Keywords

Summary



Keywords

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1. Acts of the institutions ° Notification ° Concept ° Irregularities ° Effect ° Decision applying competition rules ° Signature by a Member of the Commission ° No requirement

2. Competition ° Administrative procedure ° Commission decision finding an infringement ° Respect for the principle of audi alteram partem and the rights of the defence ° Scope

(EEC Treaty, Art. 85; Council Regulation No 17, Art. 19(1); Commission Regulation No 99/63, Arts 3, 4 and 7(1))

3. Competition ° Agreements, decisions and concerted practices ° Selective distribution system ° Whether permissible ° Conditions ° No prohibition on resale within the network

(EEC Treaty, Art. 85(1))

4. Competition ° Agreements, decisions and concerted practices ° Agreements between undertakings ° Concept ° Contractual prohibition on re-export tacitly accepted by a manufacturer' s distributors

(EEC Treaty, Art. 85(1))

5. Competition ° Agreements, decisions and concerted practices ° Agreements between undertakings ° Burden of proving the infringement and its duration incumbent on the Commission

6. Competition ° Agreements, decisions and concerted practices ° Exclusivity agreements ° Block exemption ° Exclusive distribution agreement without an export ban ° Existence of a concerted practice seeking to restrict parallel imports ° Exclusion from the exemption

7. Competition ° Agreements, decisions and concerted practices ° Concerted practice ° Affixing of distinctive signs with a view to enabling products imported through parallel channels to be identified ° Process also enabling lawful competitive advantages to be obtained ° Irrelevant

(EEC Treaty, Art. 85(1))

8. Competition ° Fines ° Amount ° Determination ° Criteria ° Infringement not obvious in the absence of a precedent in the Commission' s previous decisions ° Gravity of the infringement

(Council Regulation No 17, Art. 15(2))

9. Competition ° Fines ° Amount ° Determination ° Criteria ° Conduct of the undertaking during the administrative procedure ° Commission' s lack of diligence in conducting the administrative procedure

(Council Regulation No 17, Art. 15(2))

10. Competition ° Fines ° Amount ° Determination ° Criteria ° Duration of the infringement ° Duration shorter than that found by the Commission ° Reduction of the fine by the Community judicature ° Modalities

(Council Regulation No 17, Art. 15(2))

11. Competition ° Fines ° Amount ° Determination ° Criteria ° Turnover to be taken into consideration

(Council Regulation No 17, Art. 15(2))

12. Competition ° Fines ° Assessment in relation to the undertaking' s own conduct ° No penalty imposed on another trader ° Irrelevant

(Council Regulation No 17, Art. 15(2))

Summary

1. A decision is duly notified where it reaches its addressee and the latter is put in a position to take cognizance of it. Any irregularities in the procedure for notification do not invalidate the act notified. In the case of the notification to an undertaking of a decision applying the competition rules, there is no provision which requires that the copy notified must be signed by the competent member of the Commission.

2. There is no infringement of the principle of audi alteram partem and the rights of the defence, as provided for in Article 19(1) of Regulation No 17 and Articles 3 and 7(1) of Regulation No 99/63, where a decision applying the competition rules addressed by the Commission to an undertaking did not refer to evidence against it except evidence as to which the party concerned had been afforded the opportunity of making known its views as required by Article 4 of Regulation No 99/63. Furthermore, although such a decision must specify the evidence on which the Commission' s case hangs, it is not necessary for it to enumerate exhaustively all the evidence available but it may refer to it in general terms.

3. When a producer chooses to organize the distribution of its products by a network of authorized distributors who are guaranteed exclusive or selective distribution, such a distribution system will be permitted under Community competition law only on condition that inter alia no prohibition on the resale of the products in question within the distribution network is imposed in fact or in law on the authorized distributors. Such stipulations, the effect of which is to partition national markets and in so doing to thwart the objective of achieving a common market, are inherently contrary to Article 85(1) of the Treaty.

4. The fact that the prohibition on re-exporting the goods in question, characterizing a selective manufacturer' s distribution system is not stipulated in writing does not indicate that such a prohibition is attributable only to unilateral action by that manufacturer, which would prevent its being caught by Article 85(1) of the Treaty, where there is irrefutable evidence that that prohibition forms part of the agreements governing the relations between the manufacturer and his distributors. A contractual term contrary to the abovementioned article does not need to be recorded in writing, but may tacitly form part of the contractual relations between an undertaking and its commercial partners.

The stipulation of such a contractual term constitutes an infringement which is not negated by the fact that it was not actually implemented by the parties.

5. The requirement of legal certainty, on which economic operators are entitled to rely, entails that when there is a dispute concerning the existence of an infringement of competition law the Commission, which bears the burden of proving infringements which it finds, must adduce evidence which will sufficiently establish the existence of the facts constituting the infringement. With regard to the alleged duration of an infringement, the same principle of legal certainty requires that, if there is no evidence directly establishing the duration of an infringement, the Commission should adduce at least evidence of facts sufficiently proximate in time for it to be reasonable to accept that that infringement continued uninterruptedly between two specific dates.

6. Article 85(1) of the Treaty cannot in any event be held not to apply to an exclusive distribution agreement which in itself involves no prohibition on re-exporting the products concerned where the parties to the agreement participate in a concerted practice seeking to restrict parallel imports to an unauthorized reseller.

7. Article 85(1) of the Treaty applies where, in order to contend with parallel imports, a manufacturer and his distributors set up a system involving the affixing to products of distinctive signs intended to enable products which have been so imported to be identified with certainty.

Such a concerted practice is an infringement even though it has no effects on the market and even though the identification of the products also enables legitimate competitive advantages to be obtained.

8. Although it is true that, in determining the amount of the fine to be imposed on an undertaking for anti-competitive practices, the Commission or the Community judicature may in certain circumstances take account of the fact that at the date of the events at issue, the practice or practices condemned were not clearly identified as such by decision of the Commission, an undertaking cannot seriously claim that that applies to a general prohibition on an exclusive distribution network against re-exporting the products concerned, accompanied by various coercive measures to secure compliance with that prohibition, since it is common ground that such practices, whose object and effect are, by partitioning the different national markets, to thwart the Treaty' s very objective of achieving the single market, are inherently contrary to Article 85(1) of the Treaty.

Such a policy of partitioning national markets inevitably involves the existence of a differential pricing policy for the different national markets in question and the undertaking cannot rely before the Community judicature on the alleged novelty of certain methods, such as buying back certain of the goods concerned, used to secure compliance with the prohibition on parallel imports. On the contrary, in assessing the amount of the fine to be imposed on the undertaking, account must be taken of the fact that, far from simply requiring parties to its contracts to comply with an anti-competitive prohibition, the undertaking used numerous and various coercive means to ensure that its distributors and resellers complied with a prohibition which to its knowledge was anti-competitive.

9. Discontinuing an infringement during the administrative procedure may amount to a mitigating factor to be taken into account in deciding the amount of the fine imposed on an undertaking. It is further necessary, however, that once the undertaking concerned is informed by the Commission that its conduct conflicts with the Community competition rules, it takes without delay the measures necessary to comply with those rules.

In deciding the amount of the fine, account may also be taken in certain circumstances of the protracted nature of the administrative procedure culminating in the imposition of the fine was imposed as a result of a lack of diligence on the part of the Commisison.

10. The duration of the infringement is, as provided in Article 15 of Regulation No 17, one of the factors to be taken into consideration in deciding the amount of the fine to be imposed on undertakings which have infringed the competition rules. Where the Community judicature concludes that that duration was shorter than that stated in the Commission decision finding the infringement, it should in the exercise of its unlimited jurisdiction vary the decision and reduce the amount of the fine imposed. However, the reduction of the fine does not necessarily have to be proportionate to the amount by which the duration of the infringements has been reduced, in view of the Commission' s findings as to the gravity and the cumulative nature of the infringements while they were being actually committed.

11. The turnover referred to in Article 15(2) of Regulation No 17, laying down criteria for determining the amount of administrative fines which may be imposed on undertakings which have infringed the competition rules, is the total turnover of the undertaking.

12. When an undertaking' s conduct has infringed Article 85(1) of the Treaty, it cannot escape without penalty on the ground that another trader has not been fined, when that trader' s circumstances are not even the subject of proceedings before the Community judicature.