3.2.75 OfficialJournaloftheEuropeanCommunities NoL29/1
II
(Actswhosepublicationisnotobligatory)
COMMISSION
COMMISSION DECISION
of13December 1974
relatingtoaproceedingunderArticle85oftheEECTreaty(IV/14.650—
BayerischeMotorenWerkeAG)
(OnlytheGermantextisauthentic)
(75/73/EEC)
THECOMMISSION OFTHEEUROPEAN
COMMUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularArticle85
thereof;
HavingregardtoCouncilRegulationNo17(')of6
February1962,andinparticularArticles4and5
thereof;
Havingregardtothenotificationwhichthe
BayerischeMotorenWerkeAktiengesellschaft ,
Munich,submittedon31January1963,pursuantto
RegulationNo17,concerningthestandardformsof
contractinuseforthesaleoftheirproductsin
Germany;
Havingregardtothepublicationoftheessential
contentofthatnotificationpursuanttoArticle19(3)
ofRegulationNo17,inOfficialJournaloftheEuro­
peanCommunities NoC98of16November1973;
HavingregardtotheOpiniondeliveredon26
September1974bytheAdvisoryCommitteeon
RestrictivePracticesandDominantPositionspursuant
toArticle10ofRegulationNo17;
Whereas :
I
1.TheBayerischeMotorenWerkeAktiengesell­
schaft(BMW)hadenteredintodistributionagree­
mentswithselectedGermanwholesalers andmain
dealerswhobuydirectlyfromBMW,whichconformtothestandardformofcontractnotifiedtothe
Commission .BMWhadobligedsuchwholesalersand
maindealerstobasetheiragreementswithBMW
retaildealersonstandardformswhichBMWhadalso
notifiedtotheCommission .Thepurposeofthese
agreementswastopromotesalesofBMWmotorvehi­
clesandmotorcycles,spareparts,accessories,and
after-salesserviceinrespectthereof,andtoconcen­
trateeffortsinthefieldsofsalesandafter-salesservice
onthegoodscoveredbytheagreements,intheparti­
cularterritorywithinGermanyassignedunderthe
agreements .Withinsuchterritories,dealers,whether
wholesalers,maindealersorretaildealers,weregiven
someprotectionagainstsalesofBMWproductsby
BMWorathirdparty.BMWdealersinGermany,as
wasthecasewithallBMWdealersinothercountries,
wereprohibitedfromdeliveringnewBMWvehiclesto
countriesotherthantheirown.On3March1972,
BMWwassentastatementoftheCommission'sobjec­
tionsinrespectofthisprohibitiononexportswithin
thecommonmarketandhasnolongerpractisedsuch
aprohibition .
2.BMWisinthecourseofrevisingallitsdistribu­
tionagreementsthroughoutthecommonmarket.In
GermanyreviseddistributionagreementsforGerman
BMWdealerscameintoforceon1January1973.At
thattimeBMWintroducedonestandardformof
agreementformaindealersandinturnrequiredthese
maindealerstouseanewstandardformofagreement
whenappointingretaildealers(seeclause12ofthe
standardmaindealer'sagreement).Theseagreements
arewordedalmostidentically .Followingthepublica­
tionoftheessentialcontentofthenotification on16 (>)OJNo13,21.2.1962,p.204/62.

3.2.75 NoL29/2 Official-JournaloftheEuropeanCommunities
iv.notwithouttheconsentofBMW,tosell,directly
orindirectly,productsofcompetingmakesas
specifiedbelow:
—newvehiclesofanothermake;
—spareparts,exchangepartsandaccessoriesof
othermakestootherdealers;
—partsofothermakes,whicharenotofthe
BMWstandardofquality,tothecustomerfor
repairpurposes;thisdoesnotapplytoparts
whichareofnoparticularimportanceforthe
safetyofBMWvehicles;
theconsentofBMWmaynotbewithheldif
reasonablecauseisshown,andinthisrespectthe
economiccircumstances oftheBMWdealerare
tobetakenintoconsideration ;andNovember1973(')pursuanttoArticle19(3)ofRegu­
lationNo17,observationsonthesestandardagree­
mentsweresubmittedtotheCommission (see9
below).Onthebasisoftheseobservationsandthe
relatedinterventionbytheCommission ,BMWmade
statementssupplementing thenotificationwithregard
totheinterpretationandapplicationofcertainclauses
inthestandardagreementsandinformedallBMW
maindealersandretaildealersinGermanyofthe
contentofthesestatementsbycircularletter.
Thefollowingprovisionscontainingobligationsareto
befoundinthenewagreementsconcludedwith
Germandealers:
3.EachBMWdealer(maindealerorretaildealer)
istorepresenttheinterestsofBMWwithintheterri­
toryassignedtohimunderhisagreement,but
conductsbusinessunderhisownname,onhisown
accountandathisownrisk(seeclauses2and3.1,and
thefirstsentenceofclause3.2ofthestandardagree­
ments;savewhereotherwisestated,furtherreferences
arereferencestothestandardagreements).
Eachdealerundertakesvis-à-vistheotherpartytothe
contract(theprincipal,i.e.BMWoraBMWmain
dealer):
i.toendeavour,withintheterritorycoveredbythe
agreement,tosellatleastsuchquantityofthe
goodscoveredbytheagreementasisspecifiedby
BMWinagreementwiththemaindealeronthe
basisofanestimateofdemandandsalespoten­
tialintheterritoryandofafter-servicepotential
(annualsalestargets—clauses1,3.1and6);and
furthertoplacehisordersmonthlyandgivean
estimateofhisrequirements forthefollowing
months(clause5.1);
ii.nottosellgoodscoveredbytheagreementto
dealersnotauthorizedbyBMW,unlesssuchsales
areofgenuineBMWpartsforrepair(second
sentenceofclause1.1);
iii.nottooperatebranchesordistributiondepotsor
useintermediaries outsidehisownterritory,nor
toadvertiseorcanvassinanyotherway,outside
histerritory,unlesstheprincipalobligation
undertheagreementisfulfilled,namelythedili­
gentpromotionofsalesandafter-salesservice
withinhisterritory(clauses1,3.1and6);inany
eventheisfreetoadvertiseinpublications
havingacirculationoutsidehisterritoryandto
sellgoodscoveredbytheagreementinterritories
outsidehisown(secondsentenceofclause3.2);not,withouttheconsentofBMW,tobecomean
agentinanywayforanyothermotorvehicle
manufacturer ortohaveanydirectorindirect
interestinsuchanagency;suchconsentmay
notbewithheldifreasonablecauseisshown,and
thegroundsforthedecisiontowithholdconsent
mustbesetbutinwritingandstatetheextentto
whichtheattainmentofthecommercialobjec­
tivesofBMWishinderedbytheacceptanceof
anotheragency(clauses3.6and13(c)ofthe
maindealer'sagreement,3.6and12(c)ofthe
retaildealer'sagreement,andtheBMWcircular);
v.tofollowinstructionsgivenbyBMWregarding*
advertisingandtodiscontinueimmediatelyany
advertisingtowhichBMWobjects;inthis
respectBMW'sauthorityextendsonlytoadver­
tisingdesignedtodrawattentiontoBMW
productsandtheirproperties,butnottothe
advertisingbyBMWdealersofpricesandcondi­
tionsofsale(clause3(v)andtheBMWcircular);
vi.toobtaintheconsentofBMWbeforepartici­
patinginexhibitionsorfairs;BMWmaywith­
holditsconsentifsuchparticipation :
—weretojeopardizethesuccessofBMW'sparti­
cipationintheexhibitionorfair,or
—isinbreachofobligationsundertakenby
BMWundertherulesoftheBureauperma­
nentinternational desconstructeurs d'automo­
biles(B.P.I.C.A.)(clauses6.3.2and13(c)or12
(e)andtheBMWcircular); (')OJNo98,16.11.1973,pp.5and6.

3.2.75 OfficialJournaloftheEuropeanCommunities NoL29/3
ofclause12)andtodeterminetheirfieldof
activity(clause12.1);
iii.toterminateatBMW'srequestanystandardagree­
mentsconcludedwithappointedretaildealers
(firstsentenceofclause12.3);
iv.toensurethatappointedretaildealerskeep
adequatestocksandprovideproperafter-sales
service(clause12.2(a)and(b));
v.toseethatappointedretaildealershavetheplant,
equipmentandstaffrequiredtocopewiththe
volumeofbusiness(clause12.2(c)).
5.BMWundertakesvis-à-visBMWmaindealers
andthelattervis-à-visBMWretaildealers:
i.todelivergoodsinaccordancewiththeconditions
ofsaleanddeliverypublishedbyBMWandunder
thetermsandconditionsofdeliveryasregardsthe
salesofparts(clause5);
ii.tosetupnobranchesandappointnofurther
dealersintheterritoryandnottochangetheterri­
torywithoutgivingtheBMWmaindealerorretail
dealeratleast60days'noticeandgivinghimthe
opportunityofcommentingontheplannedreor­
ganization (clause3.3).
6.BMWundertakesvis-à-visBMWmaindealers:vii.tooperateabusinessthelayoutofwhoseprem­
ises,equipmentandtechnicalandcommercial
managementsatisfyBMW'srequirements (clauses
9to11,13and12(a)(b)and(d)respectively ;
instructionsrelatingtosparepartsserviceunder
theBMWdealer'sagreementandtheafter-sales
serviceinstructionsunderBMWagreements);
viii.tooperateaservicedepartmentandworkshopin
accordancewithBMW'srequirements ,toemploy
properlyqualifiedstaffandtoensurethatthey
receivefurthertrainingasrequired(clauses6.2
and7.2andtheservicinginstructionsreferredto
inviiabove);
ix.toprovideafter-salesserviceinaccordancewith
theinstructionslaiddownbyBMW(clauses1.2
and7),includingtakingdeliveryofBMWvehi­
clesfromcardeliveryfirms,storageanddelivery
tocustomers,servicingandmaintenance ,repair,
modifications ,workunderguaranteeand
extendedfreeservice(clause7.1;after-sales
serviceinstructionsunderBMWagreements);to
carryoutthefreepre-deliverycheckonthe
supplyofanewBMWvehicletoacustomer
(clause3.3oftheafter-salesserviceinstructions );
x.tomaintainastockofgoodssufficienttosatisfy
expecteddemandintheterritory(clauses6.1and
7.1andtheafter-salesserviceinstructions );
xi.togrant,onsaletothecustomer,aguaranteein
thetermsoftheguaranteegrantedbyBMW
(clauses5.3,5.3.1and5.3.2;clause4oftheafter­
salesserviceinstructionsforBMWdealers);to
carryoutworkunderguaranteeforthecustomer
freeofcharge,whetherornotthecustomerhas
purchasedtheBMWproductfromadifferent
BMWdealerwhetherinGermanyorabroad
(clause4.6oftheguaranteeinstructionsforBMW
dealers);
xii.touseBMWtrademarkswithoutadditionsor
alterationsandonlyinsuchmannerasisjustified
bythemethodandscopeofbusiness(clause6.4);
xiii.tosupplyBMWwithanyinformationrequired
onhistradingsituationandsalestrends,market
situation,stocksandexpecteddemand(second
sentenceofclause8,clauses8.1and8.2;after­
salesserviceinstructionsforBMWdealers).
4.Everymaindealerfurtherundertakesvis-à-vis
BMW:
i.nottoconcludeanystandardagreementswith
BMWretailsellersortomodifyorterminate
existingagreementswithBMWretaildealers
withouttheconsentofBMW(firstsentenceof
clause12andsecondsentenceofclause12.3of
themaindealer'sagreement);
ii.toconcludeagreementsatBMW'srequestwith
retaildealersselectedbyBMW(secondsentencei.nottosellordelivergoodswhetherdirectlyorindi­
rectlytopersonsotherthanfleetoperators,public
authorities,racingdrivers,foreigntourists,andstaff
ofBMWoritssubsidiaries (clause3.4);
ii.toguaranteegoodsbothtowardsmaindealersand
retaildealersinaccordancewiththeconditionsof
saleanddelivery(clause5.3);togiveeffecttothe
guaranteebyrepairingorreplacingdefectiveparts
(clause6.2oftheconditionsofsaleanddelivery)
andtobearthereasonablecostsofdismantlingand
fittingandthecostsofthecheapestmeansof
delivery(clause6.3oftheconditionsofsaleand
delivery);toreimburseBMWdealersfortheir
expenditureonservicesprovidedunderguarantee
andextendedfreeservice,brokendownintoexpen­
ditureonlabour,BMWreplacementpartsand
goodsandservicessuppliedbythirdparties
(clauses4.7to4.9oftheguaranteeinstructionsfor
BMWdealers).
7.Thestandardagreementsareoffiveyears'dura­
tionbutmaybeterminatedonsixmonths'noticeat
anytimebythepartyotherthantheprincipal;the
principal(BMWorthemaindealer)mayterminate
theagreementsimmediately ,butonlyforasubstantial
breach;forlesssubstantialbreachestheagreements
maybeterminatedonthreemonths'notice,such
noticetorunfromadatesixmonthsafterawarning
isgiven(clauses14to17).

NoL29/4 OfficialJournaloftheEuropeanCommunities 3.2.75
8.Therulesgoverningselectivedistribution
(clauses3(ii),(v)to(viii),4and5(ii)appeartohave
thefollowingapplicationinpractice.BMW'squalita­
tiverequirements ofBMWdealersfortheirselection
andretentionforthedurationoftheagreementare
applieduniformly.Furthermore ,inmakingthe
quantitativedecisionwhethertoincreasethenumber
ofdealersintheGermannetworkortoconcludea
newagreementtoreplaceonethathasexpired,BMW
willineachcaseneedtoconsiderwhetherturnover
andservicewillbeimproved.Particularfactorstobe
takenintoaccountarewhethertheapplicanthassuffi­
cientpersonnelandequipmenttofulfilBMW'sre­
quirementsastosalespromotion,andwhether,having
regardtosalesexpectationsandthepresenceof
existingBMWdealers,hecanachievetheminimum
incomenecessarytofulfilhisobligations .10.AgreementsaffectingBMWdealersintheother
countriesofthecommonmarketoutsideGermanyare
notthesubjectoftheseproceedings .Insomecoun­
triesofthecommonmarket,inwhichBMWdistri­
butesitsproductsthroughitsownsubsidiariesandnot
throughindependentimporters,standardagreements
similartothoseinGermanyareappliedasfaras
marketandregionalconditionsandnationallaw
permit.
II
11.TheagreementsnotifiedtotheCommissionby
BMW(whichwereapplieduntil1972)betweenBMW
andGermanBMW-wholesalers andmaindealers(who
boughtdirectfromBMW)andbetweenthelatterand
appointedBMWretaildealers(see1and2above)
wereagreementsfallingwithinArticle85(1)ofthe
EECTreaty.Theprohibitioncontainedinthoseagree­
mentsontheexportofnewBMWvehiclesbyBMW
dealerstootherMemberStateswasoneoftheprin­
cipalmeasureswhichhadasitsobjectandeffectthe
restrictionanddistortionofcompetitionwithinthe
commonmarket,andwaslikelytoaffecttrade
betweenMemberStates.
12.TheconditionlaiddowninArticle85(3)ofthe
EECTreaty,underwhichtheprovisionsofArticle85
(1)maybedeclaredinapplicable ,werenotsatisfiedin
thecaseoftheseagreements .Becauseoftheexport
prohibition ,consumerswerenotguaranteedafair
shareofthebenefitswhichmightotherwiseresult
fromexclusivedealingagreements,astheexportprohi­
bitionsledtoaformofterritorialprotectionenabling
differentretailpricestobechargedinthevarious
countriesofthecommonmarket.Theexportprohibi­
tionswerenotindispensable totheimprovement of
distributionandprotectionofthegoods.Such
improvements arepossiblewithlessrestrictiveprovi­
sions.BMWfurtherstatedthatitsrightundertheagreement
toobtaininformationfromdealers(see3(xiii)above)
wouldnotbeusedtopreventgoodsbeingsoldoutside
theirterritory.
9.Afterpublicationoftheessentialcontentofthe
notificationpursuanttoArticle19(3)ofRegulation
No17(see2above),theCommissionreceivedobserva­
tionsfromtwonationalassociationsofwholesalers ,
fromaninternational associationofmotorvehicle
traders,fromanationalmotoringassociationandfrom
aBMWgeneralimporter.Theobservationsmaybe
summarized asfollows:
IIIWholesaletradeinsparepartsandaccessoriesisin
competitionwithBMW,sothatarestrictionon
dealingincompetingproductsimposedonBMW
dealerswhichwastooextensivewouldlimitexces­
sivelyawholesaler'ssellingoutlets,tothedisadvan­
tageofboththeconsumerandthesupplierofsucha
wholesaler .Moreovermanysuppliers,sincetheyalso
supplyvehiclemanufacturers withoriginalequipment
andspareparts,areofteninapositionofconsiderable
economicdependence .DealersappointedbyBMW
shouldatleastbeallowedtodealincompeting
productsthroughsubsidiaries ;theirobligationto
supplyBMWwithinformationshouldnotbetoo
extensive;advertisingandparticipation infairsor
exhibitionsshouldbeamatterforcooperation
betweenthetwopartiestotheagreement,andnot
dependmerelyuponthewishesofBMW;thediscre­
tionenjoyedbyBMWinselectingBMWmaindealers
andretaildealersistoowide.Asfarasthesaleof
BMWproductsinothercountriesoftheCommunity
isconcerned,manyoftheclausescannotbeenforced
inthewaythatBMWappliestheminGermany,this
isparticularlytrueoftheprohibitionondealingin
competingproducts.TheusebyBMWofthenewformsofbothmain
dealerandretaildealeragreements (see2to8above)
leadstoagreementsbetweenundertakings ,produces
severalformsofrestrictionanddistortionofcompeti­
tionwithinthecommonmarket,andislikelytoaffect
tradebetweenMemberStates.
13.TheobligationsimposedonBMWdealersto
operateabusinessofacertainscale(see3(vii)and
(viii)above),toprovideanafter-saleservicecomplying
withinstructionslaiddownbyBMW(see3(ix)above),
tomaintainacertainstockofgoods(see3(x)above)
andtoprovideaguaranteeonsaletoacustomerin
thetermsoftheguaranteegrantedbyBMW(see3(xi)
above)specifyobjectivecriteriaandconstitute
minimumrequirements whichBMWapplies

3.2.75 OfficialJournaloftheEuropeanCommunities NoL295
(see5(ii)(above),potentialdealersofBMWproducts
arepreventedfromconcludingstandardagreements
fortheacquisitionandsaleofBMWproductswithout
firstconsultingtheauthorizedBMWdealerinthat
territory;itisalsomadedifficultforBMWsimplyto
establishsubsidiaries (see5(ii)above)throughwhich
todeliverproductsdirectlytocustomersandto
providethemwithservice.uniformlytotheselectionofBMWmaindealersand
retaildealersinGermany.Thesecriteriaandrequire­
mentsdonotprecludetheofferofmoreextensive
servicesofgreateradvantagetothecustomer.Theydo,
however,leadtotheexclusionofthoseundertakings
whicharepreparedtosellBMWproductsbutwhich
arenotpreparedtoprovidetheadditionalservice
requiredbyBMWforthedistributionofitsproducts
ortoprovidetheservicedepotsmentionedabove.The
combinedeffectoftheobjectivecriteriaandobliga­
tionsistoprevent,toanappreciableextent,the
appointment ofundertakings asBMWdealersand
theiradmissiontothetradeinBMWproducts.16.BecauseofBMWsundertakingtosellonlyin
specifiedcases,whetherbyitselforthroughitssubsidi­
aries,toconsumers (see6(i)above),directsourcesof
supplyaredeniedtotheconsumerinthathemaynot
approachthemanufactureroritssubsidiariesinthe
commonmarket,exceptintheabovementioned cases.AsinanyparticularcaseBMWcanexcludefrom
recognitionasaBMWdealereventhoseundertakings
whichsatisfyalltheobjectivecriteriaandareprepared
:ofulfiltheminimumobligations (see8above),the
BMWdistributionsystemhasanevenmorerestrictive
effectoncompetitioninBMWproducts,andleadsto
:hequantitativeselectionofdealers. 17.Theprohibitions ,affectingallBMWdealers,on
operatingbranchesordistributiondepotsorusing
intermediaries inanyotherterritory,andonadver­
tisingandotherwisecanvassinginanotherterritory,
unlessthey,fulfiltheirobligationundertheagreement
topromotediligentlysalesandafter-salesservicein
theirownterritory(see3(iii)above),restricttheir
freedomtopromotesalesoutsidetheirterritory,even
inrespectofcustomersandBMWdealersappointed
incountriesotherthanGermany.TheobligationsofBMWmaindealersvis-à-visBMW
isregardsselectingBMWretaildealers,placingthem
undercontract,terminatingormodifyingtheir
standardformofagreementanddeterminingand
supervisingtheiractivities(see4above)resultinmain
dealershavinglittlescope,whenappointingretail
dealerstofollowtheirownviewsonsalespolicy
wherethesedifferfromthoseofBMW.Selection
depends,notonvarousindividualdecisionsbyBMW
maindealersbasedontheirrespectivesalespolicies,
>utonthewishesofBMW.
TheresultistoenableBMWtorestrictaccesstotrade
nBMWproductsatalllevelsofdistribution .18.SinceBMWdealersmaynot,withoutthe
consentofBMW,becometheagentsforanyother
motorvehiclemanufacturers norsellcompeting
productsforresale,andsincetheyareallowedtouse
andtoselltothecustomerspartsofothermakes
whichareofparticularimportanceforthesafetyof
BMWvehiclesonlywheretheysatisfyBMWstand­
ardsofquality(see3(iv)above),othermanufacturers
andsuppliersofmotorvehiclesandpartscannotto
thatextentusetheseGermandealersassalesintermed­
iaries.(4.SinceneitnerBMWmaindealersnorBMW
etaildealersareallowedtosellgoodsotherthanorig­
nalBMWpartsforrepairpurposestodealersnot
uthorizedbyBMW(see3(ii)above),allindependent
lealerswhoarenotpartoftheBMWdistribution
;systemaredeniedtheopportunityofsellingnew
BMWvehicles,andsimilarlydeniedtheopportunity
)ftradinginBMWpartsexceptwheretheythem­
selvesusesuchpartsinrepairsratherthanreselling
:hem.Thisexclusionaffectsallindependentdealers
throughoutthecommonmarket.19.Alltheclausesmentioned (13to18)arealso
likelytohaveanappreciableeffectontradebetween
MemberStates.Owingtotheselectivesystem(see13
to15above),thoseGermanundertakingswhichare
preparedtodeliverBMWproductstootherMember
StatesbuthavenotbeenauthorizedbyBMWare
therebypreventedfromdeliveringtopurchasersin
suchcountries .AsBMWisalsotoensurethatitsown
subsidiariesinotherMemberStateswilldeliveronly
intheagreedexceptionalcasestoconsumersin
Germany(see16above),tradebetweenMemberStates
istothatextentaffected.Theintensityoftradewith15.InsofarasBMWhasundertaken vis-à-visits
maindealers,andthelattervis-à-vistheirretail
dealers,toappointfurtherdealersintheterritoryand
tochangetheterritoryonlyoncertainconditions
(priornotificationandopportunityofcommenting )

NoL29/6 OfficialJournaloftheEuropeanCommunities 3.2.75
MemberStatesisalsodiminished inthatBMW
dealersarepreventedfrompromotingsalesoutside
theirterritorytoconsumersorselectedBMWdealers
in..otherMemberStates(see17above).Finally,even
therestrictedscopeoftheprohibitionondealingin
competingproducts(see18above)hasadiminishing
effectontheexchangeofgoodsbetweenMember
States,becauseGermanBMWdealersarelargely
excludedfrombecomingdistributorsofcompeting
productsemanatingfromotherMemberStatesand
fromsellingsuchpartsasareessentialtosafetyand
donotsatisfyBMWstandardsofquality.
Article85(1)isthereforeapplicabletotheBMW
standardformsofagreement .BMWwithinformationontheirtradingposition,
salestrends,themarketsituation,stocksandexpected
demand(see3(xiii)above)amountstoarestrictionof
competitionsimplybecauseBMWtherebylearnsof
allthewaysinwhichBMWdealerscompeteamong
themselves,andinwhichcompetingproductsare
sold.Afinalquestiontobeconsideredwaswhether
thepowerpossessedbyBMWortheBMWmain
dealerasprincipaltoterminateaBMWcontractfor
substantialbreach(see7above),ortheirpowertoalter
theterritoryorinstalfurtherdealersinsuchaterritory
(see4and5(ii)above),amountedtoaneconomicsanc­
tionwhichcouldbeusedtoimposemoreextensive
restrictionsofcompetitiononBMWdealersthan
thoseapparentfromthewordingoftheagreement .
ProvidedBMWdoesnotrecommend BMWdealers
nottosellBMWproductsoutsidetheterritoryornot
tosellcompetingproducts,ordoesnotmaintain
resaleprices,andoffersneitherincentivesnordisin­
centivesinordertoattaintheseobjectives,itcannot
beassumedthattheopportunitiesaffordedtotheprin­
cipaltocollectinformation ,toterminatetheagree­
mentandtoaltertheterritoryhavearestrictiveeffect
oncompetition (see8above).Atthepresenttime,the
Commission hasnoevidencetosuggestthatthe
BMWdistributionsystemwouldbeoperatedinsucha
manner .IV
Thestandardformsofagreementcontainfurtherobli­
gationswhich,normallyapplied,placenorestrictions
oncompetitionwithinthemeaningofArticle85(1)
(seealsoArticle2(2)ofCommissionRegulationNo
67/67/EEC(').
20.TheobligationundertakenbyBMWdealersto
followinstructionsgivenbyBMWregardingadver­
tisingdoesnotamounttoanappreciablerestrictionof
competition ,provideditisconfinedonlytoadver­
tisingdesignedtodrawattentiontoBMWproducts
andtheirproperties .TheCommission hasno
evidencewhichmightsuggestthatBMWisoperating
theseprovisionsinarestrictivemanner,especiallyas
BMWexpresslystatedinthecirculartoBMWdealers
thatitsauthoritydidnotextendtoadvertisingby
BMWdealersconcerningpricesandconditionsofsale
(see3(v)above).
InsofarasBMWisentitledtorefusetoconscntto
BMWdealersparticipating inanexhibitionorfair
undertheconditionsmentionedinthecircular(see3
(vi)above),theCommission'sdecisiononthescopeof
thisclauseremainssubjecttotheproceedings
concerningdecisionsontheparticipation atexhibi­
tionsandfairsnotifiedbythe'Bureaupermanent
international desconstructeurs d'automobiles '
(IV/417).
21.TheobligationtouseBMWtrademarksina
specifiedmanner(see3(xii)above)doesnotcome
withinthescopeofArticle85(1),astheresulting
prohibitiononusingthesetrademarksinanyother
wayisanincidentoftheprotectionunderthelawof
trademarkstowhichBMWisentitled.
22.Furthermore itisnottobeassumedthatthe
obligationundertakenbyBMWdealerstosupplyV
23.TheCommission hastodecidewhetherthe
selectivedistributionsystemoperatedbyBMW,
containing apartialprohibitionondealingin
competingproducts,canbeexemptedunderArticle
85(3)fromtheprohibitioncontainedinArticle85(1)
oftheEECTreaty.
Inconsideringtheselectivedistributionsystemoper­
atedbyBMWinGermany,theCommission is
preparedtoacceptthatsuchasystemmaycontribute
bothtoimprovingtheproductionanddistributionof
goodsandtopromotingtechnicalprogress.
24.Limitingthenumberofdealerscanberegarded
asmorebeneficial,sofarasitisbasedontherequire­
mentbyBMWofminimumstandardsforselection
andcontinuedemploymentofdealers.Bysuchmeans
thefollowingcaninparticularbeensured:
—thatBMWmotorvehiclesarereceivedandstored
intechnicallyperfectconditionandarcdelivered
tocustomersafterapre-deliverycheckcarriedout
inaccordancewithBMW'sinstructions (see3(vii)
to(ix)and13above);
—thatbothmaintenanceandpreparationandalso
servicescarriedoutunderguaranteeandextended
treeservicearenotonlysufficientlyavailablebut (')OJNo57,25.3.1967,p.849/67.

3.2.75 OfficialJournaloftheEuropeanCommunities NoL29/7
arealsoofanadequatequalityfortheconsumer
(see3(ix)and(xi)and13above);
—thatanymodifications tovehicleswhichbecome
necessarymaybecarriedout(see3(ix)and13
above);
—thatsufficientplant,equipmentandBMW-trained
personnelareavailablefortheprovisionofthe
aboveservices(see3(vii)and(viii)and13above);
—thatthestoreofsparepartsisadequateinrange
andquality(see3(x)and13above);and25.TherestrictionsimposedbyBMWonitsmain
dealersandbythelatteronretaildealersasregards
theappointmentoffurtherdealersorchangingthe
territory(see5)(ii)and15above)donotprecludethe
conclusionofmaindealerorretaildealeragreements ,
butonlydelaytheconclusionofsuchagreementsin
theinterestsofmaindealersorretaildealersalready
appointed.Thelatterarethusgivenanopportunityto
remedyanypoorperformancewhichhasbecome
apparent,sothatBMWoramaindealermayconsider
whethertheadditionoffurthermaindealersorretail
dealerstothegroupalreadyselected,orachangein
theterritorycoveredremainsnecessary.Theabove
provisioniscloselyconnectedwiththeclauseson
selectionandfindsitsjustificationinthesamecon­
siderationsasjustifythelatter(see24above).
—thatBMWmayrapidlyandfullyinformits
appointeddealersoftechnicalproblemsasthey
arise(see3(xiii)and22above). 26.TheobligationundertakenbyBMWnottosell
vehiclesdirectlytoconsumers (see6(i)and16above)
providesalineofdemarcationbetweentheactivities
ofBMWanditsdealers,allowsBMWtoconcentrate
itsmarketingactivity,andrelievesBMWoftheneed
tomaintainamultitudeofbusinessrelationships .Itis
acceptedthattheobligationleadstoanimprovement
ofsalespromotionbytheappointeddealersandthus
rationalizesdistribution .
27.TherestrictionsimposedonBMWdealersfrom
takingcertainmeasurestopromotesalesoutsidetheir
territory(see3(i),3(iii)and17above)maybesimi­
larlyconducivetoconcentration ofeffortsinselling
BMWproductsandtorationalization inthatthey
channeldealers'activitiesprimarilytowardspotential
purchasersintheirownterritorywithoutimpeding
salestoconsumersandotherBMWdealersoutside
theterritory.BMWhasinadditionreservedtherighttomakeindi­
vidualappointments fromthoseapplicantssatisfying
theobjectiverequirements forBMWdealers,onthe
basisofconsiderations forwhichtherearenouniver­
sallypredictableandobjectivecriteria(see8and13
above).Thereservationofsucharightistobe
acceptedinthepresentcase,insofarasitrelatesto
theselectionbyBMWofitsmaindealers.Therestric­
tiveinfluencewhichBMWhasovertheselectionof
BMWretaildealersbyBMWmaindealersfacilitates
rationalization ,becauseBMWalsocooperatesdirectly
withBMWretaildealerswiththeaimofimproving
service.ThecooperationbetweenBMWandits
dealers,whichgoesbeyondthemeremarketingof
products,provides,intheviewoftheCommission in
thisparticularcase,amajorfactorjustifyingtheBMW
selectivedistributionsystem.Itcanbeconsideredto
beamethodofrationalizingthesaleandservicingof
BMWvehiclesardpartsandtherebyprovidesabetter
servicetotheconsumerthanasystemoffree
marketingtowhichsuchcooperationisnotattached.
Motorvehicles,beingproductsoflimitedlife,high
:ostandcomplextechnology,requireregularmainte­
nancebyspeciallyequippedgaragesorservicedepots,
jecausetheirusecanbedangeroustolife,healthand
propertyandcanhaveaharmfuleffectontheenviron­
nent.Itisthereforeofimportancethatthoserespon­
sibleforthemaintenance ofvehiclesaremadeaware
jfthelatesttechnicalknowledgewhichthemanufac­
urerhasacquiredinthedevelopmentandconstruc­
:ionofthevehicle.Moreover,continualcooperation
betweenBMWanditsmaindealersandretaildealers
nayassistBMWinthepreparationofitsmaintenance
nstructionsandtrainingprogrammes ,andmayalso
eadindirectlytoimprovements inthedesignof
/ehiclcs.28.ThefactthatBMWdealersmaynotdealin
competingproducts,shouldBMWwithholdits
consent,doesmeanthatsuppliersofmotorvehicles,
partsandaccessoriesofmakesotherthanBMW
cannotnormallyuseBMWdealersassalesintermedi­
aries(see3(iv)and18above).Neverthelesstheadvan­
tagesofthisclauseoutweighitsdisadvantages .Since
inprincipleappointedBMWdealershavetoconcen­
tratetheireffortsinsellingvehiclesandpartson
BMWproducts,itmaybeexpectedthattechnical
expertiseandadviceareprovidedforBMWvehicles
andpartsandthatcompetitionbetweentheproducts
ofthedifferentmanufacturers ofmotorvehiclesand
partsisstrengthenedatthedifferentlevelsofdistribu­
tion.

NoL29/8 OfficialJournaloftheEuropeanCommunities 3.2.75
BMWmaindealersandBMWretaildealers,can
providethekindofservicewhichBMWconsiders
necessaryforthemaintenanceandsafetyofitsvehi­
cles.Sinceconsumershavecompletefreedomin
purchasingBMWproductswithinthecommon
marketandcantakedeliveryfromanyundertaking
theywishtoactontheirbehalf,therestrictions
concernedwithselectivedistribution areinthis
respectlimitedtotheiressentialcontent.29.Inthepresentcaseitcanalsobeacceptedthat
consumersreceiveafairshareofthebenefitresulting
fromtheimprovements andprogressachieved
throughthestandardformsofagreementusedby
BMW.Themeasureswhicharerestrictiveofcompeti­
tion(see24to28above)notonlyhavedirectadvan­
tagesfortheconsumerintheformofimproved
service,butalsoallowadequatecompetition atthe
distributionlevel,sothatthereremainsapressureto
passontoconsumersthebenefitsresultingfrom
rationalization .Suchcompetition isassuredbythe
factthatnotonlyareconsumersfreetopurchase
goodsandrequestservicewherevertheywishwithin
thecommonmarket,butalsothatBMWdealersare
freetopurchaseBMWproductsnotonlyfromthe
BMWdealerfortheirterritorybutalsofromanyother
BMWdealeranywhereinthecommonmarket(sec27
above).Acorresponding freedomisenjoyedbythe
consumer,whomaychoosepartsofothermakesfrom
BMWdealers,unlesstheyaresuchasareofparticular
importanceforthesafetyofBMWvehiclesanddonot
satisfythestandardsofqualityofBMWparts(see28
above).TheobligationundertakenbyBMWnottosellto
consumers (see26above)andtherestrictionsimposed
onBMWdealersontakingcertainmeasuresto
promotesalesoutsidetheirterritory(see27above)are
similarlyindispensable ;foronlyrestrictionsofthis
naturecanprovideamoreeffectiveencouragement to
promotesaleswithintheterritory.Theobligation
undertakenbyBMWdealerstosellminimumquanti­
tieswithintheirterritories,suchminimumquantities
beingagreedbyBMWwiththemaindealeronthe
basisofestimates(see3(i),17and27above),isalso
nomorerestrictivethanisessential.Bycomparingthe
estimatedandactualsalesfigures,anaccountcanbe
takenofgoodscoveredbytheagreementwhichthe
BMWdealerdidnotobtainfrom,hisprincipal.
Figuresforgoodsrequiredandforwhichpaymentis
due,mustbedeclaredtotheprincipalatmonthly
intervalsandatthesametimeanestimategivenof
requirementsforthefollowingmonth(see3(i)above).
Ingivingsuchestimates,theBMWdealercanprovide
forthosequantitiesofgoodswhichheexpectstosell
outsidehisterritory.30.Therestrictionsimposedonpartiestothe
standardagreementsareconsideredtobeindispens­
abletotheattainmentoftheimprovements andtech­
nicalprogressmentioned .
Theprovisionsonselectivedistribution (see24and25
above)areindispensable ,becauseoneconomic
groundsacontinuingcooperationbetweenBMWand
dealerswouldbesubjecttoalimitationifBMWhad
tocooperatewithalldealerspreparedtosellBMW
goodsandprovidepre-andafter-salesserviceto
customers .Theminimumrequirements placedby
BMWontheprovisionofservicecouldnotbemetif
BMWwereonlytoissueserviceinstructionstoeach
maindealerorretaildealerondeliveryofitsproducts.
Moreover,BMWhasleftuntouchedtheoptionof
everycustomertohavehisvehicleservicedataninde­
pendentestablishment ,thelatterbeingableto
purchaseallitsrequirements ofBMWpartsfromany
BMWmaindealerorretaildealer.Theprohibitionagainstdealingincompeting
products(see28above)isalsoconfinedtoitsessential
content.BMWdealersareindeedprohibited,where
BMWwithholdsconsent,fromsellingnewmotorvehi­
clesofothermakes,fromsellingpartsofothermakes
todealers,andfromsellingtoconsumerssuchpartsas
areparticularlyimportantforthesafetyofBMWvehi­
clesandwhichdonotcomplywiththestandardof
qualityofBMWparts.ButBMWdealersmayask
theirprincipaltorelaxthisprohibitionagainstdealing
incompetingproducts,wheretheycanshowreaso­
nablecause(see3(iv)above).Insuchcasestheyare
entitledtobeallowedtosellsuchcompetingproducts
asleastinterferewiththesaleofBMWproducts.More­
over,theprohibitionagainstdealingincompeting
productsdoesnotapplytothesaletotheconsumerof
accessoriesofothermakeswhicharcofnoparticular
importanceforthesafetyofBMWvehicles.Further­
more,thesaletotheconsumerofpartsofother
makesandtheiruseforrepairpurposesisinanycase
notrestrictedwheretheycomplywiththestandardof
qualityofBMWparts.Aprohibitionagainstdealing
incompetingproductswhichisrestrictedinthisway
allowssellersofaccessoriesandpartsofothermakesThecreationbyBMW,withtheassistanceof
appointeddealers,ofaBMWservicenetworkdoesnot
preventthirdpartiesfromservicingBMWvehicles.In
operatingtheselectivesystem,BMWisdoingno
morethanensurethat,inadditionandparallelto
servicingbythirdparties,thereisaservicenetwork
which,becauseofthecooperationbetweenBMW,

3.2.75 OfficialJournaloftheEuropeanCommunities NoL29/9
Article5(1)ofRegulationNo17,before1February
1963.Theseagreementsdidnotsatisfytheconditions
laiddowninArticle85(3)(see11and12above).
However,BMWhasamendedthenewstandardforms
ofagreement(see1and2above)insuchawaythat
theydonowsatisfytheconditionslaiddownin
Article85(3).UnderArticle7(1)ofRegulationNo
17,theCommissionmayfixtheperiodduringwhich
theprohibitioncontainedinArticle85(1)shallapply.
AsBMWendedtheexportprohibitionwhenit
becameclearthatanexemptionforsuchrestriction
couldnotbegrantedintheautomobilesector,the
necessaryconditionsprevailfortheCommissionto
statethattheprohibitionshallnotapplyfrom13
March1962,thedateofentryintoforceofRegulation
No17,to1January1973,thedateonwhichtheold
standardagreementswerereplacedbythenew.
35.ConditionsaretobeattachedtotheDecision
sothattheCommission maybeinapositionto
examinewhetheraccesstotradeinmotorvehicles,
sparepartsandaccessoriesisbeingunreasonably
restrictedbytheBMWdistributionsystem,and
whetherthecooperationbetweenBMWandits
dealersisbeingusedtorestrictcompetitiontoan
extentgreaterthanisapparentfromthecontentof
thedistributionagreements .Annualreportsaretobe
submittedtotheCommissiongivingdetailsofany
caseswhereBMWhasrefusedtoconcludedistribu­
tionagreementsorhasterminatedoramendedsuch
agreements,orwhereBMWhasrefusedpermissionto
itsdealerstosellcompetingproducts.Theserequire­
mentsarebasedonArticle8(1)ofRegulationNo17,adequatesalesopportunities withoutimpairingthe
qualityoftheBMWdealer'sservice.
31.TheBMWstandardagreementsprovidethe
partieswithnoopportunitytoeliminatecompetition
inrespectofasubstantialpartofthegoodsconcerned .
Inthefirstinstance,theyconcernBMWvehicles,
whichcompetewitharangeofothervehicles
throughoutthecommonmarket;inthesecond,as
hasalreadybeenstated(see29and30above)competi­
tionbetweenBMWandcompetingproductsismain­
tainedatthevariouslevelsofdistributionwithinthe
BMWnetwork.
Fornoneofitsmotorcars—evenwithanarrowdefi­
nitionofthemarket—doesBMWhaveashareof
theGermanmarketwhichwouldexcludecompetition
inrespectofasubstantialpartoftheproducts
concerned .InthatrespecttheCommissionhadto
considerwhetherthefactthatinGermanyBMWhas
aconsiderableshareofthemarketinmotorcyclesof
250cccapacityandabovemilitatedagainstthe
grantingofanexemption .TheBMWshareofmotor
cyclesof250cccapacityandaboveregisteredin
Germanyin1972wasapproximately32%.In1973
BMWproduced197446carsand20856motorcycles
andsold193378carsand19918motorcycles;its
turnoverformotorcarswasDM1040000000andfor
motorcyclesDM79035000.Bearinginmindthe
lesserimportanceofthetradeinmotorcycleswhen
comparedwiththatinmotorcarsandthegreatsimi­
larityinsalesandservicemethodsforthetwo
products,itwouldbeunreasonable toimposeon
BMWadifferentmethodofdistribution formotor
cycles;moreover,BMWissubjecttoeffectivecompeti­
tioninthemotorcyclemarketinGermanyandeven
moresointheothercountriesofthecommon
market.
AlltheconditionslaiddowninArticle85(3)have
thereforebeenfulfilled .HASADOPTEDTHISDECISION :
Article1
TheprovisionsofArticle85(1)oftheTreatyesta­
blishingtheEuropeanEconomicCommunityare,
pursuanttoArticle85(3),declaredinapplicabletothe
standardformsofmainandretaildealershipagree­
mentmadebytheBayerischeMotorenWerkeAktien­
gesellschaftandusedbytheminGermanysince1
January1973.
ThisDecisionshallhaveeffectfrom1January1973
to31December1977.VI
32.PursuanttoArticle6(1)ofRegulationNo17,
thedateofoperationoftheexemptionunderArticle
85(3)istobe1January1973,sinceitwasonthat
datethatBMWbegantousetheirnewstandardforms
ofagreement,whichwerecoveredbytheprevious
notification .
33.Thenewstandardformsofagreementarevalid
until31December1977.Itisconsideredappropriate
tolimittheperiodofvalidityoftheexemptionunder
Article85(3)inaccordancewithArticleS(1)ofRegu­
lationNo17to31December1977,sothatthe
Commissionmaythereafterreexaminetheoperation
oftheBMWdistributionsystem.
34.BMWhadnotifiedtheCommission ofthe
earlieragreements ,pursuanttothesecondsentenceofArticle2
TheprohibitioncontainedinArticle85(1)shallnot
beapplicabletothestandardformsofwholesaler ,
maindealerandretaildealeragreementmadeand
usedinGermanybytheBayerischeMotorenWerke

NoL29/10 3.2.75 OfficialJournaloftheEuropeanCommunities
Aktiengesellschaft duringtheperiod13March1962
to1January1973.
Article3
TheBayerischeMotorenWerkeAktiengesellschaft is
herebyrequiredtosubmitanannualreporttothe
Commission ,thefirsttobepreparedby31December
1975,settingout:
—anycasesofrefusaltoconcludedistributionagree­
mentsinGermany,andanyterminationormodifi­
cationofsuchagreements ,
—anycaseswhereBMWdealersinGermanyare
refusedpermissiontosellcompetingproducts.Article4
ThisDecisionisaddressedtotheBayerischeMotoren
WerkeAktiengesellschaft ,8München40,Petuelring
130.
DoneatBrussels,13December1974.
FortheCommission
ThePresident
François-Xavier ORTOLI