NoL19/18 OfficialJournaloftheEuropeanCommunities 23.1.74
COMMISSION DECISION
of21December 1973
concerningproceedingsunderArticle85oftheTreaty(IV/223—Transocean
MarinePaintAssociation )
(OnlytheEnglishtextisauthentic)
(74/16/EEC)
THECOMMISSION OFTHEEUROPEAN
COMMUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularArticle85
thereof;
HavingregardtoCouncilRegulationNo17of6
February 1962('),andinparticularArticles4,6and8
thereof;
HavingregardtotheDecisionof27June1967(2),
wherebytheCommissiongrantedexemptionuntil31
December1972totheTransoceanMarinePaintAsso­
ciationinaccordancewithArticle85(3);
Havingregardtotheapplication ,lodgedon27
October1972bytheGeneralSecretaryoftheAssocia­
tiononbehalfoftheMembers,foranextensionofthe
exemption ;
Havingheardtheundertakingsconcernedinaccor­
dancewithArticle19(1)ofRegulationNo17and
RegulationNo99/63(3);
Havingregardtothepublicationoftheessential
contentoftheapplicationforextensioninpursuance
ofArticle19(3)ofRegulationNo17intheOfficial
JournaloftheEuropeanCommunities ,NoC98of
16November1973;
HavingregardtotheOpiniondeliveredon5
December1973bytheAdvisoryCommitteeon
RestrictivePracticesandDominantPositionspursuant
toArticle10ofRegulationNo17,
I—Molijn&Co.NV,Rotterdam ,Netherlands ,
—J.C.deConinckenZonenNV,Antwerp,Belgium,
—Astral,SocietedePeintures,VernisetEncresd'lm­
primerie,Paris,France,
—VenezianiZoncaS.p.A.,Trieste,Italy,
—Farbenfabriken Hansa-Hoëg ,Kiel,FederalRepub­
licofGermany,
—StorrySmithsonGroupofCompanies ,Hull,
England,
—Sadolin&HolmbladA/S,Copenhagen ,Denmark,
—C.Ljungdahls ,AB,Goteborg,Sweden,
—UrruzolaSA,Madrid,Spain,
—TheNationalLacquerandPaintProductsCo.Ltd.,
Hongkong ,
—-PacificProductsInc.,Manila,Philippines ,
—NipponPaintCo.Ltd.,Osaka,Japan,
—NipponPaintLtd.,Singapore,
—NipponPaint,Malaysia,
—NipponPaintCo.Ltd.,Thailand,
—SpartanPaintsPty.Ltd.,Melbourne ,Australia,
—Patterson-Sargent ,NewBrunswick ,USA,
—GalleonPaintsCo.Ltd.,Parow,SouthAfrica,
—Mauvilac&Co.Ltd.,Pailles,Mauritius,
—AntillianPaintFactoryLtd.,NetherlandsAntilles.
TheobjectoftheAssociationistoenableitsmembers
tocompeteeffectivelyinthespecialcircumstances of
theworldmarinepaintmarket.Thisrequiresthat
paintofstandarddescriptionshouldbeavailableinas
manyportsaspossible.Themembersthereforehave
eachagreedtomanufacturemarinepaintsofidentical
compositionandtomarkettheseinthesamepack­
agingandunderacommontrade-mark .Eachmember
istopromotethesaleofthesepaintsintheStatein
whichitisestablishedandtheotherterritoriesspecifi­
callyallocatedtoit.Themembersaretomaintain
stocksofthepaintsintheportssituatedintheseterri­
toriesandtoberesponsibleforaftersalesserviceand
promotion .whereas :
TheTransoceanMarinePaintAssociation (hereinafter
called'theAssociation')isanassociationofmedium­
sizedmarinepaintproducerswhichwasestablishedin
1959.Itconsistsatpresentofthefollowing20
producers :
(')OJNo13,21.2.1962,p.204/62.
(2)OJNo163,20.7.1967,p.10.
(3OJNo127,20.8.196.3,p.2268/63.

23.1.74 OfficialJournaloftheEuropeanCommunities NoL19/19
—PanWorldPaintAssociation ,whichhasbeenesta­
blishedrecentlyandtowhichHerberts,asubsid­
iaryofBayer,belongs,
—CamrexandW&JLeigh(UK).
TheshareofthemembersoftheAssociationamounts
tofrom5to10%ofthemarinepaintworldmarket.
AKZOandBASFarealsomanufacturers ofmarine
paints.TheAKZOGroupincludestheFrenchTrans­
oceanmemberAstralandtheNetherlands firm
Sikkens,whichmanufacturesmarinepaintsbutisnot
amemberoftheAssociation .TheBASFgroup
includestheSpanishmemberUrruzolaandalsothe
GermanfirmGlasurit,whichisalsoanon-member
paintmanufacturer .Inthemarinepaintssector,
whichmustbedistinguished fromthegeneralpaints
sector—80%ofmarinepaintscannotbeused
outsidethemarinemarket—thefirmsAKZO/
SikkensandBASF/Glasurithowever,atpresent
occupypositionsoflittlesignificance ,anddonotexer­
ciseanyinfluenceonthepolicyofthetwoTrans­
oceanmembersinthemarinepaintssector.
Noobservationsfromthirdpartieswerereceivedby
theCommission followingthepublicationofa
summaryoftheapplicationforanextensionofthe
exemption .Themembersareboundtorespecttheuniform
qualityformula,tosubmittoqualitycontrolandto
exchangelicencesandthebenefitsofexperiences
acquired.Theymayexportpaintstoanother
member'sterritory,butinsuchcasemustpaya
commission tosuchmember .Acommission isalso
payableinthecaseofdeliverytoashipregisteredin
anothermember'sterritory.Amember'scooperation
insecuringorexecutingordersalsogivesrisetoa
claimforcommission ,forwhichareferencerateis
givenandthepreciseamountofwhichisfixedinindi­
vidualcasesbythemembersconcerned .
Themembersareentitledtomanufacture andsell
marinepaintsofothercompositionundertheirown
individualtrade-marks .Suchpaintsmayonlybe
exportedtotheterritoryofanothermemberwiththe
latter'sconsent.Suchconsenthowevermaynottobe
withheldunlesstheinterestsoftheAssociationwould
beadverselyaffected.
Cooperationbetweenthemembersandothermarine
paintproducersisprohibitedunlesspreviouslyautho­
rized.Membershiprequiresatwo-thirdmajority.The
formerrequirementofaunanimousvotewasabol­
ishedin1972.Inaddition,referenceismadetothe
otherfactsandmatterssetoutintheabovementioned
CommissionDecisionof27June1967.
SincetheDecisionoftheCommission in1967the
totalturnoverofthemembersinallmarinepaintshas
increasedconsiderably .Thismaybeattributedparticu­
larlytotheNipponPaintGroupwhichalone
accountsfor60%oftheturnoverinmarinepaintsof
membersoftheAssociation .TheproportionofTrans­
oceanpainthasalsorisenconsiderablyinrelationto
thetotalmarinepaintturnoverofthemembers,rising
fromonethirdbeforetheCommission Decisionin
1967toaboutthree-quarters in1972.
ThemembersoftheAssociationare,aswasthecase
atthetimeoftheformerDecision,facedwith
genuinecompetition fromothermarinepaints
producerswhoowingtotheirlargesizeandinterna­
tionallinks,haveaworldwidesale'snetwork.The
mostimportantcompetitorisInternationalRedHand
withaworldmarketshareofapproximatively 25to
30%.Otherimportantcompetitorsare:
—BritishPaints/FederalPaint,whichistodaya
subsidiaryofHoechst(FRG),
—Hempel(Denmark),
—Jotum,agroupbelongingtoNipponOiland
includingtheformerTransoceanMemberBjercke
(Norway),
—SigmaCoatings,agroupofMarinepaintproducers
belongingtoPetrofinaandcomprising ,withinthe
Community ,thecompaniesRipolin,Pieter
Schoen,VettewinkelandVarrossieau ,
—PinchinJohnson,belongingtoCourtaulds,II
TheCommissionhasalreadygivenitsreasons,which
aresetforthindetailintheDecisionof27June1967,
forholdingthattheAgreementonwhichtheAssocia­
tionisbasedfallswithintheprohibitioncontainedin
Article85(1).TheAgreementobligesthemembersto
concentratetheirproductionandmarketingactivities
ontheirowncontractterritoryandmakesitdifficult
forthemtoengageineconomicactivityinthemarine
paintssectorwithinthecontractterritoryofother
members.Suchclosecooperationgivesrisetomutual
consideration andobservanceofthemember'sown
contractterritories.TheAgreementthereforerestricts
competition betweenthememberswithinthe
CommonMarketandmayaffecttradebetween
MemberStates.
TheCommissionconsidershoweverthattheexemp­
tionalreadygrantedmaybeextendedinaccordance
withArticle8(2)ofRegulationNo17,inviewofthe
factthattheconditionsofArticle85(3)remain
fulfilled.Coordination ofthemember'sindividual
salesnetworksatpresentprovidesmemberswitha
suitablemeansofimprovingsupplyanddistribution
inthemarinepaintssector,andenablesthemtoenter
intomoreintensivecompetitionwithlargeproducers
ofmarinepaint.Consumersalsosharethesebenefits.

NoL19/20 OfficialJournaloftheEuropeanCommunities 23.1.74
InitsDecisionof27June1967,theCommission
consideredthattheprovisionsoftheAgreement,
wherebyamembermayonlydeliverwithinthe
contractterritoryofanothermemberorforaship
registeredinsuchterritoryagainstpaymentof
commissionandmayonlyexportothermarinepaints
toacountryinwhichanothermemberisestablished
withtheconsentofthelatter,werefor'aninitial
period'indispensablerestrictionsfortheattainmentof
theobjectsoftheAssociation .Inviewofthefactthat
thetotalturnoverofTransoceanmembershasrisen
noticeablysincetheCommissionDecision,ashasthe
shareofTransoceanpaintsinthetotalturnoverof
marinepaintsofthemembers,themaintenance of
theserestrictionsnolongerappearstobejustified.
TheCommissionregardsasunjustifiedtheobligation
topaycommissioninthecaseoftheexportofTrans­
oceanpaintsordeliverytoaforeignship,irrespective
oftheroleplayedbythememberclaimingsuch
commissionintheobtainingorintheexecutionof
theorderinquestion.Theobligationtoprovidefull
detailstothememberentitledtocommission in
respectofeachoftheabovementioned transactions ,
forthepurposesofcalculatingsuchcommission ,
hinderstheachievement ofsuchdeliveriestoan
extentthatisnolongerjustifiable.Transoceanmarine
paintshavebecomegenerallywellknownthanksto
thejointsalesandpromotioninitiativesofthe
members;theobtainingofanordertobeexecutedin
anotherterritorycannolongerbeautomatically attri­
butedtothememberestablishedinthatterritory,or
beassumedthereforetogivearighttocommission .andAKZO/SikkensandBASF/Glasuritontheother.
TheCommission hasneverthelesss alsoconsidered
thefactthatthepositionoftheAKZOcompany
SikkensandtheBASFcompanyGlasuritinthe
specializedmarinepaintsectorhasuntilnow
remainedunimportant ,althoughduetothesizeofthe
companiesconcerneditmaybeconsiderablystreng­
thenedinarelativelyshorttime.Shouldthefactsin
thisregardchangethepresentexemptioncouldbe
reconsidered .TheCommissionconsidersitappro­
priateinthecircumstances tolimitthedecisiontoa
fixedperiodendingon31December1978.
Subjecttothereservationexpressedintheforegoing,
itmaybesaidthattheAgreementhasadvantages
whichmaywellhavetheeffectofcompensating for
itsdisadvantages ,andthatamarketshareof5to
10%intheCommonMarketdoesnotpresentany
opportunitytorestrictcompetitionsignificantlyinthe
goodsinquestion.
Inordertoexaminethoroughlyandwithfullknow­
ledgeofthefactswhethertheimplementation ofthe
AgreementaffectscompetitionwithintheCommon
Marketinamannerwhichisincompatiblewiththe
EEC-Treaty ,theCommission istobeinformed
withoutdelayofanyamendmentoradditiontothe
Agreement ,andofanydecisionorarbitrationheld
pursuanttotherestrictiveprovisionsoftheAgree­
ment,inparticularArticles3to9thereof,aswellasof
anychangeinmembership ,participationorinter­
lockingdirectorates ,andalsotoreceiveanannual
reportontheactivitiesoftheAssociation ,
HASADOPTED THISDECISION :
Article1
Thedeclarationofexemptioninaccordancewith
Article85(3)oftheTreatyestablishingtheEuropean
EconomicCommunity ,whichtheCommissionissued
byitsDecisionof27June1967concerningtheAgree­
mentof1January1959establishingtheTransocean
MarinePaintAssociationisherebyextendedfrom31
December1972to31December1978.TheCommission alsoregardsasunjustifiedrequire­
menttoseekconsentinthecaseofthesupplyofnon­
Transoceanpaints.Evenwheresuchconsentis
normallygivenasamatterofcourse,therequirement
amountstoanunnecessaryrestrictiononopportuni­
tiesforexport.
TheCommissionconsidersthatboththeseprovisions
inthepresentcircumstances favourthecreationofa
preferentialpositionwithinaterritory,andtothis
extentarenolongerrequiredfortheattainmentofthe
objectsoftheAgreement .TheAssociationshould
thereforebeinstructedtorevoketheseprovisions .
TheCommission hasfurtherexaminedwhetherthe
factthattheTransoceanmembersAstralandUrrazola
bothbelongtoimportantandfinanciallypowerful
groupsofenterprises (AKZOandBASF),whichenjoy
astrongpositioninthegeneralpaintsmarket,mili­
tatesagainstanunqualifiedextensionoftheexemp­
tion,andwhetheritisnecessarytoremovetheseclose
tiesortorequirethewithdrawalofthemembers
concernedinordertoguaranteegenuinecompetition
betweentheTransocean membersontheonehandArticle2
ThisDecisionissubjecttotheconditionthatthe
followingprovisionsoftheAgreementshallbe
rescindedandceasetohaveeffectwithinsixmonths
ofthisDecision,thatistosay:
1.TheprovisioninArticle5,wherebyamembermay
onlyexportmarinepaintproductsbearingitsown
trademarktothecontractterritoryofanother
memberwiththelatter'sconsentand

23.1.74 OfficialJournaloftheEuropeanCommunities NoL19/21
memberoftheAssociation insuchoutside
companiesorvicc-vcrsaincludingallchanges
insuchlinksorparticipations alreadyinexist­
ence.
2.AreportistobesubmittedbytheAssociation
annuallytotheCommissionontheactivitiesofthe
Associationandinparticularonimprovements in
theproductionandmarketingofmarinepaint
productsachieved.
Article4
ThisDecisionisaddressedtothemembersofthe
TransoceanMarinePaintAssociationthroughthe
intermediary oftheSecretary-General ,MrF.Th.
Regnault,DelftsePlein37,Rotterdam,theNether­
lands.2.TheprovisioninArticle8,wherebyamembermay
onlydeliveruniformlymarkedmarinepaint
productstothecontractterritoryofanother
memberorforashipfromsuchaterritoryagainst
paymentofacommissiontotheothermember
concernedirrespectiveoftheserviceswhichthe
latterhasfurnishedinobtainingorinexecuting
theorderinquestion.
Article3
ThisDecisionissubjecttothefollowingobligations :
1.ThattheCommission shallbeinformedwithout
delayofthefollowingmatters:
(a)AnyamendmentoradditiontotheAgreement ,
(b)AnydecisiontakenbytheBoardofDirectors
ortheresultofanyarbitrationheld,pursuantto
therestrictiveprovisionsoftheAgreement ,in
particularArticles3to9thereof,
(c)Anychangeinthecomposition ofmember­
ship,
(d)Anylinksbywayofcommondirectorsor
managersbetweenamemberoftheAssociation
andanyothercompanyorfirminthepaints
sectororanyfinancialparticipation byaDoneatBrussels,21December1973.
FortheCommission
ThePresident
Francois-Xavier ORTOLI