2.

We should therefore return to the terms of Article 85(1) which states ‘The following shall be prohibited as incompatible with the common market: all agreements between undertakings … which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market’. The passage therefore requires the conjunction of two conditions which the Commission, in its observations, considered in the light of your case-law, commencing with that which subordinates the incompatibility of the agreement with the Common Market to the finding that it has as its object or effect the distortion of competition. This is in principle the precise object of an exclusive dealing agreement with a clause giving absolute territorial protection. In fact, if in the protected zone sales by other traders are rendered more difficult or excluded and if the consumers in that zone can only obtain the same products from the exclusive dealer and thus suffer a restriction in choice at the distribution level, these are exactly the results which the agreement sought to bring about. Is this acceptable? You have certainly stated in the judgment in the Grundig case that for the purposes of the application of Article 85(1) there is no need to take into account the concrete effects of an agreement when it has as its object the prevention, restriction or distortion of competition, which might imply a negative reply to the question put; but it appears that the scope of this declaration must be restricted to the facts which form the basis of the judgment. In fact, according to the judgment in the Technique Minière case even the object of the agreement must be considered ‘in the economic context in which it is to be applied’, and for Article 85(1) to be applicable this examination must reveal a ‘sufficiently deleterious effect’ with regard to competition. In sum, this amounts to saying that the change in competition must not be merely theoretical, but must be fairly widespread, and this is therefore not far removed from the ‘appreciable’ restriction which this same judgment requires when the agreement is no longer considered with regard to its object but with regard to its effects. Moreover competition must be understood in the actual context in which it would occur in the absence of the agreement. The consequences of this for the other undertakings or consumers may be very different depending on the proportion of the market which the manufacturer controls or endeavours to obtain. At this point the question put by the German court is again encountered. You have already referred to this aspect of the problem when you considered under what conditions an exclusive dealing contract must be considered as prohibited. You listed a whole series of factors which must be taken into account. As well as the severity of the clauses intended to protect the exclusive dealership or on the other hand the opportunities allowed for other commercial competitors, and whether the agreement is an isolated one or part of a series, you particularly mentioned the nature and the quantity, limited or otherwise, of the products covered by the agreement together with the position of the grantor and of the dealer on the market in the products concerned. It is this last point which must be emphasized. If the manufacturer controls a relatively important part of the market and is in a strong position with regard to the products subject to the agreement, there are definite grounds for the view that competition is appreciably affected at the distribution level by an exclusive dealership guaranteed by absolute territorial protection. On the other hand, one cannot be so positive when the producer's position is very weak. A contract of the same type may allow him to bring his products into a sales zone, without appreciably diminishing either the consumers' choice or the sales opportunities of other traders. I do not wish to express myself within the framework of Article 177 on the case put forward by the German court, but it may be thought for example that the production figures which I have just quoted only represent a drop in the ocean in relation to the total production of the Federal Republic and the Belgian and Luxembourg markets. To close on this point it will be recalled that the Grundig judgment took particular account of the fact that that brand was extremely widespread in appraising the influence on competition in the Common Market of the agreement which aimed at isolating the French market for this brand of products and artificially maintaining separate markets. It may be deduced from this that an agreement of the same type relating to almost unknown brands would not lead you to make the same decision and to employ the same severity.