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COMMISSION DECISION

OF 21 DECEMBER 1973

ON THE AUTHORIZATION OF A JOINT-BUYING AGREEMENT BETWEEN A NUMBER OF DANISH STEEL PRODUCT DISTRIBUTORS

( ONLY THE DANISH TEXT IS AUTHENTIC )

( 74/42/ECSC )

THE COMMISSION OF THE EUROPEAN COMMUNITIES ,

HAVING REGARD TO THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY , AND IN PARTICULAR ARTICLE 65 THEREOF ;

HAVING REGARD TO THE ACT ON THE CONDITIONS OF ACCESSION AND THE ADJUSTMENTS TO THE TREATIES , ANNEXED TO THE COUNCIL DECISION OF THE EUROPEAN COMMUNITIES OF 22 JANUARY 1972 , AND IN PARTICULAR ARTICLE 156 THEREOF ;

HAVING REGARD TO THE APPLICATION BY THE INTERESTED PARTIES OF 19 MARCH 1973 ;

I

1 . WHEREAS THE FOLLOWING STEEL PRODUCT DISTRIBUTORS :

JERNKONTORET A/S , COPENHAGEN ,

LEMVIGH-MUELLER OG MUNCK A/S , COPENHAGEN ,

S . C . SOERENSEN A/S , RANDERS ,

A/S BROEDRENE EDSTRAND , HVIDOVRE ,

M . J . GROENBECH OG SOENNER A/S , COPENHAGEN ,

P . C . PETERSEN A/S , AALBORG ,

BROEDRENE KIER A/S , AARHUS ,

CH . C . RAHR OG CO . A/S , COPENHAGEN ,

LANGE OG UNMACK A/S , AALBORG ,

HANS KNUDSEN JERN - OG STAALFORRETNING A/S , SVENDBORG ,

IN ACCORDANCE WITH ARTICLE 65 ( 2 ) OF THE ECSC TREATY AND ARTICLE 156 OF THE ACT ON THE CONDITIONS OF ACCESSION AND THE ADJUSTMENTS TO THE TREATIES , ANNEXED TO THE COUNCIL DECISION OF THE EUROPEAN COMMUNITIES OF 22 JANUARY 1972 , REQUESTED ON 19 MARCH 1973 THE COMMISSION'S AUTHORIZATION FOR AN AGREEMENT THEY HAD CONCLUDED ON 2 MARCH 1967 ;

2 . WHEREAS UNDER THE AGREEMENT IN QUESTION THE MEMBER FIRMS HAVE SET UP THE COMPANY " SERVICELAGER FOR JERNBRANCHEN A/S " ( SLJ ) WITH AN INITIAL CAPITAL OF DKR 1 890 000 , TO BE INCREASED LATER TO DKR 2 975 000 ; WHEREAS THE AIM OF SLJ IS :

- TO PURCHASE FOR RESALE TO THE MEMBER FIRMS ROLLED PRODUCTS CORRESPONDING TO THE DEFINITION IN DIN 17 100 - 42.2 ;

- TO CREATE A STOCKPILE OF THE GRADES AND CATEGORIES OF THE ABOVEMENTIONED STEELS WHICH THE MEMBER FIRMS DO NOT NORMALLY KEEP IN STOCK THEMSELVES ;

- TO CUT UP COILS AND SHEET ;

- TO CARRY OUT STUDIES ON THE TRENDS IN THE INTERNATIONAL MARKET ;

3 . WHEREAS 90 % OF SLJ'S REGISTERED CAPITAL IS HELD BY THE FIRMS JERNKONTORET A/S , LEMVIGH-MUELLER OG MUNCK A/S AND S . C . SOERENSEN A/S ; WHEREAS THE REMAINING 10 % IS HELD BY THE OTHER SEVEN MEMBER FIRMS ; WHEREAS IN PRACTICE THE FIRMS HOLDING 90 % OF THE CAPITAL BUY THE STEELS IN QUESTION FROM THE STEELWORKS AND SELL THEM TO SLJ , WHICH THEN SUPPLIES THE MEMBER FIRMS ACCORDING TO THEIR NEEDS ;

4 . WHEREAS THE MEMBER FIRMS UNDERTAKE TO ABSTAIN FROM ALL COMMERCIAL ACTIVITY INCOMPATIBLE WITH THE SLJ'S OR COMPETING WITH IT ;

5 . WHEREAS THE AGREEMENT IS VALID FOR FIFTEEN YEARS ;

II

6 . WHEREAS THE AGREEMENT IN QUESTION DISTORTS NORMAL COMPETITION BETWEEN THE MEMBER FIRMS FOR THE FOLLOWING REASONS :

- THROUGH SLJ THEY OBTAIN SUPPLIES OF ROLLED STEELS AT UNIFORM CONDITIONS AND PRICES WHICH DIFFER FROM THOSE WHICH EACH COULD OBTAIN SEPARATELY ;

- THEY AGREE NOT TO KEEP INDIVIDUAL STOCKS OF CERTAIN STEEL PRODUCTS ;

- THEY AGREE NOT TO EQUIP THEMSELVES FOR CUTTING UP COILS AND SHEET ;

- THEY AGREE TO ABSTAIN FROM ALL ACTIVITY COMPETING WITH THE SLJ'S ;

7 . WHEREAS , UNDER THESE CIRCUMSTANCES , THE AGREEMENT IN QUESTION COMES UNDER THE BAN OF WHICH THE PRINCIPLE IS STATED IN ARTICLE 65 ( 1 ) OF THE TREATY ;

8 . WHEREAS , NEVERTHELESS , ACCORDING TO ARTICLE 65 ( 2 ) , SPECIALIZATION AGREEMENTS , JOINT-BUYING OR JOINT-SELLING AGREEMENTS AND AGREEMENTS STRICTLY ANALOGOUS IN NATURE AND EFFECT MAY BE AUTHORIZED IF THE COMMISSION IS SATISFIED THAT THEY MEET THE BODY OF REQUIREMENTS LAID DOWN ;

9 . WHEREAS THE AGREEMENT IN QUESTION HAS SET UP A JOINT-BUYING ORGANIZATION FOR STEEL PRODUCTS ; WHEREAS SLJ'S CUTTING-UP ACTIVITY MAY BE CONSIDERED AS A SPECIALIZATION OF THE JOINT VENTURE IN AN ACTIVITY NO LONGER EXERCISED BY THE MEMBER FIRMS ; WHEREAS THIS AGREEMENT MAY THEREFORE BE AUTHORIZED UNDER ARTICLE 65 ( 2 ) IF AND IN SO FAR AS IT MAKES FOR A SUBSTANTIAL IMPROVEMENT IN PRODUCTION OR DISTRIBUTION AND IF IT IS ESSENTIAL IN ORDER TO ACHIEVE THOSE RESULTS , WHILE NOT BEING MORE RESTRICTIVE THAN IS NECESSARY FOR THAT PURPOSE ; WHEREAS , MOREOVER , IT MUST NOT BE LIABLE TO GIVE THE UNDERTAKING CONCERNED THE POWER TO DETERMINE THE PRICES , OR TO CONTROL OR RESTRICT THE PRODUCTION OR MARKETING OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET , OR TO SHIELD THEM AGAINST EFFECTIVE COMPETITION FROM OTHER UNDERTAKINGS WITHIN THE COMMON MARKET ;

III

10 . WHEREAS THE GROUPING TOGETHER OF THE STEEL PURCHASES OF THE TEN FIRMS HAS PERMITTED THEM TO OBTAIN BETTER PRICES AND CONDITIONS FROM STEEL WORKS ; WHEREAS THE CREATION OF A SINGLE STOCKPILE HAS PERMITTED SUBSTANTIAL ECONOMIES BOTH IN CAPITAL EXPENDITURE AND IN ADMINISTRATIVE COSTS ; WHEREAS THE CUTTING-UP DONE BY THE SLJ REPRESENTS A USEFUL SERVICE TO THE MEMBER FIRMS , WHICH HAVE BEEN ABLE TO SAVE THE INVESTMENTS NECESSARY FOR EQUIPPING THEMSELVES FOR SUCH A PURPOSE ; WHEREAS THE OVERALL RESULT OF THESE ADVANTAGES HAS BEEN AN IMPROVEMENT IN THE SUPPLY CONDITIONS OF THE FIRMS , AND HENCE A SIGNIFICANT IMPROVEMENT IN THE DISTRIBUTION OF THE PRODUCTS IN QUESTION ;

11 . WHEREAS THESE IMPROVEMENTS CANNOT BE ACHIEVED ON THE SAME SCALE BY INDIVIDUAL PROCUREMENT AND STORAGE OF STEEL BY EACH OF THE FIRMS CONCERNED ; WHEREAS THE CLAUSE OF NONCOMPETITION WITH SLJ WHICH HAS TO BE OBSERVED BY THE FIRMS IS ESSENTIAL TO THE SMOOTH FUNCTIONING OF SLJ'S ACTIVITIES ; WHEREAS , ACCORDINGLY , THE AGREEMENT IN QUESTION IS ESSENTIAL FOR PURPOSES OF IMPROVEMENT , WHILE NOT BEING MORE RESTRICTIVE THAN IS NECESSARY FOR THAT END ;

12 . WHEREAS THE AGREEMENT FULFILS THE REQUIREMENTS OF ARTICLE 65 ( 2A AND B ) OF THE TREATY ;

IV

13 . WHEREAS IN 1972 THE SLJ RESOLD ABOUT 15 000 METRIC TONS OF ROLLED PRODUCTS , INCLUDING 8 500 METRIC TONS FROM PURCHASE AND RESALE OF THE STEELS IN QUESTION TO MEMBER FIRMS AND 6 500 METRIC TONS FROM THE SALE OF CUT-UP STEEL SHEET ; WHEREAS DANISH CONSUMPTION OF THE PRODUCTS IN QUESTION WAS 700 000 METRIC TONS IN 1972 ; WHEREAS THE QUANTITIES OF ROLLED STEEL SOLD BY THE DEALERS OF THE ENLARGED COMMUNITY IN 1972 CAN BE ESTIMATED AT ABOUT 40 MILLION METRIC TONS ;

14 . WHEREAS THE FOREGOING SHOWS THAT THE FIRMS IN QUESTION WILL NOT HAVE THE POWER TO DETERMINE THE PRICES , OR TO CONTROL OR RESTRICT THE PRODUCTION OR MARKETING OF A SUBSTANTIAL PART OF THE STEELS IN QUESTION WITHIN THE COMMON MARKET , OR TO SHIELD THEM AGAINST EFFECTIVE COMPETITION FROM OTHER UNDERTAKINGS ; WHEREAS THE AGREEMENT THEREFORE CONFORMS TO THE REQUIREMENTS OF ARTICLE 65 ( 2C ) OF THE TREATY ;

15 . WHEREAS SLJ AND THE MEMBER FIRMS MUST IMMEDIATELY NOTIFY THE COMMISSION OF ALL AMENDMENTS AND ADDITIONS TO THE AGREEMENT IN QUESTION , AND WHEREAS THESE CANNOT BE APPLIED UNTIL THE COMMISSION HAS DECLARED THEM ADMISSIBLE OR , WHERE APPROPRIATE , UNTIL IT HAS GRANTED AUTHORIZATION UNDER ARTICLE 65 ( 2 ) OF THE TREATY ;

16 . WHEREAS THE AGREEMENT IN QUESTION IS CONCLUDED FOR FIFTEEN YEARS AND EXPIRES ON 1 MARCH 1982 ;

17 . WHEREAS THE AGREEMENT SUBMITTED FOR AUTHORIZATION IS IN ACCORDANCE WITH ARTICLE 65 ( 2 ) AND THE OTHER PROVISIONS OF THE TREATY ,

HAS ADOPTED THIS DECISION :

ARTICLE 1

THE AGREEMENT CONCLUDED ON 2 MARCH 1967 BETWEEN THE FOLLOWING STEEL DISTRIBUTORS :

- JERNKONTORET A/S , COPENHAGEN ,

- LEMVIGH-MUELLER OG MUNCK A/S , COPENHAGEN ,

- S . C . SOERENSEN A/S , RANDERS ,

- A/S BROEDRENE EDSTRAND , HVIDOVRE ,

- M . J . GROENBECH OG SOENNER A/S , COPENHAGEN ,

- P . C . PETERSEN A/S , AALBORG ,

- BROEDRENE KIER A/S , AARHUS ,

- CH . C . RAHR OG CO A/S , COPENHAGEN ,

- LANGE OG UNMACK A/S , AALBORG ,

- HANS KNUDSEN JERN - OG STAALFORRETNING A/S , SVENDBORG ,

SETTING UP THE COMPANY " SERVICELAGER FOR JERNBRANCHEN A/S " IS HEREBY AUTHORIZED .

ARTICLE 2

THE FIRMS CONCERNED MUST IMMEDIATELY NOTIFY THE COMMISSION OF ALL AMENDMENTS AND ADDITIONS TO THE AGREEMENT , AND THESE MAY NOT BE APPLIED UNTIL THE COMMISSION HAS ASCERTAINED THAT THEY ARE IN ACCORDANCE WITH THE AUTHORIZATION GRANTED BY THIS DECISION , OR UNTIL THE COMMISSION HAS AUTHORIZED THEM IN PURSUANCE OF ARTICLE 65 ( 2 ) .

ARTICLE 3

THIS DECISION SHALL ENTER INTO FORCE ON 1 JANUARY 1973 AND SHALL EXPIRE ON 1 MARCH 1982 .

ARTICLE 4

THIS DECISION IS ADDRESSED TO :

- JERNKONTORET A/S , COPENHAGEN ,

- LEMVIGH-MUELLER OG MUNCK A/S , COPENHAGEN ,

- S . C . SOERENSEN A/S , RANDERS ,

- A/S BROEDENE EDSTRAND , HVIDOVRE ,

- M . J . GROENBECH OG SOENNER A/S , COPENHAGEN ,

- P . C . PETERSEN A/S , AALBORG ,

- BROEDRENE KIER A/S , AARHUS ,

- CH . C . RAHR OG CO . A/S , COPENHAGEN ,

- LANGE OG UNMACK A/S , AALBORG ,

- HANS KNUDSEN JERN - OG STAALFORRETNING A/S , SVENDBORG .

DONE AT BRUSSELS , 21 DECEMBER 1973 .

FOR THE COMMISSION

THE PRESIDENT

FRANCOIS-XAVIER ORTOLI