62002CC0170_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
I ─ Introduction
1. In this appeal, Schlüsselverlag J.S. Moser GmbH and Others (hereinafter
" Schlüsselverlag and Others"
or
" the appellants" ) seek to have the order of the Court of First Instance delivered on 11 March 2002 in Case T-3/02 (hereinafter
" the contested order" (2) ) set aside. In that order, the Court of First Instance declared that the action for failure to act, seeking a declaration that the Commission had unlawfully failed to adopt a decision on the compatibility of a concentration with the common market, was manifestly inadmissible.
II ─ Relevant provisions of Community law
2. Under Article 1(2) of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (3) (hereinafter
" Regulation No 4064/89" ),
" For the purposes of this regulation, a concentration has a Community dimension where:
(a) the aggregate worldwide turnover of all the undertakings concerned is more than EUR 5 000 million, and
(b) the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more than EUR 250 million,
unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide turnover within one and the same Member State.
"
3. Article 4(1) of Regulation No 4064/89 provides:
" Concentrations with a Community dimension defined in this regulation shall be notified to the Commission not more than one week after the conclusion of the agreement, or the announcement of the public bid, or the acquisition of a controlling interest. That week shall begin when the first of those events occurs."
4. Article 6(1) of that regulation reads:
" The Commission shall examine the notification as soon as it is received.
(a) Where it concludes that the concentration notified does not fall within the scope of this regulation, it shall record that finding by means of a decision.
(b) Where it finds that the concentration notified, although falling within the scope of this regulation, does not raise serious doubts as to its compatibility with the common market, it shall decide not to oppose it and shall declare that it is compatible with the common market.
...
(c) Without prejudice to paragraph 1(a), where the Commission finds that the concentration notified falls within the scope of this regulation and raises serious doubts as to its compatibility with the common market, it shall decide to initiate proceedings.
"
5. Article 21 of Regulation No 4064/89 provides that, subject to review by the Court of Justice, the Commission is to have sole competence to take the decisions provided for in that regulation.
III ─ Facts and procedure at first instance
6. By judgment of 26 January 2001, the Oberlandesgericht Wien (Higher Regional Court, Vienna) (Austria), which under Austrian competition legislation is the competent authority in this matter, approved the proposed takeover of Kurier-Magazine Verlags GmbH, belonging to Zeitschriften Verlagsbeteiligungs-Aktiengesellschaft, by Verlagsgruppe News GmbH, which is reputedly controlled by the Bertelsmann group.
7. By letter of 25 May 2001, Schlüsselverlag and Others, which are all active in the Austrian press sector, lodged a complaint with the Commission concerning that takeover. In their complaint, they claimed that the concentration had a Community dimension within the meaning of Regulation No 4064/89 and that it should therefore have been notified to the Commission, which should have taken a decision on its compatibility with the common market.
8. By letter of 12 July 2001, the director of the Merger Task Force, which is part of the Directorate-General for Competition, informed them that the thresholds in Article 1(2)(b) of Regulation No 4064/89 had not been reached since Kurier-Magazine Verlags GmbH achieved an annual turnover of less than EUR 250 million.
9. In response to the letter of 7 August 2001, in which Schlüsselverlag and Others disputed that view, the director of the Merger Task Force stated, in a letter of 3 September 2001, that his office did not share that opinion of Schlüsselverlag and Others and confirmed that the concentration did not have a Community dimension.
10. By letter of 11 September 2001, pursuant to the second paragraph of Article 232 EC, Schlüsselverlag and Others called upon the Commission formally to define its position on whether or not to initiate an investigation procedure under Regulation No 4064/89.
11. By letter of 7 November 2001, the director of the Merger Task Force acknowledged receipt of that letter and replied that, for the reasons given in the letter of 12 July 2001, his office did not propose to reconsider the matter. He also pointed out that, in the absence of any competence under the regulation on control of concentrations, the Commission could not adopt a decision in the matter.
12. On 10 January 2002, Schlüsselverlag and Others brought an action for failure to act. They claimed that the Court of First Instance should declare that, by failing to take any decision on the complaint lodged by the applicants in regard to the establishment of a concentration with a Community dimension, which was notified and approved at national level by the Oberlandesgericht Wien by judgment of 26 January 2001, the Commission had failed to fulfil its obligations under the EC Treaty; in the alternative, declare that the Commission had failed to call upon the parties to the concentration to notify it thereof; and, finally, order the Commission to pay the costs.
13. The Court of First Instance considered that there was sufficient information before it and, pursuant to Article 111 of the Rules of Procedure, decided, without taking further steps in the proceedings, to dismiss the action as manifestly inadmissible.
14. The Court of First Instance held that the letter of 7 November 2001 from the director of the Merger Task Force constituted the Commission ' s reply to the letter of formal notice of 11 September 2001. It further held that the letter in question amounted to a clear defining of the Commission ' s position in response to the letter of formal notice. In paragraph 26 of the contested order, the Court considered that it could not be claimed that the letter of 7 November 2001 gave expression only to the position of the Merger Task Force and not to that of the Commission. The Court held that, although the letters of 12 July and 3 September 2001 clearly stated that they expressed the view of the Directorate-General for Competition and were not binding on the European Commission, no such statement was made in the letter of 7 November 2001, which was therefore to be regarded as defining the position of the Commission.
IV ─ Appeal
15. On 7 May 2002 an appeal was brought by Schlüsselverlag and Others. They claim that the contested order should be set aside and that the forms of order sought at first instance should be granted; in the alternative, that the contested order should be set aside and the case remitted to the Court of First Instance; that the Commission should in any event be ordered to pay the costs.
16. The Commission contends that the appeal should be dismissed and that Schlüsselverlag and Others should be ordered to pay the costs.
V ─ Pleas in law
17. The appellants put forward two pleas in law, the first alleging incomplete finding of the facts and the second alleging incorrect assessment of the letter of 7 November 2001.
First plea in law: incomplete finding of the facts
18. By the first plea in law, Schlüsselverlag and Others submit that the Court of First Instance based its findings on the Commission ' s statement that the letters of 12 July 2001 and 3 September 2001 expressed the view of the Directorate-General for Competition and were not binding on the Commission, without including the content of that statement in the account of the facts.
19. The Commission contends that that plea in law is inadmissible, or that it is unfounded, since the facts set out in the contested order are sufficient for the purpose of reviewing the legal findings of the Court of First Instance.
Assessment
20. I share the Commission ' s view. First, as observed by the Commission, it is settled case-law that under Article 225 EC and Article 51 of the EC Statute of the Court of Justice an appeal may be based only on pleas in law alleging infringement of legal rules, to the exclusion of any assessment of facts.
21. Second, this plea in law cannot be accepted in so far as Schlüsselverlag and Others seek to argue by it that the account of the facts is so incomplete as to preclude any judicial review of the legal findings of the Court of First Instance. It is abundantly clear from paragraphs 1 to 7 of the contested order, read in conjunction with paragraph 26, that the letters of 12 July and 3 September 2001, in contrast to the letter of 7 November 2001, did in fact contain a reservation in the sense that they expressed only the opinion of the Directorate-General for Competition. The fact that those passages are not explicitly reproduced in the summary of those earlier letters under the account of the facts makes no difference in that respect.
Second plea in law: incorrect legal assessment of the letter from the director of the Merger Task Force of 7 November 2001
22. Schlüsselverlag and Others are of the opinion that the letter of 7 November 2001 came only from the director of the Merger Task Force and that that letter is not binding on the Commission as an institution. The Court of First Instance therefore erred in law by holding that the Commission defined its position within the meaning of the second paragraph of Article 232 EC in that letter and that the failure to act therefore ceased to exist.
23. Schlüsselverlag and Others point out that the director explicitly referred in that letter to the letters of 12 July 2001 and 3 September 2001. Those letters stated that his office did not propose to reconsider the matter. In those earlier letters, the director also explicitly indicated that the legal view expressed was only the opinion of the Directorate-General for Competition and was not binding on the Commission.
24. The interpretation adopted by the Court of First Instance, to the effect that the letter of 7 November 2001 can be attributed to the Commission as an actionable measure since, in contrast to the two previous letters, it does not state that it is not binding on the Commission, appears arbitrary and offends against the principle of good faith and therefore against general principles of Community law.
25. They also point out that these proceedings are not comparable with those which culminated in the judgment of the Court of First Instance in
Air France
v
Commission, (4) in which a statement to the press by a spokesman of the Directorate-General for Competition was regarded as a decision in the name of the Commission.
26. The Commission submits that the action for failure to act is inadmissible regardless of whether or not the letter of 7 November 2001 contains a reservation with regard to the legally binding effect of the content of the letter on the Commission. It observes that it also pointed out in that letter that no decision could in any event have been adopted because of the absence of an appropriate legal basis, which, in the Commission ' s view, also implies that no finding of a failure to act is possible. (5)
27. In the first place, the action for failure to act should be declared inadmissible since there is no legal basis for a decision constituting a rejection in response to a complaint. In that connection, the Commission observes that, in contrast to the position under Regulation No 17 (6) and Regulation No 2842/98 (7) which is based on it, and in particular Article 6 thereof, Regulation No 4064/89 and Regulation No 447/98 (8) do not provide for a complaints procedure. (9)
Moreover, a lengthy complaints procedure would be at odds with the principal aim of the regulation, which is to ensure effective monitoring and legal certainty for the undertakings to which the regulation applies.
28. In the second place, the Commission observes that, even if the letter of 25 May 2001 is construed as a request that it order the undertakings involved in the concentration to notify it of their transaction and that it then examine that transaction, the action for failure to act is inadmissible. In that connection, the Commission argues that Regulation No 4064/89 does not impose on it any obligation to comply with a request from a third party to enforce notification, then examine the transaction notified and address a decision to the notifying parties under Article 6(1)(a) of the regulation, so that third parties would be able to challenge that decision in court. The Community legislature deliberately did not provide for such an obligation. First, the adoption of a decision under Article 6(1)(a) of Regulation No 4064/89 presupposes prior notification by the parties. Second, any notification at the instigation of a third party which ultimately resulted in a decision under Article 6(1)(a) of Regulation No 4064/89 would fail to have regard to the
" one-stop shop"
principle enshrined in that regulation, according to which there is a clear division of powers between the Commission and a national competition authority. Such notification could lead to parallel proceedings having to be conducted. The parties involved in the concentration would then have legal certainty only after both the national and the Community proceedings were concluded.
29. Third, the Commission observes that, even if the appellants succeeded, by way of an action for failure to act, in forcing the Commission to review a national competition authority ' s decision by means of a (preparatory) decision requesting the parties to notify their transaction, the subsequent examination, and ultimately a decision under Article 6(1)(a) of the regulation, would not alter their legal position. They have no right to have the decision concerning a concentration between third parties taken by one supervisory authority instead of by the other. That could not affect their legal position because it cannot be assumed that one competition authority applies stricter criteria than the other. Moreover, the legal protection of third parties must be guaranteed in the first instance by remedies at law against the decision of the national authority concerned. The fact that certain judicial remedies are manifestly not available to them under national law cannot be decisive in this context. (10)
30. Finally, the Commission observes that the appellants only made their request to the Commission four months after the substantive decision was taken by the national authority. Assuming that they were aware of the national proceedings and only took action four months after they were notified that the national authority considered itself competent in the matter, their action must be regarded as belated, certainly in the context of control of concentrations.
31. The Commission submits that, if the Court does not share its views, the appeal must be dismissed as inadmissible since the Commission defined its position in its letter of 7 November 2001.
Assessment
32. Before I consider the second plea in law of Schlüsselverlag and Others, I shall first examine the observations made by the Commission.
33. On the one hand, the question is whether the Commission ' s arguments, which are directed, not against the operative part of the contested order, but against the ground on which the Court of First Instance came to that conclusion, are admissible. On the other hand, the Court of First Instance gave its decision without taking further steps in the proceedings, in accordance with Article 111 of its Rules of Procedure, so that the Commission did not have the opportunity to make or explain all its observations. Moreover, neither of those factors precludes an examination
proprio motu
of whether any of the Commission ' s arguments is well founded. I therefore consider that those arguments should be examined.
34. The first three arguments put forward by the Commission come down in essence to the nature of its powers or, as the case may be, its obligations in response to a complaint in the context of control of concentrations.
35. The Commission contends, in a nutshell, that there is no legal basis for a request for rejection of a complaint, that it is not obliged to act in response to a request from third parties and that, should those third parties succeed, by way of an action for failure to act, in inducing the Commission to act, that does not affect their legal position.
36. It should be noted in this connection that the Community legislature has opted for a preventive system of control of concentrations at Community level by providing for compulsory prior notification and observance of a waiting period before the concentration can be put into effect, with a possible fine for failure to comply with those provisions.
37. The Commission has sole competence with regard to concentrations of a certain size, that is to say, concentrations which exceed the turnover thresholds mentioned in Article 1 of the regulation, known as
" concentrations with a Community dimension" . The Member States may not apply their national competition legislation to such concentrations. As far as control of concentrations is concerned, that implies a strict division of powers between the Commission on the one hand and the national competition authorities on the other.
38. First and foremost, Regulation No 4064/89 is characterised by accelerated procedures in order to ensure inter alia that the traders concerned obtain a decision, and therefore legal certainty, as quickly as possible.
39. This case concerns the question whether the appellants ' action for failure to act is admissible. I am not persuaded by the Commission ' s first three arguments. It put forward similar arguments before the Court of First Instance in
Air France
v
Commission . (11)
The Court of First Instance rightly rejected them. The fact that the issue in that case was the admissibility of an action for annulment makes no difference.
40. Firstly, third parties may have an interest in a Commission investigation as to whether the concentration has a Community dimension. If the Commission takes the view that it does, that gives rise to a number of legal consequences, both for the undertakings involved in the concentration and for the Member States, as well as for third parties such as the direct competitors of the parties involved in the concentration. Those third parties may be directly and individually concerned by such a decision. (12)
41. The Commission ' s argument that Regulation No 4064/89 provides for no formal complaints procedure, so that there is no legal basis for the rejection of a complaint, and that the finding that a particular concentration does not have a Community dimension can be made only on the basis of a notification by the undertakings involved in the concentration, cannot be accepted.
42. It follows from the fact that Regulation No 4064/89 gives the Commission the power to assess certai n concentrations that it is also entitled to examine its own competence with regard to a particular concentration. It can do so both in response to the notification from the undertakings involved in the concentration and on its own initiative, as well as in response to a request to that effect from third parties. Prior notification is therefore not a prerequisite for the adoption of a decision in the matter.
43. The fact that Regulation No 4064/89 does not provide for a complaints procedure makes no difference in that respect. As directly interested parties, third parties are entitled to submit a request to the Commission to investigate whether a particular concentration has a Community dimension. If the Commission concludes that a particular concentration has no Community dimension, it can record that finding by means of a decision. In that event, as the Court of First Instance also observed in the judgment in
Air France
v
Commission, third parties can bring an action for annulment against that decision, or, if the Commission does not respond to their request, an action for failure to act.
44. I attach greater importance to the argument which the Commission derives from the fact that the appellants only submitted their request to the Commission four months after the competent national authority had taken a decision
45. It is clear from the Court ' s case-law that the call to act must be made within a reasonable period of time after it has become clear that the institution is not prepared to act or shows no intention of acting. What is reasonable depends on the actual case. In any event, the case-law makes it clear that waiting too long may have the consequence that the subsequent action for failure to act is declared inadmissible. (13)
46. In this case, the competent national authority gave its decision on 26 January 2001. The request to the Commission is dated 25 May 2001. According to the Commission, the appellants should have raised the issue of competence during the national proceedings or as soon as possible thereafter, but not four months later. The Commission points out in that connection that such a long period of time is contrary to the objective of control of concentrations, which is to ensure effective monitoring and legal certainty. The appellants have thereby, it contends, forfeited their rights.
47. This case is not so much about whether the call to act, which was dated 11 September 2001, was late, but about whether the request submitted on 25 May 2001 by Schlüsselverlag and Others was not in itself already out of time, with the consequence that an action for failure to act is inadmissible. I sympathise with the Commission ' s point of view. It is significant in that regard that the general structure of Regulation No 4064/89 is characterised by the requirement of speed (strict time-limits) and legal certainty for traders. In my view, that applies not only to the procedures following a notification, but also to a request from a third party who is of the opinion that a concentration has a Community dimension and that the Commission must therefore examine it. Such a request by a third party must therefore be made within a reasonable period of time. That is especially true if a national procedure has already been initiated. What is reasonable can vary from case to case. In this case, however, the appellants waited four months before raising the issue of the Commission ' s alleged competence and thus the Austrian authority ' s lack of competence. Assuming that, even if they were not aware of the imminent concentration and its examination by the national authority, the appellants in any event quickly became aware of it after that authority had given its decision, such a period of time cannot be regarded as reasonable. On that ground, the Court of First Instance was entitled to declare the action for failure to act inadmissible.
48. However, that is not relevant as far as the validity of the contested order is concerned, since the action brought by the appellants before the Court of First Instance was in any event inadmissible. The Court of First Instance was fully entitled to infer from the letter of 7 November 2001 that, since that letter no longer contained a reservation, it was attributable to the Commission and that it contained a definition of the latter ' s position for the purposes of the second paragraph of Article 232 EC. The fact that that letter referred to the letter of 12 July 2001, in which that reservation is certainly expressed, makes no difference. The reference in the letter of 7 November 2001 is confined to the inapplicability of Regulation No 4064/89 by virtue of the fact that the turnover involved was below the thresholds as referred to in Article 1(2) of that regulation. I therefore consider that the second plea in law put forward by the appellants is unfounded.
VI ─ Conclusion
49. In the light of the foregoing, I propose that the Court should:
(1) dismiss the appeal;
(2) order the appellants to pay the costs.
(1) .
(2) Order of the Court of First Instance (Third Chamber) of 11 March 2002 in Case T-3/02
Schlüsselverlag and Others
v
Commission
[2002] ECR II-1473.
(3) OJ 1989 L 395, p. 1, corrected in OJ 1990 L 257, p. 13 and subsequently amended by Council Regulation (EC) No 1310/97 of 30 June 1997 amending Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (OJ 1997 L 180, p. 1).
(4) Case T-3/93 [1994] ECR II-121.
(5) The Commission refers in this connection to the judgment in Case 247/87
Star Fruit
[1989] ECR 291.
(6) OJ, English Special Edition 1959-1962, p. 87.
(7) Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty (OJ 1998 L 354, p. 18).
(8) Commission Regulation (EC) No 447/98 of 1 March 1998 on the notifications, time limits and hearings provided for in Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (OJ 1998 L 61, p. 1).
(9) The Commission refers here to the judgment of the Court of First Instance in Case T-290/94
Kaysersberg
v
Commission
[1997] ECR II-2137. In that judgment, it was held that there is no analogy between the rights of third parties in the context of Regulation No 4064/89 and those of complainants in the context of Regulation No 17.
(10) The Commission refers in this connection to the judgment in Case T-398/94
Kahn Scheppvaart
v
Commission
[1996] ECR II-477, paragraph 50, and to the judgment in Case C-50/00 P
Unión de Pequeños Agricultores
v
Council
[2002] ECR I-6677.
(11) Cited in footnote 4.
(12) Case C-68/95
T. Port
[1996] ECR I-6065; Case 26/76
Metro
[1977] ECR 1875; Case C-198/91
Cook
[1992] ECR I-2489; and
Air France
v
Commission, cited in footnote 4.
(13) Case 59/70
Netherlands
v
Commission
[1971] ECR 639, paragraphs 15 to 19.