Order of the Court (Fourth Chamber) of 11 May 2000. - Deutsche Post AG v International Express Carriers Conference (IECC) and Others. - Appeal - Competition - Abuse of a dominant position - Postal services - Remail. - Case C-428/98 P.



European Court reports 2000 Page I-03061



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

Actions for annulment - Jurisdiction of the Community courts - Commission decision rejecting a complaint alleging infringement of the competition rules - Unlimited jurisdiction - None - Appeal based on the argument that annulment of the decision by the Court of First Instance is equivalent to a finding that the competition rules were infringed - Appeal clearly unfounded

(EC Treaty, Arts 86 and 172 (now Arts 82 EC and 229 EC) and Art. 173 (now, after amendment, Art. 230 EC))

Summary

$$Annulment by the Court of First Instance of a Commission decision rejecting a complaint alleging infringement of Article 86 of the Treaty (now Article 82 EC) on the basis that the grounds of justification put forward by the Commission in the contested decision were not such as to render that provision inapplicable is not equivalent to a finding by the Court of First Instance that there has been abuse of a dominant position. Since the review of legality provided for in Article 173 of the Treaty (now, after amendment, Article 230 EC) does not confer unlimited jurisdiction on the Court of First Instance, unlike that exercised by the Community Courts pursuant to Article 172 of the EC Treaty (now Article 229 EC), the Court of First Instance is not entitled to substitute another decision for the contested decision or to amend that decision.

Since the Court of First Instance confined itself, as it is required to do in an action for annulment based on Article 173 of the Treaty, to determining whether the Commission's reasoning was valid, any appeal based on the argument that, in annulling the contested decision, it ruled that there was abuse of a dominant position within the meaning of Article 86 of the Treaty must be dismissed as being clearly unfounded.

( see paras 24 to 31 )

Parties

In Case C-428/98 P,

Deutsche Post AG, having its registered office in Bonn, Germany, represented by D. Schroeder, Rechtsanwalt, Cologne, with an address for service in Luxembourg at the Chambers of Loesch and Wolter, 11 Rue Goethe,

appellant,

APPEAL against the judgment of the Court of First Instance of the European Communities (Third Chamber, Extended Composition) of 16 September 1998 in Cases T-133/95 and T-204/95 IECC v Commission [1998] ECR II-3645, seeking to have that judgment set aside,

the other parties to the proceedings being:

International Express Carriers Conference (IECC), established in Geneva, Switzerland, represented by E. Morgan de Rivery, of the Paris Bar, and J. Derenne and M. Cunningham, of the Brussels Bar, with an address for service in Luxembourg at the Chambers of A. Schmitt, 7 Val Sainte-Croix,

applicant at first instance,

Commission of the European Communities, represented by K. Wiedner, of its Legal Service, acting as Agent, and by N. Forwood QC, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, also of its Legal Service, Wagner Centre, Kirchberg,

defendant at first instance,

La Poste, represented by H. Lehman, of the Paris Bar, with an address for service in Luxembourg at the Chambers of A. May, 398 Route d'Esch,

United Kingdom of Great Britain and Northern Ireland,

and

The Post Office,

interveners at first instance,

THE COURT (Fourth Chamber),

composed of: D.A.O. Edward, President of the Chamber, P.J.G. Kapteyn (Rapporteur) and A. La Pergola, Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

Registrar: R. Grass,

after hearing the views of the Advocate General,

makes the following

Order

Grounds

1 By application lodged at the Court Registry on 30 November 1998, Deutsche Post AG (Deutsche Post) brought an appeal, pursuant to Article 168a of the EC Treaty (now Article 225 EC) and Article 49 of the EC Statute of the Court of Justice, against the judgment of the Court of First Instance of 16 September 1998 in Cases T-133/95 and T-204/95 IECC v Commission [1998] ECR II-3645 (the judgment under appeal), by which the Court of First Instance annulled the Commission's decision of 6 April 1995, delivered following a complaint by the International Express Carriers Conference (the IECC), in so far as that decision related to commercial physical ABA remail.

The facts of the dispute

2 The IECC is an organisation representing the interests of certain undertakings which provide express mail services. Its members offer, inter alia, remail services, consisting in the transportation of mail originating in Country A to the territory of Country B to be placed there with the local public postal operator (public postal operator) for final transmission by the latter on its own territory (ABB remail), to Country A (ABA remail), or to Country C (ABC remail).

3 On 13 July 1988, the IECC lodged a complaint with the Commission under Article 3(2) of Council Regulation No 17 of 6 February 1962, the First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87).

4 The complaint consisted of two parts, based respectively on Article 85 of the EC Treaty (now Article 81 EC) and Article 86 of the EC Treaty (now Article 82 EC). In the second part of its complaint, which alone is material for the purposes of the present appeal, the IECC alleged that a number of public postal operators were attempting to operate a market-allocation scheme on the basis of Article 23 of the Universal Postal Union Convention (the UPU Convention) with a view to declining deliveries of mail posted by customers with public postal operators in countries other than those in which they resided.

5 The UPU Convention, adopted on 10 July 1964 under the aegis of the United Nations Organisation, provides the framework for relations between all postal administrations worldwide. All the Member States of the European Community have acceded to the UPU Convention.

6 In any postal system, the sorting of inward mail and its delivery to final addressees involve significant costs for public postal operators. For that reason, UPU members adopted in 1969 a system of fixed compensation rates for each type of mail, referred to as terminal dues, thereby reversing a principle in force since the UPU was founded, under which each public postal operator bore the costs involved in sorting and delivering inward mail without passing on those costs to the public postal operators of the countries in which that mail originated. The economic value of the delivery service provided by the various postal administrations, their cost structures and the charges invoiced to customers might vary widely. The difference between the prices charged for the delivery of national and international mail in the various Member States and the level of terminal dues in relation to the various prices in force at national level lie at the root of the remail phenomenon. Remail operators seek, inter alia, to take advantage of those price differences by proposing to commercial companies to transport their mail to the public postal operators which offer the best quality/price ratio for a particular destination.

7 Article 23 of the 1984 UPU Convention, now Article 25 of the 1989 UPU Convention, provides as follows:

1. A member country shall not be bound to forward or deliver to the addressee letter-post items which senders resident in its territory post or cause to be posted in a foreign country with the object of profiting by the lower charges in force there. The same applies to such items posted in large quantities, whether or not such postings are made with a view to benefiting from lower charges.

2. Paragraph 1 shall be applied without distinction both to correspondence made up in the country where the sender resides and then carried across the frontier and to correspondence made up in a foreign country.

3. The administration concerned may either return its items to origin or charge postage on the items at its internal rates. If the sender refuses to pay the postage, the items may be disposed of in accordance with the internal legislation of the administration concerned.

4. A member country shall not be bound to accept, forward or deliver to the addressees letter-post items which senders post or cause to be posted in large quantities in a country other than the country in which they reside. The administration concerned may send back such items to origin or return them to the senders without repaying the prepaid charge.

8 In the second part of its complaint, which is material for the purposes of the present appeal, the IECC criticised a number of public postal operators for applying a system designed to allocate national postal markets on the basis of Article 23 of the UPU Convention. The IECC claimed that the public postal operators in the United Kingdom, Germany and France, that is to say, the Post Office, Deutsche Post and La Poste respectively, were also attempting to dissuade commercial companies from using the services of private remail operators such as the IECC's members or that they were trying to persuade other public postal operators not to cooperate with such private operators.

9 The IECC further alleged that, in the spring of 1988, Deutsche Post had attempted to discourage mailers in Germany from using remail by citing Article 23 of the UPU Convention and by intercepting and returning inbound international mail destined for addressees residing in Germany.

10 On 6 April 1995 the Commission addressed to the IECC a decision concerning the second part of its complaint (the contested decision), in which, inter alia, it stated:

4. ... The purpose of the present letter is to inform you about the final decision which the Commission has reached with regard to the allegations in your complaint relating to the interception of mail on the basis of Article [23] of the UPU Convention.

5. ...

6. With respect to commercial physical ABA remail, the Commission's position is that to the extent the commercial collection of mail from residents in country B for subsequent remailing in country A to final destinations in country B constitutes a circumvention of the national monopoly for domestic letter delivery laid down by the law of country B, the interception of such mail when it is re-entering country B may be considered to be legitimate action under the current circumstances and therefore does not constitute an abuse of a dominant position in the sense of Article 86 of the EC Treaty. ... [The] Commission ... has ... specifically noted that such circumvention of the national monopoly is "rendered profitable because of the present unbalanced levels of terminal dues" and that it is precisely for this reason that some form of protection is justifiable at this stage. ...

7. ...

8. For the above considerations I inform you that your application of 13 July 1988 pursuant to Article 3(2) of Regulation No 17/62, as far as the interception of commercial physical ABA remail ... is concerned, is hereby rejected.

11 By application lodged at the Registry of the Court of First Instance on 20 June 1995 and registered as Case T-133/95, the IECC brought an action under Article 173 of the EC Treaty (now, after amendment, Article 230 EC) seeking annulment of the contested decision.

The judgment under appeal

12 In the judgment under appeal, the Court of First Instance annulled the contested decision in so far as it concerned commercial physical ABA remail and dismissed the remainder of the action. The Commission was ordered to bear the costs of the IECC in Case T-133/95 and the interveners were ordered to bear their own costs.

13 The Court of First Instance based its annulment of the contested decision on the following grounds:

94 In its decision of 6 April 1995, the Commission took the view that commercial ABA remail amounted, in reality, to a circumvention of the statutory postal monopoly of the public postal operators. It went on to hold that interception of this type of remail was lawful under present circumstances and therefore could not be described as constituting an abuse within the meaning of Article 86 of the Treaty. It thus found that ABA remail prevented the public postal operator of the country of destination from recovering its costs in delivering the mail in so far as terminal dues are not based on real costs.

95 Having regard to the Commission's reasoning, it is necessary to ascertain whether the circumstances on which it relies are such as to exclude application of Article 86 of the Treaty.

96 The existence of the postal monopoly and, consequently, its alleged circumvention by ABA remail cannot be regarded as justifying in themselves interception of this type of remail.

97 Neither national legislation conferring statutory monopolies on public postal operators nor the UPU Convention require those public postal operators to intercept remailings. Public postal operators thus had a margin of discretion allowing them, if they thought it appropriate, not to intercept mail.

98 The necessity for the public postal operators to defend their monopoly cannot, as such, remove interceptions of inward ABA mail from the scope of application of Article 86 of the Treaty. Such reasoning would be tantamount to excluding a practice coming within the scope of that provision solely by virtue of the existence of a dominant position.

99 Contrary to the Commission's contention, the interceptions in dispute cannot be objectively justified by the fact that the terminal dues, which constitute the public postal operators' remuneration in the case of ABA remail, do not enable those operators to cover their costs of delivering the mail.

100 Although there is an imbalance between the costs which a public postal operator bears in delivering incoming mail and the remuneration which it receives, this imbalance is the result of an agreement concluded among the public postal operators themselves, including the three public postal operators involved in the present case, under which the terminal dues are fixed amounts, determined without taking into account the costs actually borne by the public postal operator of the country of destination.

101 Such a practice, which in the case of an undertaking in a dominant position helps to offset the adverse effects of a convention which it itself helped to draft and to which it is a party, cannot be regarded as an objective justification for excluding interception of commercial ABA mail from the scope of Article 86 of the Treaty.

102 Furthermore, it does not appear that the interception of incoming mail is the only means by which the public postal operator of the country of destination can recover the costs involved in delivering that mail, as is demonstrated by the fact that Deutsche Post has, on several occasions, simply recovered the costs from the senders. It does not appear from the contested decision that the Commission examined whether other measures might be regarded as less restrictive than interceptions.

103 La Poste, the Post Office and, albeit indirectly, the United Kingdom have argued that interceptions of commercial ABA remail were justified, under Article 90(2) of the Treaty, by the need to ensure that the public postal operators complied with their obligation to provide a universal service. However, it is clear from the decision of 6 April 1995 that the Commission did not refer to that provision and did not apply it in this case, a fact which it confirmed at the hearing.

104 The arguments set out in that regard by those interveners therefore go beyond the scope of these proceedings. In the review of legality which it must perform under Article 173 of the Treaty, the Court is therefore not required to address those arguments.

105 It must be concluded that the Commission erred in law in finding that interceptions of commercial ABA remail did not constitute an abuse within the meaning of Article 86 of the Treaty.

106 Consequently, the decision of 6 April 1995 must be annulled in so far as it deals with the Commission's assessment of the legality of interceptions of commercial ABA remail by public postal operators.

The appeal

14 Deutsche Post, the Commission and La Poste submit that the Court should:

- set aside the judgment under appeal in so far as it annuls the contested decision;

- order the IECC to pay the costs.

15 In the grounds of its appeal, Deutsche Post, supported by the Commission, essentially submits that the judgment under appeal is based on an error of law. The Court of First Instance, it claims, infringed Community law, in casu Article 86 of the Treaty, by finding, in paragraph 105 of the judgment under appeal, that interceptions of commercial ABA remail constituted an abuse within the meaning of that article.

16 Deutsche Post considers that the Court of First Instance reached that conclusion on the basis of three findings set out respectively in paragraphs 98, 100 and 101, and 102 of the judgment under appeal, and which are in themselves incompatible with Article 86 of the Treaty.

17 According to Deutsche Post and La Poste, the Court of First Instance was wrong to consider only whether the practice of intercepting commercial ABA remail could be justified or excluded from the scope of Article 86 without first examining whether the practice as such constituted an abuse.

18 In this regard, the appellant particularly criticises the Court of First Instance for having at no point examined or explained why having recourse to Article 25 of the UPU Convention (a public postal operator refusing to deliver cross-border mail from senders residing in its territory) constituted an abuse.

19 The IECC contends that the Court should:

- dismiss the appeal as entirely unfounded and uphold paragraphs 94 to 97 of the judgment under appeal;

- order Deutsche Post to pay the costs.

20 The IECC submits essentially that the arguments adduced in support of the appeal are unfounded inasmuch as they are based on a misreading and erroneous interpretation of the judgment under appeal. According to the IECC, this error invalidates the appeal in its entirety and the appeal must therefore be dismissed as being manifestly unfounded.

Findings of the Court

21 Article 119 of its Rules of Procedure provides that, where the appeal is clearly inadmissible or clearly unfounded, the Court may at any time dismiss it by reasoned order, without opening the oral procedure.

22 It must be borne in mind at the outset that Article 168a of the Treaty and the first paragraph of Article 51 of the EC Statute of the Court of Justice state that an appeal is to be limited to points of law and must be based on the grounds of lack of competence of the Court of First Instance, breach of procedures before it which adversely affects the interests of the appellant or infringement of Community law by the Court of First Instance (see, inter alia, Case C-8/95 P New Holland Ford v Commission [1998] ECR I-3175, paragraph 22).

23 It must be held in this regard that the error of law which the appellant invokes is in fact based on a manifestly erroneous reading of the judgment under appeal. Contrary to what Deutsche Post asserts, the Court of First Instance did not rule that interceptions of commercial ABA remail constituted an abuse under Article 86 of the Treaty or that the return of commercial physical ABA remail, pursuant to Article 25 of the UPU Convention, constituted abuse of a dominant position within the meaning of Article 86.

24 It is clear from paragraph 95 of the judgment under appeal that the Court of First Instance confined itself, as it is required to do in an action for annulment based on Article 173 of the Treaty, to determining whether the Commission's reasoning was valid.

25 The Court of First Instance found in paragraphs 96 to 98 of the judgment under appeal that the existence of the postal monopoly and, consequently, its alleged circumvention by ABA remail could not be regarded as justifying in themselves interception of this type of remail. The Court of First Instance went on to find, in paragraphs 99 to 101, that the imbalance between the costs which a public postal operator bears in delivering incoming mail and the remuneration which it receives cannot in itself be regarded as objective justification for excluding interception from the scope of Article 86 of the Treaty. Finally, the Court of First Instance noted, in paragraph 102, that, furthermore, interception did not appear to be the only means by which to rectify this problem of imbalance and that it did not appear from the contested decision that the Commission had examined whether other measures might be regarded as less restrictive.

26 Following those findings, the Court of First Instance held that the grounds of justification put forward by the Commission in the contested decision were not such as to render Article 86 of the Treaty inapplicable to the interceptions of remail in issue, and it accordingly annulled that part of the contested decision.

27 Contrary to what the appellant claims, that annulment is not equivalent to a finding of abuse.

28 As the IECC has correctly pointed out, it is not for the Court of First Instance, in an action seeking the annulment of a decision which did not find that there was abuse of a dominant position, to establish the existence of such an abuse. Since, in the context of the review of legality provided for in Article 173 of the Treaty, the Court of First Instance does not, in a case such as that in point here, have unlimited jurisdiction, unlike that exercised by the Community Courts on the basis of Article 172 of the EC Treaty (now Article 229 EC) with regard to, for example, decisions imposing penalties, the Court of First Instance was not, in the present case, entitled to substitute another decision for the contested decision or to amend that decision.

29 Consequently, the appellant's argument set out in paragraphs 15 to 18 of the present order, to the effect that the Court of First Instance ought first of all to have considered whether the practice of intercepting commercial remail as such constituted an abuse, cannot be accepted.

30 The plea in law is therefore clearly unfounded.

31 It follows that, pursuant to Article 119 of the Rules of Procedure, the appeal must be dismissed as being clearly unfounded.

Decision on costs

Costs

32 Under Article 69(2) of the Rules of Procedure, applicable to appeal proceedings by virtue of Article 118, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since Deutsche Post has been unsuccessful, it must be ordered to pay the costs. Under Article 69(3), the IECC and La Poste must be ordered to bear their own costs.

Operative part

On those grounds,

THE COURT (Fourth Chamber)

hereby orders:

1. The appeal is dismissed.

2. Deutsche Post AG shall pay the costs.

3. International Express Carriers Conference and La Poste shall bear their own costs.