61969CJ0052_EN
Parties
Subject of the case
Grounds
Decision on costs
Endorsements
Operative part
Parties
IN CASE 52/69
J . R . GEIGY AG, NOW CIBA-GEIGY AG, A LIMITED LIABILITY COMPANY GOVERNED BY SWISS LAW, HAVING ITS REGISTERED OFFICE IN BASEL, ASSISTED AND REPRESENTED BY J . J . A . ELLIS, ADVOCATE AT THE HAGUE, AND H . FLAD, ADVOCATE OF FRANKFURT AM MAIN, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF J . LOESCH, ADVOCATE, 2 RUE GOETHE, APPLICANT,
V
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISERS J . THIESING, G . MARCHESINI AND J . GRIESMAR, ACTING AS AGENTS, ASSISTED BY PROFESSOR W . VAN GERVEN, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ITS LEGAL ADVISER, E . REUTER, 4 BOULEVARD ROYAL, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF THE COMMISSION DECISION OF 24 JULY 1969 PUBLISHED IN THE JO L 195 OF 7 . 8 . 1969, P . 11 ET SEQ ., RELATING TO PROCEEDINGS UNDER ARTICLE 85 OF THE EEC ( IV/26.267 - DYESTUFFS ),
Grounds
1 IT IS COMMON GROUND THAT FROM JANUARY 1964 TO OCTOBER 1967 THREE GENERAL AND UNIFORM INCREASES IN THE PRICES OF DYESTUFFS TOOK PLACE IN THE COMMUNITY .
BETWEEN 7 AND 20 JANUARY 1964, A UNIFORM INCREASE OF 15 PER CENT IN THE PRICES OF MOST DYES BASED ON ANILINE, WITH THE EXCEPTION OF CERTAIN CATEGORIES, TOOK PLACE IN ITALY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG AND IN CERTAIN THIRD COUNTRIES .
ON 1 JANUARY 1965 AN IDENTICAL INCREASE TOOK PLACE IN GERMANY .
ON THE SAME DAY ALMOST ALL PRODUCERS IN ALL THE COUNTRIES OF THE COMMON MARKET EXCEPT FRANCE INTRODUCED A UNIFORM INCREASE OF 10 PER CENT ON THE PRICES OF DYES AND PIGMENTS EXCLUDED FROM THE INCREASE OF 1964 .
SINCE THE ACNA UNDERTAKING DID NOT TAKE PART IN THE INCREASE OF 1965 ON THE ITALIAN MARKET, THE OTHER UNDERTAKINGS DID NOT MAINTAIN THE ANNOUNCED INCREASE OF THEIR PRICES ON THAT MARKET .
TOWARDS MID-OCTOBER 1967, AN INCREASE FOR ALL DYES WAS INTRODUCED, EXCEPT IN ITALY, BY ALMOST ALL PRODUCERS, AMOUNTING TO 8 PER CENT IN GERMANY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG, AND 12 PER CENT IN FRANCE .
2 BY A DECISION OF 31 MAY 1967 THE COMMISSION COMMENCED PROCEEDINGS UNDER ARTICLE 3 OF REGULATION NO 17/62 ON ITS OWN INITIATIVE CONCERNING THESE INCREASES FOR PRESUMED INFRINGEMENT OF ARTICLE 85 ( 1 ) OF THE EEC TREATY AGAINST SEVENTEEN PRODUCERS OF DYESTUFFS ESTABLISHED WITHIN AND OUTSIDE THE COMMON MARKET, AND AGAINST NUMEROUS SUBSIDIARIES AND REPRESENTATIVES OF THOSE UNDERTAKINGS .
BY A DECISION OF 24 JULY 1969, THE COMMISSION FOUND THAT THE INCREASES WERE THE RESULT OF CONCERTED PRACTICES, WHICH INFRINGED ARTICLE 85 ( 1 ) OF THE TREATY, BETWEEN THE UNDERTAKINGS
- BADISCHE ANILIN - UND SODA-FABRIK AG ( BASF ), LUDWIGSHAFEN,
- CASSELLA FARBWERKE MAINKUR AG, FRANKFURT AM MAIN,
- FARBENFABRIKEN BAYER AG, LEVERKUSEN,
- FARBWERKE HOECHST AG, FRANKFURT AM MAIN,
- SOCIETE FRANCAISE DES MATIERES COLORANTES SA, PARIS,
- AZIENDA COLORI NAZIONALI AFFINI S . P . A . ( ACNA ), MILAN,
- CIBA SA, BASEL,
- J . R . GEIGY SA, BASEL,
- SANDOZ SA, BASEL, AND
- IMPERIAL CHEMICAL INDUSTRIES LTD . ( ICI ), MANCHESTER .
IT THEREFORE IMPOSED A FINE OF 50 000 U . A . ON EACH OF THESE UNDERTAKINGS, WITH THE EXCEPTION OF ACNA, FOR WHICH THE FINE WAS FIXED AT 40 000 U . A .
3 BY APPLICATION LODGED AT THE COURT REGISTRY ON 3 OCTOBER 1969 GEIGY AG, NOW CIBA-GEIGY AG, HAS BROUGHT AN APPLICATION AGAINST THAT DECISION .
SUBMISSIONS RELATION TO PROCEDURE AND TO FORM
THE SUBMISSIONS CONCERNING THE ADMINISTRATIVE PROCEDURE
( A ) THE COMPLAINT RELATING TO THE SIGNING OF THE " NOTICE OF OBJECTIONS " BY AN OFFICIAL OF THE COMMISSION
4 THE APPLICANT ASSERTS THAT THE NOTICE OF OBJECTIONS, FOR WHICH ARTICLE 2 OF REGULATION NO 99/63 OF THE COMMISSION MAKES PROVISION, IS IRREGULAR BECAUSE IT IS SIGNED BY THE DIRECTOR-GENERAL FOR COMPETITION PER PROCURATIONEM ALTHOUGH ACCORDING TO THE APPLICANT, NO SUCH DELEGATION OF POWERS ON THE PART OF THE COMMISSION IS PERMITTED .
5 IT IS ESTABLISHED THAT THE DIRECTOR-GENERAL FOR COMPETITION DID NO MORE THAN SIGN THE NOTICE OF OBJECTIONS WHICH THE MEMBER OF THE COMMISSION RESPONSIBLE FOR PROBLEMS OF COMPETITION HAD PREVIOUSLY APPROVED IN THE EXERCISE OF THE POWERS WHICH THE COMMISSION HAD DELEGATED TO HIM .
THEREFORE THAT OFFICIAL DID NOT ACT PURSUANT TO A DELEGATION OF POWERS BUT SIMPLY SIGNED AS A PROXY ON AUTHORITY FROM THE COMMISSIONER RESPONSIBLE .
THE DELEGATION OF SUCH AUTHORITY CONSTITUTES A MEASURE RELATING TO THE INTERNAL ORGANIZATION OF THE DEPARTMENTS OF THE COMMISSION, IN ACCORDANCE WITH ARTICLE 27 OF THE PROVISIONAL RULES OF PROCEDURE ADOPTED UNDER ARTICLE 16 OF THE TREATY OF 8 APRIL 1965 ESTABLISHING A SINGLE COUNCIL AND A SINGLE COMMISSION .
6 THEREFORE THIS SUBMISSION IS UNFOUNDED .
( B ) THE COMPLAINT RELATING TO DISPARITIES BETWEEN THE " NOTICE OF OBJECTIONS " AND THE DECISION TO COMMENCE THE ADMINISTRATIVE PROCEDURE
7 THE APPLICANT ASSERTS THAT THE NOTICE OF OBJECTIONS REFERS TO THE POSSIBLE IMPOSITION OF FINES, ALTHOUGH THE DECISION TO COMMENCE PROCEEDINGS ONLY REFERS TO PROCEEDINGS TO ESTABLISH INFRINGEMENTS .
IT IS ARGUED THAT IN THIS WAY THE COMMISSION HAS INFRINGED ARTICLE 19 OF REGULATION NO 17/62 AND ARTICLES 2 AND 4 OF REGULATION NO 99/63, COMBINED WITH THE SECOND PARAGRAPH OF ARTICLE 162 OF THE EEC TREATY AND ARTICLE 27 OF THE COMMISSION' S RULES OF PROCEDURE .
8 IT IS THE NOTICE OF OBJECTIONS ALONE AND NOT THE DECISION TO COMMENCE PROCEEDINGS WHICH IS THE MEASURE STATING THE FINAL ATTITUDE OF THE COMMISSION CONCERNING UNDERTAKINGS AGAINST WHICH PROCEEDINGS FOR INFRINGEMENT OF THE RULES ON COMPETITION HAVE BEEN COMMENCED .
MOREOVER, ALTHOUGH THE DECISION TO COMMENCE PROCEEDINGS MENTIONS " ESPECIALLY " ARTICLES 3 AND 9 ( 2 ) AND ( 3 ) OF REGULATION NO 17, IT REFERS TO THAT REGULATION AS A WHOLE, AND THUS ALSO TO ARTICLE 15 CONCERNING FINES .
9 THEREFORE THIS SUBMISSION IS UNFOUNDED .
( C ) THE SUBMISSION CONCERNING THE SERVICE OF THE NOTICE OF OBJECTIONS
10 THE APPLICANT COMPLAINS THAT THE COMMISSION SERVED THE NOTICE OF OBJECTIONS IN A MANNER WHICH DID NOT ACCORD WITH SWISS LAW, THE LAW OF THE PLACE WHERE THE NOTICE WAS TO BE SERVED .
IT IS SAID THAT THE SWISS CONFEDERATION DOES NOT RECOGNIZE THE VALIDITY OF SERVICE BY POST OF A FOREIGN MEASURE OF THIS KIND ON ITS TERRITORY .
THEREFORE SINCE THE NOTICE OF OBJECTIONS WAS NOT DULY SERVED, IT IS NULL AND VOID ACCORDING TO GENERAL PRINCIPLES OF INTERNATIONAL LAW .
IT IS ARGUED THAT THIS IRREGULARITY GIVES RISE TO AN INFRINGEMENT OF THE APPLICANT' S RIGHT TO BE HEARD GRANTED TO IT BY ARTICLE 19 OF REGULATION NO 17 AND ARTICLES 2 AND 4 OF REGULATION NO 99 .
11 THE PURPOSE OF THE NOTICE OF OBJECTIONS FOR WHICH ARTICLE 2 ( 1 ) OF REGULATION NO 99 MAKES PROVISION IS TO ENABLE THOSE CONCERNED TO PUT FORWARD THEIR ARGUMENTS IN THE CONTEXT OF PROCEEDINGS INITIATED AGAINST THEM BY A DECISION ADOPTED BY THE COMMISSION IN THE EXERCISE OF THE POWERS WHICH ARTICLES 3 AND 15 OF REGULATION NO 17 CONFER ON IT .
SINCE THERE IS NO CONVENTION ON THE MATTER BETWEEN THE COMMUNITY AND THE SWISS CONFEDERATION, THE QUESTION HOW THIS NOTICE IS TO BE SERVED ON INTERESTED PARTIES ESTABLISHED OUTSIDE THE TERRITORY OF THE COMMUNITY DEPENDS ON INTERNATIONAL PRACTICE AND MUST BE RESOLVED WITH MUTUAL REGARD TO THE SPHERES OF JURISDICTION BOTH OF THE COMMUNITY AND OF THE THIRD STATE CONCERNED .
IT APPEARS FROM THE FILE THAT THE AUTHORITIES OF THE THIRD STATE IN QUESTION DO NOT FOR THE PRESENT ENVISAGE ANY PRACTICAL POSSIBILITY OF SERVICE, CONSIDERED BY THEM TO BE VALID UNDER INTERNAL LAW, ON THE TERRITORY OF THAT STATE .
THEREFORE INTERNATIONAL LAW CANNOT BE INVOKED IN ORDER TO DENY THE COMMUNITY THE POWER TO TAKE THE NECESSARY STEPS TO ENSURE THE EFFECTIVENESS OF MEASURES TAKEN WITH A VIEW TO CURTAILING CONDUCT ADVERSELY AFFECTING COMPETITION WHICH HAS ARISEN IN THE COMMON MARKET, EVEN IF THE REGISTERED OFFICE OF THE UNDERTAKING RESPONSIBLE FOR SUCH CONDUCT IS SITUATED IN A THIRD COUNTRY .
FURTHERMORE, THE MAIN PURPOSE OF THE NOTICE IN QUESTION IS TO ENSURE THAT THOSE CONCERNED MAY EXERCISE THE RIGHTS WHICH THEY ENJOY UNDER THE TREATY AND COMMUNITY LEGISLATION .
THERE A NOTICE SERVED IN ACCORDANCE WITH COMMUNITY RULES CANNOT BE CONSIDERED TO INVALIDATE THE SUBSEQUENT ADMINISTRATIVE PROCEDURE IF IT MUST BE SERVED IN A THIRD COUNTRY, ONCE IT IS ESTABLISHED THAT BY ENABLING THE ADDRESSEE TO TAKE COGNIZANCE OF THE OBJECTIONS HELD AGAINST HIM IT HAS ACHIEVED ITS PURPOSE .
12 THE SUBMISSION MUST BE REJECTED .
( D ) THE COMPLAINT CONCERNING THE CONTINUATION OF INQUIRIES AFTER THE NOTICE OF OBJECTIONS HAD BEEN SERVED
13 THE APPLICANT ARGUES THAT THE COMMISSION, IN UNDERTAKING INQUIRIES AFTER THE NOTICE OF OBJECTIONS HAD BEEN SERVED, FAILED TO APPRECIATE THE NATURE OF THAT NOTICE WHICH, AS APPEARED FROM REGULATIONS NOS 17 AND 99, MUST CONSTITUTE THE FINAL MEASURE OF INQUIRY .
FURTHERMORE, THE CONTESTED DECISION IS BASED ON FACTORS, SUCH AS THE SIMULTANEITY OF THE TELEX MESSAGES, WHICH ARE NOT MENTIONED IN THE NOTICE OF OBJECTIONS .
14 THE COMMISSION HAS THE RIGHT AND WHERE APPROPRIATE THE DUTY TO INSTITUTE FRESH INQUIRIES DURING THE ADMINISTRATIVE PROCEDURE IF IT APPEARS FROM THE COURSE OF THAT PROCEDURE THAT ADDITIONAL INVESTIGATIONS ARE NECESSARY .
SUCH INQUIRIES WOULD RENDER IT NECESSARY TO SEND AN ADDITIONAL STATEMENT OF OBJECTIONS TO THE UNDERTAKINGS CONCERNED ONLY IF THE RESULT OF THE INVESTIGATIONS LED THE COMMISSION TO TAKE NEW FACTS INTO ACCOUNT AGAINST THE UNDERTAKINGS OR TO ALTER MATERIALLY THE EVIDENCE FOR THE CONTESTED INFRINGEMENTS .
SUCH IS NOT THE CASE IN THE PRESENT PROCEEDINGS .
IT APPEARS FROM THE TEXT OF THE NOTICE OF OBJECTIONS THAT THE FACTS TAKEN INTO ACCOUNT AGAINST THE APPLICANT WERE CLEARLY SET OUT THEREIN .
THAT NOTICE CONTAINS ALL THE INFORMATION NECESSARY FOR DETERMINING THE OBJECTIONS MADE AGAINST THE APPLICANT, AND IN PARTICULAR THE CIRCUMSTANCES IN WHICH THE INCREASES OF 1964, 1965 AND 1967 WERE ANNOUNCED AND IMPLEMENTED .
AMENDMENTS CONCERNING THE PRECISE COURSE OF THE FACTS INCLUDED IN THE CONTESTED DECISION IN THE LIGHT OF INFORMATION FURNISHED BY THE UNDERTAKINGS CONCERNED TO THE COMMISSION DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE DO NOT INFRINGE THE RIGHTS OF THE DEFENCE .
15 THEREFORE THESE COMPLAINTS ARE UNFOUNDED .
THE SUBMISSION RELATING TO NOTIFICATION OF THE DECISION
16 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS IRREGULAR IN THAT IT PROVIDES, IN ARTICLE 4, THAT IT MAY BE NOTIFIED TO ONE OF ITS SUBSIDIARIES .
17 THE SECOND PARAGRAPH OF ARTICLE 191 OF THE TREATY PROVIDES THAT " DECISIONS SHALL BE NOTIFIED TO THOSE TO WHOM THEY ARE ADDRESSED AND SHALL TAKE EFFECT UPON SUCH NOTIFICATION ".
ARTICLE 4 OF THE CONTESTED DECISION CANNOT IN ANY CIRCUMSTANCES ALTER THAT PROVISION .
THEREFORE IT CANNOT PREJUDICE THE APPLICANT .
18 IRREGULARITIES IN THE PROCEDURE FOR NOTIFICATION OF A DECISION ARE EXTRANEOUS TO THAT MEASURE AND CANNOT THEREFORE INVALIDATE IT .
IN CERTAIN CIRCUMSTANCES SUCH IRREGULARITIES MAY PREVENT THE PERIOD WITHIN WHICH AN APPLICATION MUST BE LODGED FROM STARTING TO RUN .
THE LAST PARAGRAPH OF ARTICLE 173 OF THE TREATY PROVIDES THAT THE PERIOD OF INSTITUTING PROCEEDINGS FOR THE ANNULMENT OF INDIVIDUAL MEASURES OF THE COMMISSION STARTS TO RUN FROM THE DATE OF NOTIFICATION OF THE DECISION TO THE APPLICANT OR, IN THE ABSENCE THEREOF, FROM THE DAY ON WHICH IT CAME TO THE KNOWLEDGE OF THE LATTER .
IN THE PRESENT CASE IT IS ESTABLISHED THAT THE APPLICANT HAS HAD FULL KNOWLEDGE OF THE TEXT OF THE DECISION AND THAT IT HAS EXERCISED ITS RIGHT TO INSTITUTE PROCEEDINGS WITHIN THE PRESCRIBED PERIOD .
IN THESE CIRCUMSTANCES THE QUESTION OF POSSIBLE IRREGULARITIES CONCERNING NOTIFICATION CEASES TO BE RELEVANT .
19 THEREFORE THIS SUBMISSION IS INADMISSIBLE FOR WANT OF RELEVANCE .
THE SUBMISSION AS TO THE LIMITATION PERIOD
20 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS CONTRARY TO THE TREATY AND TO THE RULES RELATING TO ITS APPLICATION BECAUSE THE COMMISSION, IN COMMENCING ON 31 MAY 1967 PROCEEDINGS CONCERNING THE PRICE INCREASE OF JANUARY 1964, EXCEEDED ANY REASONABLE LIMITATION PERIOD .
21 THE PROVISIONS GOVERNING THE COMMISSION' S POWER TO IMPOSE FINES FOR INFRINGEMENT OF THE RULES ON COMPETITION DO NOT LAY DOWN ANY PERIOD OF LIMITATION .
IN ORDER TO FULFIL THEIR FUNCTION, LIMITATION PERIODS MUST BE FIXED IN ADVANCE .
THE FIXING OF THEIR DURATION AND THE DETAILED RULES FOR THEIR APPLICATION COME WITHIN THE POWERS OF THE COMMUNITY LEGISLATURE .
ALTHOUGH, IN THE ABSENCE OF ANY PROVISIONS ON THIS MATTER, THE FUNDAMENTAL REQUIREMENT OF LEGAL CERTAINTY HAS THE EFFECT OF PREVENTING THE COMMISSION FROM INDEFINITELY DELAYING THE EXERCISE OF ITS POWER TO IMPOSE FINES, ITS CONDUCT IN THE PRESENT CASE CANNOT BE REGARDED AS CONSTITUTING A BAR TO THE EXERCISE OF THAT POWER AS REGARDS PARTICIPATION IN THE CONCERTED PRACTICES OF 1964 AND 1965 .
22 THEREFORE THE SUBMISSION IS UNFOUNDED .
SUBSTANTIVE SUBMISSIONS AS TO THE EXISTENCE OF CONCERTED PRACTICES
ARGUMENTS OF THE PARTIES
23 THE APPLICANT COMPLAINS THAT THE COMMISSION HAS NOT PROVED THE EXISTENCE OF CONCERTED PRACTICES WITHIN THE MEANING OF ARTICLE 85 ( 1 ) OF THE EEC TREATY IN RELATION TO ANY OF THE THREE INCREASES MENTIONED IN THE CONTESTED DECISION .
24 THAT DECISION STATES THAT PRIMA FACIE EVIDENCE THAT THE INCREASES OF 1964, 1965 AND 1967 TOOK PLACE AS THE RESULT OF CONCERTED ACTION IS TO BE FOUND IN THE FACTS THAT THE RATES INTRODUCED FOR EACH INCREASE BY THE DIFFERENT PRODUCERS IN EACH COUNTRY WERE THE SAME, THAT WITH VERY RARE EXCEPTIONS THE SAME DYESTUFFS WERE INVOLVED, AND THAT THE INCREASES WERE PUT INTO EFFECT OVER ONLY A VERY SHORT PERIOD, IF NOT ACTUALLY ON THE SAME DATE .
IT IS CONTENDED THAT THESE INCREASES CANNOT BE EXPLAINED SIMPLY BY THE OLIGOPOLISTIC CHARACTER OF THE STRUCTURE OF THE MARKET .
IT IS SAID TO BE UNREALISTIC TO SUPPOSE THAT WITHOUT PREVIOUS CONCERTATION THE PRINCIPAL PRODUCERS SUPPLYING THE COMMON MARKET COULD HAVE INCREASED THEIR PRICES ON SEVERAL OCCASIONS BY IDENTICAL PERCENTAGES AT PRACTICALLY THE SAME MOMENT FOR ONE AND THE SAME IMPORTANT RANGE OF PRODUCTS INCLUDING SPECIALITY PRODUCTS FOR WHICH THERE ARE FEW, IF ANY, SUBSTITUTES, AND THAT THEY SHOULD HAVE DONE SO IN A NUMBER OF COUNTRIES WHERE CONDITIONS ON THE DYESTUFFS MARKET ARE DIFFERENT .
THE COMMISSION HAS ARGUED BEFORE THE COURT THAT THE INTERESTED PARTIES NEED NOT NECESSARILY HAVE DRAWN UP A COMMON PLAN WITH A VIEW TO ADOPTING A CERTAIN COURSE OF BEHAVIOUR FOR IT TO BE SAID THAT THERE HAS BEEN CONCERTATION .
IT IS ARGUED THAT IT IS ENOUGH THAT THEY SHOULD PREVIOUSLY HAVE INFORMED EACH OTHER OF THE ATTITUDE WHICH THEY INTENDED TO ADOPT SO THAT EACH COULD REGULATE HIS CONDUCT SAFE IN THE KNOWLEDGE THAT HIS COMPETITORS WOULD ACT IN THE SAME WAY .
25 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS BASED ON AN INADEQUATE ANALYSIS OF THE MARKET IN THE PRODUCTS IN QUESTION AND ON AN ERRONEOUS UNDERSTANDING OF THE CONCEPT OF A CONCERTED PRACTICE, WHICH IS WRONGLY IDENTIFIED BY THE DECISION WITH THE CONSCIOUS PARALLELISM OF MEMBERS OF AN OLIGOPOLY, WHEREAS SUCH CONDUCT IS DUE TO INDEPENDENT DECISIONS ADOPTED BY EACH UNDERTAKING, DETERMINED BY OBJECTIVE BUSINESS NEEDS, AND IN PARTICULAR BY THE NEED TO INCREASE THE UNSATISFACTORILY LOW RATE OF PROFIT ON THE PRODUCTION OF DYESTUFFS .
IT IS ARGUED THAT IN FACT THE PRICES OF THE PRODUCTS IN QUESTION DISPLAYED A CONSTANT TENDENCY TO FALL BECAUSE OF LIVELY COMPETITION BETWEEN PRODUCERS WHICH IS TYPICAL OF THE MARKET IN THOSE PRODUCTS, NOT ONLY AS REGARDS THE QUALITY OF THE PRODUCT AND TECHNICAL ASSISTANCE TO CUSTOMERS, BUT ALSO AS REGARDS PRICES, PARTICULARLY THE LARGE REDUCTIONS GRANTED INDIVIDUALLY TO THE PRINCIPAL PURCHASERS .
THE FACT THAT THE RATES OF INCREASE WERE IDENTICAL WAS THE RESULT, IT IS SAID, OF THE EXISTENCE OF THE " PRICE-LEADERSHIP " OF ONE UNDERTAKING .
IT IS ARGUED THAT GEIGY' S CONDUCT AT THE MEETING OF 18 AUGUST 1967 IN BASEL WAS CHARACTERISTIC OF AN UNDERTAKING CONTROLLING PRICES ON AN OLIGOPOLISTIC MARKET AND HAD NO CONNEXION WITH A CONCERTED PRACTICE .
DIFFERENT PRICE INCREASES FOR INTERCHANGEABLE PRODUCTS EITHER COULD NOT PRODUCE ECONOMICALLY SIGNIFICANT RESULTS BECAUSE OF THE LIMITED LEVEL OF STOCK AND OF THE TIME NECESSARY FOR ADAPTING PLANT TO APPRECIABLY INCREASED DEMAND, OR WOULD LEAD TO A RUINOUS PRICE WAR .
DYESTUFFS FOR WHICH THERE ARE NO SUBSTITUTES ONLY FORM, IT IS SAID, A SMALL PART OF THE PRODUCERS' TURNOVER .
TAKING THESE MARKET CHARACTERISTICS INTO ACCOUNT AND IN VIEW OF THE WIDESPREAD AND CONTINUOUS EROSION OF PRICES, EACH MEMBER OF THE OLIGOPOLY WHICH DECIDED TO INCREASE ITS PRICES COULD, IT IS ARGUED, REASONABLY EXPECT TO BE FOLLOWED BY ITS COMPETITORS, WHICH HAD THE SAME PROBLEMS REGARDING PROFITS .
FINALLY, IT IS ARGUED THAT THE CONTESTED DECISION IS BASED PRIMARILY ON THEORETICAL CONSIDERATIONS AND DOES NOT SPECIFY INDIVIDUALLY THE CONCRETE FACTS WHICH MIGHT PROVE THE EXISTENCE OF A CONCERTED PRACTICE .
THE CONCEPT OF A CONCERTED PRACTICE
26 ARTICLE 85 DRAWS A DISTINCTION BETWEEN THE CONCEPT OF " CONCERTED PRACTICES " AND THAT OF " AGREEMENTS BETWEEN UNDERTAKINGS " OR OF " DECISIONS BY ASSOCIATIONS OF UNDERTAKINGS "; THE OBJECT IS TO BRING WITHIN THE PROHIBITION OF THAT ARTICLE A FORM OF COORDINATION BETWEEN UNDERTAKINGS WHICH, WITHOUT HAVING REACHED THE STAGE WHERE AN AGREEMENT PROPERLY SO-CALLED HAS BEEN CONCLUDED, KNOWINGLY SUBSTITUTES PRACTICAL COOPERATION BETWEEN THEM FOR THE RISKS OF COMPETITION .
BY ITS VERY NATURE, THEN, A CONCERTED PRACTICE DOES NOT HAVE ALL THE ELEMENTS OF A CONTRACT BUT MAY INTER ALIA ARISE OUT OF COORDINATION WHICH BECOMES APPARENT FROM THE BEHAVIOUR OF THE PARTICIPANTS .
ALTHOUGH PARALLEL BEHAVIOUR MAY NOT BY ITSELF BE IDENTIFIED WITH A CONCERTED PRACTICE, IT MAY HOWEVER AMOUNT TO STRONG EVIDENCE OF SUCH A PRACTICE IF IT LEADS TO CONDITIONS OF COMPETITION WHICH DO NOT CORRESPOND TO THE NORMAL CONDITIONS OF THE MARKET, HAVING REGARD TO THE NATURE OF THE PRODUCTS, THE SIZE AND NUMBER OF THE UNDERTAKINGS, AND THE VOLUME OF THE SAID MARKET .
THIS IS ESPECIALLY THE CASE IF THE PARALLEL CONDUCT IS SUCH AS TO ENABLE THE PERSONS CONCERNED TO ATTEMPT TO STABILIZE PRICES AT A LEVEL DIFFERENT FROM THAT TO WHICH COMPETITION WOULD HAVE LED, AND TO CONSOLIDATE ESTABLISHED POSITIONS TO THE DETRIMENT OF EFFECTIVE FREEDOM OF MOVEMENT OF THE PRODUCTS IN THE COMMON MARKET AND OF THE FREEDOM OF CONSUMERS TO CHOOSE THEIR SUPPLIERS .
27 THEREFORE THE QUESTION WHETHER THERE WAS A CONCERTED ACTION IN THIS CASE CAN ONLY BE CORRECTLY DETERMINED IF THE EVIDENCE UPON WHICH THE CONTESTED DECISION IS BASED IS CONSIDERED, NOT IN ISOLATION, BUT AS A WHOLE, ACCOUNT BEING TAKEN OF THE SPECIFIC FEATURES OF THE MARKET IN THE PRODUCTS IN QUESTION .
THE CHARACTERISTIC FEATURES OF THE MARKET IN DYESTUFFS
28 THE MARKET IN DYESTUFFS IS CHARACTERIZED BY THE FACT THAT 80 PER CENT OF THE MARKET IS SUPPLIED BY ABOUT TEN PRODUCERS, VERY LARGE ONES IN THE MAIN, WHICH OFTEN MANUFACTURE THESE PRODUCTS TOGETHER WITH OTHER CHEMICAL PRODUCTS OR PHARMACEUTICAL SPECIALITIES .
THE PRODUCTION PATTERNS AND THEREFORE THE COST STRUCTURES OF THESE MANUFACTURES ARE VERY DIFFERENT, AND THIS MAKES IT DIFFICULT TO ASCERTAIN COMPETING MANUFACTURERS' COSTS .
THE TOTAL NUMBER OF DYESTUFFS IS VERY HIGH, EACH UNDERTAKING PRODUCING MORE THAN A THOUSAND .
THE AVERAGE EXTENT TO WHICH THESE PRODUCTS CAN BE REPLACED BY OTHERS IS CONSIDERED RELATIVELY GOOD FOR STANDARD DYES, BUT IT CAN BE VERY LOW OR EVEN NON-EXISTENT FOR SPECIALITY DYES .
AS REGARDS SPECIALITY PRODUCTS, THE MARKET TENDS IN CERTAIN CASES TOWARDS AN OLIGOPOLISTIC SITUATION .
SINCE THE PRICE OF DYESTUFFS FORMS A RELATIVELY SMALL PART OF THE PRICE OF THE FINAL PRODUCT OF THE USER UNDERTAKING, THERE IS LITTLE ELASTICITY OF DEMAND FOR DYESTUFFS ON THE MARKET AS A WHOLE AND THIS ENCOURAGE PRICE INCREASES IN THE SHORT TERM .
ANOTHER FACTOR IS THAT THE TOTAL DEMAND FOR DYESTUFFS IS CONSTANTLY INCREASING, AND THIS TENDS TO INDUCE PRODUCERS TO ADOPT A POLICY ENABLING THEM TO TAKE ADVANTAGE OF THIS INCREASE .
29 IN THE TERRITORY OF THE COMMUNITY, THE MARKET IN DYESTUFFS IN FACT CONSISTS OF FIVE SEPARATE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS WHICH CANNOT BE EXPLAINED BY DIFFERENCES IN COSTS AND CHARGES AFFECTING PRODUCERS IN THOSE COUNTRIES .
THUS THE ESTABLISHMENT OF THE COMMON MARKET WOULD NOT APPEAR TO HAVE HAD ANY EFFECT ON THIS SITUATION, SINCE THE DIFFERENCES BETWEEN NATIONAL PRICE LEVELS HAVE SCARCELY DECREASED .
ON THE CONTRARY, IT IS CLEAR THAT EACH OF THE NATIONAL MARKETS HAS THE CHARACTERISTICS OF AN OLIGOPOLY AND THAT IN MOST OF THEM PRICE LEVELS ARE ESTABLISHED UNDER THE INFLUENCE OF A " PRICE-LEADER ", WHO IN SOME CASES IS THE LARGEST PRODUCER IN THE COUNTRY CONCERNED, AND IN OTHER CASES IS A PRODUCER IN ANOTHER MEMBER STATE OR A THIRD STATE, ACTING THROUGH A SUBSIDIARY .
ACCORDING TO THE EXPERTS THIS DIVIDING-UP OF THE MARKET IS DUE TO THE NEED TO SUPPLY LOCAL TECHNICAL ASSISTANCE TO USERS AND TO ENSURE IMMEDIATE DELIVERY, GENERALLY IN SMALL QUANTITIES, SINCE, APART FROM EXCEPTIONAL CASES, PRODUCERS SUPPLY THEIR SUBSIDIARIES ESTABLISHED IN THE DIFFERENT MEMBER STATES AND MAINTAIN A NETWORK OF AGENTS AND DEPOTS TO ENSURE THAT USER UNDERTAKINGS RECEIVE SPECIFIC ASSISTANCE AND SUPPLIES .
IT APPEARS FROM THE DATA PRODUCED DURING THE COURSE OF THE PROCEEDINGS THAT EVEN IN CASES WHERE A PRODUCER ESTABLISHES DIRECT CONTACT WITH AN IMPORTANT USER IN ANOTHER MEMBER STATE, PRICES ARE USUALLY FIXED IN RELATION TO THE PLACE WHERE THE USER IS ESTABLISHED AND TEND TO FOLLOW THE LEVEL OF PRICES ON THE NATIONAL MARKET .
ALTHOUGH THE FOREMOST REASON WHY PRODUCERS HAVE ACTED IN THIS WAY IS IN ORDER TO ADAPT THEMSELVES TO THE SPECIAL FEATURES OF THE MARKET IN DYESTUFFS AND TO THE NEEDS OF THEIR CUSTOMERS, THE FACT REMAINS THAT THE DIVIDING-UP OF THE MARKET WHICH RESULTS TENDS, BY FRAGMENTING THE EFFECTS OF COMPETITION, TO ISOLATE USERS IN THEIR NATIONAL MARKET, AND TO PREVENT A GENERAL CONFRONTATION BETWEEN PRODUCERS THROUGHOUT THE COMMON MARKET .
IT IS IN THIS CONTEXT, WHICH IS PECULIAR TO THE WAY IN WHICH THE DYESTUFFS MARKET WORKS, THAT THE FACTS OF THE CASE SHOULD BE CONSIDERED .
THE INCREASES OF 1964, 1965 AND 1967
30 THE INCREASES OF 1964, 1965 AND 1967 COVERED BY THE CONTESTED DECISION ARE INTERCONNECTED .
THE INCREASE OF 15 PER CENT IN THE PRICES OF MOST ANILINE DYES IN GERMANY ON 1 JANUARY 1965 WAS IN REALITY NOTHING MORE THAN THE EXTENSION TO ANOTHER NATIONAL MARKET OF THE INCREASE APPLIED IN JANUARY 1964 IN ITALY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG .
THE INCREASE IN THE PRICES OF CERTAIN DYES AND PIGMENTS INTRODUCED ON 1 JANUARY 1965 IN ALL THE MEMBER STATES, EXCEPT FRANCE, APPLIED TO ALL THE PRODUCTS WHICH HAD BEEN EXCLUDED FROM THE FIRST INCREASE .
THE REASON WHY THE PRICE INCREASE OF 8 PER CENT INTRODUCED IN THE AUTUMN OF 1967 WAS RAISED TO 12 PER CENT FOR FRANCE WAS THAT THERE WAS A WISH TO MAKE UP FOR THE INCREASES OF 1964 AND 1965 IN WHICH THAT MARKET HAD NOT TAKEN PART BECAUSE OF THE PRICE CONTROL SYSTEM .
THEREFORE THE THREE INCREASES CANNOT BE ISOLATED ONE FROM ANOTHER, EVEN THOUGH THEY DID NOT TAKE PLACE UNDER IDENTICAL CONDITIONS .
31 IN 1964 ALL THE UNDERTAKINGS IN QUESTION ANNOUNCED THEIR INCREASES AND IMMEDIATELY PUT THEM INTO EFFECT, THE INITIATIVE COMING FROM CIBA-ITALY WHICH, ON 7 JANUARY 1964, FOLLOWING INSTRUCTIONS FROM CIBA-SWITZERLAND, ANNOUNCED AND IMMEDIATELY INTRODUCED AN INCREASE OF 15 PER CENT . THIS INITIATIVE WAS FOLLOWED BY THE OTHER PRODUCERS ON THE ITALIAN MARKET WITHIN TWO OR THREE DAYS .
ON 9 JANUARY ICI HOLLAND TOOK THE INITIATIVE IN INTRODUCING THE SAME INCREASE IN THE NETHERLANDS, WHILST ON THE SAME DAY BAYER TOOK THE SAME INITIATIVE ON THE BELGO-LUXEMBOURG MARKET .
WITH MINOR DIFFERENCES, PARTICULARLY BETWEEN THE PRICE INCREASES BY THE GERMAN UNDERTAKINGS ON THE ONE HAND AND THE SWISS AND UNITED KINGDOM UNDERTAKINGS ON THE OTHER, THESE INCREASES CONCERNED THE SAME RANGE OF PRODUCTS FOR THE VARIOUS PRODUCERS AND MARKETS, NAMELY, MOST ANILINE DYES OTHER THAN PIGMENTS, FOOD COLOURING AND COSMETICS .
32 AS REGARDS THE INCREASE OF 1965 CERTAIN UNDERTAKINGS ANNOUNCED IN ADVANCE PRICE INCREASES AMOUNTING, FOR THE GERMAN MARKET, TO AN INCREASE OF 15 PER CENT FOR PRODUCTS WHOSE PRICES HAD ALREADY BEEN SIMILARLY INCREASED ON THE OTHER MARKETS, AND TO 10 PER CENT FOR PRODUCTS WHOSE PRICES HAD NOT YET BEEN INCREASED . THESE ANNOUNCEMENTS WERE SPREAD OVER THE PERIOD BETWEEN 14 OCTOBER AND 28 DECEMBER 1964 .
THE FIRST ANNOUNCEMENT WAS MADE BY BASF, ON 14 OCTOBER 1964, FOLLOWED BY AN ANNOUNCEMENT BY BAYER ON 30 OCTOBER AND BY CASSELLA ON 5 NOVEMBER .
THESE INCREASES WERE SIMULTANEOUSLY APPLIED ON 1 JANUARY 1965 ON ALL MARKETS EXCEPT FOR THE FRENCH MARKET BECAUSE OF THE PRICE FREEZE IN THAT STATE, AND THE ITALIAN MARKET WHERE, AS A RESULT OF THE REFUSAL BY THE PRINCIPAL ITALIAN PRODUCER, ACNA, TO INCREASE ITS PRICES ON THE SAID MARKET, THE OTHER PRODUCERS ALSO DECIDED NOT TO INCREASE THEIRS .
ACNA ALSO REFRAINED FROM PUTTING ITS PRICES UP BY 10 PER CENT ON THE GERMAN MARKET .
OTHERWISE THE INCREASE WAS GENERAL, WAS SIMULTANEOUSLY INTRODUCED BY ALL THE PRODUCERS MENTIONED IN THE CONTESTED DECISION, AND WAS APPLIED WITHOUT ANY DIFFERENCES CONCERNING THE RANGE OF PRODUCTS .
33 AS REGARDS THE INCREASE OF 1967, DURING A MEETING HELD AT BASEL ON 19 AUGUST 1967, WHICH WAS ATTENDED BY ALL THE PRODUCERS MENTIONED IN THE CONTESTED DECISION EXCEPT ACNA, THE GEIGY UNDERTAKING ANNOUNCED ITS INTENTION TO INCREASE ITS SELLING PRICES BY 8 PER CENT WITH EFFECT FROM 16 OCTOBER 1967 .
ON THAT SAME OCCASION THE REPRESENTATIVES OF BAYER AND FRANCOLOR STATED THAT THEIR UNDERTAKINGS WERE ALSO CONSIDERING AN INCREASE .
FROM MID-SEPTEMBER ALL THE UNDERTAKINGS MENTIONED IN THE CONTESTED DECISION ANNOUNCED A PRICE INCREASE OF 8 PER CENT, RAISED TO 12 PER CENT FOR FRANCE, TO TAKE EFFECT ON 16 OCTOBER IN ALL THE COUNTRIES EXCEPT ITALY, WHERE ACNA AGAIN REFUSED TO INCREASE ITS PRICES, ALTHOUGH IT WAS WILLING TO FOLLOW THE MOVEMENT IN PRICES ON TWO OTHER MARKETS, ALBEIT ON DATES OTHER THAN 16 OCTOBER .
34 VIEWED AS A WHOLE, THE THREE CONSECUTIVE INCREASES REVEAL PROGRESSIVE COOPERATION BETWEEN THE UNDERTAKINGS CONCERNED .
IN FACT, AFTER THE EXPERIENCE OF 1964, WHEN THE ANNOUNCEMENT OF THE INCREASES AND THEIR APPLICATION COINCIDED, ALTHOUGH WITH MINOR DIFFERENCES AS REGARDS THE RANGE OF PRODUCTS AFFECTED, THE INCREASES OF 1965 AND 1967 INDICATE A DIFFERENT MODE OF OPERATION . HERE, THE UNDERTAKINGS TAKING THE INITIATIVE, BASF AND GEIGY RESPECTIVELY, ANNOUNCED THEIR INTENTIONS OF MAKING AN INCREASE SOME TIME IN ADVANCE, WHICH ALLOWED THE UNDERTAKINGS TO OBSERVE EACH OTHER' S REACTIONS ON THE DIFFERENT MARKETS, AND TO ADAPT THEMSELVES ACCORDINGLY .
BY MEANS OF THESE ADVANCE ANNOUNCEMENTS THE VARIOUS UNDERTAKINGS ELIMINATED ALL UNCERTAINTY BETWEEN THEM AS TO THEIR FUTURE CONDUCT AND, IN DOING SO, ALSO ELIMINATED A LARGE PART OF THE RISK USUALLY INHERENT IN ANY INDEPENDENT CHANGE OF CONDUCT ON ONE OR SEVERAL MARKETS .
THIS WAS ALL THE MORE THE CASE SINCE THESE ANNOUNCEMENTS, WHICH LED TO THE FIXING OF GENERAL AND EQUAL INCREASES IN PRICES FOR THE MARKETS IN DYESTUFFS, RENDERED THE MARKET TRANSPARENT AS REGARDS THE PERCENTAGE RATES OF INCREASE .
THEREFORE, BY THE WAY IN WHICH THEY ACTED, THE UNDERTAKINGS IN QUESTION TEMPORARILY ELIMINATED WITH RESPECT TO PRICES SOME OF THE PRECONDITIONS FOR COMPETITION ON THE MARKET WHICH STOOD IN THE WAY OF THE ACHIEVEMENT OF PARALLEL UNIFORMITY OF CONDUCT .
35 THE FACT THAT THIS CONDUCT WAS NOT SPONTANEOUS IS CORROBORATED BY AN EXAMINATION OF OTHER ASPECTS OF THE MARKET .
IN FACT, FROM THE NUMBER OF PRODUCERS CONCERNED IT IS NOT POSSIBLE TO SAY THAT THE EUROPEAN MARKET IN DYESTUFFS IS, IN THE STRICT SENSE, AN OLIGOPOLY IN WHICH PRICE COMPETITION COULD NO LONGER PLAY A SUBSTANTIAL ROLE .
THESE PRODUCERS ARE SUFFICIENTLY POWERFUL AND NUMEROUS TO CREATE A CONSIDERABLE RISK THAT IN TIMES OF RISING PRICES SOME OF THEM MIGHT NOT FOLLOW THE GENERAL MOVEMENT BUT MIGHT INSTEAD TRY TO INCREASE THEIR SHARE OF THE MARKET BY BEHAVING IN AN INDIVIDUAL WAY .
FURTHERMORE, THE DIVIDING-UP OF THE COMMON MARKET INTO FIVE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS AND STRUCTURES MAKES IT IMPROBABLE THAT A SPONTANEOUS AND EQUAL PRICE INCREASE WOULD OCCUR ON ALL THE NATIONAL MARKETS .
ALTHOUGH A GENERAL, SPONTANEOUS INCREASE ON EACH OF THE NATIONAL MARKETS IS JUST CONCEIVABLE, THESE INCREASES MIGHT BE EXPECTED TO DIFFER ACCORDING TO THE PARTICULAR CHARACTERISTICS OF THE DIFFERENT NATIONAL MARKETS .
THEREFORE, ALTHOUGH PARALLEL CONDUCT IN RESPECT OF PRICES MAY WELL HAVE BEEN AN ATTRACTIVE AND RISK-FREE OBJECTIVE FOR THE UNDERTAKINGS CONCERNED, IT IS HARDLY CONCEIVABLE THAT THE SAME ACTION COULD BE TAKEN SPONTANEOUSLY AT THE SAME TIME, ON THE SAME NATIONAL MARKETS AND FOR THE SAME RANGE OF PRODUCTS .
36 NOR IS IT ANY MORE PLAUSIBLE THAT THE INCREASES OF JANUARY 1964, INTRODUCED ON THE ITALIAN MARKET AND COPIED ON THE NETHERLANDS AND BELGO-LUXEMBOURG MARKETS, WHICH HAVE LITTLE IN COMMON WITH EACH OTHER EITHER AS REGARDS THE LEVEL OF PRICES OR THE PATTERN OF COMPETITION, COULD HAVE BEEN BROUGHT INTO EFFECT WITHIN A PERIOD OF TWO OR THREE DAYS WITHOUT PRIOR CONCERTATION .
AS REGARDS THE INCREASES OF 1965 AND 1967 CONCERTATION TOOK PLACE OPENLY, SINCE ALL THE ANNOUNCEMENTS OF THE INTENTION TO INCREASE PRICES WITH EFFECT FROM A CERTAIN DATE AND FOR A CERTAIN RANGE OF PRODUCTS MADE IT POSSIBLE FOR PRODUCERS TO DECIDE ON THEIR CONDUCT REGARDING THE SPECIAL CASES OF FRANCE AND ITALY .
IN PROCEEDING IN THIS WAY, THE UNDERTAKINGS MUTUALLY ELIMINATED IN ADVANCE ANY UNCERTAINTIES CONCERNING THEIR RECIPROCAL BEHAVIOUR ON THE DIFFERENT MARKETS AND THEREBY ALSO ELIMINATED A LARGE PART OF THE RISK INHERENT IN ANY INDEPENDENT CHANGE OF CONDUCT ON THOSE MARKETS .
THE GENERAL AND UNIFORM INCREASE ON THOSE DIFFERENT MARKETS CAN ONLY BE EXPLAINED BY A COMMON INTENTION ON THE PART OF THOSE UNDERTAKINGS, FIRST, TO ADJUST THE LEVEL OF PRICES AND THE SITUATION RESULTING FROM COMPETITION IN THE FORM OF DISCOUNTS, AND SECONDLY, TO AVOID THE RISK, WHICH IS INHERENT IN ANY PRICE INCREASE, OF CHANGING THE CONDITIONS OF COMPETITION .
THE FACT THAT THE PRICE INCREASES ANNOUNCED WERE NOT INTRODUCED IN ITALY AND THAT ACNA ONLY PARTIALLY ADOPTED THE 1967 INCREASE IN OTHER MARKETS, FAR FROM UNDERMINING THIS CONCLUSION, TENDS TO CONFIRM IT .
37 THE FUNCTION OF PRICE COMPETITION IS TO KEEP PRICES DOWN TO THE LOWEST POSSIBLE LEVEL AND TO ENCOURAGE THE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES, THEREBY PERMITTING THE MOST EFFICIENT POSSIBLE DISTRIBUTION OF ACTIVITIES IN THE MATTER OF PRODUCTIVITY AND THE CAPACITY OF UNDERTAKINGS TO ADAPT THEMSELVES TO CHANGE .
DIFFERENCES IN RATES ENCOURAGE THE PURSUIT OF ONE OF THE BASIC OBJECTIVES OF THE TREATY, NAMELY THE INTERPENETRATION OF NATIONAL MARKETS AND, AS A RESULT, DIRECT ACCESS BY CONSUMERS TO THE SOURCES OF PRODUCTION OF THE WHOLE COMMUNITY .
BY REASON OF THE LIMITED ELASTICITY OF THE MARKET IN DYESTUFFS, RESULTING FROM FACTORS SUCH AS THE LACK OF TRANSPARENCY WITH REGARD TO PRICES, THE INTERDEPENDENCE OF THE DIFFERENT DYESTUFFS OF EACH PRODUCER FOR THE PURPOSE OF BUILDING UP THE RANGE OF PRODUCTS USED BY EACH CONSUMER, THE RELATIVELY LOW PROPORTION OF THE COST OF THE FINAL PRODUCT OF THE USER UNDERTAKING REPRESENTED BY THE PRICES OF THESE PRODUCTS, THE FACT THAT IT IS USEFUL FOR USERS TO HAVE A LOCAL SUPPLIER AND THE INFLUENCE OF TRANSPORT COSTS, THE NEED TO AVOID ANY ACTION WHICH MIGHT ARTIFICIALLY REDUCE THE OPPORTUNITIES FOR INTERPENETRATION OF THE VARIOUS NATIONAL MARKETS AT THE CONSUMER LEVEL BECOMES PARTICULARLY IMPORTANT ON THE MARKET IN THE PRODUCTS IN QUESTION .
ALTHOUGH EVERY PRODUCER IS FREE TO CHANGE HIS PRICES, TAKING INTO ACCOUNT IN SO DOING THE PRESENT OR FORESEEABLE CONDUCT OF HIS COMPETITORS, NEVERTHELESS IT IS CONTRARY TO THE RULES ON COMPETITION CONTAINED IN THE TREATY FOR A PRODUCER TO COOPERATE WITH HIS COMPETITORS, IN ANY WAY WHATSOEVER, IN ORDER TO DETERMINE A COORDINATED COURSE OF ACTION RELATING TO A PRICE INCREASE AND TO ENSURE ITS SUCCESS BY PRIOR ELIMINATION OF ALL UNCERTAINTY AS TO EACH OTHER' S CONDUCT REGARDING THE ESSENTIAL ELEMENTS OF THAT ACTION, SUCH AS THE AMOUNT, SUBJECT-MATTER, DATE AND PLACE OF THE INCREASES .
IN THESE CIRCUMSTANCES AND TAKING INTO ACCOUNT THE NATURE OF THE MARKET IN THE PRODUCTS IN QUESTION, THE CONDUCT OF THE APPLICANT, IN CONJUNCTION WITH OTHER UNDERTAKINGS AGAINST WHICH PROCEEDINGS HAVE BEEN TAKEN, WAS DESIGNED TO REPLACE THE RISKS OF COMPETITION AND THE HAZARDS OF COMPETITORS' SPONTANEOUS REACTIONS BY COOPERATION CONSTITUTING A CONCERTED PRACTICE PROHIBITED BY ARTICLE 85 ( 1 ) OF THE TREATY .
THE EFFECT OF THE CONCERTED PRACTICE ON TRADE BETWEEN MEMBER STATES
38 THE APPLICANT ARGUES THAT THE UNIFORM PRICE INCREASES WERE NOT CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES BECAUSE NOTWITHSTANDING THE NOTICEABLE DIFFERENCES EXISTING BETWEEN PRICES CHARGED IN THE DIFFERENT STATES CONSUMERS HAVE ALWAYS PREFERRED TO MAKE THEIR PURCHASES OF DYESTUFFS IN THEIR OWN COUNTRY .
39 HOWEVER, IT APPEARS FROM WHAT HAS ALREADY BEEN SAID THAT THE CONCERTED PRACTICES, BY SEEKING TO KEEP THE MARKET IN A FRAGMENTED STATE, WERE LIABLE TO AFFECT THE CIRCUMSTANCES IN WHICH TRADE IN THE PRODUCTS IN QUESTION TAKES PLACE BETWEEN THE MEMBER STATES .
THE PARTIES WHO PUT THESE PRACTICES INTO EFFECT SOUGHT, ON THE OCCASION OF EACH PRICE INCREASE, TO REDUCE TO A MINIMUM THE RISKS OF CHANGING THE CONDITIONS OF COMPETITION .
THE FACT THAT THE INCREASES WERE UNIFORM AND SIMULTANEOUS HAS IN PARTICULAR SERVED TO MAINTAIN THE STATUS QUO, ENSURING THAT THE UNDERTAKINGS WOULD NOT LOSE CUSTOM, AND HAS THUS HELPED TO KEEP THE TRADITIONAL NATIONAL MARKETS IN THOSE GOODS " CEMENTED " TO THE DETRIMENT OF ANY REAL FREEDOM OF MOVEMENT OF THE PRODUCTS IN QUESTION IN THE COMMON MARKET .
40 THEREFORE THIS SUBMISSION IS UNFOUNDED .
THE JURISDICTION OF THE COMMISSION
41 THE APPLICANT, WHOSE REGISTERED OFFICE IS OUTSIDE THE COMMUNITY, ARGUES THAT THE COMMISSION IS NOT EMPOWERED TO IMPOSE FINES ON IT BY REASON MERELY OF THE EFFECTS PRODUCED IN THE COMMON MARKET BY ACTIONS WHICH IT IS ALLEGED TO HAVE TAKEN OUTSIDE THE COMMUNITY .
42 SINCE A CONCERTED PRACTICE IS INVOLVED, IT IS FIRST NECESSARY TO ASCERTAIN WHETHER THE CONDUCT OF THE APPLICANT HAS HAD EFFECTS WITHIN THE COMMON MARKET .
IT APPEARS FROM WHAT HAS ALREADY BEEN SAID THAT THE INCREASES AT ISSUE WERE PUT INTO EFFECT WITHIN THE COMMON MARKET AND CONCERNED COMPETITION BETWEEN PRODUCERS OPERATING WITHIN IT .
THEREFORE THE ACTIONS FOR WHICH THE FINE AT ISSUE HAS BEEN IMPOSED CONSTITUTE PRACTICES CARRIED ON DIRECTLY WITHIN THE COMMON MARKET .
IT FOLLOWS FROM WHAT HAS BEEN SAID IN CONSIDERING THE SUBMISSION RELATING TO THE EXISTENCE OF CONCERTED PRACTICES, THAT THE APPLICANT COMPANY DECIDED ON INCREASES IN THE SELLING PRICES OF ITS PRODUCTS TO USERS IN THE COMMON MARKET, AND THAT THESE INCREASES WERE OF A UNIFORM NATURE IN LINE WITH INCREASES DECIDED UPON BY THE OTHER PRODUCERS INVOLVED .
BY MAKING USE OF ITS POWER TO CONTROL ITS SUBSIDIARIES ESTABLISHED IN THE COMMUNITY, THE APPLICANT WAS ABLE TO ENSURE THAT ITS DECISION WAS IMPLEMENTED ON THAT MARKET .
43 THE APPLICANT OBJECTS THAT THIS CONDUCT IS TO BE IMPUTED TO ITS SUBSIDIARIES AND NOT TO ITSELF .
44 THE FACT THAT A SUBSIDIARY HAS SEPARATE LEGAL PERSONALITY IS NOT SUFFICIENT TO EXCLUDE THE POSSIBILITY OF IMPUTING ITS CONDUCT TO THE PARENT COMPANY .
SUCH MAY BE THE CASE IN PARTICULAR WHERE THE SUBSIDIARY, ALTHOUGH HAVING SEPARATE LEGAL PERSONALITY, DOES NOT DECIDE INDEPENDENTLY UPON ITS OWN CONDUCT ON THE MARKET, BUT CARRIES OUT, IN ALL MATERIAL RESPECTS, THE INSTRUCTIONS GIVEN TO IT BY THE PARENT COMPANY .
WHERE THE SUBSIDIARY DOES NOT ENJOY ANY REAL AUTONOMY IN DETERMINING ITS COURSE OF ACTION ON THE MARKET, THE PROHIBITIONS LAID DOWN BY ARTICLE 85 ( 1 ) MAY BE CONSIDERED TO BE INAPPLICABLE IN THE RELATIONSHIP BETWEEN IT AND THE PARENT COMPANY WITH WHICH IT FORMS ONE ECONOMIC ENTITY .
IN VIEW OF THE UNITY OF THE GROUP THUS FORMED, THE ACTIONS OF THE SUBSIDIARIES MAY IN CERTAIN CIRCUMSTANCES BE ATTRIBUTED TO THE PARENT COMPANY .
45 IT IS NOT DENIED THAT AT THE TIME THE SUBSIDIARIES OF THE APPLICANT ESTABLISHED WITHIN THE COMMON MARKET WERE PLACED ENTIRELY UNDER THE LATTER' S CONTROL .
THE APPLICANT WAS ABLE IN PARTICULAR TO EXERCISE DECISIVE INFLUENCE OVER THE POLICY OF THOSE SUBSIDIARIES AS REGARDS SELLING PRICES IN THE COMMON MARKET AND IN FACT USED THIS POWER UPON THE OCCASION OF THE THREE PRICE INCREASES IN QUESTION .
IN EFFECT THE TELEX MESSAGES RELATING TO THE 1964 INCREASE, WHICH THE APPLICANT SENT TO ITS SUBSIDIARIES IN THE COMMON MARKET, GAVE THE ADDRESSEE ORDERS AS TO THE PRICES WHICH THEY WERE TO CHARGE AND THE OTHER CONDITIONS OF SALE WHICH THEY WERE TO APPLY IN DEALING WITH THEIR CUSTOMERS .
IN THE ABSENCE OF EVIDENCE TO THE CONTRARY, IT MUST BE ASSUMED THAT ON THE OCCASION OF THE INCREASES OF 1965 AND 1967 THE APPLICANT ACTED IN A SIMILAR FASHION IN ITS RELATIONS WITH ITS SUBSIDIARIES ESTABLISHED IN THE COMMON MARKET .
IN THESE CIRCUMSTANCES THE FORMAL SEPARATION BETWEEN THESE COMPANIES, RESULTING FROM THEIR SEPARATE LEGAL PERSONALITY, CANNOT OUTWEIGH THE UNITY OF THEIR CONDUCT ON THE MARKET FOR THE PURPOSES OF APPLYING THE RULES ON COMPETITION .
IT WAS IN FACT THE APPLICANT UNDERTAKING WHICH BROUGHT THE CONCERTED PRACTICE INTO BEING WITHIN THE COMMON MARKET .
46 THE SUBMISSION AS TO LACK OF JURISDICTION RAISED BY THE APPLICANT MUST THEREFORE BE DECLARED TO BE UNFOUNDED .
47 THE APPLICANT COMPLAINS THAT INSUFFICIENT REASONS WERE GIVEN IN THE DECISION, IN THAT IT DOES NOT MENTION THE RELATIONSHIP EXISTING BETWEEN THE PARENT COMPANY AND ITS SUBSIDIARIES BY WAY OF JUSTIFICATION OF THE COMMISSION' S JURISDICTION .
48 THE FACT THAT NO STATEMENT IS INCLUDED SHOWING WHY THE COMMISSION HAS JURISDICTION DOES NOT STAND IN THE WAY OF A REVIEW OF THE LEGALITY OF THE DECISION .
FURTHERMORE, THE COMMISSION IS NOT BOUND TO INCLUDE IN ITS DECISIONS ALL THE ARGUMENTS WHICH IT MIGHT LATER USE IN RESPONSE TO SUBMISSIONS OF ILLEGALITY WHICH MIGHT BE RAISED AGAINST ITS MEASURES .
49 THEREFORE THIS OBJECTION IS UNFOUNDED .
50 FURTHERMORE THE APPLICANT CLAIMS THAT THE COMMISSION DID NOT TAKE INTO ACCOUNT ITS SPECIAL SITUATION AS AN UNDERTAKING HAVING ITS REGISTERED OFFICE OUTSIDE THE COMMUNITY .
IT IS ARGUED THAT BY REASON OF DIFFERENCES OF OPINION AS TO THE APPLICABILITY OF THE PRINCIPLE OF JURISDICTION BASED ON EFFECTS, THE APPLICANT WAS ENTITLED TO TAKE THE VIEW THAT THE COMMISSION HAD NO JURISDICTION TO COMMENCE PROCEEDINGS AGAINST IT .
51 IT APPEARS FROM THE EXAMINATION OF THE SUBMISSION CONCERNING THE JURISDICTION OF THE COMMISSION THAT THAT JURISDICTION IS BASED NOT ONLY ON THE EFFECTS ARISING FROM A COURSE OF CONDUCT PURSUED OUTSIDE THE COMMUNITY, BUT ALSO ON AN ACTIVITY PURSUED WITHIN THE COMMON MARKET AND IMPUTABLE TO THE APPLICANT .
52 THEREFORE THIS SUBMISSION IS UNFOUNDED .
THE FINE
53 IN VIEW OF THE FREQUENCY AND EXTENT OF THE APPLICANT' S PARTICIPATION IN THE PROHIBITED PRACTICES, AND TAKING INTO ACCOUNT THE CONSEQUENCES THEREOF IN RELATION TO THE CREATION OF A COMMON MARKET IN THE PRODUCTS IN QUESTION, THE AMOUNT OF THE FINE IS APPROPRIATE TO THE GRAVITY OF THE INFRINGEMENT OF THE COMMUNITY RULES ON COMPETITION .
Decision on costs
54 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
THE APPLICANT HAS FAILED IN ITS SUBMISSIONS .
THEREFORE IT MUST BE ORDERED TO BEAR THE COSTS .
Endorsements
ON THOSE GROUNDS,
UPON READING THE PLEADINGS;
UPON HEARING THE REPORT OF THE JUDGE-RAPPORTEUR;
UPON HEARING THE PARTIES;
UPON HEARING THE OPINION OF THE ADVOCATE-GENERAL;
HAVING REGARD TO THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY, ESPECIALLY ARTICLES 85 AND 173;
HAVING REGARD TO REGULATION NO 17/62 OF THE COUNCIL OF 6 FEBRUARY 1962;
HAVING REGARD TO REGULATION NO 99/63 OF THE COMMISSION OF 25 JULY 1963;
HAVING REGARD TO THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES;
HAVING REGARD TO THE RULES OF PROCEDURE OF THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES,
Operative part
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION;
2 . ORDERS THE APPLICANT TO BEAR THE COSTS .