OPINION OF MR ADVOCATE-GENERAL LAGRANGE

DELIVERED ON 14 MAY 1964 ( 1 )

Mr President,

Members of the Court,

It would, I think, be an insult to the Court to relate, even summarily, the history of the joint-selling organization for Ruhr coal and the vicissitudes it has undergone since being subjected to the provisions of Article 65 of the ECSC Treaty: the Court has been too closely involved to be unable to approach with full knowledge of the facts the new situation constituted by Decisions Nos 5/63 and 6/63 of the High Authority and the application made against them by the Government of the Kingdom of the Netherlands. This does not mean, however, that the present application does not, like its predecessors, merit serious consideration, particularly in that this is the first time that a Member State has contested before you an authorization decision apparently accepted by the mining undertakings and agencies concerned.

I shall merely recall that from a legal point of view the dispute is necessarily confined within the limits of the Opinion 1/61 of the Court of 13 December 1961 and of its judgment in Case 13/60 of 18 May 1962 and, from an economic point of view, of a competitive situation far different — as is shown by the evidence — from that which existed in the first few years after the introduction of the Treaty. This is very important, for it is not unthinkable that an authorization similar to that resulting from the contested Decisions, had it been granted when the Common Market in coal started to operate, might have had very different effects from those likely to follow in the present market conditions and perhaps (who knows?) at that time might even have resulted in an organization which conformed with the rules of the Treaty and satisfied its aims, which, as the applicant Government justly recalls, has not been the case.

Also, I do not think it necessary here to analyse in detail the contested Decisions. You know that they authorize, subject to various conditions, two agreements, each of which grouped together about half the mining companies of the Ruhr Basin for the joint selling of fuels from their respective operations through two selling agencies; ‘Geitling’ for one of the groups, and ‘Präsident’ for the other. There no longer exists, as there had been, a ‘joint office’ allocating orders between the agencies, nor does the ‘standards board’, nor the financial arrangements for compensation, nor the joint export company; on the other hand, in the case of Konzerne, all the companies within the same group are affiliated to the same agency.

However, there remain common organizations of ‘Ruhrkohle-Treuhand’ and ‘Ruhrkohlen-Beratung’ still working for the two agencies, the former, however, being obliged to limit its activity ‘to the technical and electronic processing of data’ without having the right to intervene in the agencies' accounting methods or in their financial management (Recital 7) and the second being responsible for technical studies concerning ‘publicity for Ruhr coal’ and ‘general investigations concerning the energy market’ (Recital 8).

The four grounds mentioned in Article 33 of the ECSC Treaty are invoked in support of the application. However, as the submission of misuse of powers has been neither developed nor separately presented I may ignore it. I shall treat the submission of lack of competence in the same way, although the applicant appears to attach a certain importance to it. In fact, as usually happens, the submissions of lack of competence which have been raised coincide with the grounds of complaint based on infringement of the Treaty: it is contended that the High Authority failed to appreciate the extent of its competence in exercising those of its powers which are not disputed. The question whether or not such grounds of complaint are based on lack of competence would only be of interest if the Court were to raise it of its own motion because this ground concerns public policy; however, once the submission is raised expressly it matters little whether it be examined under the heading of lack of competence or of infringement of the Treaty. Generally in such cases the Court deals with it under the latter heading, which is to be expected, since the limits of the High Authority's powers are determined by the provisions of the Treaty.

As for the ‘infringement of an essential procedural requirement’, which in this case is the absence or insufficiency of grounds for the Decision, in such matters this is always partly linked to the substance, that is, to the legality, since, as you have several times had occasion to recall, the requirements of the reasons for the decision vary according to the more or less discretionary nature of the power exercised and must enable the Court to exercise its power to review the legality of the actions of the High Authority while observing the limits of the discretionary power which result as much from the nature of the application for annulment as from the restrictions of Article 33 (judgments in Case 18/57, Nold, 20 March 1959, Rec. 1958-59, p. 114; Case 36/57 Nold et Comptoirs, 15 July 1960, Rec. 1960, p. 890). In the latter case you only examined the various grounds of complaint in detail when the submission of infringement of an essential procedural requirement was raised. In this instance, however, certain grounds of complaint concern only the reasons for the decision: I shall consider them separately. I shall then deal with the other grounds of complaint which either concern infringement of the Treaty alone or both submissions in such a way that a separate consideration of each one would be somewhat artificial or likely to involve repetition. This method will also have the advantage of following more closely the order of the three subparagraphs (a), (b) and (c) of Article 65 (2).

I — Grounds of complaint based solely on infringement of an essential procedural requirement

The first is based on the absence of publications in extenso of the contracts and resolutions authorized, from which it follows that the grounds for the contested Decisions give only an incomplete picture of the system approved by the High Authority.

This ground of complaint cannot be maintained. It is clear that the reasons required for an authorization decision taken under Article 65 (2) do not extend to the necessity to publish the agreements authorized in their entirety: it is enough that, as in this case, the decision gives a sufficiently complete analysis of these reasons for their character to be assessed in the light of the requirements of the Treaty.

This does not mean that, in appropriate cases, the production (not the publication) of agreements might prove useful in order to enable the parties better to support particular aspects of their argument and the Court to be better informed. But this depends, as in any action, on the preparatory inquiries made into the case and not on the statement of reasons. In fact, during the proceedings the applicant received all the documents and is thus clearly in a position to understand the scope of the references to the text of the agreements made in certain provisions of the contested Decisions or in reasons given for them.

The second ground of complaint deals only with infringement of an essential procedural requirement and concerns the insufficiency of reasons given for the contested Decisions in the light of the first requirement of Article 65 (2) (a). The contested Decisions did not show, or only showed insufficiently, in what way the authorized agreements ‘will make for a substantial improvement in the … distribution of those products’.

The reasons for this requirement are found in the first subparagraph of Recital 26. In my opinion the reasons given are sufficient to meet the requirements of subparagraph (a). In fact, the various advantages of the joint selling of coal products in general and of those of the Ruhr in particular, as regards the improvement in distribution, are well known and have never been disputed; nor are they disputed by the applicant Government. In my opinion, it was enough that the contested Decisions summarized these advantages, as they did clearly and precisely in Recital 26.

II — Other grounds of complaint

A — Grounds of complaint based on the application of Article 65 (2) (b)

Here it is no longer simply a question of establishing that specialization, joint-buying or joint-selling ‘agreements’‘will make for a substantial improvement in the production or distribution of those products’ when compared with the situation which would exist in the absence of such agreements. It must still be shown that ‘the agreement in question is essential in order to achieve these results and is not more restrictive than is necessary for that purpose’, which implies a real assessment of all the features of the agreement and of its possible effects. Such an assessment necessarily involves a large measure of appreciation mainly of a technical and commercial character, since it is essentially a question whether the restrictions on the liberty and the autonomy of undertakings provided for in the agreement, are both necessary and sufficient to achieve the improvements sought in the scheme of production or the system of distribution. Then, but only then, do we come up against the requirements of subparagraph (c), which involves above all an anticipatory assessment of an economic nature concerning the possibly restrictive effects of the agreement on competition in the market which would result from the dominant position which it is likely to give to the undertakings concerned: this would amount in fact to an arbitration between the technical optimum and the need to safeguard that ‘measure of competition’ which must, according to your judgment in Case 13/60, always exist even in an imperfect market. Allow me to refer here to some remarks made in my opinion in Nold et Comptoirs, Rec. 1960, pp. 913 et seq.

It is quite clear, however, that the concept of competition underlies even a consideration of the requirements of subparagraph (b), since the obligation to reject those ‘restrictions’ in the agreement which are unnecessary is already justified by the attack on competition constituted by the agreement itself and which, for that reason, entails its prohibition in principle under Article 65 (1). It is for this reason that certain recitals in the contested Decisions, for example, Recitals 27 to 33, which are intended to ensure the mutual independence of the two agencies, come under both (c) and (b).

What, therefore, are the criticisms of the requirements of subparagraph (b) made in the application?

1. First, there is one which refers to the structure and, in particular, to the number of agencies authorized: we are told that there was no imperative reason for establishing only two selling agencies in the Ruhr. To that, the defendant replies that, when presented with a request for authorization, it does not have to consider the question whether some other agreement would also, perhaps better, meet the requirements of Article 65 (2), but only to assess whether the agreement submitted to it fulfils these requirements; this also applies to the ‘size’ of the selling organizations: the High Authority does not have to seek the ‘optimum size’ for these organizations. Stated in this way, the argument raised by the defence is clearly too unqualified. It is not correct that the High Authority has no choice between a pure and simple rejection and an unconditional acceptance of the requests for authorization submitted. To begin with, it is well known that the decisions are preceded by long and laborious discussions with the interested parties and that meanwhile the Ruhr continues under the system of cartel organization which it has known for a very long time and which, legal or not, has been maintained since the entry into force of the Treaty: it was maintained originally by means of a liberal interpretation of the transitional provisions which were the subject of a Decision of the High Authority (Decision No 37/63 of 11 July 1953) the legality of which was confirmed by this Court (judgment in Case 6/54 of 21 March 1955, Rec. 1954-1955 and Case 1/58 of 4 February 1959, Rec. 1958 1959, pp. 64 et seq) without ever having been disputed, at least expressly, by the government of any of the Member States; the cartel has since been maintained each time that it has appeared necessary by means of extensions granted by the High Authority. No one considers that the Ruhr may suddenly be deprived of any joint selling-organization. On the other hand, the High Authority always has the right — which has frequently been exercised — to make the grant of its authorization subject to certain modifications in the organization submitted to it for approval. Thus, had it considered that agreements referring to an organization limited to two agencies were not ‘essential’ in order to achieve an improved distribution of the products concerned and were, as a result of this limitation, ‘more restrictive than is necessary’ to achieve a better distribution, it would have been justified in refusing its authorization (and even obliged to do so), or in practice to inform the interested parties in good time as to conditions regarding the number of agencies under which the authorization would have been granted. I do not think, however, that the submission should be accepted. The question of legality concerns an assessment which is essentially within the discretionary power of the High Authority. One may consider that a joint-selling organization divided into two independent sales agencies, even with practically identical structures, is likely to ensure better distribution than a more fragmented organization; the really delicate question — which I shall examine in due course — is rather that of the compatibility of the two agency system with the provisions of subparagraph (c). From the point of view of insufficiency of reasons for the decision, more doubts may exist, since the recitals of the contested Decisions give no particular justification on this question of the structure and especially on the number of agencies to bring them within the requirements of subparagraph (b). However, I believe that the considerations in Recital 26, taken together with the grounds for each of the Decisions, are sufficient in this respect. In fact, as I have said, it seems difficult to dispute that the improvement in the conditions of distribution of coal products which results from a joint sales organization (an explanation of which is given by the High Authority in Recital 26) is greater the stronger the concentration, particularly as regards the products of the same basin which comprise approximately the same range and are offered to a large number of customers; as we have been rightly reminded by counsel, no reasons need be given for the obvious. Once again, it is in relation to subparagraph (c) that the question of the size of the selling agencies really becomes important and on this subject the contested Decisions contain lengthy explanations.

2. The second ground of complaint concerning subparagraph (b) is based on the fact that the High Authority did not give sufficient reasons for and did not legally justify its Decisions, in so far as it admits that the agreements are ‘not more restrictive than is necessary for that purpose’; this question has only been considered in relation to one section of the clauses of the agreements. As regards the lack of sufficient reasons, I consider that this ground of complaint cannot be maintained. The High Authority has sifted out all the clauses of the agreements which in fact appeared to be ‘more restrictive than is necessary for that purpose’; these are given in Recitals 27 to 33 (and also in Recitals 34 to 36 concerning the trading regulations), which restrain or subject to certain conditions the application of the agreements to the points at issue. This being so, it was able merely to state in the second subparagraph of Recital 26, that ‘apart from certain exceptions which have yet to be examined (the agreements) are not more restrictive than is necessary for that purpose’. As regards the legality, the applicant does not indicate, or not precisely, which clauses authorized in the agreements involved restrictions which contravened subparagraph (b), or on what grounds they should be considered as illegal. In my opinion, this ground of complaint should be set aside in its entirety.

B — Grounds of complaint based on the system of supervision employed by the High Authority

The applicant divides its grounds of complaint between the submissions of lack of competence and of infringement of the Treaty (there is no question here of infringement of an essential procedural requirement). I prefer to consider them together both for the reasons set out at the beginning of my observations and also for the following two reasons:

1. The two submissions concerned Articles 15 and 16 of the contested Decisions, which are connected with each other and quite distinct from the other provisions;

2. The source of the powers possessed by the High Authority in this matter is to be found essentially in the texts (the third and fourth subparagraphs of Artcle 65 (2), Article 65 (3) and Article 47 of the Treaty) which, as regards the two submissions raised, should be considered together.

At first sight it may seem strange that the applicant government which considers that the agreements authorized do not fulfil the legal requirements, should also complain of the provisions drawn up to supervise their application as strictly as possible. Hitherto, it is the agencies which have had nothing to say in this field. In fact, the basic criticism by the applicant government concerns the fact that the High Authority had substituted for precise and objective conditions enumerated in the authorization decisions, merely a subsequent check on the actual manner in which the agencies executed those agreements, which had been subjected to all too lax conditions: in short, the High Authority had thought: let us trust the parties concerned and we shall see how they behave. Such an attitude is contrary to the Treaty.

Criticisms of the system of ‘preventive and repressive intervention’ established by the High Authority are made in relation to the provisions of Article 15 (3) and the second section of Article 16 (1) of the contested Decisions. Let me recall the terms of these passages:

Article 15 (3):

‘Application of the contracts, resolutions and decisions set out in subparagraphs (1) (a), (b) and (c) (that is, the most important measures taken by companies) shall be subject to a statement by the High Authority or its departments that they are covered by the authorization granted by the present Decision, or to their authorization by the High Authority under Article 65 (2) of the Treaty.’

Article 16 (1) :

‘Under Article 47 and Article 65 (3) of the Treaty the High Authority shall, to the extent that it considers necessary, permanently supervise … whether the measures as a whole adopted by the parties within the framework of (the) organization are essential in order to achieve the purpose defined in Article 65 (2) (a) of the Treaty, without contravening the provisions of the Treaty, or being more restrictive than is necessary for that purpose.’

It appears possible to reduce the criticisms of these provisions to two:

1. The first concerns the fact that the express or tacit right of approval of certain company measures, which under the contested Decisions belonged to the High Authority, results in replacing the power of authorization which is granted to the High Authority by Article 65 (2) and may only be exercised, in the circumstances set out in that Article, by a discretionary power exercised without control or the right to legal protection, for the benefit of the Member States in particular. It was even a ‘new’ power, the principle of which was condemned by the Opinion 1/61 of the Court and also by the judgments of 15 July 1960 on road transport. The applicant refers also to the Opinion 1/61 insofar as it censures the substitution of a subjective a posteriori check for an objective a priori consideration of the compatibility of an agreement with the Treaty. I shall immediately set aside Opinion 1/61 which, as you know, was given in quite another context, that is, concerning a possible ‘minor revision’ of the provisions of the third and fourth subparagraphs of Article 95. The Court based its unfavourable opinion essentially on an interpretation of Article 65 (2) (c), considering, first, that the projected amendments were more than a mere ‘adjustment’ of the powers of the High Authority in relation to the requirements of that subparagraph considered alone and, secondly, that this same subparagraph which merely confirmed the general prohibition in Article 4 (d), did not, therefore, require any amendment under Article 95. In this instance, there is clearly no question of setting aside the application of Article 65 (2) (c); on the contrary, the question is whether it has been observed, which I shall consider in a moment. The question thus only arises in relation to the general principles on which the Treaty is based, which have been recalled or defined several times by the Court and which, in fact, forbid the High Authority to give up its powers or to ascribe to itself a power not provided for by the Treaty! I do not think this has happened. First, on reading the contested Decision and their Recitals, I find it difficult to maintain that the High Authority did not ‘objectively’ consider the nature and extent of the agreements which were submitted to it in relation to the various requirements of Article 65 (2). But, as I have already observed, one must not forget that this consideration, however objective it may be, involves in large measure an ‘assessment’ of the effects which the agreements appear likely to produce in the future. This is why, and the High Authority rightly emphasizes it, it is quite normal, if not indispensable, to establish in advance certain procedures intended to allow subsequent efficient supervision of the activities of the parties concerned to ensure that they respect both the provisions of the Treaty and the conditions of the authorization. One may wonder whether the applicant government, or any other applicant, would not have been legitimately entitled to complain if the High Authority had refrained from providing for such a system of supervision. Secondly, the Treaty itself contains the necessary provisions for a perfectly proper legal support for both the principle and the organization of this supervision. The principle of a permanent supervision over the authorizations is clearly shown in the third and fourth subparagraphs of Article 65 (2): the third subparagraph permits the grant of the authorizations only ‘subject to specified conditions and for limited periods’ and their renewal if the High Authority ‘finds that the requirements of subparagraphs (a) to (c) are still met at the time of renewal’. The fourth subparagraph provides, on the other hand, that ‘The High Authority shall revoke or amend an authorization if it finds that as a result of a change in circumstances the agreement no longer meets these requirements, or that the actual results of the agreement or of the application thereof are contrary to the requirements for its authorization’. Thus, the High Authority has not only the right but the duty to exercise permanent supervision over the application of the agreement which it has authorized, both in order to be able to renew the authorization on its expiry in full knowledge of the facts, as well as to revoke it if necessary before the expiry of its term. To exercise such control, it has at its disposal the powers to obtain information and make any necessary checks provided for in Article 47 to which Article 65 (3) expressly refers. I consider that in view of the requirements implied in an effective supervision of cartel organizations such as those of the Ruhr, the powers of control given to the High Authority by the contested Decisions are in no way illegal; such powers are not analogous to the adoption of a power to make regulations not provided for in the Treaty, which was disapproved of by your judgment of 15 July 1960. As for the objection that the system complained of made it impossible for the parties concerned, and in particular for the Member State, to exercise their right to bring legal proceedings where there was tacit approval of those measures subjected to the High Authority's supervision, it is sufficient in reply to observe, as does the defendant, that the inaction of the High Authority may always be the subject of proceedings under Article 35 for failure to take action. It can even be added that such proceedings are always possible on the basis of the fourth subparagraph of Article 65 (2), independently of any question relating to the approval of a measure taken by a company under Article 15 (3) of the contested Decisions. Finally, it is not clear what time-limit could run against a government in the case of proceedings for failure to take action against the High Authority, given that there is clearly no question of a direct application to the Court against the decisions of the companies making up the agencies. It is true that normally the actions in question are neither published nor brought to the knowledge of the governments (I do not mean to allude here to the drafting of the third paragraph of Article 70 concerning transport …); therefore, it is possible for a government to be unaware of a decision of the agencies which has been by implication approved by the High Authority. But if you accept my opinion that the system for taking the contested Decisions does not exceed the powers of supervision given to the High Authority by the Treaty, it follows that the governments of Member States have no right to be informed of decisions concerning the internal activity of the agencies; this would be to allow these States to bear some responsibility for the supervision of the agencies, while this responsibility belongs only to the High Authority.

2. The second criticism concerns the illegality of the delegation to the departments of the High Authority powers which, in any case, may only be exercised by the institution acting as a body; on this point, the applicant Government does not fail to refer to the numerous judgments which you have given in this field, as well as to Decision No 22/60. In this respect an allusion was made during the oral procedure to a ‘resolution’ of the High Authority of 8 January 1962‘concerning the procedure to be applied to the consideration of notifications of the two Ruhr coal selling agencies and of the Comptoir beige de Charbon (Cobechar)’. This document has, however, been neither published nor produced before the Court and consequently should be regarded as unknown to the applicant. I think, it my duty therefore not to take it into account. I shall merely observe, as regards one part of the contested Decisions, that is, Article 15 (3), that if a ‘finding of compliance’ were made under this provision by ‘the departments’ of the High Authority without the intervention of that institution, this would in no way infringe the right of action of the Member States. In fact, one of two things would happen: either ‘the departments’ would take an express decision and publish it, in which case it would be clearly illegal as contrary to both Decision No 22/60 and your own case-law; or it would not be published, in which case proceedings would lie against the High Authority for failure to take action in the circumstances to which I have just referred.

C — Grounds of complaint based on the application of Article 65 (2) (c)

It is quite clearly this third category of complaint which raises the most serious problems. Here we are no longer dealing with the submission of lack of competence, but with the absence or insufficiency of reasons and infringement of the Treaty. Despite the importance of these grounds of complaint my observations on them will be limited, for this is the most well known aspect of the problem and one on which each of you has certainly formed an opinion. I shall merely express my own view, while trying to confine myself to matters of law and to remain within the relatively strict limits of your Opinion 1/61, your judgment in Case 13/60 and, of course, the context of the argument put forward by the applicant Government.

The latter, in attempting to establish that the authorized agreements are ‘liable to give the undertakings concerned the power to determine the prices, or to control or restrict the production or marketing of a substantial part of the products in question within the Common Market’, is basing its argument essentially on two considerations: the first concerns the structure of the organizations, which does not ensure the independence of each agency in relation to the other; the second, of an economic nature, is based on the ‘duopoly’ theory.

1. As regards the structure, the applicant Government complains first of the identity of structure of the two agencies, both as regards the volume of production, the sales and the types of product as well as the internal organization and regulation of sales. Secondly, it complains of the collaboration between the two agencies within the common organizations ‘Ruhrkohle-Treuhand’ and ‘Ruhrkohlen-Beratung’. Finally, it objects to the division of the mining companies controlled by the State between the two agencies. Let me deal with these three points: (a) Identity of structure. In this respect, a double controversy is developing between the parties. In fact, the High Authority first emphasizes certain differences between the respective situations of the two agencies as regards, on the one hand, the proportion of the various categories of coal produced (net predominance of Geitling as regards household coal, coking coal and smelting coal) and, on the other hand, the geographic distribution which shows that the number of mines situated on waterways is greater in Geitling than in Präsident. The applicant replies to this by emphasizing the contradiction which, in its' opinion, results from the defendant's argument which denies that the structure of the two groups is identical but asserts that a minimum measure of competition between the two agencies and with the other units in the Common Market will only develop if the agencies are able to offer almost the same categories and types of coal on the market. I see no contradiction here. It is only a question of the predominance of one of the agencies as regards certain categories and types which, however, as regards each of these categories and types and the geographic distribution in relation to the waterways, leaves a very substantial proportion (roughly a third) to Präsident. The question then arises, and this is the second element in the controversy, whether or not the identity, or at least the comparability, of the structures as regards the range of products offered on the market is likely to favour competition. Without being an economist, I find it quite natural to accept that competition will be stronger where two agencies deal with the same range of products than where each one tends to specialize in producing and marketing different products, which would strongly resemble the sharing of ‘markets, products, customers or sources of supply’ referred to in Article 65 (1). (b) The common organizations. Whilst recognizing that the roles of ‘Treuhand’ and ‘Beratung’ have been reduced in relation to their former roles, the applicant fears that the activities of these two organizations would facilitate still more harmonization of the management of the agencies, especially as their departments are housed in the same building as those of the agencies, which clearly constitutes a convenient meeting place between the managements of the two groups. Those, are undoubtedly, important factual considerations. Do they alone justify the annulment of the contested Decisions? I do not think so. The advantages of mechanization and the pooling of general studies in the technical field and in the field of market research and publicity are clearly among those which it is legitimate to take into account as regards the requirements of Article 65 (2) (a) and (b), that is, an improvement in the distribution of products, without in any way being able to accept, a priori, that the effects of this pooling of knowledge will conflict with the provisions of subparagraph (c). This question depends largely on the discretionary power of the High Authority and any resulting abuses are subject to supervisions by it. (c) Division of the mines controlled by the State between the two agencies. On this point, the High Authority observes that Hibernia, the largest of the State-controlled companies which belongs to Geitling, disposes of the greater part of its production in the market while the other two companies, Ewald-Kohle and Märkische, belonging to Präsident, deliver the major part of their production to Salzgitter, an iron and steel undertaking by which they are 100 % controlled and whose capital is held by the Federal State. It seems, therefore, that the interests of Hibernia and the two other companies differ sufficiently to justify their affiliation to different agencies. Was this the best solution as regards the independence of each agency in relation to the other? I confess that I have no personal opinion on this point, which also falls basically within the discretionary power of the High Authority. These are the considerations which I regard as the most important when dealing with the independence of the agencies from the point of view of their structure. Many other aspects have been touched upon during the proceedings, but I thought it necessary to limit my remarks to the essential.

2. I shall now consider the purely economic aspect of the discussion, which deals with the duopoly. Basically the argument of the applicant Government in this respect maintains that the duopoly, an extreme form of oligopoly, is, in this instance, likely to eliminate or almost to eliminate that ‘measure of competition’ which, according to the judgment in Case 13/60 must be maintained for an agreement to meet the requirements of Article 65 (2) (c). I shall not enter into the academic discussions to which the oligopoly theory gives rise. I shall merely observe that, from the small amount of research I have been able to do, I have found in the learning on the subject no theory which opposes duopoly to oligopoly where economic consequences are concerned. For the rest, I intend to keep within the context of the considerations set out in your judgment in Case 13/60. Of this judgment, I note first that it adopts the doctrine of ‘imperfect competition’ characteristic of the oligopoly and that it accepts that the market in coal and even the market in energy constitute typical examples of such competition. It also adopts the ‘doctrine which sees in oligopoly a system within which each seller, when making his economic calculations, takes into account the probable market behaviour which his competitors will adopt in response to his own decisions, for the simple reason that what they do is a direct reaction to what he does’ (Rec. 1962, p. 211). The result is that, in a system of imperfect competition, the oligopoly normally has a certain power to determine prices, that is, to have a real price policy which is not solely, or even principally, influenced by the law of supply and demand as an ‘atomistic’ market would be, but rather by other considerations which gave rise to more or less long term objectives. However, still following your judgment, a certain ‘measure of competition’ may be safeguarded by an oligopolistic system and this must happen in the Common Market in coal if there is to be respect for the ‘basic requirements set forth in Articles 2, 3, 4 and 5 of the Treaty and in particular’ for the need to ensure ‘the maintenance and observance of normal competitive conditions’. Finally, the ‘power to determine the prices’ may only be accepted if it does not apply to ‘a substantial part of the products in question within the Common Market’. In this respect (and it is on this point that most criticisms of the judgment in Case 13/60 are made) the Court refers to a quantitative criterion, based on a comparison of the volume of production in the large coalfields of the Community. Relying by analogy on certain provisions of Article 66, it accepts that the single cartel of the Ruhr (authorization of which had been refused by the High Authority) whose production of hard coal ‘is roughly four times as great as that of any other coalfield in the Common Market and (which) is more than twice the total production of Charbonnages de France, the only organization of comparable size’ held, by this very fact, the power to determine the prices of a substantial part of the products in question within the Common Market. The result of this analysis of the judgment in Case 13/60 appears to be that a division of the undertakings of the Ruhr into two agencies, each of which markets about half the production of that coalfield and is thus comparable with Les Charbonnages de France, complies with the criteria accepted by the judgment as regards a ‘size’ which satisfies the requirements of Article 65 (2) (c) and that in authorizing the two agencies the High Authority used its discretionary power within the limits of Article 33. Finally, I should like to answer the argument, developed principally in the oral procedure, that the application of the new agreements has confirmed the fears of the applicant Government of the growth of real, if imperfect, competition between the two agencies: nothing in the height of experience and especially in the fixing of prices, gave the least sign of the existence of such competition, which proved both the futility of the High Authority's hopes in this respect and the illegality of the contested Decisions responsible for this state of affairs. The answer appears to be that, in the field of economic theory, it is in the nature of oligopolies that their decisions regarding prices, as in other fields, are similar: this is because the behaviour of each is conditional on the supposed behaviour of the other; therefore, the sole fact that the prices are the same is not, in itself proof of an agreement. Let me add that, insofar as this identical behaviour does not result from an agreement concerning the exploitation of a dominant position but from the needs of a rationalization policy pursued in the concurrent interests of the industry in question and of the Community itself and occurs in the context of a competition which was largely influenced by the market in energy, the common attitude does not necessarily appear to contravene the Treaty. In short I think that, in view of the conditions required for their approval, the agreements authorized by the High Authority permit the joint-selling organizations for Ruhr coal to function both satisfactorily and in a manner entirely compatible with the present provisions of the Treaty as interpreted by the Court. As in my opinion none of the submissions raised is well-founded I consider that: — the application should be dismissed; — the costs should be borne by the Government of the Kingdom of the Netherlands.

( 1 ) Translated from the French.