Judgment of the Court of 14 July 1972. - Imperial Chemical Industries Ltd. v Commission of the European Communities. - Case 48-69.



European Court reports 1972 Page 00619

Danish special edition Page 00151

Greek special edition Page 00099

Portuguese special edition Page 00205

Spanish special edition Page 00111

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Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . COMMUNITY ADMINISTRATION - NOTICE OF OBJECTIONS - DELEGATION OF AUTHORITY TO SIGN - NATURE OF SUCH DELEGATION

( REGULATION NO 99/63 OF THE COMMISSION, ARTICLE 2 )

2 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - ADMINISTRATIVE PROCEDURE - FINAL ATTITUDE OF THE COMMISSION - OBJECTIONS - NOTICE THEREOF - FACTS TO BE TAKEN INTO CONSIDERATION ( EEC TREATY, ARTICLE 85 )

3 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - ADMINISTRATIVE PROCEDURE - OBJECTIONS - COMMUNICATION TO THE INTERESTED PARTIES - METHOD

( REGULATION NO 17/62 OF THE COUNCIL, ARTICLE 19 )

4 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - ADMINISTRATIVE PROCEDURE - HEARING OF THE INTERESTED PARTIES - MINUTES - COMMUNICATION THEREOF - PURPOSE - BELATED COMMUNICATION - EFFECTS

( REGULATION NO 99/63 OF THE COMMISSION, ARTICLE 9 )

5 . MEASURE ADOPTED BY A COMMUNITY INSTITUTION - NOTIFICATION - IRREGULARITIES - EFFECTS - SUSPENSION OF TIME-LIMIT FOR INSTITUTING PROCEEDINGS

( EEC TREATY, SECOND PARAGRAPH OF ARTICLE 191 )

6 . LIMITATION OF ACTIONS - PERIOD - MUST BE FIXED IN ADVANCE

7 . COMMUNITY ADMINISTRATION - INFRINGEMENT OF THE RULES OF EUROPEAN LAW - FINES - NO TIME-LIMIT LAID DOWN - POWERS OF THE COMMISSION - BAR TO EXERCISE RESULTING FROM THE COMMISSION' S CONDUCT

8 . COMPETITION - CARTELS - PROHIBITION - CONCERTED PRACTICE - CONCEPT

( EEC TREATY ARTICLE 85 )

9 . COMPETITION - EFFECT - FUNCTION AS REGARDS PRICES

10 . COMPETITION - CARTELS - CONCERTED PRACTICE - PRICES - MANIPULATION - CRITERIA

( EEC TREATY, ARTICLE 85 )

11 . COMPETITION - INFRINGEMENT OF THE RULES OF THE TREATY - JURISDICTION OF THE COMMISSION - UNDERTAKINGS ESTABLISHED IN THIRD COUNTRIES - SUBSIDIARIES UNDER THEIR CONTROL ESTABLISHED IN THE COMMUNITY - ACTION TAKEN IN THE COMMUNITY BY THE PARENT UNDERTAKING THROUGH ITS SUBSIDIARIES - SEPARATE LEGAL PERSONALITY - UNIFORM BEHAVIOUR ON THE MARKET - APPLICABILITY OF COMMUNITY LAW

( EEC TREATY, ARTICLE 85 )

12 . MEASURES ADOPTED BY AN INSTITUTION - STATEMENT OF REASONS - EXTENT

( EEC TREATY, ARTICLE 190 )

Summary

1 . THE DELEGATION OF AUTHORITY TO SIGN CONSTITUTES A MEASURE RELATING TO THE INTERNAL ORGANIZATION OF THE DEPARTMENTS OF THE COMMUNITY ADMINISTRATION, IN ACCORDANCE WITH ARTICLE 27 OF THE PROVISIONAL RULES OF PROCEDURE ADOPTED UNDER ARTICLE 16 OF THE TREATY OF 8 APRIL 1965 ESTABLISHING A SINGLE COUNCIL AND A SINGLE COMMISSION .

2 . THE NOTICE OF OBJECTIONS IS THE MEASURE STATING THE FINAL ATTITUDE OF THE COMMISSION CONCERNING UNDERTAKINGS AGAINST WHICH PROCEEDINGS FOR INFRINGEMENT OF THE RULES ON COMPETITION HAVE BEEN COMMENCED .

ACCORDINGLY, FACTS OCCURRING SUBSEQUENT TO THE DECISION TO COMMENCE PROCEEDINGS MAY BE TAKEN INTO CONSIDERATION IN THE NOTICE OF OBJECTIONS WHEN THOSE FACTS CONSIST OF A CONTINUATION OF EARLIER ACTIONS, AND THIS DOES NOT PREJUDICE THE RIGHTS OF THE DEFENCE .

3 . IN ORDER TO PROTECT THE RIGHTS OF THE DEFENCE DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE, IT IS SUFFICIENT THAT UNDERTAKINGS SHOULD BE INFORMED OF THE ESSENTIAL ELEMENTS OF FACT ON WHICH THE OBJECTIONS ARE BASED . THIS REQUIREMENT IS MET EVEN IF THE CONTESTED DECISION CONTAINS AMENDMENTS MADE PURSUANT TO INFORMATION FURNISHED BY THE INTERESTED PARTIES DURING THE COURSE OF THE PROCEDURE .

4 . THE INTENTION OF ARTICLE 9 ( 4 ) OF REGULATION NO 99/63 IS TO ASSURE THE PERSONS HEARD THAT THE MINUTES CONTAIN A TRUE RECORD OF WHAT THEY SAID .

DELAY IN SENDING THE MINUTES OF A HEARING TO THE UNDERTAKINGS WHOSE CONDUCT HAS BEEN CALLED IN QUESTION CAN AFFECT THE LEGALITY OF THE DECISION TAKEN ONLY IF THE STATEMENTS MADE ARE INACCURATELY RECORDED .

5 . IRREGULARITY OF NOTIFICATION DOES NOT INVALIDATE THE MEASURE NOTIFIED . IT MAY IN CERTAIN CIRCUMSTANCES PREVENT THE PERIOD WITHIN WHICH AN APPLICATION MUST BE LODGED FROM STARTING TO RUN .

SUCH IS NOT THE CASE WHEN THE APPLICANT HAS HAD FULL KNOWLEDGE OF THE TEXT OF THE DECISION .

6 . IN ORDER TO FULFIL THEIR FUNCTION, LIMITATION PERIODS MUST BE FIXED IN ADVANCE .

7 . ALTHOUGH THE PROVISIONS GOVERNING THE COMMISSION' S POWER TO IMPOSE FINES IN CASES WHERE COMMUNITY RULES HAVE BEEN INFRINGED DO NOT LAY DOWN ANY PERIOD OF LIMITATION, THE FUNDAMENTAL REQUIREMENT OF LEGAL CERTAINTY HAS THE EFFECT OF PREVENTING THE COMMISSION FROM INDEFINITELY DELAYING THE EXERCISE OF ITS POWER TO IMPOSE FINES .

8 . BY ITS VERY NATURE, A CONCERTED PRACTICE DOES NOT HAVE ALL THE ELEMENTS OF A CONTRACT BUT MAY INTER ALIA ARISE OUT OF COORDINATION, WHICH BECOMES APPARENT FROM THE BEHAVIOUR OF THE PARTICIPANTS .

ALTHOUGH PARALLEL BEHAVIOUR MAY NOT BY ITSELF BE IDENTIFIED WITH A CONCERTED PRACTICE, IT MAY HOWEVER AMOUNT TO STRONG EVIDENCE OF SUCH A PRACTICE IF IT LEADS TO CONDITIONS OF COMPETITION WHICH DO NOT CORRESPOND TO THE NORMAL CONDITIONS OF THE MARKET, HAVING REGARD TO THE NATURE OF THE PRODUCTS, THE SIZE AND NUMBER OF THE UNDERTAKINGS, AND THE VOLUME OF THE SAID MARKET .

THIS IS ESPECIALLY THE CASE IF THE PARALLEL CONDUCT IS SUCH AS TO ENABLE THOSE CONCERNED TO ATTEMPT TO STABILIZE PRICES AT A LEVEL DIFFERENT FROM THAT TO WHICH COMPETITION WOULD HAVE LED, AND TO CONSOLIDATE ESTABLISHED POSITIONS TO THE DETRIMENT OF EFFECTIVE FREEDOM OF MOVEMENT OF THE PRODUCTS IN THE COMMON MARKET AND OF THE FREEDOM OF CONSUMERS TO CHOOSE THEIR SUPPLIERS .

9 . THE FUNCTION OF PRICE COMPETITION IS TO KEEP PRICES DOWN TO THE LOWEST POSSIBLE LEVEL, AND TO ENCOURAGE THE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES, THEREBY PERMITTING THE MOST EFFICIENT POSSIBLE DISTRIBUTION OF ACTIVITIES IN THE MATTER OF PRODUCTIVITY AND THE CAPACITY OF UNDERTAKINGS TO ADAPT THEMSELVES TO CHANGE .

INDEPENDENT AND NON-UNIFORM CONDUCT BY UNDERTAKINGS IN THE COMMON MARKET ENCOURAGES THE PURSUIT OF ONE OF THE BASIC OBJECTIVES OF THE TREATY, NAMELY THE INTERPENETRATION OF NATIONAL MARKETS AND, AS A RESULT, DIRECT ACCESS BY CONSUMERS TO THE SOURCES OF PRODUCTION OF THE WHOLE COMMUNITY .

10 . ALTHOUGH EVERY PRODUCER IS FREE TO CHANGE HIS PRICES, TAKING INTO ACCOUNT IN SO DOING THE PRESENT OR FORESEEABLE CONDUCT OF HIS COMPETITORS, NEVERTHELESS IT IS CONTRARY TO THE RULES ON COMPETITION CONTAINED IN THE TREATY FOR A PRODUCER TO COOPERATE WITH HIS COMPETITORS, IN ANY WAY WHATSOEVER, IN ORDER TO DETERMINE A COORDINATED COURSE OF ACTION RELATING TO A CHANGE OF PRICES AND TO ENSURE ITS SUCCESS BY PRIOR ELIMINATION OF ALL UNCERTAINTY AS TO EACH OTHER' S CONDUCT REGARDING THE ESSENTIAL ELEMENTS OF THAT ACTION, SUCH AS THE AMOUNT, SUBJECT-MATTER, DATE, AND PLACE OF SUCH CHANGES .

11 . WHERE AN UNDERTAKING ESTABLISHED IN A THIRD COUNTRY, IN THE EXERCISE OF ITS POWER TO CONTROL ITS SUBSIDIARIES ESTABLISHED WITHIN THE COMMUNITY, ORDERS THEM TO CARRY OUT A DECISION TO RAISE PRICES, THE UNIFORM IMPLEMENTATION OF WHICH TOGETHER WITH OTHER UNDERTAKINGS CONSTITUTES A PRACTICE PROHIBITED UNDER ARTICLE 85 ( 1 ) OF THE EEC TREATY, THE CONDUCT OF THE SUBSIDIARIES MUST BE IMPUTED TO THE PARENT COMPANY .

FOR THE PURPOSE OF APPLYING THE RULES ON COMPETITION, UNITY OF CONDUCT ON THE MARKET AS BETWEEN A PARENT COMPANY AND ITS SUBSIDIARIES OVERRIDES THE FORMAL SEPARATION BETWEEN THOSE COMPANIES RESULTING FROM THEIR SEPARATE LEGAL PERSONALITY .

12 . THE FACT THAT NO STATEMENT IS INCLUDED SHOWING WHY THE COMMUNITY ADMINISTRATION HAS JURISDICTION DOES NOT STAND IN THE WAY OF A REVIEW OF THE LEGALITY OF ITS MEASURES .

THE COMMUNITY ADMINISTRATION IS NOT BOUND TO INCLUDE IN ITS DECISIONS ALL THE ARGUMENTS WHICH IT MIGHT LATER USE IN RESPONSE TO SUBMISSIONS OF ILLEGALITY WHICH MIGHT BE RAISED AGAINST ITS MEASURES .

Parties

IN CASE 48/69

IMPERIAL CHEMICAL INDUSTRIES LTD . ( HEREINAFTER REFERRED TO AS " ICI "), HAVING REGISTERED OFFICES IN LONDON AND MANCHESTER, ASSISTED AND REPRESENTED BY C . R . C . WIJCKERHELD BISDOM AND B . H . TER KUILE, ADVOCATES AT THE HOGE RAAD OF THE NETHERLANDS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF J . LOESCH, ADVOCATE, 2 RUE GOETHE, APPLICANT,

V

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISERS, J . THIESING, G . MARCHESINI AND J . GRIESMAR, ACTING AS AGENTS, ASSISTED BY PROFESSOR W . VAN GERVEN, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ITS LEGAL ADVISER, E . REUTER, 4 BOULEVARD ROYAL, DEFENDANT,

Subject of the case

APPLICATION FOR THE ANNULMENT OF THE COMMISSION DECISION OF 24 JULY 1969 PUBLISHED IN THE JOURNAL OFFICIEL NO L 195 OF 7 AUGUST 1969, P . 11 ET SEQ ., RELATING TO PROCEEDINGS UNDER ARTICLE 85 OF THE EEC TREATY ( IV/26.267 - DYESTUFFS ),

Grounds

1 IT IS COMMON GROUND THAT FROM JANUARY 1964 TO OCTOBER 1967 THREE GENERAL AND UNIFORM INCREASES IN THE PRICES OF DYESTUFFS TOOK PLACE IN THE COMMUNITY .

2 BETWEEN 7 AND 20 JANUARY 1964, A UNIFORM INCREASE OF 15 PER CENT IN THE PRICES OF MOST DYES BASED ON ANILINE, WITH THE EXCEPTION OF CERTAIN CATEGORIES, TOOK PLACE IN ITALY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG AND IN CERTAIN THIRD COUNTRIES .

3 ON 1 JANUARY 1965 AN IDENTICAL INCREASE TOOK PLACE IN GERMANY .

4 ON THE SAME DAY ALMOST ALL PRODUCERS IN ALL THE COUNTRIES OF THE COMMON MARKET EXCEPT FRANCE INTRODUCED A UNIFORM INCREASE OF 10 PER CENT ON THE PRICES OF DYES AND PIGMENTS EXCLUDED FROM THE INCREASE OF 1964 .

5 SINCE THE ACNA UNDERTAKING DID NOT TAKE PART IN THE INCREASE OF 1965 ON THE ITALIAN MARKET, THE OTHER UNDERTAKINGS DID NOT MAINTAIN THE ANNOUNCED INCREASE OF THEIR PRICES ON THAT MARKET .

6 TOWARDS MID-OCTOBER 1967, AN INCREASE FOR ALL DYES WAS INTRODUCED, EXCEPT IN ITALY, BY ALMOST ALL PRODUCERS, AMOUNTING TO 8 PER CENT IN GERMANY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG, AND 12 PER CENT IN FRANCE .

7 BY A DECISION OF 31 MAY 1967 THE COMMISSION COMMENCED PROCEEDINGS UNDER ARTICLE 3 OF REGULATION NO 17/62 ON ITS OWN INITIATIVE CONCERNING THESE INCREASES FOR PRESUMED INFRINGEMENT OF ARTICLE 85 ( 1 ) OF THE EEC TREATY AGAINST SEVENTEEN PRODUCERS OF DYESTUFFS ESTABLISHED WITHIN AND OUTSIDE THE COMMON MARKET, AND AGAINST NUMEROUS SUBSIDIARIES AND REPRESENTATIVES OF THOSE UNDERTAKINGS .

8 BY A DECISION OF 24 JULY 1969, THE COMMISSION FOUND THAT THE INCREASES WERE THE RESULT OF CONCERTED PRACTICES, WHICH INFRINGED ARTICLE 85 ( 1 ) OF THE TREATY, BETWEEN THE UNDERTAKINGS

- BADISCHE ANILIN - UND SODA-FABRIK AG ( BASF ), LUDWIGSHAFEN,

- CASSELLA FARBWERKE MAINKUR AG, FRANKFURT AM MAIN,

- FARBENFABRIKEN BAYER AG, LEVERKUSEN,

- FARBWERKE HOECHST AG, FRANKFURT AM MAIN,

- SOCIETE FRANCAISE DES MATIERES COLORANTES SA, PARIS,

- AZIENDA COLORI NAZIONALI AFFINI S . P . A . ( ACNA ), MILAN,

- CIBA SA, BASEL,

- J . R . GEIGY SA, BASEL,

- SANDOZ SA, BASEL, AND

- IMPERIAL CHEMICAL INDUSTRIES LTD ., ( ICI ), MANCHESTER .

9 IT THEREFORE IMPOSED A FINE OF 50 000 U . A . ON EACH OF THESE UNDERTAKINGS, WITH THE EXCEPTION OF ACNA, FOR WHICH THE FINE WAS FIXED AT 40 000 U . A .

10 BY APPLICATION LODGED AT THE COURT REGISTRY ON 1 OCTOBER 1969 IMPERIAL CHEMICAL INDUSTRIES LTD . HAS BROUGHT AN APPLICATION AGAINST THAT DECISION .

SUBMISSIONS RELATING TO PROCEDURE AND TO FORM

THE SUBMISSIONS CONCERNING THE ADMINISTRATIVE PROCEDURE

( A ) THE COMPLAINT RELATING TO THE SIGNING OF THE " NOTICE OF OBJECTIONS " BY AN OFFICIAL OF THE COMMISSION

11 THE APPLICANT ASSERTS THAT THE NOTICE OF OBJECTIONS, FOR WHICH ARTICLE 2 OF REGULATION NO 99/63 OF THE COMMISSION MAKES PROVISION, IS IRREGULAR BECAUSE IT IS SIGNED BY THE DIRECTOR-GENERAL FOR COMPETITION PER PROCURATIONEM ALTHOUGH, ACCORDING TO THE APPLICANT, NO SUCH DELEGATION OF POWERS ON THE PART OF THE COMMISSION IS PERMITTED .

12 IT IS ESTABLISHED THAT THE DIRECTOR-GENERAL FOR COMPETITION DID NO MORE THAN SIGN THE NOTICE OF OBJECTIONS WHICH THE MEMBER OF THE COMMISSION RESPONSIBLE FOR PROBLEMS OF COMPETITION HAD PREVIOUSLY APPROVED IN THE EXERCISE OF THE POWERS WHICH THE COMMISSION HAD DELEGATED TO HIM .

13 THEREFORE THAT OFFICIAL DID NOT ACT PURSUANT TO A DELEGATION OF POWERS BUT SIMPLY SIGNED AS A PROXY ON AUTHORITY RECEIVED FROM THE COMMISSIONER RESPONSIBLE .

14 THE DELEGATION OF SUCH AUTHORITY CONSTITUTES A MEASURE RELATING TO THE INTERNAL ORGANIZATION OF THE DEPARTMENTS OF THE COMMISSION, IN ACCORDANCE WITH ARTICLE 27 OF THE PROVISIONAL RULES OF PROCEDURE ADOPTED UNDER ARTICLE 16 OF THE TREATY OF 8 APRIL 1965 ESTABLISHING A SINGLE COUNCIL AND A SINGLE COMMISSION .

15 THEREFORE THIS SUBMISSION IS UNFOUNDED .

( B ) THE COMPLAINT RELATING TO THE DISPARITIES BETWEEN THE " NOTICE OF OBJECTIONS " AND THE DECISION TO COMMENCE ADMINISTRATIVE PROCEEDINGS

16 THE APPLICANT CLAIMS THAT THE NOTICE OF OBJECTIONS MENTIONS PRICE INCREASES OCCURRING AFTER THE DECISION TO COMMENCE PROCEEDINGS WAS TAKEN, AND THAT THE SAID NOTICE ALSO REFERS TO THE POSSIBLE IMPOSITION OF FINES, ALTHOUGH THE DECISION TO COMMENCE PROCEEDINGS ONLY REFERRED TO PROCEEDINGS TO ESTABLISH INFRINGEMENTS .

17 IT IS THE NOTICE OF OBJECTIONS ALONE AND NOT THE DECISION TO COMMENCE PROCEEDINGS WHICH IS THE MEASURE STATING THE FINAL ATTITUDE OF THE COMMISSION CONCERNING UNDERTAKINGS AGAINST WHICH PROCEEDINGS FOR INFRINGEMENT OF THE RULES ON COMPETITION HAVE BEEN COMMENCED .

18 IF, DURING THE PERIOD BETWEEN THE DECISION AND THE SAID NOTICE, THE UNDERTAKINGS CONTINUE OR REPEAT ACTIONS SUCH AS THOSE AGAINST WHICH THE COMMISSION HAS DECIDED TO COMMENCE PROCEEDINGS, THE RIGHTS OF THE DEFENCE ARE NOT PREJUDICED BY THE TAKING INTO CONSIDERATION IN THE NOTICE OF OBJECTIONS OF FACTS WHICH CONSIST SIMPLY OF A CONTINUATION OF EARLIER ACTIONS; THIS, MOREOVER, ACCORDS WITH THE PRINCIPLE OF ECONOMY OF ADMINISTRATIVE ACTIVITY .

19 ALTHOUGH THE DECISION TO COMMENCE PROCEEDINGS MENTIONS " ESPECIALLY " ARTICLES 3 AND 9 ( 2 ) AND ( 3 ) OF REGULATION NO 17, IT REFERS TO THAT REGULATION AS A WHOLE, AND THUS ALSO TO ARTICLE 15 CONCERNING FINES .

20 THEREFORE THESE SUBMISSIONS ARE UNFOUNDED .

( C ) THE COMPLAINTS RELATING TO INFRINGEMENTS OF THE RIGHTS OF THE DEFENCE

21 THE APPLICANT COMPLAINS THAT IN THE CONTESTED DECISION THE COMMISSION REFERS TO FACTS WHICH ARE NOT MENTIONED IN THE NOTICE OF OBJECTIONS AND THAT THEREFORE, IT WAS UNABLE TO DEAL WITH THEM DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE .

22 IN ORDER TO PROTECT THE RIGHTS OF THE DEFENCE DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE, IT IS SUFFICIENT THAT UNDERTAKINGS SHOULD BE INFORMED OF THE ESSENTIAL ELEMENTS OF FACT ON WHICH THE OBJECTIONS ARE BASED .

23 IT APPEARS FROM THE TEXT OF THE NOTICE OF OBJECTIONS THAT THE FACTS TAKEN INTO CONSIDERATION AGAINST THE APPLICANT WERE CLEARLY STATED THEREIN .

24 THAT NOTICE CONTAINS ALL THE INFORMATION NECESSARY FOR DECIDING AS TO THE OBJECTIONS PUT FORWARD WITH REGARD TO THE APPLICANT, IN PARTICULAR THE CIRCUMSTANCES IN WHICH THE INCREASES OF 1964, 1965 AND 1967 WERE ANNOUNCED AND IMPLEMENTED .

25 AMENDMENTS INCLUDED IN THE CONTESTED DECISION CONCERNING THE PRECISE COURSE OF THE FACTS, WHICH WERE MADE PURSUANT TO INFORMATION FURNISHED BY THE INTERESTED PARTIES TO THE COMMISSION DURING THE COURSE OF THE ADMINISTRATIVE PROCEDURE, CAN BY NO MEANS BE RELIED UPON TO SUPPORT THIS COMPLAINT .

26 THIS SUBMISSION IS THEREFORE UNFOUNDED .

( D ) THE COMPLAINT RELATING TO THE MINUTES OF THE HEARING

27 THE APPLICANT COMPLAINS THAT THE DEFENDANT TOOK ITS DECISION BEFORE THE APPLICANT WAS ABLE TO MAKE KNOWN ITS OBSERVATIONS ON THE MINUTES OF THE HEARING OF THE INTERESTED PARTIES .

28 ARTICLE 9 ( 4 ) OF REGULATION NO 99/63 OF THE COMMISSION PROVIDES THAT THE ESSENTIAL CONTENT OF THE STATEMENTS MADE BY EACH PERSON HEARD SHALL BE RECORDED IN MINUTES WHICH SHALL BE READ AND APPROVED BY HIM .

29 THE PURPOSE OF THIS PROVISION IS TO ASSURE THE PERSONS HEARD THAT THE MINUTES CONTAIN A TRUE RECORD OF THE SUBSTANCE OF WHAT THEY HAVE SAID .

30 THE MINUTES OF THE HEARING OF 10 DECEMBER 1968 WERE SENT TO THE APPLICANT ONLY ON 27 JUNE 1969, ABOUT FOUR WEEKS BEFORE THE DECISION WAS ADOPTED .

31 ALTHOUGH THE COMMISSION WAS DILATORY IN SENDING THE MINUTES, THE DELAY OF WHICH THE APPLICANT COMPLAINS COULD ONLY AFFECT THE LEGALITY OF THE DECISION IF THE RECORD OF THE APPLICANT' S STATEMENTS CONTAINED IN THE MINUTES WAS OF DOUBTFUL ACCURACY .

32 SINCE THIS IS NOT THE CASE, THE ABOVEMENTIONED OMISSION IS NOT OF SUCH A NATURE AS TO VITIATE THE CONTESTED DECISION .

33 ACCORDINGLY THIS COMPLAINT IS UNFOUNDED .

THE SUBMISSION RELATING TO NOTIFICATION OF THE DECISION

34 THE APPLICANT ARGUES THAT IN PROVIDING IN ARTICLE 4 OF THE CONTESTED DECISION THAT NOTIFICATION OF THE DECISION MIGHT BE EFFECTED AT THE REGISTERED OFFICES OF THE SUBSIDIARIES OF THE APPLICANT ESTABLISHED IN THE COMMON MARKET, AND IN ACTING IN ACCORDANCE WITH THIS, THE COMMISSION HAS INFRINGED THE TREATY, OR, AT LEAST, ESSENTIAL PROCEDURAL REQUIREMENTS .

35 IT IS ARGUED THAT THE APPLICANT' S GERMAN SUBSIDIARY, TO WHICH THE DECISION WAS NOTIFIED BY THE COMMISSION, HAD NOT BEEN GIVEN ANY AUTHORITY BY THE PARENT COMPANY TO ACCEPT NOTIFICATION AND THAT, UNDER GERMAN LAW, IT WAS UNDER NO DUTY TO BRING THE DOCUMENTS IN QUESTION TO THE ATTENTION OF THE PARENT COMPANY .

36 THE SECOND PARAGRAPH OF ARTICLE 191 OF THE TREATY PROVIDES THAT " DECISIONS SHALL BE NOTIFIED TO THOSE TO WHOM THEY ARE ADDRESSED AND SHALL TAKE EFFECT UPON SUCH NOTIFICATION ".

37 ARTICLE 4 OF THE CONTESTED DECISION CANNOT IN ANY CIRCUMSTANCES ALTER THAT PROVISION .

38 THEREFORE IT CANNOT PREJUDICE THE APPLICANT .

39 IRREGULARITIES IN THE PROCEDURE FOR NOTIFICATION OF A DECISION ARE EXTRANEOUS TO THAT MEASURE AND CANNOT THEREFORE INVALIDATE IT .

40 IN CERTAIN CIRCUMSTANCES SUCH IRREGULARITIES MAY PREVENT THE PERIOD WITHIN WHICH AN APPLICATION MUST BE LODGED FROM STARTING TO RUN .

41 THE LAST PARAGRAPH OF ARTICLE 173 OF THE TREATY PROVIDES THAT THE PERIOD FOR INSTITUTING PROCEEDINGS FOR THE ANNULMENT OF INDIVIDUAL MEASURES OF THE COMMISSION STARTS TO RUN FROM THE DATE OF NOTIFICATION OF THE DECISION TO THE APPLICANT OR, IN THE ABSENCE THEREOF, FROM THE DAY ON WHICH IT CAME TO THE KNOWLEDGE OF THE LATTER .

42 IN THE PRESENT CASE IT IS ESTABLISHED THAT THE APPLICANT HAS HAD FULL KNOWLEDGE OF THE TEXT OF THE DECISION AND THAT IT HAS EXERCISED ITS RIGHT TO INSTITUTE PROCEEDINGS WITHIN THE PRESCRIBED PERIOD .

43 IN THESE CIRCUMSTANCES THE QUESTION OF POSSIBLE IRREGULARITIES CONCERNING NOTIFICATION CEASES TO BE RELEVANT .

44 THEREFORE THE ABOVEMENTIONED SUBMISSIONS ARE INADMISSIBLE FOR WANT OF RELEVANCE .

THE SUBMISSION AS TO THE LIMITATION PERIOD

45 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS CONTRARY TO THE TREATY AND TO THE RULES RELATING TO ITS APPLICATION BECAUSE THE COMMISSION, IN COMMENCING ON 31 MAY 1967 PROCEEDINGS CONCERNING THE PRICE INCREASE OF JANUARY 1964, EXCEEDED ANY REASONABLE LIMITATION PERIOD .

46 THE PROVISIONS GOVERNING THE COMMISSION' S POWER TO IMPOSE FINES FOR INFRINGEMENT OF THE RULES ON COMPETITION DO NOT LAY DOWN ANY PERIOD OF LIMITATION .

47 IN ODER TO FULFIL THEIR FUNCTION, LIMITATION PERIODS MUST BE FIXED IN ADVANCE .

48 THE FIXING OF THEIR DURATION AND THE DETAILED RULES FOR THEIR APPLICATION COME WITHIN THE POWERS OF THE COMMUNITY LEGISLATURE .

49 ALTHOUGH, IN THE ABSENCE OF ANY PROVISIONS ON THIS MATTER, THE FUNDAMENTAL REQUIREMENT OF LEGAL CERTAINTY HAS THE EFFECT OF PREVENTING THE COMMISSION FROM INDEFINITELY DELAYING THE EXERCISE OF ITS POWER TO IMPOSE FINES, ITS CONDUCT IN THE PRESENT CASE CANNOT BE REGARDED AS CONSTITUTING A BAR TO THE EXERCISE OF THAT POWER AS REGARDS PARTICIPATION IN THE CONCERTED PRACTICES OF 1964 AND 1965 .

50 THEREFORE THE SUBMISSION IS UNFOUNDED .

SUBSTANTIVE SUBMISSION AS TO THE EXISTENCE OF CONCERTED PRACTICES

ARGUMENTS OF THE PARTIES

51 THE APPLICANT COMPLAINS THAT THE COMMISSION HAS NOT PROVED THE EXISTENCE OF CONCERTED PRACTICES WITHIN THE MEANING OF ARTICLE 85 ( 1 ) OF THE EEC TREATY IN RELATION TO ANY OF THE THREE INCREASES MENTIONED IN THE CONTESTED DECISION .

52 THAT DECISION STATES THAT PRIMA FACIE EVIDENCE THAT THE INCREASE OF 1964, 1965 AND 1967 TOOK PLACE AS THE RESULT OF CONCERTED ACTION IS TO BE FOUND IN THE FACTS THAT THE RATES INTRODUCED FOR EACH INCREASE BY THE DIFFERENT PRODUCERS IN EACH COUNTRY WERE THE SAME, THAT WITH VERY RARE EXCEPTIONS THE SAME DYESTUFFS WERE INVOLVED, AND THAT THE INCREASES WERE PUT INTO EFFECT OVER ONLY A VERY SHORT PERIOD, IF NOT ACTUALLY ON THE SAME DATE .

53 IT IS CONTENDED THAT THESE INCREASES CANNOT BE EXPLAINED SIMPLY BY THE OLIGOPOLISTIC CHARACTER OF THE STRUCTURE OF THE MARKET .

54 IT IS SAID TO BE UNREALISTIC TO SUPPOSE THAT WITHOUT PREVIOUS CONCERTATION THE PRINCIPAL PRODUCERS SUPPLYING THE COMMON MARKET COULD HAVE INCREASED THEIR PRICES ON SEVERAL OCCASIONS BY IDENTICAL PERCENTAGES AT PRACTICALLY THE SAME MOMENT FOR ONE AND THE SAME IMPORTANT RANGE OF PRODUCTS INCLUDING SPECIALITY PRODUCTS FOR WHICH THERE ARE FEW, IF ANY, SUBSTITUTES, AND THAT THEY SHOULD HAVE DONE SO IN A NUMBER OF COUNTRIES WHERE CONDITIONS ON THE DYESTUFFS MARKET ARE DIFFERENT .

55 THE COMMISSION HAS ARGUED BEFORE THE COURT THAT THE INTERESTED PARTIES NEED NOT NECESSARILY HAVE DRAWN UP A COMMON PLAN WITH A VIEW TO ADOPTING A CERTAIN COURSE OF BEHAVIOUR FOR IT TO BE SAID THAT THERE HAS BEEN CONCERTATION .

56 IT IS ARGUED THAT IT IS ENOUGH THAT THEY SHOULD PREVIOUSLY HAVE INFORMED EACH OTHER OF THE ATTITUDE WHICH THEY INTENDED TO ADOPT SO THAT EACH COULD REGULATE HIS CONDUCT SAFE IN THE KNOWLEDGE THAT HIS COMPETITORS WOULD ACT IN THE SAME WAY .

57 THE APPLICANT ARGUES THAT THE CONTESTED DECISION IS BASED ON AN INADEQUATE ANALYSIS OF THE MARKET IN THE PRODUCTS IN QUESTION AND ON AN ERRONEOUS UNDERSTANDING OF THE CONCEPT OF A CONCERTED PRACTICE, WHICH IS WRONGLY IDENTIFIED BY THE DECISION WITH THE CONSCIOUS PARALLELISM OF MEMBERS OF AN OLIGOPOLY, WHEREAS SUCH CONDUCT IS DUE TO INDEPENDENT DECISIONS ADOPTED BY EACH UNDERTAKING, DETERMINED BY OBJECTIVE BUSINESS NEEDS, AND IN PARTICULAR BY THE NEED TO INCREASE THE UNSATISFACTORILY LOW RATE OF PROFIT ON THE PRODUCTION OF DYESTUFFS .

58 IT IS ARGUED THAT IN FACT THE PRICES OF THE PRODUCTS IN QUESTION DISPLAYED A CONSTANT TENDENCY TO FALL BECAUSE OF LIVELY COMPETITION BETWEEN PRODUCERS WHICH IS TYPICAL OF THE MARKET IN THOSE PRODUCTS, NOT ONLY AS REGARDS THE QUALITY OF THE PRODUCTS AND TECHNICAL ASSISTANCE TO CUSTOMERS, BUT ALSO AS REGARDS PRICES, PARTICULARLY THE LARGE REDUCTIONS GRANTED INDIVIDUALLY TO THE PRINCIPAL PURCHASERS .

59 THE FACT THAT THE RATES OF INCREASE WERE IDENTICAL WAS THE RESULT, IT IS SAID, OF THE EXISTENCE OF THE " PRICE-LEADERSHIP " OF ONE UNDERTAKING .

60 IT IS ALSO ARGUED THAT THE LARGE NUMBER OF DYESTUFFS PRODUCED BY EACH UNDERTAKING MAKES IT IMPOSSIBLE IN PRACTICE TO RAISE PRICES PRODUCT BY PRODUCT .

61 A FURTHER ARGUMENT IS THAT DIFFERENT PRICE INCREASES FOR INTERCHANGEABLE PRODUCTS EITHER COULD NOT PRODUCE ECONOMICALLY SIGNIFICANT RESULTS BECAUSE OF THE LIMITED LEVEL OF STOCKS AND OF THE TIME NECESSARY FOR ADAPTING PLANT TO APPRECIABLY INCREASED DEMAND, OR WOULD LEAD TO A RUINOUS PRICE WAR .

62 FINALLY, IT IS SAID THAT DYESTUFFS FOR WHICH THERE ARE NO SUBSTITUTES FORM ONLY A SMALL PART OF THE PRODUCERS' TURNOVER .

63 TAKING THESE MARKET CHARACTERISTICS INTO ACCOUNT AND IN VIEW OF THE WIDESPREAD AND CONTINUOUS EROSION OF PRICES, EACH MEMBER OF THE OLIGOPOLY WHO DECIDED TO INCREASE HIS PRICES COULD, IT IS ARGUED, REASONABLY EXPECT TO BE FOLLOWED BY HIS COMPETITORS, WHO HAD THE SAME PROBLEMS REGARDING PROFITS .

THE CONCEPT OF A CONCERTED PRACTICE

64 ARTICLE 85 DRAWS A DISTINCTION BETWEEN THE CONCEPT OF " CONCERTED PRACTICES " AND THAT OF " AGREEMENTS BETWEEN UNDERTAKINGS " OR OF " DECISIONS BY ASSOCIATIONS OF UNDERTAKINGS "; THE OBJECT IS TO BRING WITHIN THE PROHIBITION OF THAT ARTICLE A FORM OF COORDINATION BETWEEN UNDERTAKINGS WHICH, WITHOUT HAVING REACHED THE STAGE WHERE AN AGREEMENT PROPERLY SO-CALLED HAS BEEN CONCLUDED, KNOWINGLY SUBSTITUTES PRACTICAL COOPERATION BETWEEN THEM FOR THE RISKS OF COMPETITION .

65 BY ITS VERY NATURE, THEN, A CONCERTED PRACTICE DOES NOT HAVE ALL THE ELEMENTS OF A CONTRACT BUT MAY INTER ALIA ARISE OUT OF COORDINATION WHICH BECOMES APPARENT FROM THE BEHAVIOUR OF THE PARTICIPANTS .

66 ALTHOUGH PARALLEL BEHAVIOUR MAY NOT BY ITSELF BE IDENTIFIED WITH A CONCERTED PRACTICE, IT MAY HOWEVER AMOUNT TO STRONG EVIDENCE OF SUCH A PRACTICE IF IT LEADS TO CONDITIONS OF COMPETITION WHICH DO NOT CORRESPOND TO THE NORMAL CONDITIONS OF THE MARKET, HAVING REGARD TO THE NATURE OF THE PRODUCTS, THE SIZE AND NUMBER OF THE UNDERTAKINGS, AND THE VOLUME OF THE SAID MARKET .

67 THIS IS ESPECIALLY THE CASE IF THE PARALLEL CONDUCT IS SUCH AS TO ENABLE THOSE CONCERNED TO ATTEMPT TO STABILIZE PRICES AT A LEVEL DIFFERENT FROM THAT TO WHICH COMPETITION WOULD HAVE LED, AND TO CONSOLIDATE ESTABLISHED POSITIONS TO THE DETRIMENT OF EFFECTIVE FREEDOM OF MOVEMENT OF THE PRODUCTS IN THE COMMON MARKET AND OF THE FREEDOM OF CONSUMERS TO CHOOSE THEIR SUPPLIERS .

68 THEREFORE THE QUESTION WHETHER THERE WAS A CONCERTED ACTION IN THIS CASE CAN ONLY BE CORRECTLY DETERMINED IF THE EVIDENCE UPON WHICH THE CONTESTED DECISION IS BASED IS CONSIDERED, NOT IN ISOLATION, BUT AS A WHOLE, ACCOUNT BEING TAKEN OF THE SPECIFIC FEATURES OF THE MARKET IN THE PRODUCTS IN QUESTION .

THE CHARACTERISTIC FEATURES OF THE MARKET IN DYESTUFFS

69 THE MARKET IN DYESTUFFS IS CHARACTERIZED BY THE FACT THAT 80 PER CENT OF THE MARKET IS SUPPLIED BY ABOUT TEN PRODUCERS, VERY LARGE ONES IN THE MAIN, WHICH OFTEN MANUFACTURE THESE PRODUCTS TOGETHER WITH OTHER CHEMICAL PRODUCTS OR PHARMACEUTICAL SPECIALITIES .

70 THE PRODUCTION PATTERNS AND THEREFORE THE COST STRUCTURES OF THESE MANUFACTURERS ARE VERY DIFFERENT AND THIS MAKES IT DIFFICULT TO ASCERTAIN COMPETING MANUFACTURERS' COSTS .

71 THE TOTAL NUMBER OF DYESTUFFS IS VERY HIGH, EACH UNDERTAKING PRODUCING MORE THAN A THOUSAND .

72 THE AVERAGE EXTENT TO WHICH THESE PRODUCTS CAN BE REPLACED BY OTHERS IS CONSIDERED RELATIVELY GOOD FOR STANDARD DYES, BUT IT CAN BE VERY LOW OR EVEN NON-EXISTENT FOR SPECIALITY DYES .

73 AS REGARDS SPECIALITY PRODUCTS, THE MARKET TENDS IN CERTAIN CASES TOWARDS AN OLIGOPOLISTIC SITUATION .

74 SINCE THE PRICE OF DYESTUFFS FORMS A RELATIVELY SMALL PART OF THE PRICE OF THE FINAL PRODUCT OF THE USER UNDERTAKING, THERE IS LITTLE ELASTICITY OF DEMAND FOR DYESTUFFS ON THE MARKET AS A WHOLE AND THIS ENCOURAGES PRICE INCREASES IN THE SHORT TERM .

75 ANOTHER FACTOR IS THAT THE TOTAL DEMAND FOR DYESTUFFS IS CONSTANTLY INCREASING, AND THIS TENDS TO INDUCE PRODUCERS TO ADOPT A POLICY ENABLING THEM TO TAKE ADVANTAGE OF THIS INCREASE .

76 IN THE TERRITORY OF THE COMMUNITY, THE MARKET IN DYESTUFFS IN FACT CONSISTS OF FIVE SEPARATE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS WHICH CANNOT BE EXPLAINED BY DIFFERENCES IN COSTS AND CHARGES AFFECTING PRODUCERS IN THOSE COUNTRIES .

77 THUS THE ESTABLISHMENT OF THE COMMON MARKET WOULD NOT APPEAR TO HAVE HAD ANY EFFECT ON THIS SITUATION, SINCE THE DIFFERENCES BETWEEN NATIONAL PRICE LEVELS HAVE SCARCELY DECREASED .

78 ON THE CONTRARY, IT IS CLEAR THAT EACH OF THE NATIONAL MARKETS HAS THE CHARACTERISTICS OF AN OLIGOPOLY AND THAT IN MOST OF THEM PRICE LEVELS ARE ESTABLISHED UNDER THE INFLUENCE OF A " PRICELEADER ", WHO IN SOME CASES IS THE LARGEST PRODUCER IN THE COUNTRY CONCERNED, AND IN OTHER CASES IS A PRODUCER IN ANOTHER MEMBER STATE OR A THIRD STATE, ACTING THROUGH A SUBSIDIARY .

79 ACCORDING TO THE EXPERTS THIS DIVIDING-UP OF THE MARKET IS DUE TO THE NEED TO SUPPLY LOCAL TECHNICAL ASSISTANCE TO USERS AND TO ENSURE IMMEDIATE DELIVERY, GENERALLY IN SMALL QUANTITIES, SINCE, APART FROM EXCEPTIONAL CASES, PRODUCERS SUPPLY THEIR SUBSIDIARIES ESTABLISHED IN THE DIFFERENT MEMBER STATES AND MAINTAIN A NETWORK OF AGENTS AND DEPOTS TO ENSURE THAT USER UNDERTAKINGS RECEIVE SPECIFIC ASSISTANCE AND SUPPLIES .

80 IT APPEARS FROM THE DATA PRODUCED DURING THE COURSE OF THE PROCEEDINGS THAT EVEN IN CASES WHERE A PRODUCER ESTABLISHES DIRECT CONTACT WITH AN IMPORTANT USER IN ANOTHER MEMBER STATE, PRICES ARE USUALLY FIXED IN RELATION TO THE PLACE WHERE THE USER IS ESTABLISHED AND TEND TO FOLLOW THE LEVEL OF PRICES ON THE NATIONAL MARKET .

81 ALTHOUGH THE FOREMOST REASON WHY PRODUCERS HAVE ACTED IN THIS WAY IS IN ORDER TO ADAPT THEMSELVES TO THE SPECIAL FEATURES OF THE MARKET IN DYESTUFFS AND TO THE NEEDS OF THEIR CUSTOMERS, THE FACT REMAINS THAT THE DIVIDING-UP OF THE MARKET WHICH RESULTS TENDS, BY FRAGMENTING THE EFFECTS OF COMPETITION, TO ISOLATE USERS IN THEIR NATIONAL MARKET, AND TO PREVENT A GENERAL CONFRONTATION BETWEEN PRODUCERS THROUGHOUT THE COMMON MARKET .

82 IT IS IN THIS CONTEXT, WHICH IS PECULIAR TO WAY IN WHICH THE DYESTUFFS MARKET WORKS, THAT THE FACTS OF THE CASE SHOULD BE CONSIDERED .

THE INCREASES OF 1964, 1965 AND 1967

83 THE INCREASES OF 1964, 1965 AND 1967 COVERED BY THE CONTESTED DECISION ARE INTERCONNECTED .

84 THE INCREASE OF 15 PER CENT IN THE PRICES OF MOST ANILINE DYES IN GERMANY ON 1 JANUARY 1965 WAS IN REALITY NOTHING MORE THAN THE EXTENSION TO ANOTHER NATIONAL MARKET OF THE INCREASE APPLIED IN JANUARY 1964 IN ITALY, THE NETHERLANDS, BELGIUM AND LUXEMBOURG .

85 THE INCREASE IN THE PRICES OF CERTAIN DYES AND PIGMENTS INTRODUCED ON 1 JANUARY 1965 IN ALL THE MEMBER STATES, EXCEPT FRANCE, APPLIED TO ALL THE PRODUCTS WHICH HAD BEEN EXCLUDED FROM THE FIRST INCREASE .

86 THE REASON WHY THE PRICE INCREASE OF 8 PER CENT INTRODUCED IN THE AUTUMN OF 1967 WAS RAISED TO 12 PER CENT FOR FRANCE WAS THAT THERE WAS A WISH TO MAKE UP FOR THE INCREASES OF 1964 AND 1965 IN WHICH THAT MARKET HAD NOT TAKEN PART BECAUSE OF THE PRICE CONTROL SYSTEM .

87 THEREFORE THE THREE INCREASES CANNOT BE ISOLATED ONE FROM ANOTHER, EVEN THOUGH THEY DID NOT TAKE PLACE UNDER IDENTICAL CONDITIONS .

88 IN 1964 ALL THE UNDERTAKINGS IN QUESTION ANNOUNCED THEIR INCREASES AND IMMEDIATELY PUT THEM INTO EFFECT, THE INITIATIVE COMING FROM CIBA-ITALY WHICH, ON 7 JANUARY 1964, FOLLOWING INSTRUCTIONS FROM CIBA-SWITZERLAND, ANNOUNCED AND IMMEDIATELY INTRODUCED AN INCREASE OF 15 PER CENT . THIS INITIATIVE WAS FOLLOWED BY THE OTHER PRODUCERS ON THE ITALIAN MARKET WITHIN TWO OR THREE DAYS .

89 ON 9 JANUARY ICI HOLLAND TOOK THE INITIATIVE IN INTRODUCING THE SAME INCREASE IN THE NETHERLANDS, WHILST ON THE SAME DAY BAYER TOOK THE SAME INITIATIVE ON THE BELGO-LUXEMBOURG MARKET .

90 WITH MINOR DIFFERENCES, PARTICULARLY BETWEEN THE PRICE INCREASES BY THE GERMAN UNDERTAKINGS ON THE ONE HAND AND THE SWISS AND UNITED KINGDOM UNDERTAKINGS ON THE OTHER, THESE INCREASES CONCERNED THE SAME RANGE OF PRODUCTS FOR THE VARIOUS PRODUCERS AND MARKETS, NAMELY, MOST ANILINE DYES OTHER THAN PIGMENTS, FOOD COLOURINGS AND COSMETICS .

91 AS REGARDS THE INCREASE OF 1965 CERTAIN UNDERTAKINGS ANNOUNCED IN ADVANCE PRICE INCREASES AMOUNTING, FOR THE GERMAN MARKET, TO AN INCREASE OF 15 PER CENT FOR PRODUCTS WHOSE PRICES HAD ALREADY BEEN SIMILARLY INCREASED ON THE OTHER MARKETS, AND TO 10 PER CENT FOR PRODUCTS WHOSE PRICES HAD NOT YET BEEN INCREASED . THESE ANNOUNCEMENTS WERE SPREAD OVER THE PERIOD BETWEEN 14 OCTOBER AND 28 DECEMBER 1964 .

92 THE FIRST ANNOUNCEMENT WAS MADE BY BASF, ON 14 OCTOBER 1964, FOLLOWED BY AN ANNOUNCEMENT BY BAYER ON 30 OCTOBER AND BY CASTELLA ON 5 NOVEMBER .

93 THESE INCREASES WERE SIMULTANEOUSLY APPLIED ON 1 JANUARY 1965 ON ALL THE MARKETS EXCEPT FOR THE FRENCH MARKET BECAUSE OF THE PRICE FREEZE IN THAT STATE, AND THE ITALIAN MARKET WHERE, AS A RESULT OF THE REFUSAL BY THE PRINCIPAL ITALIAN PRODUCER, ACNA, TO INCREASE ITS PRICES ON THE SAID MARKET, THE OTHER PRODUCERS ALSO DECIDED NOT TO INCREASE THEIRS .

94 ACNA ALSO REFRAINED FROM PUTTING ITS PRICES UP BY 10 PER CENT ON THE GERMAN MARKET .

95 OTHERWISE THE INCREASE WAS GENERAL, WAS SIMULTANEOUSLY INTRODUCED BY ALL THE PRODUCERS MENTIONED IN THE CONTESTED DECISION, AND WAS APPLIED WITHOUT ANY DIFFERENCES CONCERNING THE RANGE OF PRODUCTS .

96 AS REGARDS THE INCREASE OF 1967, DURING A MEETING HELD AT BASEL ON 19 AUGUST 1967, WHICH WAS ATTENDED BY ALL THE PRODUCERS MENTIONED IN THE CONTESTED DECISION EXCEPT ACNA, THE GEIGY UNDERTAKING ANNOUNCED ITS INTENTION TO INCREASE ITS SELLING PRICES BY 8 PER CENT WITH EFFECT FROM 16 OCTOBER 1967 .

97 ON THAT SAME OCCASION THE REPRESENTATIVES OF BAYER AND FRANCOLOR STATED THAT THEIR UNDERTAKINGS WERE ALSO CONSIDERING AN INCREASE .

98 FROM MID-SEPTEMBER ALL THE UNDERTAKINGS MENTIONED IN THE CONTESTED DECISION ANNOUNCED A PRICE INCREASE OF 8 PER CENT, RAISED TO 12 PER CENT FOR FRANCE, TO TAKE EFFECT ON 16 OCTOBER IN ALL THE COUNTRIES EXCEPT ITALY, WHERE ACNA AGAIN REFUSED TO INCREASE ITS PRICES, ALTHOUGH IT WAS WILLING TO FOLLOW THE MOVEMENT IN PRICES ON TWO OTHER MARKETS, ALBEIT ON DATES OTHER THAN 16 OCTOBER .

99 VIEWED AS A WHOLE, THE THREE CONSECUTIVE INCREASES REVEAL PROGRESSIVE COOPERATION BETWEEN THE UNDERTAKINGS CONCERNED .

100 IN FACT, AFTER THE EXPERIENCE OF 1964, WHEN THE ANNOUNCEMENT OF THE INCREASES AND THEIR APPLICATION COINCIDED, ALTHOUGH WITH MINOR DIFFERENCES AS REGARDS THE RANGE OF PRODUCTS AFFECTED, THE INCREASES OF 1965 AND 1967 INDICATE A DIFFERENT MODE OF OPERATION .

HERE, THE UNDERTAKINGS TAKING THE INITIATIVE, BASF AND GEIGY RESPECTIVELY, ANNOUNCED THEIR INTENTIONS OF MAKING AN INCREASE SOME TIME IN ADVANCE, WHICH ALLOWED THE UNDERTAKINGS TO OBSERVE EACH OTHER' S REACTIONS ON THE DIFFERENT MARKETS, AND TO ADAPT THEMSELVES ACCORDINGLY .

101 BY MEANS OF THESE ADVANCE ANNOUNCEMENTS THE VARIOUS UNDERTAKINGS ELIMINATED ALL UNCERTAINTY BETWEEN THEM AS TO THEIR FUTURE CONDUCT AND, IN DOING SO, ALSO ELIMINATED A LARGE PART OF THE RISK USUALLY INHERENT IN ANY INDEPENDENT CHANGE OF CONDUCT ON ONE OR SEVERAL MARKETS .

102 THIS WAS ALL THE MORE THE CASE SINCE THESE ANNOUNCEMENTS, WHICH LED TO THE FIXING OF GENERAL AND EQUAL INCREASES IN PRICES FOR THE MARKETS IN DYESTUFFS, RENDERED THE MARKET TRANSPARENT AS REGARD THE PERCENTAGE RATES OF INCREASE .

103 THEREFORE, BY THE WAY IN WHICH THEY ACTED, THE UNDERTAKINGS IN QUESTION TEMPORARILY ELIMINATED WITH RESPECT TO PRICES SOME OF THE PRECONDITIONS FOR COMPETITION ON THE MARKET WHICH STOOD IN THE WAY OF THE ACHIEVEMENT OF PARALLEL UNIFORMITY OF CONDUCT .

104 THE FACT THAT THIS CONDUCT WAS NOT SPONTANEOUS IS CORROBORATED BY AN EXAMINATION OF OTHER ASPECTS OF THE MARKET .

105 IN FACT, FROM THE NUMBER OF PRODUCERS CONCERNED IT IS NOT POSSIBLE TO SAY THAT THE EUROPEAN MARKET IN DYESTUFFS IS, IN THE STRICT SENSE, AN OLIGOPOLY IN WHICH PRICE COMPETITION COULD NO LONGER PLAY A SUBSTANTIAL ROLE .

106 THESE PRODUCERS ARE SUFFICIENTLY POWERFUL AND NUMEROUS TO CREATE A CONSIDERABLE RISK THAT IN TIMES OF RISING PRICES SOME OF THEM MIGHT NOT FOLLOW THE GENERAL MOVEMENT BUT MIGHT INSTEAD TRY TO INCREASE THEIR SHARE OF THE MARKET BY BEHAVING IN AN INDIVIDUAL WAY .

107 FURTHERMORE, THE DIVIDING-UP OF THE COMMON MARKET INTO FIVE NATIONAL MARKETS WITH DIFFERENT PRICE LEVELS AND STRUCTURES MAKES IT IMPROBABLE THAT A SPONTANEOUS AND EQUAL PRICE INCREASE WOULD OCCUR ON ALL THE NATIONAL MARKETS .

108 ALTHOUGH A GENERAL, SPONTANEOUS INCREASE ON EACH OF THE NATIONAL MARKETS IS JUST CONCEIVABLE, THESE INCREASES MIGHT BE EXPECTED TO DIFFER ACCORDING TO THE PARTICULAR CHARACTERISTICS OF THE DIFFERENT NATIONAL MARKETS .

109 THEREFORE, ALTHOUGH PARALLEL CONDUCT IN RESPECT OF PRICES MAY WELL HAVE BEEN AN ATTRACTIVE AND RISK-FREE OBJECTIVE FOR THE UNDERTAKINGS CONCERNED, IT IS HARDLY CONCEIVABLE THAT THE SAME ACTION COULD BE TAKEN SPONTANEOUSLY AT THE SAME TIME, ON THE SAME NATIONAL MARKETS AND FOR THE SAME RANGE OF PRODUCTS .

110 NOR IS IT ANY MORE PLAUSIBLE THAT THE INCREASES OF JANUARY 1964, INTRODUCED ON THE ITALIAN MARKET AND COPIED ON THE NETHERLANDS AND BELGO-LUXEMBOURG MARKETS WHICH HAVE LITTLE IN COMMON WITH EACH OTHER EITHER AS REGARDS THE LEVEL OF PRICES OR THE PATTERN OF COMPETITION, COULD HAVE BEEN BROUGHT INTO EFFECT WITHIN A PERIOD OF TWO OR THREE DAYS WITHOUT PRIOR CONCERTATION .

111 AS REGARDS THE INCREASES OF 1965 AND 1967 CONCERTATION TOOK PLACE OPENLY, SINCE ALL THE ANNOUNCEMENTS OF THE INTENTION TO INCREASE PRICES WITH EFFECT FROM A CERTAIN DATE AND FOR A CERTAIN RANGE OF PRODUCTS MADE IT POSSIBLE FOR PRODUCERS TO DECIDE ON THEIR CONDUCT REGARDING THE SPECIAL CASES OF FRANCE AND ITALY .

112 IN PROCEEDING IN THIS WAY, THE UNDERTAKINGS MUTUALLY ELIMINATED IN ADVANCE ANY UNCERTAINTIES CONCERNING THEIR RECIPROCAL BEHAVIOUR ON THE DIFFERENT MARKETS AND THEREBY ALSO ELIMINATED A LARGE PART OF THE RISK INHERENT IN ANY INDEPENDENT CHANGE OF CONDUCT ON THOSE MARKETS .

113 THE GENERAL AND UNIFORM INCREASE ON THOSE DIFFERENT MARKETS CAN ONLY BE EXPLAINED BY A COMMON INTENTION ON THE PART OF THOSE UNDERTAKINGS, FIRST, TO ADJUST THE LEVEL OF PRICES AND THE SITUATION RESULTING FROM COMPETITION IN THE FORM OF DISCOUNTS, AND SECONDLY, TO AVOID THE RISK, WHICH IS INHERENT IN ANY PRICE INCREASE, OF CHANGING THE CONDITIONS OF COMPETITION .

114 THE FACT THAT THE PRICE INCREASES ANNOUNCED WERE NOT INTRODUCED IN ITALY AND THAT ACNA ONLY PARTIALLY ADOPTED THE 1967 INCREASE IN OTHER MARKETS, FAR FROM UNDERMINING THIS CONCLUSION, TENDS TO CONFIRM IT .

115 THE FUNCTION OF PRICE COMPETITION IS TO KEEP PRICES DOWN TO THE LOWEST POSSIBLE LEVEL AND TO ENCOURAGE THE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES, THEREBY PERMITTING THE MOST EFFICIENT POSSIBLE DISTRIBUTION OF ACTIVITIES IN THE MATTER OF PRODUCTIVITY AND THE CAPACITY OF UNDERTAKINGS TO ADAPT THEMSELVES TO CHANGE .

116 DIFFERENCES IN RATES ENCOURAGE THE PURSUIT OF ONE OF THE BASIC OBJECTIVES OF THE TREATY, NAMELY THE INTERPENETRATION OF NATIONAL MARKETS AND, AS A RESULT, DIRECT ACCESS BY CONSUMERS TO THE SOURCES OF PRODUCTION OF THE WHOLE COMMUNITY .

117 BY REASON OF THE LIMITED ELASTICITY OF THE MARKET IN DYESTUFFS, RESULTING FROM FACTORS SUCH AS THE LACK OF TRANSPARENCY WITH REGARD TO PRICES, THE INTERDEPENDENCE OF THE DIFFERENT DYESTUFFS OF EACH PRODUCER FOR THE PURPOSE OF BUILDING UP THE RANGE OF PRODUCTS USED BY EACH CONSUMER, THE RELATIVELY LOW PROPORTION OF THE COST OF THE FINAL PRODUCT OF THE USER UNDERTAKING REPRESENTED BY THE PRICES OF THESE PRODUCTS, THE FACT THAT IT IS USEFUL FOR USERS TO HAVE A LOCAL SUPPLIER AND THE INFLUENCE OF TRANSPORT COSTS, THE NEED TO AVOID ANY ACTION WHICH MIGHT ARTIFICIALLY REDUCE THE OPPORTUNITIES FOR INTERPENETRATION OF THE VARIOUS NATIONAL MARKETS AT THE CONSUMER LEVEL BECOMES PARTICULARLY IMPORTANT ON THE MARKET IN THE PRODUCTS IN QUESTION .

118 ALTHOUGH EVERY PRODUCER IS FREE TO CHANGE HIS PRICES, TAKING INTO ACCOUNT IN SO DOING THE PRESENT OR FORESEEABLE CONDUCT OF HIS COMPETITORS, NEVERTHELESS IT IS CONTRARY TO THE RULES ON COMPETITION CONTAINED IN THE TREATY FOR A PRODUCER TO COOPERATE WITH HIS COMPETITORS, IN ANY WAY WHATSOEVER, IN ORDER TO DETERMINE A COORDINATED COURSE OF ACTION RELATING TO A PRICE INCREASE AND TO ENSURE ITS SUCCESS BY PRIOR ELIMINATION OF ALL UNCERTAINTY AS TO EACH OTHER' S CONDUCT REGARDING THE ESSENTIAL ELEMENTS OF THAT ACTION, SUCH AS THE AMOUNT, SUBJECT-MATTER, DATE AND PLACE OF THE INCREASES .

119 IN THESE CIRCUMSTANCES AND TAKING INTO ACCOUNT THE NATURE OF THE MARKET IN THE PRODUCTS IN QUESTION, THE CONDUCT OF THE APPLICANT, IN CONJUNCTION WITH OTHER UNDERTAKINGS AGAINST WHICH PROCEEDINGS HAVE BEEN TAKEN, WAS DESIGNED TO REPLACE THE RISKS OF COMPETITION AND THE HAZARDS OF COMPETITORS' SPONTANEOUS REACTIONS BY COOPERATION CONSTITUTING A CONCERTED PRACTICE PROHIBITED BY ARTICLE 85 ( 1 ) OF THE TREATY .

THE EFFECT OF THE CONCERTED PRACTICE ON TRADE BETWEEN MEMBER STATES

120 THE APPLICANT ARGUES THAT THE UNIFORM PRICE INCREASES WERE NOT CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES BECAUSE NOTWITHSTANDING THE NOTICEABLE DIFFERENCES EXISTING BETWEEN PRICES CHARGED IN THE DIFFERENT STATES CONSUMERS HAVE ALWAYS PREFERRED TO MAKE THEIR PURCHASES OF DYESTUFFS IN THEIR OWN COUNTRY .

121 HOWEVER, IT APPEARS FROM WHAT HAS ALREADY BEEN SAID THAT THE CONCERTED PRACTICES, BY SEEKING TO KEEP THE MARKET IN A FRAGMENTED STATE, WERE LIABLE TO AFFECT THE CIRCUMSTANCES IN WHICH TRADE IN THE PRODUCTS IN QUESTION TAKES PLACE BETWEEN THE MEMBER STATES .

122 THE PARTIES WHO PUT THESE PRACTICES INTO EFFECT SOUGHT, ON THE OCCASION OF EACH PRICE INCREASE, TO REDUCE TO A MINIMUM THE RISKS OF CHANGING THE CONDITIONS OF COMPETITION .

123 THE FACT THAT THE INCREASES WERE UNIFORM AND SIMULTANEOUS HAS IN PARTICULAR SERVED TO MAINTAIN THE STATUS QUO, ENSURING THAT THE UNDERTAKINGS WOULD NOT LOSE CUSTOM, AND HAS THUS HELPED TO KEEP THE TRADITIONAL NATIONAL MARKETS IN THOSE GOODS " CEMENTED " TO THE DETRIMENT OF ANY REAL FREEDOM OF MOVEMENT OF THE PRODUCTS IN QUESTION IN THE COMMON MARKET .

124 THEREFORE THIS SUBMISSION IS UNFOUNDED .

THE JURISDICTION OF THE COMMISSION

125 THE APPLICANT, WHOSE REGISTERED OFFICE IS OUTSIDE THE COMMUNITY, ARGUES THAT THE COMMISSION IS NOT EMPOWERED TO IMPOSE FINES ON IT BY REASON MERELY OF THE EFFECTS PRODUCED IN THE COMMON MARKET BY ACTIONS WHICH IT IS ALLEGED TO HAVE TAKEN OUTSIDE THE COMMUNITY .

126 SINCE A CONCERTED PRACTICE IS INVOLVED, IT IS FIRST NECESSARY TO ASCERTAIN WHETHER THE CONDUCT OF THE APPLICANT HAS HAD EFFECTS WITHIN THE COMMON MARKET .

127 IT APPEARS FROM WHAT HAS ALREADY BEEN SAID THAT THE INCREASES AT ISSUE WERE PUT INTO EFFECT WITHIN THE COMMON MARKET AND CONCERNED COMPETITION BETWEEN PRODUCERS OPERATING WITHIN IT .

128 THEREFORE THE ACTIONS FOR WHICH THE FINE AT ISSUE HAS BEEN IMPOSED CONSTITUTE PRACTICES CARRIED ON DIRECTLY WITHIN THE COMMON MARKET .

129 IT FOLLOWS FROM WHAT HAS BEEN SAID IN CONSIDERING THE SUBMISSION RELATING TO THE EXISTENCE OF CONCERTED PRACTICES, THAT THE APPLICANT COMPANY DECIDED ON INCREASES IN THE SELLING PRICES OF ITS PRODUCTS TO USERS IN THE COMMON MARKET, AND THAT THESE INCREASES WERE OF A UNIFORM NATURE IN LINE WITH INCREASES DECIDED UPON BY THE OTHER PRODUCERS INVOLVED .

130 BY MAKING USE OF ITS POWER TO CONTROL ITS SUBSIDIARIES ESTABLISHED IN THE COMMUNITY, THE APPLICANT WAS ABLE TO ENSURE THAT ITS DECISION WAS IMPLEMENTED ON THAT MARKET .

131 THE APPLICANT OBJECTS THAT THIS CONDUCT IS TO BE IMPUTED TO ITS SUBSIDIARIES AND NOT TO ITSELF .

132 THE FACT THAT A SUBSIDIARY HAS SEPARATE LEGAL PERSONALITY IS NOT SUFFICIENT TO EXCLUDE THE POSSIBILITY OF IMPUTING ITS CONDUCT TO THE PARENT COMPANY .

133 SUCH MAY BE THE CASE IN PARTICULAR WHERE THE SUBSIDIARY, ALTHOUGH HAVING SEPARATE LEGAL PERSONALITY, 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 .

134 WHERE A SUBSIDIARY DOES NOT ENJOY REAL AUTONOMY IN DETERMINING ITS COURSE OF ACTION IN THE MARKET, THE PROHIBITIONS SET OUT IN ARTICLE 85 ( 1 ) MAY BE CONSIDERED INAPPLICABLE IN THE RELATIONSHIP BETWEEN IT AND THE PARENT COMPANY WITH WHICH IT FORMS ONE ECONOMIC UNIT .

135 IN VIEW OF THE UNITY OF THE GROUP THUS FORMED, THE ACTIONS OF THE SUBSIDIARIES MAY IN CERTAIN CIRCUMSTANCES BE ATTRIBUTED TO THE PARENT COMPANY .

136 IT IS WELL-KNOWN THAT AT THE TIME THE APPLICANT HELD ALL OR AT ANY RATE THE MAJORITY OF THE SHARES IN THOSE SUBSIDIARIES .

137 THE APPLICANT WAS ABLE TO EXERCISE DECISIVE INFLUENCE OVER THE POLICY OF THE SUBSIDIARIES AS REGARDS SELLING PRICES IN THE COMMON MARKET AND IN FACT USED THIS POWER UPON THE OCCASION OF THE THREE PRICE INCREASES IN QUESTION .

138 IN EFFECT THE TELEX MESSAGES RELATING TO THE 1964 INCREASE, WHICH THE APPLICANT SENT TO ITS SUBSIDIARIES IN THE COMMON MARKET, GAVE THE ADDRESSEES ORDERS AS TO THE PRICES WHICH THEY WERE TO CHARGE AND THE OTHER CONDITIONS OF SALE WHICH THEY WERE TO APPLY IN DEALING WITH THEIR CUSTOMERS .

139 IN THE ABSENCE OF EVIDENCE TO THE CONTRARY, IT MUST BE ASSUMED THAT ON THE OCCASION OF THE INCREASES OF 1965 AND 1967 THE APPLICANT ACTED IN A SIMILAR FASHION IN ITS RELATIONS WITH ITS SUBSIDIARIES ESTABLISHED IN THE COMMON MARKET .

140 IN THE CIRCUMSTANCES THE FORMAL SEPARATION BETWEEN THESE COMPANIES, RESULTING FROM THEIR SEPARATE LEGAL PERSONALITY, CANNOT OUTWEIGH THE UNITY OF THEIR CONDUCT ON THE MARKET FOR THE PURPOSES OF APPLYING THE RULES ON COMPETITION .

141 IT WAS IN FACT THE APPLICANT UNDERTAKING WHICH BROUGHT THE CONCERTED PRACTICE INTO BEING WITHIN THE COMMON MARKET .

142 THE SUBMISSION AS TO LACK OF JURISDICTION RAISED BY THE APPLICANT MUST THEREFORE BE DECLARED TO BE UNFOUNDED .

143 THE APPLICANT COMPLAINS THAT INSUFFICIENT REASONS WERE GIVEN IN THE DECISION, IN THAT IT DOES NOT MENTION THE RELATIONSHIP EXISTING BETWEEN THE PARENT COMPANY AND ITS SUBSIDIARIES BY WAY OF JUSTIFICATION OF THE COMMISSION' S JURISDICTION .

144 THE FACT THAT NO STATEMENT IS INCLUDED SHOWING WHY THE COMMISSION HAS JURISDICTION DOES NOT STAND IN THE WAY OF A REVIEW OF THE LEGALITY OF THE DECISION .

145 FURTHERMORE, THE COMMISSION IS NOT BOUND TO INCLUDE IN ITS DECISIONS ALL THE ARGUMENTS WHICH IT MIGHT LATER USE IN RESPONSE TO SUBMISSIONS OF ILLEGALITY WHICH MIGHT BE RAISED AGAINST ITS MEASURES .

146 THEREFORE THIS OBJECTION IS UNFOUNDED .

THE FINE

147 IN VIEW OF THE FREQUENCY AND EXTENT OF THE APPLICANT' S PARTICIPATION IN THE PROHIBITED PRACTICES, AND TAKING INTO ACCOUNT THE CONSEQUENCES THEREOF IN RELATION TO THE CREATION OF A COMMON MARKET IN THE PRODUCTS IN QUESTION, THE AMOUNT OF THE FINE IS APPROPRIATE TO THE GRAVITY OF THE INFRINGEMENT OF THE COMMUNITY RULES ON COMPETITION .

Decision on costs

148 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

149 THE APPLICANT HAS FAILED IN ITS SUBMISSIONS .

150 THEREFORE IT MUST BE ORDERED TO BEAR THE COSTS .

Operative part

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION;

2 . ORDERS THE APPLICANT TO BEAR THE COSTS .