Keywords

Summary



Keywords

1 Procedure - Intervention - Plea of inadmissibility not raised by the defendant - Inadmissible

(EC Statute of the Court of Justice, Art. 37, fourth para.; Rules of Procedure of the Court of First Instance, Art. 116(3))

2 Competition - Concentrations - Examination by the Commission - Advisory Committee on concentrations - Period within which it must be convened

(Council Regulation No 4064/89, Art. 19(5))

3 Competition - Concentrations - Examination by the Commission - Commission's obligations vis-à-vis qualifying third parties - Third-party undertakings which are competitors of the parties to the concentration - Right to be heard - Scope

(Council Regulation No 4064/89, Art. 18; Commission Regulation No 2367/90, Art. 15)

4 Competition - Concentrations - Examination by the Commission - Commission's obligations vis-à-vis qualifying third parties - No specific obligation regarding the length of the period fixed for the submission of observations

(Council Regulation No 4064/89, Art. 18(4); Commission Regulation No 2367/90, Art. 15(2))

5 Competition - Concentrations - Examination by the Commission - Commission's obligations vis-à-vis qualifying third parties - Communication, for prior comment, of the final terms of the commitments given by the undertakings concerned - None

(Council Regulation No 4064/89, Arts 6(1)(c), 8(2), and 18(4))

6 Competition - Concentrations - Examination by the Commission - Modifications made to the notified plan - Obligation to request a fresh notification - None

(Council Regulation No 4064/89, Arts 6(1)(c), and 8(2); Commission Regulation No 2367/90, section I)

7 Competition - Concentrations - Examination by the Commission - Modifications made to the notified plan - No time-limit previously laid down - Allegedly late modification - Commission's obligation to suspend the period for adoption of the decision - None

(Council Regulation No 4064/89, Art. 10; Commission Regulation No 2367/90, Art. 9)

8 Acts of the institutions - Statement of reasons - Obligation - Scope - Decision applying rules on concentrations between undertakings

(EC Treaty, Art. 190)

9 Competition - Concentrations - Assessment of compatibility with the common market - Concentrations neither creating nor strengthening a dominant position - Taking into account of the market position of the undertakings concerned and their access to outlets

(Council Regulation No 4064/89, Art. 2)

10 Competition - Concentrations - Examination by the Commission - Adoption of a position as to the choice of third-party operator designated to acquire a business to be divested by one of the parties to the concentration, to be sold concomitantly with the authorization - Commission not so empowered - Imposition of obligations regarding the qualities of the purchaser of the business - Commission's use of its powers under Article 8(2) of Regulation No 4064/89 - Scope of judicial review

(Council Regulation No 4064/89, Art. 8(2))

Summary

11 According to the fourth paragraph of Article 37 of the EC Statute of the Court of Justice, which applies to the procedure before the Court of First Instance by virtue of the first paragraph of Article 46 thereof, an application to intervene is to be limited to supporting the form of order sought by one of the parties. Moreover, Article 116(3) of the Rules of Procedure of the Court of First Instance provides that the intervener must accept the case as he finds it at the time of his intervention. He is not therefore entitled to raise an objection of inadmissibility that has not been set out in the defendant's application.

12 In the context of the control of concentrations between undertakings established by Regulation No 4064/89, the failure to comply with the period of notice for convening the Advisory Committee on concentrations is not in itself such as to render the Commission's final decision unlawful, even in the absence of exceptional circumstances relating to the risk of serious harm within the meaning of Article 19(5) of that regulation. That 14-day period constitutes a purely internal rule of procedure, like the period for convening the Advisory Committee on cartels and dominant positions laid down in Article 10(5) of Regulation No 17. The failure to comply with such a rule can render the Commission's final decision unlawful only if it is sufficiently substantial and it had a harmful effect on the legal and factual situation of the party alleging a procedural irregularity.

That cannot be the case where the Advisory Committee in fact had a sufficient period of time to enable it to gain knowledge of the important factors in the case and was able to give its opinion in full knowledge of the facts, that is to say, without having been misled on an essential point by inaccuracies or omissions. In such circumstances, the failure to comply with the period of notice for convening the Committee cannot have any effect on the outcome of the consultation procedure or, as the case may be, on the terms of the final decision.

13 It clearly follows from the provisions of Article 18 of Regulation No 4064/89 on `the hearing of the parties and of third persons' in the context of the control of concentrations, that the procedural position of third parties cannot be equated with that of interested persons, undertakings and associations of undertakings. A third party to the procedure cannot invoke guarantees identical to those granted to interested persons and, in particular, the rights conferred on them by Article 18(1) and (3), which provides, inter alia, that those persons must be given the opportunity, before the adoption of any decision taken under the second subparagraph of Article 8(2) of that regulation, of making known, `at every stage of the procedure up to the consultation of the Advisory Committee, ... their views on the objections against them' and that `the Commission shall base its decision only on the objections on which the parties have been able to submit their observations'.

However, although the procedural rights of third parties are not as extensive as the rights granted to the interested persons in order to ensure their rights of defence, it is nevertheless the fact that, in so far as they show a sufficient interest, qualifying third parties have a right under Article 18(4) of Regulation No 4064/89 to be heard if they have so requested, the detailed rules for the exercise of that right being set out in Article 15 of Commission Regulation No 2367/90.

It follows from those provisions taken as a whole that third-party undertakings which are competitors of the parties to the concentration have a right to be heard by the Commission, if they so request, in order to make known their views on the harmful effects on them of the notified concentration plan, but such a right must nevertheless be reconciled with the observance of the rights of the defence and with the primary aim of the regulation, which is to ensure effectiveness of control as well as legal certainty for the undertakings to which the regulation applies.

14 In the context of the control of concentrations, having regard to the fact that Article 15(2) of Commission Regulation No 2367/90 does not lay down any specific obligation in regard to the length of the period fixed by the Commission within which qualifying third parties may express their point of view, the mere fact that a third party had only a period of two working days within which to make its observations on the amendments proposed during the procedure to a concentration plan by an undertaking which is a party to the operation is not such as to show that the Commission failed to have regard for its right to be heard under Article 18(4) of Regulation No 4064/89. That interpretation is all the more called for since, although the legitimate interest of qualifying third parties in being heard may require them to be allowed a sufficient period for that purpose, such a requirement must, nevertheless, be adapted to the need for speed, which characterizes the general scheme of Regulation No 4064/89 and which requires the Commission to comply with strict time-limits for the adoption of the final decision, failing which the operation is deemed compatible with the common market.

15 In the context of the control of concentrations, the legitimate interest of qualifying third parties in making known their views on the harmful effects of the concentration on competition is fully safeguarded where they are placed in a position, on the basis of all information communicated to them by the Commission during the procedure initiated under Article 6(1)(c) of Regulation No 4064/89 and, in particular, of the offers of commitments submitted by the undertakings concerned, to make known their views on the amendments proposed to the concentration plan with a view to removing the serious doubts existing as to its compatibility with the common market. In such a case, there is a sufficient guarantee that the considerations put forward by the competing third parties can, if appropriate, be taken into account by the Commission in determining whether the concentration is in conformity with Community law and, in particular, whether the commitments proposed by the undertakings concerned appear to it to be sufficient for that purpose.

Nor is the Commission required under Article 18(4) of Regulation No 4064/89 to send to qualifying third parties, for their prior comment, the final terms of the commitments given by the undertakings concerned on the basis of the objections raised by the Commission as a result, inter alia, of the observations received from the third parties in regard to the proposed commitments offered by the undertakings in question. Article 18(1) of that regulation grants only interested persons the opportunity, at every stage of the procedure up to the consultation of the Advisory Committee, of making known their views on the objections against them, in particular where the Commission envisages attaching conditions and obligations to its decision, in accordance with the second subparagraph of Article 8(2) of that regulation, which are intended to ensure that the undertakings concerned comply with the commitments which they have entered into. It follows that it is only the undertakings concerned and the other interested persons which must - since they are, as a rule, the sole addressees of the condition imposed - be placed in a position in which they may effectively make known their views on the objections raised to the proposed commitments in order to enable them, if they so wish, to make the necessary amendments to them and to the ensure the respect of their rights of defence.

16 In the context of Regulation No 4064/89, the initiation of proceedings on the basis of Article 6(1)(c) constitutes, inter alia, the opportunity for the undertakings concerned to modify the original concentration plan in order to dispel the Commission's serious doubts as to the compatibility of the concentration with the common market. The possibility thus conferred on the undertakings concerned of modifying the plan notified is expressly provided for by Article 8(2) of the regulation.

It follows that Article 6 of Regulation No 4064/89, under which the Commission `shall examine the notification' in order to determine, in particular, whether the concentration notified raises serious doubts as to its compatibility with the common market, cannot be interpreted as requiring the Commission to refuse modifications made by the undertakings concerned to the notified concentration plan and to require a new notification, even if those modifications are material. The criterion of the allegedly material nature of the modifications made to a notification is, in itself, irrelevant, since such an eventuality is expressly envisaged by the provisions of Section I of Commission Regulation No 2367/90.

17 In the context of the control of concentrations, neither Regulation No 4064/89 nor Commission Regulation No 2367/90 makes the option given to the undertakings concerned to propose commitments in order to modify the notified concentration plan subject to compliance with a pre-established time-limit. In the absence of specific provisions to that effect, the Commission cannot refuse to examine commitments proposed practically at the end of the period of four months laid down by Regulation No 4064/89 for the adoption of the decision, where those commitments satisfy an essential requirement set by the Commission during the proceedings for the authorization of the planned concentration, the Advisory Committee was able to issue its opinion on the modified concentration plan in full knowledge of the facts and the qualifying third parties were put in a position to make known their views on the proposed commitments. In so doing, the Commission does not go beyond the bounds of what is appropriate and necessary to attain the objective sought, which, under Regulation No 4064/89, is to ensure effectiveness of control and legal certainty for the undertakings concerned and, for that purpose, to observe strict time-limits.

Furthermore, it follows from the provisions of Article 10 of Regulation No 4064/89 and of Article 9 of Commission Regulation No 2367/90 that suspension of the period for adoption of the decision may be ordered only in so far as the Commission considers that it is not in possession of all the information necessary in order to adopt its decision. Consequently, where the Commission considers, in the exercise of the discretion conferred on it for that purpose, that it has that information, it cannot, without infringing Article 10(4) of Regulation No 4064/89, suspend the prescribed period of four months merely on the ground that the proposed commitments were allegedly submitted unreasonably late, but, on the contrary, it is required to adopt its decision as soon as it appears to it that the serious doubts regarding the transaction have been removed.

18 Although under Article 190 of the Treaty the Commission is obliged to state the reasons on which its decisions are based, mentioning the factual and legal elements which provide the legal basis for the measure in question and the considerations which have led it to adopt its decision, it is not required, in regard to a decision applying the rules on concentrations between undertakings, to discuss all the issues of fact and of law raised by every interested party during the administrative proceedings. Moreover, the question whether a statement of reasons meets the requirements of Article 190 of the Treaty must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

19 It follows from Article 2(2) of Regulation No 4064/89 that the Commission is required to declare a concentration compatible with the common market where the concentration does not create or strengthen a dominant position and competition will not be significantly impeded by the creation or strengthening of such a position. If a dominant position will not be created or strengthened, the concentration must therefore be authorized, without it being necessary to examine the effects of the concentration on actual competition.

Where making its assessment, the Commission must, under Article 2(1) of that regulation, take into account in particular the market position of the undertakings concerned and their access to markets. The market shares of products which an undertaking that is party to a concentration manufactures as subcontractor for retailers which resell those products under their own labels cannot, in principle, be imputed, in whole or in part, to the market share held by that undertaking in regard to similar products which it sells under its own brand. Since the retailers sell those products under their own labels in order to compete with the products sold under the manufacturers' brands, the market share which they hold as a result of those sales must therefore, as a general rule, be attributed to them for the purposes of assessing the competition to which the manufacturers of premium and secondary brands are subject.

20 In the context of Regulation No 4064/89, the Commission has no power to adopt a position in regard to the choice, allegedly harmful to the maintenance of effective competition, of the third party operator designated to acquire the business of one of the parties to the concentration which, since it was due to be separated from that undertaking and sold concomitantly with the authorization of the concentration, was not covered by the concentration plan submitted to the Commission for its examination. In such a case, there is no concentration likely to lead to the creation of a dominant position or to the strengthening of such a position on the markets concerned by that business.

For the same reasons, the Commission is not able, pursuant to Article 8(2) of Regulation No 4064/89, to impose obligations in regard to the qualities of the purchaser of that business. It is not for the Community judicature, in the context of annulment proceedings, to substitute its own appraisal for that of the Commission and to rule on the question whether, pursuant to that article, it should have attached conditions or obligations to its decision, particularly since that provision concerns the substantive examination of the compatibility of the proposed concentration with the common market.