Judgment of the Court of First Instance (First Chamber) of 17 December 1991. - SA Hercules Chemicals NV v Commission of the European Communities. - Competition - Concepts of agreement and concerted practice - Collective responsibility. - Case T-7/89.



European Court reports 1991 Page II-01711

Swedish special edition Page II-00083

Finnish special edition Page II-00079



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Competition - Administrative procedure - Access to the file - Commission' s obligation on account of rules laid down by itself in a report on competition policy

2. Competition - Cartels - Agreements between undertakings - Meaning - Common purpose as to the conduct to be adopted on the market

(EEC Treaty, Art. 85(1) )

3. Competition - Cartels - Prohibition - Agreements which continue to produce their effects after they have formally ceased to be in force - Application of Article 85 of the Treaty

(EEC Treaty, Art. 85)

4. Competition - Cartels - Concerted practice - Meaning - Coordination and cooperation incompatible with the requirement for each undertaking to determine independently the policy which it intends to adopt on the market - Meetings between competitors having as their purpose the exchange of information decisive for the formulation of the participants' marketing strategy

(EEC Treaty, Art. 85(1) )

5. Competition - Cartels - Complex infringement involving elements of agreements and elements of concerted practices - A single characterization as "an agreement and a concerted practice" - Whether permissible - Consequences as regards the proof to be adduced

(EEC Treaty, Art. 85(1) )

6. Competition - Cartels - Concerted practice - Effect on trade between Member States - To be assessed generally and not with regard to each of the participants

(EEC Treaty, Art. 85(1) )

7. Acts of the institutions - Reasoning - Reference to opinions which are required to be obtained - Obligation - Scope - Decision implementing the competition rules - Opinion of the hearing officer - Not one which is required to be obtained

(EEC Treaty, Art. 190)

8. Competition - Fines - Amount - Determination - Criteria - Previous conduct of the undertaking

(Regulation No 17 of the Council, Art. 15(2) )

Summary

1. Once the Commission, going beyond what is required by observance of the rights of the defence, has established a procedure for providing access to the file in competition cases and has laid down the rules of that procedure and published them in one of its reports on competition policy, it may not depart from the rules which it has imposed on itself and thus has the obligation to make available to the undertakings involved in Article 85(1) proceedings all documents, whether in their favour or otherwise, which it has obtained during the course of the investigation, save where the business secrets of other undertakings, the internal documents of the Commission or other confidential information are involved.

2. In order for there to be an agreement within the meaning of Article 85(1) of the EEC Treaty it is sufficient that the undertakings in question should have expressed their joint intention to conduct themselves on the market in a specific way. Such is the case where there existed between undertakings common intentions to achieve price and sales volume targets.

3. Article 85 of the Treaty is applicable to agreements which are no longer in force but which continue to produce their effects after they have formally ceased to be in force.

4. The criteria of coordination and cooperation enabling the concept of concerted practice to be defined must be understood in the light of the concept inherent in the competition provisions of the EEC Treaty according to which each economic operator must determine independently the policy which he intends to adopt on the common market. Although this requirement of independence does not deprive economic operators of the right to adapt themselves intelligently to the existing and anticipated conduct of their competitors, it does, however, strictly preclude any direct or indirect conduct between such operators the object or effect whereof is either to influence the conduct on the market of an actual or potential competitor or to disclose to such a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market.

Participation in meetings concerning the fixing of price and sales volume targets during which information is exchanged between competitors about the prices they intend to charge, their profitability thresholds, the sales volume restrictions they judge to be necessary or their sales figures constitutes a concerted practice since the participant undertakings cannot fail to take account of the information thus disclosed in determining their conduct on the market.

5. Since Article 85(1) of the Treaty lays down no specific category for a complex infringement which is nevertheless a single infringement because it consists of continuous conduct, characterized by a single purpose and involving at one and the same time factual elements to be characterized as "agreements" and elements to be characterized as "concerted practices", such an infringement may be characterized as "an agreement and a concerted practice" and proof that each of those factual elements presents the constituent elements both of an agreement and of a concerted practice is not simultaneously and cumulatively required.

6. An undertaking must be regarded as having participated in an agreement or a concerted practice capable of affecting trade between Member States and as having thus infringed Article 85(1) of the Treaty if this could have been the result of the conduct of all the participating undertakings, irrespective of the effect of its individual participation.

7. The fact that a decision implementing the competition rules makes no reference to the hearing officer' s report does not constitute a breach of Article 190 of the Treaty since that report, which is not required by any provision to be passed on to the Advisory Committee on Restrictive Practices and Dominant Positions or to the Commission, is not an opinion which the Commission is required to obtain when taking a decision.

8. When it is a question of determining the amount of fine imposed owing to a breach of the competition rules of the Treaty, the fact that the Commission has in the past already found an undertaking guilty of infringing the competition rules and penalized it for that infringement may be treated as an aggravating factor as against that undertaking but the absence of any previous infringement is a normal circumstance which the Commission does not have to take into account as a mitigating factor.

Parties

In Case T-7/89,

S.A. Hercules Chemicals N.V., a company incorporated under Belgian law, having its registered office at Beringen (Belgium), represented by Mario Siragusa, of the Rome Bar, with an address for service in Luxembourg at the Chambers of Messrs Elvinger & Hoss, 15 Côte d' Eich,

applicant,

v

Commission of the European Communities, represented by Anthony McClellan, Principal Legal Adviser, and Karen Banks, a member of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of R. Hayder, a national civil servant seconded to its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for the annulment of the Commission' s decision of 23 April 1986 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.149-Polypropylene, Official Journal 1986 L 230, p. 1),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber),

composed of: J.L. Cruz Vilaça, President, R. Schintgen, D.A.O. Edward, H. Kirschner and K. Lenaerts, Judges,

Advocate General: B. Vesterdorf,

Registrar: H. Jung,

having regard to the written procedure and further to the hearing held from 10 to 15 December 1990,

after hearing the Opinion of the Advocate General at the sitting on 10 July 1991

gives the following

Judgment

Grounds

FACTS AND BACKGROUND TO THE ACTION

1 This case concerns a Commission decision fining fifteen producers of polypropylene for infringing Article 85(1) of the EEC Treaty. The product which is the subject-matter of the contested decision (hereinafter referred to as "the Decision"), polypropylene, is one of the principal bulk thermoplastic polymers. It is sold by the producers to processors for conversion into finished or semi-finished products. The largest producers of polypropylene have a range of more than 100 different grades covering a wide range of end uses. The major basic grades of polypropylene are raffia, homopolymer injection moulding, copolymer injection moulding, high-impact copolymer and film. The undertakings to which the Decision is addressed are all major petrochemical producers.

2 The west European market for polypropylene is supplied almost exclusively from European-based production facilities. Before 1977, that market was supplied by ten producers, namely Montedison (now Montepolimeri SpA), Hoechst AG, Imperial Chemical Industries PLC and Shell International Chemical Company Limited (called "the big four"), which together account for 64% of the market, Enichem Anic SpA in Italy, Rhône-Poulenc S.A. in France, Alcudia in Spain, Chemische Werke Huels and BASF AG in Germany and the nationalized Austrian producer Chemie Linz AG. Following the expiry of the controlling patents held by Montedison, seven new producers came on stream in western Europe in 1977: Amoco and Hercules Chemicals N.V. in Belgium, ATO Chimie S.A. and Solvay et Cie S.A. in France, SIR in Italy, DSM N.V. in the Netherlands and Taqsa in Spain. Saga Petrokjemi AS & Co, a Norwegian producer, came on stream in the middle of 1978, and Petrofina S.A. in 1980. The arrival of the new producers, with nameplate capacity of some 480 000 tonnes, brought a substantial increase in installed capacity in western Europe which for several years was not matched by the increase in demand in that market. This led to low rates of utilization of production capacity, which, however, rose progressively between 1977 and 1983, increasing from 60% to 90%. According to the Decision, supply and demand were roughly in balance from 1982. However, during most of the period covered by the investigation (1977-1983), the polypropylene market was reported to be characterized by either low profitability or substantial losses, owing in particular to the extent of the fixed costs and to the increase in the cost of the raw material, propylene. According to the Decision (point 8), in 1983 Montepolimeri SpA held 18% of the European polypropylene market, Imperial Chemical Industries PLC, Shell International Chemical Company Limited and Hoechst AG each held 11%, Hercules Chemicals N.V. slightly below 6%, ATO Chimie S.A., BASF AG, DSM N.V., Chemische Werke Huels, Chemie Linz AG, Solvay et Cie S.A. and Saga Petrokjemi AS & Co from 3 to 5% and Petrofina S.A. about 2%. The Decision states that there was a substantial trade in polypropylene between Member States because each of the then EEC producers supplied the product in most, if not all, Member States.

3 Hercules Chemicals N.V. is one of the new producers which appeared on the market in 1977. Its position on the West European market was that of a medium -sized producer whose market share was between approximately 5 and 6.8%. However, Hercules is the largest producer on the American market.

4 On 13 and 14 October 1983, Commission officials, acting pursuant to Article 14(3) of Council Regulation No 17 of 6 February 1962, the first regulation implementing Articles 85 and 86 of the Treaty (Official Journal, English Special Edition 1959-1962, p. 87, hereinafter referred to as "Regulation No 17"), carried out simultaneous investigations at the premises of the following undertakings, producers of polypropylene supplying the Community market:

ATO Chimie S.A., now Atochem ("ATO"),

BASF AG ("BASF"),

DSM N.V. ("DSM"),

Hercules Chemicals N.V. ("Hercules"),

Hoechst AG ("Hoechst"),

Chemische Werke Huels ("Huels"),

Imperial Chemical Industries PLC ("ICI"),

Montepolimeri SpA, now Montedipe ("Monte"),

Shell International Chemical Company Limited ("Shell"),

Solvay et Cie S.A. ("Solvay"),

BP Chimie ("BP").

No investigations were carried out at the premises of Rhône-Poulenc S.A. ("Rhône-Poulenc") or at the premises of Enichem Anic SpA.

5 Following the investigations, the Commission addressed requests for information under Article 11 of Regulation No 17 (hereinafter referred to as "the request for information"), not only to the undertakings mentioned above but also to the following undertakings:

Amoco,

Chemie Linz AG ("Linz"),

Saga Petrokjemi AS & Co, which is now part of Statoil ("Statoil"),

Petrofina S.A. ("Petrofina"),

Enichem Anic SpA ("Anic").

Linz, which is an Austrian undertaking, contested the Commission' s jurisdiction and declined to reply to the request for information. In accordance with Article 14(2) of Regulation No 17, the Commission officials then carried out investigations at the premises of Anic and Saga Petrochemicals UK Ltd, the United Kingdom subsidiary of Saga, and of the selling agents of Linz established in the United Kingdom and in the Federal Republic of Germany. No request for information was sent to Rhône-Poulenc.

6 The evidence obtained during the course of those investigations and pursuant to the requests for information led the Commission to form the view that between 1977 and 1983 the producers concerned had, in contravention of Article 85 of the EEC Treaty, by a series of price initiatives, regularly set target prices and developed a system of annual volume control to share out the available market between them according to agreed percentage or tonnage targets. On 30 April 1984, the Commission therefore decided to open the proceedings provided for by Article 3(1) of Regulation No 17 and in May 1984 sent a written statement of objections to the undertakings mentioned above with the exception of Anic and Rhône-Poulenc. All the addressees submitted written answers.

7 On 24 October 1984, the hearing officer appointed by the Commission met the legal advisers of the addressees of the statements of objections in order to agree certain procedural arrangements for the hearing provided for as a part of the administrative procedure, which was to begin on 12 November 1984. At that meeting the Commission announced, as a result of the arguments advanced by the undertakings in their replies to the statement of objections, that it would shortly send them further material complementing the evidence already served on them regarding the implementation of price initiatives. On 31 October 1984, the Commission sent to the legal advisers of the undertakings a bundle of documents consisting of copies of the price instructions given by the producers to their sales offices together with tables summarizing those documents. In order to ensure the protection of business secrets, the sending of that material was made subject to certain conditions; in particular, the documents were not to be made known to the commercial services of the undertakings. The lawyers of a number of undertakings refused to accept those conditions and returned the documentation before the oral hearing.

8 In view of the information supplied in the written replies to the statement of objections, the Commission decided to extend the proceedings to Anic and Rhône-Poulenc. To that end, a statement of objections, similar to the statement of objections addressed to the other fifteen undertakings, was sent to those two undertakings on 25 October 1984.

9 The first session of the oral hearing took place from 12 to 20 November 1984. During that session all the undertakings were heard, with the exception of Shell (which refused to take part in any hearing) and Anic, ICI and Rhône-Poulenc (which considered that they had not had sufficient opportunity to prepare their case).

10 At that session, several undertakings refused to deal with the matters raised in the documentation sent to them on 31 October 1984, asserting that the Commission had completely changed the direction of its case and that at the very least they should have the opportunity to make written observations. Other undertakings claimed that they had had insufficient time to examine the documents in question before the hearing. A joint letter to that effect was sent to the Commission on 28 November 1984 by the lawyers of BASF, DSM, Hercules, Hoechst, ICI, Linz, Monte, Petrofina and Solvay. In a letter of 4 December 1984, Huels associated itself with the view taken in the joint letter.

11 Consequently, on 29 March 1985 the Commission sent to the undertakings a new set of documentation, setting out price instructions given by the undertakings to their sales offices, accompanied by price tables, as well as a summary of the evidence relating to each price initiative for which documents were available. It requested the undertakings to reply both in writing and at further sessions of the oral hearing and stated that it was removing the original restrictions on disclosure to commercial departments.

12 By another letter of the same date the Commission replied to the argument raised by the lawyers that it had not clearly defined the legal nature of the alleged cartel under Article 85(1) and invited the undertakings to submit written and oral observations.

13 A second session of the oral hearing took place from 8 to 11 July 1985 and on 25 July 1985. Anic, ICI and Rhône-Poulenc submitted their observations and the other undertakings (with the exception of Shell) commented on the matters raised in the Commission' s two letters of 29 March 1985.

14 The preliminary draft of the minutes of the oral hearing, together with all other relevant documentation, was given to the Members of the Advisory Committee on Restrictive Practices and Dominant Positions (hereinafter referred to as "the Advisory Committee) on 19 November 1985 and sent to the applicants on 25 November 1985. The Advisory Committee gave its opinion at its 170th meeting on 5 and 6 December 1985.

15 At the end of that procedure, the Commission adopted the contested decision of 23 April 1986, which has the following operative part:

"Article 1

ANIC SpA, ATO Chemie SA (now Atochem), BASF AG, DSM N.V., Hercules Chemicals N.V., Hoechst AG, Chemische Werke Huels (now Huels AG), ICI PLC, Chemische Werke LINZ, Montepolimeri SpA (now Montedipe), Petrofina S.A., Rhône-Poulenc S.A., Shell International Chemical Co. Ltd, Solvay & Cie and SAGA Petrokjemi AG & Co. (now part of Statoil) have infringed Article 85(1) of the EEC Treaty, by participating:

- in the case of ANIC, from about November 1977 until a date in late 1982 or early 1983,

- in the case of Rhône-Poulenc, from about November 1977 until the end of 1980,

- in the case of Petrofina, from 1980 until at least November 1983,

- in the case of Hoechst, ICI, Montepolimeri and Shell from about mid-1977 until at least November 1983,

- in the case of Hercules, LINZ and SAGA and Solvay from about November 1977 until at least November 1983,

- in the case of ATO, from at least 1978 until at least November 1983,

- in the case of BASF, DSM and Huels, from some time between 1977 and 1979 until at least November 1983,

in an agreement and concerted practice originating in mid-1977 by which the producers supplying polypropylene in the territory of the EEC:

(a) contacted each other and met regularly (from the beginning of 1981, twice each month) in a series of secret meetings so as to discuss and determine their commercial policies;

(b) set 'target' (or minimum) prices from time to time for the sale of the product in each Member State of the EEC;

(c) agreed various measures designed to facilitate the implementation of such target prices, including (principally) temporary restrictions on output, the exchange of detailed information on their deliveries, the holding of local meetings and from late 1982 a system of 'account management' designed to implement price rises to individual customers;

(d) introduced simultaneous price increase implementing the said targets;

(e) shared the market by allocating to each producer an annual sales target or 'quota' (1979, 1980 and for at least part of 1983) or in default of a definitive agreement covering the whole year by requiring producers to limit their sales in each month by reference to some previous period (1981, 1982).

Article 2

The undertakings named in Article 1 shall forthwith bring the said infringement to an end (if they have not already done so) and shall henceforth refrain in relation to their polypropylene operations from any agreement or concerted practice which may have the same or similar object or effect, including any exchange of information of the kind normally covered by business secrecy by which the participants are directly or indirectly informed of the output, deliveries, stock levels, selling prices, costs or investment plans of other individual producers, or by which they might be able to monitor adherence to any express or tacit agreement or to any concerned practice covering prices or market sharing inside the EEC. Any scheme for the exchange of general information to which the producers subscribe (such as Fides) shall be so conducted as to exclude any information from which the behaviour of individual producers can be identified and in particular the undertakings shall refrain from exchanging between themselves any additional information of competitive significance not covered by such a system.

Article 3

The following fines are hereby imposed on the undertakings named herein in respect of the infringement found in Article 1:

(i) ANIC SpA, a fine of 750 000 ECU, or Lit 1 103 692 500;

(ii) Atochem, a fine of 1 750 000 ECU, or FF 11 973 325;

(iii) BASF AG, a fine of 2 500 000 ECU, or DM 5 362 225;

(iv) DSM N.V., a fine of 2 750 000 ECU, or Fl 6 657 640;

(v) Hercules Chemicals N.V., a fine of 2 750 000 ECU, or Bfrs 120 569 620;

(vi) Hoechst AG, a fine of 9 000 000 ECU, or DM 19 304 010;

(vii) Huels AG, a fine of 2 750 000 ECU, or DM 5 898 447.50;

(viii) ICI PLC, a fine of 10 000 000 ECU, or 6 447 970;

(ix) Chemische Werke LINZ, a fine of 1 000 000 ECU, or Lit 1 471 590 000;

(x) Montedipe, a fine of 11 000 000 ECU, or Lit 16 187 490 000;

(xi) Petrofina S.A., a fine of 600 000 ECU, or Bfrs 26 306 100;

(xii) Rhône-Poulenc S.A., a fine of 500 000 ECU, or FF 3 420 950;

(xiii) Shell International Chemical Co. Ltd, a fine of 9 000 000 ECU, or 5 803 173;

(xiv) Solvay & Cie, a fine of 2 500 000 ECU, or Bfrs 109 608 750;

(xv) Statoil Den Norske Stats Oljeselskap AS (now incorporating SAGA Petrokjemi), a fine of 1 000 000 ECU or 644 797.

Article 4

...

Article 5

..."

16 On 8 July 1986, the definitive minutes of the hearings, incorporating the textual corrections, additions and deletions requested by the applicants, was sent to them.

PROCEDURE

17 These are the circumstances in which, by application lodged at the Registry of the Court of Justice on 31 July 1986, the applicant brought this action seeking annulment of the Decision. Thirteen of the fourteen other addressees of the Decision have also brought actions for its annulment (Cases T-1/89 to T-4/89, T-6/89 and T-8/89 to T-15/89).

18 The written procedure took place entirely before the Court of Justice.

19 By order of 15 November 1989, the Court of Justice referred this case and the thirteen other cases to the Court of First Instance, pursuant to Article 14 of the Council Decision of 24 October 1988 establishing a Court of First Instance of the European Communities (hereinafter referred to as "the Council Decision of 24 October 1988").

20 Pursuant to Article 2(3) of the Council Decision of 24 October 1988, an Advocate General was designated by the President of the Court of First Instance.

21 By letter of 3 May 1990, the Registrar of the Court of First Instance invited the parties to an informal meeting in order to determine the arrangements for the oral procedure. That meeting took place on 28 June 1990.

22 By letter of 9 July 1990, the Registrar of the Court of First Instance requested the parties to submit their observations on the possible joinder of Cases T-1/89 to T-4/89 and T-6/89 to T-15/89 for the purposes of the oral procedure. No party had any objection on this point.

23 By order of 25 September 1990, the Court joined the abovementioned cases for the purposes of the oral procedure, on account of the connection between them, in accordance with Article 43 of the Rules of Procedure, then applicable mutatis mutandis to the procedure before the Court of First Instance by virtue of the third paragraph of Article 11 of the Council Decision of 24 October 1988.

24 By order of 15 November 1990 the Court adjudicated on the requests for confidential treatment lodged by the applicants in Cases T-2/89, T-3/89, T-9/89, T-11/89, T-12/89 and T-13/89 and granted them in part.

25 By letters lodged at the Registry of the Court between 9 October and 29 November 1990, the parties replied to the questions put to them by the Court in a letter sent to them by the Registrar on 19 July 1990.

26 In the light of the answers provided to its questions, on hearing the report of the Judge-Rapporteur and after hearing the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

27 The parties presented oral argument and answered questions from the Court at the hearing which took place from 10 to 15 December 1990.

28 The Advocate General delivered his Opinion at the sitting on 10 July 1991.

FORMS OF ORDER SOUGHT BY THE PARTIES

29 Hercules Chemicals N.V. claims that the Court should:

(i) annul in whole or in part Articles 1 and 3 of the decision of the Commission of the European Communities of 23 April 1986 (IV/31.149 - Polypropylene) in so far as they pertain to Hercules;

(ii) subsidiarily, modify Article 3 of the decision as it pertains to Hercules so as to annul or substantially reduce the fine imposed on Hercules therein; and

(iii) order the Commission to pay all the applicant' s costs.

The Commission claims that the Court should:

(i) dismiss the application;

(ii) order the applicant to pay the costs.

SUBSTANCE

30 It is necessary to examine, first, the applicant' s grounds of challenge relating to a breach of the rights of the defence allegedly committed by the Commission in so far as it (1) based the Decision on documents having no evidentiary value and (2) did not communicate to the applicant certain documents used against it in the Decision and even refused to disclose to it certain documents which the applicant had requested from it; secondly, the grounds of challenge relating to proof of the infringement concerning (1) the findings of fact made by the Commission and (2) the application to those facts of Article 85(1) of the EEC Treaty, whereby it is contended that the Commission (A) did not correctly define the infringement, (B) did not correctly assess the restrictive effect on competition or (C) did not correctly assess how trade between Member States was affected, and (D) imputed collective responsibility to the applicant; thirdly, the grounds of challenge relating to an alleged breach of the principle of equal treatment; fourthly, the grounds of challenge relating to the reasoning of the Decision, impugning (1) the insufficiency of the reasoning and (2) the absence of reference to the hearing officer' s report; and, fifthly, the grounds of challenge relating to the determination of the fine, which is alleged to be (1) partially time barred, (2) disproportionate to the duration of the alleged infringement and (3) disproportionate to the gravity of the alleged infringement.

THE RIGHTS OF THE DEFENCE

1. The evidentiary value of certain documents used in the Decision

31 The applicant submits that, apart from price instructions given by Hercules (Appendices to the Commission' s letter of 29 March 1985, hereinafter referred to as "letter of 29 March 1985, Appendices") and a small number of other internal documents of very limited evidentiary value, the Commission based its conclusions on documents which were not created by the applicant and were not found in the applicant' s possession. Some of those documents are partially illegible, their meaning obscure or ambiguous, their authorship unknown; the statements in such documents constitute second or third order hearsay. Because of the unknown origin of those documents, Hercules claims that it was unable to investigate their validity or the context in which its name came to be mentioned in them.

32 Hercules submits that the Commission, which, according to the case-law of the Court of Justice (judgment in Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73 Cooeperatieve Vereniging Suiker Unie UA and Others v Commission [1975] ECR 1663, paragraph 164 et seq.), is required to base its decisions on reasonable grounds drawn from credible evidence, did not even carry out a proper inquiry, and that it did not evaluate critically the documents which it used, as it ought to have done (judgment in Suiker Unie v Commission, cited above, paragraph 396 et seq.). Such a critical approach was all the more necessary since, in view of the circumstances, the instigators of the initiatives in question, the authors of the documents in question, had every interest in giving a false impression with regard to the position of the producers who were absent from the meetings in question so as to encourage those who were present to adopt their line. By reference to examples, Hercules claims to show that, even if, considered as a whole, the documents could prove the general tenor of the discussions which took place between the producers, it is not possible to draw from them precise conclusions with regard to the conduct of any individual producer, especially when that producer was not present at those meetings.

33 In its reply Hercules observes that the Commission cannot take refuge behind the fact that at the hearings held before the Commission pursuant to Article 19 of Regulation No 17 the undertakings put forward persons who could not give first-hand testimony with regard to the facts alleged by the Commission. According to Hercules, the Commission should have used its powers to require the evidence of such persons if it wished to use it. For its part, Hercules allowed the Commission' s inspectors to interview its employee who was present at the meetings.

34 Finally, Hercules observes that the Commission systematically interpreted the documents in its possession in a way unfavourable to Hercules and discounted certain statements in those documents which could have been in its favour.

35 The Commission, for its part, points out that Hercules passes over in silence damning documents some of which were found at its premises or were sent by the company to the Commission, such as Appendices 2, 23, 45 and 88 to the main statement of objections (hereinafter referred to as "main statement of objections, Appendices"). It states that it had reason to consider the evidence, in particular the ICI documents, as clear and reliable in view of their content and the fact that they supported one another. For example, in its reply to the request for information (main statement of objections, Appendix 8), ICI explained its internal notes, in particular their authorship and genesis.

36 The Commission further points out that Hercules stated in its reply to the statement of objections that it seemed reasonable to accept the accuracy of the lists of meetings given by ICI in its reply to the request for information. Likewise, Hercules wrongly contends that the statements in the documents are only second or third order hearsay. In the Commission' s view, they are documents constituting clear and consistent proof of the existence of a cartel over a long period.

37 The Commission considers that, once the documents are accepted as being generally credible and accurate, their credibility cannot be impugned in relation to aspects that happen to affect particular producers. It objects, however, that Hercules has not identified the pieces of evidence which it ought not to have found "credible" and it points out that Hercules quotes only one precise document in this regard, the report of a meeting held on 1 June 1983 (main statement of objections, Appendix 40), but gives it a wrong interpretation, isolating it from its context which shows that the statement mentioned in that document was followed by price instructions.

38 Moreover, the Commission considers that it cannot be asserted, on the basis of the judgment in Suiker Unie (cited above, paragraph 164), that the Commission is required to hold hearings on the credibility of hearsay statements. In any event, the Commission did carry out such enquiries as were necessary - for example it interviewed the Hercules employee who attended the meetings (Appendix 7 to the statement of objections raised specifically against Hercules, hereinafter referred to as "particular objections, Hercules") and in the course of the administrative procedure it satisfied itself as to the credibility of the evidence upon which it relied.

39 It also points out that at the hearings Hercules delegated its managing director, preferring perhaps not to send a person who could have given first-hand testimony in relation to the case being made against the undertakings, contrary to the request made in that regard by the hearing officer.

40 Finally, the Commission contends that its treatment of the evidence was not one-sided and unfair. If it preferred one view to another, it was because the weight of evidence pointed one way rather than the other. It refers to the last paragraph of point 78 of the Decision to show that it changed its approach when its original view was not sufficiently supported by the evidence.

41 The Court notes first of all that the identity of the authors of most of the reports of meetings originating from ICI is known since ICI identified them in its reply to the request for information (main statement of objections, Appendix 8).

42 Next, the content of those reports is confirmed by various documents, such as the meeting reports drawn up by an executive of the applicant - like the report of the meeting held on 13 May 1982 (particular objections, Hercules, Appendix 3) which confirms the report of the same meeting drawn up by ICI (main statement of objections, Appendix 24), such as a number of tables relating to the sales volumes of the various producers, price instructions matching, both in their amount and their date of entry into force, the target prices mentioned in those meeting reports, and the replies of the various producers to the requests for information addressed to them by the Commission. Furthermore, documents confirming as a whole the content of the meeting reports originating from ICI were in fact discovered at the applicant' s premises or were furnished by the applicant (main statement of objections, Appendices 2, 23, 45 and 88).

43 Consequently, the Commission could reasonably take the view that the meeting reports found at the premises of ICI objectively reflected the matters discussed at the meetings. These meetings were chaired by different members of ICI' s staff, which made it even more necessary for them to prepare written reports on them so as to give members of ICI' s staff not attending particular meetings accurate information about the matters discussed at them.

44 In those circumstances, the burden is on the applicant to provide a different explanation of what occurred at the meetings it attended by advancing exact information, such as the notes taken by its employee during the meetings in which it took part or the testimony of members of its staff who attended the meetings. The applicant has not put forward, or even offered to put forward, any such evidence before the Court.

45 The questions whether the documents used by the Commission against the applicant were such as to prove not only the general tenor of the discussions which took place between the producers but also the applicant' s precise conduct, and whether the Commission interpreted those documents in a way which was systematically unfavourable to the applicant are indissociable from the question whether the findings of fact made by the Commission in the Decision are supported by the evidence which it has produced. Since this is a question of substance related to proof of the infringement, it must be examined at a later stage together with the other questions relating to proof of the infringement.

2. Non-disclosure of, or refusal to disclose, certain documents

46 Hercules observes that after the statement of objections had been served the Commission allowed the respondents to inspect its file. However, according to Hercules, that file did not contain a certain number of documents favourable to it. By letter of 30 August 1984 it requested the Commission, without success, to disclose those documents which, according to Hercules, should have enabled it to establish the particular status of its employee, Mr B., at the meetings. Likewise, the Commission refused, by a letter of 13 September 1984, to allow Hercules, after it had made its request by letter of 30 July 1984, the right to have access to the other producers' replies to the statement of objections, which could have contained evidence favourable to Hercules and would have enabled it to prepare for the hearings and for any eventual appeal.

47 Hercules challenges the reasons given by the Commission for those refusals, namely that it had disclosed in the appendices to the statement of objections all the information that was necessary and sufficient to enable Hercules to prepare its defence, that it had a duty to take into account all evidence, including that favourable to Hercules, and that, consequently, there was no need for Hercules to have access to the documents it had requested. In the applicant' s view, the Court of Justice has recognized in its decisions (judgment in Joined Cases 56 and 58/64 Établissements Consten Sàrl and Grundig-Verkaufs- GmbH v Commission [1966] ECR 299; judgment in Case 48/69 Imperial Chemical Industries Limited v Commission [1972] ECR 619; judgment in Case 17/74 Transocean Marine Paint Association v Commission [1974] ECR 1063; judgment in Case 85/76 Hoffmann-La Roche & Co. AG v Commission [1979] ECR 461) that observance of the rights of the defence means that the undertakings concerned must be informed of the essential factual elements on which the Commission' s objections are based and given the opportunity to make their points of view known. However, the objections are based not only on the documents annexed to the statement of objections but also on documents which the person responsible for drafting that statement decided to disregard. Thus, Hercules was prevented from proving that the presence of its employee, Mr B., at certain meetings did not constitute evidence that it had taken part in an infringement. The defence must be able to draw attention to the importance of any information in the Commission' s possession which is favourable to its case but which may have been overlooked by the Commission or given too little weight.

48 Hercules further argues that this violation of the rights of the defence committed by the Commission during the administrative procedure cannot be cured by the production of the relevant documents in the course of proceedings before the Community Court.

49 In its reply Hercules further states that the Commission is not justified in claiming that it could not identify any document to support Hercules' allegations since of course Hercules could not identify documents whose existence might not have been disclosed. Nor can the Commission reproach Hercules for having concluded that certain documents which would have been helpful to Hercules had been omitted from the file since it would have been easy for it to dispel doubts on this issue by allowing Hercules access to the documents emerging from the investigation but not included in the file.

50 The Commission observes that, according to the case-law of the Court of Justice (judgment in Joined Cases 43 and 63/82 VBVB and VBBB v Commission [1984] ECR 19, paragraph 25), the Commission is not required to divulge the contents of its files to the parties. In any event, the only documents which it did not make available to the applicant during the access-to-file procedure were, in the present case, those containing genuine business secrets, its own internal documents and the replies of the other producers to its statements of objections. Thus, it denies that it refused to disclose the documents which did not suit its case. Hercules is in any event unable to identify a single document in support of its allegation that the Commission selected those documents which suited its case best and did not use or disclose the others. It also considers that it is not obliged to give access to the replies of the other producers to the statements of objections.

51 The Court observes that regard for the rights of the defence requires that an applicant must have been put in a position to express, as it sees fit, its views on all the objections raised against it by the Commission in the statement of objections addressed to it and on the evidence which is to be used to support those objections and is mentioned by the Commission in the statement of objections or annexed to it (judgment of the Court of Justice in Case 322/81 Nederlandsche Banden-Industrie Michelin N.V. v Commission [1983] ECR 3461, paragraph 7 at p. 3498).

52 However, regard for the rights of the defence does not require that an undertaking involved in a procedure pursuant to Article 85(1) of the EEC Treaty must be able to comment on all the documents forming part of the Commission' s file since there are no provisions requiring the Commission to divulge the contents of its files to the parties concerned (judgment of the Court of Justice in Joined Cases 43 and 63/82 VBVB and VBBB v Commission, cited above, paragraph 25 at p. 59).

53 It must be observed, however, that in establishing a procedure for providing access to the file in competition cases, the Commission imposed on itself rules exceeding the requirements laid down by the Court of Justice. According to those rules, which are explained in the Twelfth Report on Competition Policy (pages 40 and 41), the Commission

"... permits the undertakings involved in a procedure to inspect the file on the case.

... Undertakings are informed of the contents of the Commission' s file by means of an annex to the statement of objections or to the letter rejecting a complaint, listing all the documents in the file and indicating documents or parts thereof to which they may have access.

They are invited to come and consult these documents on the Commission' s premises. If an undertaking wishes to examine only a few of them the Commission may forward copies.

However, the Commission regards the documents listed below as confidential and accordingly inaccessible to the undertaking concerned:

(i) documents or parts thereof containing other undertakings' business secrets;

(ii) internal Commission documents, such as notes, drafts or other working papers;

(iii) any other confidential information, such as documents enabling complainants to be identified where they wish to remain anonymous, and information disclosed to the Commission subject to an obligation of confidentiality."

The Commission may not depart from rules which it has thus imposed on itself (judgments of the Court of Justice in Case 81/82 Commission v Council [1973] ECR 575, paragraph 9 at p. 584, and in Case 148/73 Louwage v Commission [1974] ECR 81).

54 It follows that the Commission has an obligation to make available to the undertakings involved in Article 85(1) proceedings all documents, whether in their favour or otherwise, which it has obtained during the course of the investigation, save where the business secrets of other undertakings, the internal documents of the Commission or other confidential information are involved.

55 The Court considers that in the present case there is nothing to show that the Commission selected the documents to be made available to the applicant in order to prevent it from demonstrating that it had not taken part in the infringement on account of the status of its employee at the meetings of polypropylene producers. Faced with the Commission' s denials, the applicant has not advanced any evidence to establish the Commission' s bad faith, as it could have done had it demonstrated before the Court what it claimed in its letter of 30 August 1984 to suspect, namely that documents found by the Commission on its premises had not been included in the file to which it was given access.

56 As regards more particularly the Commission' s refusal to grant the applicant access to the replies of the other producers to the statements of objections, the Court considers that it is not necessary to examine whether this refusal constitutes a breach of the rights of the defence. Such an examination would be necessary only if in the absence of that refusal the administrative proceedings could have led to a different result (judgment of the Court of Justice in Case 30/78 Distillers Company Ltd v Commission [1980] ECR 2229, paragraph 26 at p. 2264, and judgment of the Court of First Instance in Case T-7/90 Kobor v Commission [1990] ECR II-721, paragraph 30). That is not so here. Following joinder of the cases for the purposes of the oral procedure before the Court, the applicant had access to the replies of the other undertakings to the statements of objections and it has not drawn from those replies any exonerating evidence on which it could have relied during the oral procedure. It is safe to conclude that those replies contained no exonerating evidence and therefore that the fact that the applicant was unable to have access to them during the administrative procedure could not have affected the result reached in the Decision.

57 It follows that this ground of challenge must be dismissed.

PROOF OF THE INFRINGEMENT

58 According to the Decision (point 80, first paragraph), from 1977 onwards the polypropylene producers supplying the EEC had been party to a whole complex of schemes, arrangements and measures decided on in the framework of a system of regular meetings and continuous contact. The Decision (point 80, second paragraph) goes on to state that the overall plan of the producers was to meet and reach agreement upon specific matters.

59 It is therefore necessary to verify first of all whether the Commission has established to the requisite legal standard its findings of fact relating to (A) the contacts between the producers and the EATP meeting on 22 November 1977, (B) the system of regular meetings of polypropylene producers, (C) the price initiatives, (D) the measures for implementing the price initiatives and (E) the fixing of target tonnages and quotas, taking into account (a) the contested decision, (b) the arguments of the parties, before going on to (c) an assessment of them; it will then be necessary to review the application of Article 85(1) of the EEC Treaty to those facts.

1. The findings of fact

A. The contacts between producers and the EATP meeting of 22 November 1977

(a) The contested decision

60 In the Decision (point 17, fourth paragraph; point 78, third paragraph; point 104, second paragraph) the Commission asserts that the applicant, like Hoechst, ICI, Linz, Saga and Solvay, stated that it would be supporting the announcement made by Monte in an article which appeared on 18 November 1977 in the trade press (European Chemical News, hereinafter referred to as "ECN") of its intention to raise the price for raffia to DM 1.30/kg as from 1 December. The various statements made in this regard at the EATP meeting held on 22 November 1977, as recorded in the minutes, showed, according to the Decision, that the DM 1.30/kg level set by Monte had been accepted by the other producers as a general industry "target".

61 According to the Decision (point 16, first and second paragraphs), that declaration of support was made in the context of discussions initiated between the producers with a view to avoiding a substantial drop in price levels and attendant losses, discussions in which the major producers, Monte, Hoechst, ICI and Shell, initiated a "floor-price agreement" which was to be in operation by 1 August 1977 and the details of which were communicated to the other producers, including Hercules, whose marketing director noted that the "floor-prices" for the major grades of polypropylene were based on a raffia grade market price of DM 1.25/kg.

62 The Decision (point 16, fifth and sixth paragraphs) further states that ICI and Shell admit that there were contacts with other producers as to how the price slide could be checked. However, the Commission acknowledges that, with the exception of the "big four" (Hoechst, ICI, Monte and Shell) and Hercules and Solvay, it was not able to establish the identity of the producers involved in discussions at that time or to obtain details of the operation of the floor-price agreement.

63 The Decision (point 17, first paragraph) states once more that it was about the time of Monte' s announcement of its intention to increase prices that the system of regular meeting of polypropylene producers began. It points out, however, that on ICI' s own admission contact was occurring between producers before that date, probably by telephone and on an ad hoc basis.

(b) Arguments of the parties

64 The applicant submits that there is no evidence that it had regular communications with its competitors other than those which it had with them during the producers' meetings. Thus, the note of a telephone call (main statement of objections, Appendix 2) probably received early in 1977 by Hercules' marketing manager, on which the Commission relies for its assertion that the "major producers" had made an agreement among themselves and which was furnished voluntarily by Hercules to the Commission, proves at the most - and this has never been denied by Hercules - that Hercules received occasional information orally by telephone from other producers regarding meetings that had taken place among them. But neither that note, nor any other document, proves that Hercules took the initiative in making such contacts, which it never did.

65 Moreover, Hercules contends that the Commission believes that it can conclude from documents not relating to Hercules that some producers decided on an initiative to fix prices in December 1977 and it is only by relying on the note of the statements made by Hercules' executives at the EATP meetings in May and November 1977 (main statement of objections, Appendices 5 and 6) that it asserts that Hercules was a party to that agreement. However, Hercules points out that the statements made in May predated the first evidence of any arrangements made between the four major producers and their contents were not objectionable in any way. The November statements which supported the idea of price increases for polypropylene following the increase in production costs do not provide any proof at all of the existence of illegal collusion. Moreover, it is improbable that such collusion would emerge in an EATP meeting in the presence of customers. The November statements could equally have been no more than a normal public reaction of a producer to his competitors' public actions, such as, for example, Monte' s announcement in ECN of an increase in its prices (main statement of objections, Appendix 3). For the same reason, when Hercules, at an EATP meeting in May 1978 (main statement of objections, Appendix 7) stated that prices were not yet at a satisfactory level, such a statement cannot establish the applicant' s participation in pricing agreements, especially since the Commission states that those agreements were concluded at producer meetings which it is not proved that Hercules attended. Thus, all the available evidence suggests that in the course of 1977 until some time in 1979 Hercules was an occasional passive recipient of information about whatever discussions may have been going on among other producers.

66 The applicant also maintains that the Commission does not have matching price instructions emanating from Hercules for that period and that consequently its situation is identical to that of BP, which also had contacts with the other producers, and to that of Amoco, which, besides those contacts, also spoke at the EATP meeting in May 1978. It also points out that the Commission has admitted that it is not able to establish with certainty that Hercules became a party to a core agreement at that time.

67 The Commission bases its arguments, first, on Hercules' s awareness of the conclusion by the "big four" of the floor-price agreement, as is shown by the note of a Hercules telephone conversation dating from mid-1977 (main statement of objections, Appendix 2) describing the details of that agreement and, secondly, on the statements made by Hercules at three EATP meetings in May 1977 (main statement of objections, Appendix 5), November 1977 (main statement of objections, Appendix 6) and May 1978 (main statement of objections, Appendix 7). At the first, it stated:

"Hercules is not happy with the current price levels, but feels it will be up to the traditional industry leaders to bring some order out of the present chaos."

At the second meeting, it stated:

"Since the first alternative does not appear likely, I was happy to learn on Friday from Mrs T. of European Chemical News that Montedison had announced to her that they had made the first move in announcing the new European prices for their grades of polypropylene",

thereby expressing its support for a Monte initiative reported in the trade press (main statement of objections, Appendix 3, referring to a previous article). It is probable that Hercules knew that this initiative resulted from an illegal agreement (main statement of objections, Appendix 2). During the third meeting, it stated:

"Although prices for polypropylene have increased significantly since the fourth quarter of last year, they are not yet at a satisfactory level. It may not have been realistic to think that an increase to DM 1.30/kg could have been reached in one step, but the need to get to this minimum level has not and will not diminish".

68 As regards telephone contacts with other producers, the Commission states that Hercules itself stated in its reply to the statement of objections that occasionally Mr B. received telephone calls informing him about what went on at meetings he did not attend.

69 The Commission states that it made no finding with regard to Hercules' attendance at meetings of producers other than those of the EATP before 1979. It notes with interest the statement made by Hercules in its reply that it received communications about the results of meetings which took place "during the earlier period when Mr B. was attending such meetings initially not at all and later only very occasionally". It is thus clearly referring to the 1978 period and indicates that support for higher prices at EATP meetings was at least based on knowledge of underlying collusion and an intention to join in.

70 As regards the discrimination which the applicant allegedly suffered in relation to Amoco and BP, the Commission points out that point 78 of the Decision clearly states that it is because "on the totality of the evidence the proof against them of participation in an infringement of Article 85(1) is not conclusive" that Amoco and BP are not addressees of the Decision.

(c) Assessment by the Court

71 The Court finds that the applicant has admitted, both in its reply to the request for information (particular objections, Appendix 1) and in its application, that it occasionally received information from other producers by telephone concerning discussions or meetings which had taken place between them, even though it denies having taken the initiative in making such contacts. Furthermore, it has not limited in time the existence of those contacts.

72 In view of the existence of those contacts in 1977 and 1978 and the statements made by the applicant at the EATP meeting held on 27 May 1977, the question is whether the statements made by the applicant at the EATP meeting of 22 November 1977 constitute the expression of a common purpose with other producers regarding a target price of DM 1.30/kg for 1 December 1977, the existence of which is borne out by the statements made by the applicant at the EATP meeting on 26 May 1978.

73 The Court considers that this is indeed so. At the EATP meeting on 27 May 1977 (main statement of objections, Appendix 5), the applicant suggested that the traditional market "leaders" (that is to say, the "big four") should bring some order out of the chaos on the market; in mid-1977 (main statement of objections, Appendix 2), it learned by telephone that the "big four" had made an agreement on floor-prices (DM 1.25/kg); at the EATP meeting on 22 November 1977 (main statement of objections, Appendix 6), it publicly welcomed the news in ECN that Monte had taken the first step by announcing new European prices for polypropylene (DM 1.30/kg), knowing that an agreement on floor-prices had been concluded and that Monte was a party to that agreement; at the EATP meeting on 26 May 1978 (main statement of objections, Appendix 7), it noted that prices had increased - but not sufficiently - and that it had not been realistic to believe that the increase to DM 1.30/kg could be achieved in one step.

74 The Court considers, moreover, that the case of Amoco is different from that of the applicant in so far as there is no evidence that that undertaking had contacts with other polypropylene producers before the EATP meeting of 26 May 1978 and in so far as it did not participate in the EATP meetings of 27 May 1977 and 22 November 1977, during the last of which a common purpose emerged amongst various polypropylene producers. As for BP, it did not participate in any of those meetings.

75 It follows that the Commission has established to the requisite legal standard, first, that the applicant was informed of the outcome of the discussions about prices and that it was in contact with other producers, in particular during 1977 and 1978, on an ad hoc basis and, secondly, that the statements made by the applicant, as they appear in the minutes of the EATP meeting of 22 November 1977, constituted the expression of a common purpose between the applicant and other producers regarding the fixing of a target price of DM 1.30/kg.

B. The system of regular meetings

(a) The contested decision GROUNDS CONTINUED UNDER DOC.NUM : 689A0007.1

76 According to the Decision (point 18, first paragraph), at least six meetings were held during 1978 between senior managers responsible for the overall direction of the polypropylene business of some of the producers ("bosses"). This system soon evolved to include a lower tier of meetings attended by managers possessing more detailed marketing knowledge ("experts") (ICI' s reply to the request for information under Article 11 of Regulation No 17, main statement of objections, Appendix 8). The Decision states that before mid-1982 Hercules claimed to have attended only irregularly but from May of that year admits taking part in meetings more frequently than before (point 18, third paragraph).

77 According to the Decision (point 78, tenth paragraph), Hercules, the only American-owned producer represented at meetings, claimed to have been present as an "observer" and then only irregularly. It admits attending meetings from May 1979 as well as being informed of what had transpired at meetings at which its representative was not present. From mid-1982, despite a threat to withdraw because the German producers did not "accept" him, the Hercules representative went to some 15 out of 30 known plenary meetings. These included several bosses' sessions, and the ICI record shows that he took an active part in discussions, to the extent of proposing the "account leadership" system. He also took part in local meetings covering Benelux at least. While receiving detailed information on the monthly sales of the other producers, the Hercules representative does not appear to have communicated his firm' s own figures to the others.

78 In the eleventh paragraph of point 78 of the Decision it is stated that Hercules attempted to present the attendance of its representative as an unofficial venture by a relatively junior employee. Its own documents, however, show that he occupied a responsible position in the company as the marketing manager for polypropylene, and that as early as 1977, when the floor-price agreement was made, and later in 1981, his superiors were themselves in contact with other producers on price arrangements. It is therefore inconceivable that they did not know the real purpose of his business trips which they authorized from May 1979 onwards.

79 The Decision concludes in the third paragraph of point 85 that Hercules cannot escape responsibility for the infringement by arguing that the attendance of its representative was "unofficial" or that he withheld certain information from the other producers.

80 In point 21 the Decision states that the purposes of the regular meetings of polypropylene producers were, in particular, the fixing of target prices and sales volumes and the monitoring of their observance by the producers.

(b) Arguments of the parties

81 Hercules maintains that the Commission cannot infer that it committed an infringement from the fact that one of its employees, Mr B., took part in a few meetings of polypropylene producers since his participation was sporadic, passive, unknown to his superiors and unofficial and since the rank of that employee was insufficient to allow him to bind the company.

82 It states first of all that its employee attended five meetings out of the twenty-four mentioned in Table 3 of the Decision in respect of the period prior to May 1982, six "bosses' " meetings out of sixteen and nine "experts' " meetings out of fifteen between May 1982 and the end of August 1983 and that he did not attend any of the three meetings which were held after 23 August 1983. It further maintains that the sporadic nature of his attendance at meetings is borne out by ICI' s reply to the request for information (main statement of objections, Appendix 8) and Monte' s reply to the request for information (Appendix 3 to the statement of objections addressed to Monte).

83 The applicant states, secondly, that this sporadic attendance at meetings was purely passive, as is indicated by ICI' s reply to the request for information and as is indeed recognized by the Commission in the Decision (point 78, tenth paragraph), which states that the Hercules representative "does not appear to have communicated his firm' s own figures to the others". In the applicant' s view, this point is very important in so far as the communication of those figures was indispensable for the operation of the cartel since the exchange of information on achieved sales was the means by which the producers believed they could monitor the implementation of the agreed arrangements.

84 The applicant contends, thirdly, that the presence of its employee at the meetings had not received the approval of his superiors, who were unaware of it, and that it was contrary to company policy. In this regard, it explains that although at the beginning of the period covered by the Commission' s decision some of its executives were contacted by other producers and made aware of the existence of producer meetings and understandings on prices, this does not mean that its senior executives knew that one of its more subordinate employees was attending those meetings. When they became aware that that employee was receiving information similar to that which they themselves were receiving and had been invited to attend meetings, his superiors reminded him that attendance at meetings of producers would be contrary to company policy. According to the applicant, it was reasonable to assume thereafter that their instructions were being followed. Since the duties of the employee in question involved frequent travel to a large number of European cities and such travel required neither the prior approval of his superiors nor any explanation on his part, there was no hint - not even from his travel vouchers, whose purpose was solely to reimburse his travel expenses - to enable his superiors, who, moreover, did not know the place and date of the meetings, to find out whether he went to them, if only sporadically. Contrary to what the Commission states in its defence, that conclusion is not contradicted by the report by the Counsel of Hercules Incorporated (particular objections, Hercules, Appendix 6), which simply stated that its employee' s role "may have been known" to his superiors and not that it was known. On the contrary, that conclusion is confirmed by the fact that on 29 July 1981 the superior of that employee informed him of what had transpired at a meeting which had just taken place (particular objections, Hercules, Appendix 18), which demonstrated that he was not aware of his subordinate' s attendance. According to the applicant, the motive for the secret attendance of its employee was to obtain information in order to be well judged by his superiors.

85 That having been said, the applicant recognizes that the question whether an undertaking may be held liable for infringements of Community competition rules when it has taken reasonable precautions to prevent them from occurring and, notwithstanding its efforts, an undisciplined employee has taken actions contrary to the orders of his superiors has not yet been resolved.

86 The applicant states, fourthly, that its employee was not a full participant in the meetings and that he participated only as an observer and that the other participants at the meetings were aware of this because he made his unofficial observer status known, as is shown by the note of a meeting held in March 1983 (particular objections, Hercules, Appendix 11), which states that: "B., marketing manager attends unofficially". According to the applicant, this unofficial participation irritated the German and Netherlands producers, as is indicated by the note of the meeting held on 2 December 1982 (main statement of objections, Appendix 33) and the note of a telephone conversation between that employee and an ICI executive dated 3 December 1982 (main statement of objections, Appendix 88).

87 Finally, it states that the level of responsibility of its employee within the company prevented him from entering into agreements relating to target prices or restrictions of output and sales. According to the applicant, the employee was not a senior executive of the company despite his title. He had no management responsibilities and did not have the necessary powers to bind the company. In particular, he had no authority to control production or overall sales policy and his decisions as to pricing guidance to be given to area sales managers were subject to approval by his superiors.

88 The Commission explains that it did not treat frequency of attendance at the meetings as a relevant factor once it was satisfied that an undertaking subscribed to the common plan to regulate prices and supply (see the Decision, point 83, first paragraph). Nevertheless it points out that Hercules admitted, in its reply to the statement of objections, that its employee went "fairly frequently" to the meetings from February 1982 to March 1983. Furthermore, the note of the meeting of 1 June 1983 (main statement of objections, Appendix 40) counts Hercules amongst the usual participants at the meetings.

89 It disputes that the applicant' s participation in the meetings was passive, relying on two very brief notes, one stating "B. - Account leadership" (particular objections, Hercules, Appendix 10) and the other "B.: Originator of 'account leadership' concept (not working)" (particular objections, Hercules, Appendix 11) from which it deduces that the applicant' s employee was at the origin of the system of "account leadership". It also relies on the note of a meeting held in March 1982 (particular objections, Hercules, Appendix 43), which, according to the Commission, shows that Mr B. had requested the adjustment of the quota allocated to it. It also states that the fact that the applicant' s employee did not give its sales figures during the meetings is irrelevant since he knew that the other producers were able to work out those figures from the data available under the Fides data exchange system.

90 As regards the claim that the applicant' s employee was forbidden to attend the meetings, the Commission points out that on at least two occasions, in 1977 (main statement of objections, Appendix 2) and on 29 July 1981 (particular objections, Hercules, Appendix 18), he received from his superiors information on the price agreement that had been made. The information received on 29 July 1981 about the meeting held on 28 July does not contradict the Commission' s arguments because the applicant' s employee was not present at that meeting. Therefore, it is hardly possible to believe that the employee was supposed to understand that the company disapproved of those agreements and that he was prohibited from attending the meetings. The Commission further points out that no documentary trace of such a prohibition has been produced. Nor is it conceivable, according to the Commission, that Mr B.' s superiors were not aware of his attendance at the meetings. Moreover, a report drawn up by the Counsel of Hercules Incorporated in the weeks following the Commission' s investigations (particular objections, Hercules, Appendix 6) expressly stated that: "It appears that Mr B.' s non-participant observer role may have been known to several of his immediate superiors". The Commission further argues that, even if Mr B.' s activities were not known to his superiors and were a breach of discipline, which it claims is not the case, this cannot enable Hercules to escape its own responsibility.

91 The Commission further considers that the attendance of the applicant' s employee at the meetings was no different in nature from that of the other producers, as is shown, in its view, by the active part which he took in discussions and the commitments which he entered into on behalf of the company. It points out in this regard the role which he played in the establishment of the system of "account leadership" and his acceptance, at the meeting of 2 December 1982 (main statement of objections, Appendix 33, Table 2) and during a telephone conversation of 3 December 1982 (main statement of objections, Appendix 88), of the quota allocated to the applicant and the adjustment of that quota at a meeting held in March 1982.

92 Finally, the Commission argues that it is futile to attempt to show that the applicant' s employee had no decision-making authority in the company since the fact that the price instructions given by the applicant after the meetings reflected the target prices agreed at the meetings unambiguously demonstrates the contrary.

(c) Assessment by the Court

93 The Court notes that, as far as the commencement of the applicant' s attendance of the meetings of producers is concerned, the particular objections addressed to Hercules state that: "Mr F.B., ..., attended a number of 'Bosses' and 'Experts' meetings from 1979 ...".

94 According to the replies of ICI, Monte and the applicant to the requests for information (main statement of objections, Appendix 8; particular objections, Monte, Appendix 3; and particular objections, Hercules, Appendix 1), Hercules was an irregular participant in meetings in 1979, 1980 and 1981. It admits having participated in one or two meetings in 1979, in one meeting in 1980 and in two meetings in 1981. It should, however, be noted that it is clear from the record of the interview of Hercules' employee, Mr B., by Commission officials (particular objections, Hercules, Appendix 7, annex A) that the employee stated that he had perhaps participated in two other meetings in 1979, in two other meetings in 1980 and in one other meeting in 1981. It is also apparent from the applicant' s reply to the statement of objections that the applicant frequently participated in meetings from February 1982, which suggests that it participated in the meetings held in February, March and April 1982 (five meetings in all). Consequently, its participation in the meetings during those years was not so irregular as it contends since, according to its own statements, it is possible that before May 1982 it took part in fifteen meetings out of twenty-nine (that is to say the twenty-four meetings mentioned in Table 3 of the Decision covering the period in question, plus the meetings held during that same period which are mentioned in the record of Mr B.' s interview but are not referred to in Table 3 of the Decision), and not five meetings out of twenty-four.

95 The relative irregularity with which the applicant participated in the meetings which took place at this period are not the only factor which must be taken into account for the purpose of examining its participation in the system of regular meetings of polypropylene producers; account must also be taken of the contacts which it could have had with other producers. In this regard, it should be noted that the applicant indicated in its reply to the request for information (particular objections, Hercules, Appendix 1) that:

"Mr B. was informed on a number of occasions that meetings were scheduled to occur and was invited to attend. It does not appear that Mr B. was informed in such conversations about any action which it was proposed to take at such meetings. Mr B. did not make any commitment with respect to prices, volumes, or related matters, and did not authorize anyone to represent or act on behalf of Hercules at such meetings. On a number of occasions, but not invariably, Mr B. was informed after meetings as to what had transpired. On such occasions Mr B. did not make any commitments or express any intention, to follow or support any price changes that may have been agreed upon at such meetings. On occasion, Mr B. may have made general statements indicating Hercules' desire for higher polypropylene prices".

96 In view of those contacts, by which Mr B. was able to supplement the large amount of information which he had obtained during the meetings regarding the commercial policies which the applicant' s competitors were going to adopt, the Court finds the relative irregularity with which the applicant' s employee participated in the meetings before May 1982 does not belie its participation in the system of regular meetings of polypropylene producers during that period.

97 The Court finds that the applicant was a regular participant in the meetings from May 1982 until the end of August 1983, as is shown by its reply to the request for information, its reply to the statement of objections and the notes of the meetings of 3 May and 1 June 1983 (main statement of objections, Appendices and 38 and 40), the first of which mentions "a fairly full attendance with only Hercules missing among usual participants" and the second of which refers to the "usual participants except for Solvay + Hercules". In this regard, it must be observed that some notes of meetings, such as the notes of the bosses' meeting of 21 September 1982 (main statement of objections, Appendix 30), indicate that the applicant was present at them whereas those meetings are not mentioned in the reply to the request for information and that, consequently, that reply must be considered to be incomplete.

98 The Commission was fully entitled to take the view, based on ICI' s reply to the request for information, which is borne out by numerous notes of meetings, that the purpose of the meetings was, in particular, to fix target prices and sales volumes. Indeed, that reply contains the following passages:

"' Target prices' for the basic grade of each principal category of polypropylene as proposed by producers from time to time since 1 January 1979 are set forth in Schedule ...";

and

"A number of proposals for the volume of individual producers were discussed at meetings".

99 In addition, in explaining the organization of marketing "experts' " meetings as well as "bosses' " meetings from the end of 1978 or the beginning of 1979, ICI' s reply to the request for information reveals that the discussions about the fixing of target prices and sales volumes became increasingly concrete and precise whereas in 1978 the "bosses" had confined themselves to developing the actual concept of target prices.

100 Besides the foregoing passages, the following statement appears in ICI' s reply to the request for information: "Only 'Bosses' and 'Experts' meetings came to be held on a monthly basis". The Commission was fully entitled to deduce from that reply, as well as from the identical nature and purpose of the meetings, that they were part of a system of regular meetings.

101 It must also be noted that the allegedly passive participation of the applicant' s employee in the meetings is belied by various pieces of evidence. These consist first of all of two handwritten notes, cited by the Commission, the second one of which is dated March 1983 (particular objections, Hercules, Appendices 10 and 11), which refer to "B. - Account leadership" and "B.: Originator of 'account leadership' concept (not working)", from which it may be deduced that Mr B. proposed the system of "account leadership". Next, there is the note of the meeting of 2 December 1982 (main statement of objections, Appendix 33) and the note of a telephone conversation between the applicant and an ICI employee dated 3 December 1982 (main statement of objections, Appendix 88), which together show that that employee communicated to ICI Amoco' s, BP' s and Hercules' views on the quotas which had been allocated to them at the meeting held on 2 December 1982, even though Mr B. did not disclose Hercules' sales figure.

102 The applicant' s contentions that Mr B.' s superiors did not know that he was participating in the meetings and had told him that his participation was against company policy lack credibility in view of the following factors. No documentary trace of the prohibition against participating in the meetings has been produced by the applicant. The superiors of the employee in question had contacts with other participants in the meetings; this is shown by the fact in June 1977 and on 29 July 1981 those persons informed Mr B. of what was said during a telephone conversation (main statement of objections, Appendix 2) and of what had transpired at a meeting which he had not attended (particular objections, Hercules, Appendix 18). The report drawn up by Hercules Incorporated states that Mr B.' s role may have been known to several of his immediate superiors (particular objections, Hercules, Appendix 6). Finally, the fact that the applicant has stated before the Court that Mr B.' s decisions as to pricing guidance to be given to area sales managers were subject to approval by his superiors suggests that he had to justify his decisions by explaining to his superiors the data on which he based them and the origin of those data.

103 Furthermore, the nature of the participation of the applicant' s employee in the meetings, which was described by ICI as "unofficial" in the aforesaid note of March 1983, was no different from that of the other participants, as is shown by the active part which he took in the discussions and the fact that the price instructions given by the applicant following the meetings corresponded to a large extent, as regards their amount and their date of entry into force, to the target prices fixed at those meetings. The fact that ICI described Mr B.' s participation in the meetings as "unofficial" is not apt to weaken those findings, since the use of that description does not prove that the other producers knew that the applicant' s employee was attending without his superiors' knowledge, or even against their wishes, or that he did not have the necessary authority to be there. That description merely shows that he did not wish his participation in those meetings to become known outside them.

104 As regards the level of the duties performed by the employee in question within the applicant company, the fact that the price instructions given by the applicant match the results of the meetings indicates either that Mr B. had the authority to make the applicant' s pricing policy directly reflect the results of the meetings which he attended, which demonstrates that he had the necessary authority to bind the company, or, if that was not the case, that he had been instructed to do so.

105 It follows that the Commission has established to the requisite legal standard that the applicant participated in the system of regular meetings of polypropylene producers from the beginning of 1979 until at least the month of August 1983, which it was entitled to infer from the applicant' s participation in the meetings and the contacts which the applicant had in relation to those meetings; secondly, that the purpose of those meetings was, in particular, to fix price and sales volume targets; and, thirdly, that the applicant' s participation in those meetings had the significance attributed to it in the Decision.

C. The price initiatives

(a) The contested decision

106 According to the Decision (points 28 to 51), a system for fixing price targets was implemented through price initiatives of which six could be identified, the first lasting from July to December 1979, the second from January to May 1981, the third from August to December 1981, the fourth from June to July 1982, the fifth from September to November 1982 and the sixth from July to November 1983.

107 With regard to the first of those price initiatives, the Commission (Decision, point 29) states that it has no detailed evidence of any meetings held or price initiatives undertaken in the first part of 1979. However, a note of a meeting held on 26 and 27 September 1979 shows that a price initiative had been planned based on a raffia grade price of DM 1.90/kg applicable from 1 July and DM 2.05/kg from 1 September.

108 However, since it was difficult to get further price increases, the producers decided at the meeting held on 26 and 27 September 1979 to postpone the date for implementing the target by several months until 1 December 1979, the new plan being to "hold" the existing levels over October with the possibility of an immediate step increase to DM 1.90 or 1.95/kg in November (Decision, point 31, first and second paragraphs).

109 As regards the second price initiative, the Commission, whilst admitting (in point 32 of the Decision) that no meeting notes were found for 1980, states that at least seven producers' meetings were held in that year (reference is made to Table 3 of the Decision). Although at the beginning of the year producers were reported in the trade press as favouring a strong price push during 1980, a substantial fall occurred in market prices to a level of DM 1.20/kg or less before they began to stabilize in about September of that year. Price instructions issued by a number of producers - DSM, Hoechst, Linz, Monte, Saga and ICI - indicated that in order to re-establish price levels targets were set for December 1980 - January 1981 based on raffia at DM 1.50/kg, homopolymer at DM 1.70/kg and copolymer DM 1.95 to 2.00/kg. A Solvay internal document includes a table comparing "achieved prices" for October and November 1980 with what are referred to as "list prices" for January 1981 of DM 1.50/1.70/2.00. The original plan was to apply these levels from 1 December 1980 (a meeting was held in Zurich on 13 to 15 October) but this initiative was postponed to 1 January 1981.

110 In the Decision (point 33, third paragraph) it is stated that is not known whether Hercules was at the meetings held in January 1981, at which it was decided that a price increase, fixed in December 1980 for 1 February 1981, was required in two stages on the basis of DM 1.75/kg for raffia: the 1 February target was to remain at DM 1.75/kg and a target of DM 2.00/kg was to be introduced "without exception" from 1 March. A table was drawn up in six national currencies of the target prices for six principal grades, to come into effect on 1 February and 1 March 1981. The Decision states, however, that Hercules was present at the previous meeting, on 16 December 1980.

111 According to the Decision (point 34), the plan to move to DM 2.00/kg on 1 March does not, however, appear to have succeeded. The producers modified their expectations and now hoped to reach the DM 1.75/kg level by March. An experts' meeting, of which no record survives, was held in Amsterdam on 25 March 1981 but immediately afterwards at least BASF, DSM, ICI, Monte and Shell gave instructions to raise target (or "list") prices to the equivalent of DM 2.15/kg for raffia, effective on 1 May. Hoechst gave identical instructions for 1 May but was some four weeks behind the others in doing so. Some of the producers allowed their sales offices flexibility to apply "minimum" or "rock bottom" prices somewhat below the agreed targets. During the first part of 1981 there was a strong upward movement in prices, but despite the fact that the 1 May increase was strongly promoted by the producers momentum was not maintained. By mid-year the producers anticipated either a stabilizing of price levels or even some downward movement as demand fell during the summer.

112 As regards the third price initiative, the Decision (point 35) states that Shell and ICI had already foreseen a further price initiative in September/October 1981 in June of that year when the slowing down of the first-quarter price rise had become apparent. Shell, ICI and Monte met on 15 June 1981 to discuss methods of implementing higher prices in the market. Within a few days of this meeting both ICI and Shell instructed their sales offices to prepare the market place for a major rise in September based on a plan to move the raffia price to DM 2.30/kg. Solvay also reminded its Benelux sales office on 17 July 1981 to warn customers of a substantial price increase due to take effect on 1 September, the exact amount of which was to be decided in the last week of July, when an experts' meeting was planned for 28 July 1981. The original plan to go for DM 2.30/kg in September 1981 was revised, probably at this meeting, with the planned level for August back to DM 2.00/kg for raffia. The September price was to be DM 2.20/kg. A handwritten note obtained at the premises of Hercules and dated 29 July 1981 (the day after the meeting, which Hercules probably did not attend) lists these prices as the "official" prices for August and September and refers in cryptic terms to the source of the information. More meetings were held in Geneva on 4 August and in Vienna on 21 August 1981. Following these sessions, new instructions were given by producers to go for a price of DM 2.30/kg on 1 October. BASF, DSM, Hoechst, ICI, Monte and Shell gave virtually identical price instructions to implement these prices in September and October.

113 According to the Decision (point 36), the plan now was to move during September and October 1981 to a "base price" level of DM 2.20 to 2.30/kg for raffia. A Shell document indicates that originally a further step increase to DM 2.50/kg on 1 November had been mooted but was abandoned. Reports from the various producers showed that during September prices increased and the initiative continued into October 1981, reaching achieved market prices of some 2.00 to DM 2.10/kg for raffia. A Hercules note shows that during December 1981 the target of DM 2.30/kg was revised downwards to a more realistic DM 2.15/kg, but reports that "general determination got prices up to DM 2.05, the closest ever to published (sic) target prices". By the end of 1981, the trade press was reporting polypropylene market prices as raffia DM 1.95 to 2.10/kg, some 20 pfennig below the producers' targets. Capacity utilization was said to be running at a "healthy" 80%.

114 The fourth price initiative of June to July 1982 took place as supply and demand returned into balance on the market. That initiative was decided upon at the producers' meeting of 13 May 1982, at which Hercules participated and during which a detailed table of price targets for 1 June was drawn up for various grades of polypropylene in various national currencies (DM 2.00/kg for raffia) (Decision, points 37, 38 and 39, first paragraph).

115 The meeting of 13 May 1982 was followed by price instructions from ATO, BASF, Hoechst, Hercules, Huels, ICI, Linz, Monte and Shell, corresponding, with a few insignificant exceptions, to the target prices set at the meeting (Decision, point 39, second paragraph). At the meeting on 9 June 1982, the producers were able to announce only modest increases.

116 According to the Decision (paragraph 40), the applicant also participated in the fifth price initiative of September-November 1982 decided upon at the meeting on 20 and 21 July 1982, the aim of which was to achieve a price of DM 2.00/kg by 1 September and DM 2.10/kg by 1 October, since it was present at the majority if not all of the meetings held between July and November 1982 in which this initiative was planned and monitored (Decision, point 45). At the meeting on 20 August 1982, the increase planned for 1 September was postponed until 1 October, and that decision was confirmed at the meeting on 2 September 1982 (Decision, point 41).

117 Following the meetings of 20 August and 2 September 1982, ATO, DSM, Hercules, Hoechst, Huels, ICI, Linz, Monte and Shell gave price instructions in accordance with the price target set at those meetings (Decision, point 43).

118 According to the Decision (point 44), at the meeting on 21 September 1982, in which the applicant participated, an examination of the measures taken to achieve the target previously set was undertaken and the undertakings expressed general support for a proposal to raise the price to DM 2.10/kg by November-December 1982. That increase was confirmed at the meeting on 6 October 1982.

119 Following the meeting on 6 October 1982, BASF, DSM, Hercules, Hoechst, Huels, ICI, Linz, Monte, Shell and Saga gave price instructions applying the increase decided upon (Decision, point 44, second paragraph).

120 Like ATO, BASF, DSM, Hoechst, Huels, ICI, Linz, Monte and Saga, the applicant supplied the Commission with price instructions issued to its local sales offices, which corresponded not only with each other in terms of amount and timing but also with the target-price table attached to ICI' s account of the experts' meeting held on 2 September 1982 (main statement of objections, Appendix 29) (Decision, point 45, second paragraph).

121 According to the Decision (point 46, second paragraph), the December 1982 meeting resulted in an agreement that the level planned for November-December was to be established by the end of January 1983.

122 Finally, according to the Decision (point 47), the applicant participated in the sixth price initiative of July-November 1983. At the meeting on 3 May 1983, it was agreed that the producers would try to apply a price target of DM 2.00/kg in June 1983. However, at the meeting on 20 May 1983, the target previously set was postponed until September and an intermediate target was fixed for 1 July (DM 1.85/kg). Subsequently, at a meeting on 1 June 1983, the producers present reaffirmed complete commitment to the DM 1.85/kg increase. On that occasion, it was agreed that Shell would lead publicly in ECN.

123 The Decision (point 49) states that after the meeting of 20 May 1983, ICI, DSM, BASF, Hoechst, Linz, Shell, Hercules, ATO, Petrofina and Solvay issued instructions to their sales offices to apply from 1 July a price table based on DM 1.85/kg for raffia. It goes on to state that only fragmented price instructions were obtained from ATO and Petrofina but these confirmed that these producers were implementing the new price levels, somewhat belatedly in the case of Petrofina and Solvay. The Decision concludes that, with the exception of Huels, for which the Commission found no price instructions for July 1983, all the producers which had attended the meetings or had promised support for the new price target of DM 1.85/kg are shown to have given instructions to implement the new price.

124 The Decision (point 50) also points out that further meetings, in which all the regular participants, including Hercules, took part, took place on 16 June, 6 and 21 July, 10 and 23 August and 5, 15 and 29 September 1983. At the end of July and beginning of August 1983, BASF, DSM, Hercules, Hoechst, Huels, ICI, Linz, Solvay, Monte and Saga all issued price instructions to their various national sales offices for application from 1 September based on raffia at DM 2.00/kg, whilst a Shell internal note of 11 August, relating to its prices in the United Kingdom, indicated that its United Kingdom subsidiary was "promoting" basic prices to be in force on 1 September corresponding to the targets fixed by the other producers. By the end of the month, however, Shell was instructing the United Kingdom sales office to postpone the full increase until the other producers had established the desired basic level. The Decision states that, with minor exceptions, those instructions were identical by grade and currency.

125 According to the Decision (point 50, last paragraph), the instructions obtained from the producers show that it was later decided to maintain the impetus of the September move with further steps based on raffia at DM 2.10/kg on 1 October, rising to DM 2.25/kg on 1 November. It is further stated (point 51, first paragraph) that BASF, Hoechst, Huels, ICI, Linz, Monte and Solvay each sent instructions to their sales offices setting identical prices for October and November, with Hercules initially fixing slightly lower prices.

126 According to the Decision (point 105, fourth paragraph), whatever the date of the last meeting, the infringement lasted until November 1983, since the agreement continued to produce its effects at least until that time, November being the last month for which it is known that target prices were agreed and price instructions issued.

127 In the Decision (point 76, second paragraph) the Commission applies itself to replying in detail to Hercules, which had criticized it for (it claimed) unfairly treating price instructions of different producers as contemporaneous when they were not. Similarly, in the Decision (point 76, third paragraph), the Commission refuses to accept that the survey produced by Hercules in order to show that there was no pattern of relationship between its own price guidelines and the target prices fixed in meetings has any evidentiary value.

128 In the Decision (point 77, first paragraph) the Commission further points out that some producers did not supply the Commission with a full set of price instructions from 1979 onwards as they had been requested. Thus, for Hercules, documentation was available only in relation to 1982 and 1983.

(b) Arguments of the parties

129 The applicant maintains that the Commission was wrong to conclude, from documents emanating from other producers, that it had supported the "target price" system. Even when its employee attended some of the meetings at which prices were discussed, neither the minutes of those meetings nor any other direct evidence shows that he gave his assent to those prices or that he undertook to apply them. The evidence available, in particular the evidence of other producers, according to which Mr B. did not enter into any commitment, and his lack of authority to bind the company, proves the contrary.

130 It contends that the Commission was wrong to base its findings on the terminology used in the internal price instructions of the undertaking, since this was the terminology habitually used in the trade press.

131 The applicant complains that the Commission did not take into account the actual performance in the market place of the accused undertakings and based the Decision entirely on an analysis of pricing instructions internal to the undertakings and an assumption that those instructions necessarily distorted competition. In the applicant' s view, that analysis on the part of the Commission is incorrect. The applicant explains that its pricing system operated in such a way that it could not be used to give effect to an agreement on prices with other producers. First, the guidance given to area sales managers left them with broad authority to deviate from suggested price goals. During a large part of the 1982-1983 period, such guidance was in the form of average price goals. In view of the flexibility of that pricing system, the Commission' s argument that the agreed prices were a starting point in negotiations with customers is inapplicable to Hercules. Secondly, the purpose of the general guidelines was to maintain production at a maximum level and to that end to maximize sales even if profit margins had to be reduced.

132 It states that this policy of "maximizing" production and sales made it impossible for it to adhere to an agreed system of "target prices". The prices which it actually charged in the market place did not conform to the "targets" to which it had allegedly agreed. According to Hercules, this emerges in particular from an analysis of 850 individual transactions effected by Hercules in 1982 and 1983 in four countries in which it had significant sales (Federal Republic of Germany, United Kingdom, France and Italy). Similarly, the Commission took no account of the study by Professor Albach and the audit conducted by Coopers & Lybrand. The simple comparison of the "target" prices with the prices reported in the trade press from September 1981 to December 1983, to which the Commission confined itself (Table 9 annexed to the Decision), is not self-evident proof of unlawful effects in the market place. On the contrary, that comparison confirms the producers' contentions that prices charged were well below the alleged "target" prices and varied across a wide band, in particular in the case of non-raffia grades, in which the vast majority of Hercules' sales were made.

133 Hercules states that, contrary to what the Commission asserts, it did not selectively interpret price instructions since it used the last instruction actually given, unlike the Commission, which chose inconsistently from among multiple instructions. Similarly, it contends that it did not use "notional" figures for grades other than raffia instead of "targets", as the Commission claims. The comparison which it made involved each "target" figure for each grade of polypropylene in each currency. The simple fact was that since the number of "targets" for products other than raffia were too small Hercules calculated, for comparison purposes, additional "notional targets" but did so in a perf