4.

At the commencement of the oral procedure, the representative of the Groupement lodged a declaration by the applicants in which they withdraw their case against that part of the contested Decision which concerns the prohibition both of the agreements imposing an obligation to apply the prices fixed and of the agreements prohibiting the display of lower prices than those fixed or recommended, or at least the announcement of price reductions. At the same time, the applicants asked the Court to take note of the extent to which this reduced the scope of their applications. As a result of this withdrawal of part of the applicants' conclusions, the application must henceforth be regarded as limited to contesting only that part of the Decision which refers to the fines imposed on each of the four undertakings which belong to the Groupement. The penalties were imposed in respect of the collective boycott carried out to the detriment of Pex. The applicants' conduct must be looked at in the context of the conditions of sale, in applying which they behaved as they did. An appraisal of their conduct depends in the first place on an appraisal of the clauses of the agreement between the four members of the group, which comprises the group's Règlement d'ordre intérieur, referred to above, and the decisions on pricing policy. A boycott in defence of interests threatened by the unlawful conduct of the party concerned would not in itself be actionable. The first comment to be made is that a promise to follow a different course in the future seems a poor foundation on which to demonstrate that past conduct does not come within the rule in Article 85 (1) of the Treaty. It may be an act of mere expediency, rather than recognition or confession of guilt. The parties hold divergent views concerning the actual effect, at the material time, of the obligations imposed on the subject of prices. Whereas the Commission maintains that the system of fixed prices was still continuing, the applicants contend that the group had, for some time, no longer been insisting on strict adherence to their prescribed retail prices, which appear on the list adopted. They say that the obligation on retailers was thenceforth restricted to ensuring that shops did not display lower prices than those shown on the list or that no reductions were announced. Even though the applicants have withdrawn part of their conclusions, this point still has a bearing on the decision in the present case because, although the undertakings are willing to comply with the prohibitions laid down in the Decision, with effect from the date on which it was adopted, they continue to maintain that, in the circumstances in which they acted, their conduct was not contrary to Article 85 of the Treaty. During the hearing the applicants' lawyer expressly recognized that the refusal of the undertakings constituting the Groupement to supply Pex was due entirely to the fact that Mr Pex had first broken his undertaking to forbid those purchasing from him, in particular the Grand Bazar of Antwerp, to announce price reductions, and had then, without further ado, repudiated it. Nevertheless, the applicants continue to deny that the action they took in respect of the agreements on prices, which includes, inter alia, a prohibition against announcing price reductions, is illegal. On the question of fact, the Commission contends that the statement that the group had, for some years, no longer insisted on observance of the prices laid down for sales to the public is contradicted by the price-list and by a letter of 22 October 1973 from the group to G.B. Entreprises, in which the undertaking is reprimanded for not observing the prices fixed for resale of the products of undertakings in the group. In a number of cases, however, which obviously did not attract so much attention as that of Grand Bazar and did not, therefore, alarm the majority of other dealers who were customers of undertakings in the group, no objection was raised when retailers in fact applied prices which departed from those laid down. Nevertheless, the provision in paragraph 7 of Circular No 619 of 2 September 1972, which lays down the General Conditions of Sale for customers, is still a serious interference with freedom to fix resale prices. Retailers were, in fact, forbidden to announce any reductions whatever on wallpaper, and it was, furthermore, obligatory for shops to display notices supplied by the group informing customers that no reduction could be given on the products concerned. These notices were required to be exhibited in a prominent position either in the shop window or in the shop itself. Thus, by means of an agreement between the manufacturers and of a series of vertical agreements between them and retailers, independent fixing of retail prices was discouraged. In the case particularly of the big stores, where bargaining is impossible, the mere fact of being obliged to display the prices fixed by the group means that, in making sales, they have to adhere strictly to those prices, the effect of which, at least in the present case, is undoubtedly to make them compulsory. To contend, as was done in defence of the applicants at the hearing, that such a situation was entirely due to the present structure of the big stores seems a fallacious argument. If it is, in fact, true that, until the big stores radically change their system of sale, based on fixed prices, to match that of the small shops (that is, unless they change their principal characteristic), they will be unable to offer discounts on the Belgian or foreign products placed on the market by the members of the group, it follows that the very undertakings which could play a valuable competitive role have to charge fixed prices not subject to discount, and this represents a serious restriction on competition and the operation of its attendant advantages.