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

Case COMP/A.35.470/D3 - ARA

Case COMP/A.35.473/D3 - ARGEV, ARO

(2002/C 252/02)

(Text with EEA relevance)

1. NOTIFICATIONS AND COMPLAINTS

1. On 30 June 1994 Altstoff Recycling Austria AG ("ARA") and ARGEV Verpackungsverwertungs-Ges.m.b.H. ("ARGEV"), both with their registered offices in Vienna, notified various agreements to the EFTA Surveillance Authority seeking negative clearance or alternatively exemption from the ban on restrictive practices.

2. In a letter dated 21 March 1995 EFTA transferred responsibility for examining these notified agreements to the European Commission.

3. ARA organises a countrywide collection and recycling system for packaging in Austria. The system is designed to meet the requirements of the Austrian Packaging Ordinance (Verpackungsverordnung). To this end, ARA concludes waste disposal contracts with sectoral recycling companies (Branchenrecyclinggesellschaften - BRGs), assigning to them the task of organising the collection, sorting, transport, and recycling of packaging. The BRGs, of which ARGEV is one, are each responsible for specific packaging materials or material groups. They in turn conclude contracts with undertakings or local authorities, which then do the actual collection, sorting, transport and recycling. ARA and the BRGs together form the ARA system.

4. By letter dated 28 August 2001, ARA notified further agreements to the Commission with a view to obtaining negative clearance or exemption. ARA and ARGEV also sought to have their notifications joined. At the same time Altpapier-Recycling-Organisations GmbH ("ARO") indicated that it was becoming a party to the notification as it, too, wished to notify agreements.

5. The notification concerns agreements which together form the basis of the way that the ARA system operates.

6. On 8 May 1996 FRS Folien-Rücknahme-Service GmbH & Co. KG and Raiffeisen Umweltgesellschaft m.b.H. lodged a complaint with the European Commission (COMP/A.36.011/D3) against the planned formation of a joint venture to set up a collection and recycling system for packaging. However, the original complainants did not pursue their complaint, having abandoned their intention to take part in setting up the system. In a letter dated 27 April 2000 the newly formed joint venture EVA Erfassen and Verwerten von Altstoffen GmbH ("EVA"), with its registered offices in Vienna, took up and elaborated on the complaint against the companies in the ARA system as a new complainant, citing the aspects complained of by the previous complainants. EVA is now a wholly-owned subsidiary of Interseroh Aktiengesellschaft zur Verwertung von Sekundärrohstoffen, with its registered offices in Cologne.

7. In addition, on 24 March 1994 the Federal Chamber of Wage- and Salary-earners (Bundeskammer für Arbeiter und Angestellte) lodged a complaint with the EFTA Surveillance Authority and - when the case was handed over to the European Commission - wrote to the European Commission, Directorate-General for Competition, on 19 February 1996 citing the above complaint and submitted a statement on the ARA system, which it later expanded, notably in its letter of 22 March 2002.

2. THE AUSTRIAN PACKAGING ORDINANCE

8. On 1 December 1996 the Ordinance of the Federal Minister for the Environment, Youth and Family Affairs on the avoidance and recycling of packaging waste and certain waste goods and the establishment of collection and recycling systems (Verordnung des Bundesministers für Umwelt, Jugend und Familie über die Vermeidung und Verwertung von Verpackungsabfällen und bestimmten Warenresten und die Einrichtung von Sammel- und Verwertungssystemen(2) - "Packaging Ordinance") came into force in Austria. The Ordinance is based on the Austrian Waste Management Act (Abfallwirtschaftsgesetz - "AWG") and implements Directive 94/62/EG of the European Parliament and of the Council of 20 December 1994 on packaging and packaging waste(3). The Packaging Ordinance is an amended version of the first Packaging Ordinance that came into force in October 1993(4).

9. The aim of the Packaging Ordinance is to avoid or reduce the impact of waste and packaging on the environment. Section 1(1) of the Ordinance states that it applies to manufacturers, importers, packers, distributors and final consumers. Under Section 3 manufacturers, importers, packers and distributors of transport and sales packaging are obliged to take back any packaging they put into circulation, free of charge after use, and return it to an upstream obligated undertaking, or reuse it, or recycle it using the latest technology.

10. Under the terms of Section 12 of the Packaging Ordinance, manufacturers, importers, packers and distributors of outer packaging are also required to take back any packaging they put into circulation, free of charge after use, if they are not the final consumer, and to return it to an upstream obligated returnee, or reuse it, or recycle it using the latest technology. Obligated undertakings may use the services of third parties in order to meet their obligations. Those obligations apply from the final distributor through every stage of distribution back to the domestic manufacturer or importer. When purchasing packaged goods, final consumers can leave outer packaging at or near the point of sale. If the final consumer does not leave outer packaging behind, the rules on sales packaging apply by analogy.

11. Manufacturers, importers, packers and distributors are required under Section 3(3) of the Packaging Ordinance to take back sales packaging used by final consumers near the point of sale free of charge. This obligation is limited to packaging of the same type, shape and size as used for the goods put into circulation.

12. Owners of businesses that accumulate certain minimum quantities of packaging can apply to be registered as major sources. This means that they must ensure the collection and reuse or recycling of the packaging within the business (Section 8 of the Packaging Ordinance). In this case manufacturers, importers and packers are commonly said to be "dispensed from their obligations" by the system operator.

13. Under Section 3(5) of the Packaging Ordinance, if manufacturers, importers and packers are part of a collection and recycling system, the obligation to take back and recycle transport and sales packaging, including upstream and downstream in the distribution chain, is transferred to the system operator. The same applies under Section 4 of the Packaging Ordinance to distributors who supply transport and sales packaging to final consumers (final distributors).

14. Under Section 11 of the Packaging Ordinance a collection and recycling system of this kind for transport and sales packaging must ensure the collection and recycling of the packaging materials for which contracts have been concluded with obligated undertakings.

15. There is no general legal obligation to participate in any such system set up (but see point 18). Undertakings not participating are still obliged to take back packaging individually. However, within their field of activity, collection and recycling systems are required to conclude contracts with any obligated undertaking that wishes to participate, provided this is objectively justified. The field of activity of collection and recycling systems comprises packaging accumulating both in private households and in commerce and industry. Packaging that comes under a collection and recycling system does not have to be specially labelled.

16. Under Section 7(a)(I) of the Waste Management Act the establishment of a collection and recycling system or any major alteration requires approval by the minister responsible. Under Section 7(e) of the Waste Management Act a special procedure applies to systems which the minister responsible judges to hold a monopoly position in terms of taking over obligations for the collection and recycling of waste accumulating in households and similar areas.

17. Both undertakings with a take-back obligation but not participating in a system and collection and recycling systems themselves have to meet specified collection and recycling quotas. Under Section 11(7) of the Packaging Ordinance, authorisations for collection and recycling systems may lay down specific collection and recycling quotas if this serves the requirements of environmental protection and economic expedience and is appropriate. Under Section 3(6) of the Packaging Ordinance, manufacturers, importers and packers as defined in Section 3(4) of the Packaging Ordinance, final distributors as defined in Section 4, and all subsequent stages in the distribution chain for packaging that does not come under a collection and recycling system or has not been granted exemption under Section 7 are subject to certain record-keeping requirements regarding take-back and recycling and to packaging-specific take-back and recycling quotas.

18. Under Section 3(9) of the Packaging Ordinance, participation in a collection and recycling system is compulsory if records relating to the take-back obligations under Section 3(6) are not supplied.

3. THE ARA COLLECTION AND RECYCLING SYSTEM

19. The ARA system was set up in 1993 on the initiative of Austrian business and industry in order to implement the Packaging Ordinance. It is a country-wide system in Austria for the collection and recycling of all packaging materials and packaging (except bio-packaging) from households, businesses and industries that are subject to the Packaging Ordinance. It is a non-profit system, and consists of ARA and eight economically independent BRGs.

20. ARA, together with the BRGs, organises and coordinates the collection, sorting and recycling of transport and sales packaging in Austria. It offers its services to all Austrian and foreign businesses directly concerned by the Packaging Ordinance.

3.1. ARA

21. ARA is a public limited company (AG), privately owned, founded in 1993. The owner and sole shareholder is the Altstoff Recycling Austria Verein ("ARA Association"). Any undertaking or association of undertakings directly affected by the Packaging Ordinance can become a member. This includes firms in the packaging industry, the bottling and packing industry and the retail trade. To avoid conflicts of interest, firms in the waste disposal and recycling sector are excluded from membership. The ARA Association comprises three constituencies reflecting the interest groups of undertakings affected by the Packaging Ordinance: bottlers/packers/importers, retailers, and the packaging industry. The constituencies are represented equally on the Association's executive board, which also forms ARA's supervisory board. The ARA Association currently has about 240 members.

3.2. The BRGs

22. ARA does not take back or recycle used packaging itself. Instead it relies on the BRGs, with whom it has concluded "waste disposal contracts". Under these contracts the BRGs undertake to ensure the collection, sorting and/or recycling of used packaging under the terms of the Packaging Ordinance.

23. The following companies in the ARA system have registered with the Austrian ministry responsible as system operators under Section 45(11) or Section 7(a) of the Waste Management Act: ARGEV for metal packaging (ferrous, aluminium) and for so-called light packaging (wood, ceramic, plastic, bonded materials, textile fibre), Österreichischer Kunststoff Kreislauf AG (ÖKK) for plastic and textile-fibre packaging, Altpapier-Recycling-Organisationsgesellschaft m.b.H. (ARO) for packaging made of paper, cardboard, paperboard or corrugated board, and Austria Glas Recycling GmbH (AGR) for glass packaging.

24. By a decision under Section 7(e) of the Waste Management Act the Austrian ministry responsible has established the existence of a monopoly or near monopoly position in the case of ARO, ÖKK, ARGEV, AGR and Öko-Box Sammel GmbH, which cooperates with the ARA system.

25. The operation of the collection and recycling system enables ARA's licensees to be dispensed from their obligations for the packaging in question under Section 3(5) of the Packaging Ordinance. The rights of licensees in relation to the BRGs are represented by ARA acting as trustee.

26. The BRGs do not perform the tasks of collection and recycling directly either, but conclude contracts for this purpose in every Austrian region, i.e. political subdivision, with private businesses (known as "regional partners") who take charge of the actual disposal. The regional partners may in turn subcontract out their work. In a few instances, especially in larger cities, the regional partners are the municipal authorities. The BRGs are:

ARGEV Arbeitsgemeinschaft Verpackungsverwertungs-Ges.m.b.H.

27. ARGEV is responsible for the collection, sorting and conditioning of packaging made of plastic, metal, wood, textile fibre, ceramics or bonded material. ARGEV shareholders are ARA (11 %) and ARGEV Association. ARGEV Association comprises around 110 members in four categories (manufacturers/importers, retailers, packaging industry/BRGs, disposal/recycling firms). The waste disposal sector has no voting rights in the association's statutory bodies (executive committee, general assembly).

28. ARGEV collection systems comprise a household system for light packaging, a household system for metal packaging and a commercial system for light and metal packaging.

29. In 2000 there were 57 regional partners - waste disposal firms, municipal enterprises and consortia - running the collection systems on behalf of ARGEV. At regional level there were 144 private and municipal disposal companies involved in providing services as collectors plus 47 sorting and shredder plants. In 2002 the number of regional partners was 64.

30. ARGEV has concluded cooperation contracts with the following BRGs responsible for recycling: Alurec, AVM, FerroPack, ÖKK and VHP.

ÖKK Österreichischer Kunststoff Kreislauf AG

31. ÖKK is in charge of the recycling of plastic and textile packaging. ARA holds 11 % of the shares in ÖKK. The remaining 89 % of shares are held by the Österreichischer Kunststoffkreislauf association. At 31 December 2000 the association had a total of 51 members. The association's members are divided into constituencies of plastic manufacturers and distributors, plastic goods manufacturers and distributors, users of plastic packaging, system partners (in concrete terms ARGEV), organisations and undertakings in the plastics recycling industry and organisations and undertakings in the disposal industry. To avoid conflicts of interest, organisations and undertakings in the plastics recycling sector and the disposal industry (some of whom have business dealings with ÖKK) have no voting rights in the association's committee and are completely excluded from meetings to discuss legal business between association members and ÖKK.

32. To carry out recycling ÖKK has concluded contracts with disposal firms and transport companies. In 2001 there were 16 disposal companies for sorted plastics and eight disposal companies for mixed plastics in Austria.

Aluminium-Recycling GmbH

33. Alurec is responsible for the recycling of aluminium packaging collected by ARGEV. The shareholders in Alurec are the aluminium producer Austria Metall AG ("AMAG") and Salzburger Aluminium AG ("SAG"). The other shareholders are packaging manufacturers.

34. The recycling of aluminium packaging is done in the only two Austrian disposal plants AMAG and SAG. The proceeds from the aluminium are renegotiated each year and linked by a percentage key to the secondary quotation for aluminium on the London Metal Exchange.

Arbeitsgemeinschaft Verbundmaterialien GmbH

35. AVM is responsible for the recycling of packaging made of bonded materials except for bonded drinks cartons. The shareholders are ARO and ÖKK, each with 50 %. AVM organises recycling of the materials in close cooperation with ÖKK.

Verein für Holzpackmittel

36. VHP is responsible for the recycling and some collection of wood packaging. The association currently has 16 members, who are the Austrian wood packaging manufacturers and dealers.

FerroPack Recycling GmbH

37. FerroPack is responsible for the recycling of ferrous metal packaging collected by ARGEV, in other words tin plate and steel. The sole shareholder of FerroPack is the FerroPack Association for Metal Recycling (Verein für Metallrecycling FerroPack). The association currently has six members, who are the Austrian manufacturers of tin-plate and steel packaging.

Altpapier-Recycling-Organisationsgesellschaft m.b.H

38. ARO is responsible for collection and recycling of packaging made of paper, cardboard, board and corrugated board. ARA holds 11 % of the shares in ARO. The remaining shares are owned by paper manufacturers (roughly 28 %), de-inking recycling firms (27 %) and the paper processing industry (about 34 %). Each of the 17 ARO shareholders holds less than 17 %.

39. ARO has concluded agreements with 538 local authorities throughout Austria for near-household collection and with 79 disposal companies for all services relating to collection from retailers, business and industry.

Austria Glas Recycling GmbH

40. AGR is responsible for the collection and recycling of glass packaging. ARA owns 11 % of AGR shares. The remaining 89 % are owned equally by the two Austrian glass producers Vetropack Austria GmbH and Stölzle Oberglas GmbH.

41. AGR's country-wide collection system operates mainly as a bring-it-yourself system, with bulk containers set up at central locations. AGR operates in close cooperation with municipalities and over 30 private waste-disposal companies.

3.3. Basic economic data

42. The ARA system is financed by the fees paid by the enterprises that belong to the system (known as "licensees" (Lizenzpartner)). Firms sign up to the ARA system through a dispensation and licence agreement, by which they transfer their obligations under the Packaging Ordinance to the ARA system in return for payment of a fee, so being released from their obligations.

43. The number of licensees was 10994 in 1997, 11479 in 1998, 12027 in 1999 and 12295 in 2000. ARA's income from licence fees amounted to ATS 2608,1 million/EUR 189,6 million in 1997, ATS 2673,0 million/EUR 194,2 million in 1998, ATS 2694,2 million/EUR 195,8 million in 1999 and ATS 2543,3 million/EUR 184,8 million in 2000.

3.4. Market situation

44. The ARA system is the only country-wide collection and recycling system covering all material waste types (except bonded drinks cartons) in the area of near-household packaging in Austria. ÖKO-BOX Sammelges.m.b.H. also operates a country-wide collection and recycling system for used light drinks-packaging, cooperating with ARGEV in order to ensure country-wide collection. In addition, Bonus Holsystem für Verpackungen GmbH & Co. KG operates a disposal system in the building sector for packaging left at building sites with private final consumers and in the farming sector for packaging left with farmers.

45. In the household sector, there are no self-disposal solutions in operation under Section 3(6) of the Packaging Ordinance on any significant scale.

46. In the field of commercial and industrial packaging, the ARA system has several competitors, though they bear no comparison with the ARA system in terms of their economic importance. They are:

- EVA Erfassen and Verwerten von Altstoffen GmbH, a subsidiary of the Interseroh Gruppe in Germany, which disposes of metal, plastic, paper, wood, and bonded materials,

- Bonus Holsystem für Verpackungen GmbH & Co. KG (formerly FRS Folien-Rücknahme-Service GmbH & Co KG), Kufstein, which disposes of metal, plastic, paper, wood and textile packaging; this is, however, confined to packaging left with a commercial end user (in the building sector also with private final consumers at bare-shell buildings and in the farming sector with farmers),

- RUG Raiffeisen Umweltgesellschaft m.b.H., Kornneuburg, which disposes of reusable wine bottles and agricultural film,

- GUT Dr Klaus Galle Umwelttechnik & Ökoconsulting, Klosterneuburg, which disposes of metal, plastic, paper, wood, bonded, and bio-packaging,

- Pape Entsorgung GmbH & Co. KG, Hanover, Germany, which disposes of packaging for automobile OEM spare parts.

47. Only EVA, BONUS and GUT have their own system authorisation for the entire commercial sector.

48. There are also some self-disposal solutions, including for what are known as major sources.

4. NOTIFIED AGREEMENTS

49. This notice concerns:

- the dispensation and licence agreements between ARA and obligated undertakings under the Packaging Ordinance (without list of charges),

- the waste disposal contract between ARA and ARGEV as a model for the waste disposal contracts concluded between ARA and the following BRGs listed in the annex to the notification: ARGEV, AVM, ARO, AGR, Alurec, Verein für Holzpackmittel, FerroPack, ÖKK,

- the waste disposal or cooperation contract between ARGEV and ÖKK, and between ARGEV and Alurec, as models for the contracts concluded by ARGEV with ÖKK, Alurec, FerroPack and VHP,

- the contracts concluded by ARGEV and ARO with their respective regional disposal partners.

4.1. Dispensation and licence agreements

50. The legal relationship between ARA and the firms belonging to the system is governed by a standard contract, the "dispensation and licence agreement". The following variants of the standard contract exist:

- a dispensation and licence agreement for transport, sales, and outer packaging ("ELV"), and

- a dispensation and licence agreement for service packaging ("ELVS").

51. Licensees with a low annual licence fee can conclude a "supplementary agreement for small quantities of packaging". Firms with their registered offices in EU countries can become licensees of ARA by concluding a "supplementary agreement for foreign licensees from EU countries".

4.1.1. Dispensation and licence agreement for transport, sales, and outer packaging ("ELV")

52. Article I(1) of the ELV spells out ARA's role as trustee for the licensees, representing licensees' interests vis-à-vis the BRGs. The licensees charge and authorise ARA to conclude the lowest-cost waste disposal contracts possible with the BRGs in their interest. The waste disposal contracts are to require the BRGs to collect and/or recycle (depending on the BRG concerned) all packaging covered by collection and/or recycling guarantees in a proper professional manner in accordance with Packaging Ordinance. Licensees' rights vis-à-vis the BRGs are exercised solely by ARA as the trustee, acting in its own name but on behalf and in the interest of licensees. ARA obtains services from the BRGs under contracts with BRGs in its own name, but on behalf and in the interest of licensees.

53. Under Article I(2) licensees are obliged to participate in the collection and recycling systems in the ARA system in respect of all packaging covered by the Packaging Ordinance for which collection and recycling guarantees exist for the duration of the contract. The sole exception concerns packaging where it can be shown that there is already dispensation at another economic stage or where the licensee himself or authorised persons charged by him carry out collection and recycling demonstrably in accordance with the law without direct or indirect recourse to the ARA system.

54. ARA has stated that a confirmation of dispensation issued under Section 3(5) of the Packaging Ordinance by the operator of approved collection and recycling systems to licensees suffices as evidence of recourse to a parallel dispensation system. With regard to self-disposed packaging, ARA contents itself with presentation of the take-back records drawn up by self-disposers themselves for submission to the environment ministry in accordance with Section 3(6)(2) of the Packaging Ordinance.

55. Under Article I(4) ARA grants the licensee the right, for the duration of the contract, to use the "Green Dot" - the protected mark of the Duales System Deutschland AG ("DSD") - to indicate their participation in the collection and recycling systems of the ARA system. The right to use the mark can be withdrawn by ARA at any time; it is geographically confined to the territory of the Republic of Austria and is not transferable. Packaging must be marked so as not to mislead. The mark must always be used in such a way as to take account of the interests of the mark. The licensee must take note that use of the logo abroad may require the permission of an authorised user there. The payment of licence fees to ARA does not signify permission by DSD or a foreign authorised user to use the mark. There is no obligation to affix the Green Dot mark on packaging participating in the ARA system.

56. Article II deals with calculation and payment of the licence fee. Under paragraph 1, the fee payable by the licensee is based on the volume of packaging that the licensee puts into circulation within the country (see Article I(2) above). The licensee undertakes to determine the volume for each specific type of packaging covered by the contract and to use those figures for calculating the licence fee payable. The licence fees are calculated using the rates published by ARA, which, under paragraph 5, may be changed by ARA no more than once a year subject to three months' advance notice. In the event of substantial change in the cost situation or the fundamental assumptions underlying calculation of the size of the licence fees, special adjustments in licence fees may be made. Under paragraph 10, the licensee will receive a closing annual statement from ARA by 1 March each year, indicating all packaging reported by the licensee during the previous calendar year, broken down by type of packaging. The licensee has the right to make retrospective corrections to his reports for the previous calendar year and to request a corresponding licence fee offset. ARA has claimed that the annual closing statement thus gives the licensee the opportunity to adjust his reports to his actual situation in terms of self-disposal. ARA in turn reserves the right to make licence fee offsets only on production of supporting documents for the corrections to the annual statement.

57. According to ARA the licensee's payment obligation under Article II was never intended as payment for the use of the logo (in other words as consideration for the right to use the Green Dot on packaging), but as a fee for the dispensation provided via the system. Article II(1) has to be understood accordingly, and is applied in such a way that the licence fee is payable only for packaging in respect of which licensees seek dispensation through the system. The way in which this principle is implemented is that the licensee makes monthly or quarterly reports to ARA in accordance with Article II(4) only in respect of packaging for which it does not operate a self-disposal solution or does not participate in a parallel dispensation system. This even means that ARA sometimes has "blanks", in other words there are firms which maintain their ELV but do not wish to participate with any packaging in the ARA system over a certain period and enter "zero" in their reports on the amount of licensed packaging put into circulation.

58. ARA has also indicated that it has no objection if the Green Dot is affixed to packaging that is not licensed with ARA, provided it can be shown that the packaging is dealt with and recycled in accordance with the Ordinance and ARA can verify this. On this question ARA has entered into the second undertaking referred to at point V. Under Article III the contract is concluded for an indefinite period. The licensee has the ordinary right to terminate the contract at the end of each calendar year after giving six months' notice. ARA waives its ordinary right to terminate the contract. Both parties have the special right to terminate the contract on grounds of major importance.

59. Article IV deals with ARA rights and obligations regarding information and monitoring. ARA monitors the dispensation of licensees by the BRGs and their disposal partners. It can verify the accuracy of the licensee's reports, e.g. by checking the relevant business documents.

4.1.2. Dispensation and licence agreement for service packaging ("ELVS")

60. The dispensation and licence agreement for service packaging differs from the standard agreement for transport and sales packaging in that Article I(2) of the ELVS obliges the licensee to participate in ARA system in respect of all packaging falling under the Packaging Ordinance for which the BRGs have given collection and/or recycling guarantees or in respect of which his customers wish to obtain dispensation through him. So depending on his customers' wishes, the licensee can conclude a dispensation and licence agreement for only some of his service packaging, without having to present evidence in accordance with the second sentence of Article I(2) of the ELV in respect of packaging for which dispensation was already obtained at another economic stage or which is collected and recycled in conformity with the law without recourse to the ARA system.

4.1.3. Supplementary agreement for small quantities of packaging

61. Where ARA and the licensee expect the licensee's annual licence fee under Article II of the ELV to amount to less than ATS 25000 (excluding VAT), a "supplementary agreement for small quantities of packaging" may be concluded. This involves the agreement of simplified administrative procedures regarding reporting packaging quantities and payment of the licence fee.

4.1.4. Supplementary agreement for foreign EU licensees

62. Under Article 5 of the supplementary agreement, ARA also enjoys the ordinary right to terminate the ELV (Article III(1) ELV). The reason given by ARA is the increased difficulty of carrying out checks on licensees abroad. ARA also argues that enforcement abroad is more difficult. Ordinary termination, it says, is a precaution for cases where ARA has concrete grounds for suspecting that the party concerned has not properly fulfilled its contractual obligations, but cannot furnish proof adequate for special termination of the contract under the ELV because of the difficulties of gathering evidence abroad.

4.2. Waste disposal contracts

4.2.1. The relationship between ARA and BRGs

63. Between 25 August 1993 and 30 September 1993 waste disposal contracts were concluded between ARA and all BRGs covering the entire territory of Austria. The contract with ARGEV was notified as a model.

64. Under the terms of Article 1(1), the contract covers the disposal of the packaging listed for each BRG in the guarantee statements (Annex 2 to the waste disposal contract). Disposal comprises the collection and transport as well as sorting and conditioning in accordance with the Packaging Ordinance and with reference to the framework agreement concluded between ARA and the local authorities (Annex 3 to the contract); in particular the objectives and quotas indicated in the Packaging Ordinances must - at least - be attained proportionally. ARA receives the disposal services provided by BRGs under Article 1(3) in its own name, but in the interest and on behalf of the licensee; it thus acts as trustee for the licensee. Under Article 1(5) the BRGs are required to take back or take in, free of charge, all packaging for which a contract exists between ARA and licensees. As authentication of payment of the licence charge, ARA awards the protected Green Dot mark. Regarding this point, ARA has explained that Article 1(5) has no practical significance. In particular, the distinguishing methods used by undertakings in the ARA system in order to decide whether a given item of packaging may be brought into the ARA system or not are quite separate from the Green Dot. The provision, it says, does not entail any legal consequences.

65. Where a BRG employs subcontractors to perform its disposal tasks, it must, under Article 4, require them to fulfil its relevant contractual obligations. When awarding new contracts to subcontractors, BRGs must observe the principles of free competition and apply reasonable economic criteria. However, it must take account of the provisions of the framework agreements concluded by ARA with local authorities concerning the selection of the collector/sorter. In addition, the BRG must put new contracts with subcontractors out to tender. ARA has the right to inspect the tender documents and bids.

66. Under Article 5 the BRG enjoys exclusive rights for the duration of the contract in the territory covered, i.e. the whole of Austrian territory. The BRG undertakes not to set up, operate or participate in any other collection or recycling system within the meaning of the Packaging Ordinance besides the ARA system or to carry out any active disposal that falls under the responsibility of other BRGs. The BRG recognises ARA's position as the sole intermediary between the BRGs and licensees, but is not precluded from holding direct talks or concluding contracts with licensees where necessary to fulfil their contractual obligations; the BRG may not conclude contracts with licensees entailing dispensation of the licensee.

67. Under Article 6 the fee for the disposal carried out by BRGs is the share of the licence charges charged by ARA for their services minus a mark-up for ARA. In practical terms, the fee is based on the costs necessarily incurred in the disposal of used packaging material. Under Article 6(4) this must not result in cross-subsidies between BRGs and ARA in the packaging-material-specific calculation. Cross-subsidies are defined as fixing a fee that does not correspond to the true costs, resulting in one packaging material being treated more or less favourably than another (Article 6(4)). The fee is set in advance by ARA on a proposal by the BRG, as a general rule for one calendar year at a time. Article 6(13) contains a most-favoured clause, under which the BRG grants ARA most-favoured treatment, meaning that it undertakes not to offer or carry out services comparable to contractual disposal services or parts of such comparable services to a third party on terms more favourable than those it offers ARA or its licensees.

68. Contracts between ARA and the BRG are concluded for an indefinite period. The BRG is required to provide disposal services under the contract from 1 December 1993. Under Article 7B the contract can be terminated by either party at the end of the calendar year, with 12 months' notice. The parties' ordinary right to terminate the contract does not apply until after 31 December 2000. If another ARA enterprise offered cheaper services, ARA enjoyed the right to terminate in certain circumstances even before 31 December 2000.

69. Under an agreement of 23 January 2001 with ARGEV and ARO, ARA agreed that the waste disposal contracts concluded with the two BRGs between 24 August 1993 and 30 September 1993 could not be terminated ordinarily before 31 December 2003. Article 7C deals with the right to terminate the contract without notice on serious grounds. For instance, the contract can be terminated without notice if the contract or the ARA system does not obtain a required authorisation from the antitrust authorities.

70. Under Article 11 ARA is granted the right to inspect the collection and disposal facilities or other facilities of BRGs covered by the contract during normal working hours after giving advance notice. This right to inspect also applies to subcontractors working for BRGs. ARA also has the right to inspect BRGs' business documents, subject to advance notice, if it deems this necessary to verify that the contract is being performed properly by the BRG. Under Article 12 the BRG also enjoys a right to information and a right of inspection.

71. Section 13 lays down reciprocal reporting obligations for the contracting parties: the BRGs must give ARA quarterly and annual reports on the disposal they carry out; ARA is required to provide BRGs with regular information on the number and size of contracts concluded with licensees and on the quantity of packaging put into circulation by licensees.

72. Section 14 provides that disputes between the parties are to be settled by an arbitrator or an arbitration tribunal.

73. Under Section 15 the recycling of packaging is to be handled by the BRG responsible for the recycling of the type of waste material in question. For this purpose, ARA is required to conclude an essentially similar waste disposal contract with each of those BRGs, defining the BRGs' disposal tasks as the recycling of the packaging specified. There is also provision for conclusion of a contract between ARGEV and each BRG responsible for recycling governing relations between the two firms, specifically as regards the disposal services owed to ARA by ARGEV and by the BRG responsible. In particular, the contract should ensure that ARGEV and the BRGs together provide complete disposal - from collection, transport and sorting to recycling - and that no gaps in disposal occur between ARGEV and the BRGs.

4.2.2. BRG-BRG relations

74. Since ARGEV is responsible only for organising collection and sorting, it has concluded cooperation contracts with other BRGs (ÖKK, Alurec, FerroPack, AVM and VHP) responsible for organising recycling. ARGEV's contracts with ÖKK and Alurec were notified as model contracts.

4.2.2.1. Cooperation contract between ARGEV and ÖKK

75. This contract, concluded on 9 March 1994, governs relations between ARGEV and ÖKK as regards demarcation and the complete performance of the disposal services due from ARGEV and ÖKK to ARA.

76. Under Article 1, point 1(2) ARGEV organises the establishment and continuous operation of a country-wide collection, sorting and conditioning system for packaging; it undertakes to make available to ÖKK all sorted packaging collected under the ARGEV collection system. ÖKK organises adequate and suitable recycling capacity or temporary storage facilities and transport between the ARGEV partner concerned and the recycling or storage facility.

77. Under the terms of Article 2, ÖKK guarantees ARGEV that it will accept packaging provided by ARGEV or its contractors in accordance with the contract. The contract also lays down obligations regarding the provision and acceptance of used material and the quality of packaging, proof of licensing, the principles for calculating the ARA licence fees, the duty to supply information and to observe discretion, and an agreement on arbitration.

78. Article 4 stipulates that ARGEV becomes the owner of the packaging collected through its system. From the moment packaging in accordance with the specifications is accepted by the storage or recycling facility, ownership passes to ÖKK.

79. Under Article 15 the parties undertake not to set up, operate or participate in any other collection and recycling system within the meaning of the Packaging Ordinance outside the ARA system during the lifetime of the contract, except with the express consent of the other party. ARGEV further undertakes not to pass on the packaging to a third party without ÖKK's consent during the lifetime of the contract. Similarly ÖKK undertakes not to take packaging from a third party without ARGEV's consent. These exclusivity provisions expressly exclude reciprocal agreements with self-disposers, provided this is compatible with the waste disposal contracts concluded with ARA. The parties also undertake not to perform any active disposal falling within the area of responsibility of the other party.

80. Article 16 stipulates that the contract is to run for an indefinite period from 1 October 1993. The contract can be terminated by either party at the end of a calendar year, subject to 12 months' notice. Ordinary termination is not possible before 31 December 2000. Under Article 17 the contract may be terminated on serious grounds.

4.2.2.2. Agreement between ARGEV and Alurec

81. This contract, concluded on 20 January 1994, governs performance of the contractual obligations on ARGEV and Alurec vis-à-vis ARA. In terms of subject matter and the terms and conditions it is broadly similar to the contract between ARGEV and ÖKK.

82. Under Article II ARGEV undertakes to make available all packaging collected by it or its subcontractors. In Article III, Alurec undertakes to ensure the proper recycling of the packaging accepted by ARGEV or the sorting firms.

83. Article V stipulates that ARGEV undertakes to pass on all the packaging in question collected by it or its subcontractors solely to Alurec for the duration of the contract. Alurec in turn undertakes to accept and send for recycling only packaging collected by ARGEV or its subcontractors.

84. As regards ownership the same applies as in the cooperation agreement between ARGEV and ARO - even though this is not specifically regulated in the contract between ARGEV and Alurec. Ownership of the goods collected rests first with ARGEV, and then passes to Alurec when the goods are transferred to it.

85. Under Article VI the contract is to run from 1 October 1993 for an indefinite period. The contract can be terminated by either party at the end of a calendar year, subject to 12 months' notice. Ordinary termination is not possible before 31 December 2000. Under Article VII the contract can also be terminated on serious grounds.

4.2.3. Relations between BRGs and regional partners

86. These are the contracts concluded by ARGEV and ARO with the regional disposal companies or local authorities. The contracts govern the actual disposal of used packaging.

4.2.3.1. ARGEV agreement

87. In the original version of ARGEV's agreement with the regional partner ("partner agreement"), which dates from 1994, the regional partner undertakes, in Article 2(2), to set up a collection, sorting and conditioning system under the terms of the agreement. Only one regional partner is contracted per collection region.

88. The collection of packaging waste from households and establishments accumulating similar packaging is organised by the regional partner in consultation with the local authority. Subcontractors may be brought in under Article 2(3) subject to ARGEV's approval. Under Article 2(7) waste is collected in containers provided either by the regional partner or by the local authority. Under Article 3 the costs for the collection containers and for setting up a collection infrastructure are reimbursed through a payment by ARGEV.

89. Article 2(10) states that since the regional partner collects used material for ARGEV, it acquires ownership of the used material through collection solely on behalf of ARGEV. Consequently, the regional partner may not treat the used material in any manner other than that provided for in the agreement; any contravention constitutes grounds sufficiently serious for ARGEV to terminate the agreement without notice.

90. Under Article 2(16) ARGEV guarantees, by means of bilateral contracts with recycling guarantors, to take back the used material made available by the regional partner in accordance with the agreement. The regional partner must keep the used material in storage ready to be taken back and inform ARGEV and/or the recycler designated either by ARGEV or by the recycling guarantor responsible without delay that it is ready to be taken back.

91. Under Article 2(18) agreement with the local authority responsible should always be sought. In the event of disputes, Article 2(21) provides for an arbitrator to be called in.

92. The agreement started to run from 1994 for an indefinite period, and can be terminated by either party at the end of the calendar year, subject to 12 months' notice. Ordinary termination before 31 December 2000 was not possible. If another enterprise offered the same services to ARGEV more cheaply, ARGEV had the right to ordinary termination before 31 December 2000 subject to certain conditions. Article 4(2) governs the right to terminate without notice on serious grounds.

93. All ARGEV's legal and contractual obligations listed under Article C of the preamble also apply to the regional partner.

94. ARGEV had agreed most-favoured clauses under supplementary agreements or addenda to the existing waste disposal contracts with practically all the disposal companies with which it has contractual ties. In the undertaking given in point V(1), ARGEV waived the right to apply these most-favoured clauses from 29 November 2000.

95. In the new version of the agreements governing relations with disposers, a distinction is now made between sorting and collection partners; there is a separate standard contract for each. The two agreements are broadly similar to the original agreement, but are set out in greater detail.

96. Both standard contracts came into force on 1 January 2002, except in the case of three municipalities, Vienna, Linz, Salzburg, where the contracts had already come into force earlier; essentially they correspond in substance to the standard contracts. The contracts dating from 1993/1994 are no longer in force.

97. The agreement with the collection partners governs concrete reciprocal services between ARGEV and collection partners in implementing the Packaging Ordinance as regards "collection", "transhipment" and "individual enterprise disposal". Only one regional partner is contracted per collection region.

98. According to Article 1(2) the agreement covers the establishment and smooth operation of a collection system for used packaging in a specified collection region. Under Article 1(6) ARGEV reserves the right to collect non-packaging waste under the collection system; the provisions of the contract apply to such waste mutatis mutandis.

99. Under Article 2(2) waste from the household sector is collected together with waste from establishments accumulating similar packaging. Such establishments may be commercial or institutional sources; they must register for collection each year and show that the packaging concerned will be 100 % ARA-licensed; if licensing is less than 100 % the waste must be disposed of as commercial waste.

100. Under Article 2(2)(3) ARGEV must arrange the provision of the necessary sites with the local authority in a separate agreement. The collection containers and sacks are provided by the collection partner or the local authority after consulting ARGEV. Under Article 2(2)(4) the costs are borne by ARGEV only for containers for the household sector, but not for establishments accumulating similar packaging.

101. Under Article 2(2)(5) collection comprises the regular emptying of containers and collection of sacks, together with transport of the waste collected to the specified sorting facility or to a transhipment station in the catchment area covered by the contract. The volume of collected waste to be supplied by the collection partner is based on actual requirements, i.e. depending on the behaviour of the local population or source, subject to an average utilisation rate of 80 % for collection containers and sacks and a maximum error rate of 20 % in terms of mass. If commercial packaging is also collected together with the household collection, these are to be separated as specified by ARGEV (Annex 2).

102. For the commercial sector individual enterprise disposal applies. Under Article 2(4)(1) the collection partner operates a regional transfer point to take back, free of charge, ARGEV-packaging from commercial sources, from controlled material transferred from recycling yards and from collected problem waste. Besides the basic infrastructure of the regional transfer points, under Article 2(4)(2) the collection partner must offer pick-up systems for licensed packaging from the point where the waste occurs, especially in regions with a large commercial sector.

103. Under Article 2(5)(1), ARGEV's prior consent is required in order to subcontract out specific tasks under the agreements.

104. Article 2(5)(2) stipulates that the collection partner merely takes charge of the packaging on behalf of ARGEV and so never acquires ownership of it. Consequently, the regional partner may not treat the used material in any manner other than that provided for in the agreement; any contravention constitutes grounds sufficiently serious for ARGEV to terminate the agreement without notice.

105. Under Article 3(1) the collection partner receives a quarterly fee for the collection containers and sacks provided and documented, based on container/sack size. In return for emptying collection containers and collecting sacks from households and similar establishments, transporting and emptying collected waste at a sorting facility or transhipment station and producing the required reports, the collection partner receives a fee based on the quantity in question. For the transhipment of collected waste from households and similar establishments in the area covered by the agreement and for producing reports, the collection partner receives a fee based on the quantity involved. There is a ceiling on the collection and transhipment services chargeable annually to ARGEV per collection region and type of waste collected. The framework quantity for 2002 to 2004 inclusive was calculated on the basis of the 2001 forecasts for the gross quantity to be collected from households and similar establishments. In return for taking over and collecting packaging waste accumulating in businesses, including input control, re-sorting, conditioning, temporary storage, making available, loading, etc. of types of wastes taken by the recycler from commercial, industrial and institutional sources and from controlled take-overs and collections of problem materials, the collection partner receives output fees based on quantity.

106. Under Article 3(5) ARGEV guarantees, by means of bilateral contracts with recycling guarantors, to take back all used material made available by the regional partner in accordance with the agreement.

107. Under Article 5(1) the agreement began to run from 1 January 2002. It was concluded for an indefinite period and can be terminated by either party giving six months' notice, but not before 31 December 2004. Both parties also have the special right to terminate on serious grounds; such grounds include, for instance, gross disregard of the obligation to keep commercial waste separate in household collection.

108. Regarding the term of the contract, ARGEV has entered into the undertaking set out at point V(4).

109. ARGEV has also stated that the collection partner agreements do not contain any exclusivity obligations on disposers, either in the near-household or commercial sectors. Disposal companies are free to provide similar services for other dispensation systems or as part of self-disposal solutions. As regards shared use of collection containers, ARGEV has entered into the undertaking set out at point V(3).

110. The standard agreement for sorting partners very closely resembles the agreement for collection partners.

111. Under Article 1(5) ARGEV entrusts the task of operating collection systems for light and metal packaging from households and similar establishments in defined collection regions (as a rule political subdivisions or major cities) throughout the country to the collection partner responsible. The quantities collected by collection partners are transferred direct or via a transport company to the sorting partner. Only one sorting partner is contracted per collection region.

112. In order to optimise the collection, sorting and transport system, the quantities collected by certain collection partners or from certain collection regions are allocated to certain sorting partners or sorting facilities under Article 1(6). Through corresponding provisions in the separate collection partner agreements, ARGEV will ensure that the packaging collected by collection partners from households and similar establishments in certain collection regions (as specified in Annex 5 to the agreement) are sorted only in the collection partner's sorting facility.

113. Under Article 2(1)(1) the sorting partner is required to take and sort all quantities of packaging made available or collected from households (Module 1) and similar establishments (Module 2) by the collection partner(s) in the collection regions. The sorting partner must take unsorted waste collected under Modules 1/2 ARGEV collection only from collection partners or from collection regions specified in Annex 5. Under Article 2(2) the sorting partner must, at the site of the sorting facility, operate a regional transfer point where packaging from commercial sources (Module 3), from recycling yards (Module 4) and problem material collections (Module 5) is accepted free of charge.

114. Under Article 2(4)(2) the sorting partner merely takes charge of the packaging for ARGEV and does not, therefore, acquire ownership of the packaging. Consequently, the sorting partner may not treat the used material in any manner other than that provided for in the agreement; any contravention constitutes grounds sufficiently serious for ARGEV to terminate the agreement without notice under Article 5(5)(2)(a).

115. The provisions concerning the engagement of subcontractors (Article 2(4)(1)) and the duration/termination of the contract (Article 5) are similar to those in the collection partner agreement.

116. Under Article 3(1) the sorting partner receives the input fees indicated in Annex 6 of the contract within the specified quantity ranges. The input fees constitute the consideration for taking charge of the collected waste from the ARGEV household system and near-household system, input control, a share of the facility's fixed costs by reference to the agreed annual input quantities, removal and proper disposal of intrusive material from collected waste, and the conditioning, temporary storage, making available and loading of all output waste types, free of intrusive material or positively sorted. A ceiling applies to the sorting input quantity chargeable annually to ARGEV, being the sum of the quantities collected from households in certain collection regions. For positive sorting of output waste types from households and similar establishments, collection partner receives specific fees for each type of material. These output fees also apply to the acceptance of deliveries, input control, re-sorting, conditioning, temporary storage, making available, loading etc. of specified waste types from business sources, recycling yards and problem material collections.

117. ARGEV has also stated that the sorting partner agreements do not contain any exclusivity obligations on sorting partners. Disposal companies are free to provide similar services for other dispensation systems or as part of self-disposal solutions. ARGEV has also entered into the undertaking set out under point V(3).

4.2.3.2. ARO agreement

ARO - collection partners

118. The agreement concerns the operation of a collection system for paper packaging to satisfy the obligations flowing from the Waste Management Act, the Packaging Ordinance, the ARA/ARO waste disposal contract and the official authorisations. Only one regional partner is contracted per collection region.

119. Under Article 1(1) the agreement does not cover the collection of waste paper and paper packaging from households and establishments accumulating similar waste. Rather it covers commercial street disposal (Article 2(4)), transport of packaging from recycling yards (Article 2(5)) and individual enterprise disposal (Article 2(6)).

120. Under Article 1(5) ARO's take-back obligation is confined to the quantity of paper, cardboard, board and corrugated-board packaging licensed with ARA. However, ARO is prepared to take the entire quantity of packaging delivered to the collection and recycling system. If this means that it overruns its obligations under the official authorisation, namely making available sufficient take-back capacity for paper packaging, with a coverage quota of 90 % in the commercial sector and 80 % in the household sector, and a recycling quota of 85 % in the commercial sector and 75 % in the household sector, and conflicts with the licensee's economic and legal interests, ARO reserves the right to adapt its take-back guarantee and the corresponding fee payments to the requirements of the official authorisations; the collection partner must be informed accordingly in good time.

121. Commercial street disposal concerns the disposal of pure-paper packaging from small business sources. What are known as supervised take-back sites (recycling yards, used material etc.) are run by the local authority and take packaging from private individuals and small business sources. The ARO collection partner takes packaging from recycling yards and handles its removal. For individual enterprise disposal the ARO disposal partner operates what are known as ARO transfer points, where business sources can bring their packaging in to the collection and recycling system free of charge.

122. Under Article 2(7) the collection partner is required to take all paper packaging covered by the agreement at the ARO transfer points. Article 2(7)(4) stipulates that the business source must confirm by appropriate means that the packaging handed in is licensed with ARA. Additional transfer points must be authorised by ARO.

123. Under Article 2(8) ARO decides on the disposal companies and the transport arrangements for packaging. The partner must therefore secure written agreement with ARO in this respect. The collection partner guarantees ARO a certain minimum quality of paper packaging on delivery to the recycler (Article 2(9)).

124. Article 2(10) states that the partner collects the paper packaging for ARO and that the collected waste is therefore the sole property of ARO. Consequently, the material collected may not be treated in any manner other than that provided for in the agreement; any contravention constitutes grounds sufficiently serious for ARO to terminate the agreement without notice.

125. Under Article 2(15) ARO guarantees, by means of its bilateral contracts with recyclers, to take from collection partners the paper packaging they present and ensure its proper recycling according to the type of packaging. Should the recycling guarantees given to ARO be withdrawn, it must ensure an adequate substitute for disposal companies.

126. Under Article 4 the agreement started to run from 1 January 2002 for an indefinite period. Subject to six months' notice, it can be terminated with effect from 31 December 2004. It can also be terminated without notice on serious grounds.

127. Regarding the term of the contract, ARO has entered into the undertaking set out under point V(4).

128. ARO has also stated that the collection partner agreements do not contain any exclusivity obligations on collection partners. Collection partners are free to provide similar services for other dispensation systems or as part of self-disposal solutions.

ARO - local authorities

129. The agreement concerns cooperation between ARO and the local authority in the operation of the municipal waste paper systems for paper packaging from households and establishments accumulating similar packaging waste in the area covered by the agreement. Account is taken of the obligations stemming from the Waste Management Act, the Packaging Ordinance, the ARA-ARO waste disposal contract and the official authorisations.

130. Under Article 2(1) ARO's take-back obligation is confined to the quantity of paper, cardboard, board and corrugated-board packaging licensed with ARA. However, ARO is prepared to take the entire quantity of packaging delivered to the collection and recycling system, subject to retrospective readjustment in line with the obligations under the official authorisation, of which the local authority must be informed in good time.

131. In the municipal waste paper collection run by the local authority, packaging together with non-packaging from the same material (newspapers, magazines, catalogues, etc.) is collected regularly under Article 2(2). The share of the costs for collection of paper, cardboard, board and corrugated-board packaging is borne by ARO; the other costs of municipal waste paper collection are borne by the local authority.

132. Under Article 2(4) fundamental changes to the collection system described in the collection scheme (e.g. switch from a bring-it-yourself to a collection system) must be agreed between the local authority and ARO if it entails substantially higher costs for ARO. The local authority takes charge of putting the collection services out to tender or renegotiating them after consulting ARO. Selection of the disposal company (collector) rests with the local authority.

133. The local authority must provide the following services: collecting paper packaging as part of the municipal waste paper collection (Article 3(1)); providing sites for collection containers together with the necessary permits (Article 3(2)); providing and maintaining the collection containers (Article 3(3)); taking packaging via supervised recycling yards, used-material centres, etc. (Article 3(4)); and guaranteed quality of packaging plus bearing the cost in the event of the need for re-sorting the packaging taken over in the recycling yards (Article 3(5)). For its part, ARO guarantees recycling in accordance with the Packaging Ordinance through bilateral contracts with recyclers (Article 3(6)).

134. Article 3(7) governs the transfer of ownership of the packaging: as regards packaging waste collected from households and establishments accumulating similar waste, ownership passes from the local authority to ARO on delivery of the packaging to the ARO transfer point. Ownership of material collected under supervision in recycling yards, used-material centres, etc., passes to ARO when it is picked up by the ARO disposal partner; if the local authority provides transport, ownership does not pass from the local authority until acceptance by the ARO transfer point.

135. The local authority may not treat paper packaging in any manner other than that stipulated by ARO; any contravention constitutes grounds sufficiently serious for ARO to terminate the agreement without notice. Paper packaging may be recycled separately from non-packaging material of the same type or mixed with such material.

136. Under Article 5(1) the contract begins to run from 1 January 2002 for an indefinite period and can be terminated no earlier than 31 December 2003, subject to six months' notice. It can also be terminated without notice on serious grounds.

137. The contract contains no provision ruling out the possibility of another collection and recycling system sharing use of the municipal waste paper collection containers. ARO has stated that for the most part in the sector of near-household paper collection it purchases only quantities from municipal collection. There is no obvious reason, it says, why the local authorities should not conclude similar agreements with other dispensation systems.

5. UNDERTAKINGS GIVEN

138. The Commission indicated that it had reservations regarding the implications for competition of some aspects of the contracts notified. In the course of the procedure the parties have given the Commission the following undertakings:

- (Undertaking 1) With effect from 29 November 2000 ARGEV and ARO will refrain from invoking the most-favoured clauses which were agreed in supplementary agreements or addenda to the waste disposal contracts concluded with the disposal companies with which the company concerned had contractual relations.

- (Undertaking 2) ARA undertakes not to invoke its licence rights to the Green Dot mark vis-à-vis firms inside or outside Austria (a) that participate with marked or similar packaging in collection and recycling systems within the meaning of Directive 94/62/EG on packaging and packaging waste which require the use of the Green Dot; or (b) that are required by regulations to affix the Green Dot to packaging. This obligation applies provided that the firm concerned can show that it collects and recycles the packaging marked with the Green Dot in Austria in accordance with the Packaging Ordinance (BGBl. No 648/1996, as amended) - whether by means of a self-disposal solution within the meaning of the Packaging Ordinance or by participating in an authorised collection and recycling system - and grants ARA the corresponding monitoring rights by contract. The monitoring rights may not extend beyond the rights granted under the standard ARA contract. In exercising these monitoring rights, ARA will not impose requirements stricter in terms of providing evidence that collection and recycling comply with the Ordinance than the obligations of the firms concerned vis-à-vis the authorities responsible for implementation of the Packaging Ordinance.

- (Undertaking 3) ARGEV will not prevent local authorities and/or disposal companies from working for competitors of the ARA system. Further, ARGEV will not prevent local authorities and/or disposal companies from concluding and fulfilling contracts with competitors of the ARA system concerning the shared use of containers or other facilities for the collection and/or sorting of used packaging from households and similar establishments. This undertaking does not restrict ARGEV's right to enforce contractual arrangements for the shared collection and recycling system and to take all necessary measures to fulfil its obligations as a collection and recycling system, whether imposed by the law or by the official authorisations, in spite of shared use. Furthermore, this undertaking applies only if:

(a) the local authorities and/or disposal companies declare their willingness to reduce the charges to be paid by ARGEV for the provision and operation of collection/sorting facilities, and/or for collection/sorting, in proportion to the use of containers and other facilities, and to reimburse ARGEV an appropriate share of the other costs directly attributable to collection/sorting (that is, costs for ongoing engineering and management of the shared collection system, costs for waste consultants, costs for R & D, etc.); ARGEV will produce an attestation from an independent chartered accountant regarding the amount and chargeability of the costs charged;

(b) the local authorities and/or disposal companies declare their willingness to reimburse ARGEV for the additional costs incurred by the companies in the ARA system and/or their contractors as a result of shared use (for instance, additional analysis costs or sorting costs in order to maintain the quality of the packaging collected and sent for recycling on behalf of ARGEV). ARGEV will produce an attestation from an independent chartered accountant regarding the amount and chargeability of the costs charged. Additional costs incurred by the companies in the ARA system and/or their contractors simply by virtue of reductions in the licensed quantity will not be taken into account.

This undertaking will be implemented on a case-by-case basis through supplementary agreements to individual service contracts.

- (Undertaking 4) ARGEV and ARO will terminate their contracts with disposal partners when the contracts have run for three years, unless the contracting parties agree on extension of the contract for no more than a further two years. No later than at the end of a five-year contract period ARGEV and ARO will again put the service contracts out to tender through a competitive, transparent and objective procedure (invitation to tender of whatever kind, invitation to submit quotations, etc.).

6. FURTHER COURSE OF THE PROCEEDINGS INITIATED BY THE COMMISSION

139. The Commission intends to raise no objection to the notified agreements under Article 81 of the EC Treaty and Article 53 of the EEA Agreement, or to grant the parties exemption under Article 81(3) of the EC Treaty and Article 53(3) of the EEA Agreement, possibly with conditions attached. Before it takes a decision, all interested third parties have the opportunity to submit their observations within one month of the publication of this notice, quoting the reference "COMP/A.35.470/D3 - ARA" and "COMP/A.35.473/D3 - ARGEV, ARO", to: European Commission Directorate-General for Competition

Directorate D - Services

B - 1049 Brussels Fax (32-2) 295 30 80.

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

(2) BGBl. No 648/1996.

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

(4) BGBl. No 645/1992.