Judgment of the Court of First Instance (First Chamber) of 10 March 1992. - Società Italiana Vetro SpA, Fabbrica Pisana SpA and PPG Vernante Pennitalia SpA v Commission of the European Communities. - Competition - Concepts of agreement and concerted practices - Abuse of a collective dominant position - Evidence. - Joined cases T-68/89, T-77/89 and T-78/89.



European Court reports 1992 Page II-01403

Swedish special edition Page II-00303

Finnish special edition Page II-00287



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

++++

1. Competition - Administrative procedure - Statement of objections - Notification to undertakings of distorted documents - Consequences - Particular vigilance on the part of the Court with respect to evidence taken into consideration to justify the Commission' s decision

2. Competition - Agreements, decisions and concerted practices - Concerted practice - Non-probative nature of certain types of contact between producers

(EEC Treaty, Art. 85(1))

3. Competition - Community rules - Commission decision finding existence of an infringement - Decision based on matters not all of which have been proved to the requisite legal standard - Remaking by the Court - Precluded - Partial annulment - Conditions

(EEC Treaty, Art. 173; Regulation No 17 of the Council; Commission Regulation No 99/63)

4. Competition - Dominant position - Undertaking - Concept - Collective dominant position - Concept

(EEC Treaty, Arts 85 and 86)

Summary

1. Where, in the context of an action brought against a decision of the Commission applying the competition rules of the Treaty, it emerges from the inquiry carried out by the Court that the documents communicated to the undertakings during the administrative procedure were distorted without any objective justification, it is incumbent on the Court to check meticulously the nature and import of the evidence taken into consideration by the Commission in the decision.

2. A vertical relationship of seller and purchaser between two producers, where it concerns a product manufactured by only one of them, does not in itself constitute proof of an unlawful horizontal agreement.

Nor is such proof constituted by the fact that the co-managers of a joint production facility act together to avoid a situation in which the quantities taken by each of them from this production facility might lead to unfair competition.

3. Although the Community judicature may, as part of the judicial review of acts of the Community administration, partially annul a Commission decision in the field of competition, that does not mean that it has jurisdiction to remake the contested decision. The assumption of such jurisdiction would disturb the institutional balance established by the Treaty and would risk prejudicing the rights of the defence by depriving the undertakings concerned by the decision of the procedural guarantees provided in Regulation No 17 and Regulation No 99/63.

Partial annulment itself presupposes that certain conditions are satisfied. If it is minded to annul the decision in part, the Court must first determine whether the scope of the operative part of the decision, read in the light of the grounds of the decision, can be limited ratione materiae, ratione personae or ratione temporis in such a way that its effects are restricted but its substance remains unaltered; whether the proof of the infringement so limited is accompanied by an adequate assessment of the market in the reasoning of the decision; and whether the undertaking or undertakings concerned were given an opportunity of replying effectively to the objection so defined.

4. The concept of undertaking in Article 86 denotes, as it does in Article 85, an economic entity.

Two or more undertakings may hold a dominant position within the meaning of Article 86 of the Treaty where two or more independent economic entities are, on a specific market, united by such economic links and, by virtue of that fact, together hold a dominant position vis-à-vis the other operators on that market. This could be the case, for example, where two or more independent undertakings jointly have, through agreements or licences, a technological lead affording to them the power to behave to an appreciable extent independently of their competitors, of their customers and ultimately of their consumers.

Parties

In Cases T-68/89,

Società Italiana Vetro SpA, a company incorporated under Italian law, having its registered office in San Salvo (Italy), represented by Luigi Citarella, of the Rome Bar, and Crisanto Mandrioli, of the Milan Bar, with an address for service in Luxembourg at the Chambers of Ernst Arendt, 4 avenue Marie-Thérèse,

T-77/89,

Fabbrica Pisana SpA, a company incorporated under Italian law, having its registered office in Milan (Italy), represented by Pierre van Ommeslaghe and Bernard van de Walle de Ghelcke, of the Brussels Bar, with an address for service in Luxembourg at the Chambers of Jean-Claude Wolter, 8 rue Zithe,

and T-78/89,

PPG Vernante Pennitalia SpA (formerly Vernante Pennitalia SpA), a company incorporated under Italian law, having its registered office in Genoa (Italy), represented by Gianni Manca and A.J. Manca Graziadei, of the Rome Bar, and by Michel Waelbroeck and Alexandre Vandencasteele, of the Brussels Bar, with an address for service in Luxembourg at the Chambers of Ernst Arendt, 34 rue Philippe II,

applicants,

supported by

United Kingdom of Great Britain and Northern Ireland, represented by J.E. Collins of the Treasury Solicitor' s Department, acting as Agent, assisted by Stephen Richards, Barrister of Gray' s Inn, with an address for service in Luxembourg at the British Embassy, 14 Boulevard Roosevelt, with regard to the applicants' submissions in so far as they concern the application of Article 86 of the EEC Treaty,

intervener,

v

Commission of the European Communities, represented by Enrico Traversa, Julian Currall and during the written procedure, Hendrik van Lier, members of its Legal Service, acting as Agents, assisted by Alberto Dal Ferro, of the Vicenza Bar, and Hervé Lehman, of the Paris Bar, with an address for service in Luxembourg at the office of Roberto Hayder, a representative of the Commission' s Legal Service, Centre Wagner, Kirchberg,

defendant,

supported by

United Kingdom of Great Britain and Northern Ireland, represented by J.E. Collins, of the Treasury Solicitor' s Department, acting as Agent, assisted by Stephen Richards, Barrister of Gray' s Inn, with an address for service in Luxembourg at the British Embassy, 14 Boulevard Roosevelt, with regard to the Commission' s submissions in so far as they concern the application of Article 85 of the EEC Treaty,

intervener,

APPLICATION for the annulment of Commission Decision 89/93/EEC of 7 December 1988 (Official Journal 1989 L 33, p. 44), relating to a proceeding under Articles 85 and 86 of the EEC Treaty (IV/31.906, flat glass).

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

(First Chamber)

composed of: D.A.O. Edward, President, R. García-Valdecasas, K. Lenaerts, H. Kirschner and R. Schintgen, Judges,

Registrar: H. Jung

having regard to the written procedure and further to the oral procedure held from 12 to 15 November 1991,

gives the following

Judgment

Grounds

Facts

1 This case concerns a decision of the defendant, the Commission of the European Communities (hereinafter referred to respectively as "the decision" and "the Commission"), fining the three applicants, Italian flat-glass producers, for infringing Article 85(1) of the EEC Treaty, and finding that they infringed Article 86 of the Treaty. The three companies to which the decision is addressed are: firstly, Società Italiana Vetro ("SIV"), whose majority shareholder is the Ente Finanziamento Industria Manifatturiera ("EFIM"); secondly Fabbrica Pisana SpA ("FP"), a subsidiary of the Saint-Gobain group "SG"); and thirdly Vernante Pennitalia ("VP"), a subsidiary of PPG-Industries Inc. of Pittsburg ("PPG").

2 In the decision (point 2), the product at issue is defined as being "flat glass in all its varieties". Three types of flat glass are distinguished: drawn glass, cast glass and, the most important type, plate glass. It is stated that at present, more than 90% of flat glass is manufactured using the so-called float-glass process, a modern production method which requires an investment of approximately ECU 100 million for each production line.

3 Within the flat-glass industry in general, the Commission distinguishes two markets (point 5): the transport, and in particular the automotive, market (hereinafter referred to as "the automotive market"), and, secondly, the market in glass intended for other industries, in particular the construction and furnishing industries (hereinafter referred to as "the non-automotive market"). In the automotive market, motor vehicle manufacturers are supplied directly by the glass producers, who process the flat glass themselves in accordance with the requirements of the motor vehicle manufacturers. In the non-automotive market, flat-glass may be used unprocessed (for example, window panes) or processed. In this market, customers may be supplied either directly by producers or indirectly through wholesalers, processing wholesalers or independent processors.

4 On 28 September 1981, the Commission addressed to FP, SIV and VP, to an association of Italian undertakings specializing in flat-glass wholesaling and to the members of two similar associations which had already been wound up, a decision (81/881/EEC, Official Journal L 326 p. 32, hereinafter referred to as "the 1981 decision") which found that they had infringed the provisions of Article 85(1) of the EEC Treaty. Firstly, the Commission accused the wholesalers' associations of having adopted in their articles of association, implementing rules and decisions, clauses under which:

- members were under an obligation to purchase through the association;

- members were prohibited from importing and were required to share out any products imported, with prior authorization from the association, from State-trading countries;

- a common price list was to be adopted and complied with.

Secondly, the Commission accused the producers and wholesalers, secondly, of having concluded agreements relating to the:

- establishment of sales quotas;

- the granting of a special rebate;

- the monitoring of the operations of the members of the associations.

The 1981 decision became definitive.

5 In March 1986, Industria Vetraria Alfonso Cobelli (hereinafter referred to as "Cobelli"), a glass wholesaler based in Reggio Calabria, brought an action before the Tribunale (District Court) of Reggio Calabria against FP and SIV, accusing them of having contributed to the ruin of the company by behaviour which it considered to be unfair and an abuse of a dominant position. In particular, Cobelli accused them of having "a tacit agreement", also involving VP, "to maintain the market stability through the adoption of price-lists for the sale of their products". On 25 June 1986, VP' s lawyer sent to Cobelli a letter stating that the allegation was incorrect in so far as it concerned VP. On 15 July 1986 Cobelli' s lawyer sent a reply expressing its "amazement, since Industria Vetraria Cobelli and its owner have never called into question the correct attitude and the accessibility which Vernante Pennitalia has shown towards it".

6 In July and October 1986, the Commission, acting pursuant to Article 14(2) of Regulation No 17 of the Council of 6 February 1962 (Official Journal, English Special Edition 1959-1962, p. 87 - hereinafter referred to as "Regulation No 17"), carried out investigations both at the premises of FP, SIV and VP and at the premises of an undertaking specializing in the wholesale flat-glass trade, Socover SpA (hereinafter referred to as "Socover"), which had been one of the addressees of the 1981 decision.

7 By a document dated 31 October 1986, received at the Commission on 6 November 1986, Alfonso Cobelli, the owner of Cobelli, made an application to the Commission, pursuant to Article 3 of Regulation No 17, for a finding that SIV, FP and VP had acted in breach of the rules on competition. According to Cobelli, there was a long-standing agreement between the three producers which was "intended to control and stabilize the market and to eliminate all competition between them by means of the adoption of agreed price lists for the sale of their products; those lists, which prescribed not only identical prices for homogenous categories of products, but also identical conditions of sale and payment, classified customers into distinct categories according to their commercial importance based on turnover and field of activity, charging each group a different price by applying a 'scale of discounts' with a difference of approximately 9% between the first group and the last". Cobelli then accused FP and SIV (but not VP) of having implemented, since about 1982, a "business strategy intended to achieve full control not only of the production but also of the distribution of glass, by excluding from the market the majority of existing distributing wholesaler-distributors".

8 On 13, 14 and 15 of January 1987, acting pursuant to Article 14(3) of Regulation No 17, the Commission again carried out investigations at the premises of FP, SIV and VP.

9 By letter of 20 February 1987, VP submitted to the Commission' s Directorate-General for Competition (hereinafter referred to as "DG IV") its observations on Cobelli' s complaint, of which it had just learned for the first time, putting forward in its defence, in particular, the denial which had been sent to it by Cobelli' s lawyer on 15 July 1986.

10 On 3 April 1987, Cobelli sent to DG IV a memorandum, received at the Commission on 10 April 1987, in reply to the observations submitted by FP, SIV and VP following communication of its complaint. In that memorandum, Cobelli claimed that FP, SIV and, "on a number of occasions also" VP had participated in regular meetings with the wholesalers, "sometimes under the aegis of the category associations, sometimes initiated directly by the manufacturers", and that the three producers

"always appeared with positions which were perfectly attuned vis-à-vis the distributors' demands: the lists of products marketed, which were always absolutely identical and published simultaneously, or almost simultaneously, by the three undertakings, were sent to the distributors and subsequently clarified at the meetings, without, however, the slightest opportunity of discussing them being given: in fact, whenever [the other participants] attempted to influence the manufacturers' decisions or to propose agreements which would have taken account of their own business requirements, the manufacturers presented a 'common front' ...

Just by way of example, it is possible to mention a few of the numerous meetings which took place before 1984 and 1986, at most of which the undersigned was present: on 19 March 1984 at Naples, on the initiative of SIV, at Barbato; on 10 October and 31 October 1984 in Rome, at the Sheraton Hotel, on 19 October 1984 in Caserta, at Fontana; on 31 October 1984, another meeting in Bologna, at VIC SpA; other important meetings between the commercial directors of the three undertakings are known to have taken place on 28 February and 2 March 1985; on 2 May 1985 in Rome, at the Sheraton Hotel; on 18 February 1986 in Catania, only between Tortorici, Donato, Fontana, Milletti (FP), Baldi (SIV) and Bilotta of Callipo Vetro. Of course, there were many more meetings than those mentioned above, which are the ones that spring to mind, and what is more, they continue to be held to this day, although the undersigned is strictly excluded from them for having dared to take action against the manufacturers.

To find support for what has just been said and for proof of the existence of specific agreements among the manufacturers, intended to harmonize prices and conditions of sale, one need only examine the enclosed invoices on which absolutely identical prices are quoted on the same date and for the same products; ...".

After commenting at length on the conduct of FP and SIV, Cobelli then expressly exempted VP,

"which, while it certainly participated in the agreements with the other manufacturers as regards the price lists and discounts agreed upon, just as indisputably maintained absolutely correct commercial behaviour, in particular vis-à-vis the undersigned, and which has never been responsible for abuses or clandestine agreements intended to favour one economic operator to the detriment of the others ...".

11 On 15 October 1987, the Commission decided to implement the procedure laid down in Article 3(1) of Regulation No 17. On 28 October 1987, it sent to FP, SIV and VP the written statement of objections provided for in Article 19(1) of Regulation No 17 and in Article 2(1) of Regulation No 99/63/EEC of the Commission of 25 July 1963 on the hearings provided for in Article 19(1) and (2) of Council Regulation No 17 (Official Journal, English Special Edition 1963-1964, p. 47, hereinafter referred to as "Regulation No 99/63"). That statement of objections accused the undertakings to which it was addressed of infringing Articles 85 and 86 of the EEC Treaty both in the automotive market, in relation to the Italian undertakings Fiat and Piaggio, and in the non-automotive market. FP, SIV and VP replied in writing to that statement.

12 The hearings provided for in Article 19(1) and (2) of Regulation No 17 and in Articles 7, 8 and 9 of Regulation No 99/63 were held on 9 and 10 March 1988. FP, SIV, VP and Cobelli were represented and heard. The draft minutes of the hearings, together with the relevant documents, were sent to the members of the Advisory Committee on Restrictive Practices and Dominant Positions. It was sent to the undertakings on 25 August 1988. The definitive minutes incorporating the corrections, additions and deletions requested by the undertakings, were sent to them subsequently.

13 It emerges from the abovementioned minutes that, called on by the representative of the Portuguese Republic to state whether the Commission had contacted Fiat, a DG IV official replied:

"The Commission intends to reply to that question later".

When the representative of the Italian Republic insisted on knowing whether the Commission had carried out investigations at Fiat, the same official replied:

"I have nothing to add to what I said earlier".

The minutes also show that when Mr Cobelli was called on to specify the meetings at which, according to him, VP was present, he mentioned a single meeting in Tropea in 1986, and that that was a glass-makers' festivity attended by 500 people, including family members.

14 At the end of that procedure, the Commission adopted the contested decision on 7 December 1988. The decision is divided into two parts: an examination of the facts (points 1 to 58, hereinafter referred to as "the factual part") and a legal assessment (points 59 to 84, hereinafter referred to as "the legal part"), followed by the operative part of the decision. In essence, the decision reproduces the content of the statement of objections.

15 In the factual part, the decision first of all examines the flat-glass market from the point of view, in turn, of the product, supply and demand. It then examines the behaviour of the undertakings in relation, firstly, to the market in non-automotive glass, secondly, to the market in automotive glass, and thirdly, to exchanges of glass between them.

16 With regard to the non-automotive market, the decision examines the alleged behaviour of the undertakings under five headings:

(a) identical prices;

(b) identical discounts;

(c) identical classification of the main customers;

(d) elements of concerted practices between producers, and;

(e) relations between producers and wholesalers.

17 The decision finds that "the three Italian producers communicated identical price lists to their Italian customers on dates which were close to one another and in some cases on the same days" (point 18), that "identical discounts on the listed prices were granted in accordance with the categories or levels in which customers were classified" (point 20), and that "the main customers ... were classified in the same category or level, whenever they obtained their supplies from any of the producers [the classification being dependent on] each customer' s total purchases from all producers" (point 22). The decision then states that "the uniformity of prices and of discount scales and the uniform classification of the main customers by category or level are the result of concerted practices between the producers agreed on directly during talks, meetings or contacts or through the intermediary of the spokesman of the main customers [Socover]" (point 24). There follows "the documentary evidence of such concerted practices" (points 25 to 32). The decision also finds that "the exchanges of products between the three Italian manufacturers also provide an opportunity for knowing the prices charged by competitors or for agreeing on the conduct to be pursued on the market ... . The prices of the products exchanged were always set and subsequently adjusted on the basis of the price adjustments of the transferring producers" (point 33). Finally, the decision finds that "the prices and discounts agreed on under the concerted practices were actually applied. Examination of certain invoices shows that one and the same customer who purchased widely differing quantities from the three producers was charged identical prices and granted identical discounts". A list of the invoices examined is then given (point 34).

18 As regards relations between the producers and the wholesalers, the decision states that "the three producers took care to ensure that their prices and discounts were also applied downstream". It accepts that it does not have any direct evidence of the meetings alleged by the complainant Cobelli "with wholesalers in order to get them to accept and pass on the price increases", but it insists that "certain documents show, firstly, that some meetings between wholesalers were arranged on the initiative of the producers and that, given their identical prices and discounts, the producers managed to guide the commercial choices of the wholesalers and, secondly, they confirm that the customers expected producers' prices to be identical" (point 35). There then follows a discussion concerning certain documents (points 36 to 42). The decision finds, in particular, on the basis of one of those documents, that "Socover is the channel for passing messages from the wholesalers to the producers and from the producers to the wholesalers" (point 36).

19 With regard to the automotive market, the decision states that "the company documents discussed below indicate that SIV and FP agreed on prices and the allocation of quotas at least as from 1982. VP also participated in these restrictive practices from 1983 at least, albeit less strictly than the other two producers" (point 43). The decision then examines the evidence which the Commission regards as proof of the agreements and concerted practices concerning the Fiat group (points 44 to 51) and the Piaggio group (point 52), respectively. In the case of the Fiat group, after considering the question of prices and quotas, it states that "the three producers carried out reciprocal sales or purchases of products ... with the objective of maintaining their respective penetration quotas or of achieving the quotas agreed with their competitors" (point 48) and, referring to the producer' s argument that Fiat was a "dominant buyer", that "at all events, whatever the types of relationships that develop between a dominant buyer and its supplier, it is established that SIV, FP and VP collaborated in order to decide on the attitude to be adopted towards the Fiat group" (point 51, iii), second paragraph). In the case of the Piaggio group, the decision finds that "SIV and FP reached agreement, at least as from 1983, on the sharing of supplies and on prices charged to Piaggio" (point 52). No objection is made against VP in its relations with the Piaggio group.

20 As regards the exchanges of glass between the producers, the decision states that "large quantities of glass are exchanged under contracts between the three producers. The purpose of the exchanges is to enable each producer to have available a full range of products, even those which it does not manufacture, and to maintain its market quotas. They also provide a means of sharing markets and customers and of knowing the prices charged by competitors ..." (point 53). There then follows an examination of documents (points 54 to 56) and of the arguments of the producers (points 57 to 58). The decision states that it "does not intend to call into question exchanges of products to help out firms facing temporary shortages (renewal of production plant, shutdown for maintenance of furnaces, fulfilling occasional orders), but ... only the systematic exchanges of products agreed over long periods and which are the result of industrial and commercial policy decisions made by the manufacturers in the context of other agreements restricting competition" (point 58 i), first paragraph). From the economic point of view, the decision finds that "the exchanges cancel out the advantage of specialization and artificially place all the producers on an equal footing, thus preventing customers from benefiting economically from the production and commercial edge enjoyed by individual producers. As the uniformity of the price lists and discounts of the three producers shows, the exchanges result in practice in a flat and uniform market" (point 58 i) third paragraph). Finally, the decision insists that the exchanges are "systematic" and "apply not to marginal quantities, but to considerable tonnages" (point 58 iii).

21 Coming now to the legal assessment, the decision examines the behaviour of the undertakings in relation to Article 85 of the Treaty (points 59 to 73) and Article 86 (points 74-82).

22 In the non-automotive market, the decision finds that "the publication of identical price lists within a short period of time, or indeed on the same date, and the existence of identical discount scales and of identical lists of categories of customers qualifying for such terms are the result of agreements and concerted practices between producers in question. The documents and notes ... show that FP, SIV and VP agreed or at any rate colluded, at least from 1983 and up to 1986, in charging uniform prices and applying uniform terms of sale" (point 61). After examining the arguments put forward by the undertakings in relation to the concept of agreement, the decision considers that "even if it is not wished to describe the content of [the] notes and documents ... as amounting to agreements, there is no doubt that the notes and documents reflect collusion between the three producers, whatever the precise form which the collusion took ..." (point 63, fourth paragraph). With regard to relations between the producers and the wholesalers, the decision considers that "the meetings between the principal wholesalers that were instigated and/or organized by the producers are the result of agreements or concerted practices between FP, SIV and VP designed to orientate, along lines that suited their concerted interests the purchasing and sales policies of the wholesalers, who, because of their economic dependence, are unable to assert themselves against the power and manipulations of the producers" (point 64).

23 Finally, with regard to the non-automotive market, the decision concludes as follows:

"These agreements and concerted practices between firms manufacturing identical products constitute serious restrictions of competition within the meaning of Article 85(1). Through the agreements and concerted practices, the undertakings in question have committed themselves to restricting substantially their independence of conduct vis-à-vis their customers, and they have acted in such a way as to ensure that their principal customers fall into line with their decisions and are unable to take their own business decisions freely. The effects of these restrictions are all the more appreciable as FP, SIV and VP control some 79% of the Italian home market. Through the conduct at issue, the undertakings have reduced the scope for purchasers to benefit from competition between the local producers, given their overall market share even after imports are taken into account. In addition, in view of the risks involved in not being able to rely on regular supplies, it is difficult for the main purchasers, wholesalers and processors to dispense with supplies from the producers established in Italy" (point 66).

24 In the automotive market, with regard to relations with the Fiat group, the decision finds that "FP and SIV, from 1982 to 1986, and FP, SIV and VP, from 1983 to 1986, entered into agreements or at least concerted their behaviour on the prices to be charged to the Fiat group and, from 1982 to 1987, on the sharing of the market, thus removing any uncertainty as to their mutual conduct. The agreements and concerted practices between FP and SIV ... constitute much more serious infringements than those committed through the cooperation with VP. However, VP' s conduct also constitutes an infringement [in so far as] VP participated in the agreements or concerted practices relating to prices, ... applied the price list changes without fail, ... participated in the agreements relating to the apportionment of supplies ... and ... actively produced and continues to produce non-processed and processed products on behalf of its competitors" (point 67).

25 As regards relations with the Piaggio group, the decision finds that "FP and SIV agreed or collaborated, from the end of 1982 to 1986, on the prices to be charged to Piaggio and on the quantities and items which each of them would supply. Through these agreements and practices, which constitute clear infringements, the two producers developed a long-term strategy designed to get the customer in question to apportion its orders in accordance with what they had decided, thus depriving Piaggio, through the system of differentiated prices, of any economic scope for choosing its own sources of supply. Such conduct is all the more serious as FP and SIV actually put their agreements into effect, adapted them to changing circumstances in the course of their implementation and extended them beyond the period initially provided for" (point 68).

26 On the automotive market in general, the decision concludes as follows:

"The above agreements and concerted practices constitute restrictions of competition within the meaning of Article 85(1). Through these agreements and concerted practices, the producers in question created a market situation such as would exclude or, at the very least, reduce to a minimum any form of competition between them. The agreements and concerted practices allowed those concerned to seek and achieve an equilibrium in prices and outlets at a different level than that which would have occurred in a normal competitive situation and to crystallize their respective market positions. The effects of the restrictions applied by the producers in question are appreciable, since FP and SIV control more than 80% of the Italian automotive glass market and since FP, SIV and VP control some 95% of that market. Because of the conduct at issue, consumers were deprived of the possibility of benefiting from competition between local producers, in view of the preponderance of sales by local producers on the market in question even after imports are taken into account. In addition, it must be borne in mind that, in order to be able to rely on regular supplies, consumers are unable to dispense with supplies from producers established in Italy" (point 69).

27 On the exchanges of glass, the decision concludes as follow:

"The agreements and contracts ... relating to systematic exchanges of glass between the three producers constitute appreciable restrictions of competition within the meaning of Article 85(1), since they deprive the parties of their independence of conduct and of their ability to adjust individually to circumstances. Through the agreements and contracts, each producer gives up the right to take advantage, through increased direct sales to customers, of the other manufacturers' lack of products, of its own productive capacity, its specialization and its technical processing capacity, being in turn protected from such a risk where the situation is reversed. ... The ultimate purpose of the agreements and contracts is to share markets and customers between the producers and to prevent any change in their respective positions in the various market segments and any pressure from the consumers. In the automotive glass sector, the sharing of the market and customers is sometimes very far-reaching: certain producers perform subcontracting work for their competitors, which have the appropriate technology and processing facilities, simply in order to achieve a given apportionment of supply quotas for each customer" (point 70).

28 The decision then finds that the restrictions of competition at issue are liable to have an appreciable effect on intra-Community trade since "the agreements on prices also concern products imported by SIV from other Member States, by FP from other companies belonging to the Saint-Gobain group and by VP from its fellow group member Boussois"; since "the agreements relating to exchanges of glass also involve products from the three firms intended for export"; since those agreements "influence sales achievable in Italy through imports of articles produced in neighbouring countries"; since "the practices in question establish a structure of uniform business terms differing from the structure of differentiated conditions that would normally have obtained if competition had not been restricted, and they therefore deflect flows of trade between countries from the course they would otherwise have followed"; and since "the agreements appreciably affect trade between Member States by consolidating national compartmentalizations which obstruct the economic interpenetration desired by the Treaty" (point 71).

29 After finding that Article 85(3) of the Treaty cannot be applied to the present case (points 72-73), the decision begins examination of the conditions for the application of Article 86 by first of all defining the market at issue. It states, from the point of view of the product, that flat glass must be considered to be a specific market and, from the point of view of geography, that the Italian market must be considered to be the relevant geographical market in which to assess competition. The decision considers that "the geographical location of production facilities is a vital factor in the glass industry"; that the cost of transport "is certainly a very important factor"; and "if the profitability of the firm is to be maintained, only quantities produced at marginal cost can be sold for export"; and that "local producers ... remain the masters over most of the home market" (point 77, first paragraph). According to the decision, it follows that "the logistic and economic importance of the geographical location of production facilities means that, in order to have regular supplies, customers are essentially forced to rely on local producers" (point 77, second paragraph).

30 The decision then goes on to examine the existence of a "collective dominant position". It states that "FP, SIV and VP, as participants in a tight oligopoly, enjoy a degree of independence from competitive pressures that enables them to impede the maintenance of effective competition, notably by not having to take account of the behaviour of the other market participants" (point 78).

31 It states that "the collective dominant position of FP, SIV and VP" derives from the fact that "the joint market shares of some 79% for non-automotive glass and some 95% for automotive glass are sufficient in themselves to give FP, SIV and VP a dominant position on the Italian market in flat glass"; that "their direct control of domestic supply and their indirect control of supply from abroad enable the three undertakings to pursue a commercial policy that is not dependent on market trends and the conditions of competition"; that "despite their efforts, competing undertakings have not managed to weaken the position of the three undertakings on the Italian market"; that "the undertakings present themselves on the market as a single entity and not as individuals"; that "the three producers jointly maintain special links with a group of wholesalers who are the main glass distributors in Italy, they instigate the meetings, and they do everything possible to get them to accept price list changes and to ensure that the changes are passed on downstream"; that "the business decisions taken by the three producers display a marked degree of interdependence with regard to prices and terms of sale, relations with customers and business strategies"; and that "the three undertakings have in addition established among themselves structural links relating to production through the systematic exchange of products" (point 79).

32 The decision concludes that the conduct of the undertakings, as described, constitutes an abuse of a collective dominant position, first of all "because it restricts the consumers' ability to choose sources of supply and limits the market outlets of the Community' s other flat-glass producers" (point 80) and, secondly, "since it is incompatible with the objective enunciated in Article 3(f) of the Treaty, which provides for a system of undistorted competition within the common market" (point 81, first paragraph). The decision finds, in particular, that "the three producers prevented customers from getting the suppliers to compete with one another on prices and terms of sale and limited outlets through the setting of sales quotas for automotive glass, thus crystallizing established market positions and restricting competing producers' access to the markets" (point 81, second paragraph).

33 Finally, the decision sets out the factors to which regard was had in fixing the amount of the fines. It states that no fines should be imposed under Article 86 because "only the fines for the more serious infringement should be imposed on the undertakings" and "the concept of collective dominant position is being used for the first time" (point 84, (a) ). It finds that "the infringements have been of relatively long duration" (point 84 (b) ), that they "are of the traditional type and ... are clearly covered by Article 85" and that they are "particularly serious" (point 84 (c) ). However, "as a factor making for a reduction in the amount of the fines, [it] has taken account of the fact that ... there were periods when demand fell and that, consequently, the undertakings suffered losses" (point 84 (d) ). Finally, the decision finds that "the role played by VP [was] much less important than that played by FP and SIV" (point 85).

34 Having regard to those considerations, the Commission adopted the following decision:

"Article 1

Fabbrica Pisana SpA, Società Italiana Vetro-SIV SpA, and Vernante Pennitalia SpA have infringed the provisions of Article 85(1) of the EEC Treaty by participating in the following agreements and restrictive practices:

(a) Fabbrica Pisana, SIV and Vernante Pennitalia, from 1 June 1983 to 10 April 1986, in agreements and concerted practices on prices and terms of sale and in agreements and concerted practices designed to influence the purchasing and selling policies of the main wholesalers in the non-automotive flat-glass sector;

(b) Fabbrica Pisana and SIV, from 26 October 1982 to 1 December 1986, and Fabbrica Pisana, SIV and Vernante Pennitalia, from 11 May 1983 to 1 December 1986, in agreements and concerted practices on the prices to be charged to the Fiat Group in the automotive flat-glass sector;

(c) Fabbrica Pisana, SIV and Vernante Pennitalia, from 1 January 1982 to 30 June 1987, in agreements and concerted practices relating to the apportionment of quotas for supplies to the Fiat group in the automotive flat-glass sector;

(d) Fabbrica Pisana and SIV, from 1 January 1983 to 1 May 1986, in agreements and concerted practices relating to the prices to be charged and supply quotas to be applied to the Piaggio group in the automotive flat-glass sector;

(e) Fabbrica Pisana, SIV and Vernante Pennitalia, from 1 January 1982 to 31 December 1986, in product exchange agreements in the flat glass sector designed to achieve market sharing.

Article 2

Fabbrica Pisana, SIV and Vernante Pennitalia, have infringed the provisions of Article 86 of the EEC Treaty by abusing their collective dominant position through conduct whereby they deprived customers of the opportunity of getting suppliers to compete on prices and terms of sale and whereby they limited outlets through the setting of quotas for automotive glass:

(a) Fabbrica Pisana, SIV and Vernante Pennitalia from 1 June 1983 to 10 April 1986 in respect of non-automotive flat glass;

(b) Fabbrica Pisana and SIV from 26 October 1982 to 1 December 1986 and Fabbrica Pisana, SIV and Vernante Pennitalia from 11 May 1983 to 1 December 1986 in respect of prices for automotive flat-glass intended for the Fiat group;

(c) Fabbrica Pisana, SIV and Vernante Pennitalia from 1 January 1982 to 30 June 1987, in respect of supply quotas for automotive flat glass intended for the Fiat group;

(d) Fabbrica Pisana and SIV, from 1 January 1983 to 1 May 1986, in respect of prices and supply quotas for automotive flat glass intended for the Piaggio group.

Article 3

Fabbrica Pisana, SIV and Vernante Pennitalia shall immediately put an end to the practices established in Articles 1 and 2 (if they have not already done so) and shall in future refrain, in their flat-glass activities, from entering into any agreement or concerted practice that may have an identical or similar object or effect, including any exchange of information of a type generally covered by professional secrecy such as would allow them to monitor the implementation of any express or tacit agreement or any concerted practice relating to practices or to market sharing.

Article 4

The following fines are hereby imposed on the undertakings to which this decision is addressed, on the grounds of the infringements established in Article 1:

- Fabbrica Pisana SpA, a fine of ECU 7 million,

- Società Italiana Vetro-SIV SpA, a fine of ECU 4.7 million,

- Vernante Pennitalia SpA, a fine of ECU 1.7 million.

Articles 5 and 6

[Omissis]"

PROCEDURE

35 These are the circumstances in which, by applications lodged on 10 March 1989 (SIV), 22 March 1989 (FP) and 23 March 1989 (VP), the applicants brought before the Court of Justice these actions for the annulment of the decision. The actions were registered at the Court Registry under Nos 75/89 (SIV), 97/89 (FP) and 98/89 (VP).

36 By an application lodged at the Registry of the Court of Justice on 8 September 1989, the United Kingdom requested leave to intervene in support of the form of order sought by the Commission in so far as it relates to the application of Article 85 of the Treaty, and in support of the forms of order sought by the applicants in so far as they relate to the application of Article 86 of the EEC Treaty.

37 By order of 4 October 1989, the Court of Justice granted the United Kingdom leave to intervene in the three cases: 75/89, 97/89 and 98/89. The Court of Justice did not impose any restriction on that intervention.

38 Before the written procedure had been completed, by an order of 15 November 1989, the Court of Justice referred the three cases to the Court of First Instance, pursuant to Article 3(1) of the Council Decision of 24 October 1988 establishing a Court of First Instance of the European Communities, where they are registered under Nos T-68/89 (SIV), T-77/89 (FP) and T-78/89 (VP). The written procedure continued thereafter before the Court of First Instance.

39 In a document lodged at the Registry of the Court of First Instance on 4 February 1990, the intervener submitted its written observations, which are identical in each of the three cases since, according to the intervener, the matters that it wished to raise were issues of principle which did not vary according to the particular circumstances or arguments of the individual applicants. It stated, moreover, that:

"As regards Article 85, the United Kingdom has intervened with the sole purpose of making clear that its intervention in support of the applicants in relation to Article 86 should not be taken in any way as a token of support for the applicants in relation to Article 85. The United Kingdom accepts the conclusions that the Commission reached in the decision with regard to the application of Article 85. It also accepts the appropriateness of the level of fines imposed. It does not wish to make any additional observations on either subject".

In its rejoinder in each of the three cases, the Commission asked the Court to call upon the United Kingdom to choose which of the two parties it intended to support.

40 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance decided, by orders of 7 May 1991, to prescribe measures of inquiry and of organization of procedure and to entrust them to the Judge-Rapporteur. The Judge-Rapporteur chaired an informal meeting with the parties on 29 and 30 May 1991.

41 At that meeting, the Judge-Rapporteur explained that he intended, in order to facilitate examination of the files and the conduct of the hearing, to submit to the Chamber, following the informal meeting, Reports for the Hearing whose content could be accepted by each of the parties as a complete and detailed summary of its position, and a single common file of documents for all the cases containing all the documents which the parties considered important for consideration of their cases. He asked the parties to send him their observations on the draft Reports for the Hearing which he communicated to them, and on the list of documents to be included in the common file. He also asked the Commission to produce, in the original form in its possession, the documentary evidence on which it relied for the adoption of its decision.

42 With regard to the intervention of the United Kingdom, its representative confirmed the position which it had adopted in its memorandum of 4 February 1990, as set out in paragraph 39 above. He stated that the United Kingdom would therefore confine itself in its oral argument to stating its position in support of the applicants' submissions in relation to the application of Article 86 of the EEC Treaty. The Commission stated that in those circumstances it no longer had any objection as to the admissibility of the intervention.

43 As regards the assessment of the market, the parties agreed to place in the common file, by common accord, all the statistics needed for an appreciation of the functioning of the Italian and European flat-glass markets. They agreed that it would not therefore be necessary to commission an expert' s report in that regard.

44 With regard to the investigations carried out by the Commission, the Commission stated that the only investigation which had been carried out in relation to wholesalers was the investigation at the premises of Socover, and that all the documents found on that occasion had been identified. It also stated that, as regards the automotive market, it had not made any check or other investigation at the premises of Fiat or Piaggio and that it had not sent them any request for information.

45 With regard to the objection raised by the Commission against certain documents lodged by the parties, the Commission stated that it continued to object to the production of the "Mazzucca" plan to set up a consortium of wholesalers, but accepted that the Court would be able to rule on that question in the judgment, in so far as might be necessary.

46 With regard to VP' s request of the 19 November 1990 to be allowed to lodge an internal document of 25 February 1985 and the list annexed thereto, the Commission and VP agreed that those documents could appear in the file with an indication that they were lodged late and that the Court would decide, in so far as might be necessary, in the judgment whether they could be taken into consideration. The documents were subsequently sent to the Commission, which submitted written observations on them. The plan to set up a consortium of wholesalers, the two documents lodged by VP and the Commission' s observations on them were included in the common file, subject to consideration by the Court of First Instance of their admissibility.

47 Moreover, the Commission confirmed that pages 47 and 50 of FP' s reply to the statement of objections which had been sent to it, had not been communicated to VP and SIV during the administrative procedure and could not therefore be used against them.

48 With regard to the requests for the summoning and hearing of witnesses, VP withdrew its request to have Mr Borgonovo, a Socover employee, summoned as a witness for examination as to the meaning of the notes made by him on which the decision relied as evidence against VP. It confined itself to referring to the written statement by Mr Borgonovo (Socover) which it had lodged. VP also withdrew its request for a competent representative of Fiat to be summoned as a witness for examination as to VP' s conduct vis-à-vis Fiat.

49 The Commission produced all the handwritten notes of Mr Benvenuti, an FP employee, several extracts from which were already in the file. FP later worked together with the Commission to make the relevant pages accessible to the Court and to the other parties. The parties reached agreement on the transcription of those notes.

50 At the request of the Judge-Rapporteur, the Commission stated that the sentence appearing in the sixth paragraph of point 79 of the decision, "the undertakings presented themselves on the market as a single entity and not as individuals", constituted an essential element of its position with regard to the application of Article 86 of the Treaty, and that it was for the Commission to substantiate it.

51 The parties agreed to a possible joinder of the three cases for the purposes of the oral procedure.

52 Following that meeting, the parties produced supplementary documents and submitted their observations on the draft Reports for the Hearing. At the request of the Judge-Rapporteur, the Commission sent a list, which was received at the Registry of the Court of First Instance on 14 June 1991, indicating the documents which, in its view, contained an express or implicit reference to VP. The Judge-Rapporteur prepared a definitive Report for the Hearing for each case and a common file containing the documents - including, where appropriate, the transcriptions and translations agreed among the parties - on the basis of which the parties agreed to proceed to the hearing of oral argument. (The documents in the common file are hereinafter cited with the symbol followed by the page number).

53 By order of the Court of First Instance of 4 June 1991, Cases T-68/89, T-77/89 and T-78/89 were joined for the purposes of the oral procedure.

54 The oral argument of the parties and their replies to the questions put by the Court were heard at the hearing which was held from 12 to 15 November 1991.

55 During the oral procedure, the Court requested the parties to submit their observations on a possible joinder of Cases T-69/89, T -77/89 and T-78/89 for the purposes of the final judgment. The parties did not raise any objection to such a joinder.

56 As cases T-68/89, T-77/89 and T-78/89 are connected with regard to their subject-matter, it is appropriate, in accordance with Article 50 of the Rules of Procedure of the Court of First Instance, to join them for the purposes of the final judgment.

THE FORMS OF ORDER SOUGHT BY THE PARTIES

57 The applicant SIV claims that the Court of First Instance should:

1. declare void the Commission' s decision of 7 December 1988 relating to a proceeding under Articles 85 and 86 of the EEC Treaty (IV/31.906, flat glass), in so far as it fails to observe the rules of procedure and, in any event, infringes the general principle audi alteram partem and, in particular, the rights of defence;

2. annul the Commission decision in so far as it infringes and incorrectly applies Article 85(1) of the EEC Treaty, in conjunction with Article 2 and Article 3(f) of the Treaty;

3. in the alternative, annul the decision in so far as it concerns the alleged infringement of Article 86 of the Treaty;

4. in the further alternative, annul Article 4 of the operative part of the decision, relating to the fines imposed on SIV, in so far as it fails to state the reasons for the criteria used to fix the amount of those fines, and/or having regard to the effects to which payment of those fines could give rise;

5. in the still further alternative, reduce on the basis of equitable principles the amount of the fines imposed on SIV.

58 In reply to the applicant SIV, the Commission contends that the Court of First Instance should:

1. dismiss the application as unfounded;

2. order the applicant to pay the costs.

59 The applicant FP claims that the Court of First Instance should:

1. declare void Articles 1, 2 and 3 of the contested decision in so far as they concern the applicant;

2. declare void Article 4 of the contested decision in so far as it imposes a fine on the applicant or, in the alternative, substantially reduce the amount of the said fine;

3. order the defendant to pay the costs.

60 In reply to the applicant FP, the Commission contends that the Court of First Instance should:

1. dismiss the application as unfounded;

2. order the applicant to pay the costs.

61 The applicant VP claims that the Court of First Instance should:

1. annul the Commission' s decision of 7 December 1988 relating to a proceeding under Articles 85 and 86 of the EEC Treaty (IV/31.906, flat glass) void in so far as it finds that:

(a) VP participated from 1 June 1983 to 10 April 1986 in agreements and concerted practices on prices and terms of sale and in agreements and concerted practices designed to influence the purchasing and selling policies of the main wholesalers in the non-automotive flat-glass sector;

(b) VP participated from 11 May 1983 to 1 December 1986 in agreements and concerted practices on the prices to be charged to the Fiat group in the automotive flat-glass sector;

(c) VP participated from 1 January 1982 to 30 June 1987 in agreements and concerted practices relating to the apportionment of quotas for supplies to the Fiat group in the automotive flat-glass sector;

(d) VP participated from 1 January 1982 to 31 December 1986 in product exchange agreements in the flat-glass sector designed to achieve market sharing;

and imposes a fine on VP on those grounds;

2. order the Commission to pay the costs.

62 In reply to the applicant VP, the Commission contends that the Court of First Instance should:

1. dismiss the application as unfounded;

2. order the applicant to pay the costs.

63 In each case, the intervener contended that the Court of First Instance should:

1. annul Article 2 of the contested decision, together with Article 3 in so far as it refers to Article 2;

2. dismiss the remainder of the application as unfounded, in so far as it concerns the application of Article 85 of the Treaty and the level of fines imposed.

THE OBJECTIONS RAISED BY SIV RELATING TO THE PROCEDURE AND TO THE STATEMENT OF THE GROUNDS UPON WHICH THE DECISION IS BASED

A - Arguments of SIV

64 Before setting out its pleas in law on the substance of the case, SIV raises a number of objections concerning observance of the rules of procedure, in particular compliance with the principle audi alteram partem and, more generally, the rights of defence.

65 SIV criticizes the fact that the Commission laid down very short time-limits for SIV to make its observations, whereas the Commission' s preparation took place over a very long period of time. In that regard, it relies on the judgments in Joined Cases 100 to 103/80 (Musique Diffusion Française v Commission [1983] ECR 1825) and in Case 85/76 (Hoffmann-La Roche v Commission [1979] ECR 461), in which the Court emphasized the importance of the right of the defence to make known its views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission to support its claim that there has been an infringement of the Treaty.

66 SIV emphasizes the active and decisive influence that Cobelli could have had on the Commission' s conduct and alleges that the Commission kept secret the documents relating to Cobelli. Consequently, SIV asks the Court to order the Commission to produce in the course of the proceedings all notes, correspondence and instruments concerning the relations between Alfonso Cobelli and/or his undertaking and lawyers and the Commission, in connection with the procedure which took place before the Commission.

67 According to SIV, the Commission gathered information at the premises of Fiat concerning its commercial relations with the glass-producers which it communicated neither to the parties concerned nor to the members of the Advisory Committee. SIV requests that the Court should order the production of the minutes concerning the opinion expressed by the Advisory Committee, and all the documents and correspondence exchanged between the Committee or its members and the Commission. GROUNDS CONTINUED UNDER DOC.NUM : 689A0068.1

68 With regard to the reasoning of the decision, SIV considers that the grounds upon which the conclusions of the decision are based contain seriously flawed reasoning. For example, the Commission stated that the Italian glass producers granted wholesalers identical discounts after it had selectively picked out such (rare) evidence as was capable of supporting such an argument, and without considering the general relevance and objectivity of the argument advanced. That tendency to make its reasoning fit in with certain conclusions is nothing other than the result of a passive acceptance of the arguments put forward and proposed by third parties.

69 SIV claims that the Commission practically ignored the arguments advanced and the documents produced by the three producers concerned in so far as it reproduced in the decision the basic content of the statement of objections.

70 In its reply, SIV also objected to the fact that the Commission was both judge and prosecutor at the same time. Although the Court of Justice has already had occasion to reject such an objection (judgments in Joined Cases 209 to 215 and 218/78 Van Landewyck v Commission, known as the Fedetab judgment, [1980] ECR 3125 and in Musique Diffusion Française, cited above), the applicant requested that the Court should review that case-law having regard to Article 6, paragraph 1 of the European Convention for the Protection of Human Rights and Article 14, paragraph 1 of the United Nations' International Covenant on Civil and Political Rights. According to SIV, the grounds upon which the Court of Justice based itself are no longer adequate. The reform of all national procedures, including the procedures of administrative courts, which was dictated by the obligation to adapt national systems to the principles laid down by international agreements, must necessarily also affect the Community system.

71 In any event, SIV considers that the dual function that characterizes the action of the Commission, which exercises both an investigative and a decision-making power, imposes on the Commission an even stricter duty to observe the rights of defence (judgment in Musique Diffusion Française, cited above). In particular, the Commission must not have the right to prevent the defence from having access to documents or information that the Commission has gathered.

B - Arguments of the Commission

72 The Commission points out first of all that it gave SIV a period of three months (from 6 November 1987, the date on which it sent the statement of objections to SIV, until 2 February 1988, the date on which SIV lodged its reply to the statement of objections) to make known its observations, which was a more than sufficient time to prepare complete observations in reply to the statement of objections. In addition, a large part of the documentation gathered came from SIV itself or was already well known to SIV. The Commission points out that, at SIV' s request, it extended the time-limit for submission of the reply.

73 The Commission rejects the idea that it accorded excessive importance to Mr Cobelli' s complaint. The investigations upon which the decision is based were carried out in part before the application was made and, in any event, independently of its submission.

74 As regards the communications between Cobelli and/or its lawyers and the Commission, which SIV sought to have produced, the Commission considers that those documents are entirely extraneous to the contested decision. Each time that statements and/or evidence supplied by Cobelli were taken, even indirectly, into account by the Commission, the decision made specific reference to that fact. For the same reasons, the Commission rejects the objection that it "took from Fiat" information other than that mentioned in the decision.

75 The Commission rejects the claim that the observations made by the producers concerned were not taken into consideration. It states that it weighed up those observations very carefully, comparing them with the evidence adduced to support them and with the facts upon which the contested decision is based.

76 According to the Commission, all the documents relating to the procedure which gave rise to the contested decision were annexed to the statement of objections and sent to SIV. No limitation was placed on SIV with regard to its right of access to the evidence upon which the decision is based.

77 With regard to SIV' s application for an order requiring the production of documents relating to the Advisory Committee, the Commission considers that those documents are not in any way connected with the present case.

78 The Commission rejects the allegation that it did not provide sufficient evidence in support of its decision.

79 As regards the applicant' s additional plea in law in its reply, concerning the alleged infringement of the European Convention for the Protection of Human Rights and the United Nations' International Covenant on Civil and Political Rights, the Commission states that, in the light of the case-law of the Court of Justice in its judgments in Case 374/87 (Orkem v Commission [1989] ECR 3283) and Case 85/87 (Dow Chemical Iberica v Commission [1989] ECR 3165), Fedetab, cited above, and Musique Diffusion Française, cited above, its conduct throughout the procedure towards SIV has been well above the minimum guarantee of the rights of defence required by the Court of Justice.

80 In its application, SIV also puts forward a plea in law based on Articles 2 and 3(f) of the EEC Treaty. SIV considers that if all the principles stated in the decision are to be followed, that would have objectively disastrous results from the industrial and commercial point of view: in particular, all forms of competition would be entirely eliminated, owing to the magnitude of the investment necessary and the long-term planning it entailed; the creation of a production and commercial system on monopolistic lines would be encouraged, as would price increases at the different stages of distribution and sale and a crisis in supply.

81 The Commission rejects those claims as general, contradictory and confused. In its opinion, the decision is based on a series of irrefutable facts and notes explaining those facts, the probative value of which cannot be called into question by the assumptions made by SIV concerning the functioning of the market.

C - Assessment by the Court

82 Under the first paragraph of Article 48(2) of the Rules of Procedure of the Court of First Instance, just as under the first paragraph of Article 42(2) of the Rules of Procedure of the Court of Justice, which were previously applicable mutatis mutandis to the procedure before the Court of First Instance, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or fact which come to light in the course of the written procedure. The plea in law based on the infringement of Article 6 of the European Convention for the Protection of Human Rights and Article 14 of the United Nations' Covenant on Civil and Political Rights was introduced for the first time by the applicant only at the reply stage. It is not based on matters of law or of fact which came to light in the course of the written procedure. Consequently, that plea in law cannot be accepted. There is therefore no need, in the context of these cases, to review, in the light of allegedly changed circumstances, the case-law of the Court of Justice in its judgments in Joined Cases 209 to 215 and 218/78 Fedetab and Joined Cases 100 to 103/80 Musique Diffusion Française, cited above.

83 Furthermore, the Court finds that the applicant has not specified in any way whatsoever how the principle audi alteram partem and the rights of defence were infringed by the Commission. Consequently, the pleas in law based on the infringement of the principle audi alteram partem and the rights of defence cannot be accepted as grounds for the annulment of the decision in its entirety. In so far as those pleas have not yet been taken into consideration and concern certain specific aspects of the decision, they will be dealt with in the substantive examination of those aspects.

84 With regard to the plea in law based on Articles 2 and 3(f) of the Treaty, the Court considers that it is has no legal basis in law and that it cannot, therefore, be relied on as a ground for the annulment of the decision.

SUBSTANCE

85 The applicant SIV puts forward the following pleas in law in support of the form of order it seeks:

(a) infringement and incorrect application of Article 85(1) with regard to the assessment of the possible existence of agreements or concerted practices between the Italian glass producers;

(b) infringement and incorrect application of Article 85(1) with regard to the conditions for its applicability;

(c) infringement and incorrect application of Article 86 of the Treaty;

(d) infringement and incorrect application of Article 15(2) of Regulation No 17 with regard to the fines imposed.

86 The applicant FP puts forward the following pleas in law in support of the form of order it seeks:

With regard to the application of Article 85(1):

(a) with regard to the non-automotive glass market:

(i) factually incorrect assessments and lack of evidence;

(ii) incorrect application of the concept of concerted practice;

(b) with regard to the automotive glass market:

(i) factually incorrect assessment and lack of evidence;

(ii) incorrect assessment of the economic and legal context;

(c) with regard to the transfers of glass between producers:

(i) factually inaccurate assessments and lack of evidence;

(ii) no object or restrictive effects on competition;

With regard to Article 86:

(a) incorrect application of the concept of dominant collective position;

(b) factually incorrect assessments;

(c) cumulative unlawful application of Articles 85 and 86;

With regard to the fines:

(a) infringement of Article 15(2) of Regulation No 17.

87 The applicant VP puts forward the following pleas in law in support of the form of order it seeks:

(a) absence of credible evidence capable of establishing VP' s participation in an unlawful agreement;

(b) failure to seek evidence from independent sources;

(c) erroneous assessment of the product, the market and VP' s behaviour on the market.

88 The pleas in law of all the three applicants can be grouped under three general pleas relating respectively to: (A) the assessment of the market, (B) the findings of fact and the evidence, and (C) the legal assessment. According to the applicants, the decision does not contain any economic analysis of the market and that absence of analysis vitiates the decision in its entirety. As regards the evidence, the applicants claim that the evidence taken into consideration consists, for the most part, in a very partial selection of quotations which ought to have been read in the context both of the documents from which they were taken and of the realities of the market. Consequently, the legal assessment of the facts allegedly found to exist is vitiated with regard to the application of both Article 85 and Article 86.

89 With regard to the second plea in law, which concerns the findings of fact and the evidence, a point must be mentioned at this stage which came to light only when, as was stated above (paragraph 41), the Commission was called upon to place in the file, in the original form in its possession, the documentary evidence on which it relied when adopting its decision.

90 Under Article 14(1)(b) of Regulation No 17, in the course of the investigations which it carries out at the premises of undertakings, the Commission is authorized only to take copies of or extracts from the books and business records. In the present case, a large number of the documents to which the Commission refers in its statements of objections, and which it communicated to the undertakings in the form of photocopies, are hand-written notes, sometimes scarcely legible, in Italian. In some cases, it was clear from the form of the document communicated by the Commission to the undertakings that the document in question was only part of the original document. Other documents were internal memoranda of the undertakings or their subsidiaries. Once again, it was clear from the form of the document that, in some cases, the documents in question were merely part of the original. In other cases, the fact that the document was an extract was not evident from the document communicated.

91 It emerges from the inquiry carried out by the Court that when the Commission prepared the documentary evidence with a view to communication to the undertakings, certain relevant passages were deliberately deleted or omitted, even though they did not relate to business secrets. In particular, nine words were deleted without trace in a handwritten note from SIV of 30 January 1985 ( 374).

92 There are four references to that note of 30 January 1985 in the decision: the note is used, firstly, as evidence of the existence of "agreements between the three producers on price lists and terms of sale" in the non-automotive market (point 62 of the legal part, which recapitulates points 27 and 32 of the factual part) and, secondly, as evidence of "discussions on how to get price increases accepted by the Fiat group" (point 47 of the factual part). In the second paragraph of point 24, the decision expressly states that that document was communicated to the undertakings with the statement of objections, and it is cited in paragraph 23 (page 17) of the statement of objections. The relevant passage reads as follows in the original:

"- Problema Fiat

- Scaroni [FP] pensa di non potersi

battere per fermare PPG

- aumento fori e staffette

come cavallo di Troia in Fiat

per aumento prezzi"

("Fiat problem - Scaroni [FP] considers that he cannot fight to stop PPG [VP]"; - increase in holes and brackets [mechanism for raising side windows] as Trojan horse in Fiat for increase in prices").

In the photocopy sent with the statement of objections, the words "Scaroni pensa di non potersi battere per fermare PPG" ("Scaroni considers that he cannot fight to stop PPG") had been deleted. In the statement of objections itself the passage is quoted as follows: "Problema Fiat - aumento fori e staffette come cavallo di Troia in FIAT per aumento prezzi", without any indication that words have been omitted.

93 The Court considers that it is self-evident and indisputable that the tenor of the note is changed completely by the omission of those nine words. With those nine words the note could be taken as clear evidence of a competitive struggle between SIV and FP on the one hand and VP on the other. At the hearing, the Commission tried in vain to supply an objectively justifiable reason for the deletion of those words.

94 The Court must record that that is not the only example of such a proceeding, other examples of which will be commented upon below (see in particular paragraphs 214, 215, 224, 236 and 246 below). The Court also observes that SIV' s note of 30 January 1985, cited above, and another note of SIV of 24 June 1985 ( 715) appear in the list of documents referring expressly or implicitly to VP supplied to the Court by the Commission, as making implicit reference to VP, whereas it emerges from the full version of those notes that they make express mention of VP. That fact would appear to indicate that the full versions of those documents were not available to all departments of the Commission.

95 Accordingly, the Court considers that it is incumbent on it, in assessing the applicants' second general plea, to check meticulously the nature and import of the evidence taken into consideration by the Commission in the decision. However, since the nature and the import of the evidence is intimately connected with the nature and the functioning of the market in question, and the parties have focused their arguments essentially on analysis of the nature of the market, it will be appropriate, first of all, to examine the assessment of the market made in the decision in the light of those arguments. An examination will then be made of the evidence taken into consideration and of the findings of fact in the decision which were based on that evidence. Finally, the legal assessment made in relation to Articles 85 and 86 of the Treaty will be examined.

A - THE ASSESSMENT OF THE MARKET

1. Contested decision

96 This part of the decision (points 2-17) is divided into three headings: the product, supply and demand. However, it should be pointed out straight away that the Commission, at the hearing, stated that as the written evidence of the agreements between the three producers was unambiguous and explicit, it made any investigation whatsoever into the structure of the market entirely superfluous. This part of the decision must be considered to be descriptive rather than analytical.

(a) The product

97 The description of the product given in points 2 to 5 of the decision is repeated in essence in paragraphs 1 to 3 above. The decision states that the Italian market "accounts for some 20% of the European automotive market and roughly the same percentage of the European non-automotive market" (point 6). The development of the Italian market in flat glass is shown in the tables in Annex 1 to the decision.

(b) Supply

98 The decision finds that the three producers were able to meet "an average of 79% of Italian demand for non-automotive glass and an average of 95% of Italian demand for automotive glass" (point 7 and Annex 2). There then follows (in points 8 to 10) a description of the three producers.

99 FP is a subsidiary of SG, which, through the intermediary of FP or other group companies, owns a number of companies, including Luigi Fontana SpA, which is the largest processing wholesaler on the Italian market. FP owns a float-glass plant at Pisa and a float- glass plant at San Salvo, which it shares with SIV and is operated by Flovetro, a subsidiary of SG. FP is the only producer of cast-glass in Italy (point 8).

100 SIV, which is controlled by the State holding company EFIM, owns two float-glass plants at San Salvo, one of which is operated by Flovetro. In addition, SIV owns one company in Italy and one in Spain which produce automotive glass, another company at San Salvo which produces reflective glasses and two glass-marketing companies in Frankfurt and Paris respectively. In 1986, SIV took control of Veneziana Vetro and Splintex SpA and transferred to Glaverbel control of the company Ilved (point 9).

101 VP, which is a subsidiary of PPG, owns two float-glass plants, at Cuneo and Salerno respectively, and controls the company Pennitalia Securglass, which produces automotive glass. In 1982 PPG bought Boussois, a company which "has a long tradition in glass manufacture and a strong position on the French market for automotive and non-automotive glass" (point 10).

102 Point 11 contains two tables showing, respectively, the market shares (that is to say on the Italian market) of the three companies, on the basis of the figures in Annex 2, and their shares of the European market. The European flat-glass market is dominated by a tight oligopoly comprising SG, SIV, PPG, Pilkington, Glaverbel (of the Asahi group) and Guardian. These are groups whose activities are integrated upstream and downstream (point 12).

103 With regard to the production capacity of that market, the decision relies on the forecasts made by the European Flat-Glass Producers Association (hereinafter referred to as "GEPVP") in June 1986 (Community of Ten, valid until 1996) and in June 1987 (Community of Twelve, valid until 1989). Community production was amply sufficient to meet demand in the period from 1980 to 1987, with exports to non-community countries having consistently exceeded imports from outside the Community. Moreover, Community demand for glass would, on the most optimistic assumptions, increase by only 1 to 3% a year. The GEPVP thus anticipated that excess production capacity, which was high in the early 1980s, would persist in the years ahead, albeit at a lower level.

104 According to the information supplied by FP, the average investment involved in a float-glass plant of 150 000 tonnes per year amounts to some ECU 70.5 to 86 million on an existing site and twice that amount on a new site. The possibility of other producers entering the market in the foreseeable future can therefore be ruled out (point 12).

105 With regard to the automotive market, processing requires different production lines for each technique, each production line being especially designed in the light of the shapes and technical specifications required by demand. Technical obsolescence is therefore fairly rapid and occurs after seven to eight years, according to technical developments in motor vehicle manufacturing. According to FP, the cost of a processing line for the manufacture of 650 000 motor vehicle fittings a year may be put at ECU 40 million. "Few firms are therefore capable of bearing the costs and risks of processing glass for motor vehicles" (point 13).

(c) Demand

106 The customers of non-automotive flat-glass producers are wholesalers and producers. Some 40% of demand is accounted for by processors purchasing directly from producers, while the remaining 60% is accounted for by wholesalers. Wholesalers themselves process at least half of the glass they purchase, with the bulk of the remainder being sold directly to final customers and a smaller proportion to small processors (point 14, first paragraph). Processors are often in competition with the flat-glass producers who process glass themselves. Sometimes, processors are dependent on the transfer of technology from glass producers and thus manufacture processed products under licence granted by their suppliers (point 14, second paragraph).

107 The customers of automotive glass producers are the car manufacturers. The decision describes the two stages in the development of a product: the prototype stage involving only one or two producers, and the marketing stage at which the manufacturer calls on a larger number of producers (point 15).

108 The decision states (point 16) that the non-automotive market "saw a fall in demand in the period 1979 to 1983, reflecting the recession in the European economy. As from 1984, demand picked up again, allowing producers, particularly as from the second half of 1985, to increase their prices considerably. As was stated in [point] 12, demand for glass is expected, according to the industry' s forecasts, to increase by between 1 and 3% a year over the next decade".

109 The automotive market "is closely bound up with the trend of car production, which, following the second oil shock, went through a period of recession in Italy and the rest of Europe up to 1984. Only in 1985 did production begin to pick up again somewhat, with the recovery gathering further momentum in 1986 and 1987. According to the forecasts, the growth in demand for automotive glass over the next decade is expected to be lower than that for non-automotive glass" (point 17).

2. Arguments of the applicants

110 Throughout the procedure, both before the Commission and before the Court, the applicants insisted that the absence of an economic analysis of the market vitiated the decision in its entirety. At the hearing, they made a joint presentation of their analysis of the market. It is appropriate to summarize the essence of that presentation and to add to it the few remaining elements of their individual arguments.

(a) The argument on principle

111 The applicants claim that, although the decision describes the two markets, non-automotive and automotive, it does not draw the necessary consequences from that description when it analyses the behaviour of the parties and the economic phenomena that it finds to exist. The Commission has an obligation to take into consideration all the circumstances, including the special characteristics of the market in question, which form the legislative background and economic context of the conduct to which exception is taken (judgment in Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73 Suiker Unie [1975] ECR 1663). Since the existence of the concerted practices is categorically denied, the analysis ought to have served not only to prove that the behaviour of the undertakings had the effect of restricting competition but also, and above all, to prove that the behaviour of the undertakings could be explained only by the existence of unlawful concertation, and not merely by market forces. The analysis of the market was therefore essential in two ways: firstly, in the absence of written evidence, to prove the existence of the alleged concerted practices and, secondly, to demonstrate their restrictive effects on competition.

(b) The arguments regarding the product

112 While the parties accept that there are three types of flat glass, namely, drawn glass (or window panes), cast glass (in Italian "greggi"), and plate glass (which was formerly produced by continuous casting, but is now almost exclusively produced by the float-glass process), the applicants draw attention to the fact that their respective shares of the Italian market are, 0.5%, 4.5% and 95% (Assovetro data, 227). Consequently, although the decision concerns flat glass in general, it concerns, almost exclusively, behaviour relating to float glass.

113 Cast glass is entirely different from the two other types of flat glass from the point of view both of its characteristics (translucent but not transparent) and its uses. Intended solely for certain construction and decorative applications, this product is in decline ( 188). The manufacture of this type of glass with a very low added value is no longer profitable owing to massive cheap imports from eastern European countries and Turkey ( 188, 235). Since 1983, FP has been the only producer which still has a production line for cast glass in Italy ( 229, 235). The Commission ignored the distinction between cast glass and float glass intended for the construction industry and used documents relating to cast glass to criticize the behaviour of FP and SIV in relation to float glass.

114 Basic float glass has become a commonplace homogenous product. The same technology is used by all the producers for the construction of the floats; the production techniques of float glass are more or less identical throughout Europe and even the world; and quality standards and criteria, organization of work and level of qualification, are all largely equivalent in all European factories. It follows that at the stage of the basic products, it is extremely difficult for customers to distinguish between the products of the different producers. In fact, basic flat glass has become a true raw material, a "commodity" like gold or aluminium. For that reason, the price of the glass is more or less the same in all the countries with major glass producers. Variations in price, if any, depend on secondary costs such as, for example, transport costs. That finding is an important factor for understanding the organization of the market and for a true appreciation of certain practices and certain behaviour of the undertakings.

115 Float glass is produced in a wide variety of colours and thicknesses. Apart from clear glass there are six colours on the European non-automotive market and, in the automotive market, four colours. The production of coloured glass is more difficult and more costly than the production of clear glass on account of the additional mineral and chemical ingredients. Moreover, there are approximately 15 different thicknesses, ranging from 2mm to more than 20mm.

116 The Commission itself, in the 1981 decision, recognized that flat glass is a homogenous product (point II A 3 a-1, on page 39), whereas, in the present decision, it refused or omitted to take that factor into account as an explanation for certain phenomena which it found to exist in the market.

117 The flat glass industry covers various activities and trades, of which the most important are the production of basic glass (already considered above), processing and the manufacture of special products.

118 The decision ignored the importance of processing. Almost 78% of total production is processed (insulating glass, laminated glass for construction and reflecting glass, safety glass for construction, glass for household appliances, glass for mirrors). Processing includes the manufacture of laminated glass, tempered glass, toughened glass, double-glazing, insulating glass, layered glass etc. In Italy, most processing is carried out by independent undertakings, some of which are exclusively processors while others have mixed wholesaling, dealing and processing operations. Those which are exclusively processors have their own dynamics; their priorities are different from those of wholesalers because they are less sensitive to price changes and do not make speculative purchases, their profitability coming from the added value of processing and not simply from the purchase and resale of products.

119 The behaviour alleged in the decision (identical price lists and discounts, simultaneous publication dates, classification of wholesalers, meetings etc) concerns exclusively basic flat-glass products distributed through wholesalers. Such behaviour concerns only 30% of total flat glass consumption in Italy and not the 76 to 80% claimed in the decision, which distorts the assessment of the effects of the behaviour and its seriousness.

120 Special products, which are also ignored in the decision, are high-technology products which meet very high specific performances and/or standards (reflecting glasses, laminated glasses, low-emission glasses, glass for silvering). Those products are very different from producer to producer, and producers are fighting a veritable technological war constantly to develop new products, which is strategically important for their position in the market. Those highly competitive products represent more than one-third of the turnover of the applicant undertakings. They are, moreover, a competitive tool for other products, in so far as they permit each producer to reinforce its brand image, to penetrate new markets and thereby strengthen its position in the market for basic flat glass and processed glass. Special products are, moreover, the basis for the revitalization of the non-automotive market.

121 The automotive and non-automotive markets are organized and function in entirely different ways: the non-automotive market is supplied essentially through wholesalers and processors, to which producers sell their products either unprocessed, or processed on processing lines, while the automotive market is exclusively a market for glass processed in accordance with the specifications of the motor vehicle manufacturers and delivered directly by the producers to the vehicle manufacturers. The absence of intermediaries in the automotive market is explained by the importance and the complexity of processing for this market, its high cost, the need for close and continuous relations with motor vehicle manufacturers for the development and perfection of models, the requirement for deliveries made "just in time" (delivery to the assembly line without stocks being kept by the motor vehicle manufacturer).

122 Although the Commission acknowledged the distinction between those two markets with regard to Article 85, it refused to do so in connection with the application of Article 86. Without any explanation at all, the Commission stated that the market to be taken into consideration was the flat-glass market in general.

123 With regard to the characteristics of the industrial production of float glass, the applicants point out that float-glass furnaces are very heavy and inflexible production plant. In order to be profitable, they must have high capacities (of the order of 500 tonnes per day) and be used fully (24 hours per day) and rationally. The construction of a float-glass furnace constitutes a major investment decision (approximately ECU 100 million) so that industry cannot adapt either rapidly or flexibly to variations in demand. Once established, a float-glass furnace must operate continuously, which necessarily involves an increase in production and the risk of over-capacity.

124 Float-glass plant also lacks flexibility from the operating point of view in so far as one float-glass production line can produce only a single colour and a single thickness at one time. Each change of colour requires time (more or less 14 days) and involves a considerable loss of production (7 000 tonnes of saleable product for a furnace of 500 tonnes per day). It is imperative that production runs should be long, corresponding to a high level of demand, in order to be economically viable, whereas the variety of products required by the market is very wide. Moreover, because of its bulk, it is not economic to store flat glass either in large quantities or for long periods.

125 Finally, repairs and maintenance, which must be carried out at regular intervals, must be carried out cold, and involve production stoppages every five or six years. Float-glass production lines are out of action for several months on account of such repairs and maintenance and on account of possible technological improvements and increases in capacity.

126 All those factors make it extremely difficult to adjust supply to demand, and impossible, both technologically and economically, for each producer to have the full range of products available at any given moment. Those technical constraints and economic imperatives, which mean that the most rational utilization of capacity has to be reconciled with the need to maintain a presence on the market, explain why producers have an objective interest in purchasing from, or selling to their competitors, according to circumstances.

127 Although it is true that "few firms are ... capable of bearing the costs and risks of processing glass for motor vehicles" (point 13), the parties emphasize that that is because of the considerations set out in paragraph 121 above.

(c) The arguments relating to supply

128 The total (saleable) European production capacity in 1989 is estimated at approximately 5 100 000 tonnes, according to the applicants, whereas it was 4 444 000 tonnes in 1986 and 4 176 000 tonnes in 1982 (source GEPVP, 175). Italian float-glass production in 1985 was 700 000 tonnes and in 1986 673 000 tonnes, produced on five float-glass production lines, one of which belonged to FP, one to SIV, one to FP and SIV jointly, and two to VP (source, Assovetro Istat, 187). At the end of 1987, SIV brought into operation a new float-glass plant at Porto Marghera (Veneziana Vetro).

129 In the European flat-glass market, including the United Kingdom, Italy is the third - or fourth (depending on the year) - market in order of importance, with a share of total European flat-glass consumption of 14.1% in 1986, never having previously exceeded 16.3% ( 189).

130 The decision considers that the three Italian producers have 79% of the Italian non-automotive market. The applicants maintain that their share of the Italian non-automotive market during the period under consideration was, at its highest level, only 63.7% in 1986 when SIV took control of Vetrocoke. On average, their market share was of the order of 56.2% between 1982 and 1986. That is explained by the fact that, according to the Commission, imports from France could not be regarded as independent imports if the seller was a company linked to an Italian producer. No reasons were given for that position. Boussois, a sister company of VP, had an outside shareholder who held 30% of its capital and who forced the company to act in its own best interest, independently of VP, which was itself 20% owned by independent shareholders and was therefore not fully controlled by PPG either. Imports into Italy by Boussois were independent imports (judgment in Case 75/84 Metro v Commission [1986] ECR 3021). In any event, imports in 1986 amounted to approximately a third of the Italian market in non-automotive flat glass. Although that market structure changed a little after PPG took over Boussois in 1982, it remains the case that the flow of imports, even from sister companies, shows that imports are economically profitable. The flow of exports is also not negligible (30%).

131 Accordingly, the decision is wrong to state that Italy is the relevant geographical market because the undertakings are able to sell for export only quantities produced at a marginal cost. There is no evidence in the file to support that statement. In its 1981 decision, and in Commission Decision 84/388/EEC of 23 July 1984 relating to agreements and concerted practices in the flat glass-sector in the Benelux countries (Official Journal 1984 L 212, p. 13, hereinafter referred to as "the 1984 decision"), the Commission emphasized the importance of intra-Community trade. Thus, in its 1981 decision, (point 6, page 35), it stated, firstly, that the market shares of Italian producers in the Italian flat-glass market as a whole were FP 20%, SIV 14%, VP 14%, Fabbrica Sciarra 3%, and Vetro Coke 3%, the remainder, namely 46%, was accounted for by imports; secondly, that SIV and VP, in 1976 and 1977, sold some 55% of their output on the markets of the other Member States.

132 While it is true, as the decision points out, that at the beginning of the 1980s the flat-glass market experienced a difficult crisis period with considerable over-capacity, ever-increasing production costs, crises in the construction and motor vehicle sectors, increased energy costs, leading to heavy losses for the producers, the producers nevertheless carried out the necessary restructuring measures (closure of unprofitable or obsolete plant, reductions in the workforce, recapitalization, new investment in more efficient plant, research and development into special products, etc). The flat-glass industry, unlike the Community' s other heavy industries, (for example the steel industry), was able to survive this crisis without major interventions or specific sectorial measures on the part of the national or Community authorities. Consequently, during the period from 1982 to 1986, which is the period covered by the contested decision, the flat-glass industry was a dynamic industry which, far from seeking to weather the crisis by market sharing and other prohibited agreements, reacted in a positive way by adopting sound economic measures.

133 The Commission was not entitled to find that the market is stagnant, with permanent over-capacity and inaccessible to new producers. Quite the contrary, the market has experienced - and always experiences - frequent and profound changes: Glaverbel was taken over by Asahi, Boussois was taken over by PPG, Flachglas was taken over by Pilkington; Guardian set up in Luxembourg at the height of the crisis; nine new production lines have been brought into production since 1981, increasing capacity from 3.8 million tonnes in 1981 to more than 5.1 million tonnes in 1989, all developments which demonstrate the intensity of the competition between producers, who are constantly at war with one another using the weapons of new investment and new products.

134 In fact, despite the general situation in Europe, characterized by over-capacity, on the Italian market there was a lack of supply, which made it particularly attractive for foreign producers. This was confirmed by the import/export balance in Italy ( 253A).

135 Moreover, SIV and VP point out that in the period under consideration inflation in Italy was very high and fluctuated between 12 and 20% depending on the year, from which it follows that the price increases were more apparent than real and that the parallel increases were not necessarily unlawful ( 215).

136 Another important factor is that the concept of "producer" covers, in fact, various professions: producer of basic flat glass, processor of construction glass, processor of automotive glass, producer of special products. While it is true that all those activities concern flat glass, they relate to different markets, each having its own logic. The transfers of basic flat glass did not therefore necessarily influence the market in processed automotive glass, which obeys other laws.

137 Each of the three producers follows its own strategies, placing different emphasis on the various professions:

- FP, as part of the distribution of tasks within the Saint-Gobain group, concentrates on the Italian market and on an important processing activity in the non-automotive sector;

- SIV finds its competitive advantage in concentrating rather on the processing of automotive glass and spreads its processing capacities and sales throughout Europe, exporting 50% of its capacity in 1986, with a smaller operation (at least in the period covered by the decision) as a producer of basic glass;

- VP places the emphasis on the production of basic glass with a low degree of integration of processing activities; in 1986 it exported 40% of its output.

138 The three undertakings are also structurally different: SIV is not part of a multi-national group and is controlled by the Italian State holding company EFIM, a non-industrial public partner which does not have the same objectives, interests or operating methods as the private groups.

139 In addition, the market shares of each of the undertakings have undergone significant changes: from 1982 to 1986, for non-automotive glass,