Notice published under Article 19(3) of Council Regulation No 17(1)

Case 34.950 - Eco-Emballages

(2000/C 227/03)

(Text with EEA relevance)

I. NOTIFICATION

1. On 17 December 1993 Eco-Emballages SA, a firm located in Levallois-Perret, France (hereinafter referred to as "Eco-Emballages"), notified a number of agreements with a view to obtaining negative clearance or, failing this, an exemption decision. Eco-Emballages organises on French territory a system of selective collection and recovery of household packaging that is designed to meet the requirements laid down by the French Packaging Decree. The notification relates to the agreements governing the system's operation.

2. The Commission subsequently received additional information from Eco-Emballages. It also received information from a rival company (Adelphe SA, hereinafter referred to as "Adelphe"). Lastly, it obtained information and explanations from the Competition, Consumer Affairs and Fraud Prevention Directorate-General of the French Ministry for Economic, Financial and Industrial Affairs.

3. No formal complaint has yet been lodged against the notified system.

4. By letter received on 12 April 1999, Eco-Emballages asked that the requested exemption decision be issued with retroactive effect.

II. FRENCH PACKAGING DECREE

5. On 1 April 1992 Decree No 92-377 implementing with regard to packaging waste Law No 75-633 of 15 July 1975 on waste disposal and recovery, as amended (hereinafter referred to as "the Decree"), was adopted(2).

6. Article 1 of the Decree stipulates that it applies to all packaging held by households. According to the definitions in Article 2, a "producer" means anyone who packages products or has products packaged with a view to placing them on the market and "packaging" means any form of container or the like intended to contain a product and to facilitate its transport or presentation for sale.

7. Article 4 of the Decree stipulates that any producer or importer whose products are marketed in packaging or, if the producer or the importer cannot be identified, the person first responsible for placing the products on the market is required "to contribute to or make provision for the disposal of all of its packaging waste" (hereinafter, the term "producer" includes any person covered by this requirement). It also stipulates that the producer may either apply to a body or firm approved by the authorities to carry out its disposal operations or recover the packaging itself by establishing a deposit system or organising collection points specifically for that purpose.

8. Article 6 of the Decree provides that bodies or firms may obtain approval to carry out such operations from the competent ministers (in the first instance, the Ministry of the Environment). Approval is valid for a maximum of six years. The body or firm in question should negotiate agreements with producers and with waste collection/recovery firms and local authorities. An application for approval must be accompanied by specifications indicating the method of calculating the financial contribution required from producers to allow the body or firm to supply packaging with zero or positive value sorted by type of material. Likewise, the specifications must indicate the method of calculating the payments which the approved body or firm makes to ensure that local authorities are reimbursed the extra costs which they might incur in sorting waste.

9. Under Article 8 of the Decree, the approved body or firm is required each year to submit to certain authorities a report and the results of its recovery and salvage operations.

10. The Decree entered into force on 1 January 1993.

11. The Order of 23 July 1992 on the approval provided for by the Decree set up an Advisory Approval Committee comprising thirty-three members: five representatives of central government, six of the local authorities, seven of trade organisations representing industries producing packaged goods, five of trade organisations representing the packaging and packaging-materials industries, two of trade organisations representing the distributive sector, two of trade organisations representing waste-disposal and material-recovery firms, three of environmental protection associations, and three of consumer organisations. The Committee is consulted among other things on applications for approval and is informed of the activity reports of approved bodies.

III. ECO-EMBALLAGES AND ITS COLLECTION AND RECOVERY SYSTEM FOR PACKAGING WASTE

12. Eco-Emballages is a private limited-liability company set up in 1992. Its shareholders are the Compagnie pour le financement d'Eco-Emballages (Ecopar), which is made up of producers and their trade associations (70 % of the capital), the five sectoral undertakings concerned, i.e. steel, aluminium, paperboard/paper, plastic and glass (each with 4 % of the capital), distributive firms and their trade bodies and, as required by its articles of association, its directors.

13. It was approved by the competent ministers to collect packaging waste in respect of which producers or importers of products consumed or used by households have entered into a contract with it. The first approval was issued on 12 November 1992, to run for six years from 1 January 1993. It was renewed on 30 August 1996 for a further six years from 1 July 1996 and again on 11 June 1999 for six years from 1 January 1999.

14. Eco-Emballages sees itself as an "interface" between industry and local authorities.

15. The system it operates relies on several categories of contract which can be summarised as follows:

- the contract concerning use of the "green dot" logo and trademark,

- "producer" contracts with producers which do not wish to organise waste disposal themselves and who join the Eco-Emballages system,

- "local authority" contracts with individual municipalities or groupings of them, which are required under French law to dispose of household waste and might thus conclude a contract with Eco-Emballages,

- contracts with "sectoral undertakings" or "take-back agreements" with industrial firms which undertake to process recovered raw materials; these include "operational take-back" contracts between designated take-back firms and local authorities, and

- research and development contracts.

16. Eco-Emballages is financed out of contributions paid by the producers which participate in the system. By joining Eco-Emballages, the producer meets his obligation under the Decree. Moreover, it acquires the right to use the "green dot" logo and trademark, which it affixes to its packaging to indicate membership.

17. Eco-Emballages does not itself collect used household packaging. This is done by the local authorities, either on their own or with the help of a subcontractor, as part of their refuse-collection activities. By concluding a contract with Eco-Emballages, they receive financial support from it for the collection and sorting of household packaging waste. Once sorted, domestic packaging is passed on to the take-back firm(s) for recovery. Eco-Emballages regularly receives reports from the local authorities indicating that recovery has actually taken place.

18. In 1997 it had a net turnover of FRF 565,6 million and, after it drew on provisions to cover future costs, its total operating income was FRF 1463 million. In 1998 net turnover was FR 504,5 million and total operating income FRF 790,5 million. Its costs increased by 47 % in 1998, mainly because of a renegotiation of price scales with local authorities. In 1997 1,8 million tonnes of packaging was collected, of which some 1,3 million tonnes was recycled and some 500000 tonnes used for energy recovery. In 1998 more than 2 million tonnes of packaging was recovered. By the end of 1997 Eco-Emballages was contractually bound to 9664 municipalities grouped into 281 local authorities (inter-municipal syndicates), there being more than 36000 municipalities and more than 2000 local authorities in France. By the end of 1998 it was contractually bound to 533 local authorities representing 13862 municipalities. In 1997 the number of affiliated producers was 9135, of which more than 700 were outside France; in 1998 there were 9311.

19. According to Eco-Emballages, since 1996 "the green dot has been present on more than 90 % of products consumed by households" in France. Of the 4,6 million tonnes of domestic packaging placed on the market in France in 1997, 3,3 million tonnes came from members of the Eco-Emballages system(3).

20. Eco-Emballages' official recovery target is 75 % of its members' household packaging by 2002. At present, more than 60 % is collected and recycled.

21. Apart from Eco-Emballages, there are a number of other firms which also organise the recovery of specific types of household packaging.

22. These include Adelphe, which obtained approval on 5 February 1993 to collect and recycle packaging produced in the wine and spirits sector. There used to be a contract between Adelphe and Eco-Emballages under which the former's obligations relating to materials other than glass were transferred to the latter. Adelphe's approval was extended on 15 October 1996 so that it could "enter into contracts with producers whose activity relates primarily to the wine and spirits sector for the purpose of recovering the household packaging in respect of which the contract has been entered into". It is therefore permitted to receive packaging from such firms, irrespective of the material involved, and there is no longer a transfer contract between itself and Eco-Emballages. At the end of 1997 almost 12000 producers, including four outside France, were contributing to its system. The share of domestic packaging in the wine and spirits sector handled by Adelphe in 1997 was, according to its own statements, some 88 %. On 28 February 2000 its approval was renewed for a further six-year period from 1 January 1999 and, since then, it has been able to enter into contracts with firms from all sectors in the same way as Eco-Emballages. Its contracts with local authorities are currently concentrated on largely rural départements.

23. The association Cyclamed is an approved operator in respect of packaging for medicinal products. The Company Leclerc has been approved for its disposable shopping bags. The company Verrerie Cristalleries d'Arques was approved for all its own household packaging, but its approval expired without being renewed.

IV. THE NOTIFIED AGREEMENTS

24. The notification covers the articles of association of Eco-Emballages, the contract governing use of the "green dot" mark, the standard producer contract, the standard local authority contract, the standard sectoral contract, the standard operational take-back contract (annexed to sectoral contracts) and the standard research and development contract. Although some of the standard contracts originally notified have been amended in the course of the proceedings, Eco-Emballages has stated that "no significant amendments have been made to the notified specimen contracts".

1. Articles of association

25. According to its articles of association, the purpose of Eco-Emballages is inter alia to organise systems for waste disposal and the recovery of materials and, more particularly, to take charge of the packaging of firms subject to the obligations arising out of the above-mentioned Law No 75-633 and the decrees implementing it.

26. The transfer of shares to a non-shareholder must be approved by the company, which is not required to justify its decisions.

27. The articles of association provide for the establishment of a board of directors made up of three to twelve members (directors), who must be shareholders. A recent decision will increase the number of directors to a maximum of 24.

28. If, after certain deductions, there remains a positive balance, profits may be distributed to shareholders.

2. Contract governing use of the "green dot" mark

29. On 3 December 1992 Eco-Emballages concluded a contract with the German company Der Grüne Punkt Duales System Deutschland Gesellschaft für Abfallvermeidung und Sekundärrohstoffgewinnung mbH (hereinafter referred to as "DSD") enabling it to use in France the "green dot" mark belonging to DSD. The mark is used in the Eco-Emballages system to identify the products of producers which belong to the system, as required by the law. This contract was mentioned in the original notification.

30. Since 1995 use of the "green dot" mark has been monitored by the Packaging Recovery Organisation Europe or ProEurope SPRL (hereinafter referred to as "ProEurope"). Since 10 December 1996 it has been the contract concluded by Eco-Emballages with ProEurope that grants the former its exclusive principal licence to use the "green dot" mark and to grant sublicenses to members in France. Eco-Emballages is, moreover, required to inform its members that use of the "green dot" mark outside France is subject to authorisation from the competent party, i.e. the firm which holds the principal licence in the country of importation.

31. Since 4 December 1998 Eco-Emballages has also been required to grant sublicenses to regional systems and/or systems dealing with specific materials in France, provided that the latter comply with European Parliament and Council Directive 94/62/EC of 20 December 1994 on packaging and packaging waste(4) and with certain predetermined conditions. It has in fact granted Adelphe a non-exclusive sublicense for the use of its "green dot" system on French territory up to 31 December 2002. This agreement provides for the conclusion of tripartite contracts with local authorities under which Adelphe will be responsible for collecting and recovering glass and Eco-Emballages for collecting and recovering other materials. Adelphe is required to pay to Eco-Emballages an amount corresponding to its share of the costs claimed by ProEurope.

3. Producer contracts

32. Eco-Emballages offers producers either a standard membership contract or a simplified contract designed for small individual contributors or for syndicates or federations of contributors with an annual pre-tax turnover on packaged products intended for households on French territory of less than FRF 2 million.

33. The producer acquires the right - actually the obligation because the products covered by the system must be identified - to affix the "green dot" mark to its packaging. According to Article 3(1) of the standard contract, this right extends to all the products manufactured, imported, marketed and/or placed on the market by the co-contractor.

34. It is up to the producer to complete a posteriori a declaration on the basis of which its contribution is calculated. This has to include packaging with the "green dot" marketed by it in France.

35. The producer's financial contribution is determined according to a price scale. Under the rules applicable before the latest approval, the amount of this contribution was calculated according to the volume or quantity of material. Since January 1999 the price scale has been composed of a flat-rate amount and a contribution determined according to weight and, specified for each material. The weight-based contribution takes account of the financial needs specific to each material and incorporates a portion for non-attributable costs.

36. The contract stipulates that the price scale will change over the contract period (Article 5(1) and (6), and point A of the supplementary agreement). Eco-Emballages may decide to adjust the amount of the contribution, although not more than once a year and subject to the agreement of the price committee (made up of shareholders) and the price management committee (comprising representatives of producers, the industrial sectors concerned and Eco-Emballages and set up in the context of the approval granted to Eco-Emballages). These proposals are then submitted to the board of Eco-Emballages. Under the terms of the 1996 and 1999 approvals, the adjustment is carried out according to the extent by which Eco-Emballages's activities with local authorities increase and according to an assessment of the financial needs for each material, as defined by Article 6 of the Decree and based on economic, technical and ecological assessments, as well as with a view to reducing the quantities (weight and volume) of packaging waste at source. The price scale must not "introduce unjustified discrimination between packaging materials". The funds raised by applying the price scale are intended to ensure that the system remains in balance economically and financially and does not give rise to operating surpluses at the end of the financial year. All of the financial support paid for each material, including the portion for non-attributable costs, should be covered by the contributions received for the material in question. The funds raised must also ensure a progressive and significant increase in the extent of collections, without any threshold being imposed and with medium-term transparency for producers.

37. The price scale, adjusted in line with these principles, must still be submitted to the authorities for approval.

38. The specifications proposed by Eco-Emballages and annexed to the 1999 renewed approval also contain the following "principles": "The price scale for producers is common to all approved companies: it is calculated according to those companies' overall share. Financial transfers may be organised between approved companies to take account of the specific characteristics of their share in terms of contributing materials. The activity forecasts of approved companies take these financial transfers into account, with the objective of achieving a zero balance for the transfers to be carried out in each financial year."

39. According to the standard contract originally notified, membership contracts ran for three years and were renewable by tacit agreement for further periods of one year unless notice of termination was submitted six months before the expiry of one of the one-year periods of tacit renewal. Approximately 75 % of the contracts in force at the end of 1998, accounting for some 94 % of contributions, were of this type. Under the renewed approval, the contract term was increased to six years, renewable by tacit agreement for three years. Early termination is possible under Article 13 of the standard contract in the event of default by one of the parties.

40. The producer contract also stipulates that Eco-Emballages must guarantee total confidentiality with regard to all financial or commercial information communicated to it by producers or to which it might become privy during the contract period.

4. Local authority contracts

41. Local authorities are responsible in France for the disposal of household refuse, including packaging waste. Eco-Emballages offers them support in recovering and recycling such waste. The contributions paid by producers are thus redistributed to local authorities on the basis of several types of contract:

- "single-material" contracts, which are designed to continue and develop selective collection, or "three-material" contracts,

- "programme de durée" contracts for establishing multimaterial collection, i.e. selective collection of five materials,

- "relay" contracts offered for a transitional period of one year with a view to a "programme de durée", contract being signed subsequently (until the end of 1998),

- "pilot-site contracts" running parallel to "programme de durée" contracts and concluded with authorities selected by an independent jury on the basis of predetermined technical, economic and geographical criteria. These contracts cover pilot selective collection and sorting projects for household packaging. The 37 "pilot site" contracts, which were concluded following a call for applications in 1993, expired not later than 31 December 1996.

42. Under the terms of its approval, Eco-Emballages is required to enter into a contract with any local authority which so requests, to the extent of the quantities of packaging equivalent to those for which producers have themselves entered into a contract with it. The contract must comply with the requirements of the General Local Authorities Code (legislative part) and the Municipalities Code (regulatory part).

43. Under the terms of the 1996 approval, no "single-material" contracts could be signed after 31 December 1996. Upon expiry, "single-material" contracts had to be incorporated into "programme de durée" contracts or, as a transitional measure pending the conclusion of a "programme de durée" contract, be converted into three-material contracts of two years' duration; failing this, financial support relating to "single-material" contracts had to be withdrawn by 31 December 1998. The 1999 approval also provides for the conclusion of "programme de duree" contracts to support multimaterial selective collection of packaging waste.

44. The "programme de durée" contract, in its version of 8 July 1994, is concluded for a six-year period. Under Article 12 of the contract, Eco-Emballages must, on each occasion its approval is renewed, offer local authorities a supplementary agreement renewing the contract for a period to be determined between the parties but which may not exceed the duration of the new approval. According to Eco-Emballages, the six-year period meets the wishes of local authorities, which, in view of the substantial investment involved, seek a degree of durability in their relationship with Eco-Emballages. Termination is possible under Article 14 of the contract in the event of default by one of the parties.

45. After the renewal of Eco-Emballages's approval in 1996, some authorities opted for an amended contract (with amendments relating in particular to the level of support), while others are continuing with the old version of the contract until the end of 2002 at the latest.

46. Under a "programme de durée" contract, Eco-Emballages offers local authorities the guarantee that household packaging waste collected and appropriately sorted (i.e. in accordance with minimum technical requirements, hereinafter referred to as "the MTR") by them will be taken back from them for the purposes of recovery. Local authorities remain free not to opt for the guarantee with regard to some or all materials.

47. When an authority does opt to accept the take-back guarantee, the contract stipulates that, for the contract period, it must supply the entire tonnage of materials collected and sorted in accordance with the MTR to the designated take-back firm(s). According to Eco-Emballages, this requirement was adopted to allow its support to be calculated and to permit verification that all packaging had indeed been recycled.

48. Nevertheless, in cases where the authority identifies a new and innovative means of recovery during the contract period, an exception may be made to the principle of take-back by the designated take-back firm. Application of such an exception has to be approved by the sectoral undertaking which would normally carry out recovery.

49. When the local authority does not opt for the take-back guarantee in respect of one, some or all materials, the contract stipulates that it must ensure that the take-back firms selected by it do in fact recycle all of the packaging sorted in accordance with the MTR and that those firms inform both the authority and Eco-Emballages accordingly every three months. The name of each of the take-back firms selected must be specified in the "programme de durée" contract.

50. Under the terms of the "programme de durée" contract and the latest approval, Eco-Emballages must pay the following support to the authority, irrespective of whether or not the latter has opted for the take-back guarantee:

- an amount per tonne sorted in accordance with the MTR, with the amount varying according to the material concerned,

- a financial contribution towards energy recovery,

- support for local communication,

- temporary support corresponding to the specific situation: start-up, high-rise housing and dispersed rural communities, "sorting ambassadors" in the context of youth employment schemes, etc.,

- aid for the provision of bottle banks for use by the public.

51. In the case of single-material and three-material contracts, only some of these forms of support have been granted.

52. Similar support was available prior to the latest approval.

53. The method of calculating support is described in the contracts. It takes account inter alia of the population actually covered by selective collection.

54. The minimum take-back price paid by the take-back firm designated for a given local authority is laid down in the "programme de durée" contract. Under the terms of both the initial approval and the subsequent renewals, this price is, subject to certain restrictions, positive for steel, aluminium and glass and zero for paper/paperboard and plastic. The price management committee is charged with drawing up proposals for adjustments to the price scale while the Eco-Emballages board of directors decides on such adjustments (see point 36 above). The public authorities must then approve any amendments made to the price scale.

55. If the local authority has not opted for the take-back guarantee and enters into a contract with a take-back firm of its choice, it must, as Eco-Emballages' 1996 approval application stated, sell the products on market terms. Under the initial approval, the local authority could be required to sell them "on terms at least as favourable as those applicable under the take-back guarantee". However, only the take-back agreement for aluminium ultimately included this requirement, and this means that, in order to guarantee that the material is indeed recycled, the local authority cannot accept from its take-back firm a price lower than that offered by the designated take-back firm under the take-back guarantee (in the case of contracts applying the old price scale) or lower than the market price (in the case of contracts applying the new price scale).

5. Sectoral contracts and operational take-back contracts

56. Contracts with sectoral undertakings (or take-back agreements) regulate the relationship between Eco-Emballages and the industrial firms which undertake to take back and recycle the packaging collected, provided that it complies with the MTR. As indicated above, there are five sectoral undertakings, namely:

- steel: initially Sollac SA, whose rights and obligations were transferred to Usinor-Packaging SA in 2000,

- aluminium: France Aluminium Recyclage SA,

- paper/paperboard: Revipac,

- plastic: Valorplast SA,

- glass: Chambre syndicale des verreries mécaniques de France (CSVMF).

57. Whether or not there is an express obligation in this regard, Eco-Emballages takes the view that it could enter into contracts with several firms or bodies for the same material.

58. Following their renewal, the agreements will expire on either 30 June 2004 (steel) or 31 December 2004 (aluminium, paper/paperboard, plastic and glass). A decision on whether to extend them further will, in each case, be taken not later than three months before the corresponding expiry date.

59. A management agreement is also annexed to the take-back agreements; this defines the terms of reference, organisation and functioning of the two committees set up between Eco-Emballages and the sectoral undertaking concerned and provides for the establishment of a materials account, which is the share of Eco-Emballages's net resources allocated to each material. In addition, the latest supplementary agreements provide for a correction method involving the application of a weighting to take account, in particular in the allocation of non-attributable costs, of varying performances and different recovery rates for the various materials.

60. Some of the specific characteristics of the various take-back contracts are described below.

Take-back agreement for steel

61. This agreement was signed with Sollac on 18 November 1993. Sollac's rights and obligations have now been transferred to Usinor-Packaging, and the agreement was last amended and supplemented on 8 March 2000.

62. The take-back guarantee provided for in this agreement means that the sectoral undertaking undertakes vis-a-vis any local authority having a contract with Eco-Emballages to take back and recycle the quantities of packaging sorted in accordance with the MTR. It must ask local authorities to grant it and the designated take-back firm an exclusive right to take back all the quantities sorted on their territory during the contract period.

63. The method of determining the minimum take-back price is described at point 54.

64. The sectoral undertaking has to send Eco-Emballages a quarterly statement of the quantities of sorted packaging it has taken back and the quantities rejected.

Take-back contract for aluminium

65. This agreement was signed with France Aluminium Recyclage on 8 November 1993 and was last amended and supplemented on 23 December 1999.

66. The take-back guarantee provided for in this agreement means that the sectoral undertaking undertakes vis-a-vis any local authority having a contract with Eco-Emballages to take back and recycle the quantities of packaging sorted in accordance with the MTR. It must ask local authorities to grant it or the designated take-back firm an exclusive right to take back all the quantities sorted on their territory during the contract period.

67. The method of determining the minimum take-back price is described at point 54.

68. The sectoral undertaking has to send Eco-Emballages a quarterly statement of the quantities of sorted packaging it has taken back and the quantities rejected.

Take-back agreement for paper/paperboard

69. This agreement was signed with Revipac on 8 December 1993 and was last amended and supplemented on 4 April 2000.

70. The take-back guarantee provided for in this agreement means that the sectoral undertaking dertakes vis-a-vis any local authority having a contract with Eco-Emballages to take back and recycle the quantities of packaging sorted in accordance with the MTR. It must ask local authorities to grant it an exclusive right to take back all the quantities of relevant packaging sorted on their territory during the contract period.

71. The method of determining the minimum take-back price is described at point 54.

72. The agreement also stipulates that Eco-Emballages must pay a sum of FRF 100 per tonne taken back by the sectoral undertaking by way of "geographical compensation", irrespective of the local authority's geographical location.

73. The sectoral undertaking has to send Eco-Emballages a quarterly statement of the quantities of sorted packaging it has taken back and the quantities rejected.

Take-back agreement for plastic

74. This agreement was signed with Valorplast on 10 December 1993. It was replaced by the agreement of 12 February 1997, which was amended and supplemented on 3 January and 27 March 2000.

75. The take-back guarantee provided for in this agreement means that the sectoral undertaking undertakes vis-a-vis any local authority having a contract with Eco-Emballages to take back and recycle the quantities of packaging sorted in accordance with the MTR. It must ask local authorities to grant it an exclusive right to take back all the quantities of relevant packaging sorted on their territory during the contract period.

76. A specimen contract between Eco-Emballages and a local authority is annexed to the take-back agreement. It states inter alia that take-back is free of charge from the sorting centre and that a flat-rate amount is payable to the local authority by the designated take-back firm in the event that the material is transported.

77. The agreement contains provisions on the marketing of sorted packaging. It lays down that the sectoral undertaking must seek, preferably in France (to limit transport costs) or, failing that, within the European Union, buyers of untreated pellets or treated product (having undergone further sorting). Any sale outside the European Union requires the prior agreement of Eco-Emballages. As for the selling price, the sectoral undertaking must attempt to achieve the best selling price/cost price ratio and, to that end, to issue calls for tenders.

78. The sectoral undertaking must send Eco-Emballages a monthly report on not only the quantities of sorted packaging taken back and rejected but also the selling prices and names of buyers, the quantities which have been further sorted and the associated cost, transport costs and the level of the various stocks, their value and the cost of storage.

Take-back agreement for glass

79. This agreement was signed with the Chambre syndicale des verreries mécaniques de France (CSVMF) on 1 December 1993. It was replaced by the agreement of 26 November 1999.

80. The take-back guarantee provided for in this agreement means that the sectoral undertaking undertakes vis-a-vis any local authority having a contract with Eco-Emballages that the quantities of packaging sorted in accordance with the MTR will be taken back and recycled by the French glassworks participating. It must ask local authorities to grant the designated take-back firm an exclusive right to take back all the quantities of relevant packaging sorted on their territory during the contract period.

81. The method of determining the minimum take-back price is described at point 54.

82. The principle established in the agreement is that glass returned to the factory and ready to be used may not cost more overall than the new raw material. The glassmakers undertake to pay a minimum of FRF 150 per tonne of glass to the local authority in cases where it takes charge of transport to the processing centre.

83. The list of designated take-back firms can be amended at any time by the sectoral undertaking.

84. The method of payment by Eco-Emballages to local authorities of support per sorted tonne and support for remote areas depends on who collects and transports the packaging. If it is the local authority, the support is paid to it directly. However, if it is the glassmaker or its representative that takes charge of collection and transport, the support is paid to the service provider designated by the glassmaker. Finally, if collection is carried out by the local authority and transport by the glassmaker or its representative, support per sorted tonne is paid direct to the local authority while support for remote areas is paid to the company which carries out the transport.

85. The sectoral undertaking has to send Eco-Emballages a quarterly statement of the quantities of sorted packaging it has taken back and the quantities collected and of the take-back terms.

Operational take-back contracts

86. In the context of a take-back guarantee, it is not the sectoral undertakings which actually take back packaging waste but rather firms designated by each of them. These are known as "designated take-back firms" (repreneurs désignés). Eco-Emballages claims not to have any influence on the choice of designated take-back firms. However, the contracts concluded between the designated take-back firms and the local authorities (operational take-back contracts) are based on standard contracts "so as not to undermine the guarantee given by the sectoral undertakings". A specimen model for each contract, except the one for plastic, was therefore proposed by Eco-Emballages.

87. With regard to steel, paper/paperboard, plastic and glass, the operational contract has been concluded for the same period as the take-back contract.

88. With regard to aluminium, the operational contract runs for three years.

6. Research and development contracts

89. Eco-Emballages's involvement in research and development is essentially financial. In return, its co-contractor undertakes to implement a given process industrially or to allow Eco-Emballages to do so. These contracts regulate matters of industrial property.

V. ROLE OF THE PUBLIC AUTHORITIES INTER ALIA IN THE DETERMINATION OF PRICE SCALES

90. The Commission has learned that the most recent proposal for the price scales of each body is based on a single independent study of the costs of selective collection of household waste and system management. To the costs thus estimated for each material, but without any differentiation by local authority, are added the body's structural costs. As stated above, any proposal relating to price scales must be submitted to the advisory committee, made up of all interested partners, including consumers, for its opinion before the body presents its specifications for approval by the competent ministers. The public authorities check compliance with a number of predetermined general criteria and may still impose conditions over and above those for the approval application or decide not to take up the proposals put forward in the application.

91. The result is that in France price scales, both upstream (i.e. contributions by producers belonging to the selective collection and recovery systems) and downstream (i.e. financial support for local authorities), are currently determined in identical fashion by the public authorities for approved bodies performing the same role. The French authorities argue that different price scales downstream would prompt local authorities to move towards the highest prices, and this might result in higher prices downstream and hence higher consumer prices. Conversely, the existence of different scales upstream would prompt producers to deal with bodies offering the lowest prices. The French authorities thus claim that the existence of different scales would be harmful to a system's economic and financial balance, proper implementation and durability. They argue that the existence of two or more approved bodies performing the same activities thus leads to uniform price scales, although this does not rule out the possibility of differences regarding, for example, the quality of service and back-up provided to local authorities or the possibility of outbidding as bodies propose more efficient services or innovative solutions when approvals are being renegotiated.

VI. UNDERTAKINGS GIVEN BY ECO-EMBALLAGES

92. Eco-Emballages has given the following undertakings:

93. It has stated that, in future membership contracts, the right to use the "green dot" mark will be extended to all products manufactured, imported, marketed and/or placed on the market in cases where the packaging is declared by the co-contractor; this will make it clear that the latter is able to join the system for only certain types of material and for all or some of the packaging of a given material. With regard to ongoing contracts, it will inform its members of this by letter. It will announce to its current and future members that, if a member has included in its declaration products which should not have been declared, e.g. products which are ultimately exported, Eco-Emballages will refund the corresponding contribution on presentation of supporting documents.

94. Eco-Emballages will allow all producers to terminate their contract each year without paying any compensation. Moreover, any newly concluded contract will contain a clause allowing such annual termination.

95. Eco-Emballages will specify in future programme de durée contracts that the objectives of setting up a selective collection and sorting system for three and then five materials extend to materials covered by the contract of another approved body. It will inform accordingly the local authorities with which it has already concluded a contract. It may also specify that its financial contribution and the take-back guarantee it proposes relate to the materials covered by the contract.

96. Eco-Emballages will inform the local authorities with which it has already concluded a contract that they may at any time terminate their "programme de durée" contract unilaterally without payment of any compensation and will insert this clause into future contracts. Consequently, the six-year contract period is, in reality, binding only on Eco-Emballages.

97. If a local authority planning to terminate a contract so requests, Eco-Emballages will provide it with any necessary information concerning its proposal so that the local authority is able to compare the offers of the various bodies for each material. It also undertakes to continue to be bound by its contract with a local authority which partially (i.e. for one or more materials) terminates its contract in respect of the other materials on the same terms as hitherto applicable.

98. Eco Emballages undertakes to grant a sublicense to use the "green dot" mark in its system to any (body that has been approved in France by the public authorities in accordance with the Decree, provided that it undertakes to comply with the requirements for packaging waste collection and recovery laid down in Directive 94/62/EC and with the requirements imposed on the holder of the principal licence by ProEurope.

99. Eco-Emballages will take all necessary measures to ensure that the contract amendments and the other undertakings referred to above enter into force and become effective from the date on which this notice is published in the Official Journal of the European Communities.

VII. FURTHER PROCEEDINGS BY THE COMMISSION

100. The Commission intends not to raise any objection to the notified agreements under Article 81 of the EC Treaty and Article 53 of the EEA Agreement. Before taking its decision, it calls on interested third parties to submit their observations within one month of the publication of this notice, quoting reference "34.950 - Eco-Emballages", to: European Commission , Directorate General for Competition,

Directorate D - Services,

Rue de la Loi/Wetstraat 200 , B - 1049 Brussel . Fax (32-2) 295 30 80.

(1) OJ 13, 21.2.1962, p. 204/62.

(2) Member States also have obligations in this matter arising from European Parliament and Council Directive 94/62/EC on packaging and packaging waste (OJ L 365, 31.6.1994, p. 10).

(3) The figures (for 1997) are as follows for the various materials involved: 1,24 of the 2,3 million tonnes of glass, 0,81 of the 0,9 million tonnes of plastic, 0,89 of the 1,0 million tonnes of paper/paperboard, and 0,36 of the 0,4 million tonnes of metal.

(4) OJ L 365, 31.12.1994, p. 10.