Judgment — ECLI:EU:T:2008:315
Date: 2008-09-09
Language of the case: English
Court formation: Third Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Concentrations between undertakings
Concepts: Costs;Basis of liability;Commitments;General
Procedure: Action for damages - unfounded
Origin: United Kingdom

summary form, in the application and the applicant cannot simply refer in that regard to annexes which restate the arguments put forward in the action for annulment. 99 The applicant claims that the only test in this case is whether the Commission is able to adopt a position on the plea relied on and whether the Court is able to exercise its powers of review. The material put forward in that regard in the application satisfies that criterion and is expanded upon in Annexes 15 and 16 to that document, which contain the necessary evidence. b) Findings of the Court 100 Under the first paragraph of Article 21 of the Statute of the Court of Justice, which applies to the procedure before the Court of First Instance by virtue of the first paragraph of Article 53 of that statute, and under Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, all applications must indicate the subject-matter of the dispute and contain a summary of the pleas in law on which the application is based. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to exercise its power of review. In order to guarantee legal certainty and the sound administration of justice, it is necessary that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself (orders in Case T-85/92 De Hoe v Commission [1993] ECR II-523, paragraph 50, and Case T-294/04 Internationaler Hilfsfonds v Commission [2005] ECR II-2719, paragraph 23). 101 In order to satisfy those requirements, an application seeking compensation for damage caused by a Community institution must state the evidence from which the conduct alleged against it can be identified (order in Internationaler Hilfsfonds v Commission, cited in paragraph 100 above, at paragraph 24). 102 In the present case, the applicant states in its application that the refusal of the Commission to accept, or even to examine, the commitments submitted by it in the administrative procedure constitutes a sufficiently serious breach of a number of rules of law intended to confer rights on individuals. In that regard, the references in the application to the arguments put forward in support of the fourth plea in law in the application for annulment in Case T-342/99 (relating to the lawfulness of the Airtours decision in the light of the rules relating to commitments), put forward in detail in Annexes 15 and 16 to the application, must be considered to be no more than an amplification of the reasoning set out in the application as to the unlawfulness allegedly underlying the Commission’s conduct complained of as regards the analysis of the proposed commitments. 103 Having regard to the above, the Commission was able to prepare its defence on the basis of that plea. 104 The Commission’s submissions as to the admissibility of the plea relating to potentially unlawful conduct occurring at the stage of the analysis of the commitments will accordingly be rejected. 2. Substance a) Arguments of the parties The arguments put forward in the parties’ written pleadings 105 In its written pleadings, the applicant claims that in refusing to accept, or even to examine, the commitments submitted by it during the administrative procedure, the Commission infringed Article 2 and Article 8(2) of Regulation No 4064/89, the principle of proportionality, the principle of sound administration, the duty of diligence and the obligation to apply its own procedures for examining commitments. Those infringements constitute a sufficiently serious breach within the meaning of the case-law. The applicant argues in particular that, had the Commission accepted and not wrongfully rejected the commitments the applicant had submitted, the concentration would have been approved in accordance with Article 2(2) of Regulation No 4064/88 and that that would have been the case even though such commitments were unnecessary, since the concentration did not give rise to any competition concerns. The applicant also submits that the Commission should have considered the second set of commitments notwithstanding the fact that they were submitted outside the period laid down by Regulation No 4064/89. 106 The Commission contends that it is clear from the Airtours decision that the first set of commitments were not sufficient to render the notified concentration compatible with the common market, since the creation of a single mid-sized operator dependent on the travel agencies controlled by the main operators would not have brought about sufficient competition on the market in question (recitals 186 to 192 to the Airtours decision). As regards the second set of commitments, submitted after the expiry of the period laid down by Article 18(2) of Regulation No 447/98, the Commission states that even though that period may be extended in exceptional circumstances, the applicant neither asked for an extension, nor explained the exceptional circumstances which might have justified such a measure prior to the expiry of the period. Moreover, the second set of commitments did not contain any material which could not have been included in the first set of commitments. In addition, there was insufficient time to examine the new commitments effectively (recital 193 to the Airtours decision). The rejection of the proposed commitments was accordingly justified and does not constitute a sufficiently serious breach to give rise to liability on the Community’s part. The opportunity to examine the commitments of 15 September 1999 in the time remaining 107 In reply to the measures of organisation of procedure decided upon by the Court, which sought to establish the reasons for which the Commission was unable to evaluate effectively the commitments submitted on 15 September 1999 ‘in the short time that remained’ and the further investigations that would have been required in order to evaluate those commitments, the applicant claims that there was nothing to prevent the Commission from examining those commitments and that the particular constraints which are imposed objectively on the service in its normal operation provide neither justification nor explanation for its refusal. 108 The Commission sets out the reasons for which, although the period for adjudicating on the Airtours concentration expired on 5 October 1999, the draft decision required to be ready before noon on Tuesday 21 September 1999. The practice of the Commission is to prepare the draft decision for the meeting of the College of its Members which takes place during the week preceding the week in which the period expires in order to allow for the possibility that a majority of the Members might require the decision to be amended. In the present case, the Commission services thus had only three and a half working days in which to consider the commitments submitted on Wednesday 15 September 1999 (that is to say, Thursday 16, Friday 17, Monday 20 and the morning of Tuesday 21 September 1999). Having regard to the fact that material uncertainties remained, that it would have been necessary to conduct a new market test and to consult further with the Advisory Committee within three and a half days, that the comments received in relation to the first market test were very negative, that everything that was in the second set of engagements could have been included in the original proposal and that the applicant neither sought a derogation nor put forward any convincing arguments as to exceptional circumstances to justify such a derogation, the Commission considers that the commitments submitted on 15 September 1999 did not require to be examined. Whether the commitments submitted on 15 September 1999 were sufficient and the response to the request by the Court for the production of documents relating to that assessment 109 In response to the measure of organisation of procedure decided upon by the Court, which wished to know to what extent the commitments submitted on 15 September 1999 allowed the problems identified by the Commission at that stage of the proceedings to be addressed, the applicant claims that the Commission had raised two concerns, namely the need to constitute a fourth force with at least 10% of the relevant market and access of that entity to a distribution network. Both of those issues were addressed by the proposed commitments: the fourth force (Cosmos, with 800 000 package holidays sold in 1998) would receive a business comprising 700 000 packages sold – which would allow it, with 1.5 million packages, to represent over 10% of the relevant market, estimated in 1998 at 13.9 million passengers – and the First Choice distribution network would be transferred to it, together with access to part of the applicant’s network for a period of five years. 110 The Commission contends that its concerns were, first, to allow for the recreation of a fourth force with access to a distribution network and, secondly, to ensure that the competition provided by the small operators was maintained. It states that those concerns arose principally from the observations made by the undertakings and associations which had responded to the market test undertaken in relation to the first set of commitments. 111 In that context, the Commission submits that the commitments submitted on 15 September 1999 (following a meeting with the Commission of the same date) were new and substantially modified by comparison with the previous version and that they did not enable a clear and definitive response to be given to the problems identified at that stage. Thus, although, in formal terms, it rejected those commitments on procedural grounds, the Commission states that it nevertheless carried out a preliminary assessment of those commitments in order to assess whether the possibility of putting questions to the interested parties and the Advisory Committee might yield a positive outcome. According to the Commission, several areas of uncertainty remained and it could not conclude with confidence that its concerns relating to the creation of a collective dominant position would disappear. 112 At the hearing on 29 April 2008, the Court ordered the Commission, pursuant to Article 65(b) and the third subparagraph of Article 67(3) of the Rules of Procedure, to produce all the documents in its possession relating to the assessment of the commitments submitted on 15 September 1999 which were drawn up between that date and the date on which the Airtours decision was adopted, namely 22 September 1999. 113 In response to that request, the Commission produced two documents at the hearing on 29 April 2008. The first document is an undated note to file, which summarises the discussions which took place before and at the meeting held at the Commission on 15 September 1999 as regards the commitments and, in particular, the proposed commitments submitted informally on 14 September 1999. The second document is a note of 16 September 1999, prepared by the director of the Merger Task Force (‘the MTF’) for the Member of the Commission responsible for competition matters, which sets out conclusions in relation to the undertakings submitted on 15 September 1999 from a procedural and substantive point of view. Points 11 to 13 of the latter document set out, in substance, the content of the submissions made by the Commission in reply to the question put by the Court in relation to the assessment of the commitments. 114 Within the period laid down for that purpose by the Court, the Commission also produced other documents: – a note to file, dated 16 September 1999, prepared by a head of unit of the MTF and relating to the principles applicable to the submission of commitments out of time; – a note dated 17 September 1999, prepared by the same head of unit for an official in the Secretariat-General, together with a revised version of that note, which contain the text of the communication to be issued by the Member of the Commission responsible for competition matters and which refer to doubts and uncertainties regarding the assessment of the substance of the commitments submitted on 15 September 1999; – speaking notes of the Member of the Commission responsible for competition matters, intended for use at the meeting of the Commission on the draft Airtours decision, which refer to doubts and uncertainties regarding the assessment of the substance of the commitments submitted on 15 September 1999; – a draft of the Airtours decision, which does not refer to the assessment of the substance of the commitments submitted on 15 September 1999, but states only that those commitments were submitted out of time; – a note setting out lines to take headed ‘Defensive Points – Offer of Undertakings’ prepared by the MTF for the attention of the Member of the Commission responsible for competition matters intended to enable him to put forward arguments relating in particular to the assessment of the substance of the commitments submitted on 15 September 1999. 115 Within the period laid down for that purpose by the Court, the applicant submitted its comments on the various documents produced by the Commission in response to the Court’s request. b) Findings of the Court 116 The purpose of the control of concentrations is to provide to the undertakings concerned the authorisation which is necessary and preliminary to the implementation of every concentration having a Community dimension. As part of the arrangements for control, those undertakings may submit commitments to the Commission in order to obtain a decision finding their concentration to be compatible with the common market. 117 Depending on the stage which the administrative procedure has reached, the commitments proposed must allow the Commission either to form the view that the notified concentration does not raise serious doubts as to its compatibility with the common market at the stage of the preliminary examination (Article 6(2) of Regulation No 4064/89) or to respond to the objections sustained during the detailed investigation (Article 18(3), read together with Article 8(2) of Regulation No 4064/89). Those commitments therefore enable, at the initial stage, the initiation of a detailed investigation phase to be avoided, or, thereafter, a decision declaring that the concentration is incompatible with the common market to be avoided. 118 Article 8(2) of Regulation No 4064/89 allows the Commission to attach to a decision declaring a concentration compatible with the common market in accordance with the criterion laid down in Article 2(2) of the regulation 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 rendering the concentration compatible with the common market. 119 Having regard both to the significance of the financial interests and the industrial or commercial stakes inherent in that type of transaction, and to the powers available to the Commission in the field, the undertakings concerned can be expected to do everything to facilitate the work of the administration. For the same reasons, the Commission must display the utmost diligence in performing its supervisory duties in the field of concentrations. 120 In the present case, it is clear from the Airtours decision and from the replies of the parties to the questions put by the Court, that the Commission decided to initiate detailed investigation proceedings on 3 June 1999. It also gave the applicant the opportunity of communicating its observations on the objections raised by its services, by sending it a statement of objections on 9 July 1999, and those issues were addressed at the hearing which took place on 28 and 29 July 1999. In order to respond to those objections, the applicant submitted a number of commitments to the Commission on 19 August 1999. Originally, the commitments proposed were intended only to ensure that competition from the small operators was maintained. However, the Commission indicated to the applicant that the recreation of a fourth force would constitute an effective remedy for addressing the competition problems identified at that stage. That point was addressed by the applicant at a meeting which was held with the Commission on 24 August 1999 à propos the commitments submitted on 19 August 1999. Subsequently, it was the subject of the first set of commitments, formally submitted on 7 September 1999 following discussions with the Commission’s services, and of the second set of commitments, which amended the first set and which were formally submitted on 15 September 1999 following a meeting which was held with the Commission on the same date. 121 Moreover, it must be pointed out that in recital 193 to the Airtours decision, the Commission took the view that the commitments submitted on 15 September 1999 did not require to be taken into account by its services, because they had not been submitted within the period of three months laid down by Article 18(2) of Regulation No 447/98 – which ended on 7 September 1999 – in the absence of relevant exceptional circumstances and that it was not possible to evaluate them effectively ‘in the short time that remained before the expiry of the deadline under Article 10(3) of [Regulation No 4064/89]’, that is to say, 5 October 1999. That point is not contested by the parties. 122 It is also not contested by the parties that, on its own initiative, the applicant submitted new commitments on 15 September 1999 in order to replace those which had been submitted on 7 September 1999. That revised offer of commitments was made, having regard to the objections identified in the statement of objections and of the result of the first market test undertaken in relation to the original commitments, with a view to responding to the competition problems identified at that stage by the Commission. It is the latter set of proposed commitments which must be taken into consideration in the present case. 123 The fact that the Court declared the assessment of the effects of the concentration on competition carried out by the Commission in the Airtours decision to be unlawful does not mean that the refusal to accept the commitments submitted on 15 September 1999 is unlawful by reason of that fact alone. At the time at which the Court’s analysis was undertaken, the Airtours decision had not yet been adopted and it was therefore freely and in full knowledge of the facts that the applicant decided to offer the Commission solutions capable of responding to the objections identified, in order to obtain a decision of compatibility. It is on that basis that it is necessary to assess whether there was a sufficiently serious breach at the stage of the analysis of the proposed commitments and not on the basis of information of which the parties were not yet aware at the time of the discussion regarding the commitments. 124 At the hearing on 29 April 2008, the Commission stated that, at the material time, in September 1999, its practice in relation to the examination of commitments submitted out of time was to accept such commitments only if they clearly responded to the objections raised at that stage as regards the compatibility of the concentration with competition in the common market. That approach satisfies the duty of diligence which is imposed on the administration when implementing the decision-making powers which are conferred on it by virtue of Article 8(2) and (3) of Regulation No 4064/89 (see paragraph 49 above). 125 According to the information provided in reply to a question from the Court on that point, the Commission found that its initial, relatively indulgent and conciliatory, approach had rapidly revealed its limitations. The undertakings concerned had a tendency to wait until the last minute before submitting their commitments and that threatened to undermine the proper conduct of the decision-making process in the control of concentrations by preventing the Commission from examining those commitments and consulting third parties and the representatives of the Member States in the proper conditions. With effect from 27 May 1998, the Commission decided to apply the period of three months laid down by Article 18(2) of Regulation No 447/98 more rigorously, so as to limit cases where commitments required to be examined out of time to those in respect of which it remains in a position to carry out a proper evaluation. 126 That practice has, moreover, subsequently been restated in its notice on remedies acceptable under Regulation No 4064/89 and Regulation No 447/98 (OJ 2001 C 68, p. 3) in order to set out the lessons learned from the experience acquired in relation to commitments submitted following the entry into force of Regulation No 4064/89. Point 43 of that notice states that the Commission will examine modified commitments submitted after the deadline laid down by Regulation No 447/98 ‘where it can clearly determine – on the basis of its assessment of information already received in the course of the investigation, including the results of prior market testing, and without the need for any other market test – that such commitments, once implemented, resolve the competition problems identified and allow sufficient time for proper consultation of Member States’. 127 In a case involving a concentration notified in 2004, the Court took the view that it followed from that notice, by which the Commission had voluntarily undertaken to be bound, that the parties to a notified concentration may have their commitments which are submitted out of time taken into account subject to two cumulative conditions, namely, first, that those commitments clearly and without the need for further investigation resolve the competition concerns previously identified and, secondly, that there is sufficient time to consult the Member States on those commitments (Case T-87/05 EDP v Commission [2005] ECR II‑3745, paragraphs 162 and 163). 128 While it is true that the Airtours decision indicates otherwise, it is clear that the Commission did not reject the commitments of 15 September 1999 without considering whether they were capable of responding clearly to the objections raised at that stage of the proceedings. 129 In that regard, the documents submitted in response to the request made by the Court set out the reasons for which the Commission was entitled to consider that those commitments did not represent a satisfactory response to those objections. The note from the director of the MTF of 16 September 1999 and the note on the defensive points prepared by the MTF for the Member of the Commission responsible for competition matters thus refer to the Commission’s doubts concerning the claim that the market share of the new grouping proposed by the applicant, namely the fourth force, amounted to 10%. Not only was the market share of First Choice higher than that of the fourth force proposed by the applicant by way of replacement (11%, at the lowest), but also, and above all, that figure of 10% was achieved on the assumption that Cosmos, which was one of the members of the fourth force, would have significant internal growth from one year to another (going from 550 000 packages sold in 1998/99 to 800 000 packages sold in 1999/2000, that is to say, 45% in one year). Such internal growth was highly difficult to envisage, having regard to the characteristics of the market. Those documents also refer to doubts and uncertainties concerning a number of points, such as the exact composition of the packages to be transferred to the new business, the interest Cosmos, which did not attach great significance to the use of a network of agencies, might have in retaining the First Choice network of agencies and Cosmos’ independence from the three main operators remaining on the market after the concentration and which purchased the majority of the airline seats sold by Cosmos. The commitments submitted on 15 September 1999 were indeed, therefore, examined by the Commission’s services, which raised a number of issues liable to put in question the ability of those commitments to respond clearly to the objections identified at that stage of the proceedings. 130 The fact that the Commission did not refer in the Airtours decision to the analysis undertaken by its services of the commitments submitted on 15 September 1999 does not prevent the Court from taking account of those documents that have been produced in the present action and which are relevant, which carry sufficient evidential weight and establish that such an analysis was carried out to the requisite legal standard. 131 Without it being necessary to state a view on whether it was possible in the time available for the Commission to examine the amended commitments submitted on 15 September 1999, it follows from the above that it is apparent that those commitments did not respond clearly to the objections raised at that stage as regards the compatibility of the concentration with competition on the common market. The Commission’s conduct did not therefore result in the applicant being deprived of all possibility of having the concentration declared compatible with the common market. The Commission accordingly did not infringe its duty of diligence in that regard. 132 Consequently, the Commission did not commit a breach of a rule of law intended to confer rights on individuals that was sufficiently serious to give rise to liability on the Community’s part as regards the analysis of the commitments submitted by the applicant at the end of the administrative procedure. 133 It follows that the action will be dismissed. 134 It is also necessary to reject the various applications presented by the applicant for measures of organisation of procedure in order to obtain certain documents or for clarification of certain factual or procedural points. In the light of the replies to the questions put to the parties and after examination of the documents communicated by the Commission regarding the analysis of the commitments of 15 September 1999 (see paragraphs 113 and 114 above), it must be held that the measures requested are not necessary in order to give a ruling in the present case and, accordingly, that they should not be allowed. Costs 135 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Pursuant to Article 87(3) of the Rules of Procedure, the Court of First Instance may, however, order that the costs be shared or that each party bear its own costs where each party succeeds on some and fails on other heads, or where the circumstances are exceptional. 136 In the present case, the Court notes that the Commission stated in the Airtours decision that it had not examined the commitments submitted by the applicant on 15 September 1999, because they had been submitted out of time and since there was no time available in which to do so. The applicant and the Court could thus reasonably have formed the view that those revised commitments, submitted after a meeting held with the Commission’s services in order to alter the original set of commitments so as better to respond to the concerns identified at that stage of the proceedings, had not been examined by the Commission for purely procedural reasons. It is clear from the measures of organisation of procedure and measures of inquiry decided upon by the Court, first, with a view to preparing for the hearing on 29 April 2008 and, secondly, at that hearing, that the Commission’s services did not simply reject the commitments offered on 15 September 1999 as being out of time, but that they had also carried out a preliminary examination of those commitments and had, as a result, concluded that they were not sufficient at that stage. 137 The fact that the Commission had indeed carried out an appropriate examination of the commitments submitted on 15 September 1999 in accordance with its practice at the time, which is a decisive point in the resolution of the dispute, was thus not known to the applicant and the Court until a very advanced stage in the procedure before the Court. 138 It is all the more regrettable that this information was provided at such a late stage, since, on several occasions in this case and in Case T-403/05 (see paragraph 18 above), the applicant requested the Commission to provide to it all documents capable, in substance, of being used by it to substantiate its case before the Court. Even though it may be considered that, in principle, the documents in question are not of a type to which a party to a concentration can have access in an administrative procedure under Regulation No 4064/89 or to which a member of the public can have access following the making of a request under Regulation No 1049/2001, the fact remains that those documents were important in allowing the applicant to substantiate its case in the present proceedings and in allowing the Court to assess the non-contractual liability of the Community. 139 Thus, and although the point has no impact on the present case in so far as those documents were submitted in the course of these proceedings, the documents produced at the hearing on 29 April 2008 and thereafter ought to have been furnished at the time at which the Commission lodged its defence, in which it challenged both the admissibility and the substance of the plea alleging potentially unlawful conduct at the stage of the analysis of the commitments. Consequently, the Court considers that it would be equitable in those circumstances to hold that the Commission bear its own costs. 140 Under the first subparagraph of Article 87(4) of the Rules of Procedure, Member States which intervened in the proceedings are to bear their own costs. The Federal Republic of Germany must therefore bear its own costs. On those grounds, THE COURT OF FIRST INSTANCE (Third Chamber, Extended Composition) hereby: 1. Dismisses the action; 2. Orders MyTravel Group plc to bear its own costs; 3. Orders the Commission to bear its own costs; 4. Orders the Federal Republic of Germany to bear its own costs. Azizi Cooke Cremona Labucka Frimodt Nielsen Delivered in open court in Luxembourg on 9 September 2008. E. Coulon J. Azizi Registrar President Table of contents Facts Procedure and forms of order sought Law A – Preliminary considerations regarding the conditions governing the circumstances in which the non-contractual liability of the Community will arise 1. General arguments of the parties a) The concept of a sufficiently serious breach b) The concept of a rule intended to confer rights on individuals 2. Findings of the Court a) The concept of a sufficiently serious breach b) The concept of rules intended to confer rights on individuals B – The existence of a ‘sufficiently serious breach’ at the stage of the Commission’s assessment of the effects of the Airtours/First Choice concentration on competition in the common market 1. Arguments of the parties a) The duty to recognise the limited scope of application of Article 2 of Regulation No 4064/89 b) The obligation to define the market situation in the absence of the concentration c) The obligation to establish the conditions for tacit collusion Market share volatility Demand volatility Low demand growth Market transparency The obligation to examine whether a deterrent mechanism existed The obligation to give due weight to the reaction of current and potential competitors and consumers d) The cumulative effect of the instances of failure to have regard to evidence, and the failure to state adequate reasons 2. Findings of the Court a) The argument relating to the duty to recognise the limited scope of application of Article 2 of Regulation No 4064/89 b) The arguments relating to the obligation to define the market situation in the absence of the concentration and the obligation to establish the conditions for tacit collusion c) The arguments relating to the cumulative effect of the instances of failure to have regard to the evidence and the failure to state adequate reasons C – Potentially unlawful conduct occurring at the stage of the analysis of the commitments 1. Admissibility of the line of argument relating to potentially unlawful conduct occurring at the stage of the analysis of the commitments a) Arguments of the parties b) Findings of the Court 2. Substance a) Arguments of the parties The arguments put forward in the parties’ written pleadings The opportunity to examine the commitments of 15 September 1999 in the time remaining Whether the commitments submitted on 15 September 1999 were sufficient and the response to the request by the Court for the production of documents relating to that assessment b) Findings of the Court Costs * Language of the case: English.