Case T-325/01

DaimlerChrysler AG

v

Commission of the European Communities

(Competition – Article 81 EC – Agreements, decisions and concerted practices – Agency agreements – Distribution of motor vehicles – Economic unit – Measures seeking to obstruct parallel trade in motor vehicles – Price fixing – Regulation (EC) No 1475/95 – Fine)

Summary of the Judgment

1. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Meaning – Bilateral or multilateral conduct – Included – Unilateral conduct – Not included

(Art. 81(1) EC)

2. Competition – Community rules – Undertaking – Meaning – Economic unit – Legal persons with a distinct identity linked by an agency agreement – Rules as to whether an economic unit exists

(Art. 81(1) EC)

3. Competition – Agreements, decisions and concerted practices – Not allowed – Group exemption – Regulation No 1475/95 – Concept of ‘resale’

(Commission Regulation No 1475/95, Art. 10(12))

4. Competition – Administrative procedure – Statement of objections – Necessary content – Observance of the rights of the defence

(Council Regulation No 17, Art. 19(1); Commission Regulation No 99/63, Arts 2 and 4)

5. Competition – Agreements, decisions and concerted practices – Concerted practice – Meaning – Coordination and cooperation incompatible with the obligation on each undertaking to determine independently its conduct on the market

(Art. 81(1) EC)

6. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Burden of proving the infringement on the Commission – Evidence adduced of participation in meetings having an anti-competitive object – Burden of proof on the undertaking as regards distancing in relation to decisions taken

(Art. 81(1) EC)

7. Competition – Agreements, decisions and concerted practices – Decisions of associations of undertakings – Non-binding decision of an association applied by its members – Included

(Art. 81(1) EC)

8. Competition – Agreements, decisions and concerted practices – Effect on trade between Member States – Concerted practice producing its effects in the whole of the territory of a Member State – Automatic effect

(Art. 81(1) EC)

9. Competition – Community rules – Infringement committed by a subsidiary – Imputation to the parent company – Conditions – Separate legal personality of the subsidiary not relevant – Relevance of the fact that the subsidiary is wholly owned – Obligation of the parent company to rebut the presumption that management power was actually exercised over its subsidiary (Art. 81(1) EC)

1. The prohibition laid down in Article 81(1) EC concerns exclusively conduct that is coordinated bilaterally or multilaterally, in the form of agreements between undertakings, decisions by associations of undertakings and concerted practices. Accordingly, the concept of an agreement within the meaning of that provision centres around the existence of a joint intention between at least two parties. It follows that, where a decision by an undertaking constitutes unilateral conduct on its part, such a decision escapes the prohibition laid down in that article.

(see paras 83-84)

2. For the purposes of applying the competition rules, formal separation of two companies resulting from their having distinct legal identity, is not decisive. The test is whether or not there is unity in their conduct on the market. Thus, it may be necessary to establish whether two companies that have distinct legal identities form, or fall within, one and the same undertaking or economic entity adopting the same course of conduct on the market.

Such a situation arises not only in cases where the relationship between the companies in question is that of parent and subsidiary. It may also occur, in certain circumstances, in relationships between a company and its commercial representative or between a principal and its agent. In so far as application of Article 81 EC is concerned, the question whether a principal and its agent or ‘commercial representative’ form a single economic unit, the agent being an auxiliary body forming part of the principal’s undertaking, is an important one for the purposes of establishing whether given conduct falls within the scope of that article. Thus, if an agent works for the benefit of his principal he may in principle be treated as an auxiliary organ forming an integral part of the latter’s undertaking, who must carry out his principal’s instructions and thus, like a commercial employee, forms an economic unit with this undertaking.

The position is otherwise if the agreements entered into between the principal and its agents confer upon the agent or allow him to perform duties which from an economic point of view are approximately the same as those carried out by an independent dealer, because they provide for the agent accepting the financial risks of selling or of the performance of the contracts entered into with third parties. Therefore, an agent can lose his character as independent economic operator only if he does not bear any of the risks resulting from the contracts negotiated on behalf of the principal and he operates as an auxiliary organ forming an integral part of the principal’s undertaking. Accordingly, where an agent, although having separate legal personality, does not independently determine his own conduct on the market, but carries out the instructions given to him by his principal, the prohibitions laid down under Article 81(1) EC do not apply to the relationship between the agent and the principal with which he forms an economic unit.

(see paras 85-88)

3. The definition of the term ‘resale’ in Article 10(12) of Regulation No 1475/95 on the application of Article [81](3) [EC] to certain categories of motor vehicle distribution and servicing agreements shows that a supplier may prohibit dealers from supplying natural or legal persons deemed to be ‘resellers’ only where the latter dispose of motor vehicles in a new condition. The purpose of putting leasing contracts which include a transfer of ownership or an option to purchase before the expiry of the contract on the same footing as resales is to allow the supplier to guarantee the integrity of the distribution network by avoiding a leasing contract being used to facilitate the acquisition outside the exclusive distribution network of the ownership of a vehicle when it is still in a new condition.

(see para. 153)

4. The Commission must communicate objections which it raises against undertakings or associations concerned by them and is to deal in its decisions only with those objections in respect of which those undertakings or associations have been afforded the opportunity of making known their views as to the accuracy and the relevance of the facts, objections and surrounding circumstances on which the Commission relies.

The statement of objections must be couched in terms that, albeit succinct, are sufficiently clear to enable the parties concerned properly to identify the conduct complained of by the Commission. It is only on that condition that the statement of objections can fulfil its function under the Community regulations of giving undertakings all the information necessary to enable them to defend themselves properly before the Commission adopts a final decision That requirement is observed where the decision does not allege that the persons concerned have committed infringements other than those referred to in the statement of objections and takes into consideration only facts on which the persons concerned have had the opportunity of making known their views. However, the Commission’s final decision is not necessarily required to be a replica of the statement of objections.

Where the statement of objections provides a clear indication of the nature of the infringement of competition law which the undertaking in question is alleged to have committed and the material facts relied on in that regard, that undertaking is in a position to reply to those allegations and to defend its rights. For the decision adopted by the Commission subsequently to categorise an economic agreement as ‘vertical’ or ‘horizontal’ does not constitute a fundamental alteration to the complaints set out in the statement of objections.

(see paras 188-189, 192)

5. For there to be an agreement within the meaning of Article 81(1) EC, it is sufficient for the undertakings concerned to have expressed their joint intention to behave on the market in a certain way.

Far from requiring that an actual ‘plan’ be drawn up, the criteria of coordination and cooperation must be understood in the light of the concept inherent in the provisions of the Treaty relating to competition that every economic operator must determine independently the policy which he intends to adopt in the common market. Although this requirement of independence does not deprive economic operators of the right to adapt themselves intelligently to the existing and anticipated conduct of their competitors, it does however strictly preclude any direct or indirect contact between such operators, the object or effect of which is either to influence the conduct on the market of an actual or potential competitor or to disclose to such a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market.

(see paras 199-200)

6. Where there is a dispute as to the existence of an infringement of the competition rules, it is for the Commission to prove the infringements found by it and to adduce evidence capable of demonstrating to the requisite legal standard the existence of the circumstances constituting an infringement.

However, where it has been established that an undertaking has participated in meetings between undertakings of a manifestly anti‑competitive nature, it is for that undertaking to put forward evidence to establish that its participation in those meetings was without any anti-competitive intention, by demonstrating that it had indicated to its competitors that it was participating in those meetings in a spirit that was different from theirs. In the absence of evidence of that distancing, the fact that an undertaking does not abide by the outcome of those meetings is not such as to relieve it of full responsibility for the fact that it participated in the concerted practice.

(see paras 201-202)

7. A measure may be categorised as a decision of an association of undertakings for the purposes of Article 81(1) EC even if it is not binding on the members concerned, at least to the extent that the members to whom the decision applies comply with its terms.

(see para. 210)

8. Where a concerted practice extends over the whole of the territory of a Member State it has, by its very nature, the effect of reinforcing the partitioning of markets on a national basis, thereby holding up the economic interpenetration which the Treaty is designed to bring about.

(see para. 212)

9. The fact that a subsidiary undertaking has separate legal personality from its parent company is not sufficient to exclude the possibility of imputing its conduct to the latter, in particular where the subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company.

In that regard, while a 100 per cent shareholding of the capital of the subsidiary by the parent company does not in itself suffice for a finding that the latter actually exercised management power, which is a pre-condition for the imputation of the conduct of the former to the latter, the Commission is entitled to base its decision on such imputation on the fact that the parent company does not dispute that it was in a position to exert a decisive influence on its subsidiary’s commercial policy and produced no evidence to support its claim that the subsidiary was autonomous. Where the whole of the share capital of the subsidiary is held, the Commission is entitled to assume that the parent company exerts a decisive influence on the conduct of its subsidiary, particularly where the parent company had put itself forward in the administrative procedure as being the sole representative of the companies in the group.

In those circumstances, it is for the parent company to rebut that presumption by sufficient evidence.

(see paras 218-220)

JUDGMENT OF THE COURT OF FIRST INSTANCE (Fifth Chamber)

15 September 2005 ( )

(Competition – Article 81 EC – Agreements, decisions and concerted practices – Agency agreements – Distribution of motor vehicles – Economic unit – Measures seeking to obstruct parallel trade in motor vehicles – Price fixing – Regulation (EC) No 1475/95 – Fine)

In Case T-325/01,

DaimlerChrysler AG, established in Stuttgart (Germany), represented by R. Bechtold and W. Bosch, lawyers,

applicant,

v

Commission of the European Communities, represented by W. Mölls, acting as Agent, and H.-J. Freund, lawyer, with an address for service in Luxembourg,

defendant,

APPLICATION primarily for annulment of Commission Decision 2002/758/EC of 10 October 2001 relating to a proceeding under Article 81 of the EC Treaty (Case COMP/36.264 – Mercedes‑Benz) (OJ 2002 L 257, p. 1), and, in the alternative, for a reduction in the fine imposed by that decision,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fifth Chamber),

composed of P. Lindh, President, R. García-Valdecasas and J.D. Cooke, Judges,

Registrar: I. Natsinas, Administrator,

having regard to the written procedure and further to the hearing on 25 May 2004,

gives the following

Judgment

Facts

1 This action seeks the annulment of Commission Decision 2002/758/EC of 10 October 2001 relating to a proceeding under Article 81 of the EC Treaty (Case COMP/36.264 – Mercedes-Benz) (OJ 2002 L 257, p. 1) (‘the contested decision’).

2 DaimlerChrysler AG (‘the applicant’) is a German group which carries on business in particular in the manufacture and marketing of motor vehicles.

3 On 21 December 1998, Daimler-Benz AG merged with the applicant under a business combination agreement of 7 May 1998. The applicant then became the legal successor to Daimler-Benz AG and all of the latter’s rights, assets, liabilities and obligations were transferred to it.

4 Before the merger, Daimler-Benz AG was the umbrella company of the Daimler-Benz group, which was active worldwide through its subsidiaries. In addition, on 26 May 1997, Mercedes-Benz AG, a subsidiary of Daimler-Benz AG, merged with the latter company. Since that date, it has been the motor vehicle division within Daimler‑Benz AG. As in the contested decision, the name ‘Mercedes‑Benz’ is used in this judgment to refer, as the context requires, to Daimler-Benz AG (until 1989), to Mercedes-Benz AG (until 1997), to Daimler-Benz AG (1997 and 1998) and to the applicant (from 1998).

5 From the beginning of 1995, the Commission received a number of complaints from consumers concerning restrictions on the export of new Mercedes-Benz motor vehicles imposed by companies in the Daimler‑Benz group in various Member States.

6 The Commission had information that companies belonging to that group were partitioning the market contrary to Article 81(1) EC. On 4 December 1996, the Commission adopted a number of decisions ordering investigations pursuant to Article 14 of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-1962, p. 87). Those investigations took place on 11 and 12 December 1996 at the premises of Daimler-Benz AG in Stuttgart (Germany), Mercedes-Benz Belgium SA/NV in Belgium, Mercedes-Benz Nederland NV in Utrecht (Netherlands) and Mercedes-Benz España, SA, in Spain.

7 On 21 October 1998, the Commission sent a request for information to Daimler-Benz AG under Article 11 of Regulation No 17, to which the latter replied on 10 November 1998. On 15 June 2001, the Commission sent a further request for information to the applicant, to which the latter replied on 9 July 2001. In the course of carrying out the investigations on 11 and 12 December 1996, the Commission found and seized a large number of documents which, together with the requests for information sent to the applicant and the latter’s observations, constitute the basis of the contested decision.

8 On 10 October 2001, the Commission adopted the contested decision.

Contested decision

9 In the contested decision, the Commission held that Mercedes-Benz had itself or through its subsidiaries Mercedes-Benz España, SA (‘MBE’), and Mercedes-Benz Belgium SA (‘MBBel’) infringed Article 81(1) EC. According to the Commission, the measures established in the contested decision related to the retailing of Mercedes-Benz passenger cars (recitals 143 to 149).

10 In the contested decision, the Commission described the companies concerned and their distribution network. It stated that the distribution of Mercedes-Benz passenger cars in Germany is essentially carried out through a network comprising branches belonging to the group, agents having the status of commercial agents (as defined in Paragraph 84(1) of the German Commercial Code), who have the authority to negotiate business transactions, and commission agents (recital 15). The distribution network in Belgium comprises an importer, MBBel, which, from an unspecified date, was a wholly owned subsidiary of Daimler‑Benz AG, which has in turn been a wholly owned subsidiary of the applicant since 21 December 1998, and which sells new vehicles through two branches, dealers and agents/workshops, which also negotiate new-vehicle sales contracts (recitals 17 and 19). Passenger cars are distributed in Spain through a network comprising three branches of MBE and dealers. Some of the agents/workshops do not sell vehicles, but only negotiate sales contracts. MBE is a wholly owned subsidiary of the national holding company Daimler-Benz España, SA, which is in turn a 99.88 per cent subsidiary of Daimler-Benz AG. Since 21 December 1998, that holding company has been a wholly owned subsidiary of the applicant (recital 20).

11 The Commission held that, contrary to what the applicant had maintained during the administrative procedure, Article 81(1) EC applies to the agreements between Mercedes-Benz and its German agents in the same way as it would apply to an agreement with an authorised dealer. It stated that ‘the restrictions imposed on an agent must therefore be assessed in the same way as for a dealer’ (recital 168).

12 The Commission held in that regard, first, that the German Mercedes‑Benz agents have to bear a number of commercial risks inextricably linked to their function as agent for Mercedes-Benz and which result in Article 81 EC being applicable to the agreements between them and Mercedes-Benz (recitals 153 to 160).

13 In particular, a German Mercedes-Benz agent bears a considerable share of the price risk where he negotiates the sale of vehicles. If an agent offers discounts on the sale of new vehicles which are accepted by Mercedes-Benz, these are deducted in their entirety from his commission (recitals 155 and 156).

14 A German agent also bears the risk of transport costs for new vehicles under Clause 4(4) of the German agency agreement. In the same way as a dealer, the agent is required to pass on the costs of transport and the transport risk contractually to the customer (recital 157).

15 The agent must also use a considerable part of his own financial resources for sales promotion purposes. He must, in particular, acquire demonstration vehicles at his own expense (Clause 4(7) of the German agency agreement). Mercedes-Benz grants special terms for the purchase of demonstration and business cars. Those cars are subject to a minimum retention period of three to six months and a minimum running distance of 3 000 kilometres. Thereafter, the agent may resell them on the second-hand market, also bearing the sales risk for this not insignificant number of vehicles (recital 158).

16 In carrying out his activities, a German Mercedes‑Benz agent is exposed to a number of other commercial risks, acceptance of which is a precondition for becoming a Mercedes‑Benz agent. Clause 13 of the agency agreement requires the agent to carry out guarantee work on vehicles which are subject to a manufacturer’s guarantee. German agents are required, at their own expense, to set up a workshop and carry out after-sales service and guarantee work there and, on request, must provide standby and emergency cover (Clause 12 of the agency agreement). In addition, a German agent is required to maintain, at his own expense, a stock of spare parts to carry out repairs to vehicles in his workshop (Clause 14 of the agency agreement) (recital 159).

17 Secondly, the Commission indicated that, financially speaking, a German agent’s income from activities pursued on a self-employed basis exceeds many times over his income from negotiating the sale of new vehicles. It stated: ‘For his activity as an intermediary the agent receives a commission which in the case of passenger cars is made up of a basic commission of 12.2 per cent and a service commission of up to 3.6 per cent. This commission income of at most 15.8 per cent constitutes the revenue from the agency activity. Out of this revenue the agent has to finance the discounts he grants to car buyers. The revenue actually earned from agency business is therefore lower than the abovementioned 15.8 per cent.’ It goes on to say (recital 159): ‘the revenue from acting as an intermediary amounts, if vehicle prices are regarded as part of this revenue, to approximately 50 per cent of the total revenue of an agent. But the agent’s actual revenue from acting as an intermediary per se is the [above]mentioned commission. If this is compared with the agent’s revenue from activities contractually linked to dealing in new vehicles in respect of which the agent bears the entire risk, it becomes apparent that only about one-sixth of total revenue is derived from acting as an agent proper.’

18 The Commission held that in view of the number and quantitative scope of the risks that the agents have to bear, the applicant’s argument that those risks are typical of those borne by a true commercial agent could not be accepted. It stated that: ‘the position would be different only if the agent could choose whether to assume in particular the considerable risks connected with demonstration and business vehicles, carrying out guarantee work, setting up maintenance and repair facilities and supplying spare parts, or simply to negotiate new-vehicle sales contracts’. That is, however, not the case (recital 160).

19 It rejected as irrelevant the applicant’s argument that the German agents form an integral part of its business. The applicant relied in that regard on ‘the requirements which the agent has to meet personally and commercially (his business activity generally involves selling exclusively Mercedes-Benz vehicles, acting as a “Mercedes-Benz agent”, setting up, equipping and staffing his business, advertising, maintaining a certain image, representing the interests of [the applicant], and complying with the Mercedes-Benz identification guidelines)’ and on the fact that the agents are ‘agents of a single company’ and may sell only Mercedes-Benz vehicles (recital 162). However, the Commission held in the contested decision that the criterion of ‘integration’ is, unlike risk allocation, not a separate criterion for distinguishing a commercial agent from a dealer (recital 163). The Commission compared the provisions of the German agency contracts referred to by the applicant with those of the agreements relating to dealerships abroad in order to show that German agents formed an ‘integral part’ of the undertaking (recital 164). It held that that comparison revealed that the requirements imposed on German agents were identical to those placed on dealers and that both forms of distributor formed an equally ‘integral’ part of the Mercedes-Benz distribution system (recital 165).

20 The Commission contends that Mercedes-Benz impeded competition by means of four separate measures.

21 In the first place, it claims that on the introduction of the new W 210 series (new E-Class) very clear instructions were issued, in particular in a document of 6 February 1996, to all members of the German distribution network, including agents, ‘to concentrate on their own territory’. The instructions applied not only to the new model but to sales of new vehicles more generally. At the end of the document, Mercedes-Benz threatened that it would: ‘not hesitate to withhold vehicles in the W 210 series, should [it] discover that an allocation is not warranted by the absorption capacity of a specific territory’. That lent particular emphasis to the instructions.

22 According to the Commission, the purpose of those instructions was to ensure that the dealers sold the W 210 and other models allocated to them within their contract territory alone and did not supply customers from outside the contract territory who did not belong to the customer base within that territory. That was intended, as the document put it, to limit ‘internal competition’, that is to say ‘intra-brand’ competition between German agents, and between those agents and German and foreign dealers. The aim of the document of 6 February 1996 was thus to restrict ‘intra‑brand’ competition.

23 The Commission held, secondly, that in nearly all cases customers from other Member States outside the contract territory were required to pay a deposit of 15 per cent of the purchase price. That practice made parallel trading even more difficult, as it restricted the freedom of agents to pursue their own marketing policy and, for example, to waive those deposits when they knew the identity of the customer from outside the contract territory. Even if such deposits might sometimes be advisable from a commercial point of view, no deposits were required for sales in Germany despite the fact that, there too, there might in some cases be similar concerns as to creditworthiness. That rule accordingly discriminated against parallel trading and favoured sales of vehicles in Germany (recital 174).

24 Thirdly, the Commission held that the purpose of the ban on supplying foreign leasing companies where no lessee was specified, which was incorporated into the German agency agreements (see Clause 2(1)(d)) and the Spanish dealership agreements (see Clause 4(d)), was to restrict competition between the leasing companies within the Mercedes-Benz group and outside leasing companies in Germany and Spain. The latter could acquire Mercedes vehicles only on a case‑by‑case basis, that is to say when they already had a specific customer available, but not for stock purposes. That made it impossible for them to supply a vehicle quickly. The rules governing the sale of vehicles to leasing companies also led to outside leasing companies not receiving the same discounts on purchases of vehicles for lease as those received by other operators of vehicle fleets. Taken as a whole, the provisions in question had a negative impact on the conditions under which the outside leasing companies could obtain Mercedes vehicles and hence could enter the downstream leasing market in competition with companies in the Mercedes-Benz group. The object of the rules governing the leasing activities of agents and dealers was to restrict competition on price and delivery terms for leased vehicles (recital 176).

25 Fourthly, the Commission held that the agreement of 20 April 1995 between MBBel and the Belgian Mercedes-Benz dealers’ association, which limited discounts to three per cent and provided for an outside agency to monitor the level of discounts agreed on E-Class vehicles, with larger discounts leading to reductions in allocations of new E-Class vehicles, had as its object the restriction of price competition in Belgium.

26 Having determined that the measures in question had an appreciable effect on trade between Member States and that they could not be exempted from the application of Article 81(1) EC, the Commission held that a fine should be imposed on the applicant as the party responsible for all the infringements of competition law committed by Daimler-Benz AG and Mercedes‑Benz AG and by the Daimler-Benz subsidiaries MBBel and MBE.

27 The Commission took the view that the measures aimed at restricting exports constituted a single infringement consisting of two elements (the instructions not to sell outside the contract territory and the 15 per cent deposit rule), which for a time had a cumulative effect. That infringement was particularly serious, so that a fine of a basic amount of EUR 33 million was appropriate. As regards the duration of the infringement, the Commission stated that, if both elements of the infringement were taken together, it began on 12 September 1985 and had not yet ended. It was therefore an infringement of long duration. However, the potential impact of the deposit rule was much smaller than that of the instructions aimed directly against exports. The latter had been in force only from 6 February 1996 to 10 June 1999, that is to say for three years and four months. The Commission therefore considered that it was appropriate to increase the basic amount by only 42.5 per cent, that is to say by EUR 14.025 million. The basic amount accordingly stood at EUR 47.025 million.

28 The Commission considered that the prohibition on selling vehicles to leasing companies for stock laid down in the German agency agreement and the Spanish dealership agreement should be classified as serious. The basic amount of the fine should be set at EUR 10 million. The infringement began on 1 October 1996 and had not yet ended. Its duration therefore amounted to five years, which represented a period of medium duration. It considered that the basic amount should be increased by 50 per cent on the basis of the duration of the infringement. The increase was accordingly EUR 5 million, thereby bringing the basic amount to EUR 15 million.

29 The Commission held that the measures adopted with the active participation of MBBel for fixing selling prices in Belgium were by their nature a very serious infringement of the competition rules. Overall, it considered that that infringement was serious and held that a basic amount of EUR 7 million was appropriate. Those measures were in force from 20 April 1995 to 10 June 1999, that is to say for a period of medium duration, and it was appropriate to increase the basic amount by 40 per cent, that is to say by EUR 2.8 million, to EUR 9.8 million.

30 There were no aggravating or mitigating circumstances recorded by the Commission in the contested decision. Therefore, the sum of the above amounts gives a total fine of EUR 71.825 million.

31 In the light of those considerations, the Commission adopted the contested decision, the operative part of which reads as follows:

‘Article 1

[Mercedes-Benz has itself] or through [its] subsidiaries [MBE] and [MBBel] infringed Article 81(1) of the EC Treaty by taking the following measures to restrict parallel trade:

– as of 6 February 1996 all agents in Germany were instructed as far as possible to supply new vehicles supplied to them, and in particular those in the W 210 series, only to customers in their own contract territory and to avoid internal competition; these measures were in force until 10 June 1999,

– as of 12 September 1985 their agents in Germany were instructed to require a deposit of 15% of the vehicle price for orders for new vehicles placed by [customers from outside the contract territory]; this measure has not yet been terminated,

– restricting, from 1 October 1996 until the present time, the supply of passenger cars to leasing companies for stock,

– participating in agreements to restrict the granting of discounts in Belgium, these agreements having been concluded on 20 April 1995 and terminated on 10 July 1999.

Article 2

[Mercedes-Benz] shall, immediately after this Decision is notified, bring to an end the infringements established in Article 1 to the extent that they are still continuing and shall not replace them with restrictions having the same object or effect; in particular, it shall at the latest within two months of notification of this Decision:

– withdraw circular No 52/85 of 12 September 1985 by sending a circular to the German agents and principal agents, in so far as it instructs them to require [customers from outside the contract territory] to pay a deposit of 15% when ordering a passenger car,

– remove from the German agency agreements and the Spanish dealer agreements the rules prohibiting the sale of new vehicles to leasing companies for stock ...

Article 3

A fine of EUR 71.825 million is imposed on [Mercedes-Benz] in respect of the infringements referred to in Article 1.

…’

32 The contested decision shows that the Commission considered in essence that the expression ‘customer from outside the contract territory’ was used by the Mercedes-Benz group in the documents found in the course of the investigations (see paragraph 7 above) to denote, in cross-border sales, final consumers from another State within the European Economic Area.

Procedure and forms of order sought

33 By application lodged at the Registry of the Court of First Instance on 20 December 2001, the applicant brought the present action.

34 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Fifth Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure, requested the parties to answer a number of written questions before the hearing. The parties complied with that request.

35 The parties presented oral argument and answered the questions put by the Court at the hearing held in open court on 25 May 2004.

36 The applicant claims that the Court should:

– annul the contested decision;

– in the alternative, reduce the amount of the fine imposed in Article 3 of the contested decision;

– order the Commission to pay the costs.

37 The Commission contends that the Court should:

– dismiss the action;

– order the applicant to pay the costs.

Law

38 The applicant puts forward four pleas in law in support of its application. The first is based on an infringement of Article 81(1) EC and a manifest error in the assessment of the agreements entered into with the Mercedes-Benz agents in Germany. The second plea, regarding the first and third measures established by the Commission in the contested decision, is based on an infringement of Article 81 EC and of Commission Regulation (EC) No 1475/95 of 28 June 1995 on the application of Article [81](3) of the Treaty to certain categories of motor vehicle distribution and servicing agreements (OJ 1995 L 145, p. 25). The third plea is based on an infringement of Article 81(1) EC and a manifest error in the assessment of the second and fourth measures established by the Commission in the contested decision. The fourth plea contends that the amount of the fine imposed by Article 3 of the contested decision is incorrect.

The first plea, based on an infringement of Article 81(1) EC and a manifest error in the assessment of the agreements entered into with Mercedes-Benz agents in Germany

Arguments of the parties

39 The applicant challenges the Commission’s conclusions in the contested decision as to the legal status of the German agents. It argues that its German commercial agency agreements are not subject to the prohibition on concerted practices under Article 81(1) EC in so far as they relate to the activities of its agents in selling new Mercedes-Benz vehicles. The agents do not bear any of the risks involved in the sale of vehicles. Furthermore, they are wholly integrated into the Mercedes‑Benz organisation and have the same legal relationship with it as do its employees. They therefore satisfy the conditions laid down by the Court of Justice in settled case-law relating to the inapplicability of the prohibition on concerted practices to commercial agency agreements.

40 The applicant submits first of all that it maintains its own distribution network in Germany, both through branches and through commercial agents who act in the name and for the account of Mercedes‑Benz and dealers who act in their own name but for the account of Mercedes‑Benz. It states that agents in the Mercedes-Benz German sales network are not, either legally or economically, dealers in new vehicles. They negotiate purchase contracts for new vehicles on behalf of Mercedes-Benz in accordance with requirements laid down by the latter. The fact that the agents do not buy new vehicles from Mercedes‑Benz and thus hold no stock is of considerable importance from an economic point of view. The burden of risk associated with the sale of new vehicles, including those related to the holding of stock and the corresponding illiquidity of capital, lies entirely on Mercedes-Benz. The agents bear only the risk arising from their activities as intermediaries. The applicant is thus legally free to decide whether, and on what terms, it will enter into contracts for sale. The instructions given to agents and their contractual obligations as regards the entering into of contracts of sale and the terms on which they are written do not fall within the scope of the law relating to concerted practices.

41 The case-law of the Court of Justice provides that Article 81(1) EC does not apply to agency contracts when two cumulative conditions are satisfied, namely, first, that the agent is integrated in the sales network of the manufacturer and, secondly, that he carries out his activities as intermediary and representative for the exclusive benefit of the principal (Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73 Suiker Unie and Others v Commission [1975] ECR 1663 and Case C-266/93 Volkswagen and VAG Leasing [1995] ECR

I-3477).

42 As regards the requirement for ‘integration’, the approach followed by the Commission in the contested decision is illogical and incompatible with the case-law, in particular when the latter states that ‘the criterion of integration is, unlike risk allocation, not a separate criterion for distinguishing a commercial agent from a dealer’ (recital 163 in the contested decision).

43 By disregarding issues of ‘integration’ and by giving additional weight to the criterion of ‘risk allocation’, the Commission extended the scope of the prohibition on concerted practices to the commercial agency further than has ever been done before. However, it is clear from Suiker Unie and Others v Commission, cited in paragraph 41 above, that the Court of Justice takes the view that ‘integration’ means not only that the agent should not share in any risks, but also that his interests should be the same as those of his principal.

44 The applicant also argues that, contrary to what the Commission stated in the contested decision (see recitals 164 and 165 in the contested decision), the fact that foreign dealers who are not commercial agents transact with third parties in the same way as the German Mercedes‑Benz agents is of no significance. It must also be established that the corresponding risks are shared. Furthermore, the analogy cannot be sustained, as the case-law of the Court of Justice provides that ‘integration’ is dependent not only on external characteristics relating to the way in which the dealer transacts with third parties generally and customers in particular, but also on ‘internal’ factors associated with risk sharing and the requirement that the agent act wholly in the interests of his principal.

45 It also criticises the Commission for taking the view in the contested decision that, in assessing contracts entered into between a manufacturer and an agent from the point of view of the law relating to concerted practices, it is sufficient to determine whether or not the commercial agent has to bear the risks ‘inextricably’ linked to his function as intermediary (see, to that effect, recital 153 in the contested decision). That approach, which was adopted by the Commission in the contested decision and in its guidelines on vertical restraints (OJ 2000 C 291, p. 1) (‘the guidelines’) represents a departure from its approach to the applicability of Article 81 EC for which there is no objective justification. Furthermore, it is incompatible with the case-law of the Court of Justice on the matter.

46 The applicant accepts that Mercedes-Benz agents bear certain costs and risks.

47 First, an agent must assume in every case a ‘commission’ risk. The commission is usually fixed as a percentage of the volume of sales made by the agent. The agent’s ability to earn commission is therefore increased when the volume of sales is high and reduced when the volume of sales is low. When the principal, which is ultimately responsible for deciding whether a contract is to be concluded on the terms specified by the buyer, grants discounts, it is reducing not only its own revenue but also the commercial agent’s commission. However, the Mercedes-Benz agents do not share price risks and it is wrong to hold that the deduction of ‘price concessions’ from the agent’s commission is a ‘price risk’.

48 The true position is that the amount of the commission obtained by the agent is determined by the commercial agency agreement. It varies according to whether the sale represents a single transaction or was concluded with a major customer or a ‘user’. The agent is paid a lower commission for sales to major customers and certain users, since sales to customers which have a special contractual relationship with Mercedes-Benz (and not with the agent) in the form of volume or category discounts do not, generally speaking, require the same level of commitment as other kinds of sale, especially those to new customers. Payment to the agent of a lower commission is thus objectively justified. There is no rule of law which requires that commercial agents are always to be entitled to the same level of commission irrespective of the type of sale.

49 As regards new cars, a considerably higher level of commitment is required of dealers than of Mercedes-Benz agents, especially concerning forward funding of vehicles and the risk of sale. In the case of a dealer, the latter amounts to the whole of the sale price of the motor vehicle, whereas a Mercedes-Benz agent bears only the risk of not achieving his targeted commission. Furthermore, the exposure of commercial agents to ‘commission risk’ is limited to the amount of the commission. The risk of selling a motor vehicle at a loss is borne by the dealer but does not arise in the case of an agent. The fact that an agent may grant a discount under a special agreement concluded with the customer, to the detriment of his commission, does not mean that there is a commercial agency agreement for the purposes of the law relating to concerted practices. It should instead be seen as an element of leeway granted by Mercedes‑Benz to the agent.

50 Secondly, a Mercedes-Benz agent has to meet business expenses arising mainly out of the sales promotion activities which he undertakes with a view to successfully concluding the maximum possible number of sales. Thirdly, an agent undertakes, in his own name, for his own account and at his own risk, workshop repairs and the sale of spare parts.

51 The applicant challenges the Commission’s finding in the contested decision that the preferential treatment attaching to the activities of commercial agents cannot apply to the Mercedes-Benz agents since, in particular, they are contractually required to provide after-sales services in their own garages, to undertake guarantee work and to have spare parts in stock at all times (see paragraph 16 above).

52 In Volkswagen and VAG Leasing, cited in paragraph 41 above, the Court of Justice held that dealers participated in the risks linked to contracts entered into by them with VAG Leasing as commercial agents, by reason of the obligation to repurchase vehicles on the expiry of the leasing contracts at a price which had been agreed in advance. Moreover, the Court of Justice did not accept that selling vehicles to customers and negotiating the sale of vehicles as agents constituted parallel activities and referred to the after-sales servicing activities undertaken by the dealers in their own name and for their own account. However, that does not mean that the Court of Justice regarded after‑sales servicing as an independent activity, as it can exist only as an adjunct to the activity of selling. There is nothing in the judgment to suggest that the carrying-on of business as a commercial agent and the provision of after‑sales services lead to a double-sided relationship, thereby excluding any right to preferential treatment under the law relating to concerted practices.

53 The obligation imposed on agents under Clause 13(1) of the agency agreement ‘to carry out guarantee work on vehicles supplied by Daimler-Benz irrespective of where and through whom they were sold’ is a condition precedent to the application of the exemption under Article 5(1)(a) of Regulation No 1475/95. If Mercedes-Benz were not to have imposed the corresponding obligation to undertake guarantee work on its agents, the Commission would probably have argued that the agency agreements did not satisfy the conditions laid down under Regulation No 1475/95.

54 The Commission’s assumption that the only compensation an agent receives for guarantee work he carries out is a ‘guarantee payment’, calculated on the basis of the average customer cost rate and which therefore is ‘not necessarily’ the same as the rates which he might freely negotiate with and recover from third parties, is without foundation. By undertaking guarantee work, agents recover more than merely the reimbursement of their expenses; in other words, they recover the same payment they would have charged a third party for the same repair. Prices for this work cover the agent’s costs together with an element for profit. The agent carries out the guarantee work as part of his normal servicing activities and acts to that extent in his own name and for his own account. The difference from ‘ordinary’ repairs is ‘simply the fact that the owner of the vehicle is not the customer but Mercedes-Benz, which calls upon the agent to carry out the guarantee obligation, the latter being a matter for Mercedes-Benz alone’.

55 The same applies to the setting-up of the workshop and the maintenance of the stock of spare parts which the agent is required to undertake. Those activities are carried out by the agent in his own name and for his own account. It is accordingly appropriate for him to fund those investments.

56 The agents do not contribute towards transport costs (see, to that effect, recital 157 in the contested decision). It is true that Clause 4(4) of the agency agreement requires the agent to enter into an arrangement with the customer as to transport costs. However, that should be construed not as a risk but rather as an additional opportunity for the commercial agent to make a profit. The agent participates in transport arrangements organised by Mercedes-Benz with contractual forwarding agents, under which he can arrange for the transport of motor vehicles at a fixed price which is recharged, together with a supplement, to customers at the same time as they are invoiced for his services relating to the preparation and registration of the vehicle. Furthermore, even if it were the case that German commercial agents in the Mercedes-Benz distribution network are not entirely free of the transport cost risk, the risk involved is only an ‘insignificant’ one, whether seen as part of the wider whole or in isolation.

57 Agents’ participation in sales promotion does not entail participation in the risks linked to the different forms of selling, but arises from the obligation imposed on them to organise and fund the staffing and equipping of the commercial agency activities which they undertake. Agents do not take part in national or regional advertising, but only in promotional activities connected with their own business. Commercial agents bear the costs of those activities and the risks arising from them through their commission. The Commission’s argument that demonstration vehicles are specimens or documentation for the purposes of Article 4(2)(a) of Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents (OJ 1986 L 382, p. 17) is without foundation. That directive makes no reference to specimens but only to documentation, in other words material specifically produced for marketing purposes and not vehicles used for demonstration purposes and then sold by the agent on terms which give rise to no loss on his part.

58 The fact that a Mercedes-Benz agent may service a large number of demonstration vehicles does not mean that he participates in the risks relating to the sale of new vehicles, but only that his activities as agent require considerable investment in terms of marketing to customers. In that regard, the applicant contests the Commission’s finding in the contested decision that ‘an average of 21.66 per cent of the turnover of branches and agencies was accounted for by demonstration and business vehicles’. That rate reflects ‘the national turnover of Mercedes-Benz passenger cars’. It is not a figure which relates solely to agents.

59 By contrast, ‘if the rate is applied to agents, using as a denominator not … only the commissions earned by them but also the turnover of Mercedes-Benz in relation to sales effected through their agents, it falls to only eight per cent for new vehicles and 9.8 per cent if utility vehicles are included’. Furthermore, ‘if the share of demonstration and business vehicles is added to the agent’s actual turnover …, the rate for passenger cars alone is 15.8 per cent, or 19.3 per cent if utility vehicles are included’.

60 The Commission cannot treat the sale of demonstration vehicles, where the agent benefits from preferential terms, as a risk borne by the latter (recital 158 in the contested decision). Such a risk generally does not arise. On the contrary, activities involving demonstration vehicles provide additional revenue to the agent. However, even if the commercial agent was unable to dispose of demonstration vehicles at prices higher than his purchase price and thus incurred higher costs, that would not be a relevant argument. The commercial agent funds through his own resources only activities linked to the negotiation of sales which he is required to undertake under the commercial agency agreement and it is only the risks directly connected with those activities which fall to his account.

61 The Commission’s assertion in the contested decision that in total revenue figures for a typical commercial agency ‘only about one sixth of total revenue is derived from acting as an agent proper’ is legally irrelevant. The method of calculation used by the Commission in the contested decision is also incorrect and it is necessary to take account of ‘[the agent’s] revenue from external sources and not to take account only of the amount of commission received’. Agency business represents ‘approximately 55 per cent of the total turnover of a commercial agent according to the calculations made by Mercedes‑Benz’.

62 The Commission argues that given the nature and the extent of the costs and risks imposed by the applicant on its agents and the size of the revenue achieved by the agent through his independent activities in comparison with the revenue he achieves as an agent in selling new cars, Article 81(1) EC applies to the agreements entered into between the applicant and its German agents in the same way as it applies to an agreement entered into with a dealer.

63 The agreement between an agent and his principal is a contract entered into between two separate undertakings and accordingly it must, as a matter of principle, satisfy the requirements of competition law. The provisions of those agreements thus avoid the application of those rules only in so far as their object or effect is not anti‑competitive.

64 The applicant fails to have regard both to the nature of the risks which agents are required to bear and to the legal consequences of the transferring of those risks to its agents.

65 The Commission notes that, according to the applicant, case-law provides that in order for Article 81(1) EC not to apply to agency agreements two cumulative conditions must be satisfied: first, the risks inherent in such a relationship must be shared and, secondly, there must be ‘integration’ of the agent in the undertaking of the principal. The applicant is thus giving a wider scope to the prohibition on concerted practices in the context of agency relationships than the Commission does, because the latter refuses to recognise an agent’s preferential status under competition law only if he is required to bear significant financial and commercial risks without requiring, in addition, that he be integrated (however that expression may be defined) in the undertaking of his principal. Volkswagen and VAG Leasing, cited in paragraph 41 above, is to be interpreted as meaning that the Court of Justice no longer treats the criterion of ‘integration’ as being a separate concept from that of risk sharing. In Suiker Unie and Others v Commission, cited in paragraph 41 above, and in particular paragraphs 538 to 542 of that judgment, the Court of Justice held that an agent cannot be treated as being ‘integrated’ in the undertaking of his principal if he bears certain risks.

66 Moreover, the application to the present case of the reasoning of the Court of Justice in Suiker Unie and Others v Commission, cited in paragraph 41 above, shows that where relationships are ‘double-sided’, that is to say where the intermediary is both an agent and an independent trader, the prohibition of concerted practices applies not only to the activities which he carries on in his own name and for his own account but also to the activities he carries on in the name and for the account of the principal. In the present case, the applicant’s German agents carry out significant independent activities and even though the applicant and the agents do not market the same goods in carrying out their activities, contrary to the situation which arose in Suiker Unie and Others v Commission, cited in paragraph 41 above, the sale of new cars, the operation of a workshop and after-sales servicing are objectively closely connected. The agent is required to perform guarantee work on vehicles and to provide an after-sales service together with the sale of spare parts precisely in order that new cars may be sold, and the same applies to the other risks that he has to bear. That connection suggests that a uniform approach to the contractual relationship should be adopted, and that that approach should extend to the applicability of competition law.

67 The judgment of the Court of Justice in Case 311/85 Vlaamse Reisbureaus [1987] ECR 3801 bears no relevance to the resolution of these proceedings, as the facts which arose in that case differ from those which arise in the present dispute.

68 The Commission also refers to Volkswagen and VAG Leasing, cited in paragraph 41 above, where the Court of Justice confirmed that a commercial agent loses his preferential status under competition law when he bears even one of the risks arising from the contracts negotiated for his principal. Accordingly, the fact that the applicant’s German agents do not bear the whole, but only a significant share, of the risks arising from the transactions in which they act as intermediaries does not call into question the applicability of the prohibition on concerted practices to the measures restricting parallel trade which form part of the arrangements with them.

69 The applicant’s interpretation of Volkswagen and VAG Leasing, cited in paragraph 41 above (see paragraph 52 above) is incorrect. The applicant is attempting to give the impression that the contested decision goes beyond that case-law, whereas, on the contrary, the Commission interpreted it restrictively. It took into consideration the fact that the agents undertake separate activities involving commercial risks, namely services provided in relation to the manufacturer’s guarantee, after-sales servicing and the sale of spare parts only because they are an adjunct, thought by the manufacturer to be indispensable, to that part of the agent’s activities under which the agent acts as an intermediary. It is impossible to make sense of the applicant’s position that after-sales servicing should play no part in the present case for the purposes of assessing the measures restricting competition entered into as part of the agency relationship.

70 Some of the obligations imposed by a principal on its agent may go beyond the obligation of mutual defence of interests and thus be disproportionate. It is thus appropriate to investigate whether, in each individual case, the relevant obligation restricting competition is truly required by virtue of the nature of the relationship and whether it is necessary in order to protect the ‘legal status’ of the agent.

71 The Commission takes the view that the obligations which aim to limit ‘intra-brand’ competition on the market for goods and to restrict competition through price and conditions of supply for leased cars were not required by the nature of the relationship between the parties nor did they form an integral part of the arrangements for selling cars through commercial agents. That applies to the conditions under which the applicant restricted the agents’ commercial freedom by obliging them to require a deposit of 15 per cent from customers from the Community and by instructing them to sell, where possible, new vehicles only to customers within their contract territory and to avoid internal competition. It is wrong to argue, as the applicant does, that the prohibition on concerted practices applies to agency agreements only where the agent bears the risks and the costs arising from the conclusion or implementation of sales contracts entered into or negotiated by him on behalf of the undertaking and not where he carries on an independent economic activity as regards the activities which the principal has appointed him to carry out. That argument fails to have regard to the nature of the conduct complained of by the Commission. It also fails to take sufficient account of economic realities in that it has regard only to the upstream risks assumed by the agent by virtue of the fact that he purchases the goods in order to resell them. First, the extent of the risks which are removed from the applicant and taken on by the agent by virtue of that assumption will depend on the circumstances of each particular case. Secondly, the risks linked to upstream sales often arise from the fact that those sales require a market-specific infrastructure, irrespective of the acquisition of the goods by the agent. The Commission refers in that regard to the activities involving the performance of obligations under the manufacturer’s guarantee, which largely takes precedence over the guarantee provided by the reseller itself, and to after-sales servicing and the purchase, presentation and resale of demonstration vehicles. Mercedes dealers relieve the applicant of the sales risk, as such, only to a limited extent, as the latter manufactures its cars ‘to order’ and not for stock purposes. An undertaking which uses commercial agents to distribute its products and which transfers to them risks which are particular to the contracts or to the market must expect to see the prohibition on concerted practices apply to its relations with its agents. The obligatory assumption of economic risks by the agent should go hand in hand with the agent’s commercial freedom to face those risks and to restrict that commercial freedom is contrary to competition law where competition is appreciably restricted by doing so.

72 The applicant’s arguments regarding the analysis of the sharing of the various risks in the contested decision should be rejected apart from its observations relating to the place where the agreement was executed.

73 As regards price risk, the applicant transfers part of the marketing risk in its vehicles to its agents. The full amount of any discount offered by the agent is deducted from his commission. The commercial agents thus participate in the applicant’s sales risk and the prohibition on concerted practices accordingly applies (see, to that effect, Suiker Unie and Others v Commission, cited in paragraph 41 above), whether the agent forgoes his commission under a particular agreement on prices or under standard agreements as to terms and conditions which the applicant enters into with its major customers. In each case, the applicant uses the agent’s commission as a marketing incentive and thereby obliges the latter to share the costs and risks associated with the sale of vehicles. The agent’s commission is reduced by an amount which can be as high as six per cent when he sells a car to a customer with which the applicant has entered into an agreement as to terms and conditions. Moreover, the cost of discounts given to major customers is borne by the applicant only to the extent that they exceed six per cent. The position of dealers and agents is economically similar. Under Directive 86/653, an agent’s remuneration is generally calculated as a percentage of the volume of the contracts he has negotiated.

74 Where that volume differs from what had originally been anticipated, a commercial agent normally assumes only the risk that the agreed commission rates will be applied to that reduced volume. An agent is not required as a matter of course to take the steps necessary to ensure that his principal does not suffer the consequences of variations in volume by, for example, forgoing his commission to the extent of any discount. It is therefore impossible to interpret the fact that the agent assumes to a greater or lesser degree the applicant’s marketing risk in all types of contract as meaning simply that there is no agreement which prevents agents from forgoing their commission.

75 Agents also bear the risk associated with transport costs. Under the agency agreement, the agent is obliged to deliver the new car purchased by the customer to him and to agree the amount of the payment for that service with him. The opportunity to make a higher profit by virtue of the difference between the amount to be paid to the carrier and the payment agreed with the customer in no way affects the fact that the agent runs the risk of not receiving payment from the customer. If the vehicle is not delivered to the customer, transport costs already paid will none the less remain the responsibility of the agent. Inasmuch as the applicant relies on the obligations normally imposed on commercial agents and which form an integral part of the system, the answer should be that German law applicable to commercial agents provides that the delivery of the goods is a matter for the principal and not the agent. Lastly, it is unnecessary to consider whether the risks associated with transport costs are ‘insignificant’, as the agents must also bear many other commercial risks.

76 Under the agency agreement, the agent is required to devote a considerable part of his financial resources to sales promotion and he bears the sales risk for a large number of vehicles (see paragraph 58 above). With reference to the figure of 15.8 per cent to which the applicant refers (see paragraph 59 above), the revenue from resales of demonstration cars and business cars is considerable compared to the commission received by the agents as a result of acting as an intermediary in new-car sales. Contrary to what the applicant maintains, the financial commitment which the latter requires of its agents and the risk imposed on them cannot be considered separately from their activities as intermediaries, as demonstration cars are market-specific investments which the applicant requires the agents to make and which are directly relevant to marketing to the final customer. Article 4(2)(a) of Directive 86/653 requires the principal to make demonstration cars available free of charge to a commercial agent, as these represent the ‘specimens’ or the ‘documents’ necessary for him to carry on his activity. The applicant’s duties are thus passed on to the agents. It follows that the applicant requires its agents to assume the duties, risks and financial overheads linked to the marketing of its products which are imposed on it by the legislature. By requiring its agents to conduct themselves to a large degree as independent dealers in (demonstration) vehicles, the applicant is turning them into ‘false’ commercial agents, with the result that competition law applies.

77 The agents have to meet the manufacturer’s guarantee offered by the applicant for new cars, set up a workshop, maintain a stock of spare parts and offer after-sales and guarantee services at their own expense and at their own risk (recital 159 in the contested decision). Those market-specific investments required of the commercial agents mean that the latter share the costs and risks associated with the marketing of the applicant’s new cars.

78 The Commission challenges the distinction made by the applicant between the activities of the agent and after-sales services, stating that it is artificial and does not reflect economic reality. The purpose of after‑sales service is to promote the applicant’s sales in the light of the final customer’s expectation that there will be a maintenance network for the vehicle he is buying. Furthermore, the applicant itself treats commercial agency activities and after-sales servicing as an economic unit. Clause 6 of the agency agreement provides that, if the car is transferred to the contract territory of another agent within a specified period, part of the first agent’s commission is to be transferred to the second. The agent’s activity as an intermediary cannot therefore be considered in isolation from the costs and risks which the agent has to bear in providing guarantee services, after-sales service and spare parts. The Commission refers once again to the similarity between the present case and the facts which gave rise to the judgments in Volkswagen and VAG Leasing, cited in paragraph 41 above, and Suiker Unie and Others v Commission, cited in paragraph 41 above. The agent’s right to remuneration for providing guarantee and after-sales services is of no relevance, since he must none the less bear the costs and risks associated with carrying on his activity. Regulation No 1475/95, which the applicant refers to, does not apply where all that is involved is mere ‘intermediation’ in relation to the sale of new cars, since the element of ‘resale’, as defined in Article 10(12) thereof, is lacking. The agent could therefore perfectly well allow true agents the choice of whether or not to provide guarantee and after-sales services. Lastly, the risks assumed by the agent in relation to defective goods should be attributed primarily to his membership of the applicant’s guarantee network, and the same applies to after-sales servicing.

79 As regards the applicant’s objection that the Commission compared the agent’s revenue in terms of commission with the revenue which he realises in his own name and for his own account, the Commission argues that, even using the applicant’s benchmark as a basis, a large part of the agent’s economic activity falls within the independent activities required of him by the applicant and that that part must not be left out of account in assessing the contractual relationships between the applicant and its agents for the purposes of competition law.

80 The Commission rejects the applicant’s argument that the agents should be treated as branches. Whether an agent is an independent commercial agent does not depend on whether he acts in the interests of his principal or those of third parties as well. The prohibition on concerted practices applies if the agent has to bear contract- or market-specific risks, as is the case in these proceedings.

Findings of the Court

81 According to settled case-law, where the Court is faced with an application for the annulment of a decision pursuant to Article 81(1) EC, as a general rule it undertakes a comprehensive review of the question whether or not the conditions for the application of Article 81(1) EC are met (see, to that effect, Case 42/84 Remia and Others v Commission [1985] ECR 2545, paragraph 34, and Joined Cases 142/84 and 156/84 BAT and Reynolds v Commission [1987] ECR 4487, paragraph 62).

82 Article 81(1) EC provides:

‘The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market …’

83 It is clear from the wording of that article that the prohibition thus laid down concerns exclusively conduct that is coordinated bilaterally or multilaterally, in the form of agreements between undertakings, decisions by associations of undertakings and concerted practices. It follows that the concept of an agreement within the meaning of Article 81(1) EC, as interpreted in case-law, centres around the existence of a joint intention between at least two parties (Case T‑41/96 Bayer v Commission [2000] ECR II‑3383, paragraphs 64 and 69, upheld by the Court of Justice in Joined Cases C‑2/01 P and C-3/01 P BAI and Commission v Bayer [2004] ECR I‑23).

84 It follows that, where a decision by a manufacturer constitutes unilateral conduct of the undertaking, that decision escapes the prohibition laid down in Article 81(1) EC (see, to that effect, Case 107/82 AEG v Commission [1983] ECR 3151, paragraph 38; Joined Cases 25/84 and 26/84 Ford and Ford of Europe v Commission [1985] ECR 2725, paragraph 21; and Case T-43/92 Dunlop Slazenger v Commission [1994] ECR II-441, paragraph 56).

85 It is also settled case-law that in competition law the term ‘undertaking’ must be understood as designating an economic unit for the purpose of the subject-matter of the agreement in question, even if in law that unit consists of several persons, natural or legal (Case 170/83 Hydrotherm [1984] ECR 2999, paragraph 11, and Case T-234/95 DSG v Commission [2000] ECR II-2603, paragraph 124). The Court of Justice has emphasised that, for the purposes of applying the competition rules, formal separation of two companies resulting from their having distinct legal identity, is not decisive. The test is whether or not there is unity in their conduct on the market. Thus, it may be necessary to establish whether two companies that have distinct legal identities form, or fall within, one and the same undertaking or economic entity adopting the same course of conduct on the market (see, to that effect, Case 48/69 ICI v Commission [1972] ECR 619, paragraph 140).

86 The case-law shows that this sort of situation arises not only in cases where the relationship between the companies in question is that of parent and subsidiary. It may also occur, in certain circumstances, in relationships between a company and its commercial representative or between a principal and its agent. In so far as application of Article 81 EC is concerned, the question whether a principal and its agent or ‘commercial representative’ form a single economic unit, the agent being an auxiliary body forming part of the principal’s undertaking, is an important one for the purposes of establishing whether given conduct falls within the scope of that article. Thus, it has been held that ‘if ... an agent works for the benefit of his principal he may in principle be treated as an auxiliary organ forming an integral part of the latter’s undertaking, who must carry out his principal’s instructions and thus, like a commercial employee, forms an economic unit with this undertaking’ (Suiker Unie and Others v Commission, cited in paragraph 41 above, at paragraph 480).

87 The position is otherwise if the agreements entered into between the principal and its agents confer upon the agent or allow him to perform duties which from an economic point of view are approximately the same as those carried out by an independent dealer, because they provide for the agent accepting the financial risks of selling or of the performance of the contracts entered into with third parties (see, to that effect, Suiker Unie and Others v Commission, cited in paragraph 41 above, at paragraph 541). It has therefore been held that an agent can lose his character as independent economic operator only if he does not bear any of the risks resulting from the contracts negotiated on behalf of the principal and he operates as an auxiliary organ forming an integral part of the principal’s undertaking (see, to that effect, Volkswagen and VAG Leasing, cited in paragraph 41 above, at paragraph 19).

88 Accordingly, where an agent, although having separate legal personality, does not independently determine his own conduct on the market, but carries out the instructions given to him by his principal, the prohibitions laid down under Article 81(1) EC do not apply to the relationship between the agent and the principal with which he forms an economic unit.

89 Under this plea in law, the parties are in disagreement as to the Commission’s analysis in the contested decision of the legal status of the German Mercedes-Benz agents for the purposes of Article 81(1) EC and in particular as to the degree of risk borne by those agents under the agency agreement and the question of their integration into Mercedes‑Benz.

90 It is accordingly for the Court to consider, in the light of the above, whether, in the contested decision, the Commission correctly assessed the legal relationship between the applicant and its commercial agents in Germany.

91 It should be noted that that relationship is governed, in particular, by the terms of a standard-form agreement entered into between Mercedes‑Benz and its agents and by the German Commercial Code. In its replies to the written questions put by the Court (see paragraph 34 above), the applicant stated that the version of the standard-form agency agreement considered in the contested decision was that of June 1997. It also confirmed that that version was essentially identical to the versions in force during the whole of the period to which the contested decision relates. The documents before the Court show that the terms and conditions of the standard-form agreement are unilaterally determined by Mercedes-Benz. It is also not in dispute that the agreement entered into between Mercedes-Benz and its German agents is an agency contract under German commercial law. The Commission has not argued in these proceedings that the agency agreements entered into by Mercedes-Benz with individual agents differ materially in any way.

92 The parties do not dispute that the duties formally conferred on the agent under the agency agreement reflect the way in which the agreement is performed in practice. Thus, it is agreed that, both under the terms of the agency agreement and in practice, it is Mercedes-Benz, and not its German agents, which is responsible for selling new Mercedes-Benz cars in the Federal Republic of Germany directly to customers, and that agents are prohibited from selling them in their own name and for their own account.

93 The agency agreement is worded in such a way that the German agent has no authority or power to sell Mercedes-Benz vehicles. The role of the German agent is limited to seeking orders from potential customers, which it passes on to Mercedes-Benz for approval and implementation. In that regard, Clause 4(1) and (3) of the agency agreement states that the agent is to negotiate vehicle sales at prices fixed by Mercedes-Benz and that the contract of sale is to enter into force only from the time when Mercedes-Benz has accepted the order which the agent has passed on.

94 It is also clear from the documents before the Court that when he negotiates a contract for sale with a customer, the agent has no authority with regard to the price of the vehicle to be received by Mercedes-Benz. In its replies to the written questions put by the Court, the applicant confirmed that the agent has no authority to grant discounts at the expense of Mercedes‑Benz without the latter’s agreement. It added, however, that the agent was authorised to grant discounts which would be deducted from its own commission without that agreement and confirmed that the agency agreement did not contain any provision which prohibited such a partial waiver of commission. The applicant stated that, if the agent grants discounts to customers when selling new cars, he has to deduct them from his commission.

95 It should now be considered whether the Commission was correct to state in the contested decision that when the German agent negotiates the sale of vehicles he bears a considerable share of the price risk associated with those vehicles when he grants discounts which fall to be deducted in their entirety from his commission (see recital 155).

96 The documents before the Court show that German agents, unlike Mercedes-Benz dealers in other countries, do not buy new vehicles from Mercedes-Benz for resale to customers and it is a matter of agreement that the agent is not required to hold a stock of new vehicles (see recital 156 in the contested decision). The agency agreement provides that the agent may buy new Mercedes-Benz vehicles only for his own requirements or for demonstration purposes (Clause 9(2)).

97 As the German Mercedes-Benz agent is not required to hold a stock of cars, it is wrong to treat him, for economic purposes, as being in the same position as a dealer in cars who receives from the manufacturer, by way of remuneration, a margin which he uses not only to fund his new-car sales business in general, but also, and above all, to grant discounts to car buyers (see recital 156 in the contested decision). It should be observed in that regard that a Mercedes-Benz agent is not obliged, either under the agency agreement or in practice, to give up part of his commission in order to sell a car which he has in stock. That would represent a real price risk, as he would already have had to bear the costs associated with the purchase of the car and of holding it in stock. Unlike a dealer, the agent does not bear the risk of cars which he holds in stock remaining unsold. Therefore, if the agent does not wish to forgo a part of his commission, he does not take an order for a car.

98 The terms of the Mercedes-Benz dealership agreements entered into in Belgium and Spain show that the dealers are required to hold a stock of vehicles at all times. The volume of that stock is to be determined in particular by agreement between the parties (see Clause 8 of the Belgian dealership agreement and Clause 15(a) of the Spanish dealership agreement). It follows that, as regards the sale of vehicles, the position of the Mercedes-Benz agent in Germany differs considerably from that of Mercedes-Benz dealers in Belgium and Spain. The latter bear a substantial share of the risk associated with vehicle sales, whereas in Germany that risk is essentially borne by Mercedes-Benz. The Commission was therefore wrong to treat the agent as being in the same economic position as a dealer with respect to price risk (recital 156 in the contested decision).

99 In the circumstances of the present case, the fact that a German Mercedes-Benz agent is authorised, without, however, being obliged, to grant discounts which are deducted from his commission and exercises his commercial freedom in forgoing a part of his commission on individual sales in order, if possible, to maximise his overall commission by selling more cars cannot be classified as ‘price risk’.

100 It follows from the above that it is Mercedes-Benz which sells the vehicles and which takes, on a case-by-case basis, the decision to accept or to reject the orders negotiated by the agent. It seems that the commercial freedom of a German agent in relation to the sale of Mercedes-Benz vehicles is extremely limited, so that he is not in a position to influence competition on the market in question, namely the retail market for Mercedes passenger cars (see recital 143 in the contested decision).

101 Thus, when a customer orders a vehicle but the sale does not proceed, the financial implications, and hence the risks associated with that transaction, remain with the applicant. Indeed, the latter confirmed at the hearing that it was solely responsible for all risks associated inter alia with non-delivery, defective delivery and customer insolvency.

102 In summary, it is clear from the points set out above that, as regards the market in question, it is Mercedes-Benz, and not its German agents, which determines the conditions applying to all car sales, in particular the sale price, and which bears the principal risks associated with that activity, as the German agent is prevented by the terms of the agency agreement from purchasing and holding stocks of vehicles for sale. In those circumstances, it must be held that the relationship between the agents and the applicant is such that the former sell Mercedes-Benz vehicles in all material respects under the direction of the applicant, with the result that they should be treated in the same way as employees and considered as integrated in that undertaking and thus forming an economic unit with it. It follows that, in carrying on business on the market in question, the German Mercedes-Benz agent does not himself constitute an ‘undertaking’ for the purposes of Article 81(1) EC.

103 It is necessary to consider whether that conclusion is undermined by the Commission’s claim in the contested decision that, under the agency agreement, the applicant requires its agents to bear other costs and risks, without giving them any choice in the matter.

104 In that regard, the Commission held in the contested decision that under the agency agreement Mercedes-Benz does not bear the risk associated with transport costs, but imposes it on the agent (see recital 157). The latter, like an independent dealer, must bear the transport cost risk of new vehicles and pass on those costs to the customer through the contract entered into with him.

105 The Court notes in that regard that Clause 4(4) of the agency agreement provides that ‘if the customer does not himself collect the vehicle at the factory gate, the agent is to deliver it in return for a payment to be agreed with the customer’. In its replies to questions put by the Court, the applicant confirmed that in Germany 35 per cent of cars had been handed over to customers at the factory in 2003. Although that information does not relate to the period covered by the contested decision, it none the less shows that the possibility under the agency agreement of the customer taking delivery of a car at the factory is far from a purely theoretical one which is relevant only when the agent and the customer cannot agree on the costs or terms of delivery. Moreover, the Commission confirmed at the hearing that it was unlikely that the transport cost risk would apply in reality. In practice, the customer is informed of the date of delivery of the vehicle before arrangements for transport are put in place and if he cannot be contacted the vehicle does not leave the factory.

106 It is clear from the above that the Commission has significantly overstated the degree of risk borne by the agent in relation to transport costs.

107 The Commission also stated in the contested decision that under the agency agreement the agent must acquire demonstration vehicles for his own account (recital 158), carry out repair work under the manufacturer’s guarantee (subparagraph (a) of recital 159), set up a workshop for his own account and provide after-sales service and guarantee work and, on request, standby and emergency cover and keep a stock of spare parts for his own account (subparagraphs (b) and (c) of recital 159). The Commission held in the contested decision that, if only in view of the number and quantitative scope of the risks that Mercedes-Benz agents have to bear, the latter’s argument that the risks assumed by its German agents are typical of those borne by a genuine commercial agent cannot be accepted (recital 160).

108 It should be observed in that regard that Clause 4(7) of the agency agreement requires the agent to bear the costs of demonstration vehicles himself and that Mercedes-Benz has the right, if necessary, to specify the number of such vehicles it considers are needed. It thus appears that when those demonstration vehicles are purchased by the agent, the latter runs a certain risk. It is possible, for example, that those vehicles may be difficult to resell at a profit. However, even if it is accepted that such a risk exists, it none the less remains the case, as the Commission itself found in recital 158 in the contested decision, that the vehicles were purchased on preferential terms and may be resold three to six months later if they have accumulated a minimum of 3 000 kilometres. That point significantly undermines the importance which the Commission attaches to the obligation regarding demonstration vehicles in the contested decision and, accordingly, to the extent of the risk in question.

109 It follows that the Commission’s analysis in recital 158 in the contested decision materially overstates the importance of the risks associated with the obligation on agents to purchase demonstration vehicles.

110 As regards the Commission’s observations on the agents’ obligation to carry out repair work under the guarantee, the documents before the Court show that the agent receives a guarantee payment from Mercedes‑Benz for the approved guarantee work and that that payment is calculated, as regards the cost of labour, on the basis of the average customer cost rate weighted by reference to turnover, with the agent notifying the rate to Mercedes‑Benz in advance at the start of each quarter, and, as regards the cost of materials, on the basis of the cost price to the agent plus a premium in respect of Mercedes-Benz products (see Clause 13(3) of the agency agreement).

111 The Commission has failed to show that the guarantee payment is commercially inadequate and that the agent accordingly bears a genuine financial risk as regards the obligation to carry out repair work under guarantee. The contested decision does not show that those activities associated with the sale of Mercedes-Benz cars in fact give rise to exceptional risks, even if it is true that if they are not properly and efficiently managed they may be loss-making and reduce, or even eliminate, the profits made by the agent in selling cars. The Commission has also failed to prove that the obligations imposed on the agent to set up a workshop, to provide after‑sales servicing and to acquire and stock spare parts give rise to meaningful economic risks.

112 The true position is that the Commission merely lists the obligations imposed under the agency agreement that are linked to the sale of vehicles and mentions the alleged significance of the revenue obtained by the agent from those activities which are contractually linked to the sale of vehicles compared with the revenue he obtains from the sale of cars themselves, without showing how those obligations represent material risks for which the agent is responsible. The Commission did not carry out a correct assessment of the extent of those obligations in practical terms. In the view of the Court, those obligations do not represent a commercial risk which would justify a Mercedes-Benz agent being categorised as an independent operator.

113 It follows that the categorisation of the status of the German Mercedes‑Benz agent under Article 81(1) EC set out in paragraph 102 above is not undermined by the fact that the German Mercedes-Benz agents are required to undertake certain activities and assume certain financial obligations under the agency agreement. It should also be noted that the activities are carried out on markets other than the market at issue in the present case. Even if it must be recognised that those obligations expose the agent to certain limited risks, they do not of themselves operate to affect the relationship between the applicant and its agents under competition law as regards the market at issue in these proceedings.

114 The Commission also states in the contested decision that a number of the provisions of the German agency agreement are the same as those of the Mercedes-Benz dealership agreements entered into in Belgium and Spain and concludes from that ‘that the requirements placed on agents are identical to those placed on dealers and that both forms of distributor form an equally integral part of the Mercedes-Benz sales organisation’ and that that ‘aspect is thus not a suitable basis for distinguishing between commercial agents and dealers’ (recital 165).

115 The provisions in question concern in particular the obligations to do all that is necessary to distribute the products, to protect the applicant’s interests as regards the use of the Mercedes-Benz name and trade mark and the rules relating to the setting-up of branches and showrooms away from the main premises. Those provisions essentially concern ancillary matters which are common to all types of distribution agreement and, as the Commission itself argues, do not serve to distinguish a commercial agent from an independent dealer.

116 Contrary to what the Commission claims in recital 165 in the contested decision, those provisions do not show that the Mercedes-Benz dealers in Belgium and Spain are as strongly integrated in the Mercedes-Benz distribution system as its German agents. The Court considers that that conclusion by the Commission is manifestly incorrect and fails to take account of the fundamental differences between the German agents and the Belgian and Spanish dealers as regards the sale of Mercedes‑Benz vehicles.

117 Unlike the German agency agreement, the standard-form Mercedes‑Benz dealership agreements in Belgium and Spain provide in particular that the dealer is responsible for the marketing of vehicles and the negotiation of sales. The dealer buys his goods and sells them to his customers for his own account, in his own name and at his own risk (see Clause 2 of the Belgian agreement and Clause 6 of the Spanish agreement). Similarly, the standard-form Mercedes-Benz dealership agreements in Belgium and Spain provide that Mercedes-Benz and its dealers are to remain independent. The dealer is not an agent or a representative of Mercedes-Benz and neither of the parties can bind the other (see Clause 2 of the Belgian agreement and Clause 6 of the Spanish agreement). In addition, the Belgian and Spanish dealers have to maintain at all times a stock of new vehicles, over and above vehicles designated as demonstration vehicles, which are to be displayed at their premises and delivered to their customers (Clause 8 of the Belgian agreement and Clause 15(a) of the Spanish agreement). Like the German agency agreement, conditions of sale are annexed to the Belgian and Spanish agreements but, in the case of the latter, the conditions relate to the sale of cars by the Mercedes-Benz group to the dealer (Clause 12 of the Belgian agreement and Clause 8 of the Spanish agreement).

118 The Court is therefore of the opinion that, contrary to the view taken by the Commission, those matters emphasise the material difference between, on the one hand, the role of the German agent, who forms an integral part of the undertaking of his principal, Mercedes-Benz, and, on the other hand, that of the independent dealer in Belgium and Spain. The market at issue in these proceedings is that of the retail sale of Mercedes-Benz passenger cars. An independent dealer is in a position to determine, or at the very least to influence, the terms on which the sales are made, as he is the seller, who bears the main share of the price risk in the vehicle and who maintains a stock of the vehicles. It is that negotiating margin of the dealer, which comes between the manufacturer and the customer, which exposes the dealer to a risk that Article 81 EC may apply to his relationship with the manufacturer. The role and the status of the German Mercedes-Benz agent in the present case are very different.

119 It follows that the existence of an agreement between undertakings for the purposes of Article 81(1) EC has not been established to the requisite legal standard.

120 The first plea in law must therefore be accepted as being well founded.

The second plea in law, based on an infringement of Article 81 EC and of Regulation No 1475/95 as regards the first and third measures established by the Commission in the contested decision

121 The second plea is divided into two parts. In the first place, the applicant submits that the Commission has failed to prove in the contested decision that Mercedes-Benz entered into agreements with its commercial agents in Germany which prevented, within the meaning of Article 81(1) EC, the latter from selling vehicles to final customers abroad. It states that the instructions given to the agents related only to sales to unauthorised resellers, and they are accordingly exempt under Article 3(10) of Regulation No 1475/95. In the second place, the applicant argues that the restrictions on supplies to leasing companies in Spain and Germany do not constitute restrictions on competition for the purposes of Article 81(1) EC and are, in any event, exempt under Regulation No 1475/95.

122 It follows from the findings of the Court in relation to the first plea that the commercial agency agreements entered into by Mercedes-Benz with its agents in Germany are not subject to the prohibition on concerted practices under Article 81(1) EC. Accordingly, any instructions that Mercedes-Benz may have given to its agents in Germany not to sell to customers outside their contract territory and the alleged restrictions on supplying leasing companies in Germany do not fall within the scope of Article 81(1) EC. It is therefore unnecessary to consider the first part of this plea nor is it necessary to consider the second part of it in so far as it concerns obligations imposed on the German agents regarding the sale of new cars to leasing companies.

Arguments of the parties

123 The applicant claims that the Commission was wrong to contend in the contested decision that the aim of the restrictions on supplying leasing companies in Spain ‘for stock’ is to restrict competition. There are a number of reasons why the Spanish dealership agreements do not infringe Article 81(1) EC. First, as regards price advantages and discounts, the leasing companies in the Mercedes-Benz group and those outside the group are treated in exactly the same way. The conditions of purchase which apply to leasing companies in the Mercedes-Benz group are no different from those applying to final customers. Moreover, it is wrong to say that major customers are automatically entitled to price discounts. It is for Mercedes-Benz to decide whether major customers are to be granted discounts and such differences as there may be in treatment between the leasing companies and ‘major accounts’ are not the result of agreements restricting competition. Furthermore, the decision to grant or refuse price discounts to a particular category of customers is a unilateral act and not an agreement subject to Article 81(1) EC. Secondly, contrary to what the Commission states in the contested decision, the purpose of the prohibition on supplying external leasing companies ‘for stock’ is not to limit competition. The true position is that the supply of a car to a lessee is no quicker, as Mercedes-Benz customers generally desire a model of their choice and equipped to their own specification. The applicant adds that the tables set out in recitals 14 and 22 in the contested decision show that the outside leasing companies are in competition with its own companies. The proportion of the leasing market for Mercedes-Benz vehicles held by outside leasing companies increased from 28 per cent in 1996 to 36 per cent in 2000.

124 Even if Article 81(1) EC were to have been infringed, that infringement would in any event be exempt. Until 30 September 1996, the prohibition in question was exempt under Commission Regulation (EEC) No 123/85 of 12 December 1984 on the application of Article [81](3) [EC] to certain categories of motor vehicle distribution and servicing agreements (OJ 1985 L 15, p. 16).

125 The applicant also submits that the prohibition on supplying leasing companies for stock purposes was exempt under Regulation No 1475/95 from 1 October 1996, which is the date on which that regulation entered into force. Leasing companies which order motor vehicles separately from leasing contracts which have already been entered into, or which are actually in the course of being entered into, for stock purposes act in practice as resellers when they enter into leasing arrangements for those vehicles.

126 By virtue of Article 1 of Regulation No 1475/95, that regulation applies to motor vehicle dealership agreements where the role of the dealer can be described as one of ‘resale’. Article 10(12) of the regulation defines ‘resale’ so as to mean the disposal of a motor vehicle which the reseller has acquired in his own name and on his own behalf. Regulation No 1475/95 distinguishes between resellers and final customers. Under Article 3(10) of the regulation, a distributor may be expressly prohibited from supplying resellers. Such a prohibition has the effect of protecting the system of selective distribution.

127 The applicant claims that, although Article 10(12) of Regulation No 1475/95 ‘provides that the term “resale” is to include a leasing contract entered into by the acquirer from the dealer and a lessee which provides for a transfer of ownership or an option to purchase’, there is nothing in that regulation to indicate whether leasing companies which have not yet entered into an actual agreement with a third party relating to the motor vehicle in question are a ‘reseller’ or a ‘final customer’. However, contrary to what the Commission maintains, it would be absurd to interpret Article 10(12) of Regulation No 1475/95 as meaning that the expression ‘resale’ could apply only to a leasing contract which includes an option to purchase by virtue of which the lessee would become an owner prior to the expiry of the contract. The aim of the provision is instead to place a leasing contract on the same footing as a resale where the lessee obtains an option to purchase at the time the contract is concluded or while it is in force. Article 10(12) of the regulation covers all leasing contracts which provide for a transfer of ownership or an option to purchase.

128 Furthermore, that provision has very different consequences in the Member States depending on the contractual form of leasing c