61999CC0179_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
I ─ Introduction
1.
The present case is concerned with a review the judgment of the Court of First Instance of 11 March 1999 in Case T-136/94 (2) ( "the contested judgment"
).
2.
For the background to the course of relations between the steel industry and the Commission from 1970 to 1990, and especially for the arrangements made to cope with the obvious crisis and for Commission Decision No 2448/88/ECSC of 19 July 1988 introducing a surveillance system for certain products of undertakings in the steel industry (3) (hereinafter
"Decision No 2448/88"
), reference will be made to the contested judgment. The surveillance system based on this decision expired on 30 June 1990 and was replaced with an individual and voluntary information scheme. (4)
3.
On 16 February 1994 the Commission adopted
"Decision 94/215/ECSC ... relating to a proceeding under Article 65 of the ECSC Treaty concerning agreements and concerted practices engaged in by European producers of beams" (5) (hereinafter
"the Decision"
) against 17 European steel undertakings and one of their associations, the European Confederation of Iron and Steel Industries, Eurofer ASBL (hereinafter
"the appellant"
). The undertakings named in the Decision had, in the Commission's view, infringed the competition law of the European Coal and Steel Community by establishing information exchange systems, fixing prices and sharing markets contrary to competition law. The Commission imposed fines on 14 of the undertakings. In the case of the appellant, as an association, the Commission stated in Article 2 of the Decision that it had
"infringed Article 65 of the ECSC Treaty by organising an exchange of confidential information in connection with the infringements committed by its members ..."
In addition, Article 3 of the Decision contains a restraining order, which is also addressed to the appellant.
4.
A number of the undertakings concerned and the appellant brought actions against the Decision before the Court of First Instance, which dismissed the appellant's application.
5.
On 17 May 1999 the appellant lodged an appeal against that judgment at the Registry of the Court of Justice.
II ─ Forms of order sought and pleas in law
6.
In its appeal the appellant claims that the Court should:
─
set aside the judgment of the Court of First Instance of 11 March 1999 in Case T-136/94
Eurofer
v
Commission
in its entirety;
─
allowing in full its application at first instance, annul Article 2 of Commission Decision C(94)321 of 16 February 1994 and that part of Article 3 of that decision which concerns the appellant;
─
order the Commission to pay the costs of the proceedings.
The Commission contends that the Court should:
(1)
dismiss the appeal;
(2)
order the appellant to pay the costs of the proceedings.
7.
In its appeal, the appellant puts forward the following
pleas in law
:
First
plea in law:
"Infringement of Article 65(1) of the ECSC Treaty as a result of misinterpretation of the concept
"decisions by associations of undertakings"
.
"
Second
plea in law:
"Infringement of Article 15, first paragraph, of the ECSC Treaty by reason of grounds which are wrong in law, intrinsically contradictory and exceed the limits of the Court of First Instance's jurisdiction
ratione materiae
, in regard to the finding in Article 2 of the contested decision that Eurofer organised an exchange of confidential information
"in connection with "
the infringements committed by its members.
"
Third
plea in law:
"Infringement of Article 65(1) of the ECSC Treaty and failure by the Court of First Instance to respect the limits of its jurisdiction
ratione materiae
by reason of its misinterpretation of the concept
"...
tending
..."
in the application of that concept to allegedly anti-competitive consequences of the Eurofer information exchange.
"
Fourth
plea in law:
"Infringement of Articles 15, first paragraph, and 65(1) of the ECSC Treaty as a
result of misinterpretation and misapplication of the concept
"prevent, restrict or distort ... competition "
and of contradictory reasoning in the application of that concept to the information exchange organised by Eurofer.
"
8.
In substance, the pleas in law in these proceedings correspond to some extent to the those put forward in Case C-194/99 P
Thyssen Stahl AG
v
Commission of the European Communities (6) or parts thereof. I am also submitting my Opinion in that case today. Where the substance of the arguments corresponds, I refer in the present Opinion to my assessments in my Opinion in Case C-194/99 P.
III ─ Examination of the case
A ─
The plea in law, alleging misinterpretation of the concept
"decisions by associations of undertakings"
within the meaning of Article 65(1) of the ECSC Treaty (first plea in law)
Arguments of the parties
9.
The
appellant
objects to paragraph 109 et seq. and 137 et seq. of the contested judgment. It submits that the Court of First Instance was wrong in finding that there was a decision by the association. In so doing, it failed to recognise the purpose of a
"decision"
by an association of undertakings. As a decision by an association is
"only an organisational sub-category of agreements between undertakings and not a particular aspect of an association's activities_"
it is superfluous, if there is an agreement between undertakings, also to look for a decision by an association.
10.
Furthermore, in paragraph 130 of the contested judgment the Court of First Instance wrongly stated that Article 65(1) of the ECSC Treaty was applicable to an association's activities even though an association could infringe the prohibition of cartels only if it conducted itself as an undertaking. The Court of First Instance was wrong in relying on the judgment of the Court of Justice in
Sorema
, (7) since that judgment concerned a case in which the distribution activities of its members were imputed to the association.
11.
In response to those arguments, the
Commission
states that a series of factors, whose existence is not denied by the appellant, led the Court of First Instance to conclude in paragraph 110 et seq. of the contested judgment that there had been a decision by the appellant. That finding is an assessment of the facts and, as such, cannot therefore be challenged on appeal.
12.
In paragraphs 112 and 204 of the contested judgment the Court of First Instance found that
in parallel with
the exchange of information by the undertakings in the Poutrelles Committee there had been an exchange of information organised by the appellant. It thus rightly found that, in addition to the agreement between the undertakings, there was a decision by the association. Article 65 of the ECSC Treaty cannot be interpreted as meaning that a decision by an association is no more than a sub-category of an agreement between undertakings.
13.
Article 65(1) of the ECSC Treaty treats associations of undertakings explicitly as entities which may infringe competition law. It is incompatible with this for the appellant association to impute its conduct to its members and to seek to have its decision characterised as no more than a residual element.
14.
As the Court of First Instance had rightly recognised in paragraph 131 of the contested judgment, Article 65(1) of the ECSC Treaty applies to specific activities of associations and not only to their own activities as undertakings. This would be superfluous if that provision covered the conduct of such associations only where it was already governed by the rules concerning undertakings.
Assessment
15.
The appellant evidently sees problems in the particular situation obtaining in the proceedings at first instance, where the participation of the appellant's members in the information exchange system organised by the appellant fulfilled, according to the findings of the Court of First Instance, a triple function: the participation of the appellant's members in the information exchange system constituted, first, an infringement of competition law by the members themselves and, second, evidence of a
"decision"
of the appellant as an association; third, the organisation of the information exchange system constituted an infringement of competition law by the appellant itself.
16.
In so far as the existence of a decision by the appellant is inferred from the participation of its members, what is concerned is a finding of fact which ─ subject to a distortion check ─ is not, as such, open to review (8) in the appeal proceedings. To this extent, then, the
first
plea in law is
inadmissible
.
17.
From the contested judgment it is also evident that the Court of First Instance proceeds from the view that the conduct of undertakings may constitute an infringement of competition law and that a decision which this conduct proves has been taken by the relevant association of undertakings may also constitute an infringement of competition law by that association itself. The appellant, however, now appears to take the view that the conduct of the members of an association can be ascribed to the association only secondarily, namely if it has not already been penalised as anti-competitive conduct of the members.
18.
However, no basis for that conclusion can be found in Article 65 of the ECSC Treaty. (9) The appellant's view is indeed to be endorsed in so far as the liability of associations under competition law serves as a
"fall-back"
in those cases where conduct of undertakings which are members of the association is not based on agreements between or concerted practices of the undertakings, but results from the conduct of the association. This does not in any way mean, however, that the application of Article 65 of the ECSC Treaty to associations is limited to that case. This becomes clear from the following considerations:
19.
Unlike Article 85 of the EC Treaty (now Article 81 EC) in conjunction with Article 15 of Regulation No 17, (10) Article 65 of the ECSC Treaty does not enable fines to be imposed on an association which has taken anti-competitive decisions. Article 65(4) merely provides for the legal consequence of nullity of the decision and for the issue of a restraining order by the Commission.
20.
If that order is addressed to the members of the association, it can apply only to those members to which the decision is addressed (see Article 3 in conjunction with Article 1 of the Decision). If, merely because a decision is already addressed to some of its members the restraining order can no longer be addressed to the association as such, the association would not usually be prohibited from continuing to apply the decision unchanged with other or new members.
21.
That might deprive Article 65(4) of the ECSC Treaty of an important preventive function. As a result, Article 65 of the ECSC Treaty cannot be construed in that way, especially in view of the impossibility of imposing fines on an association which has adopted an anti-competitive decision. It cannot therefore be assumed that an association within the meaning of Article 65 of the ECSC Treaty can be penalised only secondarily in respect of conduct of its members in conformity with that decision.
22.
As regards the appellant's submission that Article 65(1) of the ECSC Treaty should apply to an anti-competitive decision by an association only if it has been taken by the association in the exercise of its business activities as an undertaking, suffice it to say that such a principle cannot, on the whole, be deduced from the case-law of the Court of Justice. (11) As the Commission rightly states, a principle of this nature would also be superfluous since associations infringing competition law in the course of their own business activities would, in any case, be deemed to be undertakings within the meaning of Article 65(1) of the ECSC Treaty and the application of that provision to
"associations"
would seem superfluous.
23.
The
first
plea in law must therefore to that extent be rejected as
unfounded
.
24.
Taken as a whole, the
first
plea in law, which criticises the interpretation of the term
"decisions by associations of undertakings"
within the meaning of Article 65(1) of the ECSC Treaty, is partly
inadmissible
and largely
unfounded
.
B ─
The pleas in law concerning the question of the separate anti-competitiveness of the information exchange system
(second
and
fourth
pleas in law)
Arguments of the parties
25.
In its arguments under the
second
plea in law, the
appellant
challenges the interpretation in paragraph 169 et seq. of the contested judgment of Article 2 of the Decision. It argues that the Court of First Instance failed to recognise an infringement by the Commission of the requirement in Article 15 of the ECSC Treaty that it give a statement of reasons, although the Decision contains contradictory reasoning in regard to the finding in Article 2 that the appellant had organised its information exchange system
"in connection"
with the infringements committed by its members.
26.
The appellant complains that the Court of First Instance contradicted itself in paragraphs 173 and 175 of the contested judgment, on the one hand, and paragraph 181 et seq., on the other, in that it found that the information exchange organised by the appellant was an infringement separate from the anti-competitive conduct of its members, while maintaining at the same time that the information exchange system had been used to ensure compliance with the quotas.
27.
In addition, the Court of First Instance exceeded the limits of its jurisdiction
ratione materiae
in paragraph 191 of the contested judgment by adding new facts to the facts of the case. In particular, it found that the appellant's members had continued to operate the quota system which had expired on 30 June 1988, drawing conclusions from this regarding the illegality of the information exchange system organised by the appellant. The alleged continuation of the quota system does not, however, have any basis either in the facts as stated in the Decision or in the judgment itself.
28.
In its arguments under the
fourth
plea in law the appellant challenges paragraph 185 et seq. of the contested judgment, in which it sees a legally erroneous interpretation and application of the concept
"prevent, restrict or distort ... competition "
in Article 65(1) of the ECSC Treaty.
29.
It argues that its information exchange system is characterised by the Court of First Instance in paragraph 202 of the contested judgment as a separate infringement, and yet, when explaining the restriction of competition, the Court bases itself in paragraph 191 of the contested judgment on the monitoring function of the information exchange system for a cartel of beam producers aimed at ensuring compliance with domestic markets, namely on a non-autonomous, support role played by the exchange of information.
30.
It denies that the information exchange system in itself could have restricted competition. An information exchange system is capable of restricting competition only if the participants' freedom of entrepreneurial action and decision-making had been limited by the flow of data. However, this would have been the case only if the participants had refrained from actions of a competitive nature because of the agreed notification of data, since the competitive edge likely to result would have been immediately offset by ensuing actions of a like nature on the part of the other participants.
31.
The data exchanged are not, however, detailed enough, especially as regards the products and customers concerned, for the participants' freedom of action to be limited to such an extent, since such data related to the general product group
"beams"
, for which there were in the official tariff statistics a total of ten different categories for H-, U- and I-beams alone, and these categories were not interchangeable. The Court of First Instance was therefore wrong to state
"laconically"
in paragraph 188 that, as the information exchange system related to homogeneous products, competition based on product characteristics played only a limited role. The Court, moreover, derived that information from a subordinate clause in paragraph 269 of the Decision, which, for its part, did not contain a word of explanation in this respect.
32.
The
Commission
begins by claiming that the appellant has misread paragraph 191 of the judgment. It is not said there that the undertakings had continued to operate the quota system beyond 30 June 1988. The Court of First Instance had said, purely and simply, that the undertakings could have used the exchange of information to monitor the extent to which each of them continued to comply with their domestic markets, which had served as the basis for the quota system.
33.
As regards the finding by the Court of First Instance that a separate infringement was committed, the Commission first submits that this is a finding of fact is not amenable to review by the Court of Justice.
34.
Moreover, the appellant complains about the contradictory nature of the reasoning only with regard to paragraph 191 of the contested judgment, which it had misunderstood. A price-fixing and market-sharing cartel did exist. Irrespective of this, however, the information exchange system was in itself capable of having an appreciable influence on the undertakings' conduct in the market.
35.
In the alternative, the Commission continues, it should be pointed out to the appellant that the exchange of information did indeed result in a restriction of the participants' freedom of action and decision-making, since even without the old quota arrangements the undertakings would have continued to be guided by the
"traditional delivery flows"
.
36.
The Commission submits, finally, that, in criticising the observations of the Court of First Instance on the homogeneity of the products, the appellant is attacking the establishment and assessment of facts on which the Court based the statement that the information exchanged is capable of appreciably influencing the conduct of the participants. The complaint is therefore inadmissible.
Assessment
37.
It should be pointed out
in limine
that the appellant is obviously pursuing the same objective with the
second
andfourth
pleas in law. As is evident from the substance of the arguments under the two pleas, what is concerned in both cases is what it claims to be the legally erroneous assessment of the Decision with regard to the assumption that the information exchange system organised by the appellant constituted an infringement of competition law for the purposes of Article 65(1) of the ECSC Treaty which is separate from the infringements committed by its members and from the other infringements of competition law criticised in the Decision. The
second
and
fourth
pleas in law can therefore be analysed together.
38.
As regards the allegation that the Court of First Instance exceeded its jurisdiction, it must first be said that paragraph 191 of the contested judgment contains nothing to indicate any infringement of Article 33 of the ECSC Treaty. Paragraph 191 refers only to the continuation of the information exchange system, not to the continuation of the quota system.
39.
As the Court of First Instance did not therefore exceed its jurisdiction, the
second
plea in law should be rejected as
unfounded
in this respect.
40.
To the extent that the appellant objects that the contested judgment confirmed the Decision on its substance in stating that the information exchange system organised by the appellant was used (by its members) for the preparation and commission of other infringements of competition law and should also be seen as a separate (12) infringement by the appellant, the appellant's objections largely correspond to the submissions of the appellant Thyssen Stahl AG in Case C-194/99 P.
41.
For the grounds on which the
second
and
fourth
pleas in law should be rejected as being partly inadmissible and largely unfounded in this respect I therefore refer to paragraph 109 et seq. of the Opinion I am delivering today in the aforementioned case. These grounds apply
mutatis mutandis
.
42.
The
second
and
fourth
pleas in law complaining of the failure to appreciate that the information exchange system did not constitute a separate infringement of competition law should therefore be rejected as being partly
inadmissible
and otherwise
unfounded
.
C ─
The plea in law alleging misinterpretation of the term
"tending"
in Article 65(1) of the ECSC Treaty and failure by the Court of First Instance to respect the limits of its jurisdiction
(third
plea in law)
Arguments of the parties
43.
The
appellant
objects to paragraphs 191 and 195 et seq. of the contested judgment.
44.
It contends that the Court of First Instance failed to recognise that the Decision is erroneously based on the effect of the information exchange system organised by the appellant when Article 65(1) of the ECSC Treaty makes it clear by using the term
"tending"
that conduct is anti-competitive only if ultimately geared to disrupting competition. This is also evident from the verb
"tendre"
used in the French version of the provision.
45.
In paragraph 191 of the contested judgment the Court of First Instance had found that the information exchange system was used to monitor the unlawfully prolonged quota system and therefore,
"by its very nature"
, tended to maintain the compartmentalisation of the markets. The Court had thus exceeded its jurisdiction
ratione materiae
by finding a fact (continuation of the quota system) which was not to be found in the Decision.
46.
In paragraph 195 of the contested judgment the Court of First Instance had found that the information exchange system was capable of influencing the conduct of the undertakings, and in paragraph 196 that
"it followed"
that the information exchange system
"tended"
to prevent, restrict or distort normal competition within the meaning of Article 65(1) of the ECSC Treaty. The Court thus effected a
"corrective legal subsumption"
in relation to the Decision by substituting for the concept of
"effect"
that of
"tending"
, in other words the purpose of the decision by the association.
47.
The
Commission
insists that in paragraphs 191 and 196 of the judgment the Court of First Instance does not in any way add to the facts as stated in the Decision, but merely appraises the facts previously found.
48.
Nor did the Court of First Instance infringe Article 65 of the ECSC Treaty. The wording
"tendre à"
(to tend to) corresponds to the wording in Article 85 of the EC Treaty (now Article 81(1) EC)
"have as their object or effect"
. Furthermore, the verb
"tendre à"
also means
"to have a tendency to ..."
,
"to evolve in such a way as to ..."
. It is enough, then, for the agreement to tend
objectively
to restrict competition. The subjective goal of the conduct cannot be the decisive point.
49.
The Court of First Instance cannot be criticised for not contenting itself with finding that the exchange of information was capable of appreciably influencing the conduct of the undertakings but going a step further and concluding from the facts found in paragraph 191 of the contested judgment that the information exchange system was specifically intended to compartmentalise the markets and in paragraph 196 concluding that the information exchange system was generally intended to prevent, restrict or distort normal competition.
Assessment
50.
The appellant's submission that the Court of First Instance exceeded its jurisdiction in the contested judgment is based, on the one hand, on an incorrect understanding of paragraph 191 of the contested judgment, which ─ as already pointed out (13) ─ says nothing about an unlawful continuation of the quota system.
51.
On the other hand, the Court of First Instance is said to have exceeded its jurisdiction by replacing the concept
"result"
in the Decision by that of
"tend"
in the contested judgment in regard to the information exchange system. As the latter complaint is logically connected to the appellant's submission that the Court misinterpreted Article 65(1) of the ECSC Treaty with respect to the term
"tending"
, the two issues will be considered together.
52.
The appellant evidently believes that it follows from Article 65(1) of the ECSC Treaty that only conduct which has anti-competitive effects on the market as its object may constitute an infringement of competition law.
53.
The Court of Justice has already held in its case-law on the parallel provision of the EC Treaty (Article 85, now Article 81 EC) (14) that it does not necessarily matter whether an agreement or concerted practice is intended to have anti-competitive effects on the market. I will not comment at this juncture on whether the general principles developed in that case-law can be generally applied to the ECSC Treaty.
54.
The observations of the Court of Justice on the anti-competitive nature of certain information exchange systems under the EC Treaty can be applied by analogy to the ECSC Treaty even without this question being considered.
55.
The Court of Justice has held that certain information exchange systems to be anti-competitive on the grounds they are inconsistent with the
"postulate of the independence" (15) of the Community's competition law since they
"reduce[s] or remove[s] the degree of uncertainty as to the operation of the market"
and are
"therefore liable to have an adverse influence on competition between manufacturers"
. (16)
56.
The grounds given by the Court of Justice in the abovementioned case-law for the anti-competitive nature of certain information exchange systems show that what matters is neither whether such systems
"have as their effect"
a distortion of competition (here in the sense of
"effects on the market"
) nor whether they
"tend"
in that direction. As the judgments cited above show, the anti-competitive nature of certain information exchange systems is already to be seen in the fact that they remove from the participating undertakings the
risk of uncertainty
which is characteristic of competition in its ideal form. Thus, for an information exchange system of this kind to be anti-competitive, it is sufficient for it to
tend
to remove the uncertainty and to result in the adverse effect on competition which
that situation
is to be seen as constituting merely in itself.
57.
Accordingly, when the Court of First Instance finds in paragraph 195 of the contested judgment that
"the information which the undertakings received under the arrangements in question was capable of appreciably influencing their conduct"
and then in paragraph 196 that
"it follows that the information exchange system in question tended to prevent, restrict or distort normal competition within the meaning of Article 65(1) of the Treaty"
, it is following the reasoning developed by the Court of Justice for demonstrating the anti-competitive nature of certain information exchange systems and cannot therefore be criticised.
58.
The
third
plea in law; alleging misinterpretation of the term
"tending"
in Article 65(1) of the ECSC Treaty and failure by the Court of First Instance to respect the limits of its jurisdiction must therefore be rejected as
unfounded
.
IV ─ Conclusion
59.
For the above reasons it is therefore proposed that the Court of Justice should
─
dismiss the appeal;
─
order the appellant to pay the costs of the proceedings.
(1) .
(2)
Eurofer
v
Commission
[1999] ECR II-263.
(3)
OJ 1988 L 212, p. 1.
(4)
See paragraph 33 of the judgment in Case T-141/94
Thyssen
v
Commission
[1999] ECR II-347.
(5)
OJ 1994 L 116, p. 1.
(6)
[2003] ECR I-10821.
(7)
Judgment in Case 67/63
Sorema
v
High Authority
[1964] ECR 323.
(8)
Settled case-law; see, for example, the order of the President of the Court of Justice of 11 April 2001 in Case C-479/00 P (R)
Commission
v
Gerot
[2001] ECR I-3121.
(9)
The Court of Justice has on several occasions been called upon to review Commission decisions in which the decision by an association was deemed to infringe competition law and the implementation of the decision by the members of the association constituted a separate infringement of competition law by the members: judgments in Case 71/74
Frubo
v
Commission and Vereniging De Fruitunie
[1975] ECR 563, Cases 209/78 to 215/78 and 218/78
Van Landewyk and Others
v
Commission
[1980] ECR 3125 and Joined Cases 96/82 etc.
IAZ and Others
v
Commission
[1983] ECR 3369.
(10)
Council Regulation No 17 of 21 February 1962 ─ First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959 and 1962, p. 87).
(11)
See the judgments in
Frubo
,
Van Landewyk
and
IAZ
(all cited in footnote 9) and the judgment in Case 45/85
Verband der Sachversicherer
v
Commission
[1987] ECR I-405.
(12)
The appellant complains only about the assumption that the information exchange system it organised was
separate in substance
from its members' pricing agreements and market-sharing operations. It does not also object, for example, to the distinction between
those responsible
for the two forms of infringement of competition law (a situation of this nature did not obtain from the outset in Case C-194/99 P) or to the assessment of its action along these lines as being
"separate "
.
(13)
See paragraph 37 above.
(14)
Judgments in Case 56/65
Société Technique Minière
v
Maschinenbau Ulm
[1966] ECR 282 and Case C-49/92 P
Commission
v
Anic Partecipazioni
[1999] ECR I-4125. Only where the purpose is not, or cannot be proved to be, to restrict competition is the effect on the market significant.
(15)
Judgments of 14 July 1972, for example in Case 48/69
ICI
v
Commission
[1972] ECR 619.
(16)
Judgment of the Court of Justice in Case C-7/95 P
Deere
v
Commission
[1998] ECR I-3111, paragraph 90.