Keywords

Summary



Keywords

1 . COMMUNITY LAW - PRINCIPLES - OBSERVANCE OF THE RIGHTS OF THE DEFENCE - FUNDAMENTAL PRINCIPLE - AMBIT - COMPETITION - ADMINISTRATIVE PROCEDURE - SCOPE OF THE PRINCIPLE

( REGULATION NO 17 OF THE COUNCIL , ART . 19 ( 1 ); REGULATION NO 99/63 OF THE COMMISSION , ART . 4 )

2.COMPETITION - ADMINISTRATIVE PROCEDURE - OBSERVANCE OF THE RIGHTS OF THE DEFENCE - NON-DISCLOSURE TO THE UNDERTAKING CONCERNED OF INFORMATION COVERED BY THE PRINCIPLE OF THE NON-DISCLOSURE OF BUSINESS SECRETS - USE OF THAT INFORMATION FOR THE PURPOSES OF THE FINAL DECISION - LIMITS

( REGULATION NO 17 OF THE COUNCIL , ART . 19 ( 1 ) AND 20 ( 2 ))

3.ACTS OF THE INSTITUTIONS - STATEMENT OF REASONS - OBLIGATION - SCOPE

( EEC TREATY , ART . 190 )

4.COMPETITION - ADMINISTRATIVE PROCEDURE - OBSERVANCE OF THE RIGHTS OF THE DEFENCE - STATEMENT OF OBJECTIONS - NECESSARY CONTENTS - SCOPE - INDICATIONS AS REGARDS THE LEVEL OF THE FINES ENVISAGED - PREMATURE INDICATIONS

( REGULATION NO 17 OF THE COUNCIL , ART . 19 ( 1 ); REGULATION NO 99/63 OF THE COMMISSION , ART . 4 )

5.COMPETITION - DOMINANT POSITION - RELEVANT MARKET - GEOGRAPHICAL DEFINITION - CRITERIA

( EEC TREATY , ART . 86 )

6.COMPETITION - DOMINANT POSITION - CONCEPT

( EEC TREATY , ART . 86 )

7.COMPETITION - DOMINANT POSITION - RELEVANT MARKET - DEFINITION - CRITERIA

( EEC TREATY , ART . 86 )

8.COMPETITION - DOMINANT POSITION - RELEVANT MARKET - DEFINITION - CRITERIA - COMPLETE ABSENCE OF COMPETITION FROM OTHER PARTIALLY INTERCHANGEABLE PRODUCTS - NOT A PRE-CONDITION

( EEC TREATY , ART . 86 )

9.COMPETITION - DOMINANT POSITION - EXISTENCE - EVIDENCE - ADVANTAGES OF BELONGING TO A GROUP OF UNDERTAKINGS

( EEC TREATY , ART . 86 )

10.COMPETITION - DOMINANT POSITION - EXISTENCE - OBLIGATIONS OF THE DOMINANT UNDERTAKING

( EEC TREATY , ART . 86 )

11.COMPETITION - DOMINANT POSITION - EXISTENCE - INCONCLUSIVE EVIDENCE

( EEC TREATY , ART . 86 )

12.COMPETITION - DOMINANT POSITION - ABUSE - CONCEPT

( EEC TREATY , ART . 86 )

13.COMPETITION - DOMINANT POSITION - ABUSE - QUANTITY DISCOUNTS - LOYALTY REBATES - CLASSIFICATION

( EEC TREATY , ART . 86 )

14.COMPETITION - DOMINANT POSITION - ABUSE - SYSTEM OF DISCOUNTS LINKED TO THE ATTAINMENT OF SALES TARGETS - CLASSIFICATION AS AN ABUSIVE PRACTICE - CRITERIA OF ASSESSMENT

( EEC TREATY , ART . 86 )

15.COMPETITION - DOMINANT POSITION - EFFECT ON TRADE BETWEEN MEMBER STATES - CRITERIA

( EEC TREATY , ART . 86 )

16.COMPETITION - COMMUNITY RULES - INFRINGEMENTS - FINES - DETERMINATION - CRITERIA - TOTAL TURNOVER OF THE UNDERTAKING CONCERNED - TURNOVER IN THE GOODS IN RESPECT OF WHICH THE INFRINGEMENT IS COMMITTED - TAKING INTO CONSIDERATION - JURISDICTION OF THE COURT - SCOPE

( REGULATION NO 17 OF THE COUNCIL , ART . 15 ( 2 ))

Summary

1 . THE NECESSITY TO HAVE REGARD TO THE RIGHTS OF THE DEFENCE IS A FUNDAMENTAL PRINCIPLE OF COMMUNITY LAW WHICH THE COMMISSION MUST OBSERVE IN ADMINISTRATIVE PROCEDURES WHICH MAY LEAD TO THE IMPOSITION OF PENALTIES UNDER THE RULES OF COMPETITION LAID DOWN IN THE TREATY . ITS OBSERVANCE REQUIRES INTER ALIA THAT THE UNDERTAKING CONCERNED MUST HAVE BEEN ENABLED TO EXPRESS ITS VIEWS EFFECTIVELY ON THE DOCUMENTS USED BY THE COMMISSION TO SUPPORT ITS ALLEGATION OF AN INFRINGEMENT .

2.ONCE THE COMMISSION HAS DECIDED THAT THE INFORMATION OBTAINED DURING ITS INVESTIGATION IS COVERED BY THE PRINCIPLE OF THE NON-DISCLOSURE OF BUSINESS SECRETS , IT IS UNDER THE DUTY , BY VIRTUE OF ARTICLE 20 OF REGULATION NO 17 , NOT TO DISCLOSE IT TO THE UNDERTAKING CONCERNED . CONSE- QUENTLY IT MAY NOT USE THAT INFORMATION TO SUPPORT ITS DECISION IN THIS CASE IF THE REFUSAL TO DISCLOSE IT WERE TO REDUCE THE UNDERTAKING ' S OPPORTUNITY TO EXPRESS ITS VIEWS ON THE ACCURACY OR SCOPE OF THE INFORMATION OR ON THE CONCLUSIONS DRAWN FROM IT BY THE COMMISSION .

3.ALTHOUGH ARTICLE 190 OF THE TREATY REQUIRES THE COMMISSION TO MENTION THE FACTS FORMING THE BASIS OF THE DECISION AND THE CONSIDERATIONS WHICH LED IT TO ADOPT THE DECISION , IT DOES NOT REQUIRE THE COMMISSION TO DISCUSS ALL THE POINTS OF FACT AND LAW DEALT WITH DURING THE ADMINISTRATIVE PROCEDURE .

4.FOR THE COMMISSION TO GIVE IN ITS STATEMENT OF OBJECTIONS INDICATIONS AS REGARDS THE LEVEL OF THE FINES ENVISAGED , BEFORE THE UNDERTAKING HAS BEEN INVITED TO SUBMIT ITS OBSERVATIONS ON THE ALLEGATIONS AGAINST IT , WOULD BE TO ANTICIPATE THE COMMISSION ' S DECISION AND WOULD THUS BE INAPPROPRIATE .

5.AS THE COMMERCIAL POLICY OF THE VARIOUS SUBSIDIARIES OF THE GROUPS COMPETING AT THE EUROPEAN OR EVEN THE WORLD LEVEL IS GENERALLY ADAPTED TO THE SPECIFIC CONDITIONS EXISTING ON EACH NATIONAL MARKET , THE COMMISSION IS RIGHT TO TAKE THE VIEW THAT THE COMPETITION FACING THE NATIONAL SUBSIDIARY OF SUCH A GROUP IS MAINLY ON THE MARKET OF THE MEMBER STATE IN WHICH IT IS ESTABLISHED AND THAT IT IS AT THAT LEVEL THAT THE OBJECTIVE CONDITIONS OF COMPETITION ARE ALIKE FOR TRADERS .

HENCE THE RELEVANT SUBSTANTIAL PART OF THE COMMON MARKET TO BE DEFINED FOR THE PURPOSE OF DECIDING WHETHER THE SUBSIDIARY HAS A DOMINANT POSITION IS THE TERRITORY OF THE MEMBER STATE IN QUESTION .

6.FOR THE PURPOSES OF ARTICLE 86 OF THE TREATY , A DOMINANT POSITION IS A POSITION OF ECONOMIC STRENGTH ENJOYED BY AN UNDERTAKING WHICH ENABLES IT TO HINDER THE MAINTENANCE OF EFFECTIVE COMPETITION ON THE RELEVANT MARKET BY ALLOWING IT TO BEHAVE TO AN APPRECIABLE EXTENT INDEPENDENTLY OF ITS COMPETITORS AND CUSTOMERS AND ULTIMATELY OF CONSUMERS .

7.FOR THE PURPOSE OF INVESTIGATING THE POSSIBLY DOMINANT POSITION OF AN UNDERTAKING ON A GIVEN MARKET , THE POSSIBILITIES OF COMPETITION MUST BE JUDGED IN THE CONTEXT OF THE MARKET COMPRISING THE TOTALITY OF THE PRODUCTS WHICH , WITH RESPECT TO THEIR CHARACTERISTICS , ARE PARTICULARLY SUITABLE FOR SATISFYING CONSTANT NEEDS AND ARE ONLY TO A LIMITED EXTENT INTERCHANGEABLE WITH OTHER PRODUCTS . HOWEVER , IT MUST BE NOTED THAT THE DETERMINATION OF THE RELEVANT MARKET IS USEFUL IN ASSESSING WHETHER THE UNDERTAKING CONCERNED IS IN A POSITION TO PREVENT EFFECTIVE COMPETITION FROM BEING MAINTAINED AND BEHAVE TO AN APPRECIABLE EXTENT INDEPENDENTLY OF ITS COMPETITORS AND CUSTOMERS AND CONSUMERS . FOR THIS PURPOSE , THEREFORE , AN EXAMINATION LIMITED TO THE OBJECTIVE CHARACTERISTICS ONLY OF THE RELEVANT PRODUCTS CANNOT BE SUFFICIENT : THE COMPETITIVE CONDITIONS AND THE STRUCTURE OF SUPPLY AND DEMAND ON THE MARKET MUST ALSO BE TAKEN INTO CONSIDERATION .

8.ALTHOUGH THE EXISTENCE OF A COMPETITIVE RELATIONSHIP BETWEEN TWO PRODUCTS DOES NOT PRESUPPOSE COMPLETE INTERCHANGEABILITY FOR A SPECIFIC PURPOSE , IT IS NOT A PRE-CONDITION FOR A FINDING THAT A DOMINANT POSITION EXISTS IN THE CASE OF A GIVEN PRODUCT THAT THERE SHOULD BE A COMPLETE ABSENCE OF COMPETITION FROM OTHER PARTIALLY INTERCHANGEABLE PRODUCTS AS LONG AS SUCH COMPETITION DOES NOT AFFECT THE UNDERTAKING ' S ABILITY TO INFLUENCE APPRECIABLY THE CONDITIONS IN WHICH THAT COMPETITION MAY BE EXERTED OR AT ANY RATE TO CONDUCT ITSELF TO A LARGE EXTENT WITHOUT HAVING TO TAKE ACCOUNT OF THAT COMPETITION AND WITHOUT SUFFERING ANY ADVERSE EFFECTS AS A RESULT OF ITS ATTITUDE .

9.IN ORDER TO ASSESS THE RELATIVE ECONOMIC STRENGTH OF AN UNDERTAKING AND ITS COMPETITORS ON THE MARKET OF A MEMBER STATE THE ADVANTAGES WHICH THOSE UNDERTAKINGS MAY DERIVE FROM BELONGING TO GROUPS OF UNDERTAKINGS OPERATING THROUGHOUT EUROPE OR EVEN THE WORLD MUST BE TAKEN INTO CONSIDERATION . THOSE ADVANTAGES MAY INCLUDE THE LEAD WHICH A GROUP HAS OVER ITS COMPETITORS IN THE MATTERS OF INVESTMENT AND RESEARCH AND THE SPECIAL EXTENT OF ITS RANGE OF PRODUCTS .

10.A FINDING THAT AN UNDERTAKING HAS A DOMINANT POSITION IS NOT IN ITSELF A RECRIMINATION BUT SIMPLY MEANS THAT , IRRESPECTIVE OF THE REASONS FOR WHICH IT HAS SUCH A POSITION , THE UNDERTAKING CONCERNED HAS A SPECIAL RESPONSIBILITY NOT TO ALLOW ITS CONDUCT TO IMPAIR GENUINE UNDISTORTED COMPETITION ON THE COMMON MARKET .

11.TEMPORARY UNPROFITABILITY OR EVEN LOSSES ARE NOT INCONSISTENT WITH THE EXISTENCE OF A DOMINANT POSITION . BY THE SAME TOKEN , THE FACT THAT THE PRICES CHARGED BY THE UNDERTAKING CONCERNED DO NOT CONSTITUTE AN ABUSE AND ARE NOT EVEN PARTICULARLY HIGH DOES NOT JUSTIFY THE CONCLUSION THAT A DOMINANT POSITION DOES NOT EXIST . FINALLY , NEITHER THE SIZE , FINANCIAL STRENGTH AND DEGREE OF DIVERSIFICATION OF THE UNDERTAKING ' S COMPETITORS AT THE WORLD LEVEL NOR THE COUNTERPOISE ARISING FROM THE FACT THAT BUYERS OF THE PRODUCT IN QUESTION ARE EXPERIENCED TRADE USERS ARE SUCH AS TO DEPRIVE THE UNDERTAKING OF ITS PRIVILEGED POSITION ON THE MARKET IN QUESTION .

12.IN PROHIBITING ANY ABUSE OF A DOMINANT POSITION ON THE MARKET IN SO FAR AS IT MAY EFFECT TRADE BETWEEN MEMBER STATES , ARTICLE 86 OF THE TREATY COVERS PRACTICES WHICH ARE LIKELY TO EFFECT THE STRUCTURE OF A MARKET WHERE , AS A DIRECT RESULT OF THE PRESENCE OF THE UNDERTAKING IN QUESTION , COMPETITION HAS ALREADY BEEN WEAKENED AND WHICH , THROUGH RECOURSE TO METHODS DIFFERENT FROM THOSE GOVERNING NORMAL COMPETITION IN PRODUCTS OR SERVICES BASED ON TRADERS ' PERFORMANCE , HAVE THE EFFECT OF HINDERING THE MAINTENANCE OR DEVELOPMENT OF THE LEVEL OF COMPETITION STILL EXISTING ON THE MARKET .

13.IN CONTRAST TO A QUANTITY DISCOUNT , WHICH IS LINKED SOLELY TO THE VOLUME OF PURCHASES FROM THE MANUFACTURER CONCERNED , A LOYALTY REBATE , WHICH BY OFFERING CUSTOMERS FINANCIAL ADVANTAGES TENDS TO PREVENT THEM FROM OBTAINING THEIR SUPPLIES FROM COMPETING MANUFACTURERS , AMOUNTS TO AN ABUSE WITHIN THE MEANING OF ARTICLE 86 OF THE TREATY .

14.IN DECIDING WHETHER AN UNDERTAKING HAS ABUSED ITS DOMINANT POSITION IN APPLYING A DISCOUNT SYSTEM PROVIDING FOR AN ANNUAL VARIABLE DISCOUNT DEPENDING ON THE ATTAINMENT OF SALES TARGETS , IT IS NECESSARY TO CONSIDER ALL THE CIRCUMSTANCES , PARTICULARLY THE CRITERIA AND RULES FOR THE GRANT OF THE DISCOUNT , AND TO INVESTIGATE WHETHER , IN PROVIDING AN ADVANTAGE NOT BASED ON ANY ECONOMIC SERVICE JUSTIFYING IT , THE DISCOUNT TENDS TO REMOVE OR RESTRICT THE BUYERS ' FREEDOM TO CHOOSE HIS SOURCES OF SUPPLY , TO BAR COMPETITORS FROM ACCESS TO THE MARKET , TO APPLY DISSIMILAR CONDITIONS TO EQUIVALENT TRANSACTIONS WITH OTHER TRADING PARTIES OR TO STRENGTHEN THE DOMINANT POSITION BY DISTORTING COMPETITION .

IT IS AN ABUSE OF A DOMINANT POSITION WITHIN THE MEANING OF ARTICLE 86 OF THE TREADY FOR AN UNDERTAKING TO BIND DEALERS TO IT BY MEANS OF A SYSTEM UNDER WHICH DISCOUNTS ARE GRANTED ACCORDING TO THE QUANTITIES SOLD DURING A RELATIVELY LONG REFERENCE PERIOD WITH THE RESULT THAT THE PRESSURE INCREASES ON THE BUYER TO REACH THE PURCHASE FIGURE NEEDED TO OBTAIN THE DISCOUNT OR TO AVOID SUFFERING THE EXPECTED LOSS FOR THE ENTIRE PERIOD , ESPECIALLY AS THAT EFFECT IS ACCENTUATED STILL FURTHER BY THE WIDE DIVERGENCE BETWEEN THE DOMINANT UNDERTAKING ' S MARKET SHARE AND THOSE OF ITS MAIN COMPETITORS WHICH MUST TAKE INTO ACCOUNT THE ABSOLUTE VALUE OF THE DOMINANT UNDERTAKING ' S ANNUAL TARGET DISCOUNT AND FIX THEIR OWN DISCOUNT AT A PERCENTAGE WHICH , WHEN RELATED TO THE DEALER ' S LESSER QUANTITY OF PURCHASES FROM THEM , IS VERY HIGH AND SECONDLY AS THE LACK OF TRANSPARENCY OF THE DOMINANT UNDERTAKING ' S ENTIRE DISCOUNT SYSTEM MEANS THAT THE DEALERS ARE LEFT IN UNCERTAINTY AND ON THE WHOLE CANNOT PREDICT WITH ANY CONFIDENCE THE EFFECT OF ATTAINING THEIR TARGETS OR FAILING TO DO SO .

SUCH A SITUATION IS CALCULATED TO PREVENT DEALERS FROM BEING ABLE TO SELECT FREELY AT ANY TIME IN THE LIGHT OF THE MARKET SITUATION THE MOST FAVOURABLE OF THE OFFERS MADE BY THE VARIOUS COMPETITORS AND TO CHANGE SUPPLIER WITHOUT SUFFERING ANY APPRECIABLE ECONOMIC DISADVANTAGE . IT THUS LIMITS THE DEALERS ' CHOICE OF SUPPLIER AND MAKES ACCESS TO THE MARKET MORE DIFFICULT FOR COMPETITORS . NEITHER THE WISH TO SELL MORE NOR THE WISH TO SPREAD PRODUCTION MORE EVENLY CAN JUSTIFY SUCH A RESTRICTION OF THE CUSTOMER ' S FREEDOM OF CHOICE AND INDEPENDENCE . THE POSITION OF DEPENDENCE IN WHICH DEALERS FIND THEMSELVES AND WHICH IS CREATED BY THE DISCOUNT SYSTEM IN QUESTION , IS NOT THEREFORE BASED ON ANY COUNTERVAILING ADVANTAGE WHICH MAY BE ECONOMICALLY JUSTIFIED .

15.WHEN THE HOLDER OF A DOMINANT POSITION OBSTRUCTS ACCESS TO THE MARKET BY COMPETITORS , IT MAKES NO DIFFERENCE WHETHER SUCH CONDUCT IS CONFINED TO A SINGLE MEMBER STATE AS LONG AS IT IS CAPABLE OF AFFECTING PATTERNS OF TRADE AND COMPETITION ON THE COMMON MARKET .

MOREOVER , ARTICLE 86 OF THE TREATY DOES NOT REQUIRE IT TO BE PROVED THAT THE ABUSIVE CONDUCT HAS IN FACT APPRECIABLY AFFECTED TRADE BETWEEN MEMBER STATES BUT THAT IT IS CAPABLE OF HAVING THAT EFFECT .

16.IN ASSESSING THE GRAVITY OF THE INFRINGEMENT OF THE COMMUNITY COMPETITION RULES , REGARD MUST BE HAD , ACCORDING TO THE CIRCUMSTANCES , TO A LARGE NUMBER OF FACTORS WHICH MAY INCLUDE IN PARTICULAR THE SIZE AND ECONOMIC STRENGTH OF THE UNDERTAKING , WHICH MAY BE INDICATED BY THE TOTAL TURNOVER OF THE UNDERTAKING AND THE PROPORTION OF THAT TURNOVER ACCOUNTED FOR BY THE GOODS IN RESPECT OF WHICH THE INFRINGEMENT WAS COMMITTED .

IT IS FOR THE COURT , EXERCISING ITS POWERS OF UNLIMITED JURISDICTION ON THIS SUBJECT , TO ASSESS FOR ITSELF THE CIRCUMSTANCES OF THE CASE AND THE NATURE OF THE INFRINGEMENT IN QUESTION IN ORDER TO DETERMINE THE AMOUNT OF THE FINE .