61979C1252
OPINION OF MR ADVOCATE GENERAL
CAPOTORTI
delivered on 12 November 1980 (
1
)
Mr President,
Members of the Court,
1.
This application, which was lodged under the second paragraph of Article 36 of the ECSC Treaty, is principally for the annulment of the individual decision of 31 October 1979 whereby the Commission imposed on Acciaierie e Ferriere Lucchini SpA (hereinafter referred to as “Lucchini”) a fine for the infringement of general Decision No 3000/77/ECSC of 28 December 1977 establishing minimum prices for certain iron and steel products. In its application the applicant had in the first place contested that general decision, claiming that it was unlawful, but as a result of the judgment given by this Court on 18 March 1980 in Joined Cases 154/78 etc., Ferriera Valsabbia and Others (known as “the concrete reinforcement bars cases”) that claim was abandoned in the reply. What remains is, principally, the request for annulment of the abovementioned individual decsion “on the ground of illegality consisting in defects pertaining to that decision”; moreover, in the alternative, the applicant requests that the Court, in the exercise of its power to give a decision on the substance of the application conferred upon it by the abovementioned Article 36, should reduce the fine to a “purely nominal” level.
The Commission found the Lucchini undertaking guilty of two infringements of the system of minimum prices : under-pricing within the context of a series of sales in France of merchant bars wich took place between 9 March and 17 May 1978, and failure to charge additional charges (extras) for quality and quantity in a series of sales in the Federal Republic of Germany of the same products in the period between 1 September and 11 November 1978. As regards both infringements, taking into account their nature, the amount of the under-pricing and the financial resources of Lucchini, the latter was ordered to pay a fine of 25000 European units of account. I would point out in this connexion that as the under-pricing involved in the first group of sales (approximately FF 32000) was much less than those in the second group (approximately DM 235000) the infringements as a result of the sales in the Federal Republic of Germany were certainly of greater importance in determining the amount of the fine.
The applicant puts forward three submissions against the Commission's decision : breach of secondary Community law, violation of general principles of law and infringement of essential procedural requirements.
2.
In relation to the first submission, it seems to me to be appropriate to emphasize that in all the sales involved the prices were determined by the alignment method permitted under Article 60 (2) (b) of the Treaty and Article 6 of the abovementioned Decision No 3000/77. This fact must always be borne in mind when moving on to establish whether or not Community law compels Lucchini to charge its German customers, in addition to the basic prices, the abovementioned extras for quality and quantity.
As regards the extras for quality, the Commission's argument that this is the case is contested by the applicant with the argument that those charges are absorbed ex legge in the compulsory minimum prices. It claims that this follows from the wording of Article 2(1) of the abovementioned Decision No 3000/77, which provides that “the minimum prices shall be basic prices, ex-basing point, including extra for quality”. The applicant claims that this argument is confirmed a contrario by the fact that in general Decision No 3139/78 of 29 December 1978 fixing minimum prices for the same products at issue in this case, the Community legislature deleted the words “including extra for quality”.
However, the defendant interprets the abovementioned Article 2 (1) of Decision No 3000/77 as meaning that the minimum legal price includes the extras which may be provided for in the previous pricelists of the undertakings only as regards the qualities in relation to which the minimum legal price was fixed and which are indicated in Article 1 (2) of the decision. It claims that this does not concern merchant bars since the quality mentioned as regards those bars in Article 1 (2) (b) is the basic quality (“merchant bars in ordinary mild steel”) which does not involve any additional charge. As regards the higher qualities however extras are normally provided for, even in the applicant's pricelist.
I would point out that the contested provision refers to minimum prices which, doubtless, within the context of Decision No 3000/77, are the prices laid down by Article 1 (2) for the products listed there. The Commission's argument therefore seems to me to be correct. However, in any case, since the sales were made by the alignment method, it was necessary to refer to a German pricelist and there is no doubt that in that country's pricelists extras for quality are always provided for. After the introduction of the system of minimum prices, the cancellation or reduction of such extras was expressly prohibited: see Article 4 (2) of the abovementioned Decision No 3000/77. Article 4 (3) of the same decision is also compatible with this logic; that article refers to the effective list prices which take account of quality and provides that “the difference between such inclusive prices and the minimum prices set out in Article 1 shall be treated as extras for quality”. For the purposes of comparison with the minimum price, the effective price must therefore be reduced by the proportion corresponding to a special quality: this means that the minimum price does not include the extra.
The applicant however seeks to base its argument on paragraph 176 of the decision in the abovementioned judgment of 18 March 1980, which states as follows:
“... Article 2 of Decision No 3000/77 states that minimum prices shall be basic prices, including extra for quality, whereas Decision No 962/77 had merely stated in Article 2 that the minimum prices should be basic prices. In those circumstances, as from 1 January 1978, on which date Decision No 3000/77 entered into force, the minimum prices included extras for quality, whilst the amount of those extras could be added to the minimum prices in Decision No 962/77.”
In my opinion the Court, in making that statement, did not in fact refuse to accept that, with regard to products of a higher quality than those described in the abovementioned Article 1 of Decision No 3000/77, the extras for quality provided for in the producers' pricelists should be calculated separately from the basic prices, giving rise to additional charges. The extract quoted from the judgment must be understood as meaning that, after Decision No 3000/77 came into force, the extras for quality which may be provided for in the pricelists for the products indicated in Article 1 (2) of that decision must be considered to be included in the minimum prices relating to those products. In reality this applies solely to “improved adhesion concrete reinforcing bars” (Article 1 (2) (d)) which have higher specifications than smooth concrete reinforcing bars in ordinary mild steel (Article 1 (2) (c)). In any case I would repeat that in this instance the prices involved were not laid down directly in the manufacturer's pricelist but determined by alignment, and I have already explained that this removes all doubts as to the need to bill the additional charges laid down in the pricelist on which the seller aligns himself. The Community rules do not in fact permit the price charged to amount to a delivered price lower than that of the undertaking on whose list the alignment was carried out: see Article 3 of general Decision No 30/53/ECSC.
The complaint so far examined should not therefore be accepted. It is however necessary to acknowledge that the abovementioned provision laid down in Article 2 (1) of Decision No 3000/77 is drafted very ambiguously, as, moreover, the defendant has itself admitted; this imperfect wording may have misled the persons to whom the provision was addressed. The Court will be able to take this into account in assessing whether the fine was appropriate.
3.
The Community rules have, according to the applicant company, been infringed also in that the Commission found that it had failed to apply in the sales at issue the extras for quantity or the additional charges for small deliveries. In this respect Lucchini states that it does not suffer any loss through supplying its own customers with merchant bars in limited quantities for each consignment because it does not provide for in its own pricelist and does not apply any extras for quantity. It states that this is also objectively justified by the fact that the specific uses to which the applicant's merchant bars are put generally involve orders for quantities of less than 5 tonnes. It is therefore in accordance with the requirements of the market not to increase the prices by any additional charge for small quantities. As regards, next, the extras for length, the applicant states that it considers the length of 4 metres, which other producers consider to be a high specification, as commercial quality.
The defendant does not contest these statements made by Lucchini as regards its normal commercial practice; it points out however that when the price is determined by alignment, all features of the pricelist, in other words the basic price, the extras for quality and quantity and the delivery dates, of the undertaking on whose conditions such alignment is carried out must be put into effect. It is scarcely necessary to say that I share this objection, as already follows from the above remarks. There is no doubt that an iron and steel undertaking may lawfully omit to lay down in its own pricelist any extras for quantity; this however does not exempt it from the duty to bill the extras appearing on the pricelist on which the alignment is made in addition to the price when that undertaking uses the alignment method.
In this case, since Lucchini had not indicated on what specific German list it was aligning itself, the Commission, since the place of delivery for the sales was Oberhausen, used as the reference pricelist one of the lists having Oberhausen as the place of delivery and those lists all provide for additional charges for small quantités and for length, substantially uniformly. It is therefore clear that the applicant, by not having included in its selling prices in the Federal Republic of Germany the extras for quantity charged by its German competitors, has infringed the rules on alignment and, thereby, also infringed the rules on minimum prices.
The latter point requires clarification. If the alignment method is correctly followed, the rules on minimum prices must be considered to have been complied with since that method is expressly permitted by the abovementioned Decision No 3000/77 and since the pricelists of Community undertakings must be in accordance with the prices laid down in that decision. This was highlighted by the Court in the abovementioned judgment of 18 March 1980 on concrete reinforcement bars (paragraphs 153 to 155 of the decision); it was stated clearly that an undertaking which charges a selling price below the price following from the application of the pricelist on which it states that it has aligned itself infringes simultaneously both the provisions of Article 60 (2) of the ECSC Treaty on alignment and those of Article 61 on the system of minimum prices. The applicant's argument that the conduct complained of (misapplication of the alignment method) cannot be assessed and checked at the same time under the provisions on alignment and those on minimum prices must therefore be rejected. The converse is true and the Commission thus lawfully imposed a penalty for the infringements found in this case on the basis of the rules on minimum prices.
4.
The second submission consists, as I have already said, in the complaint that there has been a violation of general principles of law. In this context the applicant relies in the first place on the principle of the protection of legitimate expectation, basing itself on the Commission's permissive conduct towards undertakings which applied to the alignment method during the period in which the system of minimum prices was in force.
In fact the defendant itself has acknowledged in the rejoinder that during that period it did not require rigorous compliance with the provisions relating to alignment. This tolerant attitude showed itself in various ways and on various occasions. If an undertaking which declared that it was using the alignment method instead of indicating, as it should have done, a specific pricelist, merely mentioned “alignment on the German pricelist” the Commission permitted this form of alignment and referred for the purposes of its control to a pricelist with the place of delivery chosen by the undertaking concerned. In other cases in which a price lower than that of the alignment pricelist was charged but was not lower than the minimum price the Commission did not penalize as unlawful under-pricing the difference between the price charged and the alignment price. Thus in such cases in which additional charges for small quantities were not billed, the Commission calculated the amount of the under-pricing at a lower figure than would have been justified taking into account the pricelists on which the alignment was carried out.
The main inference which the applicant draws from this course of action on the part of the Commission is that the Commission had waived the requirement of reference to a specific pricelist of another producer in respect of alignment. Moreover, Commission officials, it claims, had reassured Italian producers at the time when the events which we are examining took place, telling them that in the case of sales to other Member States of the Community it was sufficient to comply with the minimum prices laid down with regard to those Member States. The Commission, for its part, does not contest that it took a tolerant attitude with regard to alignment; it also admits that where there was no reference to a specific pricelist, the minimum price was adopted as the basic price (as regards the extras, those were essentially identical in all German pricelists).
On the basis of those facts, the applicant maintains that the Commission's current claim that the extras for quality and quantity should be applied in the. sales in question — which extras are, in its opinion, inseparable from a specific pricelist — conflicts with the principle of the protection of legitimate expectation.
In this connexion it is worth recalling a significant precedent. In Case 149/78, Rumi v Commission, Rumi, in contesting a decision which imposed upon it a fine for infringement of the rules on the publication of prices, had pointed out inter alia that that decision was based on too rigid an interpretation of the applicable provisions from which the Commission itself had derogated several times in the past. The Court, in its judgment of 12 July 1979, did not take into account that argument and confirmed, however, by implication that the point of view which I put forward in my opinion was justified: in other words, that the alleged good faith of the undertaking could not be considered as excusing the failure to comply with the law, even assuming that the Commission had actually in the past adopted a tolerant attitude and that this had given rise to the expectation of the same attitude in the case in question. I should add that I also mentioned then the possibility that factors of this nature would be relevant for the purpose of ascertaining the amount of the fine ([1979] ECR 2547).
I confirm, then the conviction that conduct of the authorities which is outside the normal application of the law to which it is itself subject cannot however give rise to a legitimate expectation on the part of a person subject to those authorities. This applies a fortiori when, as in this case, it is a question of the undertakings' obtaining wider derogations and not merely continuing to benefit from the mitigation of the rigour of the law which has already previously been granted by the authorities.
In my opinion the fact (alleged by the applicant but contested by the defendant) that the producers of other Member States have not applied the additional charges involved is equally irrelevant for the purposes of establishing the contested infringement. Although it is true that under the alignment system the extras for quality laid down in the pricelist referred to must be charged in addition to the basic price, the wrongful act or omission which may have been committed by Lucchini's competitors cannot serve to justify the failure to perform that duty on its part.
In fact, then, the sole concrete factor adopted by the applicant on this point does not confirm its statements as to the more tolerant treatment which the Commission, it claims, reserved to its foreign competitors. The extract from the pricelist of the Thyssen undertaking (Annex 11 to the rejoinder) which reserves to the undertaking the power to carry out partial deliveries with regard to the quantity ordered does not in fact enable orders for less than the amounts specified therein to be exempted from the application of the abovementioned extras for quantity.
For all these reasons, the objection relating to an alleged infringement of the principle of the protection of legitimate expectation must be considered to be unfounded.
5.
The other general principle relied upon by the applicant is that of the prohibition on discrimination. Lucchini maintains that it has been subject to discrimination on the part of the Commission since the Commission did not grant it the benefit (albeit in certain cases) of the restriction of the additional charge for small quantities to DM 60 per tonne already laid down in favour of traders and then extended to producers by Decision No 3139/78 of 29 December 1978. The applicant quotes in this connexion certain cases in which the Commission, in calculating the under-pricing complained of, referred to extras for quantity amounting to DM 140.
The defendant, however, specified in this connexion that the cases mentioned by the applicant referred exclusively to sales by alignment made by Lucchini before the adoption by the Commission of the abovementioned decision. That explanation has not been denied by the applicant. I therefore consider that this objection should also be dismissed.
6.
The applicant maintains, finally, that the Commission should have taken into account the state of necessity in which it was placed. It states that if it had applied the extras for quantity it would not only have lost the margin of penetration granted to it by the Commission for its exports within the Community territory but would have exceeded the price of foreign producers. This would have resulted in the loss of traditional markets within the Community which constitute a vital need for Lucchini.
In accordance with the case-law of this Court on this subject (I refer in particular to the abovementioned judgment of 18 March 1980 on concrete reinforcement bars, paragraphs 142 and 143 of the decision), the possibility of accepting a state of necessity as an extenuating circumstance in a case of infringement of Article 61 of the ECSC Treaty depends upon its being shown that the undertaking concerned would, if it had correctly applied the Community rules on minimum prices, have been in danger of bankruptcy or liquidation. In this case, the application has certainly not shown that conduct complying with those rules would have jeopardized its existence. For this reason the objection based on an alleged state of necessity must be rejected.
7.
It remains to consider the third submission which is that of the infringement of essential procedural requirements. According to the applicant, the contested individual decision, to the extent to which it relates to sales made in Germany, does not enable the reasoning process whereby the Commission established the under-pricing and, as a result, the fine, to be reconstructed. Lucchini observes that the table contained in Annex II to the decision on the abovementioned infringements indicates only total imports for each category of under-pricing and does not therefore enable the calculation of the under-pricing to be analysed or the individual amount of the extras for quality charged to be clarified.
Annex II to the decision involved mentions in each case the number of the invoice, its date, the nature of the infringement (failure to apply the extra for length, quality or small quantities) and the amount of the under-pricing with regard to each item of the alignment pricelist which was not complied with. It is true that these facts do not explain all the steps in the calculation on the basis of which the Commission defined, in the case of each sale in question, the amount of the contested under-pricing. It should however be pointed out that as a result of requests for explanations made by Lucchini, the Commission, in letters of 18 January 1979 (Annex No 3 to the rejoinder) and 8 February 1979 (Annex No 5 to the rejoinder) gave explanations as to the methods of calculation followed. At the administrative hearing on 7 May 1979, the undertaking in question did not put the question again, merely discussing the problems in economic and political rather than legal terms. It therefore seems reasonable to deduce from this that the charges seemed to it to be clear.
In principle, I consider that the possibility of effective legal protection which an undertaking to whom a decision affecting it adversely is addressed must be able to have and the possibility for the Court to review effectively the legality of a decision of that nature are sufficiently protected when the undertaking, during the course of the administrative procedure which led to the decision, has been informed of all the essential factors on the basis of which the Commission calculated the amount of the under-pricing indicated in the decision imposing the fine. The objection relating to the infringement of essential procedural requirements based on an alleged failure to state the grounds on which the decision was based must therefore, in my opinion, be dismissed.
Certain explanations supplied by the Commission in its rejoinder therefore enable some other more specific objections put forward by the applicant within the context of its last submission to be considered as overruled. In fact the defendant stated that it did not maintain in the decision imposing the fine the charge relating to the failure to charge an additional amount of DM 3.5 per tonne as road haulage charges and that it deducted from the amount of the under-pricing the trade discount of 2.5 % (this moreover is indicated in the last column of the tables referred to in Annex II to the contested decision). With regard to the discount of DM 5 per tonne (Vertragsrabatt — discount as per contract), this was already deducted by the undertaking. In its reply, the applicant raised no objection on these points. I therefore consider that it is justified to regard the facts claimed by the defendant as correct, which make it superfluous to take into consideration the abovementioned objections put forward by Lucchini.
8.
For the reasons set out above, I consider that none of the submissions put forward by the applicant against the decision of the Commission of 31 October 1979 are well-founded. I therefore propose that the Court should dismiss the principal request made by Lucchini for the annulment of that decision. However, I have pointed out that certain circumstances which were decisive with regard to the conduct of the defendant may have been misleading and given rise to false expectations, in particular the ambiguous wording of Article 2 (1) of Regulation No 3000/77 and the wide derogations permitted by the Commission in the application of rules on alignment. Although they cannot detract from the validity of the contested decision, they justify in my opinion a reduction in the fine imposed on Lucchini: I propose that that reduction should be determined at at least one-third of the amount of the fine. The defendant should, correspondingly, bear one-third of the costs of the action whilst the remaining two-thirds should be borne by the applicant.
(
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)	Translated from the Italian.