the Council a first proposal for a 
regulation to that effect. Moreover, its subse­
quent practice indicated a willingness to 
reconsider the application of Article 85 to 
concentrations, using the mechanism of 
'prior appraisal'. 4 That trend seemed to be 
confirmed by the judgment in the 'Philip 
Morris' case, 5 in which the Court accepted 
that the acquisition by an undertaking of a 
minority holding in the capital of a competi­
tor undertaking might, in certain circum­
stances, give rise to a restriction incompatible 
with Article 85. 
5. That judgment fuelled the debate on the 
subject and gave renewed impetus to the 
Commission which submitted a further 
proposal in 1988. It was on the basis of 
that proposal that the Council adopted the 
regulation, the final wording of which does 
not conceal the at times profound disagree­
ments which marked its drafting stage. 6 
Even with the adoption of the regulation, the 
favourable view of forms of merger which 
were designed to enable European industry 
to compete effectively on the international 
market was not abandoned. Indeed, the pre­
amble to the regulation stresses that concen­
trations, which are bound to increase as a 
result of the dismantling of internal frontiers 
in order to achieve the single market, must 
be welcomed as being in line with the 
requirements of dynamic competition and 
capable of increasing the competitiveness of 
European industry, improving the conditions 
of growth and raising the standard of living 
in the Community. However, the favouring 
of mergers and industrial reorganisation 
must not result in lasting damage to compe­
tition, so that Community law must be able 
to act against 'concentrations which may sig­
nificantly impede effective competition in the 
common market or in a substantial part of it' 
(fifth recital). 
6. The regulation is based primarily on 
Article 87 since it contains detailed rules for 
the application of Articles 85 and 86. How­
ever, since, as also stated in the sixth recital, 
4 — For that view, see, for example, Santamaria, Diritto commer­
ciale comunitario, Milan, 1995, p. 92 et seq., which cites as 
the first example of that practice Commission Decision 
85/78/EEC of 12 December 1984 (Mecaniver-PPG) (OJ 1985 
L 35, p. 54). 
5 — Judgment in Joined Cases 142/84 and 156/84 BAT and Rey­
nolds v Commission [1987] ECR 4487. However, for 
examples of opposition to applying the 'Philip Morris' judg­
ment beyond that particular case, see, inter alia, Bellamy, 
'Mergers outside the Scope of the New Merger Regulation, 
implications of the Philip Morris Judgment', in Fordham 
Corp. Law Institute, 1988, p. 22. 
6 — See Frignarli-Waelbroeck's reconstruction, Disciplina delia 
concorrenza nella CE, Turin, 1996, pp. 685 to 686. 
I -1384 
FRANCE A N D OTHERS v COMMISSION 
'Articles 85 and 86 are not ... sufficient to 
control all operations which may prove to be 
incompatible with the system of undistorted 
competition envisaged in the Treaty', it also 
has Article 235 as a legal basis. 
Concentrations are defined in Article 3(1) by 
recourse to a very broad concept which, in 
addition to mergers, also covers situations in 
which the parties concerned may retain their 
legal, and even economic, autonomy. 7 The 
primary characteristic of a concentration, 
apart from cases of merger in the technical 
sense, is the acquisition of control, defined 
by Article 3(3) as the 'possibility of exercis­
ing decisive influence on an undertaking' by 
Ownership or the right to use all or part of 
the assets of an undertaking' or by 'rights or 
contracts which confer decisive influence on 
the composition, voting or decisions of the 
organs of an undertaking'. Operations falling 
within the scope of Article 3 are covered by 
the regulation only if they have a 'Commu­
nity dimension'. 8 Other cases of concentra­
tion fall within the jurisdiction of the 
national authorities. 
7. Article 2(1) requires the Commission to 
take into account, with a view to establishing 
whether the concentration in question is 
compatible with the common market, 'the 
need to maintain and develop effective com­
petition within the common market in view 
of, among other things, the structure of all 
the markets concerned and the actual or 
potential competition from undertakings 
located either within or outwith the Com­
munity'; and a series of factors used to ascer­
tain the actual market power of the under­
takings involved. 9 The list contained in the 
provision leaves a wide discretion to the 
Commission, partly because it does not place 
the various factors to be taken into consider­
ation in any order of priority. It is also sig­
nificant that the regulation raises no pre­
sumptions of unlawfulness connected with 
the market shares held by the undertakings 
7 — Literally: 'where: (a) two or more previously independent 
undertakings merge, or (b) — one or more persons already 
controlling at least one undertaking, or — one or more 
undertakings acquire, whether by purchase of securities or 
assets, by contract or by any other means, direct or indirect 
control of the whole or parts of one or more other undertak­
ings'. 
8 — This condition is fulfilled 'where ... the combined aggregate 
worldwide turnover of all the undertakings concerned is 
more than ECU 5 000 million', or '... the aggregate 
Community-wide turnover of each of at least two of the 
undertakings concerned is more than ECU 250 million', 
unless 'each of the undertakings concerned achieves more 
than two-thirds of its aggregate Community-wide turnover 
within one and the same Member State' (Article 1(2)). 
9 — They are: 'the market position of the undertakings con­
cerned and their economic and financial power, the alterna­
tives available to suppliers and users, their access to supplies 
or markets, any legal or other barriers to entry, supply and 
demand trends for the relevant goods and services, the inter­
ests of the intermediate and ultimate consumers, and the 
development of technical and economic progress provided 
that it is to consumers' advantage and does not form an 
obstacle to competition'. 
I -1385 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
and no mathematical criteria that can be used 
for the appraisal, in contrast to other anti­
trust legislation. 10 
Article 2(2) and (3) provide that the appraisal 
of compatibility carried out on the basis of 
the aforementioned criteria is to depend, in 
the final analysis, on whether the concentra­
tion in question creates or strengthens a 
dominant position 'as a result of which effec­
tive competition would be significantly 
impeded in the common market or in a sub­
stantial part of it'. 11 
8. The control procedure is divided into two 
stages. During the first stage, which begins 
with notification 12 and lasts one month, the 
Commission examines whether the concen­
tration raises serious doubts as to its compat­
ibility with the common market. 13 If that is 
not the case, or if the concentration does not 
fall within the scope of the regulation, the 
procedure ends at the first stage with the 
Commission's decision (Article 6(l)(a) and 
(b) of the regulation). In the absence of a 
decision, the concentration is deemed com­
patible with the common market (Article 
10(6)). 
Where, on the other hand, the concentration 
raises serious doubts and the Commission 
therefore decides to initiate formal proceed­
ings (Article 6(1 )(c) of the regulation), the 
decision must be taken within four months, 
otherwise the concentration is deemed com­
patible. The (final) decision may declare the 
concentration compatible with the common 
market, subject, if necessary, to compliance 
with certain conditions and obligations 
(Article 8(2)); or declare it incompatible. In 
the latter case, where the concentration has 
already been implemented, the Commission 
10 — In the United Sutes, the 1984 Merger Guidelines intro­
duced the so-called Herfindhal-Hirschman Index (HHI) 
which totals the squares of the market shares of the indi­
vidual undertakings involved in the concentration. In order 
to establish the actual increase in the degree of market con­
centration resulting from the operation, the product of the 
market shares of the undertakings involved is doubled. If 
the HHI Index is under 1 000 after the concentration, the 
operation will, as a rule, be authorised. If it is between 
1 000 and 1 800, the concentration will be examined and 
may be prohibited where it involves an increase of more 
than 100. Finally, if the HHI is above 1 800, the concentra­
tion may be prohibited even if it entails an increase of less 
than 50. 
11 — The word 'significantly' has given rise to lively debate in 
academic literature: among the most authoritative interpre­
tations is that which makes it subject to the de minimis test, 
to the effect that only concentrations which have substantial 
effects on competition, reducing it significantly and perma­
nently, can be declared incompatible. See to that effect, 
Langeheine, 'Substantive Review under the EEC Merger 
Regulation', in Fordham Corporate Law Institute, 1990, 
p. 484 et seq. In that regard, see also Bellamy and Child, 
Common Market Law of Competition, 4th edition, Lon­
don, 1993, p. 336 et seq. With regard to the meaning of 
'effective competition', the Court's case-law makes refer­
ence to the actual context in which competition would 
occur in the absence of the limitation in question: see, in 
that regard, judgment in Case 31/85 ETA/DK Investment 
[1985] ECR 3933, paragraph 11. See also Dechery, 'Le 
règlement communautaire sur le contrôle des concentra­
tions', in Revue trimestrielle de droit européen, 1990, p. 317, 
in particular p. 323. 
12 — The concentration must be notified not more than one 
week after the conclusion of the agreement, or the 
announcement of the public bid, or the acquisition of a 
controlling interest. 
13 — Appraisal of a concentration with a 'Community' dimen­
sion clearly presupposes definition of the reference econ­
omic sector, whether in terms of the product or in terms of 
the geographical area to be taken into account. The relevant 
instructions for this purpose are contained in form C O set 
out in Annex I to Commission Regulation (EEC) N o 
2367/90 of 25 July 1990 on the notifications, time limits and 
hearings referred to in Commission Regulation (EEC) N o 
4064/89 (OJ 1990 L 219, p. 5), since repealed and replaced 
by Commission Regulation (EC) N o 3384/94 of 21 Decem­
ber 1994 (OJ 1994 L 377, p. 1). That form lists all the infor­
mation to be provided to the Commission at the time of 
notification. 
I-1386 
FRANCE AND OTHERS v COMMISSION 
may require any action that may be appro­
priate in order to restore conditions of effec­
tive competition (Article 8(4)). 
The procedure and the decision 
9. On 14 July 1993, in accordance with 
Article 4(1) of the regulation, the Commis­
sion received notification of a proposed con­
centration between the German company 
K+S, a subsidiary of the chemicals group 
BASF, and MdK, a company in which all the 
potash and rock-salt extraction and process­
ing activities of the former German Demo­
cratic Republic (GDR) are combined, whose 
sole shareholder is the Treuhand, an institu­
tion incorporated under public law whose 
task is to restructure the former GDR's 
State-owned enterprises. 
It is appropriate at this point to make clear 
that, at the time of notifying the proposed 
concentration, K+S was by far the largest 
European producer of potash, with an out­
put of more than 2 000 000 tonnes per year, 
followed by MdK with 1 430 000 tonnes per 
year. In total, therefore, German potash pro­
duction in the year immediately preceding 
the concentration (1992) reached a level of 
3 500 000 tonnes. In third place, with an out­
put of around 1 000 000 tonnes per year, was 
Mines de Potasse d'Alsace (hereinafter 
'MPA'), owned by the French public corpo­
ration EMC which, moreover, holds 100% 
of the capital of SCPA, the company which 
markets the products in question. They were 
followed, with outputs below one million 
tonnes per year, by three Spanish undertak­
ings, recently grouped together in a State-
owned corporation known as INI, which 
market their own products through the same 
company, Coposa; and, finally, by the British 
company Cleveland Potash Limited (herein­
after 'CPU). 
10. Under the concentration plan, all the 
potash and rock-salt extraction and process­
ing activities of K+S and MdK were to be 
transferred to Mitteldeutsche Kali AG 
GmbH (hereinafter 'MdK GmbH'), a joint 
venture between K+S and the Treuhandt. 
K+S would have contributed to the joint 
venture all its own activities in the sector 
concerned, while the Treuhand would have 
contributed liquid capital of over DM 1 mil­
liard. K+S was to hold 5 1 % and the Treu­
hand 49% of the capital and voting rights. 
After examining the proposal, the Commis­
sion decided, on 16 August 1993, in pursu­
ance of Article 6(1 )(c) of the regulation, to 
initiate formal proceedings since the concen­
tration raised serious doubts as to its 
compatibility with the common market. 
The Commission therefore adopted, on 
14 December 1993, the decision authorising 
I -1387 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
the concentration, 14 making it subject, how­
ever, in pursuance of Article 8(2) of the regu­
lation, to compliance with certain commit­
ments. 
11. The relevant product market, as identi­
fied in the decision, mainly concerns potash 
products for agricultural use. 15 Those prod­
ucts are mineral fertilisers which are either 
used on their own or applied to the soil 
together with other nutrients, particularly 
nitrogen and phosphate, in so-called com­
pound fertilisers. In both uses, potash cannot 
be replaced by other nutrients. In the Com­
mission's opinion, whatever their content 
(differing quantities of potash), form (stan­
dard or granulated) or intended use (agricul­
ture or industry for the production of com­
pound fertilisers), those products are, 
objectively, largely interchangeable as far as 
the customer is concerned, so that they can 
be considered together. 16 
The Commission also identified a second rel­
evant market, distinct from that for potash 
products, which includes all magnesium 
products and, moreover, found that in that 
sector only K+S and MdK are really active 
on the Community market as a whole. 17 
However, while reaching the conclusion that, 
following the merger, those companies 
would enjoy a monopoly in the Community 
as far as magnesium sulphate and kieserite 
were concerned, and that the merged com­
pany being formed would therefore have a 
dominant position on that special market, 
with a share of 92%, 18 the Commission did 
not draw any consequences from it. 
12. With regard to potash products for agri­
cultural use, on the other hand, on which the 
decision is focused almost entirely, the Com­
mission drew a distinction between two rel­
evant geographical markets: Germany and 
the rest of the Community.19 
With regard to the German market, the 
Commission found that the concentration in 
question would have strengthened the domi­
nant position of K+S, leading to a de facto 
monopoly. 20 Noting the insolvency of MdK 
which would be forced out of the market if 
it were not taken over by another undertak-
14 — The favourable opinion of the Advisory Committee on 
Concentrations, expressed by a majority at the meeting of 3 
December 1993, is published in OJ 1994 C 199, p. 5. 
15 — The Commission concluded that, in the industrial potash 
and salt sectors, the concentration would not create or rein­
force a dominant position as a result of which effective 
competition would be significantly impeded in the Com­
munity o r i n a substantial part thereof (paragraph 11 of the 
decision). 
16 — See paragraphs 13 to 29 of the decision. 
17 — See paragraphs 30 and 45 of the decision. 
18 — See paragraph 69 of the decision. 
19 — See paragraphs 31 to 44 of the decision. 
20 — Leaving aside the amounts earmarked to meet own require­
ments, the overwhelming majority of which consist of 
intra-group supplies made by K+S to BASF, K+S has a mar­
ket share of approximately 79% and MdK one of approxi­
mately 19%. That gives MdK GmbH a total market share 
of 98% (paragraph 46 of the decision). 
I -1388 
FRANCE A N D OTHERS v COMMISSION 
ing soon, with the consequence that its share 
would in any case accrue to K+S, the Com­
mission concluded that a dominant position 
would be created even in the event of the 
proposed concentration being prohibited. 21 
In those circumstances, the Commission 
found itself able to accept the parties' argu­
ments based on application of the failing 
company theory under which the competent 
authorities cannot prohibit a concentration if 
one of the undertakings concerned is on the 
verge of bankruptcy. In the light of the situ­
ation which would arise in eastern Germany 
as a consequence of the closure of MdK, that 
conclusion must, according to the Commis­
sion, be regarded as consistent with the 
requirement of strengthening the Communi­
ty's economic and social cohesion referred to 
in recital 13 in the preamble to the regu­
lation. 22 
13. So far as the market consisting of all the 
Member States apart from Germany is con­
cerned, the Commission pointed out that, as 
a result of the proposed concentration, two 
undertakings, K+S/MdK and SCPA, would 
be in a dominant position. 23 
The Commission's appraisal is based, on the 
one hand, on the consideration that supply 
outside the two main producers is frag­
mented and comes from operators who are 
not in a position to have any impact on the 
market shares held by the duopoly; 24 and, 
on the other, on the assumption that there 
will be no effective competition between 
K+S and SCPA because of the characteristics 
of the relevant market, the record of the past 
behaviour of the two companies and their 
close commercial links. 25 Those links consist 
essentially of: (a) cooperation in the export 
cartel Kali-Export GmbH, a company con­
stituted under Austrian law and based in 
Vienna, which coordinates its members' sales 
of potash products in countries outside the 
Community (the members of that cartel, 
each with a 25% interest, are: K+S, MdK, 
SCPA and Coposa); (b) control of a joint 
venture in Canada, Potascan, of which K+S 
and EMC/SCPA each have 50% of the 
shares, and (c) long-established supply links 
by virtue of which SCPA distributes K+S 
products in France. 
21 — Sec paragraph 70 of the decision. 
22 — See paragraph 95 of the decision. 
23 — As is pointed out in paragraphs 51 and 52 of the decision, 
the merged company K+S/MdK and the French company 
SCPA would together account for 80% of potash produc­
tion in the Community (K+S 35%, MdK 25% and SCPA 
20%). Excluding internal consumption by the undertakings 
concerned, and therefore on the basis of sales alone, that 
gives a combined market share of approximately 50% (K+S 
17%, MdK 8% and SCPA 25%). However, since SCPA 
also markets considerable quantities of potash from other 
producers, including from countries outside the Commu­
nity, taking into account all sales controlled by K+S, MdK 
and SCPA in the Member States apart from Germany, that 
gives a combined market share of 60% (K+S 16%, MdK 
7% and SCPA 37%). 
24 — Sec paragraphs 54 to 56 of the decision. 
25 — See paragraphs 57 to 62 of the decision. 
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OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
14. In the light of the above, the Commis­
sion took the view that the concentration 
would lead to the creation of a collective 
dominant position on the Community mar­
ket apart from Germany, which could sig­
nificantly affect competition. In order to 
avoid the negative consequences stemming 
from that conclusion, the parties agreed to 
enter into certain commitments which are set 
out in paragraph 63 of the decision and 
reproduced verbatim below: 
'— Kali-Export GmbH, Vienna 
K+S and the joint venture will withdraw 
without delay from Kali-Export GmbH in 
Vienna [...]. 
In the same way K+S and the joint venture 
will terminate the existing agency contract 
with Kali-Export GmbH in accordance with 
the termination arrangements provided for 
therein. After that date, the joint venture will 
enter into competition with Kali-Export 
GmbH via its own distribution organisation. 
— Distribution 
K+S and the joint venture will establish in 
the Community their own distribution 
organisation — where not already in exist­
ence — and will distribute their products 
through this distribution network in accord­
ance with normal commercial practice. A 
distribution organisation will be established 
in France for potash products, including pot­
ash specialities. This will cover the whole of 
the French market and its nature and size 
will be commensurate with the importance 
of the French market. Its establishment will 
conform to the principle of economic effi­
ciency. 
The current cooperation with SCPA as dis­
tribution partner in the French market will 
be terminated. It will be possible, on the one 
hand, for SCPA to fulfil contracts already 
agreed with its own customers and, on the 
other hand, for the joint venture to build up 
its own distribution organisation. The sale to 
SCPA on normal market conditions is 
allowed.' 
15. Noting the Commission's concerns 
about the negative effects of the concentra­
tion on the conditions of competition within 
the Community, K+S also undertook, as 
stated in paragraph 65 of the decision, 'to 
adapt until 30 June 1994 the structure of 
Potacan in such a way as to enable each part­
ner to market the potash obtained from 
Potacan independently of each other on the 
Community market'. 
In that connection, however, it is made clear 
in paragraph 67 that 'the Commission has 
decided not to impose a formal obligation 
I - 1390 
FRANCE AND OTHERS v COMMISSION 
based on the commitment regarding Potacan. 
It has taken note of this commitment and it 
will proceed on the assumption that K+S 
will use its best efforts to reach, in agreement 
with EMC/SCPA, an arrangement which 
will meet the abovementioned requirements'. 
Taking account of the fact that EMC/SCPA 
is not a party to the merger proceedings and 
that, moreover, K+S and EMC have notified 
the Potacan joint venture to the Commission 
under the provisions of Council Regulation 
N o 17/62, the Commission adds that, in the 
event that 'K+S is not able to reach an agree­
ment with EMC, despite K+S's best efforts, 
an appropriate solution of the competition 
problems arising from the current form of 
the Potacan joint venture is to be found in 
the proceedings under Regulation N o 17/62'. 
16. Taking the view that the commitments in 
question would result in the severing of the 
existing links between K+S and SCPA/EMC, 
the Commission therefore adopted a 
decision declaring the concentration compat­
ible, which provides in Article 1 that: 'Sub­
ject to full compliance with the conditions 
and obligations contained in the parties' 
commitments vis-à-vis the Commission, set 
out in paragraph 63 of this decision, the pro­
posed concentration between Kali und Salz 
AG, Mitteldeutsche Kah AG and Treuhan­
danstalt is declared compatible with the 
common market'. 
The two actions: terms of the problem and 
level of submissions 
17. As stated earlier, the decision has been 
challenged both by the French Government 
(Case C-68/94 26) and by SCPA and EMC 
(Case C-30/95 27). The latter parties seek the 
partial annulment of Article 1 in so far as it 
makes the declaration of the concentration's 
compatibility subject to the conditions and 
obligations set out in paragraph 63. Those 
companies also seek the annulment of that 
part of the decision in which it accepts the 
commitment (referred to in paragraph 65) 
entered into by K+S to modify the structure 
of Potacan by 30 June 1994. 
Those companies have put forward six pleas 
in support of their action: by the first two, 
they claim that the conditions referred to in 
paragraph 63 have no connection with the 
maintenance of effective competition on the 
Community market; by the third, they com­
plain that the Commission accepted the 
commitment concerning Potacan in breach 
of their rights; by the fourth and fifth, they 
claim that the Commission committed errors 
of fact and law, both in defining a geographi­
cal market comprising the Member States 
apart from Germany and in its assessment 
that an alleged collective dominant position 
existed on that market; finally, they allege 
that the provisions of the regulation do not 
apply to a collective dominant position. 
26 — In this case, the German Government has intervened in 
support of the Commission's conclusions. 
27 — In this case, the French Government has intervened in sup­
port of the applicants' conclusions, whereas K+S and MdK 
have been granted leave to intervene in support of the 
Commission's conclusions. 
I - 1391 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
18. It is important here to recall that, when 
the case was still pending before the Court 
of First Instance, 28 SCPA and EMC lodged 
an application for suspension of the opera­
tion of the contested decision in that it 
required K+S to sell its shares and/or to 
withdraw from Kali-Export and to terminate 
the contractual distribution relations binding 
it to SCPA, as well as an application for an 
order suspending the proceedings initiated 
by the Commission under Regulation N o 17 
in relation to the Potacan case. 
After first making a provisional order, 29 the 
President of the Court of First Instance, by 
an order of 15 June, 30 upheld the companies' 
application in part, suspending the operation 
of Article 1 of the decision, in so far as it 
requires K+S and the joint venture to with­
draw from Kali-Export. 
19. Unlike SCPA and EMC, the French 
Government seeks the annulment of the 
whole of the decision (Case C-68/94). It 
asserts that the Commission failed to respect 
the principle of close and constant liaison 
with the authorities of the Member States, as 
laid down by the regulation; that it made 
errors in its appraisal of the effects of the 
concentration on the German market, in par­
ticular as regards the application of the fail­
ing company theory to this case, and that it 
also made an incorrect appraisal of the con­
centration on the Community market apart 
from Germany. 
By this latter plea, which is in turn subdi­
vided into several limbs, the French Govern­
ment contests: (a) the definition of the rel­
evant geographical market comprising the 
Member States apart from Germany; (b) the 
applicability of the merger regulation to col­
lective dominant positions; (c) the misappli­
cation in this case of the concept of collective 
dominant position; (d) the imposition of 
conditions and obligations on persons who 
are not parties to the concentration. 
20. Clearly, with regard to the alleged errors 
in the appraisal of the concentration on the 
Community market apart from Germany, 
the arguments of SCPA and EMC are almost 
completely coterminous with those put for­
ward by the French Government. As I have 
already stated, that makes it possible to con­
sider the substance of the two actions 
together, drawing attention, where necessary, 
to the different arguments submitted. 
28 — SCPA and EMC's action was brought before the Court of 
First Instance and referred by it to the Court of Justice 
because the French Government's action (Case C-68/94) 
relating to the same decision was already pending before 
the latter. Indeed, since the same applicant companies had 
requested that the two cases be dealt with together by the 
Court of Justice, the Court of First Instance, by order of 
1 February 1995, declined jurisdiction in accordance with 
the third paragraph of Article 47 of the Statute and trans­
mitted the documents to the Court of Justice. 
29 — Order in Case T-88/94 R Société Commerciali des Potasses 
et de l'Azote and Entreprise Minière et Chimique v Com­
mission [1994] ECR II-263. 
30 — Case T-88/94 R Société Commerciale des Potasses et de 
l'Azote and Entreprise Miniere et Chimique v Commission 
[1994] ECR II-401. 
I - 1392 
FRANCE A N D OTHERS v COMMISSION 
Before examining the pleas put forward by 
the parties in detail, however, I consider it 
appropriate to make a few brief observations 
of a general nature with the intention of 
bringing to light, beyond the considerable 
interests at stake, the implications of these 
proceedings in principle. 
21. I shall begin by noting that, in principle, 
given the nature of competition, the rules 
thereon leave a large degree of autonomy to 
the administrative authority, which is 
responsible for assessing the specific aspects 
of any particular case in order to reach the 
most appropriate decisions. Similarly, it is 
common ground that the task of the Com­
munity judicature in this field requires some 
latitude in assessing the economic value of 
the rules. 31 
Those remarks are all the more valid with 
regard to concentrations, the control of 
which, being necessarily preventive in char­
acter, requires an inherently discretionary 
appraisal on the part of the authority whose 
task it is to interpret and apply the regu­
lation. Indeed, in all antitrust systems, even 
those endowed with forms of control based 
on structural data (market share held by the 
undertakings concerned and presumptions 
raised by it), there is a tendency to formulate 
judgments based also on qualitative factors 
and which take account of the specific fea­
tures of each individual case. 32 However, the 
application of 'qualitative' criteria must not 
become an unpredictable practice which 
would undeniably have the direct conse­
quence of considerably reducing the scope 
for a review of legality. 33 Such review, more­
over, appears all the more necessary if it is 
borne in mind that the twofold nature of the 
Commission's functions — a power of 
inquiry and investigation, coupled with a 
decision-making power — should impose on 
it an even stricter obligation to respect the 
right to a fair hearing. 34 
22. I make those observations precisely 
because the specific issues arising in these 
proceedings raise for the Court's consider­
ation a general question concerning the 
limits of the Commission's discretion 35 and 
31 — On the role of the Court of Justice in competition matters, 
Trabucchi's observations are still very helpful: 'Sviluppa 
della giurisprudenza e suo significato nella disciplina comu­
nitaria suha concorrenza', in Rivista di diruto civile, 1973, I, 
p. 497 et seq. 
32 — See, with reference to the United States, Leddy, 'The 1992 
US Horizontal Merger Guidelines and Some Comparisons 
with EC Enforcement Policy', in ECLR, 1993, p. 15. 
33 — From the point of view of formal legality, such a review 
means checking the aspects connected with jurisdiction, 
grounds, procedural regularity and observance of the right 
to a fair hearing; from that of substantive legality, on Die 
other hand, it takes the form of scrutiny of the accuracy of 
the economic and market analysis, of the anticompetitive 
effects and the correctness of the legal consequences (from 
the point of view of the characterisation of the facts, for 
example) drawn from that analysis, without, of course, 
encroaching on the scope of the discretion which the Com­
mission enjoys in the application of the rules on compe­
tition. See, in this connection, the papers by Canivet and 
Biancarelli in Le controle juridictionnel en matière de droit 
de la concurrence et des concentrations (proceedings of the 
seminar organised by the Court of First Instance of the 
European Communities on 22 and 23 November 1993), 
Luxembourg, 1994, pp. 25 to 38 and 55 to 65. 
34 — Judgment in Joined Cases 100/80 to 103/80 Musique Diffu­
sion Française v Commission [1983] ECR 1825. 
35 — In this connection, I note that the favourable view of con­
centrations, to which I have referred above, is confirmed in 
the pragmatic approach taken by the Commission in its 
application of the regulation, which is characterised by a 
preference for the adoption of 'negotiated' solutions, which 
are in any case favourable to the plans in question. In the 
end, it has frequently resorted to the power to approve con­
centrations subject to compliance with certain conditions 
and obligations and, conversely, made very limited use of 
the power of prohibiuon. In that regard, sec Van Bael-
Bellis, Il diritto della concorrenza nella CE, 1995, pp. 555 to 
556. 
I -1393 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
the consequential powers of the judicial 
authorities to act. 
The Court should therefore assess extremely 
carefully what might be described as the 
'systematic' consequences which its decision 
may have, first and foremost as regards legal 
certainty, equal treatment and guarantees for 
the rights of third parties, but then also as 
regards its implications for future practice in 
the control of concentrations. I consider it 
appropriate to point out that judicial review 
is essential when laying down rules on con­
centrations, even in systems where, unlike 
ours, there is already a predetermined assess­
ment criterion to guide the administrative 
authorities in their task, rendering their prac­
tice clear and predictable. 36 
23. In my Opinion I shall examine the 
objections of inadmissibility raised by the 
Commission with regard to the actions 
brought by the French companies (Case 
C-30/95) and relating to: (A) the possibility 
of partially annulling the decision, as sought 
by those companies; (B) their right to bring 
proceedings; (C) the possibility of contesting 
that part of the decision containing the com­
mitment entered into by K+S to adapt the 
structure of Potacan (paragraph 65); and 
finally (D) the applicants' legal interest in 
bringing proceedings. 
I shall then examine the substance of both 
cases. I shall deal first with the two pleas put 
forward by the French Government alone, 
namely, failure to observe the principle of 
close and constant liaison with the authori­
ties of the Member States, which is required 
of the Commission pursuant to Article 19 of 
the regulation (A), and the justification for 
the Commission's appraisal of the effects of 
the concentration on the German market (B). 
Next, I shall examine the pleas put forward 
in both actions with regard to the appraisal 
of the effects of the concentration on the 
Community market apart from Germany 
(C). In this context, I shall deal first with the 
aspects inherent in the definition of the rel­
evant geographical market (1), then with the 
possibility of using the provisions of the 
regulation in order to take action in relation 
to collective dominant positions (2), and 
with their applicability to this case (3), also 
in the light of the criteria developed by the 
Commission in its previous decisions. 
Finally, I shall consider the question whether 
it is lawful to impose conditions on persons 
who are not parties to the concentration (D). 
I — Admissibility (Case C-30/95) 
24. It is necessary first to establish the basis 
of the objections of inadmissibility raised by 
the Commission with regard to the French 
companies' action. 
36 — Sec, on the experience of the United States, the remarks by 
Hawk, 'Public Private Enforcement of Mener Law in the 
Untied States', in Le contrôle juridictionnel en matière de 
droit de la concurrence et des concentrations, cited in foot­
note 33, p. 81 et seq., in particular pp. 83 and 84, who notes 
that 'the legality of mergers is ultimately determined in the 
courts according to the judicial standards developed under 
Section 7 of the Clayton Act, although the Guidelines are 
increasingly consulted'. 
I -1394 
FRANCE A N D OTHERS v COMMISSION 
A — Partial annulment 
25. The first objection concerns the applica­
tion for partial annulment of the decision. 
The Commission maintains that, by remov­
ing the prerequisites for declaring the con­
centration compatible with the common 
market, the annulment of one or all of the 
conditions would inevitably oblige it to 
revoke the whole of the contested decision. 
The applicants, on the contrary, assert that 
the conditions at issue could be separated 
from the rest of the decision and that their 
annulment would have no effect other than 
to render the decision unconditional. More­
over, since Article 8(5) of the regulation, 
which authorises the Commission to revoke 
its decision in the event of failure to comply 
with a commitment entered into by the par­
ties, 37 is not applicable in this case, the situ­
ation feared by the Commission could in no 
way arise. 
26. I am of the opinion that that objection 
must be examined together with the 
substance of the action. Only in that way 
will it be possible to establish whether 
annulment of the conditions could indeed 
affect the rest of the decision, rendering its 
complete annulment necessary. 
In theory, moreover, it would certainly be 
possible to 'split' the decision, as the appli­
cants argue, also in the light of Article 10(5) 
of the regulation, which expressly contem­
plates the possibility of partial annulment. 
To that end, it should be established whether 
the conditions to which Community case-
law makes exercise of the power of partial 
annulment subject are met. As the Court 
stated in its judgment in the 'Flat Glass' 
case, 38 it is necessary 'to determine whether 
the scope of the operative part of the 
decision, read in the light of the grounds of 
the decision, can be limited ratione materiae, 
ratione personae or ratione temporis in such a 
way that its effects are restricted but its 
substance remains unaltered'. In the course 
of that examination, it should be ascertained 
whether, as the Court has stated, 'a partial 
annulment is therefore possible and is justi­
fied by the fact that, taken as whole, the 
decision is favourable to the interests of the 
undertakings concerned'. 39 
27. As already noted, the imposition of 
conditions to which compatibility of the 
concentration is made subject depends on 
whether, in the Commission's view, the con­
centration would lead, on the Community 
market outside Germany, to the creation of a 
37 — Under that provision, 'the Commission may revoke the 
decision it has taken pursuant to paragraph 2 where: (a) the 
declaration of compatibility is based on incorrect infor­
mation for which one of the undertakings is responsible or 
where it has been obtained by deceit; or (b) the undertak­
ings concerned commit a breach of an obligation attached 
to the decision'. 
38 — Judgment in Joined Cases T-68/89, T-77/89 and T-78/89 
SIV and Others v Commission [1992] ECR II-1403, para­
graph 320. 
39 — Judgment in Case 17/74 Transocean Marine Paint Associa­
tion v Commission [1974] ECR 1063, paragraph 21. 
I -1395 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
duopoly that could impede competition, 
which only compliance with such conditions 
would prevent. In order to annul the 
decision in part, therefore, it would be neces­
sary to show that that view was unfounded, 
that is to say, since the concentration would 
not have the effect which the Commission 
supposed, that there was no need, in order to 
declare the concentration compatible, to 
impose such conditions. 
That confirms that the objection can only be 
examined together with the substance. It 
should, however, be emphasised at this point 
that a possible partial annulment could, at 
most, involve the application of Article 10(5) 
of the regulation, 40 that is, reopening of the 
time-limits and a new examination by the 
Commission. 
B — Right to bring proceedings 
28. The Commission further maintains that 
the contested decision is not of direct and 
individual concern to the applicants. Similar 
arguments have been put forward by K+S 
and MdK, who consider themselves to be the 
sole addressees of the conditions imposed by 
the decision. 
This objection seems to me to be manifestly 
unfounded. Since the French companies are 
contesting a decision which is not formally 
addressed to them, it should be ascertained 
whether the decision is of direct and indi­
vidual concern to them, as required by 
Article 173 of the Treaty. I would point out 
that the contested decision is undoubtedly of 
direct concern to the applicants, since the 
harm allegedly suffered by the French com­
panies is attributable to that decision. 
29. With regard to the requirement that the 
decision must be of individual concern, it 
should be pointed out that, as the Court has 
consistently held, 'persons other than those 
to whom a decision is addressed may claim 
to be individually concerned within the 
meaning of the second paragraph of Article 
173 only if that decision affects them by rea­
son of certain attributes which are peculiar 
to them or by reason of circumstances in 
which they are differentiated from all other 
persons and by virtue of these factors distin­
guishes them individually just as in the case 
of the person addressed'. 41 In this case, it is 
obvious that the applicants' circumstances 
distinguish them clearly from all other per­
sons. 
First, it is significant that the applicants were 
heard during the pre-litigation procedure. It 
is clear from the consistent case-law of both 
the Court of Justice and the Court of First 
Instance on the right of third parties to bring 
proceedings in the matter of competition, 
40 — Literally: 'Where the Court of Justice gives a judgment 
which annuls the whole or part of a Commission decision 
taken under this regulation, the periods laid down in this 
regulation shall start again from the date of the judgment'. 
41 — Judgments in Case 25/62 Plaumann v Commission [1963] 
ECR 95, in particular p. 107; Case C-198/91 Coo* [1993] 
ECR I-2487, paragraph 20; Case T-83/92 Zunis v 
Commission [1993] ECR II-1169, paragraph 36. 
I -1396 
FRANCE A N D OTHERS v COMMISSION 
anti-dumping and aid that persons on whom 
a regulation or the Treaty itself confers the 
right to take part in administrative proce­
dures are entitled to institute proceedings 'in 
order to protect their legitimate interests'. 42 
30. Secondly, in assessing the competitive 
situation on one of the two markets identi­
fied as relevant and the effects of the concen­
tration, the Commission mainly and specifi­
cally took into account the position of 
EMC/SCPA as part of a duopoly with 
K+S. 43 
31. Thirdly, all the conditions imposed on 
the undertakings involved in the concentra­
tion in order for it to be declared compatible 
affect directly and almost exclusively the 
interests of the applicants and could seri­
ously jeopardise their position on the mar­
ket. 44 It is obvious that, in making the adop­
tion of a decision concerning one person 
conditional upon the modification or even 
discontinuance of contractual relations or a 
partnership with a third person, the activities 
of both persons and not only those of the 
former are significantly affected. 
32. Here also, the Commission's arguments 
cannot prevail. SCPA cannot properly be 
denied the right to bring proceedings on the 
ground that the decision was also of concern 
to the other company in the Kali-Export 
export cartel, the Spanish company Coposa. 
First, SCPA is also directly and specifically 
concerned by the other conditions laid down 
in the decision, which, however, do not affect 
anyone else; and that is sufficient to differen­
tiate its position from that of any other per­
son, by the same token identifying it as that 
of an addressee of the measure. Secondly, it 
would not be possible to prevent a person 
who was indisputably (and individually) 
affected by a decision from bringing pro­
ceedings in order to protect his interests, 
merely because another person was in a simi­
lar position. 
33. To accept the argument criticised here 
would be to risk undermining the right to 
judicial protection. Moreover, that argument 
does not seem to me to be supported by a 
correct interpretation of the case-law on the 
42 — Judgments in C u e 26/76 Metro v Commission [1977] ECR 
1875, paragraph 13; Case 191/82 Fediol v Commission 
[1983] ECR 2913, paragraph 28 et seq.; Case 169/84 Cofaz 
and Others v Commission [1986] ECR 391, paragraph 23. 
In more recent case-law, sec the judgments in Case T-37/92 
BEUC and NCC v Commission [1994] ECR II-285, para­
graph 36, and Case T-114/92 BEMIM v Commission [1995] 
ECR II-147, paragraph 26. 
43 — Judgments in Case C-354/87 Weddel v Commission [1990] 
ECR I-3847, paragraphs 20 to 23; and Case T-2/93 Air 
France v Commission [1994] ECR II-323, paragraph 45, in 
which the Court held that France's action against a Com­
mission decision concerning a concentration between two 
of its competitors was admissible by reason, biter alia, of 
the fact that 'in assessing the competitive situation on the 
two markets identified as being the markets concerned after 
the concentration, the Commission mainly took into 
account the position of Air France'. 
44 — See, albeit with reference to a different case, the judgment in 
Cofaz v Commission, cited in footnote 42, in particular 
paragraphs 28 and 29. 
I - 1397 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
fourth paragraph of Article 173 of the Treaty. 
There is in fact no basis, except that of an 
excessively restrictive reading, 45 for assum­
ing that the condition of being 'directly and 
individually concerned' must be peculiar to 
only one person and that it may not apply to 
several persons who can be precisely and 
specifically identified as being immediately 
concerned by the measure. Indeed, in order 
for the right to bring an action to arise, that 
condition, namely, that the position of the 
person concerned must be specifically and 
distinctively differentiated from that of any 
other person, must be met, and in this case 
that differentiation cannot seriously be called 
into question. 
34. I note, moreover, that there is again a 
causal link in this case, inasmuch as the pos­
ition of the applicants was specifically taken 
into account, to the extent of having had a 
decisive influence on the institution's 
decision and having constituted the funda­
mental reason for the contested part of the 
measure. 46 In other words, the facts of the 
case show that the position of the applicant 
companies is differentiated, and not by coin­
cidence. 
35. Finally, the Commission's reference to 
the judgment in the Zunis Holding case 47 
does not appear to be relevant. According to 
the defendant institution, from the point of 
view of the right to bring proceedings, the 
mere fact of being a shareholder in a com­
pany involved in a concentration is not suf­
ficient to differentiate a person's circum­
stances in the same way as those of the 
addressee of a decision are differentiated. 
I note first that the principles set forth in the 
judgment in the Zunis Holding case were 
applicable to the applicant undertakings 
which were shareholders in the companies 
directly involved in the concentration, and 
therefore in a completely different position 
from that of EMC and SCPA in this case. 
Moreover, in the aforementioned judgment, 
the Court did not by any means state that 
ownership of a parcel of shares is insufficient 
to differentiate the position of a person 
within the meaning of Article 173, as the 
Commission maintains, but merely pointed 
out that, for that purpose, the possible effect 
of a measure on the relations existing 
between a company's shareholders is not 
sufficient, but that, on the contrary, there 
must be specific circumstances present 
enabling the position of one of them to be 
regarded as 'directly and individually con­
cerned'. And among those circumstances, 
even on the basis of a reading between the 
lines of the judgment cited above, it would 
not be unreasonable to include the specific 
size of the holding. 48 
36. Those observations are applicable both 
to SCPA and to EMC. Moreover, the latter is 
also identified by the Commission as the 
45 — As was nude clear by the Court in Plaumann v Commis­
sion, cited in footnote 41, The words and the natural mean­
ing [of Article 173] justify the broadest interpretation. 
Moreover provisions of the Treaty regarding the right of 
interested parties to bring an action must not be interpreted 
restrictivei y' (p. 219). 
46 — See, in this respect, Barav and Vandersanden, Contentieux 
communautaire, Brussels, 1977, p. 172. 
47 — Judgment in Case T-83/92 [1993] ECR II-1169. 
48 — See the judgment in Zunis Holding, cited above, paragraphs 
34 to 36; also Cook-Kerse, EC Merger Control, London, 
1996, pp. 200 to 201. 
I -1398 
FRANCE A N D OTHERS v COMMISSION 
addressee of the condition relating to Kali-
Export. Indeed, despite the fact that only 
SCPA has an interest in the company in 
question, the decision concerns EMC and 
SCPA jointly, and they are therefore treated, 
rightly or wrongly, as a single business 
entity. 49 Consequently, the Commission's 
attempt to separate the position of EMC 
from that of SCPA in order to debar the 
former from bringing proceedings appears 
arbitrary at the very least, even apart from 
the fact that EMC has complained that it 
suffered damage 'independently' of SCPA, 
particularly as a consequence of the dissolu­
tion of the export cartel. That dissolution 
deprives it of its sales network for non-
Community countries, thus preventing it 
from achieving 'major' exports. 
It is hardly necessary to add that all the fore­
going considerations dealing with the objec­
tion of inadmissibility relating to the condi­
tions under which a person is entitled to 
bring proceedings against a measure also 
serve to refute the arguments of the interven­
ing companies, which are based primarily on 
the applicants' lack of entitlement to bring 
proceedings. 
C — Possibility of contesting the paragraph 
relating to Potacan 
37. In its final objection, the Commission 
takes the view that the part of the decision 
concerning the structure of Potacan is not 
the proper subject of an action for annul­
ment since it is not capable of producing 
binding legal effects of such a kind as to 
affect the applicants' interests. 
I would point out first of all that, under the 
Court's case-law, in order to establish 
whether proceedings may be instituted 
against a measure under Article 173 of the 
Treaty, it is necessary to take account of its 
substance and to determine whether it is 
intended to produce binding legal effects of 
such a kind as to affect the applicant's inter­
ests by clearly altering its legal position. 50 
38. However, it is certainly unusual that the 
Commission, having initiated a procedure 
specifically for the purpose of ascertaining 
the compatibility of Potacan with the com­
mon market on the basis of Article 85 of the 
Treaty, should already contemplate, or rather 
suggest, a solution in the present context, 
encouraging one of the undertakings 
involved in the concentration to 'use its best 
efforts to reach, in agreement with EMC/ 
SCPA, an arrangement which will meet the 
abovementioned requirements', namely, the 
requirements specified by the Commission 
itself with regard to the adaptation of Pota-
can's structure. That can only raise serious 
49 — Sec paragraph 60 of the decision. 
50 — With regard to competition, see the judgments in Case 
53/85 AKZO Chemie v Commission [1986] ECR 1965 and 
Case 60/81 IBM v Commission [1981] ECR 2639; more 
generally, on the concept of a contestable act as provided 
for in Article 173, see, along the lines of that provision, the 
judgments in Case C-325/91 France v Commission [1993] 
ECR I-3283, paragraph 9, and Case C-476/93 P Nutral v 
Commission [1995] ECR I-4125, paragraph 28. 
I -1399 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
doubts about the correctness of such an 
approach which obviously leads to a confu­
sion of procedures that, although different in 
terms of their subject-matter and the parties, 
ultimately influence each other. 
That said, it must nevertheless be acknow­
ledged that the part of the measure at issue 
here does not seem to meet the requirements 
laid down by Article 173 for a measure to 
form the subject of an action against it; more 
specifically, it is not of such a kind as to pro­
duce binding legal effects vù-à-vis the appli­
cant companies. 
39. In the part of the decision at issue here, 
the Commission has merely 'taken note' of a 
commitment entered into by K+S, albeit one 
expressly suggested by the Commission, to 
resolve the Potacan question in agreement 
with EMC. Moreover, no obligation is 
placed on the latter to initiate negotiations, 
still less to agree to the proposals put for­
ward by K+S. As noted above, the part of 
the decision in question could, at most, pro­
duce an effect of some kind, albeit indirect, 
on the proceedings initiated pursuant to 
Regulation N o 17; 51 however, even if they 
actually arose, those consequences would not 
have any relevance for the purpose of assess­
ing whether or not the measure which is the 
subject-matter of these proceedings may be 
the subject of an action. 
Nor, it seems to me, is it relevant in this case 
to cite the solution adopted in the 'Wood-
pulp' case, 52 in which the Court held that, 
for the purpose of assessing whether it could 
be the subject of an action, an undertaking 
given by the applicants must be treated in 
the same way as directions requiring an 
infringement to be brought to an end, as 
provided for by Article 3 of Regulation N o 
17. Even disregarding the differences 
between the two cases, I note that the 
assumption on which that solution 'was 
based, namely, that the applicants merely 
assented to a decision which the Commis­
sion could have adopted unilaterally, does 
not apply in this case. 
40. Consequently, I suggest that the objec­
tion raised by the Commission and the inter­
vening companies should be upheld and that, 
as regards the point which I have just exam­
ined, the action brought by the French com­
panies should be declared inadmissible. 
D — No legal interest in bringing proceed­
ings 
41. Finally, the intervening companies have 
objected that the French companies' action is 
also inadmissible on the ground that there is 
no legal interest in bringing proceedings 
51 — Regulation No 17 of the Council of 6 February 1962 (OJ, 
English Special Edition 1959-1962, p. 87). 
52 — Judgment in Joined Cases C-89/85, C-104/85, C-114/85, 
C-116/85, C-117/85 and C-125/85 to C-129/85 Ahlström 
Osakcytiõ and Others v Commission [1993] ECR I-1307, 
paragraph 181. 
I - 1400 
FRANCE AND OTHERS v COMMISSION 
since they have already complied fully with 
the commitments to which the conditions in 
the decision relate. 
I note first of all that, from a procedural 
point of view, the objection is inadmissible 
since there is no reference to it in the argu­
ments raised by the Commission. That 
objection has, in any event, been overcome 
by the principle laid down by the Court, 
under which, in accordance with Article 176, 
even if it proves impossible to comply with 
the obligation imposed by that provision, 
'the application for annulment still consti­
tutes an interest as the basis for possible pro­
ceedings for damages'. 53 
II — Substance 
42. With regard to the substance of the case, 
I shall first examine the pleas put forward 
only by the French Government, which 
therefore relate to Case C-68/94. More spe­
cifically, I shall begin by assessing the merits 
of the argument alleging breach of the obli­
gation to act in liaison with the national 
authorities (A), then turn to the complaints 
concerning the appraisal of the concentration 
on the German market (B). Finally, I shall 
consider the aspects connected with the 
alleged errors in the appraisal of the concen­
tration on the Community market apart 
from Germany (C), including the question of 
the lawfulness of imposing conditions and 
obligations which affect third parties not 
involved in the concentration (D), aspects 
raised in both actions and therefore to be 
dealt with together as regards the arguments 
common to both. 
A — Failure to comply with the obligation to 
act in liaison with the national authorities 
(Case C-68/94) 
43. By this plea, the French Government 
complains that the Commission failed, in 
several respects, to observe the principle, 
enshrined in Article 19 of the regulation, of 
close and constant liaison with the national 
authorities of the Member States. In particu­
lar, it asserts that the data relating to the 
breakdown of the sales of the various opera­
tors in each Member State and, in the case of 
SCPA, to the distinction between the sales of 
its own products and those of products of 
other undertakings, data which it regards as 
essential for the purpose of assessing in full 
knowledge of the facts both the objections 
raised by the Commission against the notify­
ing parties and the draft decision, were trans­
mitted to the Member States only at the 
meeting of the Advisory Committee on 3 
December 1993. Indeed, the French Govern­
ment's repeated requests to that effect 
received only a partial response, by tele­
phone, on 5 November 1993. Finally, it 
asserts that the inaccuracy of the data relat­
ing to SCPA's sales in Belgium and Luxem­
bourg, as transmitted by the Commission to 
the Advisory Committee, prevented the 53 — Judgment in Case 76/79 Kõnecke [1980] ECR 665, para­
graph 9. 
I - 1401 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
representatives of the Member States from 
properly appraising the concentration. 54 
The Commission points out, first of all, that 
the principle of close and constant liaison 
with the Member States, laid down in Article 
19(1) and (2) of the regulation, does not con­
stitute a general and absolute principle, but 
must be reconciled both with compliance 
with the particularly short time-limits pre­
scribed for initiating proceedings (Article 10 
of the regulation) and with respect for the 
confidentiality of business information, 
relied on in this case specifically in connec­
tion with the sales effected in individual 
countries. Second, it is for the Commission, 
in application of the regulation, to decide 
which documents are the most important for 
transmission to the authorities of the Mem­
ber States. At all events, in this case, both the 
authorities of the Member States and the 
Advisory Committee were, according to the 
Commission, in possession of all the infor­
mation necessary in order to make a bal­
anced appraisal of the impact on competition 
of the proposed concentration. Finally, the 
incorrect figure to which the French Gov­
ernment has drawn attention and 'which is 
manifestly no more than a serious typing 
error could not in any event be regarded as 
capable of invalidating the Advisory Com­
mittee's analysis. 
44. It is appropriate to point out in the first 
place that Article 19 of the regulation 
requires the Commission to transmit 'to the 
competent authorities of the Member States 
copies of notifications within three working 
days and, as soon as possible, copies of the 
most important documents lodged with or 
issued by the Commission pursuant to this 
regulation' (Article 19(1)). In addition, it 
requires the Commission to carry out the 
procedures set out 'in close and constant liai­
son with the competent authorities of the 
Member States, which may express their 
views upon those procedures' (Article 19(2)). 
That article also provides, as far as is relevant 
here, for representatives of the national 
authorities to participate in a special advisory 
committee set up to deliver an opinion on 
the basis of 'a summary of the case, together 
with an indication of the most important 
documents and a preliminary draft of the 
decision' (Article 19(5)). 
However, it is common ground in this case 
that the Commission transmitted to the par­
ties concerned, in sufficient time, as required 
by Article 19(1), both the objections 
addressed to the notifying parties (14 Octo­
ber 1993) and the draft decision relating to 
the concentration (26 November 1993), 
which, among other things, contained the 
data relating to the shares held by the opera­
tors of the sector on the Community market; 
in addition, on 5 November 1993, certain 
data relating to the sales volumes of indi­
vidual operators in each Member State were 
transmitted to the French Government at its 
request, albeit by telephone. It is also com­
mon ground that the data requested by the 
French Government were transmitted to all 
the Member States only during the Advisory 
Committee meeting on 3 December 1993 
54 — SCPA's total sales in Belgium and Luxembourg were in fact 
22 000 tonnes, whereas the figure given in the documents 
transmitted by the Commission was 221 000 tonnes. 
I - 1402 
FRANCE AND OTHERS V COMMISSION 
and that one of the details, that relating to 
SCPA's sales in Belgium and Luxembourg, 
was incorrect. 
45. Accordingly, it must be established 
whether, as the applicant government main­
tains, the belated transmission of the data 
relating to the volume of potash sales, com­
bined with the inaccuracy of one of the 
details, constitutes a breach of the Commis­
sion's obligation to act in liaison with the 
national authorities. 
Let me begin by pointing out that the 
belated transmission of those data cannot be 
justified in this case, either in the interests of 
confidentiality said to have been relied on by 
the undertakings involved in the concentra­
tion, since in that case those data should not 
have been transmitted, even belatedly, 55 or 
by a general reference to the discretion 
which the Commission enjoys in deciding 
which are the most important documents 
within the meaning of Article 19(1) of the 
regulation. It is true that transmission within 
the time-limit is not an end in itself, but is 
necessary in order to ensure the proper con­
duct of the procedure. From this point of 
view, the important thing is to determine 
whether the data in question were essential 
for the purpose of appraising the anticom­
petitive effects of the concentration and 
whether their belated transmission was such 
as to distort the procedure. 
46. I admit to harbouring some doubts as to 
the fact that the data relating to the volume 
and breakdown of sales of the various opera­
tors in the sector, while admittedly impor­
tant in order to obtain a complete picture of 
the effects of the concentration, are to be 
included among the most important docu­
ments within the meaning of Article 19(1) of 
the regulation. I am of the opinion that there 
is some basis for arguing, as the Commission 
does, that the data relating to the market 
shares held by each operator, which were 
contained in the draft decision, were suffi­
cient in order to appraise the proposed con­
centration in full knowledge of the facts. 
In any event, in view of the particularly 
short time-limit within which the Commis­
sion's decision must be adopted, as well as of 
the fact that those data were transmitted to 
the French Government by telephone as 
early as 5 November, I am of the opinion 
that the Commission cannot be accused of 
having failed, with regard to the French 
Government, to comply with its obligations 
under Article 19(1) and (2) of the regulation. 
Furthermore, the belated transmission of the 
information in question cannot in itself be 
considered such as to cast doubt on the 
validity of the decision since it is, on the 
contrary, necessary to that end for the 
alleged irregularity to involve an infringe­
ment of essential procedural requirements. I 
would point out in this connection that, as 
the Court has consistently held, 'for ... an 
infringement of the right to be heard to 
result in an annulment it must ... be estab­
lished that, had it not been for that irregular­
ity, the outcome of the procedure might have 
55 — The Commission itself has stated in its observations that 
these were mostly statistical data which were easily obtain­
able and that, in any case, Article 19 of the regulation guar­
antees Member States access to the file. 
I - 1403 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
been different'. 56 However, in this case, the 
applicant government has not by any means 
shown that the Commission's decision 
would have been different had it not been for 
the alleged breach of the obligation to act in 
constant liaison with the national authorities; 
it merely states that such a possibility could 
not be ruled out. 
47. There remains to consider the fact, as the 
French Government also points out, that the 
Advisory Committee only received all the 
relevant data, including the incorrect figure, 
during the meeting on 5 December, that is, 
on the day when it was required to deliver 
its opinion. However, Article 19(5) of the 
regulation requires the draft decision and all 
the most important documents to be sent to 
the Advisory Committee at the time when it 
is convened, that is, at least 14 days before 
the meeting at which the opinion is deliv­
ered. 57 
The complaint in question, which, as the 
Commission has pointed out, really concerns 
the procedures for convening and consulting 
the Advisory Committee, does not seem 
capable of having substantial effects on the 
contested decision. First, the fact that the 
Advisory Committee, which was composed 
of experts from the sector, did not raise any 
objection in this regard should not be under­
estimated. Second, the applicant government 
has by no means shown that transmission of 
the data in question within the time-limit 
and absence of error in respect of a particular 
detail would have led the Advisory Commit­
tee to adopt a different opinion, still less that 
the Commission's final decision would have 
been different. 58 On the contrary, the argu­
ments put forward by the Commission in 
this regard, and which have remained undis­
puted, would seem to rule out that possibil- ' 
ity. 
B — Effects of the concentration on the Ger­
man market (Case C-68/94) 
48. The French Government puts forward 
two pleas relating to the appraisal of the con­
centration on the German market: on the 
one hand, it accuses the Commission of, in 
this case, misapplying the so-called failing 
company theory, according to which the 
56 — Judgment in Case C-142/87 Belgium v Commission [1990] 
ECR I-959, paragraph 48. To the same effect see, among 
others, the judgments in Case 30/78 Distillers Company v 
Commission [1980] ECR 2229, paragraph 26, and Case 
234/84 Belgium v Commission[1986] ECR 2263, paragraph 
30. 
57 — Article 19(5) provides, however, that the Commission may 
shorten that period 'as appropriate in order to avoid serious 
harm to one or more of the undertakings concerned by a 
concentration'. 
58 — In this connection, it is worth recalling that 'the Commis­
sion shall take the utmost account of the opinion delivered 
by the Committee. It shall inform the Committee of the 
manner in which its opinion has been taken into account' 
(Article 19(6)). The Commission may therefore disregard 
the Committee's opinion, or review its own position and 
adopt a final decision which is different from the draft 
decision submitted for the Committee's opinion. In this 
regard, the case which led to the adoption of Commission 
Decision 94/208/EC of 31 January 1994 declaring a concen­
tration to be compatible with the common market (Case 
N o IV/M.315 — Mannesmann/Vallourec/Ilva) (OJ 1994 
L 102, p. 15) strikes me as exemplary. In that case, the draft 
decision on which the Advisory Committee delivered its 
opinion was to the effect that the concentration was incom­
patible with the common market (see the Opinion of the 
Advisory Committee in OJ 1994 C 111, p. 6), whereas the 
Commission's final decision was to the opposite effect, 
although it is not known whether this was by reference to 
the opinion of a minority of the Advisory Committee. On 
the point examined in the body of the text, see also, with 
regard to the Advisory Committee established on the basis 
of Reguladon N o 17, the judgment in Case T-69/89 Radio 
Telefis Eireann v Commission [1991] ECR II-485, para­
graphs 21 to 27. 
I - 1404 
FRANCE A N D OTHERS v COMMISSION 
acquisition of an undertaking which is bank­
rupt (or verging on bankruptcy) must, sub­
ject to certain conditions, be authorised since 
it would not give rise to competition prob­
lems; on the other hand, it complains that 
the Commission did not make authorisation 
of the concentration subject to any condi­
tions relating to the market in question, even 
though this led to the creation of an outright 
monopoly (98%) for the joint venture on 
that market. 
49. With regard to the first complaint, I 
would first point out that American antitrust 
legislation allows the possibility, although 
within strict limits in order to prevent 
abuses, of authorising the acquisition of an 
undertaking which is insolvent, provided 
that the undertakings which are parties to 
the concentration can show, in the same way 
as in a test of proportionality, that: (a) the 
undertaking acquired will fail to meet its 
financial obligations in the near future; (b) it 
is unable to reorganise successfully under 
Chapter 11 of the Bankruptcy Act; (c) there 
are no alternative solutions to concentration 
which are less anticompetitive; and (d) the 
'failing' undertaking would withdraw from 
the market if the concentration were not 
implemented. 59 
As the Commission expressly points out in 
its decision, it did not apply the theory in 
question unreservedly, but made its own 
appraisal. In particular, while basing itself on 
that theory, it relied on the following three 
criteria: (1) MdK would have withdrawn 
from the market had it not been taken over 
by another company; (2) K+S would in any 
case have absorbed MdK's share after the lat­
ter's withdrawal from the market; (3) no 
alternatives were available that were less 
anticompetitive. 
50. In substance, the French Government 
disputes the Commission's decision to apply 
a theory developed in and for another sys­
tem, modifying some of its criteria. In par­
ticular, it asserts that the Commission took 
no account whatsoever of criteria (a) and (b) 
of the American theory; that it arbitrarily 
introduced the criterion of the absorption of 
market shares; and finally, that it has not suf­
ficiently shown that MdK would in any case 
have been forced to withdraw from the mar­
ket or that no other alternatives were avail­
able. 
While acknowledging, moreover, that it is 
appropriate, in the appraisal of a concentra­
tion, to take into consideration the objective 
of economic and social cohesion referred to 
in Articles J.2 and J.3 of the Treaty, and also 
recalled in recital 13 in the preamble to the 
regulation, 60 the French Government main­
tains that that should not in any event result 
in the negation of the primary purpose of the 
59 — See, on the 1992 Guidelines, Leddy, cited above in footnote 
32. 
60 — This recital provides that 'the Commission must place its 
appraisal within the general framework of the achievement 
of the fundamental objectives referred to in Article 2 of the 
Treaty, including that of strengthening the Community's 
economic and social cohesion, referred to in Article 130a'. 
I - 1405 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
control of concentrations, which is to protect 
competition. 
51. However, the criteria, as laid down by 
the regulation and in the light of which the 
compatibility of concentrations with the 
common market must be appraised, are 
undoubtedly characterised by a rigorously 
economic approach which is therefore based 
mainly on considerations relating to the pro­
tection of competition. 61 Nevertheless, as 
the French Government has acknowledged, 
recital 13 also undoubtedly reveals the sig­
nificant attention paid to the requirements of 
economic and social cohesion, so justifying 
the account taken of objectives regarded as 
equally fundamental by the Treaty, provided 
of course that the protection of competition 
is not jeopardised. 
It is clear, moreover, that the fact the Com­
mission was guided by a theory developed in 
another system, although partly modifying 
the criteria for its application, cannot be 
regarded as a ground for annulment of the 
decision. What is important here is that the 
theory in question should not be contrary to 
the regulation, that the analysis relating to it 
in the decision should not be flawed and 
that, in short, the criteria adopted should 
have been properly applied. 
52. As is clear from the decision, the Com­
mission took the view that a line of argu­
ment based on the failing company theory 
can in fact be taken into account 'pursuant to 
Article 2(2) of the merger regulation, as far 
as the causality of a concentration for the cre­
ation or strengthening of a dominant position 
is concerned'. 62 
On that view, the contested introduction of 
the criterion by which it must be ascertained 
whether the acquiring undertaking would in 
any case obtain the market share of the 
undertaking acquired is specifically intended 
to show that the strengthening of the domi­
nant position would be inevitable in that it 
would take place even if the concentration 
were prohibited. 
53. I note first of all that the impermeability 
of the German market, which has been 
established, and the fact, also pointed out in 
the decision, that K+S was in a position to 
increase its production 'without any increase 
in costs and to become the sole supplier on 
the German market, lead inevitably to the 
61 — Sec Article 2(3). The Commission's practice seems to have 
followed this line. Prior to the decision at issue in this case, 
no decisions can be found in which the considerations of a 
social nature referred to prevailed over the need to safe­
guard competition. I refer in this connection to the 
Aérospauale-Atenia/de Havilland decision in which the 
Commission did not accept the parties' argument based on 
the likely elimination of de Havilland from the market in 
the event that the concentration was not approved, instead 
considering that there was no such likelihood [Commission 
Decision 91/619/EEC of 2 October 1991, Case N o 
IV/M.053 — Aérospaoale-Alenia/de Havilland (OJ 1991 
L 334, p. 42)]. 62 — See paragraph 71 of the decision; emphasis added. 
I -1406 
FRANCE AND OTHERS v COMMISSION 
conclusion that MdK's market share would, 
in the event of its withdrawal from the mar­
ket, have accrued to K+S; that, moreover, is 
not seriously contested even by the French 
Government. 
What the French Government contests is, 
rather, the application of that criterion, on 
the ground that an undertaking which was 
already in a dominant position would thus 
be enabled to strengthen its position, solely 
by reason of the probability that it would in 
any case, in the near future, ultimately 
acquire the market share of the other under­
taking operating on the market, which would 
be taking things too far and would be con­
trary to the objective of protecting compe­
tition. That assertion, while irrefutable in 
itself, nevertheless overlooks the fact that the 
criterion in question assumes the fulfilment 
of two other criteria: that the undertaking in 
question is in any event bound to withdraw 
from the market and that there are no alter­
native, less anticompetitive methods of 
acquisition. 
54. With regard to the latter two criteria, 
however, the French Government maintains, 
as I have stated, that they were not correctly 
applied in this case. In particular, as far as the 
probable withdrawal of MdK from the mar­
ket is concerned, it asserts that the Commis­
sion has by no means shown that it would be 
impossible to keep MdK alive as a public 
undertaking by, for example, granting aid 
compatible with Articles 92 and 93 of the 
Treaty. 
That argument cannot be accepted. It is true 
that the Treuhand, the public institution 
whose task is to privatise the former GDR's 
enterprises and the owner of MdK, holds 
49% of the share capital in the undertaking 
created as a result of the concentration and 
that, as a consequence, the Treuhand (and 
therefore the State) has given and will be giv­
ing that undertaking substantial aid. It is also 
true, however, that the Commission's analy­
sis is based on the following circumstances: 
(a) MdK's considerable losses cannot be per­
manently subsidised by the Treuhand from 
public funds, in so far as such a solution 
would in any event be incompatible with the 
provisions of the Treaty relating to State aid; 
(b) the costs of any restructuring would in 
any case be greater than the aid provided for 
by the concentration; (c) the statement by 
the Treuhand, in the context of privatisations 
already embarked upon, that it will close 
down all MdK's operations if it cannot find a 
private undertaking prepared to take them 
over. It was therefore in the light of the par­
ticular circumstances of this case (privatisa­
tion of a State-owned enterprise which can­
not be regarded as viable according to the 
normal criteria for valuing companies) that 
the Commission considered that it had suffi­
cient evidence to show that MdK was bound 
to withdraw from the market in the medium 
term. 
55. Finally, I am of the opinion that the 
Commission's analysis must also be 
endorsed from the point of view of the 
absence of other, less anticompetitive solu­
tions. It is common ground, as the privatisa­
tion procedure documents forwarded by the 
Treuhand to the Commission clearly show, 
that all the undertakings which had 
expressed an interest in acquiring MdK had 
subsequently abandoned their interest. 
I - 1407 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
Moreover, the Commission conducted a fur­
ther investigation and, in particular, 
informed the undertakings concerned of the 
exact amount of aid from which the concen­
tration would have benefited and which 
would therefore also have been granted in 
the event of purchase by a private undertak­
ing. Despite that, no undertaking declared 
itself willing to purchase MdK. 
Under those circumstances, it seems to me 
that the conclusion which the Commission 
reached can be endorsed. However, the fact 
that the Commission did not consider as a 
possible alternative the offer submitted by 
the Peine group, after the conclusion of the 
agreement on the merger contract, to pur­
chase the Bischofferode mine, that is to say, 
one of MdK's four operational mines, 
remains to be examined. This was because 
Bischofferode apparently does not constitute 
a significant part of MdK, and also for rea­
sons connected with the employment factor. 
56. The latter aspect, which, moreover, even­
tually assumed considerable importance in 
the application of the 'failing company 
defence' theory in the United States as 
well, 63 is in my view decisive, particularly in 
the light of the requirements of economic 
and social cohesion to which I have referred 
on a number of occasions. 
The specific nature of the framework within 
which concentrations must be viewed, which 
inevitably includes issues of industrial policy, 
as well as the objectives of strengthening 
economic and social cohesion referred to in 
Articles 2 and 130b of the Treaty, may very 
well justify appropriate account being taken 
of employment and, in general, social aspects 
in the appraisal of concentrations. That is 
true at least in cases such as this, where there 
are considerable differences, specifically in 
terms of potential employment, between the 
various solutions. 64 
57. I would point out, moreover, that, in 
two recent judgments, even though their 
context and purpose were different in that 
they were more specifically concerned with 
the right to bring proceedings granted to the 
trade union representatives of the employees 
of the undertakings involved in the concen­
tration, the Court of First Instance itself has 
held that, in applying the regulation, the 
attention given to the protection of compe­
tition may certainly be reconciled, in the 
context of the assessment of a concentra­
tion's compatibility, with appropriate con­
sideration of its social consequences from the 
point of view of Article 2 of the Treaty. To 
that end, the Commission may, according to 
the Court, ascertain whether the concentra­
tion is hable to affect the position of the 
63 — The failing company theory arose from concerns relating to 
economic policy and corporate efficiency. Subsequently, 
however, in its application, political and social consider­
ations emerged, connected, inter alia, with the need to safe­
guard employment. See, in this respect, the judgment in 
United Sates v General Dynamics Corp., 415, US 486, 507 
(1974); and Areeda Turner, cited above, v o l . IV, 1980, 
p. 941. 
64 — In this case, whereas the concentration involves activities 
representing 3 000 jobs in total, the Peine group's offer was 
limited to the purchase of an operation affecting only 536 
jobs, that is, 18% of the jobs guaranteed by the concentra­
tion. Although primarily a matter for the legislature, the 
balance between the competition policy objectives and 
other aims of the Treaty is not outside the scope of the 
Court's case-law either see, for example, the judgment in 
the Europembaüale and Continental Can v Commission 
case (cited above m footnote 3), and also the judgment in 
Joined Cases 154/78, 205/78, 206/78, 226/78 to 228/78, 
263/78 and 264/78, 31/79, 39/79, 83/79 and 85/79 Valsabbia 
and Others v Commission [1980] ECR 907. 
I - 1408 
FRANCE A N D OTHERS v COMMISSION 
employees of the undertakings in question, 
'such as to affect the level or conditions of 
employment in the Community or a sub­
stantial part of it'. 65 The Court did not fail 
to refer, in those judgments, to recital 13 in 
the preamble to the regulation, cited above. 
Finally, it is significant that in this case the 
protection of employment is set in a wider 
context characterised by the need to over­
come the structural deficiencies of eastern 
Germany, where MdK is established. Even 
from that point of view, therefore, the 
decision is certainly consistent with the 
objective of economic and social cohesion 
referred to in recital 13. 
58. The French Government's second com­
plaint, which is closely connected with that 
just considered, relates, as I have stated, to 
the fact that the Commission did not attach 
any conditions and/or obligations to autho­
risation of the concentration as far as the 
German market is concerned, despite the fact 
that it gives rise to a monopoly on that mar­
ket (98% of the market). In particular, the 
Commission should, in the French Govern­
ment's opinion, have made the compatibility 
assessment conditional upon a specific com­
mitment by the undertakings to leave the 
German market open to competition, on the 
model of the Nestlé/Perrier decision. 66 
In reply, the Commission states that the 
Nestlé/Perrier decision is not at all relevant, 
since in this case the opening up of the mar­
ket to competition does not depend on the 
structure of that market, as it did in that 
case, but on buyer behaviour, and therefore 
on demand and not on supply. It notes, 
moreover, that the French Government has 
not specified what commitments might be 
imposed on K+S and MdK in order to 'open 
up the market to competition'. 
59. However, it is undoubtedly true that, as 
the French Government claims, it is not its 
task to propose solutions in this connection, 
since that is a matter for the Commission as 
the institution responsible for applying the 
antitrust rules. Nevertheless, the absence of 
suggestions on its part merely indicates the 
difficulty of finding conditions to attach to 
the concentration on the German market, 
which could open it up to competition. 
It is sufficient to observe in this connection 
that, even assuming that, in order to open up 
65 — Judgments in Case T-96/92 CCE de la Société Générale des 
Grandes Sources and Others v Commission [1995] ECR 
II-1213, paragraphs 28 and 29, and Case T-12/93 CCE de 
Vittel and Others v Commission [1995] ECR II-1247, para­
graphs 38 and 39. 
66 — Commission Decision 92/553/EEC of 22 July 1992 relating 
to a proceeding under Council Regulation (EEC) N o 
4064/89 (Case N o IV/M.190 — Nestíé/Perrier) (OJ 1992 
L 356, p. 1). 
I -1409 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
the German market to competition, despite 
the special features noted by the Commis­
sion, it was still necessary to influence its 
structure, the fact remains that a solution 
such as that adopted in the Nestlé/Perrier 
case was not practicable. Indeed, as I have 
stated, no alternative methods of acquisition 
were available in this case. Accordingly, I do 
not consider that the Commission's apprais­
als can be refuted by the applicant govern­
ment's objections. 
60. In conclusion, even taking account of the 
foregoing considerations concerning the par­
ticular socio-economic features of this case, I 
suggest that the Court should dismiss the 
plea in question and that the Commission's 
appraisal of the effects of the concentration 
on the German market should be approved 
as a whole. 
C — Effects of the concentration on the 
Community market apart from Germany 
(Cases C-68/94 and C-30/95) 
61. Both the French Government (Case 
C-68/94) and SCPA and EMC (Case 
C-30/95) challenge the decision's appraisal of 
the concentration in relation to the second 
relevant geographical market, namely that 
comprising all the Member States apart from 
Germany. Indeed, the applicants' complaints 
concern the very definition of that market, 
the possibility of applying the regulation to 
collective dominant positions, tne misuse, in 
this case, of the concept of collective domi­
nant position and, finally, the imposition of 
conditions and obligations on persons who 
are not parties to the concentration. 
It is appropriate to make clear that, since the 
arguments put forward by SCPA and EMC 
are for the most part included among those 
relied on by the French Government (which 
has, moreover, presented them more fully 
and in greater detail), I shall refer below, in 
particular, to the latter's arguments. Of 
course, I shall not omit to draw attention to 
the specific features of each of the actions in 
question. 
(1) Definition of the relevant geographical 
market 
62. The applicant government and undertak­
ings argue that insufficient reasons are given 
for identifying the Community (apart from 
Germany) as the second geographical market 
relevant for the purpose of appraising the 
concentration and that such identification is 
based on an incorrect and, in any case, par­
tial analysis of the factors to be taken into 
consideration. In particular, the French Gov­
ernment observes that the criteria used by 
the Commission for defining the geographi­
cal market at issue here should, if they were 
consistent with those usually employed 
when applying the regulation, have led it to 
I -1410 
FRANCE A N D OTHERS v COMMISSION 
deny the existence of a single market consist­
ing of the other Member States of the 
Community. That market, it maintains, is a 
very heterogeneous one, for several reasons. 
In reply, the Commission asserts that it 
legitimately and correctly defined the Com­
munity as a whole, apart from Germany, as a 
distinct geographical market, a definition 
which it adopted by reference to this specific 
case, and in particular to the nature and char­
acteristics of the product in question. That is 
why, according to the Commission, it is 
hardly relevant to refer to the criteria used in 
other cases. 
63. I shall begin by noting that the definition 
of the relevant geographical market, a neces­
sary and prior condition for any analysis of 
allegedly anticompetitive conduct, assumes 
even greater importance where, as in this 
case, it is sought to demonstrate the existence 
of a dominant position. 67 
Although the Commission undeniably 
enjoys a wide discretion on this question, it 
is clear that it is in any event for the 
Community judicature to verify the accuracy 
and validity of the analysis made in the 
decision and on which the finding of a col­
lective dominant position on the Commu­
nity market apart from Germany is based. 68 
64. It should be pointed out that the regu­
lation does not give any clear guidance on 
the definition of the relevant geographical 
market, and only Article 9(7) deals with the 
criteria necessary for assessing whether there 
is a distinct market within a Member State 
and therefore whether the conditions are ful­
filled for the Commission to refer the exami­
nation of the notified concentration to the 
competent authorities of that State. Those 
criteria are repeated in Section 5 of form 
CO: 69 'The relevant geographic market 
comprises the area in which the undertakings 
concerned are involved in the supply of 
products or services, in which the conditions 
of competition are sufficiently homogeneous 
and which can be distinguished from neigh­
bouring areas because, in particular, condi­
tions of competition are appreciably different 
in those areas. Factors relevant to the assess­
ment of the relevant geographic market 
include the nature and characteristics of the 
products or services concerned, the existence 
of entry barriers or consumer preferences, 
appreciable differences of the undertakings' 
market shares between neighbouring areas or 
substantial price differences.' 
67 — With reference to the concept of relevant market tout court, 
the Court, in its judgment in Case T-29/92 SPO and Others 
v Commission [1995] ECR II-289, pointed out that this 
aspect is more important for the purpose of applying 
Article 86 than for the purpose of applying Article 85. The 
remarks made on that occasion seem to me to be equally 
relevant to a dominant position arising from a concentra­
tion. 
68 — Judgment in the 'Flat Glass1 case, cited above in footnote 
38, paragraph 360. 
69 — Form CO, as provided for by Regulation N o 2367/90, cited 
above in footnote 13. 
I -1411 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
Among the factors to be taken into consider­
ation, according to the requirements of form 
C O , there is therefore no order of impor­
tance which would allow any one of them to 
be regarded as predominant or at any rate 
more significant than the others. Conse­
quently, while the Commission's claim that 
the criteria applied in earlier decisions are to 
be regarded as irrelevant in this case cannot 
be accepted, they must be regarded as consti­
tuting only one frame of reference, since the 
validity and consistency of the Commis­
sion's decisions must be assessed by refer­
ence to the particular context within which 
each specific case is set. 
65. That being so, I now turn to the various 
arguments put forward. First, in the appli­
cants' opinion, the Commission regarded as 
homogeneous a market comprising countries 
with no domestic production (Belgium, the 
Netherlands, Denmark and Greece), pro­
ducer countries in which production is struc­
turally higher than consumption (Spain and 
the United Kingdom) and others in which 
consumption is structurally higher than pro­
duction (France). Furthermore, the purchas­
ing strategies of the importing Member 
States are substantially different, so that 
almost all intra-Community trade consists of 
flows in one direction only and not of recip­
rocal movements which normally character­
ise a genuinely homogeneous market. 
According to the French Government, the 
Commission therefore lumped together 
totally different situations, whereas it could 
have established some degree of homogene­
ity only with regard to the non-producer 
countries. In its view, further proof of the 
lack of homogeneity of the market in ques­
tion derives from the examination of the 
market shares held by the suppliers, which 
vary considerably from one country to 
another, as well as from the concentration of 
supply. Even the analysis of the characteris­
tics of demand confirms, according to the 
applicant government, the non-existence in 
this case of a geographical market compris­
ing all the Member States apart from Ger­
many. In its view, the Commission's assess­
ment concerning the interchangeability of 
the products is incorrect since the choice of 
potash products depends on the geological 
nature of the soil, the size of the agricultural 
area, consumer habits and agricultural poli­
cies, as well as on the presence of potash 
industries within the country. 70 
66. The Commission counters this by stating 
that the inclusion of producer and non-
producer countries in the same market in no 
way implies an incorrect definition of the 
relevant geographical market, just as the 
presence of only one producer in a Member 
State is by no means decisive. Moreover, the 
existence of trade flows in only one direction 
does not preclude homogeneity of the mar­
ket concerned, 'with which, according to 
economic theory, it is perfectly compatible. 
According to the Commission, it is not pos­
sible to come to a different conclusion on the 
basis of the different purchasing strategies 
employed by the importing Member States, 
70 — The applicant undertakings, on the other hand, seem to 
agree with the Commission with regard to the interchange-
ability of products, but assert that this depends on how the 
relevant product market is defined and therefore does not 
affect the identification of the relevant geographical market. 
I -1412 
FRANCE AND OTHERS v COMMISSION 
still less on the basis of the different market 
shares held in the individual countries by the 
main operators, which is not a decisive factor 
in the definition of the relevant market since 
it may be due, for example, to pre-existing 
trade barriers or firmly established consumer 
habits. 
With regard to the characteristics of demand 
for the products in question, the Commis­
sion considers that it took them sufficiently 
into account and found, on the one hand, a 
high degree of interchangeability, since in no 
country except Germany do users have a 
clear preference for local products and, on 
the other, that all Community potash pro­
ducers had the capacity to produce the dif­
ferent types of potash. Consequently, unlike 
other cases in which it had found consumer 
preferences for well-known brands 71 or for 
domestic products 72 or extremely weak 
demand in a newly developing market, 73 in 
this case there is no evidence that the struc­
ture of demand points to the existence of 
distinct national markets. 
67. Second, according to the applicants, the 
analysis of transport costs and prices within 
the reference market, as carried out by the 
Commission, is not at all reliable. As far as 
transport costs are concerned, the Commis­
sion did not actually conduct an analysis but 
merely stated apodictically that transport 
costs are not an obstacle to trade flows. 
The survey of potash prices within the Com­
munity, is equally inadequate: the Commis­
sion failed to undertake, as it should have 
done, a comparative analysis of the prices 
charged by the various operators in each 
Member State. In order to demonstrate the 
absence of substantial differences in price 
levels between the various countries con­
cerned, it supplied statistics which were five 
years old and therefore unreliable. 
68. The Commission rejects the criticisms 
levelled at its analysis, objecting that the 
absence of trade flows between producer 
countries and importing countries is not 
always and not necessarily caused by trans­
port costs. On the other hand, the existence 
of trade between some non-adjacent coun­
tries (Germany and Portugal, Spain and Bel­
gium, Germany and Ireland) and, by con­
trast, its absence between neighbouring 
States (the United Kingdom and the Nether­
lands) show, in its view, that transport costs 
are by no means prohibitive. The Commis­
sion draws attention to the considerations set 
out in the contested decision (paragraph 42) 
which, it maintains, show that the level of 
those costs is not capable of preventing trade 
flows within the geographical market in 
question. 
71 — Commission Decision 91/403/EEC of 29 May 1991 (Case 
No IV/M043-Magneti Marelli/CEAc) (OJ 1991 L 222, 
p. 38). 
72 — Commission Decision of 6 November 1990 (Case No 
IV/M004 — Renault/Volvo) (OJ 1990 C 281, p. 2). 
73 — Nestlé/Perrier decision, cited above in footnote 66. 
I -1413 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
With regard to the prices charged in the 
Member States apart from Germany, the 
Commission points out that they are not 
markedly different. In fact, the maximum 
price difference within the Community is 
10%, whereas in Germany it is as high as 
20%. 
69. Finally, according to the applicant gov­
ernment and undertakings, the Commission 
should at least have isolated, in its appraisal 
of the proposed concentration, the French 
and Spanish markets in which, because of 
their particular characteristics, the conditions 
of competition are unlike those of the other 
Community partners. In particular, accord­
ing to the French Government, the Spanish 
market displays characteristics similar to 
those of the German market, whereas French 
market conditions are very unusual, deter­
mined by a production level below that of 
consumption and by the presence of a single 
large operator. 
The very fact of not separating the markets 
of the two States in question from that of the 
remainder of the Community eventually 
results, in the applicants' opinion, in a 
wholly distorted analysis of the conditions 
of competition before and after the concen­
tration, by giving a false picture of the bal­
ance of power between K+S and SCPA. 
70. The Commission points out that the 
presence of significant trade flows, albeit in 
only one direction, the absence of marked 
differences between prices and the inter-
changeability of the various potash products 
could only lead to the inclusion of Spain and 
France in the Community market apart from 
Germany, all the more so as the distribution 
methods used in those two countries are 
identical to those employed in the rest of the 
Community (apart from Germany). 
As far as France is concerned, the Commis­
sion also disputes that the conditions of 
competition on that country's market are 
different from the rest of the Community 
and points out that no importance can be 
attached, for this purpose, to the fact that 
K+S and SCPA/EMC have artificially kept 
the French market separate from the Com­
munity market. That does not in any way 
alter the fundamental homogeneity of the 
two markets, which stems from objective 
factors. 
71. That being so, I shall begin by noting 
that the unilateral nature of the trade flows, 
which is also acknowledged by the Commis­
sion, is unquestionably an important factor 
in defining the relevant geographical market 
since it could be inferred from it that there 
are barriers to the entry of individual coun­
tries, which could prevent the marketing of 
products and thereby demonstrate the exist-
I -1414 
FRANCE A N D OTHERS v COMMISSION 
enee of national markets. 74 This question 
should therefore have been examined in 
more detail by the Commission, which 
instead merely noted the presence of signifi­
cant trade flows between the Member States 
in question. 
Likewise, the Commission's disregard of the 
fact that the largest importers in the sector 
had and have substantial market shares in 
their own countries and significantly differ­
ent market shares in the other countries 
seems less than wholly convincing, as does 
the minor importance it attaches to the 
degree of concentration of supply. 
72. The deficiencies to which I have just 
drawn attention are not, however, such as to 
invalidate the Commission's appraisal, which 
seems to be founded on objective factors that 
are essentially undisputed. 
First, the conditions do not seem to have 
been met in this case for considering that the 
structure of demand indicates the existence 
of distinct national markets, particularly 
since there is, throughout the Community 
apart from Germany, a high degree of inter-
changeability between potash products and 
there are no particular consumer preferences 
for speciality products which are only avail­
able from local producers. 
73. With regard to the analysis of transport 
costs, a factor commonly considered to be 
among the most significant in defining the 
concept of relevant market, as the Court 
stated in the 'sugar case, 75 it is certainly true 
that the Commission has often confined 
itself to general assertions. 76 However, it 
does not seem to me that, in its objections, 
the applicant government has succeeded in 
showing that the differences in costs are such 
as to constitute 'barriers to entry': it is well 
known, as the Court has held, that different 
transport costs are not relevant for this pur­
pose if they are 'not discriminatory'. 77 
A similar observation may apply to the 
analysis of prices of the products in question, 
which are another important factor to be 
taken into account, according to the opinion 
expressed by the Commission in previous 
cases. 78 While it is true that the only infor­
mation supplied by the institution as evi-
74 — On the other hand, reasoning a contrario, trade patterns 
characterised by mutual interpénétration have always been 
regarded by the Commission as an important, although not 
decisive, indication of belonging to the same geographical 
market: see the Mannesmann/Vallourec/Ilva decision cited 
above in footnote 58, paragraphs 33 to 37. In this respect, 
and to the same effect, see Cook and Kerse, cited above in 
footnote 48, p. 145 et seq. 
75 — Judgment in Joined Cases 40/73 to 48/73, 50/73, 54/73 to 
56/73, 111/73, 113/73 and 114/73 Suiker Unie v Commis­
sion [1975] ECR 1663, paragraph 372. 
76 — For example, in the decision it asserts that 'transport costs 
... tend to vary ... In any case, they do not appear to be of a 
level capable of preventing significant trade flows within 
the Community outside Germany' (paragraph 42 of the 
decision). 
77 — See the judgment in Case 27/76 United Brands v Commis­
sion [1978] ECR 207, paragraphs 52 and 53. 
78 — See, for example, the Magneti Marelli/CEAc decision, cited 
above in footnote 71. 
I -1415 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
dence of the absence of significant differ­
ences in price levels between States consists 
of a few statistical data provided by the FAO 
for the period from 1987 to 1989 and of the 
reference to the 1992 prices charged by K+S 
in Belgium, the Netherlands and Germany, it 
is also true that neither the French Govern­
ment nor the applicant undertakings have 
countered the Commission's analysis with 
any evidence to the contrary. Indeed, they 
have actually affirmed that there is no sub­
stantial difference between prices, while 
attributing this to the transparency of the 
market and not to its homogeneity. 
74. If one adds to the foregoing consider­
ations the fact that the applicants have not 
disputed the substantial uniformity of the 
distribution methods adopted in the different 
States, which is such as to preclude the exist­
ence of barriers to entry similar to those 
existing in Germany, the Commission's 
analysis can only be regarded as essentially 
correct and sufficiently reasoned. 
Nor would it be possible to come to a differ­
ent conclusion on the basis of the arguments 
put forward by the French Government in 
order to show that France and Spain are 
independent markets which cannot be 
lumped together with the other Community 
countries, although the Commission's pos­
ition is not entirely free from contradictions. 
75. It must be acknowledged in this connec­
tion that, in the analysis of so-called 'barriers 
to entry', 79 the existence of SCPA's statu­
tory monopoly (even though limited to the 
transit of imports from countries outside the 
Community), which is regarded by the 
Commission as a major barrier to entry to 
French territory, 80 is not taken into consid­
eration in any way thereafter in order to 
establish whether or not France may consti­
tute a distinct market. Nor can such incon­
sistency be explained, as the Commission 
claims, by the distinction between barriers 
which prevent intra-Community trade and 
those which hinder trade with non-
Community countries. Indeed it seems 
doubtful, to say the least, whether SCPA's 
distribution monopoly has any effect on the 
entry of products from non-Community 
countries into the market of the other Mem­
ber States, since certain data supplied by the 
French Government, and not disputed by 
the Commission, show that the contrary is 
the case. 81 
The contradictions to which I have just 
drawn attention do not, however, appear suf­
ficient to justify acceptance of the French 
Government's argument; according to the 
Commission's assessments, which have not 
been disputed, both France and Spain dis­
play, as regards competition, similar charac­
teristics to the rest of the Community mar­
ket from the point of view of product 
interchangeability, opening up of markets 
(confirmed by the large volumes of imports), 
79 — Public monopolies are prominent among barriers to entry: 
see, for example, the Commission Decision of 29 April 
1991 (Case No IV/M.063 — ELF/Ertoil) (OJ 1991 C 124, 
p. 13). 
80 — See section 53 of the defence. 
81 — Data cited in section 78 of the reply. 
I -1416 
FRANCE AND OTHERS v COMMISSION 
price levels and distribution systems. Even in 
respect of those two countries, therefore, 
there is sufficient evidence for regarding the 
Commission's decision to include them in 
the market comprising all the Member States 
apart from Germany as justified. 
76. In the light of the foregoing consider­
ations, I am of the opinion that the definition 
of the geographical market given in the 
decision must essentially be endorsed, above 
all in its conclusions. 
The Commission could, and perhaps should, 
have justified its assessments more fully; on 
closer examination they prove not to be 
without a few approximations. However, it 
does not seem to me that some degree of 
homogeneity in the conditions of compe­
tition on the market comprising all the 
Member States apart from Germany can 
plausibly be denied or, more particularly, 
that the French Government's objections can 
lend weight to the opposite conclusion. It 
should be borne in mind, moreover, that, as 
the Court has held, 'homogeneity' of condi­
tions of competition for the purposes of this 
case does not mean perfect equality of condi­
tions in the different parts of the territory 
regarded as the relevant market. Rather, what 
is required is that the conditions of compe­
tition should be sufficiently homogeneous to 
appear non-discriminatory, 82 that is, such as 
to enable traders to engage in competition on 
an equal footing. 
77. In this case, it does not seem to me that 
the applicant government's arguments make 
it possible to regard as not homogeneous, in 
the sense used here, the conditions of com­
petition within the market defined as rel­
evant by the Commission. Accordingly, I 
propose the Court should reject the plea put 
forward by the French Government. 
(2) Possibility of using the regulation as the 
basis for action in relation to collective domi­
nant positions 
78. It will be recalled that the conditions to 
which authorisation of the concentration in 
question was made subject were specifically 
intended, on the basis of the analysis made 
by the Commission, to remove any basis for 
creating a situation of oligopolistic domi­
nance by K+S and SCPA on the relevant 
market. 
Both the French Government and SCPA and 
EMC, which in any event dispute the exist­
ence of a collective dominant position in the 
present case, assert that the regulation does 
not even apply to circumstances of this type. 
82 — Judgment in the United Brands v Commission case, cited 
above in footnote 77, paragraphs 44, 52 and 53. 
I - 1417 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
79. The applicants maintain that it is not 
possible, even from a theoretical and general 
perspective, to rely on the concept of collec­
tive dominant position in the context of 
applying the rules on the control of concen­
trations. There are several reasons for this: 
— first, it is precluded by the wording: 
Article 2 of the regulation, unlike Article 
86 of the Treaty ('... one or more under­
takings ...'), does not expressly provide 
for the case of a collective dominant pos­
ition; 
— second, neither the legal bases of the 
regulation (Articles 235 and 87 of the 
Treaty) nor the legislature's intention 
allow application of the provisions on 
concentrations to situations of oligopolis­
tic dominance; 
— finally, further confirmation is to be 
found in the procedural guarantees 
accorded to third parties by the regu­
lation; in particular, the undertakings 
forming part of a collective dominant 
position, but not of the concentration, 
would have insufficient means of protec­
tion. 
80. The Commission counters those argu­
ments with the following: 
— The wording of the regulation, and in 
particular the fact that it does not provide 
expressly for the case of a dominant pos­
ition held by several undertakings, in no 
way precludes its application to cases 
involving the formation or strengthening 
of collective dominant positions. It is sig­
nificant that Article 2(3) links the domi­
nant position to the concentration, and 
not to the undertakings concerned, by 
taking into consideration its implications 
for effective competition. 
— The legal bases of the regulation show 
that its objective is to fill a gap left in the 
rules on competition by Articles 85 and 
86 with regard to the control of oligopo­
listic dominant positions. Nothing in the 
preparatory work or in the declarations 
cited by the French Government sup­
ports the conclusion that the Council 
intended to exclude application of the 
regulation for the purpose of declaring 
unlawful or eliminating collective domi­
nant positions. 
— A decision authorising a concentration is 
binding only and exclusively on the noti­
fying undertakings. Since the act closing 
proceedings initiated pursuant to the 
regulation cannot cause any harm to 
I -1418 
FRANCE A N D OTHERS v COMMISSION 
third parties, even where they form part 
of the collective dominant position in 
question, it is inappropriate to speak of a 
lack or inadequacy of guarantees for 
third parties. In any case, the detailed 
procedural rules for implementing the 
regulation afford ample protection for the 
rights and interests of third parties. 
— The possibility of prohibiting a concen­
tration which would strengthen the oli­
gopolistic framework of the market arises 
from the economic theory which holds 
that competition is at all events affected, 
provided that certain conditions are ful­
filled, within an oligopolistic market. The 
use of the regulation as a basis for action 
in relation to a collective dominant pos­
ition is therefore vital in order to ensure 
effective competition. 
— The wording 
81. I shall begin by observing that the appli­
cants' view is difficult to dispute: the regu­
lation, and in particular Article 2 thereof, 
contains no reference, even indirectly, to the 
concept of oligopolistic dominant position. 
That is all the more significant if it is borne 
in mind, as the applicants point out, that 
Article 86 of the Treaty provides, on the 
contrary, and expressly, that any abuse of a 
dominant position by 'one or more under­
takings' is incompatible with the common 
market. 
Clearly, Article 2(3), which, as the Commis­
sion maintains, does indeed link the domi­
nant position to the concentration and not to 
the undertakings concerned, refers to the 
dominant position of the concentration and 
not to the dominant position involving 
undertakings which are not parties to the 
concentration. In those circumstances, it 
would be too easy to evoke the well-known 
adage ubi lex voluit, dixit, ubi noluit tacuit. 
82. However, while it is true that the word­
ing can only lead to the conclusion that the 
regulation is aimed solely at discouraging 
concentrations which create or strengthen a 
dominant position held by a single undertak­
ing, and does not cover those which result in 
dominance by several undertakings, 83 it is 
also true that the wording of Article 2 of the 
regulation cannot be considered decisive, 
since that provision must be read in the light 
of the regulation in its entirety and of its 
underlying objective. 
83 — For this view, see, for example, Siragusa-Subiotto: 'Il con-
trollo delle concentrazioni a livello CEE: una prima analisi 
critica delle decisioni della Commissione', in Giurisprudenza 
Commerciale 1992, I, 233, in particular pp. 271 and 272. 
The position of some writers is more qualified, since they 
merely draw attention to the difficulty of accepting the 
opposite view: thus, among others, Cook and Kerse, cited 
above in footnote 48, p. 134 et seq.; Korah: EC Competition 
Law and Practice, London, 1994, p. 242; Bellamy and 
Child: Common Market Law of Competition, London, 
1993, pp. 343 and 344. 
I -1419 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
This brings me to the other arguments relied 
on by the applicants and relating to the legal 
bases, to the legislature's intention (as it 
appears from the preparatory work and is 
reflected in the wording of the regulation) 
and to the procedural guarantees, as well as 
to the economic considerations put forward 
by the Commission, which are closely linked 
to the objectives of the rules on competition. 
— Legal bases and intention of the legisla­
ture 
83. Let it be said immediately that I do not 
share the applicants' view that the choice of 
legal bases is in itself a ground for conclud­
ing that the regulation does not apply to col­
lective dominant positions. In principle, 
Articles 87 and 235 can indeed be used for 
that purpose. On the other hand, it seems to 
me that neither the fact that the regulation is 
based mainly on Article 235, rather than on 
Article 87, nor the declaration by the Coun­
cil and the Commission on Article 22 of the 
regulation, in so far as it precludes the appli­
cability of Articles 85 and 86 to concentra­
tions, 84 can be relied on. 
It is hardly necessary to add that it is difficult 
to see any other possible basis for preventive 
action against collective dominant positions 
created or strengthened as a result of concen­
trations, unless the view were taken, albeit 
unreasonably, that the Treaty itself precludes 
such a possibility. 
84. Unlike the Commission, however, I am 
unable to infer from such a conclusion that 
the regulation in its present version actually 
authorises action against collective dominant 
positions. I shall merely observe that the fact 
that the legal basis chosen is undoubtedly 
capable of conferring specific powers does 
not in itself mean that those powers have in 
fact been conferred. The fact remains that, 
being founded on that legal basis, certain 
powers have been provided for and not oth­
ers. 
In the end, the point is whether the wording 
of the regulation confirms, either expressly 
or even implicitly, that the power to take 
action against collective dominant positions 
has been conferred on the Commission. 
However, it seems to me that the text as a 
whole tends to support a restrictive interpre­
tation of Article 2. 
85. That conclusion is supported, for 
example, as the applicant undertakings have 
asserted, by the wording of recital 15 in the 
84 — Apart from the fact that, as the Court has consistently held, 
verbal declarations have limited legal significance (see, for 
example, the judgment in Case C-292/89 Antonissen [1991] 
ECR I-745, paragraph 18) and that the declaration in ques­
tion cannot in any event be so construed as to restrict the 
scope of Articles 85 and 86, the fact remains that such a 
declaration certainly cannot be used in support of the con­
clusion that the legal basis constituted by Article 87 of the 
Treaty is in fact limited in scope, with the result that the 
concept of collective dominant position cannot be linked to 
Article 86. 
I - 1420 
FRANCE A N D OTHERS v COMMISSION 
preamble to the regulation, on the basis of 
which 'concentrations which, by reason of 
the limited market share of the undertakings 
concerned, are not liable to impede effective 
competition may be presumed to be compat­
ible with the common market' and 'an indi­
cation to this effect exists, in particular, 
where the market share of the undertakings 
concerned does not exceed 25%' . In their 
view, the choice of that percentage would be 
inappropriate if the regulation also applied to 
collective dominant positions. 85 
However, it is quite true that the presump­
tion of incompatibility of a dominant pos­
ition on the basis of a total market share in 
excess of 25%, as contained in the recital, is 
not repeated in the operative part of the 
regulation. 86 It is also true that, in the deci­
sions adopted pursuant to the regulation, 
market shares are only the starting point for 
appraising the effects of the concentration 
since many other factors must be taken into 
consideration. 87 However, if any significance 
is to be attached to recital 15, it would not be 
unreasonable to regard it as evidence of the 
legislature's intention not to include cases of 
collective dominance within the scope of the 
regulation, since the 25% share is certainly 
rather low for an oligopoly. 88 
86. Furthermore, the preparatory work 
would seem rather to confirm the legisla­
ture's intention not to apply the regulation 
to collective dominant positions. Although it 
is well known that the Commission's inten­
tion, as indicated during the process of draft­
ing the act and expressed on several occa­
sions, was to apply the rules in question to 
oligopolies, 89 it is also true, as the Commis­
sion has pointed out, that the present word­
ing of Article 2(3) is the result of a difficult 
compromise reached specifically on the 
question of collective dominant positions. 90 
It is worth noting at this juncture that a 
comparison between the final amended 
85 — For this view, see also Cook and Kerse, cited above in foot­
note 48, p. 134. 
86 — The Commission has drawn attention to this in, for 
example, the Decision of 18 December 1991 (Case N o 
IV/M.165 — Alcatel/AEG Kabel) (OJ 1992 C 6, p. 23), 
paragraph 22. 
87 — Sec, for example. Commission Decision 94/359/EC of 21 
December 1993 declaring a concentration compatible with 
the common market (Case N o IV/M.358 —Pilkington-
Techint/SIV) (OJ 1993 L 158, p. 24). I would point out, 
moreover, that, m the Court's case-law on Article 86, a 
market share, while constituting important evidence of the 
existence of a dominant position where equal to or greater 
than 80%, is not necessarily a decisive factor, but must be 
taken into consideration together with other factors: to this 
effect, see, among others, the judgment in Case 247/86 
Alsatel v Novasam [1988] ECR 5987, paragraph 19. 
88 — In this connection, for example, the German Law against 
restrictions on competition, which is actually based on a 
structural approach linked to a system of presumptions by 
reference to the market shares held by undertakings, pro­
vides for a threshold of at least 50%. More specifically. 
Paragraph 23(2)(2) of that Law provides: 'For the purposes 
of the control of concentrations, a group of undertakings 
shall also be regarded as being in a dominant position 
where: 
1. it comprises three or fewer undertakings which hold the 
highest market share and account, in aggregate, for a 50% 
share, or 
2. it comprises five or fewer undertakings which hold the 
highest market share and account, in aggregate, for a two-
thirds share, unless they show that conditions of compe­
tition are such that significant competition can be expected 
to take place between them even after the concentration, or 
where all those undertakings together do not hold a domi­
nant position in relation to the remaining competitors ...'. 
89 — It is sufficient to refer, for this purpose, to the Sixteenth 
Report on Competition Policy, 1986, in particular section 
333. 
90 — See p. 36 of the rejoinder. 
I - 1421 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
proposal submitted by the Commission 91 
and the definitive text shows that the refer­
ence to obstacles to the maintenance and 
development of effective competition, as set 
out in the former, was subsequently replaced 
by the concept of 'dominant position', which 
undeniably refers to the wording of Article 
86. Accordingly, it must be accepted that the 
final text is the result of a conscious choice 
determined, as the Commission has 
acknowledged, by the difficulty of reaching 
agreement on this point. 
87. However, regrettable though it may be 
that the Council took its decision in accord­
ance with the wishes of some of its members 
and against those of others, no-one except 
the legislature itself can do anything about it. 
I am not swayed by the Commission's argu­
ment that, as a result, in the absence of a 
provision expressly precluding the applica­
bility of the regulation to collective domi­
nant positions, that question has been left 
open. In any event, I do not believe that the 
Commission can take the view, as it claims, 
that it has the power to resolve issues delib­
erately left unresolved by the Member States. 
To put it more clearly, to believe otherwise 
would amount to supporting a sui generis 
criterion of subsidiarity, according to which, 
whenever it deemed it appropriate or neces­
sary, the Commission could deputise for 
other institutions and, in particular, for the 
legislature. It would certainly be more in 
keeping with the rules, from this point of 
view, if the Commission were to take the ini­
tiative in proposing an amendment to the 
regulation along the aforementioned lines. 
Failing that, I would be very hesitant to state 
that the Commission and the Court may, 
when applying and/or interpreting rules, fill 
any lacunae deliberately left by the legisla­
ture. 92 
88. In conclusion, even the preparatory 
work would seem to confirm that the legis­
lature's intention, as reflected in the wording 
of the regulation, is that the latter should not 
apply to collective dominant positions. That 
finding is not, however, decisive for the pur­
poses of this case. The fact remains that the 
preparatory work can, at most, provide guid­
ance but is not conclusive since, in order to 
establish the correct interpretation of a pro­
vision, it is necessary to refer to its wording 
and purpose. 
— Procedural guarantees 
89. I now turn to an aspect which is unques­
tionably of fundamental importance in this 
context. Both the French Government and 
the applicant undertakings maintain, as I 
91 — COM(88) 734/Final. 
92 — Trabucchi, cited above in footnote 31, p. 503, referring to 
the case-law on competition, has stateci that 'the frequent 
reference to economic data and the significance attached to 
them in reaching judicial decisions are by no means con­
trary to the essential function of the Court, which is to com­
ply with and enforce the Treaty and the legislation adopted 
under it... When the rule exists, it must be complied with 
fully ...'. 
I - 1422 
FRANCE A N D OTHERS v COMMISSION 
have already stated, that the fact that the 
regulation must not and cannot be applied to 
collective dominant positions is decisively 
confirmed by the absence from its provisions 
of procedural guarantees capable of protect­
ing the rights of undertakings which, even 
though they are not involved in the concen­
tration, are part of a collective dominant pos­
ition. 
I have already drawn attention, in examining 
the admissibility of the applicant undertak­
ings' action, to the lack of justification for 
the Commission's view that the act closing 
proceedings initiated pursuant to the regu­
lation is binding only on the parties to the 
concentration, with the result that it could 
under no circumstances cause damage to 
third parties. Without citing other examples, 
it is precisely this case which, in an 
extremely significant way, indicates the con­
trary. 93 
90. That being so, it is necessary at this junc­
ture to establish whether the procedural 
guarantees provided for by the regulation in 
order to protect third parties can be consid­
ered appropriate even where the 'third par­
ties' are part of the oligopoly to which the 
Commission's decision relates. 
Let me say at once that the participation of 
third parties in the proceedings, as provided 
for by the regulation, does not seem capable, 
in this case, of ensuring appropriate protec­
tion for the right to a fair hearing. First, the 
undertakings which are presumed to be 
members of the oligopoly but are not parties 
to the concentration are not given any spe­
cific information. Secondly, under Article 
18(4), third parties are heard only in so far 
as the Commission or the competent 
authorities of the Member States deem it 
necessary also to hear other natural or legal 
persons (who must obviously be taken to 
include the undertakings not parties to the 
concentration) or where, on their initiative, 
the latter show a sufficient interest. Conse­
quently, as Regulation N o 2367/90 M (appli-
93 — It is only coo obvious that the damage suffered by the 
applicant companies as a result of the decision is the direct 
consequence of the behaviour adopted by the undertakings 
involved in the concentration in compliance with the Com­
mission's requirements. This was perceived moreover by 
the President of the Court of First Instance hearing the 
application for interim measures. In the Order in Case 
T-88/94 R (cited in footnote 30), which suspended the 
operation of Article 1 of the contested decision in so far as 
it requires withdrawal from Kali-Export, the President 
notes that the possibility cannot be excluded that the con­
dition in question 'might injure the rights of third parties, 
in this case those of the two other partners in Kali-Export 
... which were not parties to the proceedings before the 
Commission' (paragraph 28). 
94 — Cited above in footnote 13. In the same way as Regulation 
N o 99/63/EEC of the Commission of 25 July 1963 on the 
hearings provided for in Article 19(1) and (2) of Council 
Regulation N o 17 (OJ, English Special Edition 1963-64, 
p. 47), this regulation governs only the hearings of the par­
ties to the concentration (Articles 13 and 14), whereas for 
third parties, such as the applicant undertakings in this case, 
according to the Commission, it provides for an arrange­
ment for them to be heard upon application, without any 
procedural guarantees (Article 15). In this regard, the 
French Government has pointed out that such hearings are 
in practice merely contacts with Commission officials and 
can in no way satisfy the requirements of informing and 
protecting persons who are fully involved in the proceed­
ings, such as the 'parties' to the oligopoly which would be 
created following the concentration. It must be made clear 
that Regulation N o 2367/90 has been replaced by Regu­
lation N o 3384/94 (cited in footnote 13), the provisions of 
which are, in certain respects, more protective. As far as is 
relevant here, however, the terms of the problem have 
remained essentially unchanged. While it is true that third 
parties who have submitted written observations may, pur­
suant to Article 16 of the new regulation, take part in an 
official hearing, it is also true that such a possibility is at the 
Commission's discretion. 
I - 1423 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
cable rationetemporis to this case) confirms, 
those proceedings are non-mandatory and 
informal, given that they are conducted 
without the participation of the representa­
tives of the Member States' authorities and 
without the formal requirements and guaran­
tees laid down for the hearing of the parties. 
In short, they are proceedings which are 
capable of protecting the rights of those who 
really are 'third persons' (in every sense of 
the term), but not the rights of those who are 
'parties' to the dominant position. 
91. The analysis carried out by the French 
Government, which compared the proce­
dural arrangements laid down by Regulation 
N o 2367/90 pursuant to Article 18(4) of the 
regulation with the mechanism envisaged for 
proceedings initiated under Articles 85 and 
86, merely confirms the inadequacy of the 
guarantees provided for the right to a fair 
hearing of undertakings which are members 
of an oligopoly but are not involved in the 
concentration. 95 
That analysis clearly shows that, unlike 
undertakings holding a collective dominant 
position as referred to in Article 86, under­
takings participating in an oligopoly alleg­
edly created or strengthened by a concentra­
tion in which, however, they are not 
involved, are treated as 'third persons', with 
the negative consequences which inevitably 
flow from that as regards the right to a fair 
hearing. 
92. However, it is hardly necessary to point 
out that respect for the right to a fair hearing 
in administrative proceedings is an essential 
principle of the Community legal order. As 
the Court has held on numerous occasions, 
'observance of the right to be heard is, in all 
proceedings initiated against a person which 
are liable to culminate in a measure adversely 
affecting that person, a fundamental principle 
of Community law 'which must be guaran­
teed even in the absence of any rules govern­
ing the procedure in question'. 96 
That lends some credence to the Commis­
sion's view that, since respect for the right to 
a fair hearing constitutes a fundamental right, 
any absence of specific procedural guarantees 
from the regulation is of no importance for 
the purposes of its applicability to collective 
dominant positions. In any event, third 
95 — As the French Government points out (pp. 20 to 23 of the 
application), proceedings under Article 86 are, in accord­
ance with Regulations N o 17 (cited in footnote 51) and N o 
99/63 (cited in the previous footnote), always inter partes 
with the undertakings deemed to be in a dominant position, 
which are, from the very outset, informed of the proceed­
ings initiated against them and given the opportunity to 
defend themselves. 
'6 — Judgment in the Belgium v Commission case, cited in foot­
note 56, paragraph 27. This means, as the Court has pointed 
out, that 'the person against whom an administrative pro­
cedure has been initiated must have been afforded the 
opportunity, during that procedure, to make known his 
views on the truth and relevance of the facts and circum­
stances alleged and on the documents used by the Commis­
sion to support its claim that there has been an infringe­
ment of Community law'. See to the same effect the earner 
judgment in Case 85/76 Hoffmann-La Roche v Commission 
[1979] ECR 461, paragraphs 9 and 11. 
I - 1424 
FRANCE A N D OTHERS v COMMISSION 
persons, as well as parties, remain fully 
entitled to receive the necessary protection. 
93. That is certainly an attractive argument, 
but one with which I am nevertheless unable 
to agree. While it is true that the right to a 
fair hearing must in any event be observed, 
quite apart from individual express provi­
sions to that effect in relation to any circum­
stances likely to arise, it is nevertheless true 
that it would be paradoxical to allow the 
Commission to take refuge behind such a 
screen when it has made no provision, 
despite the adoption of specific legislation on 
the subject, of which Regulation N o 2367/90 
is clearly an example, for the necessary guar­
antees in favour of those who may be injured 
by the application of the rules in question. 
That said, I recognise that the Court could 
overcome the problem by stating that it 
would suffice to extend the guarantees pro­
vided for the parties to the concentration so 
as to cover the parties to the presumed oli­
gopoly. The fact remains, however, that the 
absence of provisions to that effect in the 
regulation can only confirm, as the appli­
cants have maintained, that the regulation is 
not, or at least was not intended by the leg­
islature, to be applied to collective dominant 
positions. Finally, it is scarcely necessary to 
add that, in this case, observance of the right 
to a fair hearing, to which the applicant 
undertakings were (according to the Com­
mission) in any event entitled, was certainly 
not ensured. 97 
— Economic considerations and objectives 
of the regulation 
94. I now turn to the economic arguments 
put forward by the Commission, which are 
closely linked to the objective of ensuring 
effective competition. 
Essentially, the Commission's view is that it 
is vital to bring oligopolistic situations under 
control 98 since they could result in damage 
to competition at least as severe as that 
caused by an individual dominant position. 
The applicability of the regulation to collec-
97 — It is worth pointing out that, following repeated requeste 
on their part, the representatives of the applicant companies 
were received by Commission officials only on 1 December, 
that is, two days before the meeting of the Advisory Com­
mittee and thus when the die was already cast. Even if it 
were true that, as the Commission asserts but the applicants 
deny, SCPA's representatives were received by the officials 
of the institution as early as 3 November 1993, the position 
would remain unchanged, given the essential 'opacity' of 
the whole procedure for third parties, all the more so as the 
Commission states that it was only on 1 December that the 
undertakings given by K+S were discussed with the French 
company's representatives. 
98 — The need for this is confirmed by the fact that all the main 
antitrust systems apply the rules on the control of concen­
trations to oligopolistic dominance as well: for a compara­
tive analysis, see Briones: 'Oligopolistic dominance: is there 
a common approach in different jurisdictions? A review of 
the decisions adopted by the Commission under the Merger 
Regulation', in ECLR, 6, 1995, p. 334 et seq. 
I - 1425 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
tive dominant positions is based, in the final 
analysis, on the need to control oligopolies 
in order to safeguard competition. 99 
95. I shall begin by noting that the Commis­
sion's concern is justified, especially if it is 
examined in the light of the economic and 
legal implications of oligopolistic situations. 
It is hardly necessary to point out that an 
oligopoly, that is to say, a market supplied 
by only a handful of undertakings, 100 can 
produce harmful effects very similar to those 
generally attributed to a monopoly. 101 
Added to that is the undeniable fact that, on 
the one hand, there is a certain correlation 
between concentration and market power, 
understood specifically as the power to raise 
prices by reducing production and increasing 
profit margins, and, on the other, that con­
centrations can foster collusion between 
competitors and the adoption of parallel, 
even if not concerted, conduct. 
The Commission has also pointed out that 
the problem could not be resolved by relying 
on Articles 85 and 86 of the Treaty either, 
since those provisions do not always or in all 
circumstances allow effective action to be 
taken against oligopolies. Indeed, at times an 
oligopoly cannot be contained by recourse 
to the prohibition of agreements, decisions 
and concerted practices since, as the Court 
made clear in its judgment in the 'Woodpulp' 
case, parallel conduct, which sums up the 
very concept of an oligopoly, 'cannot be 
regarded as furnishing proof of concertation 
unless concertation constitutes the only 
plausible explanation for such conduct. It is 
necessary to bear in mind that, although 
Article 85 prohibits any form of collusion 
which distorts competition, it does not 
deprive economic operators of the right to 
adapt themselves intelligently to the existing 
and anticipated conduct of their competi­
tors'. 102 Moreover, reliance on Article 86 is 
limited by the nature of the provision itself 
which can affect only pre-existing situations 
of dominance. 
96. However, the lacunae to which I have 
just drawn attention do not seem to me suf­
ficient to justify the application of the regu­
lation to oligopolistic dominance; nor does 
the 'Woodpulp' judgment appear to me to 
99 — It is precisely from this perspective that certain writers 
have by no means ruled out the possibility of applying the 
regulation to cases of oligopolistic dominance where 
effective competition is significantly impeded by several 
undertakings which, together, are in a position to act 
independently of their competitors and customers. See, for 
example, Jones, Gonzales-Diaz: 'The EEC Merger 
Regulation', London 1992, p. 168 et seq.; and Venit: 'The 
Evaluation of Concentrations under Regulation 4064/89: 
The nature of the beast', in International Mergers and 
Joint Ventures, Annual Proceedings of the Fordham 
Corporate Law Institute, 1991, p. 519, in particular p. 540 
et seq. 
100 — Based on the pioneering study on the subject by Cournot: 
Recherches sur Us principes mathématiques de la théorie 
des richesses, Paris 1848, the economic theory of the oli­
gopoly has given rise to a large number of remarkable 
contributions: for a summary see Pigassou: Les oligopoles 
et le droit, Paris, 1983, Ch. I I I , pp. 151 to 260. 
101 — Areeda and Turner Antitrust Law, vol. III, Boston/ 
Toronto, 1978, p. 359: 'oligopoly with monopoly-like 
results'. This view finds support in economic theory 
which identifies, in similar situations, the same conditions 
of exercise of market power justifying the application of 
antitrust provisions to monopoly situations; and which 
even considers that the oligopoly may be a source of 
greater dangers for competition than individual dominant 
positions, since the latter tend to dwindle away in rime 
under the effect of competition from smaller undertakings, 
whereas a strong oligopoly may, in certain circumstances, 
last for a long time. See, in that regard, Scherer and Ross: 
Industrial Market Structure and Economic Preference, 
Boston, 1990. 
102 — Judgment in the 'Woodpulp' case, cited above in footnote 
52, paragraph 71. 
I -1426 
FRANCE A N D OTHERS v COMMISSION 
contain any indications of the kind sought 
by the Commission: the fact that parallel 
conduct exists which cannot be punished on 
the basis of Article 85 103 does not in itself 
mean that such conduct must in any event be 
punished; nor, above all, can it justify a 
broad interpretation of the regulation, as 
proposed by the Commission. 
Moreover, the preceding observation high­
lights very significantly the inconsistency of 
the position adopted by the Commission in 
this case: as we have seen, it relies on the 
inappropriate nature of the legislative instru­
ments furnished by Articles 85 and 86 for 
taking action against oligopolies, a fact 
which, in its view, justifies a broad interpre­
tation of Article 2(3) of the regulation. How­
ever, on closer examination, the action taken 
by the Commission against the alleged 
K+S/SCPA/EMC duopoly consisted of an 
'order' to the first-named undertaking to 
sever its contractual links with the other two. 
In those circumstances, that is, faced with 
obvious signs of 'concertation', why not use 
Article 85? 104 
97. I note, finally, that not even the practice 
followed in applying the regulation, referred 
to on a number of occasions in the course of 
the proceedings, offers any arguments in 
support of a different solution. In fact, in the 
Nestlé/Perrier decision, in which the Com­
mission did not conceal its intention to 
develop an independent concept of collective 
dominance, the applicability of the regu­
lation to oligopolies was based mainly on 
Article 3(g) of the Treaty. 105 
It is quite true that that provision is referred 
to in general terms in recital 1 in the pre­
amble to the regulation and that, having the 
objective of protecting effective competition, 
it can only apply to any kind of anticompeti­
tive situation, whether attributable to one or 
to more than one undertaking. It is equally 
true, however, and should be borne in mind, 
that that provision also states that it is to be 
implemented only 'as provided for in this 
Treaty and in accordance with the timetable 
set out therein'. 
98. All the factors which I have so far exam­
ined raise numerous doubts as to the possi-103 — On this question, in all its implications, see the detailed 
Opinion of Advocate General Darmon in the 'Woodpulp' 
case [1993] ECR I-1445. Sec also, for a recent exhaustive 
study of the case-law on the subject, Soames: 'An Analysis 
of the Principles of Concerted Practice and Collective 
Dominance: A Distinction without a Difference', in ECLR 
1996, p. 24. 
104 — The answer to this question may lie in the need for expe­
diency. It would be confirmed, for example, by the fact 
that one of the undertakings originally provided for, 
namely that relating to Potacan, which was subsequently 
converted into an informal solution examined above 
(under Admissibility) was in fact the subject-matter of a 
proceeding initiated pursuant to Regulation N o 17. 
105 — Decision 92/553, cited above in footnote 66. The decision 
goes on to sute that, if the regulation were not applicable 
to oligopolistic situations, it would follow that the 
national authorities, which before its introduction would 
have been able to penalise such situations under their 
national provisions, would have abandoned such control 
altogether 'without any substitute for it at Community 
level' (paragraph 115). 
I - 1427 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
bility of relying on the concept of collective 
dominant position in the context of the pro­
visions of the regulation on concentrations. 
In the final analysis, I consider that the regu­
lation is not applicable to oligopolistic domi­
nant positions and that this interpretation of 
the relevant provisions is the most consis­
tent, not only with their wording, but also 
with the rationale on which they are based 
and, more generally, with the overall scheme 
of the system. While finding some justifica­
tion in economic terms for the opposite 
solution, it would have a number of negative 
consequences; and above all, in view of the 
absence of similar reference parameters in 
the form of legislation and/or regulations to 
those existing in other antitrust systems, it 
would ultimately foster uncertainty. That 
would, moreover, be contrary to the require­
ment, emphasised on several occasions, that 
Community legislation must be unequivocal 
and its application must be predictable for 
those who are subject to it. 106 
Of course, as I noted earlier, the Commis­
sion's concerns relating to the negative con­
sequences which the non-application of the 
regulation to oligopolies could have as 
regards the penalisation of anticompetitive 
conduct cannot and must not be overlooked. 
Moreover, it would be more appropriate, in 
my opinion, to translate such concerns into 
action in their natural context and to make 
them the subject of a proposal for an amend­
ment aimed at completing the relevant provi­
sions. 
(3) Mistaken reliance in this case on the con­
cept of collective dominant position 
99. By this plea, both the French Govern­
ment and the applicant companies maintain 
that a number of errors of law and of fact 
were committed in the appraisal of the con­
centration on the Community market apart 
from Germany. 
In general, the French Government com­
plains that the Commission failed, in assess­
ing whether a collective dominant position 
existed, to follow either the criteria devel­
oped in the case-law on Article 86, or those 
established in its previous decisions, which, 
moreover, are more flexible than those sug­
gested by the Community judicature. In sup­
port of its view, the French Government also 
makes a series of specific criticisms concern­
ing all the factors taken into account in the 
decision, at the same time emphasising the 
importance of the criteria which the Com­
mission omitted to take into consideration. 
Those arguments, it maintains, expose the 
errors by which the decision is vitiated as 
regards the existence of a collective dominant 
position and, in any event, the inadequate 
reasons on 'which it is based. 
The applicant companies, which also dispute 
some of the factors taken into consideration 
in the decision, relying on arguments similar 
to those of the French Government, main­
tain in particular that the Commission has 
failed to prove the existence of a causal link 
between the concentration and the alleged 
creation of a collective dominant position. 
106 — Judgment in Case 70/83 Kloppenburg [1984] ECR 1075, 
paragraph 11. 
I - 1428 
FRANCE AND OTHERS v COMMISSION 
100. The Commission counters that by say­
ing that the criteria which it used in the con­
tested decision in no way conflict with those 
employed in earlier decisions. In order to 
establish the existence of a collective domi­
nant position in this case, it contends that it 
acted essentially on the basis of three criteria: 
the degree of market concentration which 
would result from the concentration, the 
structural factors relating to the nature of the 
market and the characteristics of the product, 
and the structural links between the under­
takings concerned. 
In addition, it asserts that the present case is 
distinguished by certain specific features 
from other cases in which it has taken action. 
First, prior to the concentration there was 
already no effective competition between the 
largest two suppliers of potash products 
because of the absence of K+S from the 
French market and because of the links exist­
ing between it and SCPA. Second, as a result 
of the enhancement of their competitive 
potential following from the merger with 
MdK, K+S and SCPA would find themselves 
in a dominant position in relation to other 
potash suppliers. 
101. More generally, the Commission main­
tains, in replying to the French Govern­
ment's objections, that the criteria developed 
in connection with Article 86, while not 
absent from the decision, are not decisive in 
regard to the control of concentrations. In 
this context, unlike that of Article 86 where 
it is defined primarily on the basis of market 
shares, the existence of a collective dominant 
position can only be the result of an analysis 
based on the future. The market shares held 
are therefore only a starting point; for the 
rest, it is essential to ascertain the scope for 
present and future competitors to act as a 
counterbalance to any dominant position 
held by the new undertaking. It is precisely 
following such an analysis that many con­
centrations, although having significant mar­
ket shares and almost certainly such as to 
lead to a declaration of incompatibility with 
Article 86, have been approved under the 
regulation. 
With regard to the criteria established in its 
decision-making practice, the Commission 
points out, on the one hand, that the deci­
sions on which the French Government 
bases its arguments are all, with the excep­
tion of the Nestlé/Perrier decision, 107 later 
than the contested decision and, on the other, 
that it is the characteristics of each specific 
case which determine whether greater weight 
or even decisive significance should be 
attached to certain criteria rather than to 
others. It was therefore by reference to the 
particular features of this case that it consid­
ered the abovementioned criteria to be of 
paramount importance. 
102. Let me begin by pointing out that the 
concept of collective dominant position, as 
developed in connection with Article 86 of 
the Treaty, which is to the effect that the 
hegemony from which abuse may result may 
107 — Decision 92/553, cited above in footnote 66. 
I - 1429 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
be attributable either to one undertaking or 
to more than one, 108 has been clarified over 
the years. In particular, in its judgment in the 
'Flat Glass' case, the Court of First Instance 
made it clear that several undertakings hold a 
collective dominant position when, while 
independent, they are united on the market 
by particularly strong economic links, which 
could, for example, be the case where they 
jointly have a technological lead affording 
them the power 'to behave to an appreciable 
extent independently of their competitors, 
their customers and ultimately of their con­
sumers'. 109 The Court of Justice essentially 
confirmed that definition in its judgment in 
the Almelo case, stating that, in order for a 
collective dominant position to exist, the 
undertakings concerned 'must be linked in 
such a way that they adopt the same conduct 
on the market'. 110 
With regard to the criteria developed in the 
decision-making practice on the subject, it is 
quite true, as the applicants maintain, that, in 
appraising concentrations, the Commission 
has developed a concept of collective domi­
nance which is broader than, and in any case 
partly different from, that defined in the 
case-law relating to Article 86. It must, how­
ever, be acknowledged that, although it 
refers to the same factors as those used by 
Court in order to identify collective domi­
nance, the regulation avoids any definition of 
the term, thereby not excluding a predomi­
nance of 'structural' appraisals and hence the 
possibility of developing a concept some­
what independent of that developed in rela­
tion to Article 86. 111 
103. Clearly, a new concept of collective 
dominance, different from that developed in 
the case-law relating to Article 86, while pos­
sibly justified by the specific nature of the 
control of concentrations, is liable to render 
application of the concept in question to the 
system of rules governing concentrations 
even more problematical and unpredictable. 
Moreover, although Article 2(1) of the regu­
lation, always assuming that the criteria 
listed therein for appraising concentrations 
in respect of their compatibility with the 
common market are also applicable to this 
case, does not specify any order in which the 
relevant factors are to be taken into account, 
the fact remains that the Commission cannot 
disregard the criteria listed and that the 
108 — Despite this, the Court initially seemed reluctant to recog­
nise the concept of collective dominance, partly because of 
the difficulty of identifying, where not specified in the leg­
islation, the constituent elements of a firm definition of 
that concept. Thus, on one occasion, it seemed to restrict 
the application of Article 86 to cases of individual domi­
nant positions. In the judgment in Hoffmann-La Roche 
(cited in footnote 96), the Court stated that 'a dominant 
position must also be distinguished from parallel courses 
of conduct which are not peculiar to oligopolies in that in 
an oligopoly the courses of conduct interact, while in the 
case or an undertaking occupying a dominant position the 
conduct of the undertaking which derives profits from 
that position is to a great extent determined unilaterally'. 
See in this respect Korah: 'Concept of a dominant position 
within the meaning of Artide 86, in Common Market 
Law Review, 1980, p. 395, in particular p. 398. 
109 — Judgment in the 'Flat Glass' case, cited above in footnote 
38, paragraph 358. To the same effect, see the judgment in 
the Hoffmann-La Roche case, cited above in footnote 96, 
paragraphs 38 and 48. 
110 — Judgment in Case C-393/92 [1994] ECR I-1477, paragraph 
42. The principles set forth in that judgment were subse­
quently confirmed by the Court in Joined Cases C-140/94 
to C-142/94 DIP and Others v Comune di Bassano del 
Grappa and Comune di Chioggia [1995] ECR 1-3257, 
paragraphs 24 to 26. See, in this respect, the Opinion in 
that case of Advocate General Fennelly who pointed out, 
among other things, that the concept of collective domi­
nance cannot be used as a substitute for the lack of any 
direct evidence of the existence, and still less of any abuse, 
of a dominant position (point 64). 
111 — For this view, sec Venit, cited in footnote 99, p. 527 et seq., 
in particular pp. 530 to 531. This approach is also sup­
ported by the idea that the concept of 'impeded compe­
tition', as contained in Article 2(3) of tne regulation, 
would allow the Commission to develop a new concept of 
'dominance' based on a probability analysis with reference 
to the characteristics of the market. See Brittan: 'The Law 
and Policy of Merger Control in the EEC, in European 
Law Review, 1990, p. 354. 
I - 1430 
FRANCE A N D OTHERS v COMMISSION 
discretion which the regulation allows it 
must not be taken so far as to become arbi­
trary. In short, the Commission is clearly 
precluded from inventing whatever criteria it 
considers to be most appropriate in relation 
to each particular case. 
In those circumstances, moreover, the Com­
mission's practice, while unquestionably 
complex and not free from contradictions, 
may nevertheless prove to be a useful instru­
ment for identifying possible inconsistencies 
and contradictions in the Commission's 
decision and in its defence and thus, by the 
same token, show conclusively whether or 
not the criteria used in this case were correct. 
If the issue is viewed in those terms, it seems 
to me that the Commission is not justified in 
claiming that there is no need to take 
account of the criteria and appraisals con­
tained in decisions subsequent to the one at 
issue in this case. The Commission's prac­
tice, whether in earlier decisions — such as 
in the Nestlé/Perrier case often cited by the 
applicants 112 — or in later ones, is certainly 
not a parameter for determining the lawful­
ness of the contested decision, but is at least 
a guide to the method hitherto used by the 
Commission when applying the regulation 
to collective dominant positions. 
104. That said, I now turn to the criticisms 
levelled by the French Government, and by 
the applicant undertakings, at the criteria 
applied in the decision in order to establish 
the existence of a collective dominant pos­
ition liable, as forecast, to result in a signifi­
cant distortion of competition. 
In my view, it is appropriate, immediately 
after considering the preliminary aspect — 
the degree of market concentration — to 
deal with the issue of the structural links 
which, as the Commission itself has admit­
ted, were the main factor which it relied 
upon in order to find the existence of a joint 
dominant position held by K+S/MdK and 
SCPA. I shall then examine the other criteria 
used in the decision, as well as the relevance 
of criteria employed in other decisions but 
not used at all in this case. 
— Degree of market concentration 
105. The Commission's appraisal is based, 
first and foremost, on the increase in the 
degree of market concentration (already 
high), which is considered such as to lead, in 
the future, to the reinforcement of a collec­
tive dominant position liable significantly to 
impede competition. 
112 — In this connection, I note moreover that the wording and 
scheme of the Nestlé/Perrier decision do not seem exempt 
from criticism, mainly because they tend to develop a test 
for identifying collective dominant positions which is 
legally rather vague. See in this regard the remarks of 
Winckler and Hansen: Collective dominance under the EC 
Merger Control Regulation, in Common Market Law 
Review (1993) 30, p. 787 et seq., in particular p. 828, who 
take the view that 'if the standard used in Nestlé/Perrier is, 
as suggested, one of "probability" or "facilitation", then 
the Commission has not explained in sufficient detail what 
types of economic conduct ("collective abuses") it wishes 
to avoid making "much easier"' (this statement refers to 
paragraph 120 of the decision). 
I -1431 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
The French Government and the applicant 
undertakings dispute that appraisal, asserting 
that the increase is not substantial since the 
market shares held by K+S and SCPA rose, 
as a result of the concentration, from 54% to 
6 1 % . The French Government also contends 
that the Commission's analysis is arbitrary 
inasmuch as, on the one hand, it fails to take 
account of the fact that, following the con­
centration, the number of potash suppliers 
fell from ten to nine and, on the other, it did 
not take properly into consideration the role 
of two important suppliers, CPL and 
Coposa. Finally, the Commission's analysis 
is not reliable, in its view, because it calcu­
lates the market shares in two different ways, 
depending on the result to be achieved: on 
the basis of the first method, it takes into 
consideration only the sales volumes of the 
individual operators in the Community; on 
the basis of the second method, the sales 
made on the French market are instead 
included in SPCA's sales volume and accord­
ingly deducted from K+S's sales volume. 
106. It must be said, first of all, that the 
mere quantitative increase in the market 
shares held by the undertakings concerned, 
upon which the Commission laid stress, even 
excessively, in the decision, is not in itself 
sufficient to constitute the creation of a col­
lective dominant position, as, moreover, the 
Court of First Instance emphasised in its 
judgment in the 'Flat Glass' case, a point on 
which it was very clear. That is all the more 
so in this case, since the concentration led to 
an increase of only 7%. 
It must therefore be acknowledged that the 
increase in the degree of market concentra­
tion resulting from the acquisition is not par­
ticularly important, being limited in terms of 
both the number of competitors operating 
on the market ('which fell from ten to nine) 
and the increase in the total market share 
held by K+S and SCPA on the same market. 
In those circumstances, the importance 
attached in the decision to the criterion in 
question appears excessive. 113 In any event, 
the analysis made in this respect could, at 
most, show that the degree of market con­
centration is not such as to preclude auto­
matically the existence of a collective domi­
nant position. 
— Structural links between K+S and SCPA 
107. The parties agree that the central aspect 
of the contested decision is the finding of 
'the existence of exceptionally close links 
between the two companies [K+S and 
SCPA] extending over a long period of 
time', 114 links so close in fact as to suggest 
that there is no effective competition 
between the two undertakings. It was those 
very links which were the decisive factor 
taken into account by the Commission in its 
own appraisal; indeed, it considered that the 
severance of those links, through the condi­
tions imposed, could bring to an end the 
alleged collective dominant position. 
113 — See paragraphs 52 to 56. 
114 — Paragraph 57 of the decision. 
I -1432 
FRANCE A N D OTHERS v COMMISSION 
108. According to the French Government, 
the Commission made a series of errors of 
assessment in its examination of the struc­
tural links between K+S and SCPA, links 
which are not in fact capable of establishing 
a causal connection between the concentra­
tion and the creation of a K+S/SCPA 
duopoly since they are not sufficient to 
prove that the concentration in question cre­
ated the conditions for collusive conduct by 
the two undertakings. In particular, (1) 
although the Commission identified the 
Community apart from Germany as consti­
tuting the relevant market, the links in ques­
tion affect only France; (2) the decision 
should have included the Spanish undertak­
ing Coposa in the oligopoly; 115 (3) the weak 
presence of K+S on the French market is not 
sufficient to show the existence of dominance 
by that undertaking together with SCPA; 
and (4) it has not been proven that the acqui­
sition of MdK by K+S could lead to the cre­
ation of a duopolistic dominant position held 
by K+S and SCPA. 
The applicant undertakings focus their atten­
tion principally on the latter aspect, pointing 
out that there are certain substantive contra­
dictions in the Commission's position, in 
particular the fact that the concentration, 
according to the Commission itself, would 
have created, and not merely strengthened, a 
collective dominant position on the relevant 
market. 
109. With regard to the first of those argu­
ments, I would observe that the links 
between the companies concern, directly or 
indirectly, only the French market; it is 
therefore only in that market that they could 
be regarded as likely to have a bearing on the 
competitive relationship between K+S and 
SCPA. This is true, in the first place, as 
regards the severance of the distribution 
links between K+S and SCPA, which operate 
exclusively in the context of the French mar­
ket. But it is also true, in the second place, as 
regards the interest in the Kali-Export cartel. 
According to the Commission, that interest, 
while not concerning sales on the Commu­
nity market but only exports to non-
Community countries, is such as to interfere 
with sales in France. That assertion cannot 
be verified, for lack of evidence; 116 however, 
if it were proven, it would, at the very most, 
demonstrate the absence of effective compe­
tition between K+S and SCPA on the French 
market, that is to say, on a market which, in 
the opinion of the Commission itself, does 
not constitute the relevant market. It follows 
that, if the Commission's argument were 
well founded, even the interest in the export 
cartel would, in the Community context, 
affect only the French market which, I 
repeat, is not a relevant market for the pur­
poses of the decision. 
In this regard, the conclusion reached by the 
French Government, that the Commission 
has not shown how the acquisition of MdK 
115 — This is the company which markets the potash produced 
by certain Spanish undertakings which were recently 
grouped together in a State-owned corporation known as 
INL 
116 — The Commission claimed in its pleadings that it had suf­
ficiently demonstrated, in paragraphs 57, 59, 61 and 67 of 
the decision, that such interference exists. A reading of the 
paragraphs in question, however, shows that the Commis­
sion merely drew attention in them to the structural links 
existing between K+S and SCPA. 
I - 1433 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
by K+S would lead to the creation of a 
duopoly capable of impeding competition on 
the Community market apart from Ger­
many, seems to be well founded. It is not 
sufficient, for that purpose, to take into 
account the links existing between K+S and 
SCPA in France, which is not an indepen­
dent market. 
110. With regard, on the other hand, to the 
Spanish company Coposa, the French Gov­
ernment asserts that the Commission 
wrongly excluded it from the alleged oli­
gopoly consisting of K+S and SCPA. In any 
case, it maintains, the Commission cannot 
argue, in order to demonstrate that the iden­
tification of the Community apart from Ger­
many as the geographical market was cor­
rect, that Coposa's exports to France are 
significant and then state, in order to demon­
strate the existence of a collective dominant 
position, that Coposa is not present to any 
significant extent in France and that in any 
event its sales are channelled. 
Let me say at once that I am unconvinced by 
the argument put forward by the Commis­
sion in its defence that the links between 
K+S and SCPA are such as to characterise 
their relations towards all the other opera­
tors, and that the possible inclusion of 
Coposa in the oligopoly is not, in any case, a 
determining factor for the purposes of the 
decision since it would, by definition, only 
result in a strengthening of the collective 
dominant position. It is only too obvious 
that the exact identification of the members 
of an oligopoly is a matter of priority in 
terms of its appraisal, as is ascertaining the 
conditions of competition outside that oli­
gopoly. 117 In this case, therefore, it seems 
difficult, on the basis of the available data 
and applying the criteria used for the inclu­
sion of K+S and SCPA in the collective 
dominant position, to exclude Coposa from 
that oligopoly. It is sufficient to point out in 
this connection that Coposa is also a partner 
in the Kali-Export cartel and that it sells in 
France mainly through SCPA. 
111. Nor does it appear to me to be decisive, 
for the purpose of establishing the absence of 
competition between K+S and SCPA, and 
therefore the existence of a collective domi­
nant position held by them, that, as the 
French Government maintains in its third 
argument, K+S is not present to any signifi­
cant extent in France and that it uses SCPA's 
distribution organisation for a proportion of 
its sales in that country. The first fact could 
have several explanations, such as, for 
example, the structure of the French market, 
consumer preferences or the German compa­
ny's commercial strategy. Moreover, if more 
importance were to be attached to this 
aspect, it would be necessary to ask why 
similar situations, that is, absence from 
important national markets, arise for all the 
major operators in the sector, and, in par­
ticular, why, in the contested decision, with 
regard to the German market, the Commis-
117 — In this connection, I would point out, for example, that in 
a checklist of factors relevant to the control of concentra­
tions, adopted in 1990 by the Federal Cartel Office in Ger­
many (published in English in Fordham Corporate Law 
Institute, 1991, p. 161 et seq.), the absence of competition 
between the members of an oligopoly and the 'outside' 
competitors is treated as an essential factor for characteris­
ing the oligopoly as dominant. 
I - 1434 
FRANCE AND OTHERS v COMMISSION 
sion attributed SCPA's absence not to the 
links with K+S, but to structural factors spe­
cific to that market. 
With regard to K+S's product sales through 
SCPA, it should be emphasised that, 
although a large proportion of French 
imports of K+S products passes through 
SCPA, that represents such a small volume 
(1.4% of the relevant market) that it cannot 
constitute sufficient evidence to substantiate 
the Commission's argument. 
112. That brings me to the French Govern­
ment's final argument relating to the implica­
tions of the takeover of MdK by K+S: in 
particular, it maintains that the Commission 
has by no means proved that that acquisition 
gave rise to a duopolistic dominant position 
detrimental to competition. The applicant 
undertakings have also raised a similar argu­
ment, particularly emphasising the contradic­
tion inherent in the position adopted by the 
Commission which, on the one hand, 
applied the failing company theory on the 
basis that MdK would have withdrawn from 
the market in any case, since its plight was 
now irreversible, and, on the other, took the 
view that the takeover of MdK by K+S, and 
the resulting concentration, were likely to 
create a duopolistic dominant position which 
might impede competition. 
On this point, the Commission's rejoinder is 
that the creation of a joint dominant position 
by K+S/MdK and SCPA is in fact a conse­
quence of the concentration, since the latter 
altered considerably the structural conditions 
of the market. In particular, the Commission 
draws attention to the following factors: (a) 
MdK accounts for 25% of the Community's 
total potash production; (b) at the time of 
the decision, the rate of utilisation of MdK's 
production capacity was down to 50%; and 
finally (c) the 7% market share is a crucial 
factor in view of the fact that supply outside 
the group comprising K+S/MdK and SCPA 
is fragmented and that the group's market 
share, according to the Commission's analy­
sis, is bound to increase. 
113. I observe, first of all, that the Commis­
sion's aforementioned statements do not 
answer the applicants' objections. Both the 
French Government and the undertakings 
maintain that there is an absence of any 
causal link between the creation of oligopo­
listic dominance and the concentration, an 
absence which stems from the fact that, 
according to the analysis made by the Com­
mission in this regard, MdK was in any case 
bound to withdraw from the market. In 
short, how could the takeover of MdK result 
in the creation of a collective dominant pos­
ition when — with or without a concentra­
tion — MdK's market share would in any 
case have been taken over, following its 
withdrawal from the market, by the other 
operators in the sector? 
Even assuming that the Commission's analy­
sis, according to which it is unreasonable to 
I - 1435 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
take the view that MdK's share of the Com­
munity market apart from Germany would 
almost certainly have accrued to K+S, 118 is 
correct, and that one of the criteria for the 
application of the failing company theory is 
therefore not met, the fact remains that the 
entire argument built up by the Commission 
appears, from the absolutely vital point of 
view of a causal link between the concentra­
tion and the creation of a joint dominant 
position by K+S and SCPA, to be rather 
weak. It follows that the significance 
attached in this context to MdK's 7% share 
of the relevant geographical market is by no 
means decisive. 
— Characteristics of the eliminated com­
petitor 
114. According to the French Government, 
the Commission failed to analyse, as it had in 
the Nestlé/Perrier decision, the characteris­
tics of the competitor eliminated from the 
market as a result of the concentration, 
namely, in this case, MdK. In the French 
Government's opinion, examination of those 
characteristics would necessarily have led to 
the conclusion that MdK's elimination from 
the market could not have any influence on 
the concentration since, moreover, according 
to the Commission's analysis, it was an 
undertaking which was in any case bound, 
albeit in the medium term, to withdraw from 
the market. 
The French Government's argument is not 
without substance. In the decision given in 
the Nestlé/Perrier case, in which the elimi­
nated competitor (Perrier) accounted for a 
share fluctuating between 35.9% and 44.2% 
of the market, the Commission took the 
view that 'the reduction from three to two 
suppliers (duopoly) is not a mere cosmetic 
change in the market structure. The concen­
tration would lead to the elimination of a 
major operator who has the biggest capacity 
reserves and sales volumes in the market. 
Perrier sources and brands would be divided 
between the two remaining suppliers. In 
addition, the reduction from three to only 
two national suppliers would make anticom­
petitive parallel behaviour leading to collec­
tive abuses much easier'. 119 The Commis­
sion thus drew attention to the implications 
and effects of the takeover of Perrier which, 
by virtue of its size and market share, was an 
essential factor in ensuring effective compe­
tition. 
115. In the present case, on the other hand, 
the analysis in the decision seems, to say the 
least, to contain some gaps. While not seek­
ing to attach excessive importance to the 
share of the Community market held by 
MdK (7%),1 2 0 it is impossible not to have 
some doubts as to the actual effect of MdK's 
withdrawal on competition on the market. 
Moreover, the decision makes no reference 
to the 'impressive production capacities' 
mentioned by the Commission in its 
118 — See paragraph 79. 
119 — Decision 92/553, cited above in footnote 66, paragraph 
120. 
120 — This share, moreover, is the same as that held by SIV, 
whose acquisition by Pilkington and Techint was autho­
rised, without the imposition of any conditions, by 
Decision 94/359, cited above in footnote 87. 
I - 1436 
FRANCE AND OTHERS v COMMISSION 
defence 121 and which, moreover, appear dif­
ficult to reconcile with the characterisation 
of the undertaking as an economic entity 
that cannot be expected to survive. 122 
Finally, there is nothing in the decision to 
suggest that MdK plays an essential role, 
even beyond its actual weight, in maintaining 
competition. 
In conclusion, I take the view that the Com­
mission has not shown that MdK's with­
drawal from the Community market apart 
from Germany is likely to result in, or at 
least contribute to, the creation of a duopoly 
consisting of K+S/MdK and SCPA and 
capable of significantly impeding compe­
tition. 
— Position of the competitors 
116. The French Government claims that the 
decision contains a contradictory and inad­
equate analysis of the position of the com­
petitors operating on the relevant market. In 
particular, it draws attention to the inconsis­
tency of the Commission's attitude in mini­
mising the market position of CPL and 
Coposa while specifically laying emphasis, 
for the purpose of identifying the relevant 
geographical market, on exports from Spain 
and the United Kingdom to the other Mem­
ber States. The French Government also 
disputes the Commission's view that the 
channelling through SCPA of imports from 
countries outside the Community shows that 
the competitive pressure exerted by those 
countries on the duopoly is almost non­
existent. 
From this point of view also, the French 
Government's argument seems to highlight a 
number of objective gaps in the decision. 
117. In the first place, the method used by 
the Commission, which, in order to show 
the absence of competitive pressure on the 
alleged oligopoly, puts forward as evidence 
the channelling of imports from non-
Community countries into France through 
SCPA, 123 cannot be accepted. Above all, 
France is not, for the purposes of this case, 
an independent market. Consequently, the 
analysis of the factors involved in the 
appraisal of the concentration cannot take 
account solely of the French market, but 
must rather, and in any event, take into con­
sideration the territory defined by the 
decision as the relevant market, namely, the 
market comprising the Community as a 
whole apart from Germany. 
121 — Sec p. 32 of the defence. 
122 — Paragraph 76 of the decision. 123 — Sec pp. 33 and 34 of the defence and p. 54 of the rejoinder. 
I - 1437 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
The Commission's observations on the sig­
nificance of imports from the CIS, which, 
according to the figures supplied by the 
French Government 124 and not disputed by 
the Commission, have progressively 
increased, reaching 11% of sales within the 
Community, a level which is by no means 
insignificant, seem to be just as inadequate · 
and contradictory. Moreover, the nine opera­
tors remaining on the market following the 
concentration hold shares which are such as 
to give rise to a situation in which the influ­
ence of the competitors of the duopoly alleg­
edly consisting of K+S/MdK and SCPA 
would undoubtedly appear to be signifi­
cant. 125 
— Comparison between the position of 
K+S/MdK and that of SCPA 
118. In its criticism of the criteria applied in 
this case in order to establish the existence of 
oligopolistic dominance, the French Govern­
ment also disputes both the excessive impor­
tance attached by the Commission to the 
total market share held by K+S and SCPA 
and the fact that it did not take account of 
the imbalance between the two undertakings, 
an imbalance which, in previous decisions, 
had instead constituted a significant reason 
for denying the existence of an oligopolistic 
dominant position. 
The Commission points out that a market 
share of 60% clearly indicates the existence 
of a collective dominant position, in particu­
lar when, as in this case, there is an appre­
ciable difference from the market shares held 
by the competitors. While acknowledging 
that there are considerable differences 
between the undertakings in question, it dis­
putes the theory that a duopoly is conceiv­
able only when the undertakings involved 
have similar characteristics. 
119. With regard to the first aspect men­
tioned above, I note to begin with that the 
Commission has in the past ruled out the 
possibility of establishing thresholds for pre­
suming the existence of collective domi­
nance; and that it has in any case, in recent 
decisions, 126 authorised concentrations with 
combined shares equivalent to those calcu­
lated in this case. Consequently, while it is 
impossible, in theory, to deny that a 60% 
share is of some importance, such a share 
cannot, at least not by itself, be of decisive 
importance and constitute proof of the exist­
ence of an oligopolistic dominant position. 
Furthermore, the judicial precedents cited by 
the Commission are not relevant, inasmuch 
as they refer to individual dominant posi­
tions, 127 which justifies the presumptive sig­
nificance attached to a share of between 45% 
and 80% of the market. Moreover, in those 
124 — See p. 42 of the rejoinder. 
125 — See the figures in the table on p. 43 of the French Govern­
ment's reply, which the Commission his not disputed. 
126 — See, for example. Decision 94/359, cited above in footnote 
87. 
127 — They are the judgments in the Hoffmann-La Roche case, 
cited above in footnote 96; Case 322/81 Michelin v Com­
mission [1983] ECR 3461; and Case C-62/86 AKZO v 
Commission [1991] ECR I-3359. 
I -1438 
FRANCE A N D OTHERS v COMMISSION 
judgments the market share is always analy­
sed together with other factors such as the 
difference (of at least 50%) between the larg­
est and second largest undertakings operat­
ing on the market. 
120. Nor do I find myself able to share the 
Commission's view on the second aspect 
mentioned here, that is, the failure to take 
into consideration the absence of symmetry 
between the undertakings presumed to hold 
a collective dominant position. 
I note first that the absence of symmetry 
between the undertakings concerned, which 
is undisputed in this case, 128 has been con­
sidered decisive by the Commission in other 
cases in order to exclude the existence of a 
duopoly, 129 whether from the point of view 
of the market shares taken as a whole and in 
relation to the markets of individual coun­
tries, or from that of 'economic power', or, 
finally, from that of production capacity. It 
should be borne in mind in this context that 
in the Nestlé/Perrier decision the Commis­
sion made clear the implications of similarity 
in size and nature of the undertakings con­
cerned and the reasons for taking it into 
account in its appraisal of the effects of the 
concentration, 130 pointing out in particular 
that similarity in size and nature of the 
undertakings is a clear deterrent to compe­
tition and makes it easier to engage in coor­
dinated and collusive behaviour. Conse­
quently, I consider that the Commission's 
defence, by merely treating the difference 
between K+S and SCPA as irrelevant for the 
purpose of establishing the existence of a 
duopoly, is inadequate. Nor do I consider 
that the Commission is justified in claiming 
that the practice which it has followed in 
applying the regulation is completely irrel­
evant in this case. Although practice is cer­
tainly not a mandatory reference parameter, 
but can be adapted according to the circum­
stances of each individual case, it certainly 
cannot be regarded in this context as wholly 
meaningless. 
121. All the considerations expounded so far 
bring to light a series of gaps and contradic­
tions in the appraisal and in the application 
of the criteria developed by the Commission, 
leading to the conclusion that the reasoning 
behind the decision is not consistent. The 
Commission has failed to prove to a suffi­
cient standard, even on the basis of its own 
practice, the existence on the relevant market 
of a collective dominant position for 
K+S/MdK and SCPA which would be cre­
ated as a result of the proposed concentra­
tion. 
That leads me to deal only briefly with the 
other arguments put forward by the French 
Government with regard to the other factors 
taken into consideration in the decision. 
More specifically, I shall focus on the man­
ner in which the aspects concerning the 
economic power of the customers, the barri-
128 — Sec the Commission's defence, pp. 37 to 58. 
129 — For example, in the Piikington-Tcchint/SIV decision, cited 
above in footnote 87, paragraph 55; conversely, in the 
Mannesmann/Vallourec/Uva decision (cited above in foot­
note 58), the similarity in size and nature of the undertak­
ings involved in the concentration, which held shares of 36 
and 33% respectively, was regarded by the Commission as 
an incentive to adopt parallel conduct. 
130 — Decision cited above in footnote 66, paragraph 123. 
I -1439 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
ers to entry and the market and product 
characteristics, as well as parallel conduct, 
were examined. 
— Economic power of the customers 
122. The French Government criticises the 
Commission for failing to take any account 
at all of the criterion relating to the custom­
ers' economic power, and in particular for 
failing to analyse the nature and influence of 
the producers and importers of potash, 
which could (and should) have led to the 
conclusion that the creation of an oligopolis­
tic dominant position by K+S/MdK and 
SCPA was highly unlikely. 
The Commission acknowledges the impor­
tance of the customers' economic power as a 
'counterbalance' to the duopoly and there­
fore capable of discouraging any parallel 
conduct; however, it adds that that is only 
one factor among others to be taken into 
consideration in order to reach a definitive 
appraisal of the effects of the concentration 
in question. 
123. There is no doubt that in this case no 
account was taken of the influence and char­
acteristics of the various types of customer 
for the products in question. That makes it 
more difficult to establish whether, as the 
French Government maintains, the large 
multinational producers of compound fertil­
isers in fact have a degree of purchasing 
power capable of preventing the members of 
the oligopoly from strengthening their pos­
ition or whether, on the contrary, as the 
Commission asserts, it is the bulk blenders 
of fertilisers who are prominent among the 
customers. Nor is it specified whether those 
bulk blenders are actually small and 
medium-sized undertakings which are not in 
a position to exert adequate pressure on the 
producers, or whether, as the applicant gov­
ernment asserts, their activity is also carried 
out by the subsidiaries of the large multina­
tionals. Clearly, an answer to this question 
would have been essential in order to deter­
mine whether or not the customers have 
effective bargaining power. 
The Commission's position therefore seems 
weak, all the more so as the customers' nego­
tiating power is undoubtedly an important 
factor in ascertaining the conditions of com­
petition, since it may discourage the adop­
tion of anticompetitive behaviour. Moreover, 
it is to that effect that the Commission's 
analysis, in both the Pilkington-Techint/SIV 
case and the Nestlé/Perrier case, 131 must be 
interpreted. 
131 — In that decision, cited in footnote 66, the power of the 
customers was considered, after a detailed analysis which 
is lacking in this case, to be insufficient to constrain sig­
nificantly the power of the suppliers (sec, in particular, 
paragraphs 77 to 89). 
I -1440 
FRANCE A N D OTHERS v COMMISSION 
124. In view of the abovementioned uncer­
tainties, other aspects raised by the French 
Government can be left aside, even though 
they relate to the customers' characteristics. I 
shall merely add, for the sake of clarity, that 
the statement by the Court of First Instance 
in the 'Fkt Gkss' judgment that the Com­
mission 'is not required to discuss in its deci­
sions each argument advanced by the under­
takings concerned', 132 contrary to that 
institution's contention in the course of the 
proceedings, does not provide any support 
for the Commission's argument. 
The customers' power is not an argument 
relied on by the applicants at the administra­
tive stage and is not included in the decision, 
but is an important factor to be taken into 
account in determining whether or not an 
oligopolistic dominant position exists. As 
such, it must necessarily be examined, failing 
which the decision may contain a lacuna 
such as to affect its substance. Besides, pre­
cisely in the judgment which I have just 
cited, the Court found, by reference to 
Article 86, that the analysis of those aspects 
of the market which the applicants alleged 
had not been taken into consideration 'was 
absolutely essential for an assessment of the 
question of dominance', 133 thus confirming 
the necessity for the Commission to base its 
findings on investigations which are as full 
and exhaustive as possible. 
— Barriers to entry 
125. The Commission is criticised for not 
making any analysis, in the part of the 
decision concerning the existence of a collec­
tive dominant position, on the presence of 
barriers to entry, a factor regarded as highly 
important in the Commission's practice. 
That is all the harder to explain since atten­
tion was drawn to the absence of such 
obstacles in the decision itself for the pur­
poses of defining the relevant geographical 
market. 
The Commission acknowledges the absence 
of barriers to entry within the Community. 
However, it adds that in this case there are 
two types of barriers to entry for undertak­
ings from countries outside the Community, 
namely, anti-dumping measures for imports 
from the CIS, and SCPA's statutory 
monopoly whereby all imports into France 
from non-Community countries are chan­
nelled through that undertaking. 
126. Let me say at once that I very much 
doubt whether the aforementioned factors 
are capable of constituting barriers to entry. 
Anti-dumping duties are certainly not barri­
ers to entry since, as the Commission itself 
has admitted, they are intended to restore 
132 — Judgment in the 'Flat Class' case, cited above in footnote 
38, paragraph 36. 
133 — Ibid., paragraph 363. 
I - 1441 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
competition and not to obstruct trade. 134 In 
addition, their actual effect on the level of 
imports has by no means been established, 
and certainly not on the basis of objective 
data. If anything, the appraisals relating to 
the individual national markets, contained in 
the decision (paragraph 64), raise the oppo­
site presumption. 
With regard to SCPA's monopoly, moreover, 
the defective approach already noted on sev­
eral occasions, that is, the Commission's ten­
dency to make an analysis limited to France, 
as if the French market constituted the rel­
evant geographical market for the purpose of 
the decision, features again here. In addition, 
even without considering in detail the extent 
of the effects of such a monopoly, the exist­
ence, as the Commission itself acknowl­
edges, 135 in individual Community countries 
of flows of imports from non-Community 
countries on such a scale as to represent a 
predominant share of the market, leads 
rather to the conclusion that the presence of 
barriers to entry has not been established. 
— Characteristics of the market and the 
product 
127. Finally, with regard to the characteris­
tics of the market and the product, usually 
regarded as significant factors to be taken 
into account in the analysis, I shall merely 
point out, with the French Government, that 
among the Commission's assessments, which 
are, moreover, characterised by a certain con­
ciseness, there is no detailed and specific 
analysis either of the prices charged by K+S 
and SCPA, 136 which are an absolutely essen­
tial factor in establishing market transpar­
ency (which, as is well known, makes uni­
form conduct easier) and in assessing 
elasticity of demand, or of the cost structures 
of the two undertakings, which, if they are 
different, may constitute an incentive to 
competitive behaviour. 
It is unnecessary to point out that such 
omissions, relating to decisive aspects, con­
tribute towards both the weakness of the 
Commission's analysis and its results. I am 
therefore of the opinion that there is no need 
to examine in detail the other 'structural' fac­
tors mentioned, such as those relating to the 
homogeneity of the product, on which, 
moreover, I do not share the French Govern­
ment's position, as I have already pointed 
out in examining the definition of the rel­
evant geographical market. 
— Existence of parallel conduct 
128. As the French Government has rightly 
asserted, the Commission's assessments in 
this regard are by no means convincing. 
134 — See p. 61 of the rejoinder. 
135 — See p. 61 of the rejoinder. 
136 — See, in this connection, the point I have already made with 
regard to the identification of the relevant geographical 
market. 
I -1442 
FRANCE AND OTHERS v COMMISSION 
Indeed, the circumstances from which the 
Commission seeks to derive evidence for the 
existence of joint dominance by K+S/MdK 
and SCPA are of no significance, especially if 
they are compared with those relied on in 
other decisions. 
It is only too obvious that the agreement 
between K+S and SCPA, declared incompat­
ible with Article 85 in 1973, 137 must be 
regarded as too weak a basis on which to 
infer, after an interval of more than 20 years, 
that there is no competition between K+S 
and SCPA. 138 Similarly, from the point of 
view under discussion here, the consider­
ations relating to the minor presence of K+S 
on the French market are not decisive and 
may well have a different explanation, as I 
have pointed out in examining the structural 
links between K+S and SCPA. 
129. Those observations are also supported 
by the fact that the factors taken into 
account for these purposes in previous deci­
sions were of a completely different nature. 
In the Nesdé/Perrier decision, for example, 
after drawing attention to the much-reduced 
level of price competition, the Commission 
found that there was a high degree of parallel 
pricing by the three producers concerned by 
the concentration, which was combined with 
the development of instruments of transpar­
ency capable of facilitating coordination and 
mutual monitoring of pricing policies. 139 
Moreover, in that same case, the Commis­
sion took into consideration, as evidence of 
the links between the undertakings con­
cerned, their response to the takeover bid by 
an outside operator, a response regarded as 'a 
joint entry deterrence action'. 140 In the 
Pilkington-Techint/SIV case, on the other 
hand, the Commission took the view that 
certain agreements between the undertakings 
concerned, which had been condemned in 
1988, that is, only five years prior to the 
decision, and by the Bundeskartellamt only a 
few months prior to the decision, were such 
as to foster anticompetitive parallel con­
duct. 141 
The factors in question were, even prima 
facie, considerably more significant and con­
clusive as evidence than those taken into 
account in this case. 
130. In the light of all the considerations set 
out above, I am of the opinion that the 
Commission has not consistently applied, in 
this case, the criteria which it has developed 
in order to ascertain the existence of a collec­
tive dominant position. That is not all; even 137 — OJ 1973 L 217, p. 3. See paragraph 57 of the decision. 
138 — Even without taking account systematically of the prin­
ciple laid down in the judgment in the 'Fiat Glass' case, in 
which it is made clear that 'for the purposes of establishing 
an infringement of Article 86 of the Treaty, it is not suf­
ficient ... to "recycle" the facts constituting an infringe­
ment of Article 85, deducing from them the finding that 
the parties to an agreement or to an unlawful practice 
jointly hold a substantial share of the market, that by vir­
tue of that fact alone they hold a collective dominant pos­
ition, and that their unlawful behaviour constitutes an 
abuse of that collective dominant position' (judgment cited 
above in footnote 38, paragraph 360). 
139 — See paragraphs 59, 121 and 122 of the decision. 
140 — See paragraph 127 of the decision. 
141 — Decision 94/359, cited above in footnote 87, paragraph 32. 
It is worth adding here that the factor in question was not 
considered such as to lead to the imposition of conditions, 
still less to the refusal of authorisation of the concentra­
tion. 
I - 1443 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
on the assumption that, as already suggested, 
the concept of collective dominant position 
can be adapted to the specific features of the 
control of concentrations, as well as to the 
characteristics of this particular case, it is 
none the less necessary for the Commission 
to adduce, in the context of the control of 
concentrations, sufficient evidence to estab­
lish the existence of a causal link between the 
concentration and the collective dominant 
position. 142 
There is no such evidence in this case. 
Indeed, there is substantial evidence for 
rejecting the Commission's view. In conclu­
sion, I am of the opinion that the Commis­
sion has by no means shown that the con­
centration examined creates a position of 
joint dominance by K+S/MdK and SCPA 
which could significantly impede compe­
tition. 
D — Imposition of conditions and obligations 
affecting third parties not involved in the 
concentration (Cases C-68/94 and C-30/95) 
131. Assessment of the plea alleging the 
unlawful imposition of obligations on per­
sons who are not parties to the concentration 
clearly presupposes, on the one hand, that 
the collective dominant position is relevant 
for purposes of applying the regulation and, 
on the other, that the Commission has in fact 
shown that a collective dominant position 
exists in this case. 
On the basis of the conclusions which I have 
reached so far, in particular with regard to 
the use in this case of the concept of collec­
tive dominant position, it would not seem 
necessary to examine the plea in question. 
However, for the sake of completeness, I 
consider it appropriate to examine the argu­
ments put forward by the applicants in this 
context as well. 
132. The French Government maintains 
that, even assuming it to be applicable to col­
lective dominant positions, the regulation 
does not allow a declaration of compatibility 
to be made subject to conditions and obliga­
tions which, as in this case, directly affect the 
position of third parties who are not 
involved in the concentration. To that end, it 
asserts that Article 8(2) of the regulation 
authorises the Commission only to accept, 
from the notifying undertakings, commit­
ments concerning the concentration in the 
strict sense and not commitments which sub­
stantially affect third parties as well. 
The applicant undertakings, which agree 
with the French Government that it is 
impossible, on the basis of the regulation, to 
impose conditions and obligations affecting 
142 — If this were not so, the finding of the existence of a collec­
tive dominant position detrimental to competition would 
ultimately be made to depend on mere assumptions 
detached from any specific evidence and therefore wholly 
unreliable. 
I - 1444 
FRANCE AND OTHERS v COMMISSION 
third parties, essentially claim that, even if 
the existence of a collective dominant pos­
ition is considered proven in this case, the 
fact remains that the conditions laid down 
are neither suitable nor appropriate for the 
maintenance of effective competition on the 
relevant market. 
(1) Possibility of applying Article 8(2) to 
undertakings which are not parties to the 
concentration 
133. Let me say at the outset that the French 
Government's view must be endorsed. 
Article 8(2) of the regulation authorises the 
Commission to make the declaration of 
compatibility subject only to 'conditions and 
obligations intended to ensure that the 
undertakings concerned comply with the 
commitments they have entered into vis-
à-vis the Commission with a view to modi­
fying the original concentration plan'. That 
wording indicates that it does not fall within 
the Commission's powers to take action 
with respect to operators who are not 
involved in the concentration, even if it con­
siders that they form an oligopoly together 
with the undertakings which notified the 
plan. 
In other words, Article 8(2) clearly and 
expressly limits the Commission's power to 
the right to obtain from the undertakings 
concerned commitments entered into with a 
view 'to modifying the original concentra­
tion plan'; it therefore precludes the adop­
tion of any structural changes in the com­
petitive context in which the concentration is 
created. The power to modify the plan can­
not therefore be transformed, in the absence 
of an express provision to this effect, into a 
more general power to restructure an entire 
market and/or industrial sector. 
134. That solution does not seem to me to 
be capable of serious contradiction by the 
Commission's arguments that: (a) the 
decision imposed conditions and obligations 
only on the undertakings which were parties 
to the concentration, and those conditions 
and obligations were intended to ensure 
compliance with the commitments entered 
into by the parties which notified the plan; 
and (b) the prohibition of a concentration on 
the basis of the fact that the conditions in 
question might affect the interests of third 
parties is contrary to the objectives pursued 
by the regulation and is not compatible with 
the principle of proportionality. 
With regard to the latter aspect, I refer to 
what I stated earlier when examining the 
applicability of the regulation to collective 
dominant positions, bearing in mind econ­
omic considerations and the objectives of 
that regulation. 143 As far as the former 
aspect is concerned, it is sufficient to observe 
that although, as the Commission has main­
tained, it is in the very nature of the control 
of concentrations that the commitments 
entered into by the notifying parties may, 
however indirectly, affect third parties, in 
this case the conditions at issue certainly do 
not merely affect third parties, but concern 
them objectively and subjectively, at least to 
143 — Sec points 94 to 98 above. 
I - 1445 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
the same extent as they concern the parties 
themselves. Nor does the practice relied on 
by the Commission allow the emphasis of 
the problem to be shifted: the decisions 
referred to do not impose any conditions 
directly concerning third parties and are 
therefore not comparable with the contested 
decision. 144 Moreover, and in any event, the 
fact remains that 'a mere practice cannot 
override the provisions of the Treaty', 145 or, 
I would add, provisions contained in second­
ary legislation which clearly conflict with the 
Commission's practice. As I have already 
pointed out on another occasion, it would be 
paradoxical to treat a breach of the rules as 
legitimate merely because of its repetition! 
(2) Whether the conditions imposed in this 
case for the purpose of maintaining effective 
competition are appropriate 
135. This point has, in particular, been raised 
by the applicant undertakings which claim 
that the conditions in question are neither 
necessary nor appropriate for the purpose of 
maintaining effective competition on the 
relevant market; as such, those conditions are 
unsuitable for attaining the objective referred 
to in Article 8(2) of the regulation. 
In substance, SCPA and EMC cite the arbi­
trary nature of the conditions laid down by 
the contested decision, which did not and do 
not in any way concern the concentration 
plan, but relate solely to contractual relations 
and partnerships subjectively and objectively 
unconnected with it, and, furthermore, are to 
be complied with in a geographical context 
different from the relevant market. 146 
136. I note as a preliminary point that the 
effectiveness from the point of view of com­
petition of the conditions laid down appears 
doubtful, both on account of the geographi­
cal discrepancy, to which attention has 
already been drawn, between the subject-
matter of the conditions and the relevant 
market, and on account of the lack of evi­
dence showing that those conditions are 
capable of ensuring that the concentration 
complies with the provisions of the regu­
lation. From that angle, it would seem pos­
sible to endorse the applicant undertakings's 
view, namely, that, in determining the condi­
tions to be imposed pursuant to Article 8(2) 
of the regulation the Commission should act 
on the basis of serious and detailed appraisals 
144 — The Commission refers, in particular, to the Decisions of 4 
May 1993 in the KNP/BT and VRG case (OJ 1993 L 217, 
p. 35); 19 December 1991 in the Courtaulds/SNIA case 
(OJ 1991 C 333, p. 16); and 31 July 1991 in the Varta/ 
Bosch case (OJ 1991 L 320, p. 26). 
145 — Judgment in Case C-327/91 France v Commission [1994] 
ECR I-3641, paragraph 36. 
146 — The scope of those conditions shows, rather, that the 
Commission could, if it had seen fit, have acted against the 
alleged participants in the duopoly (SCPA/EMC and K+S) 
by relying on other instruments, and in particular on 
Article 85, as it did, moreover, in a parallel case to this 
one, concerning the joint Canadian subsidiary Potacan, 
which is the subject of an investigation under Regulation 
N o 17 (cited in footnote 51). 
I -1446 
FRANCE AND OTHERS v COMMISSION 
and not of hypothetical considerations such 
as those relied on by it in its defence to jus­
tify the conditions imposed in this case. 
Since, it will be recalled, I have concluded 
that the action brought by the applicant 
undertakings is inadmissible in so far as it 
seeks annulment of the conditions relating to 
the Potacan joint venture, the brief analysis 
which follows will focus on the conditions 
concerning the withdrawal from the Kali-
Export partnership and the termination of 
the distribution contracts, merely referring, 
of course, to those points already dealt with 
exhaustively in the analysis of the structural 
links between K+S and SCPA. 147 
— Condition concerning the withdrawal of 
K+S from the Kali-Export cartel 
137. The applicant undertakings argue first 
of all that the existence of Kali-Export and 
the shares held by K+S, MdK and SCPA in 
the capital of that undertaking are not likely 
to have the slightest effect on the conditions 
of competition within the Community. In 
any case, the Commission has by no means 
established the anticompetitive effect of 
K+S's interest in the Kali-Export cartel. 
The Commission counters that the structure 
of the market in question was such that the 
possibility of cooperation between K+S and 
SCPA in the Kali-Export cartel having an 
indirect effect on the anticompetitive behav­
iour of the members of the cartel on the 
Community market could not be ruled out. 
In particular, it points out that: (a) K+S oper­
ates only on the margins of the French mar­
ket, (b) CPL had access to the French mar­
ket, increasing its sales there by 13% in six 
years, only after withdrawing from the Kali-
Export cartel, and (c) Coposa does not oper­
ate to any significant extent on the French 
market where, moreover, a substantial pro­
portion of the potash produced by it is sold 
by SCPA. 
138. The arguments put forward by the 
Commission, as I have just outlined them, 
do not seem to me to be capable of answer­
ing the objections raised by the applicant 
undertakings. The fact remains that the 
Commission has failed to show that the 
weak presence of K+S on the French market 
is attributable to its membership of the Kali-
Export export cartel, while that situation, as 
the applicant undertakings have pointed out, 
could well be explained by historical and 
geographical factors. Moreover, although, as 
the Commission has maintained, the prin­
ciples relating to the application of Articles 
85 and 86 cannot be applied to concentra­
tions, the Commission can certainly not base 
its appraisal on mere presumptions and 
probabilities. It has a duty, in any case, to 
show that the conditions in question are nec­
essary in order to ensure the maintenance of 
effective competition. 147 — Sec points 107 to 113 above. 
I - 1447 
OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
In this case the Commission has not only 
failed to explain convincingly how the 
absence of cooperation in a cartel which pro­
duces its effects on the market outside the 
Community is likely to ensure effective com­
petition on the Community market apart 
from Germany, but it has also failed to prove 
that the weak presence of K+S or Coposa on 
the French market is attributable to member­
ship of that cartel. With regard to the fact 
that CPL allegedly increased its exports to 
France only after its withdrawal from Kali-
Export, it is self-evident that this could be 
attributable specifically to a decision by CPL 
to concentrate on the Community market or, 
as claimed by the applicants and not dis­
puted by the Commission, to the operating 
difficulties experienced by CPL during the 
period when it was a member of Kali-
Export. 
— Condition relating to termination of the 
distribution contracts between K+S and 
SCPA 
139. In the opinion of the applicant under­
takings, the Commission has in no way 
shown how and why termination of the dis­
tribution contracts between K+S and SCPA 
would be likely to ensure the maintenance of 
competition on the Community market 
apart from Germany. In their view, those 
links actually produce effects only on the 
French market. 
Moreover, the links in question consist of a 
contract of 28 June 1985 for the distribution 
of products containing, not potash, but 
kieserite. For the rest, SCPA confines itself 
to purchasing potash used by EMC or 
intended for sale outside the French market. 
Finally, SCPA purchases from K+S potash 
products containing magnesium and sold in 
France, but those products, as is clear from 
the decision, are not covered by the relevant 
product market. 
140. In view of the situation which I have 
just described, and which, moreover, is not 
disputed by the Commission which merely 
relied on the importance of the establishment 
by K+S of its own distribution organisation 
on the French market, it is only too obvious 
that K+S and SCPA had no special relation­
ship for the distribution of potash products. 
However, it is worth pointing out that the 
wording of the decision led K+S to terminate 
the only existing distribution link 'with 
SCPA: the contract relating to kieserite, that 
is to say, I repeat, to a product which in the 
decision 'was not considered to be covered 
by the relevant market. 
That factor, more than any other assessment, 
helps to confirm the validity of the appli­
cants' argument concerning the direct impact 
of the decision on their interests, and also 
reinforces doubts as to the expediency of the 
conditions imposed for the purpose of elimi­
nating the duopolistic dominant position 
allegedly created by the concentration. 
I - 1448 
FRANCE AND OTHERS v COMMISSION 
Conclusions 
141. The foregoing considerations show, in my opinion, that in this case mistakes 
were made in the interpretation and application of the provisions of the regulation 
on concentrations. 
It is necessary, at this stage, to establish whether those mistakes warrant annulment 
of the decision as a whole or only its partial annulment, that is, only of the part 
containing the conditions concerning the applicant companies. For reasons which I 
shall explain below, I am of the opinion that the latter solution is the most appropri­
ate. 
142. First of all I regard as unfounded the Commission's argument that partial 
annulment of the decision would alter the institutional balance since the Commu­
nity judicature is not competent to amend the Commission's decision by substitut­
ing itself for the Commission in the appraisal of the concentration. 
I shall merely observe in this connection that the right of the Court to annul only 
partially a decision given in subjecta materia derives from the regulation itself, as 
well as from the Court's settled case-law. 148 It would moreover be paradoxical to 
maintain that the exercise by the Court of a power expressly conferred on it under­
mines the rights and powers of the Commission. Allow me instead to reaffirm that, 
for the purposes of partial annulment, the conditions laid down on the matter in the 
case-law, which are, in substance, intended to ensure that partial annulment does 
not result in the contested decision being emptied of all substance, must be met. 149 
143. In view of the foregoing, I am of the opinion that it is possible to annul the 
decision in part and that this solution can be adopted in respect of any of the pleas 
148 — Judgment in Case 2/56 Grilling v High Authority [1957] ECR 3. 
149 — See already, to that effect, the judgment in Case 37/71 Jama v Commission [1972] ECR 483, paragraphs 11 and 12. 
I - 1449 
OPINION OF MR TESAURO — CASES C-68/94 A N D C-30/95 
put forward by the parties which I have considered well founded and which the 
Court sees fit to accept. Whether the Court inclines towards inapplicability, in prin­
ciple, of the regulation to collective dominant positions, or whether it considers that 
a collective dominant position is non-existent or in any event insufficiently proven, 
the premiss on which the Commission based its imposition of the contested condi­
tions on the applicant undertakings would be negated. Those conditions, let us 
remember, were laid down in order to prevent the concentration from creating a 
situation of oligopolistic dominance which could impede competition on the Com­
munity market. 
Those observations would, in my opinion, also apply should the Court come to the 
conclusion, once the problems connected with the application of the provisions of 
the regulation to oligopolies have been dealt with and the existence of a collective 
dominant position has been established, that Article 8(2) of the regulation does not 
authorise the Commission to impose conditions which directly affect the interests 
of third parties not involved in the concentration. Similarly, if the conditions in 
question were considered invalid for the purpose of ensuring the maintenance of 
effective competition on the relevant market, the most appropriate solution would 
be, once again, to annul them and thus annul the decision in part. 
144. In conclusion, it would be possible, in all the various solutions which I have 
just outlined, to annul the conditions without emptying the decision as a whole of 
all substance. 150 It is hardly necessary to point out in that respect that the appraisal 
of the effects of the concentration on the Community market, of which the disputed 
conditions form part, is completely and objectively independent of that concerning 
the German market, a fact which could form the basis of a limitation ratione maté­
riae of the operative part of the decision in such a way as to satisfy the requirements 
laid down in the relevant case-law. 
Nor, on the other hand, would partial annulment of the decision be likely to under­
mine its scope. Furthermore, in this case, taken as a whole, the contested decision is 
150 — In those circumstances, moreover, that possibility would be available to the Commission, by virtue of the reopening of the time-
limits provided for in Article 10(5) of tne regulation, by laying down new and different conditions or else by showing more fully 
and coherently how the original conditions would take effect from the point of view of protecting competition. However, while 
such a course of action is quite permissible in theory, it does not seem likely to me, since it implies re-examining a concentration 
which has already produced its effects and which would therefore render an appraisal in the light of the previously existing state 
of affairs very difficult. 
I - 1450 
FRANCE AND OTHERS v COMMISSION 
favourable to the undertakings concerned, a factor which, according to the Court's 
case-law, is relevant for the purpose of granting an action for partial annulment. 151 
145. With regard to costs, I propose, pursuant to Article 69(3) of the Rules of Pro­
cedure, that the parties should be ordered to bear their own as far as Case C-68/94 
is concerned. As regards Case C-30/95, however, I am of the opinion, on the basis 
of the same provision, that the fact that the Commission has been essentially unsuc­
cessful requires that it be ordered to pay the costs, including those incurred by the 
intervening undertakings. The governments which have intervened in the cases in 
question should, on the other hand, be ordered to bear their own costs. 
146. In the light of the foregoing observations, I therefore conclude by proposing 
that the Court should: 
— in Case C-68/94: 
(a) annul Article 1 of Commission Decision 94/449/EC of 14 December 1993 
relating to a proceeding pursuant to Council Regulation (EEC) N o 4064/89 
(Case N o IV/M.308 — Kali + Salz/MdK/Treuhand), in so far as it makes the 
declaration of the concentration's compatibility subject to compliance with the 
conditions and obligations referred to in paragraph 63; 
(b) dismiss the rest of the action; 
(c) order the parties, and the German Government which has intervened, to bear 
their own costs; 
— in Case C-30/95: 
(a) declare the actions brought by SCPA and EMC admissible, save for the plea 
concerning the undertaking in relation to the Canadian company Potacan; 
151 — Judgment in Transocean Marine Paint Association, cited above in footnote 39, paragraph 21. 
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OPINION OF MR TESAURO — CASES C-68/94 AND C-30/95 
(b) annul Article 1 of Commission Decision 94/449/EC of 14 December 1993 
relating to a proceeding pursuant to Council Regulation (EEC) N o 4064/89 
(Case N o IV/M.308 — Kali + Salz/MdK/Treuhand), in so far as it makes the 
declaration of the concentration's compatibility subject to compliance with the 
conditions and obligations referred to in paragraph 63; 
(c) order the Commission to pay the costs, including those of the intervening 
undertakings, and the French Government to bear its own costs. 
I -1452