61978C0032
OPINION OF MR ADVOCATE GENERAL WARNER
DELIVERED ON 12 JUNE 1979
My Lords,
Introductory
These actions are brought by BMW Belgium N.V. (‘BMW Belgium’) and by 47 BMW dealers in Belgium to challenge a Decision of the Commission dated 23 December 1977 (78/115/EEC, OJ L 46 of 17. 2. 1978, p. 33). By Article 1 of that Decision the Commission declared that the Applicants had infringed Article 85 (1) of the EEC Treaty by agreeing, on the basis of two circulars dated 29 September 1975, to a general prohibition on exports, and by maintaining that prohibition in force from 29 September 1975 to 20 February 1976. By Article 2 fines were imposed in respect of the infringement amounting to 150000 units of account (or 7500000 BF) in the case of BMW Belgium and, varyingly, to 2000, 1500 or 1000 units of account (or, respectively, 100000, 75000 and 50000 BF) in the case of each dealer.
Two major questions are for decision by Your Lordships:
(1)
Did the Commission correctly interpret the two circulars of 29 September 1975, together with the acceptance of their terms by the 47 dealers in question, as constituting an agreement for the prohibition of all re-exports of new BMW cars from Belgium? The Applicants concede (as I understand it) that such an agreement would infringe Article 85 (1); their contention is that the circulars were aimed only at sales to non-approved dealers in breach of contracts entered into by the BMW dealers in Belgium with BMW Belgium.
(2)
If the answer to the first question is ‘Yes’, were the fines imposed on the applicants appropriate?
BMW Belgium is a wholly owned subsidiary of the wellknown Bayerische Motoren Werke AG of Munich, which, following the example of the parties, I shall call ‘BMW Munich’.
The standard form contracts under which BMW Munich supplies its products to dealers in Germany were the object of a Decision of the Commission dated 13 December 1974 (75/73/EEC OJ L 29 of 3. 2. 1975, p. 1) granting those contracts, for a limited period, exemption under Article 85 (3) of the Treaty from the prohibition contained in Article 85 (1). By means of those contracts BMW Munich maintains a system of selective distribution through -approved dealers. It is an essential feature of the system that approved dealers are prohibited from reselling BMW products to non-approved dealers. They are, however, free to resell to other approved dealers or to consumers, not only within their own concession territory but anywhere in the common market; and purchases may be made on behalf of consumers (and I assume, though it is nowhere expressly stated in the papers before the Court, on behalf of other approved dealers) through non-approved dealers acting purely as intermediaries. The contracts as originally notified by BMW Munich to the Commission contained a general prohibition of exports by BMW dealers to other Member States. The Commission made it a condition of granting exemption under Article 85 (3) that that prohibition should be deleted (see paragraphs 11, 12 and 34 of the Decision).
BMW products are imported into Belgium by BMW Belgium and distributed through a similar network of approved dealers. The standard form of contract entered into by the Belgian dealers largely corresponds to that of the contracts entered into by German dealers. It contains no export prohibition. Article 1 provides:
‘…
Le concessionnaire s'interdit toutefois toute vente à des revendeurs de véhicules ou de pièces detachées non-agréés pour la distribution des produits contractuels, sauf l'hypothèse de pieces de rechange et équipement d'origine démandés aux fins de reparation …’
On 13 January 1975 BMW Belgium notified the standard form contract to the Commission and applied for exemption under Article 85 (3). There has so far been no decision on that application. The Commission explained to us that, having clarified its general approach to selective distribution systems by granting temporary exemption to BMW's German dealers' contracts, it is now conducting an overall examination of the distribution system for BMW products in the whole of the common market. Some of the relevant contracts (notably those in force in France and in the United Kingdom) were not notified to it until 1977 and 1978. The Commission is particularly disturbed by the persistence of different prices for BMW cars, motorcycles and spare parts in different Member States. It hopes however to conclude its examination soon after the end of the present proceedings.
In 1975 prices for new BMW cars were appreciably lower in Belgium than in other Member States, owing, in part at least, to a price freeze imposed by the Belgian Government between 5 May and 1 November 1975.
The lower prices in Belgium led to a marked increase in the re-exportation of BMW vehicles from that country. Some of those re-exports were made to non-approved dealers acting on their own account.
BMW Belgium reacted by addressing a number of letters to individual Belgian dealers reminding them of the terms of Article 1 of their contracts (see the letters of May and June 1975 in Annex 5 to the Defence in Case 32/78). It also sent out a number of circulars to all the BMW dealers in Belgium: Having regard to the central role played by those circulars in this case, I shall have to read them in full. They were issued in French and Dutch, and I shall read the French. It was not disputed that the Dutch had exactly the same meaning.
The first circular was dated 4 July 1975 and was in these terms:
‘Ventes à l'étranger
Messieurs,
Nous devons vous faire savoir que nos usines de Munich nous ont communiqué le fait que plusieurs concessionnaires ont vendu des voitures BMW aux Pays-Bas ou en Allemagne.
Un fait qui est difficilement compréhensible pour nous dans une période pendant laquelle nous devons fournir nos voitures par des contingents limités.
De l'autre côté nous devons attirer votre attention sur le fait que chaque concessionnaire BMW s'est obligé en signant le contrat de concession BMW de ne pas fournir des produits BMW à des revendeurs non agrees pour la vente des produits contractuels BMW.
Des concessionnaires qui vendent des voitures par l'intermédiaire de tels revendeurs en Belgique ou à l'étranger, ont commis une infraction grave contre les articles du contrat de concessionnaire BMW.
Nous devons vous faire savoir que nous sommes tenus de réagir sévèrement et si nécessaire de résilier le contrat de concession BMW au cas où de telles infractions seront commises.’
Your Lordships observe that, already in that circular, BMW Belgium was expressing its concern that there should be any re-exports from Belgium at all. But undoubtedly the emphasis in the circular was on the prohibition of sales to non-approved dealers.
Despite the circular, re-exports from Belgium, including sales to non-approved dealers, continued. There are among the papers before the Court copies of a number of letters sent by BMW Belgium to individual Belgian dealers about such re-exports in July, August and September 1975 (see Annex 5 to the Defence and Annexes 7 and 8 to the Rejoinder in Case 32/78). Some of those letters went further than to seek to prevent sales to non-approved dealers. Some of them were couched in terms suggesting that even sales through such dealers (as intermediaries) to consumers were forbidden and some went so far as to suggest that there should be no sales abroad at all. At the terms of one of these, of which it had received a copy, BMW Munich, conscious no doubt of its obligations under Communitiy law, became alarmed, and wrote to BMW Belgium, on 22 July 1975, drawing its attention ‘once again’ (‘noch einmal’) to the fact that a re-exportation did not in itself constitute a breach of the dealer's contract and asking BMW Belgium to concern itself only with improper sales to dealers (Annex 10 to the Rejoinder in Case 32/78).
On 29 September 1975 the two circulars were issued on the basis of which the Commission held that Article 85 of the Treaty had been infringed. The drafts of those circulars had been submitted by BMW Belgium to Counsel for him to settle. (He was not one of the Counsel who appeared before us). In returning the settled drafts to BMW Belgium on 26 September 1975 he wrote this (Annex to the Reply):
‘Messieurs,
BMW/Vente étranger/réf. 27466
J'ai examiné les documents qui m'ont été remis par M. Thyssen lors de notre dernier entretien.
J'ai eu l'occasion à ce moment de lui faire part des différentes remarques et modifications qui, à mon avis, devaient être apportées à ce texte afin d'éviter qu'il ne soit en contradiction trop flagrante avec les dispositions de l'article 85 du traité de Rome.
J'y ai supprimé dans toute la mesure du possible toute mention relative à des mesures de rétorsion qui pourraient être prises par BMW AG à l'encontre du marché belge dans son ensemble.
Il me paraît, quant à moi, que le simple fait d'annoncer lesdites menaces, sans même passer le cas échéant à leur exécution, constitue déjà une infraction à la legislation communautaire et pourrait être utilise par un concessionnaire ou par toute personne désireuse de nuire à BMW.
A fortiori si des mesures devaient être effectivement prises, l'infraction à la legislation communautaire serait évidente.
Je suppose que vous ne manquerez pas d'attirer l'attention de votre société mère sur ce point.
Je tiens également à attirer votre attention sur le fait que des retards trop importants de livraison ou des non-livraisons qui trouveraient leur origine dans de telles mesures, entraîneraient très probblement de nombreux litiges entre votre firme et vos concessionnaires ainsi qu'entre vos concessionnaires et leurs clients.
J'attire enfin votre attention sur le fait que le texte des circulaires telles qu'elles ont été rédigées et revues par moi, constituent incontestablement le maximun au-delà duquel on ne peut aller sans prendre de risques certains.
Déjà dans leur forme actuelle et édulcorée, ces circulaires se situent incontestablement à la limite de ce qui ne doit pas être franchi.
Je reste bien entendu à votre entière disposition pour tous renseignements complémentaires.’
Of the two circulars issued on 29 September 1975 the first was addressed by BMW Belgium to all the Belgian BMW dealers. It was in these terms:
‘Vente de nouvelles voitures BMW à l'étranger
Messieurs,
En dehors de lettres individuelles à certains concessionnaires nous avons déjà au 4. 7. 1975 attire l'attention de vous tous aux stipulations du contrat de concession BMW concernant la vente des produits BMW.
Néanmoins nous devons constater que nous recevons toujours des rapports de la part de nos usines de Munich et de l'importateur des Pays-Bas, concernant des ventes de voitures BMW dans ces pays par les concessionnaires beiges et malheureusement nous devons en tirer la conclusion que ceux-ci ne peuvent ou ne veulent pas voir les consequences de leurs actions.
Au cours d'une reunion extra-ordinaire du conseil consultatif des concessionnaires nous avons exposé ce qui suit:
1.
Un certain nombre de concessionnaires livre des voitures en Allemagne et aux Pays-Bas, ceci c'est un fait constaté.
2.
Il y a deux raisons pour ce phénomène:
1)
La difference de prix
2)
Très vraisemblablement le fait que certains concessionnaires disposent d'un stock trop important ou mal assorti.
3.
Chacun comprendra facilement que les “usines BMW de Munich peuvent en tirer seulement deux conclusions:
a)
les prix en Belgique sont trop bas
b)
les concessionnaires belges ont trop de stock.
Et les conséquences en seront:
a)
nos prix vont être adaptés aussi vite que possible aux prix des pays environnants.
b)
la livraison de voitures neuves pour la Belgique sera diminuée à partir du mois d'octobre 1975.
4.
Vous crééz pour vous-mêmes déjà des désavantages énormes par le fait que vous vendez, dans une période où l'on n'a pas assez de voitures, à des clients qui:
a)
n'apparaîtront jamais dans votre atelier
b)
auxquels vous ne pourrez jamais vendre des pièces détachées ou des accessoires
c)
qui vous donneront pas la possibilité de faire un profit additionnel par la revente de leur voiture d'occasion
d)
qui ne vous achèteront jamais une deuxième ou troisième BMW comme le font en général les clients de votre propre région.
5.
En dehors de tout cela vous crééz des difficultés énormes pour vous-mêmes et vos collègues en vue des mesures que BMW Munich serait logiquement amenées à prendre, cela veut dire, une réduction importante des quantités de voitures prévues principalement pour la Belgique.
Nous croyons donc que dans cette situation il y ait seulement une solution: aucun concessionnaire BMW en Belgique ne vendra à l'avenir des voitures à l'étranger ou à des firmes qui fourniraient des voitures à l'étranger.
C'est une question de solidarité et de sauvegarde du réseau belge.
Cette solidarité absolue du réseau complet BMW et le respect de cette politique de vente seront les seuls arguments qui permettront de renouveller la confiance au réseau BMW belge.
Veuillez-bien donner votre accord avec ces propositions en signant la copie de la lettre ci-jointe pour accord.
Vous trouverez en annexe une declaration des membres du conseil consultatif des concessionnaires qui sont unanimes dans leur accord avec nos arguments et qui expliqueront leur point de vue personnellement au cours des réunions régionales.”
The second circular of 29 September 1975 was addressed to all the Belgian BMW dealers by the Dealers’ Advisory Committee (the ‘conseil consultatif des concessionnaires’). This appears to be a body elected by the dealers to liaise between them and BMW Belgium. It consisted at the time of eight members, who were proprietors of or held senior positions in firms which were approved BMW dealers. We were told that they had merely signed what was placed before them on behalf of BMW Belgium. It was in the following terms:
‘Ventes à l'étranger
Cher Collègue,
Comme membres du conseil consultatif des concessionnaires nous sommes tous d'accord avec les faits exposés par BMW Belgium dans la lettre du 29. 9. 1975.
Nous le trouvons vraiment regrettable que les réseau complet des concessionnaires devra souffrir des conséquences désavantageuses qui ont leur origine dans le fait qu'un certain nombre de concessionnaires n'a pas suivi les conseils de l'importateur du 4 juillet 1975 et qui ont continué à livrer des voitures à l'étranger.
Nous avons demandé qu'on nous fasse connaître les noms de ces concessionnaires de sorte que nous, votre conseil consultatif des concessionnaires, soyons à même de faire savoir à vous tous lesquels de vos collègues sont responsables pour une réduction éventuelle des quantités des voitures 2-portes et 518 pour la Belgique.
Le conseil consultatif des concessionnaires considère sa tâche la plus importante de donner au réseau BMW des bons conseil. Dans ce cas ce conseil peut uniquement être le suivant: “plus aucune vente en dehors de la Belgique!”
Vous serez invité dans les prochains jours à des réunions régionales au cours desquelles nous voudrions vous donner des informations plus détaillées concernant ce problème important.’
Forty-seven dealers (out of 90), i.e the 47 who are applicants in these proceedings, complied with the request contained in the first circular that they should sign a copy of it to mark their agreement.
Regional meetings as forshadowed in the circulars were held on 13 and 31 October 1975, but nothing of particular moment seems to have emerged at them.
On behalf of BMW Belgium importance was attached to a further circular which it issued on 2 October 1975, dealing specifically with the activities of a firm called Pentacom N.V. of Antwerp (Annex 1 to BMW's Answers to the Court's Questions). That circular was in these terms:
‘Messieurs,
Nous venons d'apprendre que la firma susdite agit comme intermédiaire pour des importateurs allemands et même pour des concessionnaires BMW allemands pour acheter chez des concessionnaires belges des voitures destinées pour d'Allemagne.
Dans un cas bien précis il nous a été communiqué que la firma Pentacom aurait commande des voitures, soit disant pour la Belgique, et les a expédiées par après en Allemagne.
Nous le croyons donc utile d'attirer votre attention sur l'article du contrat de concession BMW s'y référant qui ne vous permet pas de vendre des voitures via des revendeurs non agréés.’
It was submitted that that circular showed that BMW Belgium's true concern throughout was to enforce the clause in the BMW dealers' contracts forbidding sales to non-approved dealers. It seems to me however that the circular was equivocal. Why, if that was its only purpose, the reference to ‘et même pour des concessionnaires BMW allemands’? And why the reference to Pentacom's purchase ‘soit disant pour la Belgique’? If Pentacom was not an approved dealer, a sale to it was a breach of contract even if the destination of the cars in question were the Belgian market. The fact that the true destination was the German market made no difference. Moreover the last sentence was positively misleading: a sale ‘via’ a non-approved dealer was permitted if he were acting as an intermediary for a consumer or for another approved dealer.
After hearing from BMW Belgium of the content of the circulars of 29 September 1975, BMW Munich wrote to BMW Belgium on 17 October 1975, congratulating BMW Belgium on taking action to curb sales to non-approved dealers, but continuing:
‘As already mentioned on 17 January, 23 June and 22 July 1975, we must again ask you, in respect of any measures taken, to bear in mind that:
—
no action may be taken against your dealers simply because they have reexported cars; warnings may be given only where a dealer is suspected of selling cars to non-approved dealers in breach of his agreement,
—
no action may be threatened against your dealers unless made necessary by a proved breach of their agreement.
This instruction must also be complied with in any correspondence between BMW Belgium SA and the Belgian distribution network.’
The papers before the Court include copies of a few letters written by BMW to individual Belgian BMW dealers in October 1975. They are in terms that virtually equiparate any exportation with a breach of the dealer's contract (see Annex 5 to the Defence in Case 32/78).
A great deal of the evidence and of the argument before us concerned the activities of two German firms, namely Automobilimporte C. Heuer of Dillingen (‘Heuer’) and MGH Motorgesellschaft mbH of Herford (‘MGH’). They were non-approved dealers and I would accept, on the evidence, the contention of BMW Belgium that they never traded in BMW cars except on their own account, whatever they may have done in relation to other makes. It would follow that any sale by an approved BMW dealer to either of them was in breach of that dealer's contract. There appear to have been a number of such sales.
It seems to me however that the activities of Heuer and of MGH are relevant only in two respects, and in those only because they form part of the history of the case.
Firstly it was as a result of applications made by Heuer and by MGH, on 24 November 1975 and 9 December 1975 respectively, under Article 3 of Regulation No 17, that the Commission commenced the proceedings that led to its Decision of 23 December 1977. The point was briefly taken on behalf of BMW Belgium that, since neither Heuer nor MGH could ‘claim a legitimate interest’ in the matter, those proceedings might be invalid. In my opinion that point is a bad one. The Commission was perfectly entitled to carry on the proceedings ‘upon its own initiative’, whatever might be Heuer's or MGH's standing.
Secondly, it became common ground during the course of the argument before us that it was as a consequence of an action instituted by MGH against BMW Belgium in the Rechtbank van Koophandel of Antwerp that BMW Belgium, on 20 February 1976, sent yet another circular to the BMW dealers in Belgium. This circular was in the following terms:
‘Vente de voitures BMW neuves à des revendeurs non agréés
Messieurs,
Par notre lettre du 29 septembre 1975 nous avons attiré votre attention sur la nouvelle situation du marché belge suite à la vente de voitures BMW neuves à des revendeurs situés à l'étranger au cours de l'année 1975.
Nous vous avions à l'époque formulé à ce sujet différents conseils et nous avions attiré votre attention sur ce qui nous a semble et qui nous semble toujours être votre intérêt personnel.
Contrairement à notre propos il nous a été rapporté que cette circulaire ainsi que son annexe avaient été considérées par des tiers comme pouvant être des directives de l'importateur à son réseau de distributeurs.
Si tel a pu être le cas nous entendons par la présente mettre fin à toute confusion à ce sujet.
Il n'a jamais été et il n'est toujours pas de notre intention ni de celle du conseil consultatif des concessionnaires de vous donner des directives précises ou de vous formuler des interdictions de réexportation. En toute hypothèse nous vous demandons de bien vouloir considérer notre circulaire du 29 September 1975, en tant qu'elle pourrait être interprétée comme une interdiction à la réexportation, comme nulle et non avenue.
Le but de notre lettre du 29 September 1975 consistait à vous rappeler qu'en vertu du contrat de concession signé par vous la vente de voitures BMW à des revendeurs non agréés tant à l'intérieur du pays qu'à l'étranger est interdite.
En aucun cas nous n'avons voulu et ne voulons empêcher le concessionnaire BMW de négocier avec un intermédiaire du client particulier, mais nous nous opposons à ce que les concessionnaires négocient avec les revendeurs.
En accord avec le conseil consultatif des concessionnaires nous aimerions attirer votre attention encore une fois sur le fait que votre intérêt financier personnel n'est pas limité seulement à la vente de voitures BMW neuves.
Un client qui s'adresse à vous également pour l'entretien de sa BMW est acquéreur de pièces détachées et d'accessoires et utilisateur de prestations de services, ce qui offre aussi une source de bénéfices appréciables.
Cette considération vaut également lors de la reprise éventuelle de voitures d'occasion.
En conclusion un client satisfait vous achètera aussi sa prochaine BMW.
Nous espérons que ces précisions écarteront les doutes éventuels que vous pourriez ressentir concernant les droits et les devoirs des concessionnaires BMW autorises en Belgique.’
It was of course because of the issue of that circular that the Commission held that the infringement of Article 85 (1) ceased on 20 February 1976.
The interpretation of the circulars of 29 September 1975
I can be comparatively brief on the. question of the interpretation of the circulars of 29 September 1975.
The statement in BMW Belgium's own circular ‘Nous croyons donc que dans cette situation il y ait seulement une solution: aucun concessionnaire BMW en Belgique ne vendra a l'avenir des voitures à l'étranger ou à des firmes qui fourniraient des voitures à l'étranger’ and the statement in the Advisory Committee's circular ‘… ce conseil peut uniquement être le suivant: “plus aucune vente en dehors de la Belgique!”’ are quite unequivocal and susceptible of only one interpretation. Moreover the whole tenor of the circulars reinforces that interpretation. The heading of each of them does so. The arguments they contain do so: they are arguments against exporting, not arguments merely against selling to non-approved dealers. The sanctions that are threatened do so: an increase in Belgian prices and a reduction of deliveries to the Belgian dealers generally, not the cancellation of the contracts of dealers who sell to non-approved dealers. On behalf of the Applicants much reliance was placed on the first sentence in BMW Belgium's circular, referring to its circular of 4 July 1975, but that sentence is much too weak to contradict what follows and, in any case, as I pointed out earlier, the circular of 4 July 1975 had already expressed BMW Belgium's concern that cars should be re-exported from Belgium at all.
Nor do I find more impressive the arguments of the Applicants based on factors external to the texts of the circulars themselves.
First it was said that BMW Belgium must be presumed to have been seeking to act in accordance with the wishes of BMW Munich, which were confined to the prevention of exports to non-approved dealers. A passage from my Opinion in Cases 6 & 7/73 Commercial Solvents v Commission [1974] 1 ECR at p. 264 was cited in that connexion. The short answer is that BMW Belgium clearly exceeded its instructions from BMW Munich, as the latter's own letters evinced.
Secondly it was said that the circulars must be interpreted in the light of the letters that BMW Belgium sent to individual dealers in the period May to October 1975. But those letters, as I have mentioned, were not uniformly consistent with a desire on the part of BMW Belgium to prevent only sales to non-approved dealers. Nor, in any case, could such letters affect the meaning that the circulars would have to dealers who had not received them.
Thirdly it was said that the activities of non-approved dealers, in particular Heuer and MGH, were so notorious at the time that dealers receiving the circulars would automatically conclude that they were designed to cope with the problem that those activities created. Maybe so, but a reader of the circulars would conclude that the solution of the problem was to be a total ban on exports.
Lastly it was said that the behaviour of the parties after the circulars had been sent showed that they did not interpret them as imposing a total ban on exports, because exportations continued after that date and BMW Belgium raised objections only in cases of sales to nonapproved dealers. I find this unconvincing. According . to figures supplied by BMW Belgium in answer to one of the Court's questions, BMW Belgium was informed between October 1975 and February 1976 of 59 re-exportations of new cars by Belgian BMW dealers. It was able to ascertain the identity of the buyer in only 28 of those cases. In 2 the buyer was a BMW dealer, in 8 he was a private person and in 18 he was a non-approved dealer. Whatever those figures show, they do not show that the recipients of the circulars interpreted them as forbidding only exports to non-approved dealers. As for BMW Belgium's own alleged conduct (as to which there is no relevant evidence relating to the period after October 1975), that could be explained as resulting from BMW Munich's letter of 17 October 1975.
I am thus of the opinion that the Commission came to the right conclusion when it interpreted the circulars of 29 September 1975 as intended to impose a total ban on exports. That being so there was a clear infringement of Article 85 (1) of the Treaty by BMW Belgium, by the members of the Dealers' Advisory Committee and by the other dealers who signed the first circular, regardless of what the actual effect of what they did may have been: consider Case 19/77 Miller v Commission [1978] ECR 131.
The fines
I turn to the question whether the fines imposed by the Commission on the applicants were appropriate.
I think it important to have in mind the relevant provisions of Article 15 (2) of Regulation No 17. They are as follows:
‘The Commission may by decision impose on undertakings … fines of from 1000 to 1000000 units of account, or a sum in excess thereof but not exceeding 10 % of the turnover in the preceding business year of each of the undertakings participating in the infringement where, either intentionally or negligently … they infringe Article 85 (1) or Article 86 of the Treaty …
In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’
In the Miller case ([1978] ECR at p. 161) I pointed out (among other things) that the Commission's discretion as to the amount of a fine should therefore be taken to lie in the range between 0 % and 10 % of the turnover of the undertaking concerned; that a fine of 10 % of turnover should be taken to be appropriate to an intentional infringement of the gravest kind and of considerable duration, whilst, at the other end of the scale, a fine of less than 1 % would be appropriate for a merely negligent infringement of the most trivial kind and continuing only for a short time, in a case where, nonetheless, the circumstances warranted the imposition of some fine. I also expressed the view that the lower limit of 1000 u.a. must be taken to indicate that, if the appropriate fine would be less than that amount, no fine should be imposed.
Article 17 of Regulation No 17 confers on the Court unlimited jurisdiction to review decisions whereby the Commission has fixed a fine; the Court may, under that Article, cancel, reduce or increase the fine. That does not, however, in my opinion, mean that the Court should, in every case brought before it, substitute its own assessment of the appropriate fine for the Commission's. The Court should, in my opinion, alter the amount of a fine imposed by the Commission only if persuaded that the Commission has, in fixing the fine, made a material error of fact or of law. Such an error may of course be either implicit or explicit in the relevant decision of the Commission.
On two other points of interpretation of Articles 15 and 17 of Regulation No 17 we were referred by the parties to the Opinion of Mr Advocate General Mayras in Case 26/75 General Motors v Commission [1975] 2 ECR at pp. 1388-1390 (Rec. 1975 II, pp. 1389-1391).
It was submitted, firstly, that in that Opinion Mr Advocate General Mayras had authoritatively defined what constituted, for the purposes of Article 15, an ‘intentional’ infringement of Article 85 (1) or Article 86 of the Treaty and what, in contrast, constituted only a ‘negligent’ infringement of it. I do not however, for my part, read his Opinion as intended to supply exhaustive definitions of those concepts. Mr Advocate General Mayras was, I think, concerned to deal only with the facts of the case before him and in particular to show why, in his view, General Motors had not infringed Article 86 intentionally. At all events his Opinion has now been overtaken by the Judgment of the Court in the Miller case. The Court there decided that one who has adopted or accepted a clause which he must have known had as its object the restriction of competition within the common market must be held to have intentionally committed an act prohibited by the Treaty, whether or not he was conscious of infringing the prohibition contained in Article 85 (see paragraph 18 of the Judgment).
Secondly, attention was drawn to the fact that, in that Opinion, Mr Advocate General Mayras had expressed the view that, where the Commission had fined an undertaking on the footing that it had ‘intentionally’ infringed Article 85 (1) or Article 86 of the Treaty, the Court could not, if it found that the undertaking had acted only ‘negligently’, alter the amount of the fine accordingly, but must then cancel it altogether. From that view I must express my respectful dissent. The powers conferred on the Court by Article 17 of Regulation No 17 are in the widest terms and are, in my opinion, sufficient to enable the Court to do in every case whatever it considers that justice requires.
In the present case the Commission held that BMW Belgium and the eight members of the Dealers' Advisory Committee had infringed Article 85 (1) intentionally, and that the other dealers who had signed a copy of the first circular had, in doing so, been ‘at least negligent’.
As I mentioned at the outset the Commission imposed on BMW Belgium a fine of 150000 units of account or 7500000 BF. This appears to have been less than 1/2 % of the amount of BMW Belgium's turnover for the accounting year ended 30 September 1975 (see Annex 6 to the Defence in Case 32/78) and therefore almost at the lowest end of the scale prescribed by Article 15 of Regulation No 17. Nonetheless BMW Belgium seeks the cancellation of or, alternatively, a reduction in the fine.
Through the arguments put forward on behalf of BMW Belgium in support of its claim for the cancellation or reduction of the fine there runs the same thread as through its arguments on the question of interpretation of the circulars. BMW Belgium's sole purpose, it is said, was to stop sales to non-approved dealers. If, however, as I think, the Commission was right in holding that the circulars, on the face of them, had as their object to impose a total ban on exports, and that it was that, essentially, that constituted the infringement of Article 85 (1), it is to that that the amount of the fine must be related.
Three specific points were made on behalf of BMW Belgium.
First it was contended that the imposition of the fine constituted a breach of Article 15 (5) of Regulation No 17, which precludes the imposition of a fine in respect of, inter alia_‘acts taking place … after notification to the Commission and before its decision in application of Article 85 (3) of the Treaty, provided they fall within the limits of the activity described in the notification’. The immunity conferred by that provision could not however extend to the ban on exports enjoined by the circulars, which was never notified to the Commission and in respect of which exemption under Article 85 (3) was never applied for. The Commission does not dispute that the immunity would extend to the prohibition of sales to non-approved dealers contained in Article 1 of each dealer's contract, but it was not in respect of that that the fine was imposed.
Secondly it was contended on behalf of BMW Belgium that, if it had infringed Article 85 (1), it had not done so intentionally, but at most negligently, because its true intention had been only to stop sales to non-approved dealers. Reference was made to the fact that BMW Belgium had taken the precaution of consulting Counsel on the text of the circulars. In the light of the evidence and of the Judgment of the Court in the Miller case, that contention must, in my opinion, fail. BMW Belgium deliberately uttered documents in terms restrictive of competition within the common market; and of the plain meaning of those documents it cannot be heard to say that it was unaware. Nor would it matter if BMW Belgium did not have the terms of Article 85 in mind. In fact however it was expressly referred to that Article by Counsel. In the Miller case the Court held (contrary to the view I had expressed) that the opinion of Miller's legal adviser could not be ‘a mitigating factor’. Here the opinion of Counsel was, to my mind, if anything, an aggravating factor. It conveyed that Counsel thought the circulars contrary to Article 85 but hoped that, with the emendations he had made, their incompatibility with it would not be ‘too flagrant’.
Thirdly it was contended on behalf of BMW Belgium that the fine was too heavy having regard to the short period for which the ban had been in force and to the fact that it had had little effect. But those factors were expressly taken into account by the Commission, which, in paragraph 26 of its Decision said:
‘The fines to be imposed on BMW Belgium and these eight undertakings should reflect the fact that the agreement existed for only a relatively brief period and that its effects cannot be quantified precisely.’
I would therefore wholly reject BMW Belgium's claim for the cancellation or reduction of the fine.
I turn to the amounts of the fines imposed on the dealers.
On five of the eight members of the Advisory Committee the Commission imposed fines of 2000 units of account or 100000 BF each; on the other three it imposed fines of 1500 units of account or 75000 BF each. The five had in 1975 turnovers ranging between 39842000 BF and 79913367 BF, whilst the other three had turnovers ranging between 12202675 BF and 22213431 BF (see Annex 5 to the Application in Case 42/78). Hence the difference in the amounts of their fines.
On the 39 dealers who were not members of the Advisory Committee but who signed the first circular, the Commission imposed the minimum fine of 1000 units of account or 50000 BF. No information has been placed before the Court as to the amount of the turnover of any of them, but no point is taken on behalf of any of them related to their turnover.
As respects these 39, the only question can be whether is was permissible for the Commission to impose fines on them at all. There can be no reduction of the fine. No argument was put forward on their behalf to show that the Commission was powerless to fine them, or that it had erred in the exercise of its power to fine them. It was said that this was the only case in which the Commission had been known to fine dealers upon whom their supplier imposed a restriction as distinct from fining that supplier himself. The Commission answered that there were features of this case that were not present in other cases. Be that as it may, the Court cannot hold that, because the Commission has not fined dealers in other cases, it may not fine them in any case: that would amount to a partial repeal of Regulation No 17.
Much was made on behalf of all the dealers of the fact that they were economically dependant on BMW Belgium, so that it was difficult for them to resist pressure from BMW Belgium. That fact was fully taken into account by the Commission in fixing the amounts of their fines. But I think that they, and others in a similar position, may in future find it easier to resist improper pressures from a supplier if they can point to this case and thereby show that, by giving in to such pressures, they may lay themselves open to fines.
On behalf of the members of the Advisory Committee it was submitted that the Commission had erred in holding that they had infringed Article 85 intentionally as distinct from negligently. I do not think it did. The members of the Advisory Committee, albeit at the behest of BMW Belgium, signed the second circular in full knowledge of its contents. They cannot have done so in a moment of absent-mindedness. Here again the Judgment of the Court in the Miller case is relevant. But even if their action is to be regarded as merely negligent, I do not see how the fines imposed on them could properly be reduced. Their role was a much more active one than that of the other 39, and their membership of the Committee imposed on them an added responsibility. What they did was designed to make their fellow BMW dealers fall into line. The circular they signed even contained a threat addressed to those who did not fall into line.
Conclusion
In the result I am of the opinion that these actions should be dismissed with costs.