62006CC0501_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
Table of contents
I –  Legal framework
II –  The background to the dispute, the contested decision and the judgment under appeal
III –  Procedure before the Court of Justice and forms of order sought by the parties
A – Forms of order sought by the parties in the individual cases
1. Case C‑501/06 P (GSK’s appeal)
2. Case C‑513/06 P (the Commission’s appeal)
3. Case C‑515/06 P (EAEPC’s appeal)
4. Case C‑519/06 P (Aseprofar’s appeal)
B – Joinder and hearing
IV –  Admissibility
A – Admissibility of the submissions by the Commission and Aseprofar regarding the restriction of competition by object in their appeals (C‑513/06 P and C‑519/06 P)
B – Admissibility of the Commission’s submissions in Case C‑501/06 P in response to GSK’s appeal which are described as a ‘cross‑appeal’
1. The Commission’s submissions regarding the restriction of competition by object
a) Inadmissibility in the context of a cross‑appeal
b) Admissibility in the context of a response seeking to dismiss an appeal
c) Ability to take the submissions into account
d) The substantive identity of the Commission’s submissions in Cases C‑513/06 P and C‑501/06 P
2. The Commission’s submissions regarding the restriction of competition by effect
3. Admissibility of the Commission’s cross‑appeal contesting paragraph 1 of the operative part of the judgment under appeal
C – Conclusion
V –  GSK’s appeal in Case C‑501/06 P
A – Errors of law made by the Court of First Instance in the part of its reasoning relating to the restrictive object of the General Sales Conditions
1. The part of the grounds of the judgment under appeal relating to the restrictive object of the General Sales Conditions
2. The notion of restriction of competition by object
3. Errors of law
a) Legally erroneous interpretation of the notion of restriction of competition by object
i) The finding that an agreement which seeks to restrict parallel trade can only in principle be regarded as a restriction of competition by object
ii) Presumption of a restrictive effect
iii) Taking into account of detriment to the final consumer
iv) Limited account taken of the benefits of parallel trade for the final consumer
v) Conclusion
b) Account taken of the legal and economic context
i) The assumption that intermediaries may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers
ii) The other assumptions and findings
4. Conclusion
B – Replacement of grounds
1. The facts of the case established by the Court of First Instance
2. Upholding of the Commission’s reasoning that the General Sales Conditions have a restrictive object
a) Standardised approach
b) Presumption of a restriction of competition
c) Interim conclusion
3. Conclusion
C – The finding by the Court of First Instance that the Commission was entitled to consider that the General Sales Conditions had a restrictive effect
D – Conclusion
VI –  The appeals of the Commission, Aseprofar and EAEPC
A – The part of the grounds of the judgment under appeal
B – The Commission’s appeal in Case C‑513/06 P and its cross‑appeal in Case C‑501/06 P
1. The first condition laid down by Article 81(3) EC
a) Distortion of the legal and economic context
b) The concept of promoting technical progress, the allocation of the burden of proof and the standard of proof
i) Application of a test from merger control
ii) The threshold as from which gains in efficiency can be assumed
iii) Significance of the structural nature of the price differentials
iv) Currency fluctuations
v) The relationship between the extra financial resources for GSK and promoting technical progress
vi) Conclusion
c) Distortion of the contested decision and absence of consideration of events in the past in the prospective analysis
i) Distortion of the contested decision
– Distortion of the content of the contested decision
– Replacement of grounds
– Conclusion
ii) Consideration of events in the past
iii) Taking into account of data that did not exist at the time when the contested decision was adopted
iv) Conclusion
d) Misapplication of the standard of review
i) Creation of a new ground for annulment
ii) Exceeding of jurisdiction by the Court of First Instance
e) Error of reasoning on account of a terse assessment of the evidence and unexplained assumptions by the Court of First Instance
i) Assessment of the evidence submitted by GSK
ii) Failure to explain why research and development would have been impossible without the General Sales Conditions
2. The further conditions laid down by Article 81(3) EC
3. Conclusion
C – EAEPC’s appeal in Case C‑515/06 P
1. The role and function of Article 81(3) EC
2. Burden of proof
3. Erroneous assessment of, or failure to take into account, evidence
a) Shifting of the burden of proof
b) Erroneous assessment or non‑consideration of facts which are apparent from the file
c) Taking into account of incorrect facts
4. Conclusion
D – Aseprofar’s appeal in Case C-519/06 P
1. The first condition laid down by Article 81(3) EC
2. The further conditions laid down by Article 81(3) EC
a) Allowing consumers a fair share of the benefit
b) Indispensability
c) The possibility of eliminating competition
3. Conclusion
E – Conclusion
VII –  Summary
VIII –  Conclusion
1. These appeals give the Court an opportunity, following its judgment in Sot. Lélos kai Sia (2) which concerned the assessment of unilateral measures to restrict parallel trade in medicines under Article 82 EC, to take a view on the compatibility of agreements having such an object with Article 81 EC.
2. The subject‑matter of these appeals is the assessment under Article 81 EC of general business conditions (‘the General Sales Conditions’) of the producer of medicines GlaxoSmithKline Services Unlimited (‘GSK’). Under the General Sales Conditions, GSK charged intermediaries established in Spain to whom it sold medicines (‘the Spanish intermediaries’) different prices for certain medicines, depending on whether the Spanish intermediaries sold them in Spain or other Member States.
3. The purpose of the General Sales Conditions was to restrict parallel trade in GSK’s medicines between Spain and other Member States, in which the Spanish intermediaries were engaging on account of the price differentials between Member States. In GSK’s view, the parallel trade primarily benefits the intermediaries while a restriction of parallel trade is beneficial to the final consumers. GSK argues that the additional resources which it, or the group to which it belongs, (3) obtains through the restriction of parallel trade can be invested by it in the research and development of new medicines.
4. GSK notified the General Sales Conditions to the Commission. In its decision of 8 May 2001 (4) (‘the contested decision’), the Commission found that the General Sales Conditions infringed Article 81(1) EC and could not be exempted under Article 81(3) EC. Ruling on GSK’s action by judgment of 27 September 2006 in Case T‑168/01 (5) (‘the judgment under appeal’), the Court of First Instance upheld the contested decision in so far as the Commission found that the General Sales Conditions infringed Article 81(1) EC, but annulled it in so far as the Commission rejected the request for exemption of the General Sales Conditions under Article 81(3) EC.
5. By its appeal in Case C‑501/06 P, GSK, on the one hand, contests the judgment under appeal in so far as it upheld the Commission’s finding that the General Sales Conditions infringe Article 81(1) EC. On the other hand, the Commission (supported by the Republic of Poland as intervener), the Asociación de exportadores españoles de productos farmacéuticos (‘Aseprofar’) and the European Association of Euro Pharmaceutical Companies (‘EAEPC’) by their appeals in Cases C‑513/06 P, C‑515/06 P and C‑519/06 P, and the Commission and Aseprofar by their cross‑appeals in Case C‑501/06 P, contest the judgment under appeal in so far as it annulled the Commission’s decision to reject GSK’s request for exemption of the General Sales Conditions under Article 81(3) EC.
I – Legal framework
6. Article 3(1)(g) EC provides that the activities of the Community are to include a system ensuring that competition in the internal market is not distorted.
7. Article 81 EC provides:
‘1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
2. Any agreements or decisions prohibited pursuant to this article shall be automatically void.
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
– any agreement or category of agreements between undertakings,
– any decision or category of decisions by associations of undertakings,
– any concerted practice or category of concerted practices,
which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.’
8. Council Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of national health insurance systems (6) lays down requirements intended to make it possible to verify that such measures do not constitute quantitative restrictions on imports or exports or measures having equivalent effect.
9. At the time of notification of the General Sales Conditions, the Member States had different national regulations on the prices of medicines (‘national price regulations’). They included inter alia regulations on the setting of selling prices of medicines, on the setting of rates of reimbursement for medicines or on the profits of the producers of medicines.
II – The background to the dispute, the contested decision and the judgment under appeal
10. The group to which GSK belongs is one of the world’s main producers of medicines. GSK agreed (7) with 89 Spanish intermediaries, with whom it had commercial relations outside any distribution network, on the applicability of the General Sales Conditions which entered into force on 9 March 1998. Under the General Sales Conditions, two different prices, known as the Clause 4A price and the Clause 4B price, were fixed for 82 medicines.
11. The Clause 4A price was in no event to exceed the maximum industrial price established by the Spanish health authorities. It was charged when, firstly, the medicines were financed by the funds of the Spanish social security or by Spanish public funds and, secondly, the acquired medicines were subsequently marketed through Spanish pharmacies and hospitals.
12. In all other cases, the Clause 4B price was charged. The General Sales Conditions provided that the Clause 4B price was to be fixed according to real, objective and non-discriminatory economic criteria and completely irrespective of the destination of the product determined by the purchasing warehouse. In particular, the price – updated where appropriate – which GSK had proposed to the Spanish health authorities at the beginning of the negotiations during the Spanish pricing procedure was to be applied.
13. The medicines concerned included Beconase, Becloforte, Becotide, Flixotide, Serevent, Ventolin, Lamictal and Imigran, which were prime candidates for parallel trade between Spain and the United Kingdom on account of the price differentials.
14. By letter of 6 March 1998, GSK submitted an application under Article 2 of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles [81] and [82] of the Treaty (8) (‘Regulation No 17’) for a certificate that the General Sales Conditions did not infringe Article 81(1) EC (negative clearance) and, in the alternative, an application under Article 4 of Regulation No 17 for exemption of the General Sales Conditions under Article 81(3) EC. The Commission did not grant those applications. In Article 1 of the contested decision, it found that the General Sales Conditions infringed Article 81(1) EC. It based its finding on the ground that the General Sales Conditions had both the object and the effect of restricting competition. In Article 2 of the contested decision, it rejected the request for an exemption of the General Sales Conditions pursuant to Article 81(3) EC.
15. GSK brought an action for annulment of the contested decision before the Court of First Instance. In the judgment under appeal of 27 September 2006, the Court of First Instance granted GSK’s application only in part. In so far as the application was directed against the finding in Article 1 of the contested decision that the General Sales Conditions infringe Article 81(1) EC, the Court of First Instance dismissed the application in paragraph 2 of the operative part. The Court of First Instance did find that the Commission should not have considered that the General Sales Conditions had the object of restricting competition. However, it dismissed the challenge to Article 1 of the contested decision because it ultimately upheld the Commission’s reasoning in respect of the restrictive effects of the General Sales Conditions. In so far as the application was directed against the rejection in Article 2 of the contested decision of the request for exemption, the Court of First Instance granted it in paragraph 1 of the operative part of the judgment under appeal. (9) In paragraphs 3 to 5 of the operative part, the Court of First Instance made orders as to costs.
III – Procedure before the Court of Justice and forms of order sought by the parties
A – Forms of order sought by the parties in the individual cases
1. Case C‑501/06 P (GSK’s appeal)
16. By document lodged at the Court Registry on 11 December 2006, GSK brought an appeal against the judgment under appeal. That case was registered under number C‑501/06 P.
17. In its appeal, GSK claims that the Court should:
– set aside the judgment under appeal in so far as it rejected GSK’s application for annulment of Article 1 of the contested decision;
– take such other action as justice may require;
– order the Commission to pay the costs.
18. In response to GSK’s appeal, the Commission contends in this case that the Court should:
– dismiss GSK’s appeal in its entirety;
– set aside paragraphs 1 and 3 to 5 of the operative part of the judgment under appeal;
– give final judgment in the matter by dismissing the application in the proceedings at first instance as unfounded;
– order GSK to pay the Commission’s costs arising from the proceedings in Case T-168/01 and from this appeal.
19. In response to that form of order sought by the Commission, GSK contends that the Court should:
– dismiss the Commission’s cross‑appeal as inadmissible and unfounded;
– order the Commission to pay the costs.
20. In response to GSK’s appeal, EAEPC contends in this case that the Court should:
– dismiss GSK’s appeal in its entirety.
21. In response to GSK’s appeal, Aseprofar contends in this case that the Court should:
– dismiss GSK’s appeal in its entirety;
– set aside paragraph 1 of the operative part of the judgment under appeal;
– give final judgment on the application at first instance and substitute the reasoning of the judgment under appeal in paragraphs 91 to 195 as regards the existence of a restriction of competition within the meaning of Article 81(1) EC;
– set aside paragraphs 3, 4 and 5 of the operative part of the judgment under appeal relating to costs and order GSK to pay the entire costs of the proceedings at first instance and the present proceedings.
22. The Republic of Poland was granted leave to intervene in support of the Commission and contends that the Court should:
– dismiss the appeal in its entirety;
– set aside paragraphs 1 and 3 to 5 of the operative part of the judgment under appeal;
– give final judgment in the case at first instance and dismiss GSK’s application for annulment.
23. In response to the form of order sought by the Republic of Poland, GSK maintains the form of order sought by it and, in addition, contends that the Court should:
– find the statement in intervention of the Republic of Poland inadmissible in part;
– award GSK the costs.
2. Case C‑513/06 P (the Commission’s appeal)
24. By document lodged at the Court Registry on 11 December 2006, the Commission brought an appeal against the judgment under appeal. That case was registered under number C‑513/06 P.
25. In its appeal, the Commission claims that the Court should:
– set aside paragraphs 1 and 3 to 5 of the operative part of the judgment under appeal;
– give final judgment in the matter by dismissing the application at first instance;
– order GSK to pay the Commission’s costs arising from the proceedings at first instance and from the appeal.
26. EAEPC supports the form of order sought by the Commission.
27. In response to the Commission’s appeal, GSK contends in this case that the Court should:
– dismiss the Commission’s appeal as inadmissible or unfounded;
– order the Commission to pay the costs.
28. The Republic of Poland was granted leave to intervene in support of the Commission and claims that the Court should:
– set aside paragraphs 1 and 3 to 5 of the operative part of the judgment under appeal;
– give final judgment in the case at first instance and dismiss GSK’s application for annulment.
29. In response to the form of order sought by the Republic of Poland, GSK maintains the form of order sought by it and, in addition, contends that the Court should:
– find the statement in intervention of the Republic of Poland inadmissible in part;
– award GSK the costs.
3. Case C‑515/06 P (EAEPC’s appeal)
30. By document lodged at the Court Registry on 18 December 2006, EAEPC brought an appeal against the judgment under appeal. This case was registered under number C‑515/06 P.
31. In its appeal, EAEPC claims that the Court should:
– set aside the judgment under appeal to the extent that it annulled the contested Commission decision;
– order GSK to pay the costs.
32. The Commission supports the form of order sought by EAEPC.
33. In response to EAEPC’s appeal, GSK contends that the Court should:
– dismiss the appeal as inadmissible or unfounded;
– order EAEPC to pay the costs.
4. Case C‑519/06 P (Aseprofar’s appeal)
34. By document lodged at the Court Registry on 13 December 2006, Aseprofar brought an appeal against the judgment under appeal. This case was registered under number C‑519/06 P.
35. In its appeal, Aseprofar claims that the Court should:
– set aside paragraph 1 of the operative part of the judgment under appeal;
– give final judgment in the case at first instance by dismissing GSK’s application and confirming the contested decision;
– set aside paragraphs 3, 4 and 5 of the operative part of the judgment under appeal regarding costs and order GSK to pay the entire costs of the proceedings before the Court of First Instance and of the appeal.
36. The Commission and EAEPC support the form of order sought by Aseprofar.
37. In response to Aseprofar’s appeal, GSK contends that the Court should:
– dismiss the appeal as inadmissible and unfounded;
– order Aseprofar to pay the costs.
B – Joinder and hearing
38. By order of 17 December 2008, Cases C‑501/06 P, C‑513/06 P, C‑515/06 P and C‑519/06 P were joined for the purposes of the oral procedure and the judgment.
39. A hearing was held on 18 March 2009 involving the participation of representatives of GSK, the Commission, EAEPC, Aseprofar and the Government of the Republic of Poland, who supplemented their submissions and answered questions.
IV – Admissibility
40. GSK has submitted that the forms of order sought and submissions made by the Commission and Aseprofar are partly inadmissible. Since GSK bases its objections as to admissibility, in part, on the overall relationship of the forms of order sought by the parties in the individual cases, those objections must be examined first.
41. The objections as to admissibility are directed, first, against the submissions by the Commission and Aseprofar in their appeals in Cases C‑513/06 P and C‑519/06 P alleging errors of law in the reasoning of the Court of First Instance in respect of the restriction of competition by object (A). Secondly, GSK claims, in Case C‑501/06 P, that part of the form of order sought and submissions made by the Commission in response to its appeal should be rejected as inadmissible (B).
A – Admissibility of the submissions by the Commission and Aseprofar regarding the restriction of competition by object in their appeals (C‑513/06 P and C‑519/06 P)
42. The claims of the Commission and Aseprofar in their appeals in Cases C‑513/06 P and C‑519/06 P that paragraph 1 of the operative part of the judgment under appeal should be set aside are admissible. The Commission and Aseprofar are adversely affected by paragraph 1 of the operative part of the judgment under appeal and submit reasons why, in their view, paragraph 1 of the operative part should be set aside.
43. GSK doubts the admissibility of the submissions in which the Commission and Aseprofar allege errors of law in the part of the grounds of the judgment under appeal which forms the basis of paragraph 2 of the operative part.
44. GSK rightly objects that those arguments cannot be taken into account as autonomous pleas in law. The Commission and Aseprofar do not claim that the second paragraph of the operative part of the judgment under appeal should be set aside, but that it should be upheld, though with replacement of the grounds of the judgment under appeal. Such a request is inadmissible in the context of a notice of appeal. (10) According to settled case‑law, appellants may in principle seek a review of a part of the grounds of a judgment only where an error of law in that part of the grounds may call into question the operative part of the judgment under appeal. (11) In principle, therefore, no legal interest exists in raising pleas which are not directed against the operative part but merely against the grounds of the judgment under appeal. (12)
45. The Commission and Aseprofar argue, in favour of the admissibility of their submissions, that the reasoning of the Court of First Instance regarding the restrictive object of the General Sales Conditions under Article 81(1) EC influenced its reasoning on the eligibility of the General Sales Conditions for exemption under Article 81(3) EC.
46. Even if those submissions are correct, that cannot, for the aforementioned reasons, lead to an appellant being granted a legal interest in bringing an extensive application for replacement of the grounds of a judgment. In such a case, the submissions may be taken into account only in so far as they are capable of calling into question the part of the operative part of the judgment under appeal which adversely affects the appellant.
47. In the Commission’s and Aseprofar’s appeals in Cases C‑513/06 P and C‑519/06 P, therefore, the submissions directed against the part of the grounds relating to the restrictive object of the General Sales Conditions cannot be taken into account as autonomous pleas against that part of the judgment. They can be taken into account only in the context of the claim in their appeals that paragraph 1 of the operative part of the judgment under appeal should be set aside, that is to say, to the extent to which they are directed at the reasoning of the Court of First Instance under Article 81(3) EC.
B – Admissibility of the Commission’s submissions in Case C‑501/06 P in response to GSK’s appeal which are described as a ‘cross‑appeal’
48. In Case C‑501/06 P, the Commission responded as follows to GSK’s appeal:
– Firstly, under the heading ‘Response’, it responded to the pleas in law by which GSK contested, with the aim of having paragraph 2 of the operative part of the judgment under appeal set aside, the grounds of the judgment relating to the restrictive effect of the General Sales Conditions.
– Secondly, under the heading ‘Cross-appeal’, it put forward reasons for which the Court of First Instance should have based paragraph 2 of the operative part of the judgment under appeal simply on the finding that the Commission correctly considered that the General Sales Conditions had a restrictive object.
– Thirdly, likewise under the heading ‘Cross‑appeal’, it alleged errors of law by the Court of First Instance in its reasoning relating to the restrictive effect of the General Sales Conditions. It thus alleged errors of law in the grounds of the judgment under appeal on the basis of which the Court of First Instance ultimately upheld the Commission’s finding in the contested decision that the General Sales Conditions infringed Article 81(1) EC.
– Fourthly, as a ‘cross‑appeal’, it claimed that paragraph 1 of the operative part of the judgment under appeal should be set aside. It based this on the ground that the Court of First Instance wrongly annulled Article 2 of the contested decision, in which the Commission had rejected the request for an exemption pursuant to Article 81(3) EC.
49. It should first be noted that the Commission’s reply to GSK’s pleas in law which is referred to in the first indent of the preceding point is admissible without any problems as a response seeking to dismiss the appeal, within the meaning of Article 116(1), first indent, first alternative, of the Rules of Procedure. I shall therefore confine myself below to examining the form of order sought, and submissions made, by the Commission which the latter has identified as a ‘cross‑appeal’.
1. The Commission’s submissions regarding the restriction of competition by object
50. In response to GSK’s appeal, the Commission alleges errors of law in the reasoning of the Court of First Instance on the basis of which it held that the Commission should not have considered that the General Sales Conditions had a restrictive object. GSK maintains that these submissions are inadmissible.
a) Inadmissibility in the context of a cross‑appeal
51. First, GSK must be concurred with when it states that these submissions are inadmissible in the context of a cross‑appeal under Article 116(1), first indent, second alternative, of the Rules of Procedure. As in the context of an appeal, so also, in principle, in the context of a cross‑appeal, it is not permissible to challenge only the grounds of the judgment under appeal. (13)
b) Admissibility in the context of a response seeking to dismiss an appeal
52. However, it must be borne in mind that the Commission has stated in the course of the proceedings that, by these submissions, it was primarily seeking to respond to GSK’s appeal. It therefore does not intend its submissions to be construed as a cross‑appeal under Article 116(1), first indent, second alternative, of the Rules of Procedure, but as a response seeking to dismiss GSK’s appeal, within the meaning of Article 116(1), first indent, first alternative, of the Rules of Procedure.
53. It should, firstly, be noted in this connection that such submissions can certainly be taken into account in the context of a response seeking to dismiss the appeal under Article 116(1), first indent, first alternative, of the Rules of Procedure, unlike in the context of an appeal under Article 113(1), first indent, of the Rules of Procedure or of a cross‑appeal under Article 116(1), first indent, second alternative, of the Rules of Procedure.
54. A response seeking to dismiss the appeal can be based on a request for replacement of the grounds of the judgment under appeal. The Court does not in fact dismiss appeals only where it confirms the grounds of the judgment under appeal as being free from errors of law. It also dismisses appeals where it can replace legally erroneous reasoning of the Court of First Instance by reasoning which is free from errors of law and the latter reasoning supports the part of the operative part contested by the appeal. (14)
55. Secondly, it must be pointed out that such a situation exists in this case. Article 81(1) EC lays down as a condition, in the form of an alternative, the existence of a restriction of competition either by object or by effect. (15) The Commission based the finding in Article 1 of the contested decision of an infringement of Article 81(1) EC both
on the ground that the General Sales Conditions had a restriction of competition as their object and on the ground that they had such a restriction as their effect.
56. Although the Court of First Instance did not regard the Commission’s reasoning regarding the restriction of competition by object as sufficient, it nevertheless dismissed GSK’s action because it ultimately upheld the Commission’s reasoning regarding the restrictive effect. In paragraph 2 of the operative part of the judgment under appeal, the Court of First Instance therefore upheld Article 1 of the contested decision.
57. The Commission would therefore be entitled, in a response to GSK’s appeal, which is directed against paragraph 2 of the operative part of the judgment under appeal, to base a claim seeking dismissal of the appeal on the ground that the Court of First Instance should already have upheld the Commission’s reasoning regarding the restrictive object of the General Sales Conditions.
c) Ability to take the submissions into account
58. The question therefore arises, first, whether the Commission’s submissions identified as a ‘cross‑appeal’ can be construed as a claim seeking dismissal of the appeal.
59. Contrary to GSK’s submissions, this question cannot hinge solely on the words chosen; what matters is the discernable intention of the Commission. It is true that the limit of such an interpretation or reclassification based on the party’s intention is reached at the point where the other party’s right to a fair hearing is impaired. This is likely to be the case, in particular, where the intention has not been sufficiently clearly expressed for the other party. However, since the part identified as the ‘cross‑appeal’ manifestly sought dismissal of GSK’s appeal, with replacement of the grounds of the judgment under appeal, such interpretation or reclassification appears to me to be justifiable. In addition, I cannot see that this would impair GSK’s right to a fair hearing. GSK has fully expressed its views on the reasoning of the Court of First Instance regarding the restrictive object of the General Sales Conditions.
60. Irrespective of whether it is considered permissible to interpret or reclassify the ‘cross‑appeal’ as a response seeking dismissal of the appeal, substantive consideration of the Commission’s submissions on the restrictive object of the General Sales Conditions seems to me to be possible. The Court’s jurisdiction to replace grounds ought not to be dependent on a corresponding claim by the party opposing the appeal.
61. It is true that replacement of the grounds of a judgment of the Court of First Instance cannot take place irrespective of whether the occasion arises, that is to say, outside of an appeal. However, where an appeal challenges the part of the operative part which the Court of First Instance has based on the part of the grounds in question, replacement of the grounds in question cannot be dependent on an appropriate request being expressed or specific alternative grounds being proposed by a party opposing the appeal. Such an approach does not seem to me to be compatible with the role of the Court of Justice under Article 220 EC. Under that provision, the Court of Justice, within its jurisdiction (which is invoked by the lodging of an appeal), is to ensure that in the interpretation and application of the Treaty the law is observed. It seems to me that the only approach compatible with that is one whereby the Court, in the context of an appeal, can replace legally erroneous reasoning of the Court of First Instance whether or not a corresponding request is made by a party opposing the appeal. I consider my view of the law to be confirmed by the fact that, in the cases cited in footnote 14, the Court appears also to have undertaken the replacement of grounds of its own motion.
62. Since the Court’s jurisdiction to replace grounds is therefore not dependent on an application by the parties, the Commission’s submissions on the anti-competitive object of the General Sales Conditions can be taken into account when examining GSK’s appeal, even if the Commission’s submissions described as a ‘cross‑appeal’ are not capable of being interpreted or reclassified as a claim seeking dismissal of the appeal.
d) The substantive identity of the Commission’s submissions in Cases C‑513/06 P and C‑501/06 P
63. Finally, GSK’s objection that the fact that the Commission’s submissions in its appeal in Case C‑513/06 P and in response to GSK’s appeal in Case C‑501/06 P are substantively identical constitutes an abuse of process must also be rejected.
64. Firstly, it should be pointed out that, despite being joined, both cases must still be regarded as separate proceedings. Secondly, GSK cannot in any event succeed in its objection because the relevant submissions by the Commission in the context of its appeal in Case C‑513/06 P must be rejected as inadmissible. (16) The situation of repeated advancing of the same appeal objected to by GSK as an abuse of process therefore does not exist. Thirdly, in Case C‑501/06 P, the Commission cannot, for the aforementioned reasons, be denied an interest in the consideration of its submissions. (17)
2. The Commission’s submissions regarding the restriction of competition by effect
65. As set out above, (18) in Case C‑501/06 P the Commission, in response to GSK’s appeal, put forward further reasons concerning why the Court of First Instance made errors of law in its reasoning regarding the restrictive effect under Article 81(1) EC, and referred to these likewise under the term ‘cross‑appeal’.
66. In so far as GSK also objects to the admissibility of these submissions, reference may be made to the above reasoning. (19) As a cross‑appeal, these submissions would have to be rejected as inadmissible. So far as concerns the ability to take these submissions by the Commission into account, their interpretation or reclassification as a claim seeking dismissal of the appeal is admittedly a less obvious solution than in the case of the submissions discussed previously, regarding the restrictive object. That is because, in this context, the Commission has merely alleged errors of law on the part of the Court of First Instance without addressing the question of by what alternative reasoning the reasoning regarded as legally erroneous should be replaced. However, the fact that the thrust of these submissions is primarily directed only against the reasoning of the Court of First Instance, but not at dismissal of the appeal, can be overcome by the assumption that the Commission is seeking replacement of the grounds regarded by it as legally erroneous with grounds which uphold its reasoning in the contested decision on the restrictive effect of the General Sales Conditions. In any event, the Commission’s submissions regarding the restriction of competition by effect can also be taken into account by virtue of the Court’s jurisdiction to replace grounds of its own motion, as explained above, (20) without any need for a decision to be made as to whether the submissions described under the term ‘cross‑appeal’ can be interpreted or reclassified as a claim seeking dismissal of the appeal.
3. Admissibility of the Commission’s cross‑appeal contesting paragraph 1 of the operative part of the judgment under appeal
67. As set out above, (21) the Commission has also sought under the heading ‘cross-appeal’ to have paragraph 1 of the operative part of the judgment under appeal set aside. In this instance, this is in fact a cross‑appeal as referred to in Article 116(1), first indent, second alternative, of the Rules of Procedure.
68. GSK submits that this cross‑appeal is inadmissible, since the Commission, by its appeal in Case C‑513/06 P, has already sought to have paragraph 1 of the operative part of the judgment under appeal set aside. In its view, the remedies of lodging an appeal and a cross‑appeal cannot both be exercised. The Commission, on the other hand, invokes, in particular, the separate status of the procedures and the fact that a party who has himself lodged an appeal may, in addition, also intervene in other appeal proceedings against the judgment under appeal.
69. The Commission’s cross‑appeal in Case C‑501/06 P is admissible.
70. Firstly, it must be pointed out that, despite their being joined, Cases C‑501/06 P and C‑513/06 P have not lost their character as separate proceedings. On the contrary, the allegations put forward must be examined in each individual case.
71. Secondly, contrary to GSK’s submission, the taking into account of considerations of procedural economy cannot, in principle, mean that the exercise of a legal remedy provided for in the Rules of Procedure is to be viewed as an abuse of process.
72. Thirdly, I cannot infer from the wording of Article 116(1), first indent, second alternative, of the Rules of Procedure any limitation to the effect that a cross‑appeal may be lodged only if the party concerned has not yet lodged an appeal. Admittedly, the possibility of lodging a cross‑appeal might well play a practical role particularly in cases where one party wishes to wait first before lodging an appeal, in order to see whether another party contests the judgment. However, that is not a requirement of Article 116(1), first indent, second alternative, of the Rules of Procedure. It should further be pointed out that a party may decide initially to lodge only an appeal limited to certain grounds, and lodge a more extensive cross‑appeal only when another party appeals. Such a course of action ought to be compatible with the wording and purpose of Article 116(1), first indent, second alternative, of the Rules of Procedure.
73. Fourthly, contrary to GSK’s submission, neither the principle of concentration of proceedings nor the principle under which new pleas in law are not to be raised after the expiry of the time‑limit for appeals militates against the lodging of both an appeal and a cross‑appeal. Under Article 116(1), first indent, second alternative, of the Rules of Procedure, even where the time‑limit for lodging an appeal has already expired, a party may still seek to have the judgment entirely set aside by means of a cross‑appeal. (22) If the Rules of Procedure grant a party the right still to challenge a judgment in its entirety by means of a cross‑appeal, despite the expiry of the time‑limit for appeals, it can, in my view, be inferred a fortiori from this that the taking into account of the principle of concentration of proceedings and the principle under which new pleas in law are not to be raised cannot prevent a party who has already lodged an appeal from lodging a cross‑appeal.
74. Finally, in so far as GSK also views the fact that the Commission’s appeal in Case C‑513/06 P and its cross‑appeal in Case C‑501/06 P are largely identical in substance as an abuse of process, this objection to admissibility must also be rejected. In this connection also, the separate status of the individual cases should be noted. (23)
C – Conclusion
75. As a result of the examination of admissibility, I conclude that the Commission’s and Aseprofar’s submissions in Cases C‑513/06 P and C‑519/06 P regarding the restrictive object of the General Sales Conditions should be disregarded as inadmissible in so far as they seek by those submissions merely to replace the grounds of the judgment under appeal.
76. On the other hand, the Commission’s submissions regarding the reasoning of the Court of First Instance on the restrictive object and effect of the General Sales Conditions can be taken fully into account in the context of the examination of GSK’s appeal in Case C‑501/06 P. That also applies to the corresponding submissions of Aseprofar, (24) EAEPC and Poland in that case.
77. Finally, the lodging of the Commission’s appeal in Case C‑513/06 P does not result in the inadmissibility of its cross‑appeal in Case C-501/06 P.
V – GSK’s appeal in Case C‑501/06 P
78. GSK’s appeal in Case C‑501/06 P is essentially directed against paragraph 2 of the operative part of the judgment under appeal. In that paragraph, the Court of First Instance dismissed GSK’s application in so far as it sought the annulment of Article 1 of the contested decision. In Article 1 of the contested decision, the Commission found that GSK’s General Sales Conditions infringed Article 81(1) EC.
79. Before I start examining the appeal, I would first draw attention to the particular circumstance that the Commission, Aseprofar, EAEPC and the Republic of Poland seek replacement of the grounds of the judgment regarding the restrictive object of the General Sales Conditions. They thus seek, in Case C‑501/06 P, the dismissal of GSK’s appeal with replacement of the grounds of the judgment relating to the restrictive object of the General Sales Conditions. (25) Secondly, I would draw attention to the structure of Article 81(1) EC, in accordance with which it is first examined whether an agreement has a restrictive object, and only if that cannot be considered to be the case must the restrictive effects of the agreement be examined. (26)
80. I am of the view that those particular circumstances justify examining first whether the Court of First Instance made an error of law in its reasoning regarding the restrictive object of the General Sales Conditions and whether that entails replacing the grounds. This is because if the reasoning of the Court of First Instance that the Commission was not entitled to regard the General Sales Conditions as having a restrictive object is replaced by reasoning according to which the Commission was right to regard the General Sales Conditions as having a restrictive object, GSK’s appeal would have to be dismissed for that reason alone, (27) as GSK could then no longer be successful with its pleas in law directed against the grounds of the judgment under appeal regarding the restrictive effect of the General Sales Conditions.
81. For those reasons, I shall first examine whether the reasoning of the Court of First Instance regarding the restrictive object of the General Sales Conditions is vitiated by errors of law (A). Should that be the case, I shall further examine whether the Court of Justice can, in the exercise of its jurisdiction in appeal proceedings, replace that legally erroneous reasoning of the Court of First Instance with reasoning confirming that the Commission was entitled to regard the General Sales Conditions as having a restrictive object (B). Should the conditions for such a replacement of the grounds regarding the restrictive object of the General Sales Conditions be met, GSK’s pleas in law contesting the reasoning of the Court of First Instance on the restrictive effect of the General Sales Conditions would no longer be relevant, since they could no longer call into question paragraph 2 of the operative part of the judgment under appeal (C).
A – Errors of law made by the Court of First Instance in the part of its reasoning relating to the restrictive object of the General Sales Conditions
82. The Commission, Aseprofar, EAEPC and the Republic of Poland assert that the Court of First Instance made errors of law in the part of its reasoning relating to the restrictive object of the General Sales Conditions. I shall therefore deal briefly first with the relevant part of the grounds of the judgment under appeal (1) and the concept of a restriction of competition by object (2). Based on that, I shall examine by what errors of law the relevant part of the judgment under appeal is vitiated (3).
1. The part of the grounds of the judgment under appeal relating to the restrictive object of the General Sales Conditions
83. In paragraphs 114 to 147 of the judgment under appeal, the Court of First Instance examined whether the Commission was entitled to regard the General Sales Conditions as having the object of restricting competition. First, the Court of First Instance found that GSK used the General Sales Conditions to pursue the object of restricting parallel trade and that, in the case of agreements which have as their object a restriction of parallel trade, a restriction of competition by object must, in principle, be considered to exist. (28)
84. However, in the present case, the Court of First Instance did not regard the object of restricting parallel trade as a sufficient basis for finding a restriction of competition by object. Instead, it observed that the application of Article 81(1) EC cannot depend solely on the fact that parallel trade is limited and that therefore trade is affected. The present case requires, in addition, an analysis designed to determine whether the General Sales Conditions have as their object or effect the restriction of competition on the relevant market, to the detriment of the final consumer. (29) A restriction of competition by object as the result of a restriction of parallel trade can be assumed to exist only if final consumers may be presumed to be deprived of the advantages of effective competition. (30)
85. The Court of First Instance then stated that, if account is taken of the legal and economic context of the present case, it cannot be presumed that the General Sales Conditions deprive the final consumers of the advantages of competition. (31)
86. In this connection, the Court of First Instance first observed that the Spanish intermediaries may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers. (32)
87. Also, the Court of First Instance criticised the Commission for at no point examining the specific and essential characteristic of the medicines sector, which relates to the fact that the prices of the products in question, which are subject to control by the Member States, which fix them directly or indirectly at what they deem to be the appropriate level, are determined at structurally different levels in the Community and, unlike the prices of other consumer goods, are in any event to a significant extent shielded from the free play of supply and demand. (33) That circumstance, the Court of First Instance continued, means that it cannot be presumed that parallel trade has an impact on the prices charged to the final consumers of medicines reimbursed by the national sickness insurance scheme and thus confers on them an appreciable advantage analogous to that which it would confer if those prices were determined by the play of supply and demand. (34)
88. On the basis of those findings, the Court of First Instance concluded that the principal conclusion reached by the Commission, namely that the General Sales Conditions have as their object the restriction of competition, could not be upheld. According to the Court of First Instance, as the prices of the medicines concerned are to a large extent shielded from the free play of supply and demand owing to the applicable regulations and are set or controlled by the public authorities, it cannot be taken for granted at the outset that parallel trade tends to reduce those prices and thus to increase the welfare of final consumers. An analysis of the terms of the General Sales Conditions, carried out in that context, therefore does not permit the presumption that a limitation of parallel trade tends to diminish the welfare of final consumers. In that largely unprecedented situation, it cannot be inferred merely from a reading of the terms of that agreement, in its context, that the agreement is restrictive of competition, and it is therefore necessary to consider the effects of the agreement, if only to ascertain what the regulatory authority was able to apprehend on the basis of such a reading. (35)
2. The notion of restriction of competition by object
89. According to the case‑law, the alternatives under Article 81(1) EC of having the object or the effect of restricting competition imply a two‑stage examination. If the restrictive object of an agreement is proven, no further evidence of its restrictive effects needs to be produced. (36) There is no need to take account of the actual effects of an agreement once it appears that its aim is to restrict competition. (37) Such an agreement falls under Article 81(1) EC even in the absence of restrictive effects on the market. (38) It is therefore clear that, so far as the alternative requirement of restriction of competition by object in Article 81(1) EC is concerned, it is a form of inchoate offence. (39)
90. A restrictive object must be considered to exist where agreements are by their very nature liable to restrict competition. That can be assumed to be the case where an agreement, having regard to its legal and economic context, has the specific capability and the tendency to have a negative impact on competition. (40)
91. In this connection, regard must be had, in particular, to existing experience according to which, in all probability, certain types of agreement have a negative impact in the market and jeopardise the objectives pursued by the Community’s competition legislation. Under this approach, the character of the restriction of competition by object as a form of inchoate offence becomes particularly clear, since certain types of agreement (such as price‑fixing agreements, customer sharing or resale price maintenance) are classified, on the basis of existing experience, as restrictions of competition by object, without any specific analysis of their effects. This standardised approach certainly creates legal certainty. However, it is always subject to the proviso that the legal and economic context of the agreement to be examined does not preclude application of this standardised assessment. (41)
92. The notion of restriction of competition by object is nevertheless not confined solely to certain types of agreement. It also covers agreements where a sufficiently deleterious effect on competition may be presumed on the basis of economic analysis. (42) Such an assessment of an agreement presupposes that it is appraised in its legal and economic context. That situation therefore retains a certain closeness in content to examination of the restrictive effects of the agreement. (43) However, the difference compared with an examination of the restrictive effects of the agreement lies in the fact that, with a restriction of competition by object, the negative interference with market conditions is so clear that the agreement can be presumed, without any detailed market analysis, to have a restrictive effect.
93. In determining whether an agreement has a restrictive object, account must be taken, in particular, of the agreement’s content, the objective aims pursued by the agreement, the agreement’s legal and economic context and the conduct of the parties. The intention of the parties may also be taken into account as a circumstantial factor. (44)
94. If the agreement does not have a restrictive object, it is then prohibited under Article 81(1) EC only if it is argued and proved, on the basis of an analysis of the actual and/or potential effects of the agreement on the relevant market(s), that the agreement has the effect of restricting competition. (45)
3. Errors of law
95. The Commission, Aseprofar, EAEPC and the Republic of Poland assert numerous errors of law which relate, in particular, to the interpretation of the notion of restriction of competition by object (a) and to the taking into account of the legal and economic context (b).
a) Legally erroneous interpretation of the notion of restriction of competition by object
i) The finding that an agreement which seeks to restrict parallel trade can only in principle be regarded as a restriction of competition by object
96. The Commission, Aseprofar und EAEPC object to the finding by the Court of First Instance, in particular in paragraphs 115, 116 and 121 of the judgment under appeal, that an agreement which seeks to restrict parallel trade must only in principle
be regarded as a restriction of competition by object.
97. This objection must be rejected.
98. It is true that, according to the Court of Justice’s case‑law, agreements which limit parallel trade are typically agreements which have as their object a restriction of competition. (46) It is, however, as explained above, (47) always necessary to take into account the legal and economic context of an agreement. In so far as that proviso is expressed in the words ‘in principle’, the Court of First Instance cannot therefore be accused of making an error of law.
ii) Presumption of a restrictive effect
99. The Commission, Aseprofar and EAEPC complain that, in particular in paragraphs 121, 122 and 134 of the judgment under appeal, the Court of First Instance made the existence of a restriction of c ompetition by object dependent on the condition that the restrictive effects of the agreement must be capable of being presumed .
100. That finding by the Court of First Instance also contains no errors of law.
101. In view of the consequences which may result for an undertaking from an infringement of Article 81(1) EC, the notion of an anti-competitive object must not be interpreted excessively broadly. (48) That requirement is expressed in the condition requiring a presumption of restriction of competition. Moreover, I can see no fundamental difference between the criterion discussed above, as to whether, on the basis of existing experience, an agreement has the potential to have a negative impact on competition, (49) and the criterion used by the Court of First Instance, according to which it must be ascertained whether the restrictive effects of the agreement may be presumed. So long as no proof of potential effects is required in connection with the presumption, no error of law therefore lies in the use of that criterion.
iii) Taking into account of detriment to the final consumer
102. Aseprofar and the Commission further object to the findings of the Court of First Instance in paragraphs 118, 119, 133, 134 and 147 of the judgment under appeal. In those paragraphs, the Court of First Instance found, in essence, that, in order for a restriction of competition by object to be assumed in the present case, an analysis is required to determine whether the General Sales Conditions have as their object or effect a restriction of competition on the relevant market to the detriment of the final consumer . The Commission was therefore not entitled to consider that the General Sales Conditions had as their object a restriction of competition, because it could not presume without an examination of the effects of the General Sales Conditions that they restricted competition to the detriment of the final consumer. The Court of First Instance relied on the fact that, in view of the circumstance that the prices of medicines are to a large extent shielded from the free play of supply and demand owing to the national price regulations and are set and controlled by the public authorities, it cannot be taken for granted at the outset that parallel trade tends to reduce the prices charged to the final consumer.
103. Aseprofar and the Commission rightly criticise the findings and conclusions of the Court of First Instance in the aforementioned paragraphs of the judgment under appeal. In so far as those paragraphs require an analysis of the disadvantages for the final consumers, that is based on a legally erroneous interpretation of the notion of restriction of competition by object.
104. Firstly, it should be noted that, according to its wording, Article 81(1) EC requires only that the agreement have as its object or effect the prevention, restriction or distortion of competition. There is therefore no support in the wording for the finding that, over and above the existence of a restriction of competition, there needs to be an analysis of whether the agreement has as its object or effect a disadvantage for the final consumers. (50)
105. Moreover, as Aseprofar rightly submits, from a systemic point of view regard must be had to the structure of Article 81 EC. Under Article 81(1) EC, agreements which have as their object a restriction of competition are in principle prohibited. Under Article 81(3) EC, such agreements may be exempted from the prohibition under Article 81(1) EC only if four conditions are all satisfied. Those conditions comprise, firstly, that the agreement results in a benefit in terms of improving the distribution of goods or promoting technical or economic progress, secondly, that consumers are allowed a fair share of that benefit, thirdly, that no restrictions which are not indispensable to the attainment of those objectives are imposed on the undertakings concerned and, fourthly, that no possibility of eliminating competition in respect of a substantial part of the products in question is afforded.
106. According to the general scheme of Article 81 EC, the consumers’ share of the benefit of an agreement is thus a condition which must be taken into account under Article 81(3) EC. Moreover, it follows from Article 81(3) EC that even agreements which allow consumers a fair share of the benefit are exempted only if the further conditions laid down by Article 81(3) EC are also satisfied. Against that background, it does not seem to me to be compatible with the scheme of the provisions of Article 81 EC to make the existence of a restriction of competition by object dependent on proof of harmfulness to consumers. (51)
107. That does not mean that the effects of an agreement on the final consumer cannot be taken into account at all under Article 81(1) EC. However, this must involve aspects which cast doubt on the very existence of a restriction
of competition. (52) It should be pointed out in this connection that the benefits which may accrue to final consumers from the fact that GSK, by restricting parallel trade, has greater financial resources at its disposal and may, as the case may be, spend these on research and development of new medicines, are not capable of casting doubt on the existence of a restriction of competition within the meaning of Article 81(1) EC. On the contrary, such benefits, even though they may strengthen competition between producers of medicines, are to be taken into account not under Article 81(1) EC but under Article 81(3) EC. (53)
108. For that reason, GSK’s submission that a restriction of competition by object cannot be assumed to exist if the General Sales Conditions cannot be presumed to be an agreement harmful to consumers must also be rejected. The notion of restriction of competition by object presupposes that the agreement has the potential and tendency to produce a sufficient impact on competition, but not, on the other hand, that that agreement must be characterised in an overall assessment as harmful to consumers. In examining whether an agreement has as its object a restriction of competition, a comparative assessment of the harmfulness to consumers of agreements which restrict parallel trade in medicines and agreements which have as their object serious restrictions of competition which are not, as a rule, justifiable under Article 81(3) EC is therefore not pertinent. Such an interpretation is incompatible with the structure of Article 81 EC. The notion of restriction of competition by object cannot be confined to particularly serious restrictions of competition or core offences. (54)
109. Contrary to GSK’s submissions, an unqualified treatment of restrictions of competition by object under Article 81(1) EC as equivalent to per se prohibitions within the meaning of United States antitrust law must also be rejected on account of the structure of Article 81 EC. (55)
110. In my view, caution is also called for as regards the transferability of assessments from judgments delivered on the basis of Article 82 EC. Admittedly, such judgments may provide, in particular, indications as to whether and to what extent the limitation of parallel trade is capable of restricting competition. (56) However, it is not automatically possible to conclude from the assessment that unilateral conduct limiting parallel trade in medicines on the part of a dominant undertaking should not, under certain conditions, be classified as an abuse that an agreement between undertakings which limits parallel trade in medicines does not constitute a restriction of competition by object for the purposes of Article 81(1) EC. Firstly, the assessment as to whether unilateral conduct constitutes an abuse under Article 82 EC is subject to different criteria from the examination of whether an agreement is compatible with Article 81 EC. Secondly, it should be pointed out that the assessment of abuse under Article 82 EC is the result of a full examination, whereas the assessment of whether an agreement has as its object a restriction of competition constitutes only a first step in the examination under Article 81 EC.
111. Furthermore, while it is certainly true that the system of undistorted competition, as intended by the EC Treaty pursuant to Article 3(1)(g) EC, has the objective of the best possible supply to consumers by preventing harmful private restrictions of competition, that does not mean that account must necessarily be taken, at the stage of examining whether an agreement has as its object the restriction of competition, of whether the agreement gives rise to actual disadvantages for the final consumer.
112. On the contrary, a restriction of competition by object must be assumed to exist where, having regard to its legal and economic context, the agreement has the potential and tendency to produce a sufficiently negative impact on competition. (57) Article 81(1) EC protects competition at all levels of the market. (58) In the present case, therefore, the intrabrand competition which arises from the fact that the direct customers for the medicines, that is to say, hospitals and pharmacies, have the option of obtaining supplies of GSK medicines not only from the intermediaries in the countries of destination, but also from the Spanish intermediaries by way of parallel trade, is protected. That is because not only the restriction of competition in a market in which the final consumer acts as the customer, but also the restriction of competition at an upstream market level, is in principle capable of adversely affecting the final consumer.
113. Benefits which arise from competition at an upstream market level may in fact be passed on to the final consumer. This is true in particular where effective competition exists at the downstream levels of the market. In my view, moreover, the mere fact that no, or insufficient, competition exists at the downstream levels of the market does not mean that a restriction of competition upstream is not caught by Article 81(1) EC. The problem that the benefits resulting from competition at an upstream market level are not passed on to the final consumer due to a lack of competition at a downstream market level must in fact be solved at the market level at which the problem exists. However, the fact that the benefits resulting from competition at the upstream market level are not passed on to the final consumer due to lack of competition at the downstream market level may be taken into account in assessing the agreement in question under Article 81(3) EC.
114. In addition, it may be argued against the approach adopted by the Court of First Instance that it would deprive restriction of competition by object as one of the alternative criteria under Article 81(1) EC of part of its practical effectiveness. Admittedly, cases where competition is affected in a market in which the consumer directly asks for the product concerned could still be caught by the notion of restriction of competition by object. However, under the approach adopted by the Court of First Instance, if the restriction of competition takes place at an upstream market level, it will probably be appreciably more difficult to consider that there is a restriction of competition by object.
115. That is because, as the distance from the market level at which the final consumer asks for the end product increases, the analysis of whether the restriction of competition at the upstream market level has an appreciable adverse effect on the final consumer would probably also be more difficult. Beyond a certain distance, such an analysis would probably be barely feasible without carrying out a market analysis. With a market analysis, however, the dividing line between restriction of competition by object and restriction of competition by effect would be crossed.
116. The approach of the Court of First Instance would thus mean that, in the case of agreements which take place at a market level at a certain distance from the market level at which the final consumer asks for the end product, restrictions of competition by object would then hardly be possible, but only restrictions by effect.
117. Furthermore, this legally erroneous interpretation by the Court of First Instance also finds no support in the case‑law to which it referred in paragraph 118 of the judgment under appeal. Thus, in paragraph 115 of the judgment in Österreichische Postsparkasse v Commission, (59) the Court of First Instance merely held that the ultimate purpose pursued by means of Article 81 EC is to increase the well-being of consumers, and in that context mentioned, in connection with Article 81(3) EC, allowing consumers a share of the benefit of the agreement concerned. Nor can an interpretation of the notion of restriction of competition by object corresponding to the interpretation taken by the Court of First Instance as its basis in the judgment under appeal be inferred from Consten and Grundig v Commission . (60)
118. The Court of First Instance thus gave a legally erroneous interpretation to the notion of restriction of competition by object in finding that, in order for a restriction of competition by object to be assumed in the present case, an analysis is required to determine whether the agreement has as its object or effect a restriction of competition on the relevant market to the detriment of the final consumer.
iv) Limited account taken of the benefits of parallel trade for the final consumer
119. Merely for the sake of completeness, I would point out that, even if, taking as a basis what is, in my view, the legally erroneous approach of the Court of First Instance, an analysis of the disadvantages for the final consumer is required, a further error of law would lie in the fact that its approach is based on too restrictive an understanding of the advantages for final consumers which are protected under Article 81(1) EC.
120. Aseprofar and the Commission allege that the Court of First Instance should not have confined itself to taking into account only the effects of parallel trade on the prices charged to final consumers. They argue that other advantages for final consumers must also be regarded as protected by Article 81 EC. They indicate in this connection inter alia that sickness insurance schemes could reduce the costs of medicines by virtue of parallel trade.
121. Contrary to GSK’s view, this submission should not be rejected as a submission of fact which is inadmissible on appeal. That is because Aseprofar and the Commission are thereby alleging primarily that the Court of First Instance has too restrictive an understanding of the benefits for final consumers which are protected under Article 81 EC, and thus adopts a legally erroneous interpretation of Article 81 EC. Their complaint is also well founded. Under Article 81 EC, all benefits which may result for final consumers from a system of undistorted competition, that is to say, all direct and indirect price advantages and all other direct and indirect benefits which are not price‑related, are in fact covered.
122. By only taking into account, in paragraphs 133, 134 and 147 of the judgment under appeal, the effects of the General Sales Conditions on the prices charged to final consumers and by regarding the Commission’s reasoning as vitiated by errors of law simply because it did not take that aspect into account, the Court of First Instance misconstrued the extent of the benefits for final consumers which are protected under Article 81 EC.
v) Conclusion
123. In conclusion, it must be found that the Court of First Instance interpreted the notion of restriction of competition by object in a legally erroneous manner.
124. Since the aforementioned errors of law alone seem to me to be capable of resulting in replacement of the grounds stated by the Court of First Instance on the restrictive object of the General Sales Conditions, I shall in principle dispense with an examination of the further complaints. However, it should be noted that, when replacing grounds, the Court of Justice must act on the basis of the facts found by the Court of First Instance. (61) I shall therefore still deal below with the complaints made regarding the account taken by the Court of First Instance of the legal and economic context of the General Sales Conditions.
b) Account taken of the legal and economic context
125. The Commission, Aseprofar, EAEPC and the Republic of Poland allege errors by the Court of First Instance when taking into account the legal and economic context of the General Sales Conditions. A fundamental point of those allegations is that, in its reasoning on the restrictive object of the General Sales Conditions, the Court of First Instance took as its starting point a different legal and economic context from that postulated in its reasoning on the restrictive effect of the General Sales Conditions. In that connection, an erroneous understanding of the legal and economic context, distortion of the facts and contradictions in the reasoning are alleged in particular. GSK, on the other hand, objects that those complaints are largely inadmissible in the context of an appeal, since they seek a review of the findings of fact made by the Court of First Instance. Moreover, GSK makes the same allegations in reverse, that is to say, it alleges that the Court of First Instance made the errors not in the part of the judgment relating to the restrictive object of the General Sales Conditions, but in the part relating to their restrictive effect.
126. First, the complaint that the Court of First Instance had a legally erroneous understanding of the notion of legal and economic context, because it postulated that the legal and economic context for the purpose of examining the restrictive object could be a different one from that for the purpose of examining the restrictive effect, must be rejected. As is apparent from paragraph 110 of the judgment under appeal, the Court of First Instance correctly postulated that the same legal and economic context must be taken into account both for the examination of the restrictive object of an agreement and for the examination of its restrictive effect. (62)
127. In the case of the remaining complaints, a distinction must be made between the assumption by the Court of First Instance in the second sentence of paragraph 122 of the judgment under appeal that intermediaries may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers (i), and the other findings by the Court of First Instance (ii).
i) The assumption that intermediaries may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers
128. The Commission, Aseprofar, EAEPC and the Republic of Poland rightly object to the assumption in the second sentence of paragraph 122 of the judgment under appeal that intermediaries trading in medicines may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers. That finding is vitiated by errors of law.
129. Firstly, that finding constitutes a distortion of the clear sense of the evidence. It is true that the findings of fact made by the Court of First Instance may not, in principle, be called into question in appeal proceedings, since appeals to the Court of Justice are limited to points of law. (63) However, an exception applies where the substantive inaccuracy of the findings made by the Court of First Instance is apparent from the documents in the case‑file. (64)
130. That is indeed the case here. As is apparent from the documents in the file, the assumption by the Court of First Instance in the second sentence of paragraph 122 of the judgment under appeal that intermediaries trading in medicines may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers, finds no basis in the documents in the file, but is, on the contrary, refuted by them.
131. It must first be stated that this is the Court of First Instance’s own assumption . That is apparent, in particular, from a comparison between the first and second sentences of paragraph 122 of the judgment under appeal. In the first sentence, the Court of First Instance made a finding as to what the Commission was entitled to presume if account was taken of the legal and economic context. That is not the Court of First Instance’s own assumption . In the second sentence, on the other hand, the Court of First Instance made an assumption of its own that intermediaries may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers. That sentence cannot be construed as anything other than the Court of First Instance’s own assumption.
132. Furthermore, that assumption has no basis in the file. In this connection, it should be pointed out in particular that GSK did not
submit in the proceedings before the Court of First Instance that the Spanish intermediaries did not undercut the prices in the countries of destination and that advantages were not passed on to the patients. (65) GSK merely expressed the view that the extent of the undercutting and the size of the advantage to the final consumers were very small. Although the parties to the proceedings disagree as to the extent of the undercutting and the size of the advantage, they do not disagree on the fundamental question of whether such a divergence exists at all.
133. The assumption by the Court of First Instance in the second sentence of paragraph 122 of the judgment under appeal that the intermediaries may keep the (entire) advantage in terms of price which parallel trade entails, in which case that advantage is not passed on to the final consumers, therefore constitutes a distortion of facts which is to be taken into account in the context of an appeal.
134. Secondly, the assumption in the second sentence of paragraph 122 of the judgment under appeal is vitiated by an error of law in the form of contradictory grounds. (66) It is contradictory for the Court of First Instance, on the one hand, to make its own assumption in the second sentence of paragraph 122 of the judgment under appeal that the intermediaries may keep the advantage in terms of price which parallel trade entails, but to rely, on the other hand, in the context of assessing the restrictive effect, in particular in paragraphs 185, 187 and 189 of the judgment under appeal, on the fact that the Spanish intermediaries which export medicines to a country of destination undercut (even if only marginally) the price charged by the intermediaries in that country of destination.
ii) The other assumptions and findings
135. In so far as the Commission, Aseprofar, EAEPC and the Republic of Poland allege further distortions of facts or contradictions in the reasoning of the Court of First Instance, in particular as regards the effects of the national price regulations in the medicines sector on intrabrand competition, those allegations must be rejected.
136. Without there being any need to examine their admissibility, it seems to me that those allegations should be rejected simply because the Court of First Instance, in the part of its reasoning relating to the restrictive object of the General Sales Conditions, did not make any further assumptions of its own which conflict with the findings which it made in the part of its reasoning relating to the restrictive effect. In so far as the Court of First Instance examined, on the basis of the legal and economic context established in paragraphs 124 to 131 of the judgment under appeal, what the Commission was entitled to presume in the examination of the restrictive object of the General Sales Conditions and in so far as, in that respect, the Court of First Instance came to different conclusions from those reached when examining the restrictive effect, the result of that examination seems to me to be primarily attributable to the errors of law in the interpretation of the notion of restrictive object which have been dealt with above, and not to an erroneous understanding of the legal and economic context.
4. Conclusion
137. In summary, I conclude that the Court of First Instance interpreted the notion of restriction of competition by object in a legally erroneous manner. In addition, the assumption by the Court of First Instance in the second sentence of paragraph 122 of the judgment under appeal that intermediaries may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers, is vitiated by errors of law.
B – Replacement of grounds
138. GSK’s appeal would have to be dismissed if the reasoning of the Court of First Instance which is vitiated by errors of law were to be replaced by reasoning according to which the Commission correctly considered that the General Sales Conditions have a restrictive object.
139. Since, when replacing the reasoning of the Court of First Instance, the Court of Justice may rely only on the facts established by the former, I should like to deal, first, with the facts of the case established by the Court of First Instance (1). I shall then deal with the reasoning which should replace the legally erroneous reasoning of the Court of First Instance (2).
1. The facts of the case established by the Court of First Instance
140. In the context of an appeal, the Court of Justice is not entitled, in principle, to make findings of fact. Replacement of the reasoning of the Court of First Instance is therefore permissible only where the Court of Justice is able to base the reasoning on facts which the Court of First Instance found. (67)
141. Problems in this connection lie in the contradictory assumptions made by the Court of First Instance in the second sentence of paragraph 122 of the judgment under appeal, on the one hand, and in paragraphs 185, 187 and 189 of the judgment under appeal, on the other. On the one hand, the Court of First Instance assumed, in the second sentence of paragraph 122 of the judgment under appeal, that intermediaries trading in medicines may keep the advantage in terms of price which parallel trade may entail, in which case that advantage will not be passed on to the final consumers. On the other hand, in paragraphs 185, 187 and 189 of the judgment under appeal, the Court of First Instance assumed that the Spanish intermediaries who export medicines to a country of destination would undercut (even if only marginally) the price charged by the intermediaries in that country of destination.
142. Despite that contradiction, it can, in my view, be accepted that the Court of First Instance takes as its starting point a factual situation in which the Spanish intermediaries who export medicines to a country of destination undercut (even if only marginally) the price charged by the intermediaries in that country of destination.
143. It can be argued in favour of that, firstly, that the second sentence of paragraph 122 merely expressed an assumption by the Court of First Instance which it revised in a more detailed examination in paragraphs 185, 187 and 189.
144. Secondly, the assumption in the second sentence of paragraph 122 should probably be viewed in conjunction with the (legally erroneous) view that disadvantages for the final consumer must be taken into account in the context of the restriction of competition by object and may be taken into account only in the form of an adverse effect on the prices charged to the final consumers.
145. Thirdly, it must be borne in mind that the case before the Court here is a special one. The Court of First Instance did not fail to make a finding of fact. On the contrary, the Court of First Instance made two contradictory findings regarding an element of the facts of the case and it is apparent from the documents in the file that one of those findings is incorrect and the other, by contrast, correct. In my view, in such a case the Court of Justice would not be exceeding its jurisdiction in appeal proceedings by taking as its starting point the finding of the Court of First Instance which is consistent with the content of the documents in the file.
146. In conclusion, I am of the opinion that, on a sound appraisal of the judgment under appeal, the Court of Justice can take as its basis the finding of the Court of First Instance in paragraph 185 of the judgment under appeal that the Spanish intermediaries who export medicines to a country of destination undercut the price charged by the intermediaries in that country of destination.
2. Upholding of the Commission’s reasoning that the General Sales Conditions have a restrictive object
147. It must also be examined whether, having regard to those facts of the case and taking as a basis the correct interpretation of the notion of a restrictive object, (68) the grounds of the judgment under appeal should be replaced, to the effect that the Commission correctly assumed in the contested decision that the General Sales Conditions have a restrictive object.
148. It should be pointed out in this connection that, in an action for annulment under Article 230 EC, the Court of First Instance is to review the reasoning set out in the Commission’s decision for errors of law, but must not substitute its own reasoning for that of the Commission. (69) That case‑law applies mutatis mutandis
to the Court of Justice where, in an appeal, it replaces the reasoning of the Court of First Instance. In this case, it must therefore be examined whether the Commission’s finding that the General Sales Conditions have as their object a restriction of competition has a sufficient basis in the reasoning set out in the contested decision.
149. As set out above, an agreement can be considered to have a restrictive object when, having regard to its legal and economic context, it has the potential and the tendency to produce a sufficiently negative impact on competition. (70) In this connection, both existing experience, by way of a standardised approach, and economic analysis, on the basis of which the occurrence of such an impact can be presumed, may be taken into account.
a) Standardised approach
150. First and foremost, the Commission based its finding that the General Sales Conditions had a restriction of competition as their object on the fact that they were aimed at limiting parallel trade and for that reason had as their object a restriction of competition. (71) The Commission thus based its reasoning primarily on the standardised approach, which can be summed up in the words ‘restriction of parallel trade, therefore restriction of competition by object’.
151. I can see no error of law in that reasoning.
152. First, it should be pointed out that such a standardised approach is compatible with the character of a restriction of competition by object as a form of inchoate offence. (72)
153. Moreover, when taking into account existing experience by way of a standardised approach, recourse must be had, in particular, to the case‑law of the Court. This shows that an agreement which is aimed at limiti ng parallel trade constitutes one of the typical cases of restriction of competition by object. (73)
154. Furthermore, while the standardised approach is always subject to the proviso that the legal and economic context of the agreement to be examined does not preclude application of that standardised assessment, (74) that cannot be considered to be the case here.
155. Firstly, according to my understanding, it follows from paragraphs 65 and 66 of the judgment delivered by the Grand Chamber in Sot. Lélos kai Sia (75) that, notwithstanding the particular legal and economic characteristics of the medicinal products sector, it too is subject to the principle that an agreement to limit parallel trade is to be regarded as a restriction of competition by object. Even though that judgment arose from a question referred for a preliminary ruling concerning the interpretation of Article 82 EC, the Court expressly referred in that case to the notion of restriction of competition by object under Article 81 EC.
156. Secondly, none of the particular characteristics of the medicines sector on which GSK relies is such as to cast doubt on the assessment derived from experience that agreements which are aimed at limiting parallel trade have as their object restriction of competition.
157. It should first be noted that, in accordance with the legal and economic context ascertained by the Commission, it could not be assumed that the national price regulations in the individual Member States excluded all scope for competition. (76)
158. In addition, the existence of differing national price regulations in the Member States does not militate per se against assuming that there is a restriction of competition by object. As the Commission and EAEPC rightly explain, competition within the European internal market regularly takes place under conditions which differ at national level. This is because, despite a certain degree of harmonisation, the European internal market is still characterised by the different ways in which the legal and economic systems of the Member States have developed. Competition subject to absolutely identical conditions is thus non‑existent from the outset. However, that does not mean that Article 81(1) EC does not apply. (77)
159. Furthermore, contrary to GSK’s view, it is immaterial in this context that Member States wish to limit the validity of national provisions to their national territory. Rather, the exploitation of favourable conditions offered by a Member State specifically constitutes one of the fundamental benefits of the internal market.
160. Finally, it must be borne in mind that Article 81 EC also serves the purpose of strengthening the integration of the national markets. (78) Admittedly, to some extent I share the scepticism of the Court of First Instance as to whether application of the competition rules in the medicinal products sector does in fact achieve market integration in the sense that the prices for final consumers become aligned. However, it at least cannot be ruled out that partitioning the national markets may impair market integration at other market levels.
161. In the final analysis, I do not believe that the objective of market integration is of crucial importance in this case. It is true that competition within the meaning of Article 81(1) EC is referred to as a means of achieving the objectives of the Treaty, that is to say, it is also placed in the service of the Community in order to achieve progressive integration of the market. (79) However, it does not take effect only within that objective. Article 81(1) EC protects competition even when the latter leads in only limited measure to market integration.
162. In the end, therefore, it must be concluded that no reason arose from the legal and economic context for the Commission to depart from the standardised assessment of ‘limitation of parallel trade, therefore restriction of competition by object’.
b) Presumption of a restriction of competition
163. For the sake of completeness, I would point out that, even though the Commission based its reasoning primarily on a standardised approach, the reasoning set out in the contested decision contains at least elements which justify a presumption of a restriction of competition.
164. Thus, firstly, it is apparent, from recital 116 of the contested decision that the General Sales Conditions were intended to restrict a source of supply for medicines and that, due to the price differential between Spain and other Member States, the Spanish intermediaries had both the opportunity and the incentive to undercut the prices charged by the intermediaries established in the country of destination.
165. Secondly, in its reasoning on the restrictive object of the General Sales Conditions, the Commission admittedly did not expressly discuss what role patents play in terms of competition within the medicines sector. In its reasoning on the restriction of competition by object, it did not expressly draw attention to the significance of parallel trade, which consists in the fact that, until the patent expires, competition on price by parallel trade constitutes the predominant form of competition in this area. (80) However, in recital 122 of the contested decision, it made reference to this phenomenon by noting the increasing competitive pressure for a GSK medicinal product as a result of expiry of patent protection. Consequently, this aspect too is at least touched upon in its reasoning.
166. Thirdly, the Commission cannot be criticised in this connection for not taking into account the fact that Member States can set prices and thus reduce the costs of medicines. In so far as national law allows scope for competition, the competition within that scope is protected by Article 81 EC.
167. Fourthly, the Commission correctly noted that restriction of parallel trade also necessarily strengthens the bargaining position of a producer of medicines in negotiations in the Member States where the selling prices or reimbursement rates for medicines are set by the public authorities. (81) That is because, even if the procedure between the authorities and the producers of medicines cannot be equated with contract negotiations between two private undertakings, a multitude of factors will nevertheless play a part, including the possibility of obtaining medicines from a source of supply at favourable prices. (82) This aspect cannot be disregarded in the context of Article 81(1) EC.
168. The Commission’s conclusion that the General Sales Conditions had as their object a restriction of competition was therefore founded not only on the reasoning that a restriction of competition by object could be assumed to exist on the basis of a standardised approach simply because they had as their object a limitation of parallel trade. On the contrary, the Commission’s reasoning also contained at least elements on the basis of which it could be presumed, without a detailed market analysis, that the General Sales Conditions would lead to an impairment of competition.
c) Interim conclusion
169. In conclusion, therefore, the Commission correctly found in the contested decision that the General Sales Conditions had as their object a restriction of competition.
3. Conclusion
170. The grounds of the judgment under appeal must therefore be replaced to the effect that the Commission was entitled to consider that the General Sales Conditions had as their object a restriction of competition. The Court of First Instance should have upheld Article 1 of the contested decision simply because the Commission was entitled to postulate that the General Sales Conditions had a restrictive object.
C – The finding by the Court of First Instance that the Commission was entitled to consider that the General Sales Conditions had a restrictive effect
171. Since the Court of First Instance wrongly held that the Commission was not entitled to consider that the General Sales Conditions had a restrictive object, and since the grounds of the judgment under appeal must be replaced accordingly, (83) GSK’s pleas in law which are directed against the grounds of the judgment under appeal relating to the restrictive effect of the General Sales Conditions must be rejected as irrelevant. Those pleas in law cannot call into question paragraph 2 of the operative part of the judgment under appeal. That paragraph already finds sufficient support in the replacement grounds relating to the restrictive object.
D – Conclusion
172. For the aforementioned reasons, I propose that GSK’s appeal in Case C‑501/06 P should be dismissed, with replacement of the grounds of the judgment under appeal relating to the restrictive object of the General Sales Conditions.
VI – The appeals of the Commission, Aseprofar and EAEPC
173. Before I deal with the appeals of the Commission (B), Aseprofar (C) and EAEPC (D), I should like to deal briefly with the part of the judgment under appeal which is contested by those parties (A).
A – The part of the grounds of the judgment under appeal
174. In paragraphs 233 to 320 of the judgment under appeal, the Court of First Instance examined the reasoning on which the Commission based the rejection of GSK’s request for exemption of the General Sales Conditions under Article 81(3) EC. First, the Court of First Instance noted that a person who relies on Article 81(3) EC must demonstrate that the conditions laid down in Article 81(3) EC are satisfied, by means of convincing arguments and evidence. (84) The Commission has the task of examining and assessing the arguments and evidence adequately. (85)
175. The Court of First Instance then states that assessment of an agreement under Article 81(3) EC involves complex economic assessments. The review by it in the context of an action for annulment is therefore confined to verifying whether the Commission has accurately stated the facts, whether it has made any manifest errors of appraisal and whether it has deduced the correct legal consequences from those facts. (86) The Court of First Instance added that this also involved establishing whether the evidence put forward by GSK contained all the relevant information and whether it was capable of substantiating the conclusions drawn from it. (87) However, the Court of First Instance must not substitute its own reasoning for that of the Commission. (88)
176. In paragraphs 247 to 308 of the judgment under appeal, the Court of First Instance first examined the Commission’s reasoning regarding the first condition laid down by Article 81(3) EC. The Court of First Instance noted that a finding of promotion of technical progress within the meaning of Article 81(3) EC requires an appreciable objective advantage which is not identified with all the subjective advantages which the participating undertakings derive from the agreement. (89) The examination of whether such an advantage exists may entail a prospective analysis. In that case, it is appropriate to ascertain whether, in the light of the arguments and evidence put forward by the undertaking, it is more likely that the agreement makes it possible to obtain objective advantages or not. (90) If it is so, it is for the Commission, in the second place, to evaluate whether those appreciable objective advantages are of such a kind as to offset the disadvantages for competition. (91)
177. In reviewing the Commission’s reasoning, the Court of First Instance proceeded as follows. First it set out the factual arguments and the evidence on which GSK based its request for exemption, and examined and affirmed their relevance. (92) It then verified whether the Commission took those arguments and that evidence adequately into consideration in examining whether there was an appreciable objective advantage. (93) The Court ultimately concluded that the Commission’s reasoning was vitiated by a failure to carry out a proper examination, as the Commission did not adequately take into account and refute all the factual arguments and the evidence relevantly submitted by GSK. (94) Consequently, the Commission was not able lawfully to conclude that GSK had not demonstrated that the first condition laid down by Article 81(3) EC was satisfied. (95)
178. Finally, the Court of First Instance stated that the Commission had based its conclusions regarding the three further conditions laid down in Article 81(3) EC essentially on its conclusion regarding the first condition. Since the conclusion regarding the first condition was vitiated by a failure to carry out a proper examination and the rest of the reasoning regarding the further conditions was also inadequate, the Commission was not lawfully entitled to draw the conclusion that the three further conditions were not satisfied. (96)
B – The Commission’s appeal in Case C‑513/06 P and its cross‑appeal in Case C‑501/06 P
179. In its appeal in Case C‑513/06 P and in its cross‑appeal in Case C‑501/06 P, the Commission objects, firstly, by five plea s in law, to the reasoning of the Court of First Instance regarding the first condition laid down in Article 81(3) EC (1) and, secondly, by one plea in law, to the reasoning of the Court of First Instance regarding the further conditions laid down in Article 81(3) EC (2). Since the Commission’s appeal and its cross‑appeal are largely identical in substance, they will be examined together.
1. The first condition laid down by Article 81(3) EC
180. Regarding the first condition, the Commission raises a multitude of different complaints which it has grouped into five pleas in law.
a) Distortion of the legal and economic context
181. In its first plea, the Commission complains first that the Court of First Instance distorted the legal and economic context of the General Sales Conditions. Since the Commission does not identify the contested part of the judgment, this complaint must be rejected as inadmissible pursuant to Article 225 EC, the first paragraph of Article 58 of the Statute of the Court of Justice and Article 112(1)(c) of the latter’s Rules of Procedure. (97)
182. The Commission further alleges erroneous reasoning. This, it claims, lies in the fact that the Court of First Instance did not explain why, in paragraph 104 of the judgment under appeal, it merely postulated that the national price regulations might distort competition, whereas, in paragraph 276 of the judgment under appeal, it postulated the existence of a distortion of competition by those rules.
183. This allegation is unfounded. The finding by the Court of First Instance in paragraph 104 of the judgment under appeal was made in the context of examining whether the existence of the national price regulations leads to inapplicability of Article 81(1) EC. In paragraph 105 of the judgment under appeal, the Court of First Instance held that national rules which lead to a distortion of competition do not preclude the applicability of Article 81(1) EC. Consequently, in that context, a positive finding on whether those rules distort competition was unnecessary. There is therefore no defect of reasoning in the fact that, in paragraph 104 of the judgment under appeal, the Court of First Instance referred only to the fact that the national price regulations may distort competition while, in paragraph 276 of the judgment under appeal, by contrast, it postulated a distortion of competition by those rules. (98)
b) The concept of promoting technical progress, the allocation of the burden of proof and the standard of proof
184. In its second plea, the Commission claims that the Court of First Instance made errors of law in the interpretation of the concept of promoting technical progress and in regard to the allocation of the burden of proof and to the standard of proof.
i) Application of a test from merger control
185. Firstly, the Commission complains that, in particular in paragraphs 242 and 269 of the judgment under appeal, the Court of First Instance erred in law by applying a test from merger control. The Commission states that, in the context of merger control, it is obliged to establish the facts for and against the merger’s compatibility with the common market and carries the burden of proof in that regard. In the context of a request for exemption of an agreement under Article 81(3) EC, by contrast, it is for the notifying undertaking to demonstrate that the conditions laid down by Article 81(3) EC are satisfied. In that respect, the undertaking bears the burden of proof.
186. This complaint is not well founded. It is true that, in paragraph 242 of the judgment under appeal, the Court of First Instance made reference to judgments given in connection with merger control. (99) However, it cannot be inferred from this that the Court of First Instance considered that the Commission had an obligation to establish the facts for and against the compatibility of the General Sales Conditions with Article 81(3) EC, and that the Commission bore the burden of proof in that regard. Such an inference is opposed by, in particular, the findings of the Court of First Instance in paragraphs 235, 236, 248 and also 269 of the judgment under appeal, in which the Court of First Instance clearly stated that it is first for the notifying undertaking to demonstrate, by means of convincing arguments and evidence, that the conditions laid down by Article 81(3) EC are satisfied. It is also opposed by, in particular, the conclusion of the Court of First Instance in paragraph 303 of the judgment under appeal that the reasoning set out in the contested decision is vitiated by a failure to carry out a proper examination as the Commission did not validly take into account all the arguments and the evidence relevantly submitted by GSK.
187. Secondly, the Commission complains that the Court of First Instance considered it sufficient for GSK to submit relevant, reliable and credible arguments and evidence. According to settled case‑law, by contrast, the notifying undertaking is required to submit convincing arguments and evidence that the conditions laid down in Article 81(3) EC are satisfied. The Court of First Instance thus erred in law by shifting the burden of proof onto the Commission. In addition, in paragraphs 269, 277, 281, 286 and 313 of the judgment under appeal, the Court of First Instance required the Commission to submit convincing arguments and evidence. The Court of First Instance thus applied an asymmetrical test more demanding for the Commission.
188. This complaint is also unfounded. It should first be pointed out that the Court of First Instance itself made no finding as to whether an appreciable objective advantage exists. It correctly drew attention in paragraph 241 of the judgment under appeal to its limited jurisdiction in reviewing Commission decisions where they are based on complex economic appraisals. In such a case, the Court of First Instance must limit its review to verifying whether the relevant rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of appraisal or misuse of powers. (100) The Court of First Instance thus rightly confined itself to verifying whether the Commission’s reasoning adequately examined GSK’s arguments and evidence.
189. The first step in such a review is to establish the relevant preconditions to be satisfied. As a second step, the Court of First Instance must examine to what extent the submissions of the undertaking were relevant to the satisfaction of the preconditions concerned. (101) As a third step, the Court of First Instance must examine whether the Commission, in so far as it does not accept the undertaking’s submissions, has adequately taken into account and rejected all its relevant arguments and evidence. How far the Commission’s reasoning needs to be substantiated depends, in particular, on the relevant arguments and submissions of the undertaking. (102) It is therefore a sliding scale.
190. In so far as, in paragraphs 269, 277, 281, 286 and 313 of the judgment under appeal, the Court of First Instance characterised the Commission’s reasoning in the contested decision as unconvincing, that does not, therefore, constitute the Court of First Instance’s own assessment of whether or not the Commission’s conclusion regarding the non‑fulfilment of the first condition laid down by Article 81(3) EC was substantively correct. It is merely examining the Commission’s reasoning so as to ascertain whether the Commission convincingly reproduced and adequately refuted the arguments and evidence relevantly submitted by GSK.
191. Against that background, I cannot see in those paragraphs either the application of an asymmetrical test or any other error of law as regards the approach followed by the Court of First Instance. Whether the Court of First Instance correctly appraised or else distorted the content of the contested decision is a different matter. (103)
ii) The threshold as from which gains in efficiency can be assumed
192. The Commission further objects to the findings of the Court of First Instance in paragraphs 249 and 252 of the judgment under appeal. In those paragraphs, the Court of First Instance, for the purpose of determining whether an appreciable objective advantage exists, took as its basis whether, in the light of the arguments and evidence submitted by GSK, it seemed more likely either that the agreement in question would make it possible to obtain appreciable objective advantages or that it would not. The Commission complains that the Court of First Instance thus erred in law by departing from the substantive test according to which the existence of an appreciable objective advantage is a requirement.
193. This complaint is unfounded. The Court of First Instance set out the substantive test in paragraph 247 of the judgment under appeal, where it correctly found that the existence of an appreciable objective advantage is a requirement. (104) Paragraph 249 of the judgment under appeal should, in my view, be construed as meaning that an exemption, which under Regulation No 17 is granted ex ante
for a specified period, may require a prospective analysis regarding the occurrence of the advantages associated with the agreement, and thus contains a prognostic element. (105) A prognosis can ultimately never be made with 100% certainty. (106) It is therefore sufficient for a finding of an appreciable objective advantage for the Commission, on the basis of the arguments and evidence submitted, to arrive at the conviction that the occurrence of the appreciable objective advantage is sufficiently likely in the light of actual experience. The fact that, in paragraph 249 of the judgment under appeal, the Court of First Instance took as its basis whether the occurrence of the advantage is likely is therefore not wrong in law per se . The question of what degree of probability must exist for it to be considered that there is an appreciable objective advantage does, admittedly, arise in principle in this context. In my opinion, a high degree of probability must be set here. That is because, with infringements of Article 81(1) EC, the existence of losses in efficiency in the form of a restriction of competition must already be postulated. However, the requisite degree of probability is of no relevance to the present appeal proceedings. The Court of First Instance did not base the judgment under appeal on a finding that the Commission set too high a degree of probability. Its basis was, rather, the finding that the Commission did not state adequate reasons for its conclusion regarding the absence of an appreciable objective advantage, because the Commission did not take sufficiently into account or refute in its statement of reasons the arguments and evidence submitted by GSK which were relevant to an assessment of the existence of an appreciable objective advantage.
194. In so far as the Commission complains that, in paragraph 252 of the judgment under appeal, the Court of First Instance held that it was sufficient for an appreciable objective advantage just to be made possible, this complaint is not well founded, simply because the Court of First Instance made no such finding in that paragraph. On the contrary, in that paragraph, the Court of First Instance reproduced the content of the contested decision. Only the following can therefore be inferred from paragraph 252 of the judgment under appeal: in the view of the Court of First Instance, the Commission concluded in the contested decision that the arguments and evidence submitted by GSK did not demonstrate sufficiently that it would have been possible to obtain an appreciable objective advantage.
iii) Significance of the structural nature of the price differentials
195. The Commission further complains that the Court of First Instance required it to carry out a particularly careful examination on account of the structural factor of the national price regulations in the individual Member States.
196. In this context, the Commission objects, firstly, to the findings by the Court of First Instance in paragraphs 276 and 301 of the judgment under appeal, according to which the Commission should have taken the legal and economic context of the medicines sector into account when examining a loss in efficiency associated with parallel trade and a gain in efficiency associated with the General Sales Conditions. The Commission complains that the Court of First Instance erred in law in those paragraphs by considering that there was an aggravated burden of proof on the Commission, due to the structural nature of the price differentials.
197. This complaint cannot ultimately succeed. With regard to paragraph 301 of the judgment under appeal, it must be pointed out that that paragraph follows on from paragraph 300. In paragraph 300, the Court of First Instance referred primarily to the important role played by competition on innovation between producers of medicines and therefore to the importance of research and development in that sector. In this paragraph, the Court of First Instance mentioned the effect of the national price regulations in the individual Member States only as an additional point (‘Furthermore’). In so far as the Court of First Instance then focused, in paragraph 301 of the judgment under appeal, on the point that the Commission should have examined more specifically the likelihood of the advantage alleged by GSK being achieved, that is therefore, in my view, directed primarily towards taking into account competition on innovation between producers of medicines. The increase in the Commission’s duty of care arising from the national price regulations which is complained of by the Commission cannot therefore be inferred from paragraph 301 of the judgment under appeal.
198. That is not the case in paragraph 276 of the judgment under appeal. In that paragraph the Court of First Instance considered it particularly serious on account of the legal and economic context in the medicinal products sector, where competition is distorted by the presence of national regulations, that the Commission omitted to examine the likelihood of the aforementioned advantage being achieved. A connection with the national price regulations is clearly apparent here.
199. It must be conceded that the Commission is right that the distortion of competition by the national price regulations does not directly relate to the advantages which could be brought about by the General Sales Conditions. The national price regulations directly relate to the impact of the restriction of competition produced by the General Sales Conditions.
200. However, I do not find the basic rationale of the Court of First Instance in paragraph 276 of the judgment under appeal to be legally flawed. It must first be borne in mind in this context that, in the present case, the disadvantages in terms of efficiency resulting from the limitation of parallel trade constitute the ‘debit side’ of the overall assessment in terms of competition to be carried out under Article 81(3) EC, whereas the ‘credit side’ includes, in particular, the advantages in terms of efficiency which may result from promoting technical progress. It should further be pointed out that the Commission is required, in exercising its power under Article 81(3) EC to grant exemption from the prohibition contained in Article 81(1) EC, to take account of the particular nature of different branches of the economy and the problems peculiar to them. (107) The Commission must therefore, as part of the balancing exercise to be carried out under Article 81(3) EC, take into account circumstances in the light of which the impact of the limitation of parallel trade may appear less serious. Since a lesser amount on that ‘debit side’ may affect the result of the overall assessment in terms of competition, in such cases particular care is required in determining the advantages in terms of efficiency which constitute the ‘credit side’ of the overall assessment in terms of competition. On the basis of this rationale alone, I consider that the finding of the Court of First Instance in paragraph 276 of the judgment under appeal is in principle not incorrect.
201. Secondly, the Commission objects to paragraph 284 of the judgment under appeal. The Commission complains that in that paragraph the Court of First Instance distorted the content of the contested decision by stating that, according to the Commission’s findings, the phenomenon of parallel trade is explained by the existence, in the different Member States, of different prices for the same medicine and cyclical currency fluctuations constitute only a complicating factor of that phenomenon. In the Commission’s submission, it merely found in the contested decision that parallel trade depends on two separate factors.
2 02. This complaint is admissible, since a distortion of the content of the contested decision may be alleged on appeal before the Court of Justice. (108)
203. However, it is unfounded. It must first be pointed out that paragraph 284 of the judgment under appeal is an element of the reasoning of the Court of First Instance in paragraphs 281 to 293 of that judgment. In those paragraphs, the Court of First Instance examined whether the Commission’s subsidiary conclusion, according to which parallel trade in GSK’s medicines did not, at least appreciably, affect GSK’s expenditure on research and development, was sufficiently reasoned. (109) In that context, in paragraph 283 of the judgment under appeal the Court of First Instance essentially reproduced GSK’s submissions according to which, although currency fluctuations do determine the financial magnitude of parallel trade, the existence of parallel trade between Spain and the United Kingdom does not result solely from currency fluctuations, but also from the fact that prices in the Member States are structurally different. In paragraph 284 of the judgment under appeal, the Court of First Instance stated that this argument put forward by GSK is relevant to the assessment of the existence of an appreciable objective advantage and is corroborated by recitals 31, 32 and 53 of the contested decision.
204. In my view, there is no distortion of the content of the contested decision in the finding that those submissions by GSK were corroborated by the content of the contested decision. In recitals 31 and 32 of the contested decision, the Commission in fact explained that parallel trade arises from the interplay of two factors. As the Commission pointed out in recital 31 of the contested decision, one factor, structural in nature, is that, in the absence of harmonisation at Community level, the Member States enact and enforce rules aimed at controlling, directly or indirectly, the sales prices charged by producers of medicines and at determining the purchasing cost for end-consumers and the State budget. In recital 32 of the contested decision, the Commission drew attention to the further factor of currency fluctuations, which is cyclical in nature. The drawing of the distinction between a structural factor and a cyclical factor indicates, as I understand it, that the structural factor is a permanent reality. Nothing fundamentally different seems to me to have been expressed by the Court of First Instance in paragraph 284 of the judgment under appeal. I can therefore see no fundamental difference between the content of the contested decision and the finding by the Court of First Instance in paragraph 284 of the judgment under appeal.
205. Moreover, this complaint would probably also be ineffective, since the Court of First Instance also justified the relevance of GSK’s argument by stating that this factor was corroborated by the Commission in the Communication on the single market in pharmaceuticals. (110)
206. Contrary to the Commission’s submissions, there is also no distortion, in the finding in paragraph 284 of the judgment under appeal, of recital 164 of the contested decision, in which the Commission had found that the magnitude of parallel trade between 1996 and 1998 appeared to have more to do with currency fluctuations than with the price levels in Spain. In paragraph 285 et seq. of the judgment under appeal, the Court of First Instance took into account the fact that the Commission was indeed entitled, in principle, to consider that the parallel trade between Spain and the United Kingdom between 1996 and 1998 was a special case caused by the currency fluctuations, but made it clear that the Commission’s figures were not sufficiently substantiated to be capable of providing convincing support for that conclusion while refuting the arguments and evidence submitted by GSK.
207. The allegation that the Court of First Instance distorted the contested decision in paragraph 284 of the judgment under appeal must therefore be rejected as unfounded.
208. Finally, the Commission alleges in this connection that, in paragraph 292 of the judgment under appeal, the Court of First Instance made an error of reasoning by referring to the Commission Communication on the single market in pharmaceuticals (111) without identifying the number of the particular paragraph to which it was referring. This is not correct. Paragraph 292 must be read in conjunction with paragraph 264 of the judgment under appeal. In that paragraph, the Court of First Instance summarised the main assertions in the communication, identifying the relevant page numbers. The reference is thus apparent from the sixth and seventh indents of paragraph 264 of the judgment under appeal.
209. Thirdly, the Commission complains that, in paragraphs 281 to 293 of the judgment under appeal, the Court of First Instance, because of what it considered to be the structural origin of the parallel trade, took the view that no debate on the extent of the losses in efficiency caused by parallel trade was necessary. This also constitutes a legally erroneous interpretation of the applicable test, under which appreciable
advantages must be demonstrated.
210. This complaint is also unfounded. In paragraphs 281 to 293 of the judgment under appeal, the Court of First Instance did not call into question the requirement that an appreciable advantage must exist. It merely found that the Commission had based the conclusion that no appreciable impact of parallel trade on research and development could be considered to exist on reasoning which did not adequately examine the arguments and evidence submitted by GSK or did not adequately refute them. (112)
211. In so far as the Commission complains, fourthly, that the existence or absence of a causal link between parallel trade and the development of technical progress has nothing to do with whether parallel imports are caused by a structural factor, it must first be pointed out that the Court of First Instance did not base its finding primarily on that consideration. On the contrary, it took as its basis primarily the consideration that the Commission had based its conclusion that no appreciable objective advantage exists on an inadequately reasoned rejection of any causal connection or appreciable causal connection between parallel trade and research and development and had not adequately analysed whether it was likely that gains in efficiency in the form of promotion of economic progress could be associated with the General Sales Conditions. Furthermore, it should be pointed out, with reference to points 199 to 200 of this Opinion, that, in a case where certain circumstances could reduce the ‘debit side’ of the overall assessment in terms of competition to be carried out under Article 81(3) EC, the examination of the likelihood of an appreciable objective advantage as the ‘credit side’ must be undertaken with particular care.
212. In so far as the Commission complains that it is unjustifiable for undertakings to adopt restrictions of competition on a unilateral basis in order to limit the disadvantages of the impact of national regulations, this complaint must be rejected, since GSK also pleads that the General Sales Conditions lead to an appreciable objective advantage in the form of promoting technical progress within the meaning of Article 81(3) EC. Nor, finally, contrary to the Commission’s complaint, does it constitute contradictory reasoning for the Court of First Instance to find, on the one hand, in paragraph 192 of the judgment under appeal and thus in the context of the examination of Article 81(1) EC, that the particular features of the medicines sector, in particular the existence of the national price regulations, do not preclude the existence of a restriction of competition, but, on the other, to point out that the Commission, in exercising its power under Article 81(3) EC to grant exemption from the prohibition contained in Article 81(1) EC, is required to take account of the particular features of the medicines sector.
iv) Currency fluctuations
213. The Commission further complains that the Court of First Instance, in particular in paragraphs 292 and 293 of the judgment under appeal, accepted that currency fluctuations alone or in combination with the structural factor of the national price regulations may justify a restriction of competition. That, it alleges, is wrong in law.
214. This complaint is also unfounded. In paragraphs 292 and 293 of the judgment under appeal, the Court of First Instance did not find that an agreement restricting competition and directed solely towards offsetting currency fluctuations may be justified under Article 81(3) EC. Firstly, in paragraph 286 of the judgment under appeal, the Court of First Instance noted that the Commission did not deal with the situation where even with currency fluctuations the proportion of parallel imports of medicines to the United Kingdom from Spain remained stable. For that reason, the Court of First Instance considered that the Commission’s conclusion in recital 165 et seq. of the contested decision that the parallel trade between the United Kingdom and Spain was essentially caused by currency fluctuations was insufficiently reasoned. Secondly, GSK’s submissions do not merely maintain that it wishes to offset currency fluctuations by means of the General Sales Conditions. On the contrary, GSK submits that the General Sales Conditions will serve to achieve an advantage in terms of efficiency in the form of promoting technical progress as set out in Article 81(3) EC.
v) The relationship between the extra financial resources for GSK and promoting technical progress
215. Next, the Commission alleges that the Court of First Instance applied Article 81(3) EC in a legally erroneous manner by applying, contrary to the case‑law, a less strict standard to the existence of promotion of technical progress within the meaning of Article 81(3) EC.
216. In this context, the Commission complains firstly
that, in paragraphs 255, 269, 281 and 300 of the judgment under appeal, the Court of First Instance applied as a legal standard that extra profit increases the capacity for innovation. That is, it submits, wrong in law. Undertakings may in fact also use extra financial resources for other purposes, in particular for the distribution of profits to the proprietors of the undertaking.
217. This complaint must be rejected as unfounded. As is apparent from paragraph 247 of the judgment under appeal, the Court of First Instance did not apply such a standard, but required an appreciable objective advantage in the form of promotion of technical progress which is not identified with all the advantages which the undertakings participating in the agreement derive from it as regards their activities, but with appreciable objective advantages, of such a kind as to offset the resulting disadvantages for competition. The Court of First Instance merely found that the Commission’s conclusion that no appreciable objective advantage existed was based on inadequate reasoning. It is clear also from the contested paragraphs 269, 281 and 300 of the judgment under appeal that the Court of First Instance took as its basis that the Commission’s conclusion regarding the alteration of GSK’s capacity for innovation was vitiated by a failure to state adequate reasons.
218. Secondly, the Commission alleges that the Court of First Instance erred in law in considering that it is sufficient for only a part of the extra financial resources to be invested in expenditure on research and development.
219. This complaint is also unfounded. First, it must be pointed out that the Commission did not base the contested decision on this point. However, that alone is not the decisive factor. If it were actually to be inferred from Article 81(3) EC that an appreciable objective advantage for the purposes of that provision can be found to exist only if the totality of the financial resources which GSK obtains through the limitation of parallel trade flows into the promotion of research and development, GSK’s submissions would no longer be relevant. GSK has in fact argued that a gain in efficiency would arise even if the producers of medicines were to invest only a part of the extra financial resources in research and development.
220. The existence of an appreciable objective advantage for the purposes of Article 81(3) EC does not though necessarily require the totality of the extra financial resources to be invested in expenditure on research and development. Contrary to what the Commission maintains, that is not to be inferred from Verband der Sachversicherer
v Commission . (113) Under the first condition laid down by Article 81(3) EC, it must merely be examined whether a gain in efficiency exists which has an impact beyond the circle of those directly involved and at least offsets the disadvantages of the restriction of competition. Admittedly, the size of the proportion plays a vital role in the assessment of whether such a gain in efficiency exists. That determines whether the expenditure on research and development, in so far as its occurrence can be assumed with a high degree of probability, offsets the disadvantages arising from the limitation of parallel trade. This also applies to the examination of the second and third conditions laid down by Article 81(3) EC, that is, whether consumers are allowed a fair share of the resulting benefit and whether a limitation of parallel trade can be considered indispensable. The fact that only a proportion is invested in research and development can therefore certainly be taken into account by the Commission in its examination. However, it does not constitute a justification for dispensing altogether with that examination or for not taking all the arguments and evidence sufficiently into account in the examination.
221. Thirdly, the Commission complains that, in paragraphs 274 and 300 of the judgment under appeal, the Court of First Instance ultimately took account of whether more research and development is to be expected of a producer of medicines or of parallel traders or final consumers. That, it argues, is legally erroneous, since it would lead to the first condition laid down by Article 81(3) EC always being fulfilled as soon as, in consequence of an agreement, financial resources are redistributed from the intermediaries or consumers to the producer of medicines.
222. This complaint also is not well founded. First, it must again be pointed out that the Court of First Instance merely reviewed the Commission’s reasoning regarding the absence of an appreciable objective advantage in the form of technical or economic progress, and did not make a determination of its own. Thus, in paragraph 274 of the judgment under appeal, as is apparent from paragraph 270 of the judgment, and in paragraph 300, it reproduced GSK’s submissions.
223. Furthermore, in paragraphs 274 and 300 of the judgment under appeal, no comparison is made between the research and development activities of the producers of medicines, on the one hand, and of the Spanish intermediaries or the consumers, on the other. GSK merely argued that, in the overall assessment in terms of competition of the General Sales Conditions and the redistribution of financial resources resulting from them, the following elements must be compared: on the one hand, on the ‘credit side’, the gains in efficiency, through promotion of technical development, which could be expected as a result of the importance of competition on innovation between producers of medicines; and, on the other hand, on the ‘debit side’, the losses in efficiency which must be expected as a result of the limitation of parallel trade. In that context, GSK observed that, in assessing the magnitude of the losses in efficiency which may be expected as a result of the limitation of parallel trade, the Commission must take into account that, because of the market structures in the medicines sector, parallel traders keep the majority of the revenues from the parallel trade for themselves. (114)
vi) Conclusion
224. The Commission’s second plea in law must therefore also be rejected in its entirety.
c) Distortion of the contested decision and absence of consideration of events in the past in the prospective analysis
225. In this plea in law, the Commission alleges that the Court of First Instance, firstly, distorted the content of the contested decision (i), secondly, did not allow events in the past to be taken into account (ii) and, thirdly, did not allow account to taken of data which did not exist at the time the decision was adopted (iii).
i) Distortion of the contested decision
226. First, the Commission objects to the reasoning of the Court of First Instance in paragraph 261 of the judgment under appeal. In that paragraph, the Court of First Instance found that the Commission’s assessment of the gains in efficiency associated with the General Sales Conditions was confined solely to recital 156 of the contested decision. The Commission alleges that this finding by the Court of First Instance constitutes a distortion of the contested decision.
227. Considerable significance must be attached to this complaint. That is because the Court of First Instance based its reasoning on deficiencies in the Commission’s reasoning. If the Court of First Instance reproduced the content of the contested decision in a distorted manner, that could call into question the finding of the Court of First Instance regarding the deficiencies in the Commission’s reasoning.
228. This complaint is admissible, since a distortion of the content of a decision may be alleged in an appeal. (115) The allegation of distortion of the content of the decision is also, in my view, well founded, since, in paragraph 261 and further paragraphs of the judgment under appeal, the Court of First Instance misconstrued the content of the contested decision. However, since the Court of First Instance’s conclusion that the Commission’s reasoning is vitiated by deficiencies is correct, it must be upheld, with replacement of the grounds of the judgment under appeal.
– Distortion of the content of the contested decision
229. First, it must be pointed out that the Commission and the Court of First Instance clearly had different views as to the analytical approach to be applied.
230. In recitals 154 to 169 of the contested decision, the Commission examined whether an appreciable objective advantage can be considered to exist. First, it pointed out that undertakings have discretion to decide their expenditure on research and development. The existence of an appreciable objective advantage was rejected by the Commission because, in its view, no direct causal link or appreciable direct causal link could be considered to exist between extra financial resources which would be obtained by GSK through limitation of parallel trade and increased spending on research and development. The Commission based that conclusion, in particular, on an analysis of GSK’s historical data.
231. The Court of First Instance, on the other hand, as is apparent, in particular, from its finding in paragraph 295 of the judgment under appeal and from the subheadings before paragraphs 269, 281, 294 and 304 of the judgment under appeal, postulated the following structure for the examination. Firstly, the Commission should have examined the disadvantages of the losses in efficiency associated with parallel trade for the pharmaceutical industry in general and for GSK in particular. In this context, the Court of First Instance found that the Commission based its conclusion that parallel trade does not lead to a loss in efficiency by altering GSK’s capacity for innovation on inadequate reasoning. (116) Secondly, the Commission should have examined the magnitude of the loss in efficiency associated with parallel trade. In this regard, the Court of First Instance found that the subsidiary conclusion, that it was not in any event demonstrated that parallel trade leads to an appreciable loss in efficiency by altering GSK’s capacity to innovate, was likewise vitiated by errors of reasoning. (117) Thirdly, the Commission should have examined the gains in efficiency associated with the General Sales Conditions. However, according to the Court of First Instance, the Commission did this only in recital 156 of the contested decision, in which it essentially found that extra financial resources would not automatically lead to higher investment in research and development, since it was a matter of discretion for producers of medicines to decide how much they wished to invest in research and development. The Court of First Instance regarded that reasoning as inadequate in view of the arguments and evidence submitted by GSK. (118) Fourthly, the Commission should have carried out a balancing exercise as between the advantage in question and the disadvantage for competition that resulted from the infringement of Article 81(1) EC by the General Sales Conditions; however, the Commission did not do that. (119)
232. According to the finding made by the Court of First Instance in paragraph 295 of the judgment under appeal, the aforementioned structure of the examination followed unavoidably
from the structure of GSK’s arguments and from the discussion in this regard during the administrative procedure.
233. That starting point adopted by the Court of First Instance is incorrect. Whether the Commission’s examination and reasoning are sufficient or inadequate actually depends primarily
on the relevant precondition and only secondarily on whether the Commission examined sufficiently all the arguments and evidence relevantly submitted in respect of that precondition. (120)
234. According to the structure of Article 81(3) EC, it was therefore necessary to examine, first of all, whether it could be considered with sufficient probability that the General Sales Conditions were associated with promoting technical progress. In this respect, the first step, contrary to the finding of the Court of First Instance in paragraph 295 of the judgment under appeal, was not unavoidably
to examine whether parallel trade led to a loss in efficiency for the pharmaceutical industry in general, and for GSK in particular.
235. Admittedly, the above explanation must not be construed to the effect that the approach proposed by the Court of First Instance leads to an incorrect result. (121) However, the Court of First Instance cannot accuse the Commission of an error of reasoning merely because the Commission follows the structure of examination predetermined by Article 81(3) EC. Furthermore, the imposition of a structure of examination incorrectly described as unavoidable must not lead to the Court of First Instance distorting the content of the contested decision by looking at the decision only from the viewpoint of such an examination structure. However, that is what the Court of First Instance did by finding, in paragraph 261 of the judgment under appeal, that the Commission examined the gains in efficiency associated with the General Sales Conditions only in recital 156 of the contested decision and there only once. The Court of First Instance thus failed to recognise that the Commission had examined not only in recital 156, but also in recitals 154, 155 and 157 to 169 of the contested decision, whether it could be considered with a sufficient degree of probability that the General Sales Conditions led to gains in efficiency.
236. The Commission is therefore right in complaining that, by its finding in paragraph 261 of the judgment under appeal, the Court of First Instance misconstrued the content of the contested decision.
– Replacement of grounds
237. In the final analysis, however, that does not call into question the conclusion of the Court of First Instance that the Commission failed to state adequate reasons for its decision. A legal assessment of the facts which is based on those findings of the Court of First Instance which are not affected either by the aforementioned distortion of the content of the contested decision or by other alleged errors of law leads to the result that the Commission’s conclusion concerning the absence of an appreciable objective advantage was not based on adequate reasoning.
238. In paragraphs 275 to 280 of the judgment under appeal, the Court of First Instance found that the Commission had not stated adequate reasons for its conclusion that there was no evidence of a causal link between extra financial resources for GSK from parallel trade and extra expenditure on research and development. Thus, in particular, in paragraph 277 of the judgment under appeal, the Court of First Instance stated that, in recital 157 of the contested decision, the Commission had not adequately refuted the link pleaded by GSK between the general level of current profits or the expected profitability of the products, on the one hand, and expenditure on research and development, on the other. According to the Court of First Instance, since GSK pleaded on the basis of evidence adduced by it that those factors (general level of current profits or expected profitability of the products) were adversely affected by parallel trade, the Commission should not have omitted to examine that evidence. (122) In paragraphs 278 and 279 of the judgment under appeal, the Court of First Instance stated, inter alia, that the Commission had not adequately examined GSK’s arguments that it had every interest in investing in research and development, owing to the fact of the lively interbrand competition which relies on innovation, but found it impossible to recover the entire proceeds of that investment, in order to reinvest them in research and development, because of parallel trade.
239. The Court of First Instance further stated, in paragraphs 281 to 293 of the judgment under appeal, that the Commission likewise failed to state adequate reasons to support the conclusion that the extra financial resources would have at least no appreciable impact on research and development. Thus, in paragraph 286 of the judgment under appeal, the Court of First Instance found that the Commission had not refuted GSK’s argument that, while the currency fluctuations altered the value of the parallel imports from Spain, they did not alter their proportion. Then, in paragraph 291 of the judgment under appeal, the Court of First Instance had regard to the fact that, in connection with the appreciability of the advantage, the Commission had taken into account only parallel trade between Spain and the United Kingdom, whereas, in connection with the appreciability of the restriction of competition, the Commission had attached great importance to the fact that the impact in other Member States must also be taken into account. Finally, in paragraph 292 of the judgment under appeal, the Court of First Instance pointed out that currency fluctuations, which could affect the value of GSK’s losses from parallel trade, could also arise in the future.
240. The Commission observes that, as is apparent from recital 160 of the contested decision, it was unable to establish on the basis of the data submitted by GSK that in the past there had been a direct link between the loss of financial resources for GSK as a result of parallel trade, on the one hand, and the cancellation of research and development projects, on the other. It also states that it found in the contested decision that GSK’s expenditure on research and development had further increased in relative terms, indeed also in the years in which GSK suffered losses of revenue.
241. However, it cannot be inferred from Article 81(3) EC that the existence of an appreciable objective advantage can be demonstrated only by the undertaking demonstrating a direct link between parallel trade and expenditure on research and development. On the contrary, it is conceivable for an undertaking to produce the proof in another way. (123)
242. The Commission cannot therefore disregard the submissions of an undertaking which relies on an economic argument and cites economic and econometric data which are relevant to it solely because no direct link is thereby demonstrated. (124) It can certainly refute in general terms submissions by an undertaking which are couched in general terms. However, where an undertaking backs up its arguments in a detailed and relevant manner, the Commission must also deal with those arguments in a detailed manner. A reference to the possibility that extra resources may also simply be added to the company’s profits, since it is a matter of discretion for undertakings to decide how much they will invest in research and development, is not sufficient in that case. Such a general reference fails to have regard to the fact that the market conduct of undertakings may be influenced to a considerable extent by competition with other undertakings and that an undertaking’s discretion may be restricted by that.
243. From a factual point of view, attention must first be drawn to the finding of the Court of First Instance in paragraph 256 of the judgment under appeal that GSK had submitted economic and econometric evidence. The Court of First Instance further pointed out, in paragraph 264 of the judgment under appeal, that the Commission itself, in the Communication on the single market in pharmaceuticals, (125) had emphasised the importance of competition in terms of innovation in the medicines sector, the continuous flow of new products onto the market, the particular features of the financing of investment in research and development, and the relationship to the profitability of undertakings.
244. On the basis of those facts – for the establishment of which jurisdiction is held by the Court of First Instance alone whose findings of fact can no longer, in principle, be called into question in appeal proceedings – I conclude, in the light of the aforementioned legal considerations, that the Court of First Instance was ultimately right to find, in paragraph 301 of the judgment under appeal, that the Commission should not have rejected, without providing arguments, the factual arguments and the evidence submitted by GSK. At this point, I would again expressly point out that the Court of First Instance did not find that the Commission was obliged to postulate, on the basis of the arguments and evidence submitted by GSK, the existence of an appreciable objective advantage. It merely found that the Commission should have examined GSK’s arguments and evidence which were relevant to the existence of an appreciable objective advantage, and refuted them if it did not consider them sufficient.
– Conclusion
245. Ultimately, therefore, the Court of First Instance was right to find that the Commission’s conclusion regarding the absence of an appreciable objective advantage was based on a statement of reasons vitiated by defects of reasoning. The Commission’s complaint must therefore be rejected, with replacement of the grounds of the judgment under appeal.
ii) Consideration of events in the past
246. The Commission further complains that the Court of First Instance erred in law by not acknowledging that the Commission is entitled to refer to events in the past in carrying out the prospective analysis.
247. This complaint is also unfounded. The Court of First Instance did not preclude the Commission from relying on events in the past. As observed above, it merely found that the Commission’s reasoning in question was inadequate, because it had not taken sufficiently into account all the arguments and evidence relevantly submitted by GSK.
iii) Taking into account of data that did not exist at the time when the contested decision was adopted
248. In so far as the Commission complains, finally, that in paragraphs 58 and 59 of the judgment under appeal the Court of First Instance did not allow it to refer, in the proceedings before the Court of First Instance, to data which did not exist at the time when the contested decision was adopted, I can see no error of law in that. As the Court of First Instance correctly pointed out in those paragraphs, the review of the contested decision is carried out solely by reference to the elements of fact and of law existing on the date of adoption of the decision. (126) It is therefore incomprehensible to me how the Commission intends to remedy defects of reasoning in the prospective analysis to be carried out at the time of adoption of the contested decision by having recourse to data which were compiled only after the adoption of the decision and therefore, of necessity, could not have been taken into account by the Commission in its reasoning.
iv) Conclusion
249. This plea in law must therefore also be rejected in its entirety.
d) Misapplication of the standard of review
250. The Commission further alleges misapplication of the standard of review inasmuch as, firstly, the Court of First Instance created a new ground for annulment (i) and, secondly, it exceeded its jurisdiction (ii).
i) Creation of a new ground for annulment
251. Firstly, the Commission alleges that, in paragraphs 269, 277, 281, 286 and 313 of the judgment under appeal, the Court of First Instance created a new ground for the annulment of decisions, namely, the failure to carry out an adequate examination of the undertaking’s arguments or to refute them in a convincing manner. In its submission, there is no legal basis for that ground of annulment.
252. This allegation is not well founded. As explained above in point 188 of this Opinion, in cases where the Commission enjoys a margin of discretion by reason of the complex economic appraisal to be carried out, the Court of First Instance limits its review to verifying whether the relevant rules on procedure and on the content of the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of appraisal or misuse of powers. In that respect, a review of whether the Commission’s reasoning is adequate is consistent with the settled case‑law of the Court of Justice cited in footnote 100 at point 188 of this Opinion.
ii) Exceeding of jurisdiction by the Court of First Instance
253. In so far as the Commission alleges that, in paragraphs 274 and 278 of the judgment under appeal, the Court of First Instance substituted its own reasoning for the reasoning set out in the decision, this allegation must be rejected as unfounded. It must first be pointed out that, as is apparent, in particular, from paragraph 270 of the judgment under appeal, in paragraph 274 of the judgment under appeal the Court of First Instance was above all reproducing GSK’s arguments that, because of healthy competition on innovation in the sector, every producer of medicines has every interest in investing at least a part of its extra profit in research and development. Furthermore, in paragraph 278 of the judgment under appeal, the Court of First Instance found that the Commission did not adequately examine this aspect and did not give an adequate response to those arguments put by GSK. This again shows that the Court of First Instance did not substitute its own reasoning for the Commission’s reasoning.
e) Error of reasoning on account of a terse assessment of the evidence and unexplained assumptions by the Court of First Instance
254. Finally, the Commission alleges errors of reasoning by the Court of First Instance regarding the assessment of the evidence adduced by GSK (i) and regarding the question as to why research and development would not have been possible without the General Sales Conditions (ii).
i) Assessment of the evidence submitted by GSK
255. In this connection, the Commission criticises, firstly, the finding by the Court of First Instance in paragraphs 262 and 263 of the judgment under appeal. It is, in its submission, an error of reasoning for the Court of First Instance to have found in those paragraphs that GSK discharged its part of the burden of proof with the evidence which the Court of First Instance set out in paragraphs 256 to 259 of the judgment under appeal. Some of the arguments and evidence mentioned in paragraph 258 were in fact disputed.
256. This complaint is not well founded. First, it must again be pointed out that the Court of First Instance did not examine whether an appreciable objective advantage existed, but merely the Commission’s reasoning on this point. Moreover, it is apparent, in particular, from the subheading before paragraph 263 that, in paragraph 263 et seq. of the judgment under appeal, the Court of First Instance merely examined whether GSK’s evidence was relevant and therefore had to be examined and, where appropriate, refuted by the Commission. Finally, as has already been stated, the Court of First Instance examined the Commission’s reasoning and found that the Commission had not sufficiently examined all GSK’s arguments and evidence. The Court of First Instance did not base its reasoning on the fact that GSK had demonstrated certain points. It based its reasoning on the fact that the Commission did not examine certain arguments and evidence submitted by GSK or did not do so sufficiently.
257. Secondly, the Commission alleges contradictory reasoning by the Court of First Instance.
258. First, it alleges that, in paragraph 273 of the judgment under appeal, the Court of First Instance found that parallel trade does not bring any significant advantages for the final consumer, whereas in paragraph 190 it asserted that the restriction of parallel trade entails disadvantages for consumers. This complaint is unfounded. As is apparent, in particular, from paragraph 270 of the judgment under appeal, in paragraph 273 of the judgment under appeal the Court of First Instance was above all reproducing GSK’s arguments and evidence.
259. The Commission further complains that, in paragraphs 133, 143 and 144 of the judgment under appeal, the Court of First Instance found that the medicines sector is shielded from the forces of supply and demand, whereas in paragraphs 271 and 272 it correctly described the interplay of supply and demand. Since the Commission thus does not criticise the content of the reasoning in paragraphs 271 and 272 of the judgment under appeal, but that of the reasoning in paragraphs 133, 143 and 144, this complaint must be rejected as inadmissible for the reasons set out above in points 42 to 47 of this Opinion. Moreover, it must be pointed out that, as is apparent from paragraph 270 of the judgment under appeal, in paragraphs 271 and 272 the Court of First Instance was above all reproducing the arguments submitted by GSK.
260. Thirdly, the Commission alleges that the finding in paragraph 265 of the judgment under appeal contains a defect in reasoning. In that paragraph, the Court of First Instance stated that some of GSK’s arguments were corroborated in the Commission Communication on the single market in pharmaceuticals. (127) The Commission complains that this is not comprehensible, since it is impossible to understand which elements of GSK’s arguments were corroborated. This complaint is also unfounded. It is sufficiently clear from a comparison of the arguments submitted by GSK, set out in paragraphs 258 and 259 of the judgment under appeal, and the summary of the principal assertions in the Commission Communication on the single market in pharmaceuticals, set out in paragraph 264 of the judgment under appeal, which part of the arguments the communication corroborated, namely, in particular, the significance of competition in terms of innovation, the continuous flow of new products onto the market, the financing of investment in research and development, its relationship to the profitability of undertakings, and the structural factor of the national price regulations in the individual Member States. Furthermore, in paragraph 284 of the judgment under appeal, the Court of First Instance referred to the communication in order to prove the relevance of the argument based on the structural factor of the national price regulations. Besides, an error of reasoning would not be important. Where an undertaking submits arguments and evidence which support its relevant submissions, the Commission must take them sufficiently into account. In this case, the relevance of GSK’s submissions was merely reinforced by virtue of the contents of the Commission’s communication.
ii) Failure to explain why research and development would have been impossible without the General Sales Conditions
261. Finally, the Commission objects to paragraphs 278 and 297 of the judgment under appeal. In its submission, the Court of First Instance made an error of reasoning, since it did not explain why GSK is unable to invest sufficiently in research and development without the extra resources.
262. This complaint is also unfounded. First, it must again be pointed out that, in paragraphs 253 to 308 of the judgment under appeal, the Court of First Instance confined itself to examining the Commission’s reasoning regarding the satisfaction of the first condition laid down by Article 81(3) EC, that is to say, the existence of an appreciable objective advantage. In paragraph 278 of the judgment under appeal, the Court of First Instance found that the Commission, in reasoning that GSK can also finance expenditure on research and development from other budgetary items, did not sufficiently examine GSK’s submission that it has every interest in investing in research and development, owing to the competition on innovation between producers of medicines. Contrary to the Commission’s view, it is not for the Court of First Instance to substitute its reasoning for the Commission’s reasoning. Moreover, the question of whether a producer of medicines is also able to react to falls in profits by cutting back on an item other than research and development does not relate to the question of whether an appreciable objective advantage exists, but to the question of whether the restriction of competition was indispensable to the attainment of the advantage, and consequently to the third condition laid down by Article 81(3) EC.
2. The further conditions laid down by Article 81(3) EC
263. Finally, the Commission complains that the Court of First Instance made errors of law in paragraph 309 of the judgment under appeal, in which it considered the Commission’s reasoning on the further conditions laid down by Article 81(3) EC.
264. In so far as the Commission complains, firstly, that the Court of First Instance itself stated no grounds concerning the indispensability of the General Sales Conditions, it must be pointed out that, as set out above in point 188 of this Opinion, the Court of First Instance must not substitute its own assessment for that of the Commission. The Court of First Instance thus rightly confined itself to a review of the reasoning set out in the Commission’s decision.
265. Nor, contrary to the Commission’s submissions, did the Court of First Instance distort the content of recital 187 of the contested decision by its finding in paragraph 309 of the judgment under appeal that the Commission’s conclusions concerning the indispensability of the General Sales Conditions were inadequate because they rested on the conclusions relating to the absence of an appreciable objective advantage.
266. It is clear from recital 187 of the contested decision that the Commission justified its conclusion as to the absence of indispensability on the basis that there was no evidence of any advantage and that there was therefore no contribution whose indispensability could be analysed. This militates against the view that the Commission actually examined indispensability.
267. In so far as, notwithstanding that reasoning, the Commission’s finding in recital 157 of the contested decision that GSK could also finance expenditure on research and development from another budgetary item should additionally be taken into consideration, the following should be noted. It is true that indispensability means more than being such as to contribute to the attainment of the positive aims of the agreement. (128) However, an agreement is indispensable not only when the advantages pursued cannot be achieved in any other way at all, but also when they cannot be brought about to the same extent, within the same period of time or with the same degree of certainty. The market conditions and economic realities faced by the parties to the agreement must be taken into account in that assessment.
268. It admittedly follows from the Commission’s reasoning in recital 157 of the contested decision that an increase in investment in research and development in some other way was not out of the question. However, it is by no means clear from that reasoning whether an increase in investment in research and development would occur to the same extent and with the same degree of certainty. It must be borne in mind in this connection that GSK’s argument implied that the producers of medicines would spend more on research and development in absolute terms if their revenues were higher in absolute terms. Therefore, the taking into account of the Commission’s reasoning in recital 157 of the contested decision would also not call into question the conclusion of the Court of First Instance in paragraph 309 of the judgment under appeal that the Commission had not stated adequate reasons as to why the condition was not fulfilled.
269. Consequently, this plea in law must also be rejected.
3. Conclusion
270. In conclusion, the Commission’s appeal and cross‑appeal in Cases C‑513/06 P and C‑501/06 P must be dismissed in their entirety.
C – EAEPC’s appeal in Case C‑515/06 P
271. EAEPC bases its appeal in Case C‑515/06 P on three pleas in law.
1. The role and function of Article 81(3) EC
272. In its first plea, EAEPC objects essentially to the finding of the Court of First Instance in paragraph 261 of the judgment under appeal that the Commission addressed the question of whether the General Sales Conditions led to a gain in efficiency only on one specific occasion, in recital 156 of the contested decision. EAEPC submits that the finding of the Court of First Instance is vitiated by errors of law, since it was based on a distorted account of GSK’s arguments and of the contested decision.
273. This complaint is ultimately unsuccessful. As was observed in points 226 to 236 of this Opinion, paragraph 261 of the judgment under appeal is vitiated by errors of law; however, the complaint ultimately fails, because in the end the Court of First Instance rightly drew the conclusion that the Commission’s reasoning is inadequate (see points 237 to 245 of this Opinion).
2. Burden of proof
274. In so far as EAEPC complains in its second plea, firstly, that, in paragraph 258 of the judgment under appeal, the Court of First Instance held that GSK’s arguments were relevant, although GSK had not established that extra financial resources for it derived from the restriction of parallel trade would also have led directly to an increase in expenditure on research and development, this complaint must be rejected as unfounded.
275. It must first be pointed out that the Court of First Instance only reviewed the Commission’s reasoning. As set out in point 186 of this Opinion, the Court of First Instance correctly proceeded on the basis that it is for GSK to demonstrate with a sufficient degree of probability, by arguments and evidence, the achievement of an appreciable objective advantage. The Court of First Instance did not find that GSK, by means of the arguments and evidence submitted by it, had adduced proof of the achievement of an appreciable objective advantage. It merely found that the Commission had not, or had only inadequately, rejected relevant arguments and evidence submitted by GSK, including the economic studies mentioned in paragraph 256 of the judgment under appeal, and that its reasoning was therefore inadequate.
276. By its second complaint, EAEPC objects to the finding of the Court of First Instance in paragraph 274 of the judgment under appeal that the fact that the extra financial resources are retained by the producer of medicines will in all likelihood give rise to a gain in efficiency by comparison with the situation in which the profit is shared with the intermediary. This complaint must be rejected as unfounded from the outset because, as is apparent from paragraph 270 of the judgment under appeal, in paragraphs 271 to 274 the Court of First Instance was above all reproducing GSK’s arguments.
3. Erroneous assessment of, or failure to take into account, evidence
277. In its third ground of appeal, EAEPC alleges errors of law in regard to the shifting of the burden of proof and the erroneous assessment and distortion of facts.
a) Shifting of the burden of proof
278. In so far as EAEPC complains, firstly, that the Court of First Instance considered, erroneously in law, that the burden of proof passed to the Commission, this must be rejected with reference to the observations in points 187 to 191 of this Opinion. The Court of First Instance merely found that the Commission had not taken all of GSK’s relevant arguments and evidence sufficiently into account in its reasoning. In this connection, EAEPC’s argument that the burden of submitting arguments and evidence and the burden of proof can be considered to pass to the Commission in the present case only if, on the basis of GSK’s submissions, a gain in efficiency can be presumed to exist must also be rejected. Since the review by the Court of First Instance is limited when it is carrying out a complex economic appraisal, the application of a presumptive criterion would be inappropriate. That would presuppose that the Court of First Instance, contrary to its limited jurisdiction, carries out its own appraisal.
279. Secondly, EAEPC alleges a distortion of the sense of the evidence in paragraph 277 of the judgment under appeal. In paragraph 277 the Court of First Instance stated that the Frontier Economics II study, while admitting that parallel trade was not the main factor underlying decisions on research and development, also found that a connection existed between the general level of current profits or the expected profitability of the products and decisions on research and development. According to the Court of First Instance, since GSK pleaded that those factors were affected by parallel trade, the Commission should have carried out a more thorough examination of the evidence presented by GSK in that regard.
280. In so far as EAEPC complains that the Court of First Instance interpreted the study as indicating a direct connection between parallel trade and expenditure on research and development, this complaint is unfounded. Rather, paragraph 277 of the judgment under appeal indicates a subdivision of that connection into two stages, of which only the first was based by GSK on the study. As a first stage, in order to prove the connection between the general level of current profits or the expected profitability of the products, on the one hand, and expenditure on research and development, on the other, GSK relied on the study. As a second stage, GSK then submitted, producing further evidence, that those factors (level of current profits, profitability of the products) were adversely affected by parallel trade. Contrary to EAEPC’s submissions, it therefore cannot be inferred from paragraph 277 of the judgment under appeal that the Court of First Instance inferred from the study a direct connection between parallel trade and expenditure on research and development.
b) Erroneous assessment or non‑consideration of facts which are apparent from the file
281. EAEPC goes on to contest paragraph 275 of the judgment under appeal. It submits that, in finding that the Commission failed to undertake a rigorous examination of the factual arguments and the evidence, but confined itself to a fragmentary account of limited relevance or value, the Court of First Instance distorted the contested decision. It is true that the error of law discussed in points 226 to 236 of this Opinion also affects the finding in paragraph 275 of the judgment under appeal. However, this complaint must ultimately be rejected for the reasons mentioned in points 237 to 244 of this Opinion, because in the end the Court of First Instance rightly drew the conclusion that the Commission’s reasoning was inadequate.
282. EAEPC further complains that the Court of First Instance did not have regard to the Commission’s finding in recital 157 of the contested decision, according to which GSK could also have financed additional research and development from other resources and therefore no indispensability exists for the purposes of Article 81(3) EC. In so far as this complaint was supposed to be directed against paragraph 275 of the judgment under appeal, it must be rejected as unfounded, since that is not relevant in the context of examining whether an appreciable objective advantage exists. Nor is EAEPC’s complaint capable of succeeding as a complaint against the finding of the Court of First Instance in paragraphs 309 and 310 of the judgment under appeal, in which the Court of First Instance found that the Commission did not state adequate reasons for its conclusion that the General Sales Conditions were not indispensable. Firstly, the complaint would be inadmissible because EAEPC would then not have clearly identified the contested part of the judgment. (129) Secondly, the complaint would have to be rejected on the basis of the grounds set out in points 265 to 268 of this Opinion.
c) Taking into account of incorrect facts
283. Finally, EAEPC’s complaint directed against paragraph 273 of the judgment under appeal, by which it alleges a misinterpretation of the notion of the final consumer by the Court of First Instance, must be rejected as unfounded. It is apparent from paragraph 270 of the judgment under appeal that the Court of First Instance was above all reproducing GSK’s arguments in paragraphs 271 to 274 of the judgment under appeal.
284. In so far as EAEPC complains, last, that the reasoning of the Court of First Instance regarding the anti‑competitive object of the General Sales Conditions is wrong in law, this complaint in EAEPC’s appeal must be rejected as inadmissible for the reasons set out in points 42 to 47 of this Opinion.
4. Conclusion
285. In conclusion, therefore, EAEPC’s appeal in Case C‑515/06 P must be dismissed in its entirety.
D – Aseprofar’s appeal in Case C-519/06 P
286. Aseprofar bases its appeal in Case C‑519/06 P on two pleas in law, the first of which is directed against the reasoning of the Court of First Instance on the first condition laid down by Article 81(3) EC (1) and the second against its reasoning on the further conditions laid down by Article 81(3) EC (2).
1. The first condition laid down by Article 81(3) EC
287. Aseprofar’s first plea is directed against the conclusion of the Court of First Instance in paragraph 301 of the judgment under appeal. In that paragraph, the Court of First Instance found that, in recital 156 of the contested decision, the Commission should not merely have rejected GSK’s arguments outright on the ground that the advantage described by GSK would not necessarily be achieved.
288. In this connection, Aseprofar submits, first, that recitals 156 to 161 of the contested decision contain no manifest error of assessment. In the present case, the Commission was entitled to find that a causal link between parallel trade and research and development was not demonstrated. The finding by the Court of First Instance in paragraph 301 of the judgment under appeal is therefore wrong in law.
289. This complaint must be rejected with reference to the above explanations in points 251 and 252 and 237 to 241 of this Opinion. Although the Court of First Instance did distort the content of the contested decision, in the end it rightly found that the Commission stated inadequate reasons for its decision, since it did not sufficiently examine all the relevant arguments and evidence which GSK had submitted.
290. In so far as Aseprofar further
complains in this connection that the Court of First Instance did not take into account the fact that, if necessary, GSK could also have financed the expenditure on research and development through credit, this must be rejected with reference to the above explanations in points 265 to 269 of this Opinion. It should be pointed out, in addition, that GSK had put forward reasons why that expenditure would normally be financed out of an undertaking’s own funds and in its case exclusively out of its own funds, and the Commission did not address them.
291. In addition, the complaint that the Court of First Instance wrongly considered that there was an error of reasoning under Article 253 EC must also be rejected. As is clear from paragraphs 210 to 213 of the judgment under appeal, the conclusions of the Court of First Instance in paragraph 301 of the judgment under appeal do not relate to failure to observe the formal requirement under Article 253 EC, but to the objective incorrectness of the reasoning, which results from an inadequate consideration of the arguments and evidence submitted.
292. Finally, the complaint that the Court of First Instance introduced a new ground for annulment must be rejected with reference to points 251 and 252 of this Opinion and the complaint that the Court of First Instance impermissibly substituted its assessment for the Commission’s must be rejected with reference to point 188 of this Opinion.
2. The further conditions laid down by Article 81(3) EC
293. In its second plea, Aseprofar objects to paragraphs 309 to 315 of the judgment under appeal. In those paragraphs, the Court of First Instance found that the Commission’s reasoning on the further conditions was not sufficient. Aseprofar alleges that the Court of First Instance failed to have regard to the fact that undertakings bear the burden of proof in respect of the conditions laid down by Article 81(3) EC. It should therefore not have characterised the Commission’s reasoning as too summary without first examining whether GSK had submitted relevant arguments and evidence on the further conditions.
a) Allowing consumers a fair share of the benefit
294. Aseprofar complains, first, that the Court of First Instance wrongly considered that the Commission had failed to state adequate reasons as regards allowing final consumers a fair share of the benefit. Firstly, GSK merely submitted that parallel trade achieved no benefits for consumers. Secondly, GSK did not demonstrate that consumers would enjoy a substantial part of the gains in efficiency. Finally, the Commission listed in the contested decision the disadvantages which would have resulted from a restriction of parallel trade.
295. This complaint is unfounded. The Court of First Instance rightly found that the Commission’s reasoning on allowing consumers a fair share of the benefit was inadequate. GSK had pleaded that parallel trade leads to losses in efficiency. That submission implied that the gains in efficiency arising in the form of promotion of technical progress would outweigh the losses in efficiency resulting from the limitation of parallel trade. (130) The Commission did not examine this point sufficiently. As the Court of First Instance rightly held, the Commission based its finding in recital 179 of the contested decision primarily on the fact that GSK had not demonstrated the achievement of any appreciable objective advantage. The Commission could have based the contested decision additionally on the finding that GSK had not demonstrated that final consumers were allowed a fair share of the benefit. A separate line of reasoning, independent of the fulfilment or non‑fulfilment of the first condition, would, however, have required the Commission to examine the second condition in the alternative, on the assumption that the first condition was fulfilled. Such an examination might, for example, have consisted in the Commission’s finding, on the assumption that the advantages claimed by GSK were achieved, that, even if that was the case, the disadvantages resulting from the restriction of parallel trade were predominant. The Commission did not do that, however. In setting out, in recitals 183 to 186 of the contested decision, the losses in efficiency resulting from the limitation of parallel trade, the Commission was primarily refuting GSK’s arguments that parallel trade achieves no benefits for the final consumers. However, it did not carry out a balancing exercise in respect of the (assumed) gains and losses in efficiency.
b) Indispensability
296. Aseprofar further complains that the Court of First Instance considered, erroneously in law, that the Commission made an error of reasoning in respect of the condition of indispensability. According to Aseprofar, GSK merely submitted that the General Sales Conditions were necessary in order to compensate for the distortion of competition caused by Spain. GSK did not state that there was no alternative means of promoting technical progress.
297. This complaint is also unfounded. Undertakings certainly bear the burden of proof in respect of the conditions laid down by Article 81(3) EC. However, it must be borne in mind that the procedure under Article 4 of Regulation No 17 is an administrative procedure which is governed by the principle that the public authority is responsible for the procedure (‘Offizialmaxime’). (131) Undertakings are thus entitled to an appropriate examination by the Commission of their requests for exemption of an agreement under Article 81(3) EC. In so doing, the Commission may not confine itself to requiring from undertakings proof of the fulfilment of the requirements for the grant of the exemption but must, as a matter of good administration, play its part, using the means available to it, in ascertaining the relevant facts and circumstances. (132) This does not mean that the Commission is required to prove that the conditions laid down by Article 81(3) EC are not fulfilled. However, it follows from the principle of good administration and from general principles of procedural law that the Commission’s reasoning in relation to non‑fulfilment of the individual conditions laid down by Article 81(3) EC must have a certain minimum of substance if the Commission also wishes to base a decision of rejection on that reasoning. That minimum of substance includes, first, the finding that the condition in question is not fulfilled. The reasoning must then at least show that the Commission has examined the condition in question.
298. However, in the final analysis, the Commission’s reasoning in recital 187 consists only of the finding that there is no need to examine indispensability, since the first condition is not fulfilled. The Commission thus expressly stated that it did not examine that condition. The Court of First Instance therefore rightly held in paragraphs 309 and 310 of the judgment under appeal that the Commission’s reasoning in question was not sufficient.
c) The possibility of eliminating competition
299. Finally, Aseprofar complains that the Court of First Instance wrongly considered that the Commission failed to state adequate reasons with regard to the fourth condition laid down by Article 81(3) EC, that is, the possibility of eliminating competition. In its submission, first, in recital 188 of the contested decision, the Commission found that GSK had not submitted any evidence in this regard. The Commission then found in that recital that GSK had substantial market shares for certain products in some Member States. In addition, in paragraph 315 of the judgment under appeal, the Court of First Instance made an error of law by considering that the Commission should have carried out a balancing exercise as between the restriction of competition on price, on the one hand, and competition by innovation, on the other. The Commission is not obliged to refute arguments which GSK did not put forward during the administrative procedure. Moreover, a balancing exercise would have led to the conclusion that competition on price should be given priority. Finally, the reference by the Court of First Instance to the insufficiently clarified definition of the market in paragraph 314 of the judgment under appeal is not convincing, since, irrespective of the definition of the market, GSK must be assumed to have considerable market power.
300. These complaints must be rejected simply on the ground that they are ineffective. The Court of First Instance based its conclusion, first of all, on the reasoning in paragraph 312 of the judgment under appeal, in which it found that the Commission had not ultimately resolved the question of GSK’s market power. Since that part of the grounds is not contested by Aseprofar, the complaints directed against paragraphs 314 and 315 of the judgment under appeal are ineffective from the outset.
301. Furthermore, this complaint would also be unfounded. First, it must be pointed out that, contrary to Aseprofar’s submission, the Commission did not find, in recital 188 of the contested decision, that GSK made no submissions with regard to the fourth condition, but merely that GSK did not put forward any arguments in this connection which it had not already submitted elsewhere. It must also be pointed out that, as a matter of good administration, (133) the Commission may not confine itself to leaving certain matters which are obvious or are apparent from the arguments of the parties unexamined merely because the parties have not expressly raised those matters in relation to the conditions laid down by Article 81(3) EC. The Court of First Instance thus rightly held that the Commission should have at least taken into account in this context the fact that, in the case of patented medicines, GSK was exposed, on expiry of the patent, to potential competition from manufacturers of generic medicines.
3. Conclusion
302. In that regard, Aseprofar’s appeal must also be dismissed in its entirety.
E – Conclusion
303. I therefore propose that the Commission’s appeal in Case C‑513/06 P, EAEPC’s appeal in Case C‑515/06 P, Aseprofar’s appeal in Case C‑519/06 P and the cross‑appeals of the Commission and Aseprofar in Case C‑501/06 P be dismissed in their entirety.
304. I would expressly point out in this connection that Article 2 of the contested decision must be annulled, on the ground that the Commission’s reasoning was inadequate. No decision as to whether the General Sales Conditions can be exempted under Article 81(3) EC has therefore been taken.
VII – Summary
305. The appeals against the judgment under appeal should therefore be dismissed, albeit, as regards GSK’s appeal in Case C‑501/06 P, with replacement of the grounds relating to the anti-competitive object of the General Sales Conditions and, as regards the appeals of the Commission, EAEPC and Aseprofar in Cases C‑513/06 P, C‑515/06 P and C‑519/06 P and the cross‑appeals of the Commission and Aseprofar in Case C‑501/06 P, with replacement of the part of the grounds in which the Court of First Instance distorted the content of the contested decision.
VIII – Conclusion
In the light of the above considerations, I propose that the Court should:
(1) dismiss GSK’s appeal and the Commission’s and Aseprofar’s cross‑appeals in Case C‑501/06 P;
(2) dismiss the Commission’s appeal in Case C‑513/06 P;
(3) dismiss EAEPC’s appeal in Case C‑515/06 P;
(4) dismiss Aseprofar’s appeal in Case C‑519/06 P.
(1) .
(2)  –	Case C‑468/06 [2008] ECR I-0000. With regard to the assessment of unilateral measures having the object of limiting parallel trade in medicines, see also the Opinion of Advocate General Ruiz-Jarabo Colomer in that case and the Opinion of Advocate General Jacobs in Case C‑53/03 Syfait and Others [2005] ECR I‑4609.
(3)  –	From now on no distinction will be made between GSK and the group to which it belongs.
(4)  –	Commission Decision 2001/791/EC of 8 May 2001 in Cases IV/36.957/F3 Glaxo Wellcome (notification), IV/36.997/F3 Aseprofar and Fedifar (complaint), IV/37.121/F3 Spain Pharma (complaint), IV/37.138/F3 BAI (complaint) and IV/37.380/F3 EAEPC (complaint) (OJ 2001 L 302, p. 1).
(5)  –	GlaxoSmithKline Services
v Commission
[2006] ECR II-2969.
(6)  –	OJ 1989 L 40, p. 8.
(7)  –	According to the findings of the Court of First Instance in paragraphs 65 to 90 of the judgment under appeal, the Commission was right, in the contested decision, to proceed on the basis that the General Sales Conditions were an agreement. This is not challenged by any of the parties in the appeal proceedings.
(8)  –	OJ, English Special Edition 1959-62, p. 87.
(9)  –	In paragraph 1 of the operative part, the Court of First Instance also annulled Articles 3 and 4 of the contested decision, in which the Commission ordered that the infringement found to have been committed be immediately brought to an end and not repeated and that information concerning the steps taken be provided.
(10)  –	With regard to consideration in the context of a response to an appeal, see points 52 to 54 of this Opinion.
(11)  –	Order of the Court of 28 October 2004 in Case C-236/03 P Commission
v CMA CGM and Others, paragraphs 25 and 26. Reference should also be made in this context to the case‑law according to which pleas in an appeal are inoperative, and therefore do not have to be taken into account, if they are incapable of calling into question the operative part of a judgment (see Joined Cases C‑302/99 P and C‑308/99 P Commission and France
v TF1
[2001] ECR I‑5603, paragraphs 26 to 29). The idea which lies behind that case‑law can also be invoked in support of the principle of procedural law that there is no entitlement to a review of the grounds of a judgment where this cannot affect the operative part.
(12)  –	In so far as, under certain conditions, the admissibility of a plea by which the appellant alleges that the Court of First Instance should have dismissed an action as inadmissible from the outset and not proceeded to dismiss it as unfounded is affirmed (see, in that regard, points 25 to 29 of the Opinion of Advocate General Kokott in Case C‑362/05 P Wunenburger
v Commission
[2007] ECR I-4333), that has no relevance to this case. The request by the Commission and Aseprofar is directed at the reasoning of the Court of First Instance regarding the existence of a restriction of competition by object, and thus at the substance of the judgment under appeal. An appeal by which the appellant complains that the Court of First Instance should have dismissed an action as inadmissible from the outset seeks anyway to have the judgment set aside and therefore cannot be construed as seeking a replacement of grounds (see Case C‑141/02 P Commission v max.mobil
[2005] ECR I‑1283, paragraphs 74 and 75).
(13)  –	See point 44 of this Opinion.
(14)  –	Case C‑30/91 P Lestelle
v Commission
[1992] ECR I‑3755, paragraph 28; Case C‑36/92 P SEP
v Commission
[1994] ECR I‑1911, paragraph 33; Case C‑320/92 P Finsider
v Commission
[1994] ECR I‑5697, paragraph 37; Case C‑210/98 P Salzgitter
v Commission
[2000] ECR I‑5843, paragraph 58; and Case C‑113/07 P Selex Sistemi Integrati
v Commission and Eurocontrol
[2009] ECR I-0000, paragraphs 66 to 68.
(15)  –	Case 56/65 LTM
[1966] ECR 235, 249, and Case C‑219/95 P Ferriere Nord
v Commission
[1997] ECR I‑4411, paragraphs 13 to 15.
(16)  –	See point 44 of this Opinion.
(17)  –	See points 52 to 57 of this Opinion.
(18)  –	See point 48 of this Opinion.
(19)  –	See points 50 to 62 of this Opinion.
(20)  –	See points 60 to 62 of this Opinion.
(21)  –	See point 48 of this Opinion.
(22)  –	Case C‑136/92 P Commission
v Brazzelli Lualdi and Others
[1994] ECR I‑1981, paragraph 72.
(23)  –	See point 70 of this Opinion.
(24)  –	It should be pointed out in this connection that Aseprofar, in responding to GSK’s appeal in Case C‑501/06 P, referred to its observations in its notice of appeal in Case C‑519/06 P.
(25)  –	With regard to the details, I refer to the observations in points 52 to 57 of this Opinion.
(26)  –	LTM, cited in footnote 15, p. 249, and Joined Cases 56/64 and 58/64 Consten and Grundig
v Commission
[1966] ECR 299, 342.
(27)  –	See point 54 of this Opinion.
(28)  –	Paragraphs 114 to 116 of the judgment under appeal.
(29)  –	Paragraphs 117 to 119 of the judgment under appeal.
(30)  –	Paragraph 121 of the judgment under appeal.
(31)  –	Paragraph 122 of the judgment under appeal.
(32)  –	Paragraph 122 of the judgment under appeal.
(33)  –	Paragraph 133 of the judgment under appeal.
(34)  –	Paragraph 134 of the judgment under appeal.
(35)  –	Paragraph 147 of the judgment under appeal.
(36)  –	LTM, cited in footnote 15, p. 249, and Consten and Grundig
v Commission, cited in footnote 26, p. 342.
(37)  –	Settled case‑law since Consten and Grundig
v Commission, cited in footnote 26, p. 342. See Joined Cases C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P Aalborg Portland and Others v Commission
[2004] ECR I‑123, paragraph 261; Case C‑209/07 Beef Industry Development Society and Barry Brothers
[2008] ECR I‑0000, paragraph 16; and Joined Cases C‑101/07 P and C‑110/07 P Coop de France bétail et viande
v Commission
[2008] ECR I‑0000, paragraph 87.
(38)  –	Case C‑49/92 P Commission
v Anic Partecipazioni
[1999] ECR I-4125, paragraph 122; Case C‑199/92 P Hüls
v Commission
[1999] ECR I‑4287, paragraph 163; and Case C‑235/92 P Montecatini
v Commission
[1999] ECR I‑4539, paragraph 123.
(39)  –	See, in this regard, point 46 of my Opinion in Beef Industry Development Society and Barry Brothers, cited in footnote 37.
(40)  –	Case 19/77 Miller International Schallplatten
v Commission
[1978] ECR 131, paragraph 7, and Case C‑8/08 T-Mobile Netherlands
[2009] ECR I‑0000, paragraph 31.
(41)  –	LTM, cited in footnote 15, p. 249, and Joined Cases T‑374/94, T‑375/94, T‑384/94 and T‑388/94 European Night Services and Others v Commission
[1998] ECR II‑3141, paragraph 136.
(42)  –	LTM, cited in footnote 15, p. 249.
(43)  –	This is because potential
effects of an agreement can also be taken into account in the examination of its restrictive effects (see point 94 of this Opinion).
(44)  –	LTM, cited in footnote 15, p. 249; Joined Cases 96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82 IAZ International Belgium and Others
v Commission
[1983] ECR 3369, paragraph 25; Beef Industry Development Society and Barry Brothers, cited in footnote 37, paragraphs 16 and 21; Miller
v Commission, cited in footnote 40, paragraph 7; Joined Cases 29/83 and 30/83 CRAM and Rheinzink
v Commission
[1984] ECR 1679, paragraph 26; and Case C‑551/03 P General Motors
v Commission
[2006] ECR I‑3173, paragraphs  66, 77 and 78.
(45)  –	LTM, cited in footnote 15, p. 249.
(46)  –	See, in particular, IAZ International Belgium and Others v Commission, cited in footnote 44, paragraphs  23 to 27; Case C‑306/96 Javico [1998] ECR I-1983, paragraphs 13 and 14; and General Motors
v Commission, cited in footnote 44, paragraphs 67 to 69. With regard to Sot. Lélos kai Sia, cited in footnote 2, see below, in point 155 of this Opinion.
(47)  –	See point 91 of this Opinion.
(48)  –	Case 24/67 Parke, Davis and Co.
[1968] ECR 55, 71.
(49)  –	See point 90 of this Opinion.
(50)  –	T-Mobile Netherlands, cited in footnote 40, paragraph 36; Säcker, F.J., Molle, A., in: Hirsch, G., Montag, F., Säcker, F.J., Münchener Kommentar zum Europäischen und Deutschen Wettbewerbsrecht (Kartellrecht), Beck, 2007, Article 81, point 490.
(51)  –	See also, in this regard, Case T-112/99 M6 and Others v Commission
[2001] ECR II‑2459, paragraphs 72 to 77.
(52)  –	See, for example, Case 258/78 Nungesser and Eisele
v Commission
[1982] ECR 2015, paragraphs 57 and 58.
(53)  –	See also, in this regard, point 57 of my Opinion in Beef Industry Development Society and Barry Brothers, cited in footnote 37.
(54)  –	In this respect, see point 49 of my Opinion in Beef Industry Development Society and Barry Brothers, cited in footnote 37.
(55)  –	Ibid. See also, in this regard, Bellamy & Child, European Community Law of Competition, Oxford, 6th edition, 2008, footnote 291 relating to point 2.069.
(56)  –	See, in this regard, paragraphs 52 to 57 and 65 of Sot. Lélos kai Sia, cited in footnote 2 of this Opinion, a judgment with which I shall deal, in particular, in point 155 of this Opinion.
(57)  –	See point 90 of this Opinion.
(58)  –	Consten and Grundig v Commission, cited in footnote 26, p. 339 et seq.; Case C‑266/93 Volkswagen and VAG Leasing
[1995] ECR I‑3477, paragraph 17; and Javico, cited in footnote 46, paragraph 11.
(59)  –	Joined Cases T‑213/01 and T‑214/01 [2006] ECR II-1601.
(60)  –	Cited in footnote 26.
(61)  –	See, in th at regard, point 140 of this Opinion.
(62)  –	See, in this regard, LTM, cited in footnote 15, p. 249.
(63)
–	See the second subparagraph of Article 225(1) EC and Article 58 of the Statute of the Court of Justice.
(64)  –	Commission
v Brazzelli Lualdi and Others, cited in footnote 22, paragraph 49; Case C‑119/97 P Ufex and Others v Commission
[1999] ECR I‑1341, paragraph 66; order in Case C‑437/98 P Infrisa
v Commission [1999] ECR I‑7145, paragraph 34; and Case C‑315/99 P Ismeri Europa
v Court of Auditors
[2001] ECR I‑5281, paragraphs 19 to 20.
(65)  –	See, in particular, p. 14 et seq. of GSK’s replies of 21 April 2006 to the questions put by the Court of First Instance on 7 March 2006 in the proceedings at first instance.
(66)  –	Case C‑401/96 P Somaco
v Commission
[1998] ECR I‑2587, paragraph 53, and Case C‑446/00 P Cubero Vermurie
v Commission
[2001] ECR I‑10315, paragraph 20.
(67)  –	See points 178 and 179 of the Opinion of Advocate General Léger in Case C‑294/95 P Ojha
v Commission
[1996] ECR I‑5863.
(68)  –	See points 89 to 94 and 95 to 123 of this Opinion.
(69)  –	Case C‑164/98 P DIR International Film and Others v Commission
[2000] ECR I‑447, paragraphs 43 to 49.
(70)  –	See points 89 to 94 of this Opinion.
(71)  –	See recitals 115 to 125 of the contested decision.
(72)  –	See point 91 of this Opinion.
(73)  –	See, in particular, IAZ International Belgium and Others v Commission, cited in footnote 44, paragraphs 23 to 27; Javico, cited in footnote 46, paragraphs 13 and 14; and General Motors
v Commission, cited in footnote 44, paragraphs 67 to 69.
(74)  –	See point 91 of this Opinion.
(75)  –	Cited in footnote 2.
(76)  –	This was confirmed by the Court of First Instance, see paragraphs 103 to 108 of the judgment under appeal.
(77)  –	Joined Cases 32/78 and 36/78 to 82/78 BMW Belgium and Others v Commission [1979] ECR 2435, paragraph 5; General Motors
v Commission, cited in footnote 44, paragraph 75; and Case T‑175/95 BASF
v Commission
[1999] ECR II‑1581, paragraphs 133 to 136, in response to the arguments in paragraphs 121 to 123 of that judgment.
(78)  –	Sot. Lélos kai Sia, cited in footnote 2, paragraphs 65 and 66.
(79)  –	Schröter, H., in: Schröter, H., Jakob, T., Mederer, W., Kommentar zum Europäischen Wettbewerbsrecht, Nomos, 2003, introduction to Article 81, point 20.
(80)  –	Aseprofar had referred to this aspect; see recital 106 of the contested decision.
(81)  –	See recital 120 of the contested decision.
(82)  –	To that effect, see also Sot. Lélos kai Sia, cited in footnote 2, paragraph 63.
(83)
–	See points 147 to 169 of this Opinion.
(84)  –	Paragraph 235 of the judgment under appeal.
(85)  –	Paragraph 236 of the judgment under appeal.
(86)  –	Paragraph 241 of the judgment under appeal.
(87)  –	Paragraph 242 of the judgment under appeal.
(88)  –	Paragraph 243 of the judgment under appeal.
(89)  –	Paragraph 247 of the judgment under appeal.
(90)  –	Paragraph 249 of the judgment under appeal.
(91)  –	Paragraph 250 of the judgment under appeal.
(92)  –	Paragraphs 263 to 268 of the judgment under appeal.
(93)  –	Paragraphs 269 to 302 of the judgment under appeal.
(94)  –	Paragraph 303 of the judgment under appeal.
(95)  –	Paragraph 308 of the judgment under appeal.
(96)  –	Paragraphs 309 to 315 of the judgment under appeal.
(97)  –	Order in Case C‑173/95 P Hogan
v Court of Justice
[1995] ECR I-4905, paragraph 20.
(98)  –	In so far as the Commission complains in this connection that the Court of First Instance took into account, in the context of Article 81(3) EC, the effects of the national price regulations, in order to avoid repetition reference should be made to points 195 to 212 of this Opinion, since the Commission puts forward that complaint in more detailed form elsewhere.
(99)  –	Case C‑12/03 P Commission v Tetra Laval
[2005] ECR I-987, paragraph 39, and Case T-210/01 General Electric
v Commission
[2005] ECR II-5575, paragraphs 62 and 63.
(100)  –	Case C‑195/99 P Krupp Hoesch v Commission [2003] ECR I‑10937, paragraph 55; Case C‑7/95 P Deere v Commission [1998] ECR I‑3111, paragraph 34; Case 42/84 Remia and Others v Commission
[1985] ECR 2545, paragraph 34; and Joined Cases 142/84 and 156/84 BAT and Reynolds v Commission
[1987] ECR 4487, paragraph 62.
(101)  –	The Commission does not in fact need to examine arguments and evidence which are not relevant.
(102)  –	Faull, J., Nikpay, A., The EC law of competition, Oxford University Press, 2nd edition, 2007, point 3.339A.
(103)  –	See, in that regard, points 226 to 236 of this Opinion.
(104)  –	Consten and Grundig
v Commission, cited in footnote 26, p. 347 et seq., and Case T‑17/93 Matra Hachette
v Commission
[1994] ECR II‑595, paragraphs 108 to 111.
(105)  –	Case T‑65/98 Van den Bergh Foods
v Commission
[2003] ECR II-4653, paragraph 143.
(106)  –	Schröter, H., cited in footnote 79, Article 81(3), point 343, calls for a high degree of probability.
(107)  –	Case 45/85 Verband der Sachversicherer
v Commission
[1987] ECR 405, paragraph 15, and Case T‑29/92 SPO and Others
v Commission [1995] ECR II‑289, paragraph 253.
(108)  –	DIR International Film and Others v Commission, cited in footnote 69, paragraphs 44 to 48.
(109)  –	See points 288 and 289 of this Opinion.
(110)  –	COM(1998) 588 final.
(111)  –	COM(1998) 588 final.
(112)  –	As regards, in detail, the failures to carry out a proper examination, see point 239 of this Opinion.
(113)  –	Cited in footnote 107 of this Opinion.
(114)  –	On this aspect, see above, in point 200 of this Opinion.
(115)  –	DIR International Film and Others v Commission, cited in footnote 69, paragraphs 44 to 48.
(116)  –	Paragraphs 269 to 280 of the judgment under appeal.
(117)  –	Paragraphs 281 to 293 of the judgment under appeal.
(118)  –	Paragraphs 294 to 303 of the judgment under appeal.
(119)  –	Paragraphs 304 to 307 of the judgment under appeal.
(120)  –	See point 189 of this Opinion.
(121)  –	Paragraphs 295 and 296 of the judgment under appeal suggest that the Court of First Instance seems to have construed the notion of losses in efficiency associated with parallel trade as constituting an overall assessment of parallel trade in the medicines sector as a market phenomenon, along the lines of the overall assessment contained in the Communication on the single market in pharmaceuticals (COM(1998) 588 final).
(122)  –	Since EAEPC alleges, with regard to paragraph 277 of the judgment under appeal, an error of law in the form of a distortion of the sense of evidence, it should be pointed out at this stage that that allegation is unfounded; see points 279 and 280 of this Opinion.
(123)  –	Reference should be made in this context to paragraph 54 of the Commission’s Guidelines on the application of Article 81(3) of the Treaty (OJ 2004 C 101, p. 97). Under that paragraph, proof of efficiencies on the basis of indirect effects is not excluded per se, but only as a general rule too uncertain and too remote.
(124)  –	See Case T‑65/98 Van den Bergh Foods
v Commission
[2003] ECR II-4653, paragraph 143, in which the Commission had relied on a market analysis. That possibility must also exist for undertakings.
(125)
–	COM(1998) 588 final.
(126)  –	Joined Cases 15/76 and 16/76 France v Commission
[1979] ECR 321, paragraph 7, and Case T‑340/04 France Télécom v Commission [2007] ECR II‑573, paragraph 126.
(127)  –	COM(1998) 588 final.
(128)  –	Consten and Grundig, cited in footnote 26 of this Opinion, p. 348.
(129)  –	See the case‑law cited in footnote 97.
(130)  –	See footnote 121 to this Opinion.
(131)  –	Schröter, H., cited in footnote 106, Article 81(3) EC, point 307.
(132)  –	Consten and Grundig
v Commission, cited in footnote 26 to this Opinion, p. 347.
(133)  –	Consten and Grundig
v Commission, cited in footnote 26, p. 347.