Case T-203/01





Manufacture française des pneumatiques Michelin

v

Commission of the European Communities



«(Article 82 EC – Rebate system – Abuse)» Judgment of the Court of First Instance (Third Chamber), 30 September 2003

Summary of the Judgment 1.. Competition – Dominant position – Abuse – Meaning – Objective concept referring to conduct likely to influence the structure of the market and with the effect of hindering the maintenance or development of competition – Obligations on dominant undertakings – Exercise of competition only on the merits

(Art. 82 EC) 2.. Competition – Dominant position – Abuse – Discounts with a foreclosure effect on the market – Loyalty rebate – Abusive practice

(Art. 82 EC) 3.. Competition – Dominant position – Abuse – Quantity rebates – Whether permissible – Conditions – Abusive nature of the rebate system – Criteria for assessment

(Art. 82 EC) 4.. Competition – Administrative procedure – Statement of objections – Matters to be stated

5.. Competition – Dominant position – Abuse – Quantity rebates with a loyalty-inducing effect – Rebate, granted annually, representing a percentage of the overall turnover achieved with the customer over the preceding year and rising progressively and significantly with that figure

(Art. 82 EC) 6.. Competition – Administrative procedure – Observance of the rights of the defence – Access to the file – Limits – Obligation to communicate to the dominant undertaking the identity of its customers which collaborated in the investigation – None

7.. Competition – Administrative procedure – Commission decision finding an infringement – Exclusion of evidence in documents not disclosed to the parties – Consequences – Relevant objection may not be proved by reference to those documents

8.. Competition – Dominant position – Abuse – System of rebates leaving the dominant undertaking with a broad scope for subjective assessment – Rebates devoid of objective economic justification

(Art. 82 EC) 9.. Competition – Dominant position – Abuse – Tyre manufacturer – Contracts granting a rebate to retailers undertaking systematically to have carcasses retreaded by that manufacturer – Condition with a tied sales effect – Permissible under national law – Irrelevant – Primacy of Community law

(Art. 82 EC) 10.. Competition – Dominant position – Abuse – Obligations imposed on retailers of the dominant undertaking's products in return for financial advantages – Obligations aimed at eliminating competition from other manufacturers

(Art. 82 EC) 11.. Competition – Dominant position – Abuse – Obligations to provide information and submit to supervision without objective justification imposed on retailers of the dominant undertaking's products in return for financial advantages – Application of Regulation No 4087/88 allowing obligations to provide information in the context of franchise agreements – Excluded

(Art. 82 EC; Commission Regulation No 4087/88, Art. 3(2)) 12.. Competition – Dominant position – Abuse – Meaning – Conduct having either the effect or the object of hindering the maintenance or development of competition

(Art. 82 EC) 13.. Competition – Fines – Amount – Determination thereof – Raising of the general level of fines – Whether permissible – Condition – Duty to state reasons – None

(Council Regulation No 17, Art. 15(2); Commission Communication 98/C 9/03) 14.. Competition – Fines – Amount – Determination – Criteria – Fine for abuse of a dominant position – Assessment of the seriousness of the infringement – Account to be taken of the nature and object of the abusive practices and not their specific effects

(Council Regulation No 17, Art. 15(2) 15.. Competition – Fines – More than one infringement – Imposition of a single fine – Permissible – Duty of the Commission to state specifically each individual abusive component – None

(Council Regulation No 17, Art. 15(2)) 16.. Competition – Fines – Amount – Determination thereof – Criteria – Duration of infringement – Duration, taken into account as such, irrespective of its consequences on the harm caused – Permissible

(Council Regulation No 17, Art. 15(2)) 17.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Aggravating circumstances – Recidivism – Concept

(Commission Communication 98/C 9/03) 18.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Aggravating circumstances – Recidivism – Similar infringements successively committed by two subsidiaries of the same parent company

19.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Aggravating circumstances – Increase in the uplifts previously applied for recidivism – Diminution of the reductions previously applied for certain mitigating circumstances – Permissible

(Council Regulation No 17, Art. 15(2); Commission Communication 98/C 9/03) 1. An abuse is an objective concept referring to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is already weakened and which, through recourse to methods different from those governing normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition. It follows that not all competition on price can be regarded as legitimate and that an undertaking in a dominant position cannot have recourse to means other than those within the scope of competition on the merits. Therefore, whilst the finding that a dominant position exists does not in itself imply any reproach to the undertaking concerned, it has a special responsibility, irrespective of the causes of that position, not to allow its conduct to impair genuine undistorted competition on the common market. Similarly, whilst the fact that an undertaking is in a dominant position cannot deprive it of its entitlement to protect its own commercial interests when they are attacked, and whilst such an undertaking must be allowed the right to take such reasonable steps as it deems appropriate to protect those interests, such behaviour cannot be allowed if its purpose is to strengthen that dominant position and thereby abuse it. see paras 54-55, 97 2. A rebate system which has a foreclosure effect on the market will be regarded as contrary to Article 82 EC if it is applied by an undertaking in a dominant position. That is the case with a loyalty rebate, which is granted by an undertaking in a dominant position to its customers in return for an undertaking to obtain their stock exclusively or almost exclusively from that undertaking. Even in cases where it is not discriminatory, such a rebate is designed, through the grant of financial advantages, to prevent customers from obtaining their supplies from the dominant undertaking's competitors. see paras 56-57, 65 3. Quantity rebate systems applied by an undertaking in a dominant position, linked solely to the volume of purchases made from that undertaking, do not generally have a foreclosure effect on the market prohibited by Article 82 EC. If increasing the quantity supplied by that undertaking results in it incurring lower costs, it is entitled to pass on that reduction to its customer s in the form of a more favourable tariff. It follows that a quantity rebate system in which the rate of the discount increases according to the volume purchased from the dominant undertaking will not infringe Article 82 EC unless the criteria and rules for granting the rebate reveal that the system is not based on an economically justified countervailing advantage but tends, following the example of a loyalty and target rebate, to prevent customers from obtaining their supplies from competitors. In determining whether a quantity rebate system is abusive, it is therefore necessary to consider all the circumstances, particularly the criteria and rules governing the grant of the rebate, and to investigate whether, in providing an advantage not based on any economic service justifying it, the rebates tend to remove or restrict the buyer's 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. see paras 58-60, 62 4. 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 to which the Commission objects. It is only on that basis that the statement of objections can fulfil its function under the Community regulations of giving undertakings and associations of undertakings all the information necessary to enable them properly to defend themselves, before the Commission adopts a final decision. see para. 77 5. A quantity rebate system applied by a supplier to its customers, in which there is a significant variation in the discount rates between the lower and higher steps, which has a reference period of one year and in which the discount is fixed on the basis of total turnover achieved during the reference period, has the characteristics of a loyalty-inducing discount system in that it constitutes a strong incentive to obtain supplies from that supplier. see para. 95 6. In the context of proceedings seeking to establish that a dominant position has been abused, the Commission must take account of the risk that the undertaking concerned might adopt retaliatory measures against its customers who collaborated in the investigation. In the light of that risk, the Commission is entitled to refrain from communicating the identity of those undertakings to the dominant undertaking, and to send it only a table reproducing, without mentioning names, the answers provided to requests for information which it had sent to them. Therefore, by preparing a non-confidential version of those answers in the context of the administrative procedure, the Commission complies both with the requirement to protect confidential information and, on the other hand, the right of the addressee of the statement of objections to have access to the whole of the file. see paras 124-125 7. Documents which the Commission used against the undertaking concerned without the latter having received them during the administrative procedure must be excluded as evidence of an infringement of the competition rules. Such exclusion leads to annulment of the decision finding the infringement in so far as it refers to a complaint which can be proved only by reference to those documents. see para. 129 8. The granting of a discount by an undertaking in a dominant position does not have be regarded as abusive within the meaning of Article 82 EC if it is based on an objective economic justification. It follows that a discount system which is applied by an undertaking in a dominant position and which leaves that undertaking a considerable margin of discretion as to whether its customers may obtain the discount must be considered unfair and constitutes an abuse within the meaning of Article 82 EC. Because of the subjective assessment of the criteria giving entitlement to the discount, customers are left in a situation of uncertainty by not being able to predict with any confidence the rate of discount which they are able to receive. see paras 140-141 9. Where a tyre manufacturer in a dominant market position remunerates retailers of its products for undertaking, systematically, to have the carcasses of the dominant undertaking's tyres retreaded by that undertaking, it commits an abuse within the meaning of Article 82 EC. By that remuneration, the dominant undertaking uses its financial weight in the tyre market in general, and the new tyre market in particular, as a lever to ensure its being chosen as retreader by the retailers. It thereby imposes a condition with a tied sales effect, prohibited under Article 82 EC. In that regard, it is irrelevant that such a condition complies with the relevant national law, given the primacy of Community law on the matter and the direct effectiveness of Article 82 EC. see paras 163, 166 10. Where an undertaking in a dominant position undertakes to participate in the financial effort of the retailers of its products, demanding in return that those undertakings promote its brand, do not divert spontaneous demand for its products and carry sufficient stocks to meet that spontaneous demand immediately, it abuses its position within the meaning of Article 82 EC. Those conditions together are aimed at eliminating competition from other manufacturers by consolidating the undertaking's dominant position on the market. see paras 208, 210 11. The obligations which an undertaking in a dominant position imposes on the retailers of its products, in return for participation in their financial effort, to provide it with certain information, such as balance-sheets, statistics on turnover and services provided, and information about shareholders, and to allow it to carry out an audit of sales outlets in order to ensure that areas for progress agreed with those retailers are being complied with, constitute an abuse if they are not objectively justified. In particular, those obligations must be regarded as abusive if they reflect the dominant undertaking's desire to supervise distribution of its products in detail, to obtain information about the market which is not public and which is of value for the carrying out of its own marketing strategy, and to increase the retailers' dependence on the dominant undertaking. Such obligations to provide information go far beyond those which may be imposed in the context of a franchise agreement under Regulation No 4087/88, and in particular Article 3(2) thereof, which, in any event, falls within the scope of Article 81(1) EC, and is therefore irrelevant when assessing the obligations to provide information imposed by a dominant undertaking on its own customers from the point of view of Article 82 EC. see paras 21, 215-217, 219 12. For the purposes of establishing an infringement of Article 82 EC, it is sufficient to show that the abusive conduct of the undertaking in a dominant position tends to restrict competition or, in other words, that the conduct is capable of having that effect. It follows that, for the purposes of applying that article, establishing the anti-competitive object and the anti-competitive effect of abusive conduct are one and the same thing. If it is shown that the object pursued by the conduct of an undertaking in a dominant position is to limit competition, that conduct will also be liable to have such an effect. Therefore, when an undertaking actually implements practices with the aim of restricting competition, the fact that the result sought is not achieved is not enough to avoid the application of Article 82 EC. see paras 239, 241, 245 13. The fact that the Commission has in the past imposed fines of a certain level and applied a certain uplift to them by reference to the duration of the infringement does not mean that it is estopped from raising that level, or that uplift, within the limits set out in Regulation No 17 and in the Commission's Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, if that is necessary in order to ensure the implementation of Community competition policy. In particular, it is permissible for the Commission to raise the level of fines in order to reinforce their deterrent effect. The Commission's previous decision-making practice therefore does not in itself serve as a legal framework for the fines imposed in competition matters, since that framework is defined solely in Regulation No 17 and in those Guidelines. In those circumstances, the Commission is likewise not required to state in a decision imposing a fine for breach of the competition rules the reasons why the starting amount chosen for calculating the fine was not the same as that set in an earlier decision finding the same infringement by another undertaking. see paras 254-255, 277 14. For the purposes of setting the amount of the fine imposed for abuse of a dominant position, the Commission is entitled to establish the seriousness of that infringement solely by reference to its nature and object, without taking account of the specific effects of the abusive practices, the former being potentially more significant in that regard than the latter. In particular, the Commission is not required to examine the development of the relevant undertaking's market shares and selling prices. see paras 258-259 15. In a decision finding several infringements of the competition rules by the same undertaking, the Commission is entitled to impose a single fine for a multiplicity of infringements, that fine dealing globally with all of the infringements over a certain period. In that regard, the Commission does not have to state specifically in the grounds of the decision how it took into account each of the abusive components complained of for the purposes of setting the fine. see paras 265, 267 16. The Commission's increasing a fine for breach of the competition rules by reference to the duration of the infringement is not limited to a situation in which there is a direct relation between the duration and serious harm caused to the Community objectives referred to in those rules. see para. 278 17. The concept of recidivism, which features in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty as an aggravating factor, must be understood as referring to cases where an undertaking has committed fresh infringements after having been penalised for similar infringements. see para. 284 18. Since Community competition law recognises that different companies belonging to the same group form an economic unit and therefore an undertaking within the meaning of Articles 81 EC and 82 EC if the companies concerned do not independently determine their own conduct on the market, with the result that the Commission may impose a fine on the parent company for the practices of group companies, the Commission is entitled to find recidivism where one group company commits an infringement of the same type as that for which another was previously punished. see para. 290 19. The fact that the Commission has applied a certain uplift to fines in the past, when dealing with aggravating factors like recidivism, cannot prevent it from increasing that uplift, within the limits set out in Regulation No 17 and in the Commission's Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, if that is necessary in order to ensure the implementation of Community competition policy. The Commission's previous decision-making practice does not in itself serve as a legal framework for the fines imposed in competition matters, since that framework is defined solely in Regulation No 17 and in those Guidelines, and the Commission must, for the purpose of determining the amount of the fine, ensure that its action has the necessary deterrent effect. In particular, recidivism is a circumstance which justifies a significant increase in the basic amount of the fine, since it constitutes proof that the sanction previously imposed was not sufficiently deterrent. Similarly, the fact that the Commission has considered in previous decisions that certain conduct constituted mitigating circumstances, as a result of which the fine was significantly reduced or the procedure closed, does not mean that it is obliged always to make the same assessment of such conduct. see paras 292-293, 298

JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

30 September 2003( )

(Article 82 EC - Rebate system - Abuse)

In Case T-203/01,

Manufacture française des pneumatiques Michelin, established in Clermont-Ferrand (France), represented by J.-F. Bellis, M. Wellinger, D. Waelbroeck and M. Johnsson, lawyers, with an address for service in Luxembourg,

applicant,

v

Commission of the European Communities, represented by R. Wainwright, acting as Agent, and A. Barav, lawyer, with an address for service in Luxembourg,

partie défenderesse,

soutenu(e) par

Bandag Incorporated, représenté par Me H. Calvet, avocat et Me R. Saint-Esteben, avocat,

defendant,

supported by

Bandag Inc., established in Muscatine, Iowa (United States), represented by H. Calvet and R. Saint-Esteban, lawyers, with an address for service in Luxembourg,

intervener,

APPLICATION for annulment of Commission Decision 2002/405/EC of 20 June 2001 relating to a proceeding pursuant to Article 82 of the EC Treaty (COMP/E-2/36.041/PO - Michelin) (OJ 2002 L 143, p. 1),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: K. Lenaerts, President, J. Azizi and M. Jaeger, Judges,

Registrar: J. Plingers, Administrator,

having regard to the written procedure and further to the hearing on 3 April 2003,

gives the following

Judgment

The applicant's commercial policy in the markets in question

1 Manufacture française des pneumatiques Michelin (the applicant or Michelin France) has as its main activity the manufacture of tyres for various vehicles. In France, it inter alia manufactures and sells new and retreaded tyres for heavy trucks.

2 So far as concerns new tyres, a distinction is drawn between the original equipment market and the replacement market. Original equipment tyres are sold by the tyre manufacturer direct to the vehicle producer, without passing through an intermediary. Replacement tyres, on the other hand, are sold to the final consumer primarily through a large number of specialised commercial outlets.

3 The demand for tyres for heavy goods vehicles is not satisfied only by the supply of new tyres. Provided the casing is in a sound condition, used tyres may be given a new tread: this is the retreading operation.

4 This case concerns the commercial policy pursued by Michelin in the French markets for new replacement tyres for trucks and for retreaded tyres for trucks. The policy consisted of the following three components, which will be examined in greater detail below: the general price conditions for France for professional dealers, the agreement for optimum use of Michelin truck tyres (the PRO agreement) and the agreement on business cooperation and assistance service (known as the Michelin Friends Club).

1. The general price conditions for France for professional dealers

5 The general price conditions for France for professional dealers (the general conditions) laid down, first, a list price known as the invoicing scale (net price invoiced, less any rebates) and, secondly, a set of rebates or refunds.

6 From 1980 to 1996, the rebates provided for in the general conditions were divided into three categories: quantity rebates, rebates for the quality of the dealer's service to users (service bonus) and rebates dependent on increases in new tyre sales (progress bonus). These were not invoice rebates but were paid at the end of February of the calendar year following the financial year in question.

7 The quantity rebates system provided for an annual refund expressed as a percentage of the turnover achieved by the dealer with the applicant, the rate increasing gradually according to the quantities purchased. In that regard, the general conditions provided for three scales, depending on the tyres in question (all types, heavy plant tyre and retreads).

8 In 1995, for example, the all types scale consisted of 47 steps. The rebate percentages ranged from 7.5% on a turnover of FRF 9 000 to 13% on a turnover of over FRF 22 million. The heavy plant tyre and retreads categories each had their own scale. In 1995 for example, the rebates ranged, in the case of retreads, from 2% on a turnover of over FRF 7 000 to 6% on a turnover in excess of FRF 3.92 million.

9 In 1995 and 1996, the general conditions provided, under certain conditions, for three advances on quantity rebates, payable in May, September and December of the current financial year.

10 The service bonus was paid to the specialist dealer to improve his facilities and after-sales service. To qualify for such a bonus, a minimum annual turnover had to be achieved with the applicant in the course of the year. The amount ranged from FRF 160 000 in 1980 to FRF 205 000 in 1985. It then became FRF 50 000, falling to FRF 45 000 in 1995 and 1996. The size of the bonus, which was fixed at the beginning of the year by annual agreement with the dealer in a document entitled Service bonus, depended on compliance with commitments entered into by the dealer in a number of areas. Each commitment corresponded to a number of points, and where certain thresholds of points were exceeded the dealer was entitled to a bonus corresponding to a percentage of the turnover achieved with the applicant for all tyre types combined. This percentage ranged from 0% to 1.5% during the period 1980 to 1991 and from 0% to 2.25% for the period 1992 to 1996. The maximum score was 35 points and the maximum bonus was earned for a score of at least 31 out of 35 points. Amongst the commitments for which points could be earned were promoting the sale of the applicant's new products and providing the applicant with market information. The dealer earned an extra point if he systematically had Michelin casings retreaded by Michelin France. In 1996 only the systematic first retreading of Michelin tyres by Michelin was insisted upon. The service bonus was abolished in 1997.

11 The progress bonus was intended to reward dealers who agreed at the beginning of the year to undertake in writing to exceed a minimum base (expressed in numbers of casings purchased per annum) fixed by mutual agreement, depending on past performance and future prospects, and who managed to exceed it. The base was proposed each year and was negotiated with the dealer. In 1995 and 1996, if the amount by which the base was exceeded was equal to or greater than 20%, the dealer was entitled to a rebate rate of 2% or 2.5% applied to the entire turnover in respect of new truck tyres achieved with the applicant.

12 Furthermore, dealers who, during two consecutive financial years, exceeded a fixed maximum turnover with the applicant could negotiate a commercial cooperation agreement (known as an individual agreement), which entitled them to additional rebates. Between 1993 and 1996, 16 to 18 major dealers signed this type of agreement .

13 As from 1997, the applicant changed its business conditions for dealers. So far as concerns new truck tyres, the main changes concerned the disappearance of quantity rebates, the service bonus and the progress bonus, and the appearance of new categories of rebate, namely invoice rebates, the achieved-target bonus, end-of-year rebates and a multiproduct rebate. Those rebates were applicable in 1997 and 1998. As from 1997, the bulk of the rebates previously paid at the end of February in the year following the reference period was shown on the invoice.

14 Invoice rebates (of between 15% and 19%) were granted on the basis of the number of new truck/earthmover/light plant tyres purchased the previous year, the average purchases for the two previous years or the average purchases for the three previous years, depending on which was most favourable to the dealer.

15 Dealers wishing to obtain a larger invoice rebate than the amount to which they would have been entitled by virtue of their previous services were required to sign a target contract drawn up in agreement with the applicant which took account of the dealer's potential together with foreseeable market trends. The invoice rebate obtainable then corresponded to the tranche within which the commitment entered into by the dealer fell.

16 In 1997 dealers who had signed a target contract obtained an achieved-target bonus of 2% of their net annual invoiced turnover, paid at the end of February, if the target was reached. In 1998 the bonus was set at 1.5%.

17 Depending on the invoice rebate originally granted and the net invoiced turnover, an end-of-year rebate of between 0% and 3% was paid at the end of February. The multiproduct rebate was granted to dealers whose total turnover in respect of tyres of all types accounted for more than 50% of their total turnover and who achieved significant sales in at least two of the following four categories: car/van, motorcycle/scooter, truck and agricultural tractor. They were entitled to an end-of-year rebate on their invoiced turnover in respect of new products (with the exception of heavy plant) and retreaded products according to a scale ranging from 1% to 2.20% in 1997 and from 1.5% to 2.70% in 1998.

18 As regards retreaded truck tyres, from 1997 the system comprised two rebates: (i) a 5% invoice rebate on all retreaded products; and (ii) an end-of-year quantity rebate depending on total net turnover in respect of retreads (van, truck, earthmover, agricultural tractor, light and heavy plant), increasing progressively from 1% (above FRF 6 500) to 4% (above FRF 2 500 000) of total net turnover in respect of retreads, according to a 16-step scale ranging from 1% at the bottom of the scale to 0.1% at the top.

19 Dealers who had signed an individual agreement continued to enjoy additional rebates (for both new tyres and retreads).

2. Agreement for optimum use of Michelin truck tyres (the PRO agreement)

20 The agreement for optimum use of Michelin truck tyres (the PRO agreement), which was introduced in 1993, was intended only for dealers purchasing new truck tyres from Michelin France and enabled such dealers to obtain further rebates. To this end, a dealer was required to enter into a number of obligations, namely to sign with the applicant a truck progress bonus commitment for the current year and to present to Michelin for retreading Michelin truck tyres which had reached the legal tread wear limit. In return, for every truck casing considered retreadable by Michelin, the dealer received FRF 45.65 or 120 depending on the type of tyre concerned. If the casings had been regrooved and then reused, the dealer received an additional FRF 15, 25 or 40. A dealer could therefore earn a maximum rebate of FRF 160. The bonus was paid in the form of a credit towards the dealer's purchases of new truck tyres. The maximum number of PRO bonuses was limited by the number of new truck tyres bought the previous year. As from 1997, the amount of the bonuses granted was limited by the number of tyres which the dealer had undertaken to buy in the course of the current year in his 1997 target contract. In 1998 the PRO agreement was abolished.

3. The agreement on business cooperation and service assistance (the Michelin Friends Club)

21 The Michelin Friends Club, which was created in 1990, is composed of tyre dealers wishing to enter into a closer partnership with the applicant. Michelin participates in the financial effort of the Club-member dealer notably by contributing towards investment and training and by making a financial contribution amounting to 0.75% of annual Michelin Service turnover. In return, the applicant imposes, inter alia, the following conditions: the dealer must provide the applicant with certain information concerning his undertaking (he must communicate balance-sheets, statistics on turnover and services provided and information about the shareholders); the Club-member dealer must permit quality controls of the service, must promote the Michelin brand and particularly its new products, and carry a sufficient stock of Michelin products to meet any customer demand immediately. Up to 1995, he was required not to divert to other brands (spontaneous) customer demand for Michelin products. Finally, he was required to have the first retreading of truck tyres carried out at Michelin France. This last condition, which appeared in 1991, was removed in respect of vans in 1993 and abolished in 1995.

The administrative procedure and the contested decision

22 In May 1996, the Commission, acting on its own initiative, opened a file on the applicant. It considered that it had reasons for suspecting that the applicant was abusing its dominant position in the French market for replacement tyres for trucks and buses by imposing on dealers unfair commercial conditions, based inter alia on a loyalty-inducing rebate system. Requests for detailed information were sent on several occasions to the applicant, to its competitors and to tyre dealers and importers. Moreover, in June 1997, investigations were carried out at the applicant's offices pursuant to Article 14(3) of Council Regulation No 17, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-1962, p. 87).

23 By letter of 30 April 1998, the applicant gave the Commission an undertaking to change its commercial conditions in the French market for new replacement tyres and retreaded tyres for trucks and buses, in order to eliminate all the aspects of its commercial policy called in question by the Commission.

24 On 28 June 1999, the Commission sent a statement of objections to the applicant, which replied on 8 November 1999. The applicant was given a hearing on 20 December 1999.

25 On 20 June 2001, the Commission adopted Decision 2002/405/EC of 20 June 2001 relating to a proceeding pursuant to Article 82 of the EC Treaty (COMP/E-2/36.041/PO - Michelin) (OJ 2002 L 143, p. 1, the contested decision). In the contested decision, the Commission establishes, first of all, that replacement tyres for trucks and buses comprise two relevant product markets, namely the market in new replacement tyres and the market in retreads. In France, the applicant occupies a dominant position in each of those product markets.

26 The Commission maintains that the applicant abused its dominant position in those two markets by pursuing a commercial and pricing policy in France with regard to dealers which was based on a complex system of rebates, discounts and/or various financial benefits whose main objective was to tie resellers to it and to maintain its market shares. The rebate systems introduced by the general conditions, the PRO Agreement and the Business cooperation and service assistance agreement are specifically regarded as abusive.

27 The operative part of the contested decision states:

Article 1

The Commission finds that, during a period extending from 1 January 1990 to 31 December 1998, [the applicant] infringed Article 82 of the EC Treaty by applying a system of loyalty-inducing rebates to dealers in new replacement tyres and retreaded tyres for trucks and buses in France.

Article 2

For the infringement referred to in Article 1, a fine of EUR 19.76 million is hereby imposed on [the applicant].

...

Article 3

[The applicant] shall refrain from repeating any conduct described in Article 1, and from adopting any measure having equivalent effect.

Article 4

This Decision is addressed to [the applicant].

Procedure

28 By application lodged at the Registry of the Court of First Instance on 4 September 2001, the applicant brought the present action.

29 By document lodged at the Registry of the Court of First Instance on 3 January 2002, Bandag Inc. (Bandag) applied for leave to intervene in support of the form of order sought by the Commission.

30 By letter of 8 February 2002, the applicant requested that several pieces of confidential material should be excluded from the file which was to be communicated to Bandag.

31 By order of the President of the Third Chamber of the Court of First Instance of 28 February 2002, Bandag was granted leave to intervene in support of the form of order sought by the Commission. Non-confidential versions of the various documents in the file, prepared by the applicant, were sent to Bandag.

32 On 21 May 2002, Bandag lodged its statement in intervention, on which the main parties submitted their observations.

33 By order of 15 October 2002, the President of the Third Chamber of the Court of First Instance acceded in part to the applicant's request for confidentiality. The Registrar then sent Bandag a copy of the documents in the file which the Court considered non-confidential.

34 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Third Chamber) decided to open the oral procedure. By way of measures of organisation of procedure, the Court put a number of written questions to the main parties, to which they replied within the prescribed period.

35 The main parties presented oral argument and replied to the oral questions put by the Court at the hearing on 3 April 2003. Bandag did not attend the hearing.

36 At the hearing, the Commission presented to the Court the replies from the Michelin tyre dealers to the Commission's requests for information of 30 December 1996 and 27 October 1997, which, pursuant to the second subparagraph of Article 67(3) of the Rules of Procedure of the Court of First Instance, were not communicated to the applicant or Bandag. At the hearing, the main parties expressly consented that the Court should ascertain that the dealers' replies were consistent with the tables prepared by the Commission during the administrative procedure, which reproduced those replies without giving names.

37 At the request of the Court, the Commission, on 24 April 2003, produced the letters exchanged between Bandag and the Commission between October and December 1996 concerning the dealers who had information of use in the Commission's investigation. Those letters likewise were not communicated to the applicant. At the hearing the main parties gave their express consent for the Court to determine whether during the administrative procedure the Commission contacted only the dealers suggested by Bandag, as the applicant claims.

Forms of order sought

38 The applicant claims that the Court should:

– annul the contested decision;

– at the very least, cancel or substantially reduce the fine imposed by the contested decision;

– order the Commission to pay the costs.

39 The Commission contends that the Court should:

– dismiss the application;

– order the applicant to pay the costs.

40 Bandag claims that the Court should:

– dismiss the application;

– order the applicant to pay the costs of the intervention.

Law

41 The application consists of two parts. The first concerns the alleged unlawfulness of the contested decision in that it finds an infringement of Article 82 EC. The second part relates to the alleged unlawfulness of the fine imposed.

1. The alleged unlawfulness of the contested decision in that it finds an infringement of Article 82 EC





Preliminary observations

42 The applicant puts forward five pleas alleging various infringements of Article 82 EC. The first three relate respectively to the quantity rebates, the service bonuses and the characteristics of the Michelin Friends Club. By its fourth plea, the applicant denies that there was a further abuse resulting from the cumulative effect of the various rebate systems. By its fifth plea, it criticises the Commission for not having carried out a specific analysis of the effects of the impugned practices.

43 The Court notes that, in its action, the applicant does not challenge various findings made by the Commission in the contested decision.

44 Thus, the applicant does not challenge the definition of the relevant markets referred to in the contested decision, namely the French market for new replacement tyres for trucks and buses and the French market for retreaded tyres for trucks and buses (recitals 109 to 171 of the contested decision). Nor does it dispute the finding that it occupies a dominant position on those markets (recitals 172 to 208 of the contested decision).

45 Likewise, the applicant does not raise any specific pleas against the Commission's assessment of the abusive nature of the progress bonus (recitals 67 to 74 and 260 to 271 of the contested decision) and of the PRO Agreement (recitals 97 to 100 and 297 to 314 of the contested decision).

46 When asked at the hearing how the application could give rise to the annulment of the whole of the contested decision, as sought by the applicant (see paragraph 38 above), the applicant explained that it has raised a parallel plea in its application, relating to all the practices called into question by the contested decision. That is its fifth plea, alleging infringement of Article 82 EC in that the Commission did not carry out a specific analysis of the effects of the impugned practices (see paragraphs 235 to 246 below).

47 Should the fifth plea of the applicant's application not be upheld, therefore, the action could at the most give rise to the partial annulment of the contested decision and a reduction in the amount of the fine.

First plea: the Commission infringed Article 82 EC by holding that the quantity rebates constituted an abuse within the meaning of that provision

The contested decision

48 At recitals 216 and 217 of the preamble to the contested decision, the Commission states:

216 Quantity rebates took the form of an annual rebate as a percentage of total turnover (trucks, cars and vans) achieved with Michelin France. To be eligible, the dealer had to achieve the turnover thresholds provided for in the rebate grids. In the first Michelin case ..., and consistently in more recent cases, the Court of Justice has ruled against the granting of quantity rebates by an undertaking in a dominant position where the rebates exceed a reasonable period of three months (as is the case in this instance) on the grounds that such a practice is not in line with normal competition based on prices. Merely buying a small additional quantity of Michelin products made the dealer eligible for a rebate on the whole of the turnover achieved with Michelin and this was greater than the fair marginal or linear return on the additional purchase, which clearly creates a strong buying incentive effect. In the Court's view, a rebate can only correspond to the economies of scale achieved by the firm as a result of the additional purchases which consumers are induced to make.

217 In addition, since the rebates were not paid until February in the year following that in which the tyre purchases were made (Michelin is the only company which applies this practice, since all its competitors pay most of their rebates immediately), [various] abuses were evident.

49 According to the Commission, the abuses resulting from the quantity rebate system were as follows.

50 First, the Commission maintains that the quantity rebates were unfair (recitals 218 to 225 of the contested decision). In that regard, it states that the dealers could not know with certainty the final purchasing price of Michelin tyres. Indeed, [s]ince the rebates applied to all of the Michelin turnover and were calculated only about one year after the start of the first purchases, it was not possible for the dealers to know, before the very last orders had been placed, what the real unit purchase price of the tyres would be, which placed them in a situation of uncertainty and insecurity, prompting them to minimise their risks by purchasing mainly from Michelin (recital 220 of the contested decision). Furthermore, according to the Commission, [g]iven the intensity of competition and the low level of margins in the sector (about 3.7% according to the Commission's investigation), dealers were obliged to resell at a loss pending the payment of the rebates. The price paid to Michelin was generally higher than the price charged by the dealer to final consumers. The dealer thus initially sold at a loss. It was only when he was paid the various bonuses and premiums that the reseller recovered his costs and re-established his profit margin (recital 218 of the contested decision). The system thus placed an undue financial burden on dealers (recital 224 of the contested decision). Finally, the Commission states that, in view of the fact that the rebates were paid extremely late, dealers were forced to enter into quantitative commitments to Michelin (in connection with the progress bonus) before they had even received the quantity rebates for the previous year (recital 223 of the contested decision).

51 Secondly, the quantity rebates were loyalty-inducing ( recitals 226 to 239 of the contested decision). The Commission states that [a]ny system under which rebates are granted according to the quantities sold during a relatively long reference period has the inherent effect, at the end of that period, of increasing pressure on the buyer to reach the purchase figure needed to obtain the discount or to avoid suffering the foreseeable loss for the entire period (recital 228 of the contested decision). It further states that it was in the dealer's interest to go beyond the maximum figure stipulated, since this allowed him to sign a commercial agreement with Michelin, with all the advantages which this involved (recital 230 of the contested decision).

52 Thirdly, the quantity rebates are alleged to have had a market-partitioning effect (recitals 240 to 247 of the contested decision). In the Commission's submission, [t]he rebates applied only to purchases made from Michelin France and thus discouraged purchases made abroad or from importers. Conversely, the high level of prices in France, before rebates, discouraged purchases in France from abroad (recital 240 of the contested decision).

Principles employed in determining whether a rebate system applied by an undertaking in a dominant position constitutes an abuse

53 The applicant claims that any rebate is loyalty-inducing since it encourages purchasers to purchase more from the person offering the rebate. In order to establish an infringement of Article 82 EC, the Commission is required to prove that the rebates are likely in due course to undermine the competitive structure of the market and ultimately to permit the undertaking concerned to abuse the consumer. Since the specific aim of competition law is to encourage price competition, the applicant maintains that a rebate system can be described as an abuse only if it has a foreclosure effect or, in other words, if it weakens competition in the longer term and enables the undertaking in a dominant position to recover the costs generated by its rebate policy.

54 In that regard, the Court points out that, according to a consistent line of decisions, an abuse is an objective concept referring to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is already weakened and which, through recourse to methods different from those governing normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition (Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 91; Case 322/81 Michelin v Commission [1983] ECR 3461, paragraph 70; Case C-62/86 AKZO v Commission [1991] ECR I-3359, paragraph 69; and Case T-228/97 Irish Sugar v Commission [1999] ECR II-2969, paragraph 111).

55 Therefore, whilst the finding that a dominant position exists does not in itself imply any reproach to the undertaking concerned, it has a special responsibility, irrespective of the causes of that position, not to allow its conduct to impair genuine undistorted competition on the common market (Michelin v Commission, cited at paragraph 54 above, paragraph 57, and Irish Sugar v Commission, cited at paragraph 54 above, paragraph 112). Similarly, whilst the fact that an undertaking is in a dominant position cannot deprive it of its entitlement to protect its own commercial interests when they are attacked, and whilst such an undertaking must be allowed the right to take such reasonable steps as it deems appropriate to protect those interests, such behaviour cannot be allowed if its purpose is to strengthen that dominant position and thereby abuse it (Case 27/76 United Brands v Commission [1978] ECR 207, paragraph 189; Case T-65/89 BPB Industries and British Gypsum v Commission [1993] ECR II-389, paragraph 69; Joined Cases T-24/93 to T-26/93 and T-28/93 Compagnie maritime belge transports and Others v Commission [1996] ECR II-1201, paragraph 107; and Irish Sugar v Commission, cited above, paragraph 112).

56 With more particular regard to the granting of rebates by an undertaking in a dominant position, it is apparent from a consistent line of decisions that a loyalty rebate, which is granted in return for an undertaking by the customer to obtain his stock exclusively or almost exclusively from an undertaking in a dominant position, is contrary to Article 82 EC. Such a rebate is designed through the grant of financial advantage, to prevent customers from obtaining their supplies from competing producers (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, paragraph 518; Hoffmann-La Roche v Commission, cited at paragraph 54 above, paragraphs 89 and 90; Michelin v Commission, cited at paragraph 54 above, paragraph 71; and Case T-65/89 BPB Industries and British Gypsum v Commission, cited at paragraph 55 above, paragraph 120).

57 More generally, as the applicant submits, a rebate system which has a foreclosure effect on the market will be regarded as contrary to Article 82 EC if it is applied by an undertaking in a dominant position. For that reason, the Court has held that a rebate which depended on a purchasing target being achieved also infringed Article 82 EC (Michelin v Commission, cited at paragraph 54 above).

58 Quantity rebate systems linked solely to the volume of purchases made from an undertaking occupying a dominant position are generally considered not to have the foreclosure effect prohibited by Article 82 EC (see Michelin v Commission, cited at paragraph 54 above, paragraph 71, and Case C-163/99 Portugal v Commission [2001] ECR I-2613, paragraph 50). If increasing the quantity supplied results in lower costs for the supplier, the latter is entitled to pass on that reduction to the customer in the form of a more favourable tariff (Opinion of Advocate General Mischo in Portugal v Commission, cited above, at ECR I-2618, point 106). Quantity rebates are therefore deemed to reflect gains in efficiency and economies of scale made by the undertaking in a dominant position.

59 It follows that a rebate system in which the rate of the discount increases according to the volume purchased will not infringe Article 82 EC unless the criteria and rules for granting the rebate reveal that the system is not based on an economically justified countervailing advantage but tends, following the example of a loyalty and target rebate, to prevent customers from obtaining their supplies from competitors (see Hoffmann-La Roche v Commission, cited at paragraph 54 above, paragraph 90; Michelin v Commission, cited at paragraph 54 above, paragraph 85; Irish Sugar v Commission, cited at paragraph 54 above, paragraph 114; and Portugal v Commission, cited at paragraph 58 above, paragraph 52).

60 In determining whether a quantity rebate system is abusive, it will therefore be necessary to consider all the circumstances, particularly the criteria and rules governing the grant of the rebate, and to investigate whether, in providing an advantage not based on any economic service justifying it, the rebates tend to remove or restrict the buyer's 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 (see Hoffmann-La Roche v Commission, cited at paragraph 54 above, paragraph 90; Michelin v Commission, cited at paragraph 54 above, paragraph 73; and Irish Sugar v Commission, cited at paragraph 54 above, paragraph 114).

The abusive nature of the quantity rebate system applied by the applicant

– Introduction

61 The applicant maintains, in essence, that quantity rebates are actually quantity discounts which an undertaking in a dominant position is entitled to grant its customers.

62 In that regard, the Court points out that the mere fact of characterising a discount system as quantity rebates does not mean that the grant of such discounts is compatible with Article 82 EC. It is necessary to consider all the circumstances, particularly the criteria and rules governing the grant of the discounts, and to investigate whether, in providing an advantage not based on any economic service justifying it, the quantity rebates tend to remove or restrict the buyer's 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 (see the case-law cited at paragraph 60 above).

63 In the present case, unlike in Suiker Unie and Others v Commission (cited at paragraph 56 above), Hoffmann-La Roche v Commission (cited at paragraph 54 above), Irish Sugar v Commission (cited at paragraph 54 above) and Portugal v Commission (cited at paragraph 58 above), the Commission did not consider that the system called in question led to the application of dissimilar conditions to equivalent transactions with other trading parties within the meaning of subparagraph (c) of the second paragraph of Article 82 EC.

64 It is apparent from the contested decision that the Commission considers that the quantity rebate system applied by the applicant constitutes an infringement of Article 82 EC because it is unfair, it is loyalty-inducing and it has a partitioning effect (see paragraphs 48 to 52 above).

65 However, it may be inferred generally from the case-law that any loyalty-inducing rebate system applied by an undertaking in a dominant position has foreclosure effects prohibited by Article 82 EC (see paragraphs 56 to 60 above), irrespective of whether or not the rebate system is discriminatory. In Michelin v Commission (cited at paragraph 54 above), the Court, when considering the lawfulness of Commission Decision 81/969/EEC of 7 October 1981 relating to a proceeding under Article [82] of the Treaty (IV/29.491 - Bandengroothandel Frieschebrug BV/NV Nederlandsche Banden-Industrie Michelin) (OJ 1981 L 353, p. 33, the NBIM Decision), did not uphold the Commission's claim that the rebate system applied by Michelin was discriminatory but nevertheless held that it infringed Article 82 EC because it placed dealers in a position of dependence in relation to Michelin.

66 This Court considers that it is necessary, first, to consider whether the Commission had good reason to conclude, in the contested decision, that the quantity rebate system was loyalty-inducing or, in other words, that it sought to tie dealers to the applicant and to prevent them from obtaining supplies from the applicant's competitors. As the Commission acknowledges in its defence, moreover, the alleged unfairness of the system was closely linked to its loyalty-inducing effect. Furthermore, it must be held that a loyalty-inducing rebate system is, by its very nature, also partitioning, since it is designed to prevent the customer from obtaining supplies from other manufacturers.

– The loyalty-inducing nature of the quantity rebates

67 The applicant submits that to equate quantity rebates with target discounts, or even loyalty discounts, is to disregard the fundamental characteristics of the impugned system, namely a system composed of a graduated scale of discounts, based on a large number of very close thresholds, which require only small volumes of purchases to reach the next threshold. The discounts were calculated according to the volumes actually purchased and were on a sliding scale, since the discount granted for each threshold attained decreased as the purchaser moved up the curve. The system was therefore completely transparent to the purchaser. According to the applicant, it was a standard quantity discount system which did not constitute an abuse. The Court of Justice and the Court of First Instance have never imposed a limit on the reference period for quantity discounts. In support of its arguments, the applicant refers in particular to the judgment in Portugal v Commission (cited at paragraph 58 above).

68 The Court notes that there was a scale of quantity rebates for all types of tyres combined, except for heavy plant tyres and retreads, and two different scales for the latter two categories. The contested decision refers only to the rebates in so far as they apply to new replacement truck tyres and to retreaded truck tyres.

69 The scale of quantity rebates (all types combined) comprised, for the period 1990 to 1996, between 47 and 54 steps. The scale of the quantity rebates which formed part of the 1995 general conditions, which is representative of the other years, was as follows:

T/O 95 Rate T/O 95 Rate T/O 95 Rate T/O 95 Rate 9000 7.50 172000 10.65 5855000 11.85 10660000 12.45 15000 8.50 241000 10.75 6242000 11.90 11170000 12.50 25000 9.00 492000 10.85 6604000 11.95 11730000 12.55 30000 9.25 757000 10.95 6934000 12.00 12520000 12.60 35000 9.50 1030000 11.05 7280000 12.05 13380000 12.65 45000 9.85 1306000 11.15 7640000 12.10 14314000 12.70 60000 10.00 1656000 11.25 8020000 12.15 15314000 12.75 80000 10.10 2100000 11.35 8415000 12.20 16385000 12.80 100000 10.20 2663000 11.45 8830000 12.25 17532000 12.85 118000 10.35 3376000 11.55 9260000 12.30 18792000 12.90 142000 10.50 4280000 11.65 9710000 12.35 20145000 12.95 5136000 11.75 10180000 12.40 22000000 13.00





70 A similar table, contained in the 1995 general conditions and comprising 18 steps, existed for retreaded tyres during the period 1990 to 1996. For 1995, the table was as follows:

Retreading Turnover Excluding VAT Discount rate < 7 000 0 7 000 2 7 400 3 8 000 3.5 10 800 4 14 700 4.50 19 600 4.75 29 400 5 49 000 5.1 88 200 5.2 166 600 5.3 323 400 5.4 637 000 5.5 1 127 000 5.6 1 813 000 5.7 2 499 000 5.8 3 185 000 5.9 . 3 920 000 6

71 It is clear from the tables reproduced above that the quantity discount rate increased, as the applicant states, according to the turnover achieved with the applicant. The rate shows a rapid increase over the first steps while the increase is much less rapid for the higher steps.

72 In Portugal v Commission (cited at paragraph 58 above, paragraph 51), the Court of Justice held that it is of the very essence of a system of quantity discounts that larger purchasers of a product or users of a service enjoy lower average unit prices or - which amounts to the same - higher average reductions than those offered to smaller purchasers of that product or users of that service. It should also be noted that even where there is a linear progression in quantity discounts up to a maximum discount, initially the average discount rises (or the average price falls) mathematically in a proportion greater than the increase in purchases and subsequently in a proportion smaller than the increase in purchases, before tending to stabilise at or near the maximum discount rate. The mere fact that the result of quantity discounts is that some customers enjoy in respect of specific quantities a proportionally higher average reduction than others in relation to the difference in their respective volumes of purchase is inherent in this type of system, but it cannot be inferred from that alone that the system is discriminatory.

73 However, it cannot be inferred from that paragraph of the judgment in Portugal v Commission (cited at paragraph 58 above) that the quantity rebate system applied by the applicant must automatically be regarded as compatible with Article 82 EC solely because the discount rate per tyre increases according to the quantities purchased. In that judgment, the Court of Justice examined the lawfulness of Commission Decision 1999/199/EC of 10 February 1999 relating to a proceeding pursuant to Article [86] of the Treaty (Case No IV/35.703 - Portuguese Airports) (OJ 1999 L 69, p. 31) in which a discount system had been considered discriminatory. However, the Court emphasised, at paragraph 51 of that judgment, that the application of a quantity rebate system leads to a situation in which larger purchasers enjoy higher average reductions than smaller purchasers and that it cannot be inferred from that alone that the system is discriminatory.

74 However, according to settled case-law (see paragraphs 56 to 60 above), a discount system which seeks to tie dealers to an undertaking in a dominant position by granting advantages which are not based on a countervailing economic advantage and to prevent those dealers from obtaining their supplies from the undertaking's competitors infringes Article 82 EC.

75 In the present case, the Commission infers that the quantity rebates are loyalty-inducing from the following evidence: the fact that the discount is calculated on the dealer's entire turnover with Michelin and the fact that the reference period applied for the purpose of the discount is one year (see recitals 216 and 226 to 239).

76 However, the applicant claims that the Commission never criticised it during the administrative procedure for having applied the quantity rebate percentage to the total turnover achieved by the dealers. The Commission has thus formulated a new objection and the contested decision should therefore be annulled in part for infringement of the rights of the defence.

77 The Court reiterates that 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 to which the Commission objects. It is only on that basis that the statement of objections can fulfil its function under the Community regulations of giving undertakings and associations of undertakings all the information necessary to enable them properly to defend themselves, before the Commission adopts a final decision (Joined Cases T-25/95, T-26/95, T-30/95 to T-32/95, T-34/95 to T-39/95, T-42/95 to T-46/95, T-48/95, T-50/95 to T-65/95, T-68/95 to T-71/95, T-87/95, T-88/95, T-103/95 and T-104/95 Cimenteries CBR and Others v Commission [2000] ECR II-491, paragraph 476).

78 However, the applicant must have realised upon reading the statement of objections that the Commission based the loyalty-inducing nature of the quantity rebates on, inter alia, the consideration that those rebates were calculated on the overall turnover achieved by the dealers with the applicant. The part of the statement of objections devoted to the loyalty-inducing nature of the quantity rebates states, at point 197, that a dealer could not take the risk at any given moment of diversifying his range to any significant extent at Michelin's expense since this could have jeopardised his ability to reach the rebate threshold and could thus have had a major effect on the overall cost price of the Michelin tyres purchased over the year (emphasis added). For new tyres, point 199 of the statement of objections notes the application of quantity rebates to the whole of the turnover in Michelin products (emphasis added) and, for retreaded tyres, point 200 states that the variations in the rate of the rebate resulting from a final order for retreads during a year affected the dealer's profit margin in respect of the total amount of retread sales for the whole of the year (emphasis added).

79 It is also clear from the applicant's reply to the statement of objections that it realised that one of the aspects of the Commission's objections to the quantity rebate system was the fact that the discount attained applied to the overall turnover with the applicant and not only to the bracket of additional quantities. Thus, on page 136 of its reply, the applicant attempts to show that reaching one turnover threshold had only a slight effect on the increase in the rebate rate. It states: The example given by the Commission in point 198 of the statement of objections ... speaks for itself: the Commission refers to the situation of a dealer whose annual turnover with Michelin is FRF 9 000, entitling him to a rebate of 7.5%, and who is clearly under considerable pressure to reach the next step, FRF 15 000, in order to receive 1% extra discount on all his annual purchases. The Commission does not appear to realise that 1% of a turnover of FRF 15 000 is only FRF 150, ... a very modest sum (emphasis added).

80 The applicant's argument therefore has no factual basis and must be rejected.

81 Also, as to whether the factors mentioned in paragraph 75 above show that the quantity rebate system has unlawful loyalty-inducing effects, it must be remembered that the Court of Justice held in Michelin v Commission (cited at paragraph 54 above, paragraph 81), that any system under which discounts are granted according to the quantities sold during a relatively long reference period has the inherent effect, at the end of that period, of increasing pressure on the buyer to reach the purchase figure needed to obtain the discount or to avoid suffering the expected loss for the entire period. As the Commission rightly points out in the contested decision (recital 230), [a] factor which considerably increased the pressure was that a final extra order of truck tyres allowing the higher scale to be reached affected the dealer's profit margin on sales of new Michelin tyres in all categories ....

82 However, the applicant claims that, contrary to what the Commission asserts in the contested decision (recital 216), the Community judicature has never imposed a maximum limit of three months on the reference period for quantity rebates. On the contrary, the Commission has always accepted that quantity discounts are calculated on an annual basis (Commission Decision 73/109/EEC of 2 January 1973 relating to proceedings under Articles [81] and [82] of the EEC Treaty (IV/26.918 - European Sugar Industry) (OJ 1973 L 140, p. 17, point 16) and Commission Decision 91/300/EEC of 19 December 1990 relating to a proceeding under Article [82] of the EEC Treaty (IV/33.133-D - Soda Ash - ICI) (OJ 1991 L 152, p. 40, point 6); Notices pursuant to Article 19(3) of Regulation No 17 concerning the rebate schemes applied by British Gypsum (OJ 1992 C 321, pp. 9 to 11)). The applicant claims that the pressure to reach a higher step in the discount system at issue in the present case was significantly less than in the target discount system examined in Michelin v Commission (cited at paragraph 54 above). Indeed, unlike the pressure caused when there is a single high target, where the dealer has everything to lose if he does not reach it, the large number of thresholds in the present case makes it easy for the dealer to reach the level necessary to be entitled to a discount and to move on to a higher scale, and also ensures that he does not risk losing the whole discount by obtaining part of his supplies from other suppliers. Furthermore, in the applicant's submission, the higher the dealer climbs up the discounts scale, the less he earns in additional discounts as he reaches each threshold.

83 The Court points out that the Commission, in the previous decision-making practice to which the applicant refers, did not adjudicate on the compatibility with Article 82 EC of discount systems which are linked to the volume of annual purchases from an undertaking in a dominant position. In Decisions 73/109 and 91/300, referred to in the preceding paragraph, the Commission called in question systems of loyalty discounts granted by an undertaking in a dominant position in return for commitments to obtain all or virtually all supplies from the undertaking.

84 As for the Commission notices concerning British Gypsum's commercial policy, mentioned in paragraph 82 above, the Commission did admittedly indicate that it intended to take a favourable approach to rebate schemes characterised by an annual reference period. However, in those notices, the Commission pointed out various specific features of the rebate schemes applied by British Gypsum which are absent in the present case. Thus, the rebates granted by British Gypsum were determined on the basis of the anticipated annual turnover and not on the basis of actual turnover. In those schemes, there was no readjustment of the discount for a customer whose annual turnover was lower than that initially anticipated, which significantly reduced the pressure on the customer to make additional purchases from British Gypsum at the end of the reference period. Furthermore, the British Gypsum rebates were granted quarterly. Before 1995, the quantity rebates applied by the applicant were granted once, at the end of February of the year following the reference year. Finally, in its notices, the Commission emphasised that the quantity rebates applied by British Gypsum were based on actual cost savings for that undertaking. Such justification is lacking in the present case (see paragraphs 107 to 110 above). The applicant therefore cannot find any support for its argument in the Commission notices concerning the rebate schemes applied by British Gypsum.

85 In Michelin v Commission, moreover, the discount system in issue was based, as in the present case, on an annual reference period (Michelin v Commission, cited at paragraph 54 above, paragraph 81). Admittedly, contrary to what the contested decision suggests (recital 216), the Court of Justice did not expressly hold that the reference period could not exceed three months. However, it cannot be denied that the loyalty-inducing nature of a system of discounts calculated on total turnover achieved increases in proportion to the length of the reference period. A quantity rebate system has no loyalty-inducing effect if discounts are granted on invoice according to the size of the order. If a discount is granted for purchases made during a reference period, the loyalty-inducing effect is less significant where the additional discount applies only to the quantities exceeding a certain threshold than where the discount applies to total turnover achieved during the reference period. In the latter case, the saving which may be made by reaching a higher scale applies to total turnover achieved whereas, in the former case, it applies only to the additional amount purchased.

86 However, the applicant claims that the question whether the discount is calculated on total turnover or only on the additional amount purchased is merely a question of presentation. It states, in that regard, that a discount of a specific amount may always be expressed either as a percentage of the additional volume purchased or as a percentage of the total volume, although the percentage will be higher when the basis of the discount is the additional volume rather than the total volume.

87 That argument must be rejected. When the discount is granted by tranche, the discount obtained for the purchase of an additional unit never exceeds the percentage for the tranche in question. If the table reproduced at paragraph 69 above comprised a quantity rebate system in which the discount was calculated by tranche, the consequence, for example, of reaching the FRF 30 000 threshold in turnover would be that, for purchasing units exceeding that turnover threshold, a dealer would obtain a discount of 9.25% instead of 9%. In other words, by increasing his turnover with the applicant from FRF 29 999 to FRF 30 000, the dealer would obtain, in a discount system calculated by tranche, an additional discount of 0.25% or FRF 0.0025 (0.25% additional discount on the amount of FRF 1). A dealer's interest in reaching such a threshold is relatively limited. On the other hand, if, as in the present case, the discount applies to the total volume purchased, an increase in turnover with the applicant from FRF 29 999 to FRF 30 000 brings the dealer an additional discount of FRF 75 (0.25% additional discount on the amount of FRF 30 000), which is 7 500% of the additional turnover achieved (FRF 75 additional discount on an additional turnover of FRF 1). A dealer has a genuine interest in reaching a further threshold as regards both the thresholds at the lower end of the scale, as the above example shows, and those at the upper end of the scale. For example, by increasing his turnover from FRF 16 384 999 to FRF 16 387 000, a dealer would earn an additional discount of FRF 1 in a by tranche discount system (0.05% additional discount on the amount of FRF 2 001)]. In the system applied by the applicant, the additional discount was FRF 8 193.5 (0.05% additional discount on an amount of FRF 16 387 000), or an additional discount of approximately 410% of the additional turnover achieved (FRF 8 193.5 additional discount on an additional turnover of FRF 2 001).

88 The incentive to purchase created by a quantity rebate system is therefore much greater where the discounts are calculated on total turnover achieved during a certain period than where they are calculated only tranche by tranche. The longer the reference period, the more loyalty-inducing the quantity rebate system.

89 Furthermore, in Portugal v Commission (cited at paragraph 58 above), which the applicant cites on a number of occasions as evidence of the lawfulness of the quantity rebates examined in the present case, the discount rate set was applicable by tranche and the reference period was one month.

90 The applicant also draws attention to the fact that the variations between the discount rates for the last steps on the scale were slight.

91 It is apparent from the tables reproduced at paragraphs 69 and 70 above that, in the quantity rebate system applied by the applicant, the discount rates varied considerably between the lower and higher steps. It is true, as the applicant submits, that the increase in the discount rate at the lower end of the scale was greater than at the upper end of the scale (0.05% for the final steps). However, the Court of Justice held in Michelin v Commission, cited at paragraph 54 above, paragraph 81, that the variations in the rate of discount [between 0.2% and 0.4%] over a year as a result of one last order, even a small one, affected the dealer's margin of profit on the whole year's sales of Michelin heavy-vehicle tyres. In such circumstances, even quite slight variations might put dealers under appreciable pressure.

92 Furthermore, the variations in the discount rates were not as slight as the applicant claims. The abusive nature of the quantity rebate system cannot be assessed in isolation. A dealer who exceeded the maximum figure stipulated for quantity rebates was allowed to sign a commercial agreement with the applicant (see paragraph 51 above). The dealer could thus have an extension of the tables corresponding to the quantity rebates and thus be entitled to an additional discount of up to 2% of turnover.

93 However, in reply to a question put at the hearing, the applicant disputed, for the first time, the finding made in recitals 76 and 230 of the contested decision that the commercial agreements offered the dealers concerned an extension of the quantity rebate tables. It contended that the additional discount which could be obtained by concluding a commercial agreement applied to the progress bonus and not to the quantity rebates.

94 That argument must be rejected. The Commission enclosed with its defence a copy of the commercial agreement for 1994. Article 1 of that agreement, entitled Quantity rebates, states unequivocally that the rebate scale annexed to the commercial agreement supplements the quantity rebate scale in the general conditions and forms part of it. The variation between the lower and higher rates on the scale attached to the general conditions, which takes as its starting point the last step of the quantity rebates in the general conditions, is 2%. It therefore follows that the Commission was correct to state in the contested decision that an extension of the tables corresponding to the quantity rebates could potentially [result] in a difference of up to 2% of turnover (recital 76). Furthermore, the applicant acknowledged, in point 18 of its reply, that the scale to which a dealer had access by signing a commercial agreement formed part of the quantity rebate system.

95 It follows from all of the foregoing that a quantity rebate system in which there is a significant variation in the discount rates between the lower and higher steps, which has a reference period of one year and in which the discount is fixed on the basis of total turnover achieved during the reference period, has the characteristics of a loyalty-inducing discount system.

96 Admittedly, as the applicant points out, the aim of any competition on price and any discount system is to encourage the customer to purchase more from the same supplier.

97 However, an undertaking in a dominant position has a special responsibility not to allow its conduct to impair genuine undistorted competition on the common market (Michelin v Commission, cited at paragraph 54 above, paragraph 57). Not all competition on price can be regarded as legitimate (AKZO v Commission, cited at paragraph 54 above, paragraph 70, and Irish Sugar v Commission, cited at paragraph 54 above, paragraph 111). An undertaking in a dominant position cannot have recourse to means other than those within the scope of competition on the merits (Irish Sugar v Commission, cited at paragraph 54 above, paragraph 111).

98 In those circumstances, it is necessary to consider whether, in spite of appearances, the quantity rebate system applied by the applicant is based on a countervailing advantage which may be economically justified (see, in that regard, Michelin v Commission, cited at paragraph 54 above, paragraph 73; Irish Sugar v Commission, cited at paragraph 54 above, paragraph 114; and Portugal v Commission, cited at paragraph 58 above, paragraph 52) or, in other words, if it rewards an economy of scale made by the applicant because of orders for large quantities. If increasing the quantity supplied results in lower costs for the supplier, the latter is entitled to pass on that reduction to the customer in the form of a more favourable tariff (Opinion of Advocate General Mischo in Portugal v Commission, cited at paragraph 58 above, point 106).

99 In that regard, the applicant criticises, first, the fact that the Commission first raised in its defence (points 60 and 100) the objection that in the present case the quantity rebates are not justified by economies of scale. Since that objection was not stated in the statement of objections or in the contested decision, the applicant maintains that all the Commission's arguments relating to it must be rejected as inadmissible.

100 It must be borne in mind that, according to settled case-law, discounts granted by an undertaking in a dominant position must be based on a countervailing advantage which may be economically justified (Michelin v Commission, cited at paragraph 54 above, paragraph 85; Irish Sugar v Commission, cited at paragraph 54 above, paragraph 114; and Portugal v Commission, cited at paragraph 58 above, paragraph 52). A quantity rebate system is therefore compatible with Article 82 EC if the advantage conferred on dealers is justified by the volume of business they bring or by any economies of scale they allow the supplier to make (Portugal v Commission, cited at paragraph 58 above, paragraph 52).

101 It must be stated first of all that, in the contested decision, the Commission makes express reference to that case-law, stating that a rebate can only correspond to the economies of scale achieved by the firm as a result of the additional purchases which consumers are induced to make (recital 216). After examining the arrangements, the Commission, paraphrasing the judgment in Michelin v Commission, concludes that the quantity rebate system [was] not based on any economic service justifying [it] (recital 227 of the contested decision).

102 It follows that the Commission did not alter the scope of the contested decision by claiming, in its defence, that the quantity rebates were not justified by economies of scale.

103 Furthermore, the statement of objections and the contested decision are also consistent on this point, so that the applicant cannot invoke an infringement of its rights of defence during the administrative procedure.

104 At point 195 of its statement of objections, the Commission already complained to the applicant that the quantity rebates [were] not based on any economic service justifying [them].

105 Finally, the applicant fully understood that objection since, in its reply to the statement of objections, it stated that, in the present case, [t]he granting of rebates [was] ... economically justified in the case of a manufacturer who makes economies of scale in manufacture and distribution (p. 129). Similarly, at the hearing, the applicant reiterated that a quantity rebate system was lawful, referring to the economy of scale in manufacture and distribution which results from the purchase of increasing quantities (transcript of the hearing, p. 82).

106 In those circumstances, the argument set out at paragraph 99 above must be rejected.

107 It is then necessary to examine whether the applicant has established that the quantity rebate system, which presents the characteristics of a loyalty-inducing rebate system, was based on objective economic reasons (see, in that regard, Irish Sugar v Commission, cited at paragraph 54 above, paragraph 188, and Portugal v Commission, cited at paragraph 58 above, paragraph 56).

108 It must be stated that the applicant provides no specific information in that regard. It merely states that orders for large amounts involve economies and that the customer is entitled to have those economies passed on to him in the price that he pays (point 57 of the application). It also refers to its reply to the statement of objections and to the transcript of the hearing (reply, point 91). Far from establishing that the quantity rebates were based on actual cost savings (Opinion of Advocate General Mischo in Portugal v Commission, cited at paragraph 58 above, point 118), the applicant merely states generally that the quantity rebates were justified by economies of scale in the areas of production costs and distribution (transcript of the hearing, p. 62).

109 However, such a line of argument is too general and is insufficient to provide economic reasons to explain specifically the discount rates chosen for the various steps in the rebate system in question (see, in that regard, Portugal v Commission, cited at paragraph 58 above, paragraph 56).

110 It follows from all of the foregoing that the Commission was entitled to conclude, in the contested decision, that the quantity rebate system at issue was designed to tie truck tyre dealers in France to the applicant by granting advantages which were not based on any economic justification. Because it was loyalty-inducing, the quantity rebate system tended to prevent dealers from being able to select freely at any time, in the light of the market situation, the most advantageous of the offers made by various competitors and to change supplier without suffering any appreciable economic disadvantage. The rebate system thus limited the dealers' choice of supplier and made access to the market more difficult for competitors, while the position of dependence in which the dealers found themselves, and which was created by the discount system in question, was not therefore based on any countervailing advantage which might be economically justified (see Michelin v Commission, cited at paragraph 54 above, paragraph 85).

111 The applicant cannot find support in the transparent nature of the quantity rebate system. A loyalty-inducing rebate system is contrary to Article 82 EC, whether it is transparent or not. Furthermore, the quantity rebates formed part of a complex system of discounts, some of which on the applicant's own admission constituted an abuse (see paragraph 45 above). The simultaneous application of various discount systems - namely, the quantity rebates, the service bonus, the progress bonus, and the bonuses linked to the PRO Agreement and the Michelin Friends Club - which were not obtained on invoice, made it impossible for the dealer to calculate the exact purchase price of Michelin tyres at the time of purchase. That situation inevitably put dealers in a position of uncertainty and dependence on the applicant.

112 The applicant's argument alleging that the Directorate-General for Competition, Consumer Affairs and Fraud Prevention (the DGCCRF) approved the quantity rebate system must also be rejected. Firstly, the documents referred to by the applicant provide no proof of the DGCCRF's approval (see paragraphs 305 to 308 below). Secondly, it is in any event immaterial whether granting the discounts was compatible with French law or was approved by the DGCCRF, given the primacy of Community law on the matter and the direct effectiveness of Article 82 EC (Case 127/73 BRT and Others [1974] ECR 51, paragraphs 15 and 16; Case 66/86 Ahmed Saeed Flugreisen and Others [1989] ECR 803, paragraph 23; and Irish Sugar v Commission, cited at paragraph 54 above, paragraph 211). The alleged conformity of the quantity rebate system with United States competition law is likewise irrelevant in the present case.

113 It follows from the foregoing that the Commission was correct to find that the quantity rebate system applied by the applicant infringed Article 82 EC, inter alia because it was loyalty-inducing. There is therefore no longer any need to examine those parts of the contested decision dealing specifically with the unfairness (recitals 218 to 225 of the contested decision) and the market-partitioning effect (recitals 240 to 247 of the contested decision) of the quantity rebate system (see paragraph 66 above).

114 It follows that the first plea must be rejected in its entirety.

Second plea: the Commission infringed Article 82 EC by finding that the service bonus system constituted an abuse within the meaning of that provision

The contested decision

115 In recital 60 of the contested decision, the Commission states that the service bonus was an additional incentive proposed by Michelin to the specialised dealer to improve his equipment and after-sales service. In recital 62 of the contested decision, it describes the system as follows:

The size of the bonus, which was fixed at the beginning of the year by annual agreement with the dealer in a document entitled Service bonus, depended on compliance with commitments entered into by the dealer in a number of areas. Each commitment corresponded to a number of points, and the exceeding of certain thresholds of points gave entitlement to a bonus corresponding to a percentage of the turnover achieved with Michelin France, all tyre types combined. This percentage ranged from 0 to 1.5% between 1980 and 1991 and from 0 to 2.25% between 1992 and 1996.

116 The Commission considered that the service bonus infringed Article 82 EC since (i) it was unfair because of the way in which it was fixed; (ii) it had a loyalty-inducing effect; and (iii) it was in the nature of a tied sale (recital 249 of the contested decision).

117 As regards the unfairness of the service bonus, it is stated in recital 250 of the contested decision:

The granting of the points was somewhat subjective and gave Michelin a margin of discretion in its assessment. In addition, some of the points depended on the provision of very precise strategic information on the market (from 1980 to 1992), which was not in the dealer's interest (no return in the form of studies, for example).

118 The Commission adds in recital 252 of the contested decision: Some of the headings were by their very nature subjective in their assessment and/or the number of points granted could vary depending on the quality of the service provided. However, the tally of the points scored was calculated by Michelin's representative, who also set the targets and the corresponding points for the current year. Michelin's ability to unilaterally decrease the bonus during the year if the targets were not met is yet another factor which enabled Michelin to make the conditions granted to dealers dependent on its subjective assessment. Michelin's argument that use was made of this possibility only in exceptional cases does not alter the fact that it was an abuse. The Commission goes on to refer to a number of replies given by Michelin tyre dealers to the requests for information made by the Commission during the administrative procedure.

119 The loyalty-inducing effect of the service bonus is described as follows in recital 254 of the contested decision:

Up to 1992, points were granted if the dealer achieved a minimum percentage of purchases of Michelin products. Meeting this target set by Michelin as part of the service bonus greatly strengthened the links between Michelin and dealers by means of a loyalty-inducing effect which must be regarded as [an] abuse. Up to 1992 at least, a heading service new products enabled the dealer to obtain additional points if his purchase of new products amounted to a specific percentage in relation to the regional share of such products. However, since the earning of points did not depend on quantities, but on the achievement of a given percentage in relation to the regional share of such products, this was a variant of a loyalty bonus which must be regarded as an abuse where it is required by an undertaking in a dominant position. The heading constituted an improper incentive to promote new Michelin products at the expense of competing products.

120 Finally, as to the tied sales effect, the Commission points out in recital 256 of the contested decision:

One point was granted if the dealer committed himself to systematically returning used Michelin tyres to Michelin for retreading. The service bonus was thus also a means of achieving tied sales, an abuse which enabled Michelin to use its dominant position on the market for new truck tyres to enhance its position on the adjacent retread market.

121 It further states, in recital 257 of the contested decision:

The possible loss of that point and the possible reduction in the total amount of the annual bonus that could be earned meant a direct increase in the unit cost of all the tyres purchased from Michelin, since the dealer lost not only the bonus on retreads, but also that linked to the whole of his turnover with Michelin.

The abusive nature of the service bonus

– Introduction

122 In connection with this plea, the applicant claims, first of all, that its rights of defence were infringed during the administrative procedure in that it did not have access to the Michelin tyre dealers' answers to the Commission's requests for information of 30 December 1996 and 27 October 1997. Next, the applicant contends that the contested decision misinterprets Article 82 EC and misconstrues the fundamental characteristics of the service bonus system in that it maintains that the service bonus system (i) was unfair; (ii) was loyalty-inducing; and (iii) had a tied sales effect as regards retreaded tyres.

– Infringement of the rights of the defence

123 The applicant complains that it never had access, during the administrative procedure, to the dealers' answers to the Commission's requests for information. The Commission communicated to it only the tables enclosed as annexes 10 and 16 to the application. Therefore, the answers given by the dealers cannot be considered valid pieces of evidence (Case 107/82 AEG v Commission [1983] ECR 3151, paragraph 23 et seq., and Case T-30/91 Solvay v Commission [1995] ECR II-1775, paragraph 58 et seq.). The applicant submits that it should have had access, during the administrative procedure, to the actual documents in the file. It refers in that regard to Case T-7/89 Hercules Chemicals v Commission [1991] ECR II-1711, paragraph 54, to Joined Cases T-68/89, T-77/89 and T-78/89 SIV and Others v Commission [1992] ECR II-1403, paragraphs 91 to 95, and also to the Commission Notice on the internal rules of procedure for processing requests for access to the file in cases pursuant to Articles [81] and [82] of the EC Treaty, Articles 65 and 66 of the ECSC Treaty and Council Regulation (EEC) No 4064/89 (OJ 1997 C 23, p. 3). In the applicant's submission, the Commission's failure to communicate those documents deprived it of the opportunity to check that there were no errors in the preparation of the tables to which it had access. Furthermore, if it had known the identity of the dealers alleged to have been harmed, it would have been able to ascertain their real reasons for criticising it.

124 In that regard, the Court observes that, with regard to answers by third parties to requests by the Commission for information, the Commission must take into account the risk that an undertaking holding a dominant position might adopt retaliatory measures against competitors, suppliers or customers who have collaborated in the investigation carried out by the Commission (Case C-310/93 P BPB Industries and British Gypsum v Commission [1995] ECR I-865, paragraph 26, and Case T-5/02 Tetra Laval v Commission [2002] ECR II-4381, paragraph 98).

125 In view of that risk, the applicant cannot criticise the Commission for not informing it of the identity of the dealers who answered the requests for information. The Commission only refused the applicant access to those parts of the dealers' answers to the requests for information which would have enabled them to be identified. Thus, in order to avoid the dealers concerned being identified by the applicant, the Commission sent the applicant a table reproducing, without mentioning names, the answers provided by each of the dealers to the requests for information which it had sent to them (annexes 10 and 16 to the application). By preparing a non-confidential version of those answers, it scrupulously observed the requirements of the case-law, which seek to balance the protection of confidential information against the safeguarding of the right of the person to whom a statement of objections is addressed to have access to the whole of the file (Cimenteries CBR and Others v Commission, cited at paragraph 77 above, paragraph 147).

126 As for the argument alleging that it was impossible for the applicant to verify that there had been no errors in the preparation of the tables to which it had access, it must be remembered that the parties expressly consented at the hearing that the Court should ascertain that no such errors were present (see paragraph 36 above). After examining them, the Court finds that the tables prepared by the Commission contain only one material inaccuracy. The percentage which the Michelin brand represented in the turnover of the first dealer mentioned under Question 2 of the request for information of 30 December 1996 is, according to the Commission's table (annex 10 to the application), between 25% and 30%, whereas it was, in fact, in the order of 23.4% (document 36041-14745). That inaccuracy cannot have affected the applicant's rights of defence since the information given in the table is close to the correct figure.

127 Also, a comparison of the dealers' answers with the tables to which the applicant had access during the administrative procedure reveals that the applicant had access to all the non-confidential answers provided by the dealers to the requests for information, with the exception of an extract cited in recital 252 of the contested decision. The extract reads as follows; [a]nother dealer explains that he has been subject to retaliatory measures in the form of the drastic reduction of certain bonuses: service bonus (document 36041-15166). The applicant had also claimed in its application that it had not been aware of that incriminating evidence during the administrative procedure.

128 The Commission concedes that, as a result of an administrative error, the applicant did not have access to that part of the answer during the administrative procedure.

129 In that regard, it has been consistently held that the answer identified in paragraph 127 above must be excluded as evidence (Cimenteries CBR and Others v Commission, cited at paragraph 77 above, paragraph 364, and the case-law cited there). Its exclusion would lead to the annulment of the contested decision in so far as it refers to the service bonus only if the objection relating to that bonus could be proved only by reference to that document (Cimenteries CBR and Others v Commission, cited at paragraph 77 above, paragraph 364, and the case-law cited therein).

130 It is apparent from the contested decision (recital 252) that the Commission refers to the answer concerned only in order to show that the service bonus is unfair. However, the Commission concludes that the service bonus constitutes an abuse not only because it is unfair but also because it is loyalty-inducing and has a tied sales effect.

131 Furthermore, it is apparent from the analysis to be carried out below (see paragraphs 136 to 150) that, even disregarding that answer, it was established to the requisite legal standard in the contested decision that the service bonus was unfair.

132 Finally, the applicant claims that, during the administrative procedure, the Commission contacted only the dealers suggested by Bandag. That situation was, it alleges, to the detriment of the applicant.

133 That argument must be rejected. It is clear from the correspondence between Bandag and the Commission, submitted to the Court on 24 April 2003 (see paragraph 37 above), that Bandag suggested to the Commission the names of six dealers who had information relevant to the Commission's investigation. Although those six dealers were all among the addressees of the request for information of 30 December 1996, that request was also sent to 13 other dealers. Furthermore, none of the dealers suggested by Bandag is among the 20 addressees of the request for information of 27 October 1997. The names of the dealers indicated by Bandag were therefore used only for a small proportion of the requests for information.

134 In any event, it is apparent from the contested decision that, for the purposes of establishing the infringement of Article 82 EC, the Commission relied principally on the characteristics of the discount systems applied by the applicant and not on the dealers' answers to the requests for information. It is quite clear that the Commission referred to the dealers' answers only to show the existence of a dominant position - which the applicant does not dispute - (recital 201 of the contested decision) and to show that the service bonus was unfair (recital 252 of the contested decision). As already stated above, the Commission concluded that the service bonus constituted an abuse not only because it was unfair but also because it was loy