Judgment of the Court of First Instance (Third Chamber) of 7 October 1999. - Irish Sugar plc v Commission of the European Communities. - Article 86 of the EC Treaty (now Article 82 EC) - Dominant position and joint dominant position - Abuse - Fine. - Case T-228/97.



European Court reports 1999 Page II-02969



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1 Competition - Administrative proceedings - Observance of the rights of the defence - Whether the parties involved have a right to express an opinion regarding the way in which their own arguments have been taken into account - No such right

2 Competition - Dominant position - Collective dominant position - Meaning

(EC Treaty, Art. 86 (now Art. 82 EC))

3 Competition - Dominant position - Collective dominant position - Meaning - Joint abusive conduct or individual abusive conduct

(EC Treaty, Art. 86 (now Art. 82 EC))

4 Competition - Dominant position - Existence - Extremely large market shares - Generally constitutes sufficient evidence

(EC Treaty, Art. 86 (now Art. 82 EC))

5 Competition - Dominant position - Abuse - Meaning - Obligations incumbent upon dominant undertakings

(EC Treaty, Art. 86 (now Art. 82 EC))

6 Competition - Dominant position - Abuse - Abusive pricing policy

(EC Treaty, Art. 86 (now Art. 82 EC))

7 Competition - Dominant position - Abuse - Discriminatory pricing - Anti-competitive effects on competitors in a neighbouring market

(EC Treaty, Art. 86 (now Art. 82 EC))

8 Competition - Dominant position - Abuse - Selective and discriminatory rebates granted by an undertaking to customers exposed to its competitors

(EC Treaty, Art. 86 (now Art. 82 EC))

9 Competition - Dominant position - Abuse - Fidelity rebates intended to prevent customers of an undertaking from obtaining their supplies from competing producers - Target rebates

(EC Treaty, Art. 86 (now Art. 82 EC))

10 Competition - Administrative proceedings - Obligations of the Commission - Must act within a reasonable time - Criteria of assessment

(Council Regulation No 17)

Summary

1 The taking into account of an argument put forward by an undertaking during the administrative procedure leading to the adoption of a decision concerning it with regard to competition, when the undertaking has not been given an opportunity to express an opinion in that respect before the adoption of the final decision, cannot as such constitute an infringement of defence rights, especially where the fact that the argument was taken into account does not alter the nature of the complaints against it. Where the undertaking has had an opportunity to express its view on the position adopted by the Commission in the statement of objections, it can expect that its own explanations may lead the Commission to alter its opinion.

2 A joint dominant position consists in a number of undertakings being able together, in particular because of factors giving rise to a connection between them, to adopt a common policy on the market and to act to a considerable extent independently of their competitors, customers and, ultimately, consumers.

The mere fact that two economic entities are independent is not sufficient to remove the possibility of their holding a joint dominant position. It cannot be accepted that undertakings in a vertical relationship, without however being integrated to the extent of constituting one and the same undertaking, should be able abusively to exploit a joint dominant position.

3 Whilst the existence of a joint dominant position may be deduced from the position which the economic entities concerned together hold on the market in question, the abuse does not necessarily have to be the action of all the undertakings in question. It only has to be capable of being identified as one of the manifestations of such a joint dominant position being held. Therefore, undertakings occupying a joint dominant position may engage in joint or individual abusive conduct. It is enough for that abusive conduct to relate to the exploitation of the joint dominant position which the undertakings hold in the market.

4 The existence of a dominant position may derive from several factors which, taken separately, are not necessarily decisive. Amongst these factors, however, extremely large market shares are in themselves, save in exceptional circumstances, evidence of the existence of a dominant position. A market share of over 50% in itself constitutes evidence of the existence of a dominant position on the market in question.

5 `Abuse' is an objective concept referring to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is already weakened and which, through recourse to methods different from those governing normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition. It follows that Article 86 of the Treaty (now Article 82 EC) prohibits a dominant undertaking from eliminating a competitor and thereby reinforcing its position by having recourse to means other than those within the scope of competition on the merits. From that point of view, not all competition on price can be regarded as legitimate. The prohibition laid down in Article 86 of the Treaty is also justified by the consideration that harm should not be caused to consumers.

Therefore, whilst the finding that a dominant position exists does not in itself imply any reproach against the undertaking concerned, that undertaking has a special responsibility, irrespective of the causes of that position, not to allow its conduct to impair genuine undistorted competition on the common market. Similarly, whilst the fact that an undertaking is in a dominant position cannot deprive it of its entitlement to protect its own commercial interests when they are attacked, and whilst such an undertaking must be allowed the right to take such reasonable steps as it deems appropriate to protect those interests, such behaviour cannot be allowed if its purpose is to strengthen that dominant position and thereby abuse it.

6 Where an undertaking enjoys a dominant position, it is necessary, in order to determine whether a particular pricing policy is abusive, to consider all the circumstances, particularly the criteria and rules governing the grant of discounts, and to investigate whether, in providing an advantage not based on any economic service justifying it, the discount tends to remove or restrict the buyer's freedom to choose his sources of supply, to bar competitors from access to the market, to apply dissimilar conditions to equivalent transactions with other trading parties or to strengthen the dominant position by distorting competition. The distortion of competition arises from the fact that the financial advantage granted by the undertaking in a dominant position is not based on any economic consideration justifying it, but tends to prevent the customers of that dominant undertaking from obtaining their supplies from competitors. One of the circumstances may therefore consist in the fact that the practice in question takes place in the context of a plan by the dominant undertaking aimed at eliminating a competitor.

7 For an undertaking with a dominant position on a given market to reserve for itself, without objective need, an auxiliary or derivative activity on a neighbouring but distinct market on which it does not occupy a dominant position, at the risk of eliminating all competition on that market, falls within Article 86 of the Treaty (now Article 82 EC).

Specifically, a situation in which an undertaking enjoying a dominant position on the industrial sugar market grants discriminatory price rebates to its customers, depending on whether or not those customers are in competition with it as sugar packers on the retail sugar market, falls within Article 86 in so far as, first, there is an undeniable connection between the industrial and retail sugar markets and, secondly, the undertaking in question also holds a dominant position on the retail sugar market. The possible absence of competition between the applicant's customers enjoying rebates and competing sugar packers does not preclude the application of Article 86(c) of the Treaty, since the discriminatory practice complained of restricts competition from rival sugar packers on the retail sugar market.

8 The influence of the pricing policy of operators active on a national market on that of operators active on a neighbouring national market is of the very essence of a common market. Anything which restricts that influence must therefore be regarded as an obstacle to the achievement of that common market and prejudicial to the outcome of effective and undistorted competition, especially with regard to the interests of consumers. Accordingly, where such obstacles are brought about by an undertaking holding a dominant position, it is in principle appropriate to conclude that this is a case of abuse incompatible with Article 86 of the Treaty (now Article 82 EC).

The grant, by an undertaking holding more than 88% of the relevant market, of special rebates to certain customers exposed to competition because of their location along a border, constitutes an abuse contrary to Article 86. The undertaking cannot rely on the insufficiency of the financial resources at its disposal at the time to justify the selective and discriminatory granting of those border rebates and thereby escape the application of Article 86, without making a dead letter of the prohibition contained therein.

9 Fidelity rebates granted by an undertaking in a dominant position are an abuse within the meaning of Article 86 of the Treaty (now Article 82 EC) where their aim is, by granting financial advantages, to prevent customers from obtaining their supplies from competing producers. In such cases, all the circumstances must be appraised, in particular the criteria and detailed rules for granting rebates. It must also be determined whether there is a tendency, through an advantage not justified by any economic service, to remove or restrict the buyer's choice as to his sources of supply, to block competitors' access to the market, to apply dissimilar conditions to equivalent transactions with other trading parties, or to reinforce the dominant position by distorting competition.

The granting of target rebates by an undertaking in a dominant position, one of the immediate effects of which is a build-up of stocks and a concomitant reduction in purchases, amounts to restricting the normal development of competition and is incompatible with the objective of undistorted competition in the common market. It is not based on any economic service justifying that advantage, but seeks to remove or restrict the purchaser's freedom of choice concerning his sources of supply and to block the access of other suppliers to the market.

10 It is a general principle of Community law that the Commission must act within a reasonable time when adopting decisions following administrative proceedings relating to competition policy. However, the question whether the duration of an administrative proceeding is reasonable must be determined in relation to the particular circumstances of each case and, in particular, its context, the various procedural stages followed by the Commission, the conduct of the parties in the course of the procedure and the complexity of the case.

Parties

In Case T-228/97,

Irish Sugar plc, a company incorporated under Irish law, established in Carlow, Ireland, represented by Alexander Böhlke, of the Brussels and Frankfurt am Main Bars, and Scott Crosby, Solicitor, with an address for service in Luxembourg at the Chambers of Victor Elvinger, 31 Rue d'Eich,

applicant,

v

Commission of the European Communities, represented by Klaus Wiedner, of its Legal Service, acting as Agent, assisted by Conor Quigley, Barrister, with an address for service in Luxembourg at the Chambers of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

"APPLICATION for the annulment of Commission Decision 97/624/EC of 14 May 1997 relating to a proceeding pursuant to Article 86 of the EC Treaty (IV/34.621, 35.059/F-3 - Irish Sugar plc) (OJ 1997 L 258, p. 1) or, in the alternative, for the annulment of the third and fourth paragraphs of Article 3 of the operative part of that decision, in so far as they contain instructions exceeding the scope of the abuses established in points 5 and 6 of Article 1, and reduction of the fine imposed on the applicant by Article 2 of the operative part,

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

(Third Chamber),

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

Registrar: J. Palacio González, Administrator,

having regard to the written procedure and further to the hearing on 14 January 1999,

gives the following

Judgment

Grounds

Facts

1 This action challenges Commission Decision 97/624/EC of 14 May 1997 relating to a proceeding pursuant to Article 86 of the EC Treaty (IV/34.621, 35.059/F-3 - Irish Sugar plc) (OJ 1997 L 258, p. 1; `the contested decision'), in which the applicant, the sole processor of sugarbeet in Ireland and the principal supplier of sugar in that Member State, was fined for infringing Article 86 of the EC Treaty (now Article 82 EC). The product forming the subject-matter of the contested decision is white granulated sugar, on both the industrial sugar market and the retail sugar market.

2 On 25 and 26 September 1990 the Commission inspected the applicant's head office in Dublin. On 7 and 8 February 1991 it inspected the Dublin offices of Sugar Distributors Ltd (`SDL'), the distributor of sugar supplied by the applicant. On 13 February 1991 it inspected the Belfast offices of William McKinney Ltd (`McKinney'), a subsidiary of the applicant responsible for distributing sugar supplied by the applicant in Northern Ireland.

3 In a first administrative proceeding concerning the existence of market-sharing agreements between the applicant and its two competitors in the United Kingdom (Case IV/33.705), the Commission sent the applicant on 4 May 1992 a statement of objections within the meaning of Article 2(1) of Regulation No 99/63/EEC of the Commission of 25 July 1963 on the hearings provided for in Article 19(1) and (2) of Council Regulation No 17 (OJ, English Special Edition 1963-64, p. 47; `Regulation No 99/63'). The applicant replied on 11 September 1992. This first proceeding also led, on 6 October 1992, to a hearing as provided for by Article 19 of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87). On 2 August 1995 the applicant was advised that the proceeding had been terminated.

4 On 22 April 1993 the Commission opened a second administrative proceeding (IV/34.621) concerning infringements of both Article 85 of the EC Treaty (now Article 81 EC) and Article 86 of the Treaty by sending a fresh statement of objections to the applicant and a number of other parties. The applicant replied on 1 September 1993 and took part in a hearing on 21 and 22 September 1993. On 28 June 1995 the Commission informed the applicant that the objections relating to Article 85 of the Treaty had been dropped. On 19 July 1995 the Commission adopted a decision under Article 11 of Regulation No 17 requiring the applicant to provide certain information.

5 On 16 January 1995 the Commission inspected the Dublin offices of Greencore plc (`Greencore'), a holding company which has held the applicant's capital since April 1991. On the same date it also inspected the applicant's offices in Carlow, Ireland.

6 On 25 March 1996 the Commission sent the applicant a revised statement of objections replacing the previous one in its entirety and thereby commencing a third administrative proceeding (IV/34.621, 35.059). The applicant sent its reply on 12 July 1996.

7 On 14 May 1997 the Commission adopted the contested decision, in which it established the existence of infringements of Article 86 of the Treaty from 1985 to 1995, consisting more precisely in seven individual abuses by the applicant (and/or SDL for the period up to February 1990) on the market in granulated sugar intended for retail and for industry in Ireland. The contested decision imposed a fine of ECU 8 800 000 on the applicant for those abuses.

Procedure 8 The contested decision was notified to the applicant on 23 May 1997.

9 By application lodged at the Registry of the Court of First Instance on 4 August 1997 the applicant brought the present action.

10 Upon hearing the report of the Judge Rapporteur, the Court (Third Chamber) decided to open the oral procedure and adopted measures of organisation of procedure in which it requested the parties to reply to certain written questions. The parties complied with those requests.

11 The parties presented oral argument and answered questions put to them by the Court at the hearing on 14 January 1999.

Forms of order sought

12 The applicant claims that the Court should:

- annul the contested decision;

- in the alternative, reduce the fine imposed in Article 2 and annul the third and fourth paragraphs of Article 3 in so far as they exceed the scope of the abuses established in points 5 and 6 of Article 1;

- order the Commission to pay the costs.

13 The Commission contends that the Court should:

- dismiss the application;

- order the applicant to pay the costs of the proceedings.

Principal forms of order sought

14 In support of its principal claim for the annulment of the contested decision, the applicant relies on four pleas in law. In the first, alleging infringement of Articles 86 (now Article 82 EC) and 190 of the EC Treaty (now Article 253 EC), of the principle of legal certainty and of Article 4 of Regulation No 99/63, the applicant argues that it did not occupy a joint dominant position together with SDL. In the second, alleging infringement of Article 86 of the Treaty, it maintains that it did not occupy a dominant position on the industrial sugar market. In the third and fourth pleas, which allege infringements of Article 86 of the Treaty and which will be examined together, it argues that it did not abuse its alleged dominant position on either the industrial or the retail sugar market.

1. The existence of a joint dominant position of the applicant and SDL

15 In this first plea, the applicant argues, first, that the operative part of the contested decision is incomplete and contradictory; second, that the finding of the existence of two different markets in the contested decision alters the intrinsic nature of the infringements attributed to the applicant; and, third, that the contested decision has not established the existence of a joint dominant position.

The argument that the operative part of the contested decision is incomplete and contradictory

16 The applicant argues first that the operative part of the contested decision contains no formal finding of the existence of a dominant position and a joint dominant position. Whilst recognising that that question is examined in other parts of the contested decision, the applicant nevertheless maintains that, to be lawful, a finding cannot simply be inferred from the legal assessment in the contested decision. The legal assessment is not definitive with regard to the addressee of such a decision, since its function is to state the reasons on which the decision is based and thus to explain the findings set out in the operative part. An infringement can be penalised only to the extent to which it has been duly found to exist, as otherwise there would be an infringement of the principle of legal certainty, which is a fundamental principle of the Community legal order.

17 It should be remembered that the operative part of a measure must be read in the light of its reasoning, the measure forming a whole (see in particular Case T-145/89 Baustahlgewebe v Commission [1995] ECR II-987, paragraph 146, and Joined Cases T-213/95 and T-18/96 SCK and FNK v Commission [1997] ECR II-1739, paragraph 104). In this case, the applicant does not deny that the grounds for the contested decision include a finding of a dominant position on its part and a joint dominant position with SDL. Points 99 to 113 of the contested decision conclude, in point 113, with wording that is quite unequivocal in that respect:

`It is therefore concluded that, throughout the relevant period, [the applicant] held an individual, or at least, prior to February 1990, a joint, dominant position on the granulated sugar market for both retail and industrial sale in Ireland.'

18 In Article 1 of the operative part of the contested decision, the Commission found that the applicant had infringed Article 86 of the Treaty `as part of a sustained and comprehensive policy of protecting its position on the sugar market in Ireland'. As the Commission rightly observes, to infringe Article 86 an undertaking must be in a dominant position. The formal finding which the applicant requires is therefore implied but clear in the operative part of the contested decision, inasmuch as it is found that Article 86 was infringed.

19 The applicant's argument based on the lack of a formal finding of the existence of a dominant position and a joint dominant position therefore fails on the facts and must be rejected (Case T-65/89 BPB Industries and British Gypsum v Commission [1993] ECR II-389, paragraph 98).

20 Secondly, the applicant alleges that the operative part is inconsistent with the grounds of the contested decision as regards the definition of the relevant market. The Commission referred in the operative part of the contested decision to the `sugar market in Ireland', whereas in the grounds it accepted that the retail and industrial sugar markets were different markets (points 90, 99 and 118). The definition of the relevant market in the operative part of the contested decision in fact corresponds to the definition which the Commission adopted in the last two statements of objections sent to the applicant (proceedings IV/34.621 and IV/34.621, 35.059). Consequently, any finding in the operative part of the contested decision of the existence of a dominant position and a joint dominant position related to a market, the sugar market in Ireland, which was not defined in the grounds of the contested decision.

21 The alleged contradiction has not been demonstrated. Since the operative part of the contested decision is to be read in the light of its grounds, in accordance with the requirements of the case-law cited in paragraph 17 above, use of the expression `the sugar market in Ireland' in Article 1 of the operative part is not capable of misleading the applicant or the Court as to the nature of the objections raised against the applicant.

22 The wording used in points 90 and 98 of the contested decision shows that, following the explanations given by the applicant in response to the statement of objections, the Commission decided that in this case there were two distinct markets. In point 90 it states: `The Commission accepts, however, as was argued by [the applicant] [footnote 71, which reads: In its response to the Statement of Objections of 12 July 1996 at 3.2.1 to 3.2.7], that the market for white granulated sugar is further subdivided into two markets, that of industrial sugar and that of retail sugar. The two markets have overlapping characteristics ... However, while there is a degree of substitution on the supply side, in terms of the use to which the products are put, the volumes sold and the type of customers, the markets are different.' In point 98, the Commission states: `On the basis of the above characteristics, the Commission concludes that the relevant markets are those of retail and industrial granulated sugar in Ireland. It is further concluded that this is a substantial part of the common market within the meaning of Article 86 on the basis of the volumes of production and consumption of sugar.'

23 Moreover, a reading of Article 1 of the operative part of the contested decision as a whole clearly shows that that provision, like the grounds for the decision, draws a distinction between the retail granulated sugar market and the industrial granulated sugar market in Ireland. The applicant's argument alleging a contradiction between the grounds and the operative part of the contested decision therefore fails on the facts and must also be rejected.

24 Thirdly, the applicant challenges the interpretation of Article 1 of the contested decision advanced by the Commission for the first time in its defence, to the effect that it formally found that the applicant occupied a sole dominant position throughout the period in question and, in the alternative, that the applicant and SDL occupied a joint dominant position prior to February 1990. The applicant argues that neither the statement of reasons (points 111, 112, 113, 117, 135 and 167) nor the operative part of the contested decision confirms the Commission's belated allegations. In any event the applicant considers that if this reading of the contested decision were to be endorsed the contested decision would infringe its rights of defence in so far as it deviates from the position adopted in the statement of objections (paragraphs 106, 108 and 150). Furthermore, the matters accepted in the contested decision as proof of a joint dominant position between 1985 and February 1990 are attributable to Sugar Distribution (Holding) Ltd (`SDH') and SDL.

25 It is plain that the applicant is right to dispute the interpretation of the contested decision defended on that point by the Commission in these proceedings. Even if the Commission's interpretation may appear to correspond with the legal assessment in the grounds of the contested decision and in the statement of objections to the effect that there was both a dominant position and an abuse of that position, it cannot be reconciled with the other extracts from the contested decision and the statement of objections cited by the applicant. The distinction between establishing the dominant position held by the applicant and establishing the abuses committed in that respect which the Commission seeks to rely upon in these proceedings to justify that variation in the terms used is not pertinent. A number of extracts from the legal assessment in the contested decision dealing with abuses make express reference to the abuse by the applicant and SDL of their `joint dominant position'.

26 It is apparent from points 99 to 113 of the grounds, for instance, under the heading `B. Dominant position', that the Commission considered that throughout the period concerned, that is to say from 1985 to 1995, the applicant held an individual dominant position, but that the Commission took account of the applicant's argument that it did not exercise control of SDL before the purchase of all the shares of its parent company, SDH, in February 1990. That analysis is no different from that which the Commission put forward in paragraphs 95 to 106 of the statement of objections, dealing with the existence of a dominant position. Points 114 and 116 of the contested decision, under the heading `C. Abuse of the dominant position,' are along the same lines. Paragraph 110 of the statement of objections also confirms that position on the part of the Commission.

27 However, several parts of the contested decision dealing with abusive practices and the wording of the operative part show that before 1990 the applicant and SDL abused a joint dominant position by either individual or joint conduct. Thus, in point 117, it is stated:`The actions taken by [the applicant] before 1990 with regard to the transport restriction, by both companies with respect to border rebates, export rebates and the fidelity rebate and by SDL with respect to the product swap and selective pricing, were undertaken from a position of joint dominance'. The final sentence of point 135 states: `It is therefore concluded that [the applicant] and SDL abused a joint dominant position by engaging in these practices'. Point 167 likewise states: `The other abusive behaviour of [the applicant] and/or SDL ... [is] not time-barred for fining purposes. [The applicant] has sought, by this behaviour, to maintain or reinforce its dominant position and, in the period prior to February 1990, [the applicant] and SDL sought, by their behaviour, to maintain a position of joint dominance ... The Commission therefore considers that [the applicant] has intentionally or at least negligently abused its dominant position and that, prior to February 1990, [the applicant] and SDL intentionally or at least negligently abused their joint dominant position. The Commission therefore intends to impose a fine on Irish Sugar for its own infringements and, as appropriate, as successor in title, for the infringements of SDL ...'. Article 1 of the contested decision states: `... To this effect, [the applicant] (and/or Sugar Distributors Limited in the period before February 1990) engaged in the following abusive conduct on the granulated sugar market for retail and industrial sale in Ireland ...'. Those passages show that the interpretation of the contested decision argued for by the applicant is well founded. The same applies to paragraph 150 of the statement of objections mentioned by the applicant, which states, like point 167 of the contested decision: `[the applicant] has sought, as a result of this behaviour, to maintain or reinforce its dominant position and in the period prior to February 1990 [the applicant] and SDL sought, as a result of their behaviour, to maintain a position of joint dominance ... The Commission therefore considers that [the applicant] has intentionally or at least negligently abused its dominant position and that, prior to February 1990, [the applicant] and SDL intentionally or at least negligently abused their joint dominant position. The Commission therefore intends to impose a fine on [the applicant] for its own infringements and, as successor in title, for the infringements of SDL prior to February 1990 ...'.

28 The various terms used in the contested decision to describe the applicant's position on the market before February 1990 are the result of the special nature of its links with SDL before that date. The Commission claims to have established the existence of infringements of Article 86 of the Treaty from 1985 to February 1990 committed by the applicant alone, by SDL alone, or by both together. Having accepted the applicant's argument that it did not control the management of SDL, despite holding 51% of SDH's capital, the Commission decided that even if it was not possible to regard the applicant and SDL as a single economic entity, they had, together at least, held a dominant position on the market in question. Paragraph 110 of the statement of objections confirms that that was the Commission's view: `To defend its market [the applicant] had recourse to different forms of abusive conduct which were used alternatively or in combination with one another whenever it was felt necessary throughout the period from 1985. Some of the relevant practices were carried out by [the applicant] itself; others, on the retail sugar market, by SDL, the commercial subsidiary of [the applicant]'.

29 The characteristics of the relations between the applicant and SDL before February 1990 do not, however, enable the Commission to maintain that it has established on the same facts that, before February 1990, the applicant held at the same time both an individual dominant position and a joint dominant position with SDL. Similarly, if it permits doubt to remain as to the nature of the dominant position in question that will affect the specific nature of the complaints concerning the applicant and prevent it from effectively preparing its defence, thereby infringing the defence rights guaranteed by Article 4 of Regulation No 99/63. The Court therefore shares the applicant's view that, in line with the statement of objections, the contested decision finds the existence of a joint dominant position of the applicant and SDL from 1985 until February 1990 and an individual dominant position of the applicant from February 1990 until 1995.

30 The allegations by the Commission in these proceedings as to the nature of the dominant position between 1985 and February 1990 found in the contested decision to exist, even if inaccurate, do not entail an infringement either of the applicant's rights of defence or of the duty to state reasons because they concern the interpretation of the contested decision, which is ultimately a matter for the Court to determine, as the preceding paragraph makes clear.

31 The first limb of the first plea made by the applicant in support of its principal claim must therefore be dismissed.

Alteration of the intrinsic nature of the infringements attributed to the applicant

32 The applicant maintains that the distinction in the contested decision between the retail sugar market and the industrial sugar market undermines its rights of defence and thus infringes Article 4 of Regulation No 99/63. That distinction, which alters the intrinsic nature of the infringements with which it was charged in the statement of objections, should have been intimated to it before the contested decision was adopted.

33 However, the applicant has failed to show how its defence rights have been affected by the fact that one of the arguments it put forward during the administrative procedure was taken into account (see paragraph 23 above). It is not enough to allege that the nature of the objections has been altered as a result of the distinction drawn between the retail and the industrial sugar markets without submitting the least detail in that regard.

34 The taking into account of an argument put forward by an undertaking during the administrative procedure, without it having been given the opportunity to express an opinion in that respect before the adoption of the final decision, cannot as such constitute an infringement of defence rights, especially where taking account of the argument does not alter the nature of the complaints against it. The applicant had the opportunity to express its view on the definition of the product market used by the Commission in the statement of objections, and it could therefore expect that its own explanations would lead the Commission to alter its opinion (Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73 Suiker Unie and Others v Commission [1975] ECR 1663, paragraphs 437 and 438).

35 Moreover, observance of the rights of the defence requires that the undertaking concerned be afforded the opportunity from the stage of the administrative procedure effectively to put forward its view as to the truth and relevance of the facts and circumstances alleged and objections raised by the Commission (Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 11; Joined Cases T-10/92, T-11/92, T-12/92 and T-15/92 Cimenteries CBR and Others v Commission [1992] ECR II-2667, paragraph 39; Joined Cases T-39/92 and T-40/92 CB and Europay v Commission [1994] ECR II-49, paragraph 48), so that the statement of objections must supply the undertaking with all the information necessary to enable it properly to defend itself before the Commission adopts a final decision (Case 45/69 Boehringer Mannheim v Commission [1970] ECR 769, paragraph 9; Case 52/69 Geigy v Commission [1972] ECR 787, paragraph 11; Case 27/76 United Brands v Commission [1978] ECR 207, paragraphs 274 and 277; Hoffmann-La Roche, paragraph 10; Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85 Ahlström Osakeyhtiö and Others v Commission [1993] ECR I-1307, `Woodpulp', paragraph 42). The statement of objections must set out clearly all the essential facts upon which the Commission is relying at that stage of the procedure. That may be done summarily and the decision is not necessarily required to be a replica of the statement of objections (Joined Cases 100/80, 101/80, 102/80 and 103/80 Musique Diffusion Française and Others v Commission [1983] ECR 1825, paragraph 14).

36 Since the distinction between the retail and industrial sugar markets has not altered the complaints against the applicant, and the latter have been set out sufficiently clearly and precisely in the statement of objections for the applicant to take cognisance of them and defend itself properly, or, at the very least, the applicant has not in any way demonstrated how the complaints have been modified, no infringement of its defence rights can be found.

37 The second limb of the first plea raised by the applicant in support of its principal claim must therefore be dismissed.

The finding of a joint dominant position

38 The applicant denies that it held a joint dominant position together with SDL between 1985 and February 1990.

39 In that regard, it sets out the historical background of its relations with SDH, which at that time held all the shares in SDL. It emphasises that, even though it held 51% of the shares in SDH before acquiring all of them in February 1990, it did not control the management of that company. Since 1982, responsibilities had been allocated for practical purposes between it and its sales subsidiaries in such a way that it was responsible for technical services and marketing, including consumer promotions and rebates, while its sales subsidiaries were responsible for the operation and funding of sales, trade promotions, merchandising and distribution of the products. Contrary to what the Commission alleges in the contested decision (point 30), however, that arrangement did not deprive SDL of the right to trade in competing products. It refers in that respect to transactions by SDL which until 1991 involved, through McKinney's, the purchase and sale in Northern Ireland of sugar from a British supplier. The applicant states, moreover, that its responsibilities under that arrangement were the subject of a management services agreement pursuant to which SDL paid the applicant management charges between 1982 and 1989, the amount of which varied each year and was calculated by the financial director of SDL. It adds that, in practice, the pricing of sugar was essentially a matter for SDL. In order to confirm the autonomy of SDL's management, the applicant also cites extracts from a report drawn up by two experts appointed by the High Court in 1992 and from a report drawn up by Arthur Andersen.

40 The applicant also asserts that since its economic ties with SDH did not have the effect of uniting the two undertakings they were not capable of supporting a finding of a joint dominant position in the retail and industrial markets in granulated sugar in Ireland. It criticises the Commission for using in the contested decision (point 112) a false criterion, the parallel interests of the two companies vis-à-vis third parties, in order to find that they held a joint dominant position. It also claims that the reference to the judgment in Joined Cases T-68/89, T-77/89 and T-78/89 SIV and Others v Commission [1992] ECR II-1403, paragraph 358, is not logical.

41 The applicant maintains that its links with SDH guaranteed the independence of the board and management of the latter. The test used in the case-law to determine the existence of a joint dominant position held by linked undertakings is the adoption of the same conduct on the relevant market (Case C-393/92 Almelo v Energiebedrijf IJsselmij [1994] ECR I-1477, paragraph 42, and Joined Cases T-24/93, T-25/93, T-26/93 and T/28/93 Compagnie Maritime Belge Transports and Others v Commission [1996] ECR II-1201, paragraphs 62 to 68). Adopting the same conduct on the market represents more than mere parallel interests, which tends to be the rule in a producer-trader relationship, and the more so in a situation of structural oversupply, as in this case. The applicant also points out that in the statement of objections the Commission did not address the issue of whether the relationship between the two undertakings led them to adopt the same conduct on the market, since it merely found that there were structural ties between the applicant and SDH/SDL (statement of objections, paragraphs 102, 103 and 104 et seq.).

42 Similarly, the applicant points out that, whilst the absence of competition in a vertical commercial relationship between a producer and a trader may be a salient feature of a collective dominant position, it is not sufficient to establish the existence of such a dominant position. The applicant questions the relevance of the concept of a collective dominant position in a vertical commercial relationship. Furthermore, all the collective dominant position cases decided by the Community judicature so far concerned horizontal commercial relationships. In its reply the applicant adds that a vertical commercial relationship is characterised by the absence of competition.

43 The applicant also criticises the allegedly collective nature of most of the abuses committed in the context of the joint dominance alleged. In that regard, it points out that although the Commission finds that the product swap operations were exclusively arranged by SDL (point 48 of the contested decision) and that the applicant was only informed of these on 18 July 1988 (point 52), it none the less considers that this amounted to abusive exploitation of a joint dominant position. It accuses the Commission of `recycling' certain facts in the contested decision by using them to establish both the existence of a joint dominant position (point 112) and abusive exploitation of that joint dominant position (points 117, 127 and 128), contrary to the principle laid down in the case-law in that regard (Compagnie Maritime Belge Transports, paragraph 67). That `recycling' exercise is said also to amount to an infringement of the applicant's rights of defence, and therefore of Article 4 of Regulation No 99/63, since the fact that the applicant financed the rebates allowed by SDL, as distinct from granting them, was not considered to constitute an abuse in the statement of objections.

44 It is obvious, first, that although the applicant disputes the collective nature of the dominant position which it is alleged to have held with SDH/SDL on the retail sugar market between 1985 and February 1990, it has not in any way denied in its application that it carried out more than 88% of sales registered on that market for the entire duration of the infringement period (point 159 of the contested decision). Thus, even if it formally denies having held an individual or joint dominant position on the industrial sugar market (see the examination of the second plea of the principal claim below), it has not raised any specific arguments capable of casting doubt on the assessment that it held a dominant position on the retail sugar market.

45 Moreover, whilst the applicant castigates as inappropriate the criterion used by the Commission at point 112 of the contested decision to establish the existence of a joint dominant position, the parties nevertheless agree on a number of the conditions required by the case-law to establish the existence of a joint dominant position. They thus maintain that, according to the case-law, two independent economic entities may hold a joint dominant position on a market (SIV, paragraph 358, cited in point 112 of the contested decision). They also consider that there must be close links between the two entities, and that those links must be such as to be capable of leading to the adoption of the same conduct and policy on the market in question. In that respect, both parties cite the judgments in Almelo and Compagnie Maritime Belge Transports.

46 Their analysis of the state of the case-law on this question must be accepted. Following its earlier case-law and the case-law of the Court of First Instance (Almelo, paragraph 42; Case C-96/94 Centro Servizi Spediporto v Spedizioni Marittima del Golfo [1995] ECR I-2883, paragraphs 32 and 33; Joined Cases C-140/94, C-141/94 and C-142/94 DIP and Others v Comune di Bassano del Grappa [1995] ECR I-3257, paragraph 26; Case C-70/95 Sodemare and Others v Regione Lombardia [1997] ECR I-3395, paragraphs 45 and 46; SIV, paragraph 358; Compagnie Maritime Belge Transports, paragraph 62), the Court of Justice has confirmed that a joint dominant position consists in a number of undertakings being able together, in particular because of factors giving rise to a connection between them, to adopt a common policy on the market and act to a considerable extent independently of their competitors, their customers, and ultimately consumers (Joined Cases C-68/94 and C-30/95 France and Others v Commission [1998] ECR I-1375, paragraph 221).

47 It is therefore necessary to determine in this case whether, by reason of the factors connecting the applicant and SDL from 1985 to February 1990, they had the power to adopt a common market policy.

48 The applicant relies on the nature of its relations with SDL up to 1990 to dispute the existence of a joint dominant position. It insists that the two entities were independent, making existence of links of the type claimed by the Commission ipso facto impossible.

49 In the first place, the applicant's argument is based on the false premiss that the economic independence of the two entities prevents them from holding a joint dominant position. In fact, the case-law relied on by the applicant and referred to in paragraph 46 above shows that the mere independence of the economic entities in question is not sufficient to remove the possibility of their holding a joint dominant position.

50 Secondly, the factors connecting the applicant and SDL identified in the contested decision show that between 1985 and February 1990 those two economic entities had the power to adopt a common market policy.

51 In the contested decision (point 112), the Commission thus identifies as connecting factors the applicant's shareholding in SDH, its representation on the boards of SDH and SDL, the policy-making structure of the companies and the communication process established to facilitate it, and the direct economic ties constituted by SDL's commitment to obtain its supplies exclusively from the applicant and the applicant's financing of all consumer promotions and rebates offered by SDL to its customers. Details thereof are set out in points 29, 30 and 111 of the contested decision.

52 The arguments whereby the applicant seeks to question the reality of those factors are both few in number and largely unfounded. It does not deny, for example, that it held 51% of the shares of SDH, which in turn held all the shares in SDL; that half the board of SDH were its representatives; that its chief executive and several of its board members sat on the board of SDL; that from July 1982 to February 1990 it was responsible, on the basis of an allocation of tasks jointly determined in July 1982, for technical services and marketing, commercial strategy, consumer promotions and rebates; that SDL carried out the distribution of sugar produced by the applicant in Ireland; that SDL undertook, subject to the availability of supplies, to purchase its sugar requirements only from the applicant and not to become concerned or interested in the purchase, sale, resale or promotion of any products of a like or similar kind to those available from the applicant; that the applicant and SDL were required to communicate to each other certain information concerning marketing, sales, advertising, consumer promotions and financial matters; and, finally, that monthly meetings were held between representatives of SDL and of the applicant.

53 On the other hand, it claims that SDL's exclusive supply undertaking did not prevent it from trading in competing products, particularly in Northern Ireland through the intermediary of McKinney; that the management charges paid by SDL to the applicant arose from the performance of a contract, the amount varying each year and being calculated by the financial director of SDL (letter of 23 October 1991 addressed to the shareholders of Greencore); that those management charges did not constitute a financing of SDL's commercial policy; that the chairmanship of the monthly meetings between the two undertakings was assumed in turn by a representative of the applicant and a representative of SDL and not exclusively by the chief executive of the applicant's sugar division; and, finally, that the pricing of sugar was essentially a matter for SDL.

54 Those criticisms are, however, not capable of affecting the probative value of the documents used by the Commission to support its analysis of the relations between the applicant and SDL. To demonstrate that, it is sufficient to examine the extract from the minutes of the SDL board meeting of 1 July 1982 which appears in Annex 3 to the statement of objections:

`PROPOSALS FOR MARKETING/SALES/DISTRIBUTION OF IRISH SUGAR

Currently sugar products are sold into three market areas:

Home Market Northern Ireland Market U.K. Market

The overall responsibility for the Irish Sugar industry rests with C.S.E.T. [the abbreviation of the name under which the applicant was founded by the Irish Government in 1933, "Comhlucht Siúcra Éireann Teoranta"] and the policies of the C.S.E.T. Board towards the overall interests of C.S.E.T. are fulfilled by the C.S.E.T. Organisation and the subsidiary and Associated Boards to whom certain of these functions have been allocated.

To improve the organisation and eliminate the areas where responsibilities are unclear, it is necessary to:

(a) clarify both the duties of the C.S.E.T. Sugar Division staff and the S.D.L. sales and distribution roles and the co-responsibilities of areas of mutual interest, with the clear recognition of the parent Company position of C.S.E.T. as a major State Company.

(b) clarify the co-operation and communications framework within which the two companies should operate.

(c) clarify the communications framework between the above functions and the production units.

To meet these objectives, it is proposed that S.D.L. would be responsible for sales, trade promotions, merchandising and distribution of all C.S.E.T. sugar products in the Home and Northern Ireland markets and, that C.S.E.T. would be responsible for marketing and technical services in these markets. In detail, the duties of the staff in both companies will be broken down as follows:

C.S.E.T. RESPONSIBILITIES

(A) Home and Northern Ireland

1. Marketing strategy.

2. Advertising (Generic and Brand) (subject as outlined under co-responsibilities).

3. Packaging and presentation. 4. Product development. 5. New products. 6. Quality.

7. Dealing with all customer complaints re quality and packaging both received directly and advised by S.D.L., J.C. Cole Limited and William Mc Kinney (1975) Limited.

8. Consumer promotions. 9. Technical support (including R&D) and Services. 10. Product availability.

11. Rebating as required to ensure that we maximise the optimum levels of both price and volume in the Home and Northern Ireland markets.

(B) U.K. Market - Sales, Marketing and Distribution

S.D.L. RESPONSIBILITIES

1. Operation and funding of sales, trade promotions, merchandising and distribution in respect of C.S.E.T. sugar products in the South and Northern markets. The above responsibilities divided into the designated areas between S.D.L., J.C. Cole Limited and William Mc Kinney (1975) Limited.

2. S.D.L. to be responsible for sales decisions including pricing decision for all of the three sales and distribution Companies above. These decisions to be taken in accordance with policy as laid down by the Chief Executive of the Sugar Division.

3. Sugar Distributors Limited will, subject to availability of supplies purchase its sugar requirements only from C.S.E.T. and shall not be concerned or interested in the purchase, sale, re-sale or promotion of any products which are of a like or similar kind to those available from C.S.E.T..

4. S.D.L. and J.C. Cole Limited, to distribute sugar from the factory as designated by C.S.E.T.. The distribution costs to be borne as part of the sales margin.

5. Invoicing/administration of U.K. sugar sales at no additional administration costs to C.S.E.T.

Co-responsibilities - covering areas of mutual interest

(1) Advising and reviewing of pricing and promotion policies to ensure the maintenance of markets at optimum price and volume levels.

(2) Communicating information as necessary to each other on all aspects of sugar marketing, sales, trading, advertising, consumer promotions and financial.

(3) Brand and consumer advertising in respect of Northern Ireland in consultation with the Board of William Mc Kinney (1975) Limited.

(4) Agreeing market research and any other studies required to update market information.

To ensure that all aspects of sugar trading as outlined above are effectively communicated between C.S.E.T. and S.D.L. and that the areas of co-responsibility are properly covered, it is proposed that a monthly meeting should take place to discuss all aspects of sugar trading as outlined above between the C.S.E.T. Sugar Division and S.D.L. Those meetings to be attended by:

FOR C.S.E.T Chief Executive - Sugar Division General Manager, Marketing Area General Manager, Carlow Financial Controller - Sugar Division (?)

FOR S.D.L. Managing Director Sales Director Financial Director

The meetings to be chaired by the Chief Executive of the Sugar Division.

Other persons to attend as required.'

55 Bearing in mind the contents of that document and the matters referred to in the contested decision, the applicant's claim that SDL traded competing products in Northern Ireland through the intermediary of McKinney does not in any way undermine the Commission's assessment of SDL's exclusive supply clause with the applicant. First, it is a claim not supported by any particular proof. Next, McKinney was not in principle legally bound by SDL's undertaking to the applicant. The same applies to the explanations it put forward in its reply to a written question of the Court, concerning sales of German and French sugar through the intermediary of Trilby Trading Ltd, 51% of whose shares the applicant claims to have acquired in August 1987. Contrary to the applicant's claims, the only examples which it adduces in an attempt to minimise the importance of the exclusive supply clause concluded in 1982, namely McKinney's sales in Northern Ireland and the sales by Trilby Trading Ltd after August 1984, tend rather to demonstrate that SDL remained loyal to its undertaking. The minutes of the SDL board meeting of 1 July 1982 also mention McKinney where that company is concerned. McKinney is not expressly referred to by the exclusive supply clause, as drafted in those minutes. Finally, the example of McKinney concerns Northern Ireland, which is not part of the geographical market at issue in this case.

56 The applicant's presentation of the financing characteristics of the rebates granted by SDL to its customers is full of contradictions. For example, it acknowledges in the final subparagraph of paragraph 28 of its application that it accepted for its account all rebates granted by SDL, and advertising and promotion costs, only to deny in its reply that it financed rebates granted by SDL. In those circumstances, the Court can only find that the Commission correctly assessed the nature of the financial services organised between the applicant and SDL. The contents of the letter from the chairman of Greencore to shareholders of 23 October 1991 is of no use to the applicant in that respect, since it contains no details as to the actual allocation of roles between the applicant and SDL.

57 Similarly, the statement that the `monthly communication meetings' between the applicant and SDL were chaired in turn by their respective representatives is not only unsupported by any probative document but is also irrelevant. Little purpose is served by stating who chaired the monthly meetings in turn, their existence alone being sufficient to demonstrate that such meetings constitute a connecting factor within the meaning of the case-law (see paragraph 46 above). The Court cannot but note, moreover, that the text of the minutes of the SDL board meeting of 1 July 1982 is quite unequivocal, since it states: `The meetings are to be chaired by the Chief Executive of the Sugar Division'.

58 Nor do the applicant's criticisms concerning the price fixing policy, to the effect that this was essentially a matter for SDL, correspond to the minutes of the SDL board meeting of 1 July 1982, which state, in paragraph 2 of the section dealing with SDL's responsibilities: `SDL to be responsible for sales decisions including pricing decisions for all of the three sales and distribution companies above. These decisions to be taken in accordance with policy as laid down by the Chief Executive of the Sugar Division'. Once again, moreover, these claims are not supported by any particular item of evidence. The letter from the chairman of Greencore to shareholders of 23 October 1991 makes no mention of the allocation of responsibilities in the fixing of prices.

59 The Court therefore finds that the applicant has not succeeded in demonstrating that the Commission committed an error of assessment in finding that the connecting factors mentioned in the contested decision showed that, between 1985 and February 1990, SDL and the applicant had the power to adopt a common market policy (see paragraph 46 above).

60 Furthermore, other market operators considered that the applicant and SDL formed one and the same economic entity. For example, ASI International Foods (formerly ASI International Trading Ltd), the importer of French sugar to the Irish market (`ASI'), sent a letter to the applicant on 18 July 1988 complaining about its market conduct and that of SDL. The author of that letter, which is addressed to the chief executive of the applicant, states: `I write to draw your attention to the unfair practices which are the direct creation of your undertaking or of SDL which is controlled by you, as regards our efforts to retail our Eurolux sugar in one kilo packets in Ireland'.

61 The fact that the applicant and SDL are in a vertical commercial relationship does not affect that finding.

62 First, documents of the applicant show that the two companies were active in the same market from 1985 to 1990, so that there could not have been an exclusively vertical commercial relationship. At paragraph 27 of its application, for example, the applicant reproduces an extract from an agreement between SDH shareholders in 1975, which stipulates that `SDL and the Sugar Company shall continue to trade as independent and competing enterprises ...'. Moreover, in its reply to a written question of the Court, the applicant insists that SDL distributed the whole of the applicant's supply on the retail sugar market only as from 1988. It also supplies information showing that on the industrial sugar market SDL and the applicant shared the market with a third undertaking, Harcourt Agency Ltd, until the beginning of the 1980s. However, although it maintains that it was no longer present in the industrial sugar market from 1985 to 1989, it does not supply any evidence in support of that allegation. In those circumstances, the applicant's argument based on the absence of competition between itself and SDL may be rejected at the outset.

63 Nor does the case-law contain anything to support the conclusion that the concept of a joint dominant position is inapplicable to two or more undertakings in a vertical commercial relationship. As the Commission points out, unless one supposes there to be a lacuna in the application of Article 86 of the Treaty, it cannot be accepted that undertakings in a vertical relationship, without however being integrated to the extent of constituting one and the same undertaking, should be able abusively to exploit a joint dominant position.

64 Moreover, since all the factual elements relied on in the contested decision to demonstrate that the applicant and SDL held a joint dominant position were mentioned in the statement of objections, the applicant cannot now accuse the Commission of not considering the relations between the two undertakings in the light of the same market conduct in the statement of objections. As the Commission emphasises in the discussion concerning the amount of the fine, the applicant was perfectly aware of the nature of its links with SDL and of the use which might be made of them in the market. A memorandum headed `Notes on meeting dealing with S.D.L. held on 21st November 1988 in Head Office' (Annex 3 to the statement of objections) states at paragraph 6: `Having 51% of S.D.L. should prevent any action being taken against us under Article 85. We would have to use our influential presence in S.D.L. to prevent any breaches of Article 86 occurring'.

65 Nor can the applicant derive an argument from the alleged absence of any collective nature in the abuses of a dominant position found in the contested decision.

66 Whilst the existence of a joint dominant position may be deduced from the position which the economic entities concerned together hold on the market in question, the abuse does not necessarily have to be the action of all the undertakings in question. It only has to be capable of being identified as one of the manifestations of such a joint dominant position being held. Therefore, undertakings occupying a joint dominant position may engage in joint or individual abusive conduct. It is enough for that abusive conduct to relate to the exploitation of the joint dominant position which the undertakings hold in the market. In this case, the Commission maintains that the exploitation of that joint dominant position formed part of a continuous overall policy of maintaining and strengthening that position, and that conduct adopted by both SDL and the applicant between 1985 and February 1990 fell within that policy. Point 117 of the contested decision states: `The actions taken by Irish Sugar before 1990 with regard to the transport restriction, by both companies with respect to border rebates, export rebates and the fidelity rebate and by SDL with respect to the product swap and selective pricing, were undertaken from a position of joint dominance'. The Commission was therefore entitled to take the view that the individual conduct of one of the undertakings together holding a joint dominant position constituted the abusive exploitation of that position.

67 Nor can the applicant complain that there has been `recycling' of certain facts in the contested decision within the meaning that the case-law gives to that concept (SIV, paragraph 360; Compagnie Maritime Belge Transports, paragraph 67). The Commission has not used the same facts to establish both the existence of a joint dominant position and its abusive exploitation. Thus, even if the applicant's financing of rebates granted by SDL was held by the Commission to be one of the connecting factors between the two entities (see paragraph 51 above), it has not in any way been regarded as an abuse in itself. The abuse consists in having granted certain rebates in the particular circumstances of the market in question at that time. The applicant cannot therefore claim to have established infringement of its defence rights and of Article 4 of Regulation No 99/63.

68 It follows that the third limb of the first plea of the principal claim must be dismissed, as, in consequence, must that plea in its entirety.

2. The existence of a dominant position of the applicant in the industrial sugar market

69 The applicant argues in this second plea in law that, in so far as the contested decision found that it held a dominant position in the industrial sugar market, it is vitiated by manifest errors of assessment and of law.

70 The applicant has, however, nowhere denied that throughout the period in question (1985 to 1995) it held a market share of industrial sugar in Ireland of over 90% (point 108 of the contested decision). As the Commission has emphasised in the decision (point 100), a dominant position relates to a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, its customers and ultimately consumers (Hoffmann-La Roche, paragraph 38). The existence of a dominant position may derive from several factors which, taken separately, are not necessarily decisive. Amongst these factors, however, extremely large market shares are in themselves, save in exceptional circumstances, evidence of the existence of a dominant position (Hoffmann-La Roche, paragraph 41; Case C-62/86 AKZO v Commission [1991] ECR I-3359, paragraph 60; Case T-30/89 Hilti v Commission [1991] ECR II-1439, paragraph 91; Case T-83/91 Tetra Pak v Commission [1994] ECR II-755, paragraph 109; Compagnie Maritime Belge Transports, paragraph 76). The case-law thus demonstrates that a market share of over 50% in itself constitutes evidence of the existence of a dominant position on the market in question (AKZO, paragraph 60).

71 In principle, therefore, the applicant's dominant position on the industrial sugar market in Ireland from 1985 to 1995 could be deduced simply from the finding that, during that period, it made more than 90% of the sales recorded on that market.

72 The applicant considers, nevertheless, that the Commission erred in not correctly taking into consideration four factors which, it submits, constitute exceptional circumstances within the meaning of the case-law cited above, and which relate, first, to its lack of independence in relation to competitors (alleged inaccessibility of the Irish market and failure to take potential competition into account) and, secondly, to its lack of independence in relation to customers (lack of independence in relation to its largest customers and financial losses).

The alleged lack of independence of the applicant in relation to its competitors

73 The applicant denies first that the Irish market was inaccessible to sugar producers established in other Member States (point 107 of the contested decision). It argues that the cost of transport did not in any way hinder imports of industrial sugar into Ireland during the period under consideration, and submits that a proper understanding of the common organisation of the market in sugar in general, and of sugar pricing in particular, demonstrates that allegation to be unfounded. Recalling the objectives of that common organisation, it argues that the regionalisation of the intervention price no longer reflects the cost of transport as much as it did, and that the viability of exporting to Ireland depends inter alia on the sugar prices differential between Ireland and other Member States (footnote 11, point 22 of the contested decision).

74 The applicant also states that, in the contested decision, the Commission accepts that average ex-factory prices for granulated bulk sugar in Ireland are among the highest in the Community and have always been higher than average prices in the United Kingdom (point 108), and that there are no obstacles to sea transportation of sugar between Great Britain and Northern Ireland (point 96). It follows that the Commission does not seem to regard the cost of freight as a major impediment to imports to Northern Ireland, in spite of the relatively small size of the market. Accordingly, there is no reason why the impact on imports of transport costs to Ireland should be assessed differently.

75 It adds that imports of industrial sugar to Ireland have always taken place, in particular imports of bagged sugar from France (contested decision, point 102). Similarly, Gem Pack Ltd (`Gem Pack'), a packager of sugar competing with the applicant on the retail market, and Irish Biscuits Ltd (`Irish Biscuits'), one of its larger customers, now import 75% and 30% of their respective industrial sugar needs. The Commission has accepted that the need for special containers and the associated additional cost are no longer an obstacle to imports of bulk sugar (contested decision, point 95). Furthermore, the applicant maintains, there is also the threat of imports from the sugar surpluses generated by the common organisation of the market in sugar, having regard to the lower price of that surplus sugar. It refers in that regard to the Community surpluses for 1990/1991 and 1995, which amounted to 4 200 000 tonnes and 3 100 000 tonnes respectively.

76 The applicant concludes that, although the competition created by imports is relatively low in terms of volume, it has more than a marginal impact on the applicant's competitive position, contrary to what the Commission alleges in the contested decision (point 105).

77 Secondly, the applicant argues that the Commission erred in law in not properly assessing potential competition. It points out that, under the case-law, for the purpose of establishing the existence or otherwise of potential competition on a market account must be taken of any unused manufacturing capacity capable of creating potential competition between manufacturers established on that market (Hoffmann-La Roche, paragraph 48). For the same reasons, in the present case there was potential competition on the industrial sugar market in Ireland, since it could be supplied many times over, without the applicant's competitors being placed in any economic or financial difficulties, owing to the overproduction on the Community market to which the common organisation of the market in sugar gave rise.

78 It adds that in the Commission's decision of 30 July 1991 relating to a concentration on the sugar market in Italy (Case No IV/M.062 - Eridania/ISI), in which it held a concentration to be compatible with the common market on the basis of Council Regulation (EEC) No 4064/89 (OJ 1991 C 204, p. 1), the Commission took a different view of the industrial sugar market and considered that the merged entity did not present the risk of occupying a dominant position on its market owing to the threat of imports of sugar at a lower price from neighbouring areas and the low cost of transport. The applicant maintains that the Commission errs in law in treating Ireland and the Republic of Italy in such different ways, whereas both Member States are considered deficit areas for the purposes of the common organisation of the market in sugar.

79 It considers that in any event the contested decision errs in law because it contains no assessment of potential competition on the industrial sugar market in Ireland. Even if, in the present proceedings, the Commission continues to avoid the issue of potential competition, what it has to say about peripheral factor allowances (`PFAs') shows that it recognises the existence and influence of potential competition resulting from the possibility of obtaining cheaper industrial sugar in other Member States.

80 The applicant's argument that the Commission failed to take account of potential competition on the industrial sugar market must be rejected. Amongst other things, the Commission identified the applicant's competitors on that market (point 102 of the contested decision) and took account of the existence of competition resulting from the importation of sugar (point 107). Moreover, the Commission emphasises in its pleadings that it recognised the existence of residual competition and potential competition from imports, but that it was led to conclude on the facts that only ASI had actually attempted to import industrial sugar to Ireland in competition with the applicant, which the applicant does not deny. Thus, far from invalidating the Commission's finding, the fact that, amongst its customers in the industrial market, only Gem Pack and British Biscuits imported industrial sugar confirms the weakness of the residual competition in the Irish market. Similarly, as the applicant has itself observed, the finding relating to PFAs in the contested decision (points 70 to 72 and 136 to 144) also shows that the Commission detected the residual and potential competition from imports.

81 Moreover, the applicant's arguments in these proceedings, both in its pleadings and in its reply to a written question of the Court, do not demonstrate that the Commission erred in its assessment of the effect of transport costs on imports of industrial sugar to Ireland.

82 In the contested decision (point 95), the Commission took into account the applicant's arguments that the particular features of the common organisation of the market in sugar and the existence of large surpluses in other Member States indicated the existence of potential competition through imports. Far from denying the applicant's statements, the Commission states that `imports of sugar into Ireland have hitherto made up only a small part of total granulated sugar consumption in Ireland'. The applicant has not challenged that statement.

83 The Commission goes on to state that `a major barrier for importing sugar from the continent is the cost of freight, particularly in the absence of a load travelling in the opposite direction' (point 95 of the contested decision).

84 In the contested decision, therefore, the Commission assessed the impact of the cost of transport only in relation to imports from the continent, from Member States which, according to the applicant's own statements, had large surpluses, namely France, Germany, Denmark, Belgium and the Netherlands. The applicant cannot therefore rely in these proceedings on a comparison with transport costs between Great Britain and Northern Ireland in order to avoid the Commission's reply to its argument based on the existence of surpluses in the Member States referred to above. It should be remembered, moreover, that Great Britain and Northern Ireland are territorially parts of the same Member State.

85 In the contested decision (point 95), the Commission really based its reply on an extract from a June 1994 corporate plan of Greencore, the undertaking which had owned the applicant since 1991 (point 18), which stated that:

`... the vast majority of imports is in 50 kg bags, with bulk sugar transport being relatively expensive because of the need for dedicated containers. We encourage customers to move towards bulk sugar treatment installations as soon as possible, stressing the savings which may be made and shared by both sides. The proportion of bulk sugar in our industrial sales continues to rise and is currently 83%.'

86 That passage shows that, until 1994, imports of industrial sugar took place primarily in the form of 50 kg bags on account of the higher cost of transporting sugar in bulk form, and that the applicant successfully promoted with its customers the use of installations for treating sugar in bulk form.

87 The criticisms of the applicant, already put forward in its reply to the statement of objections (point 95 of the contested decision), thus concern only the assessment of the cost of transporting sugar in bulk form as from 1994. They do not, by contrast, in any way serve to call into question the Commission's findings for the period before 1994. The further information supplied by the applicant in reply to a written question of the Court even indicates that its argument is really concerned with the end of the period in which the infringements referred to in Article 1 of the contested decision were committed, or even a period later than that decision. In its reply, the applicant stated that `up to 1995, and partly into 1996, the imports of sugar were almost exclusively in bags. From 1996, the emphasis switched to bulk because of less expensive and more sophisticated bag-in-box containers'. The Commission was therefore entitled to take the view that `whatever the current situation, [the applicant's] own statement shows that the cost of freight was an impediment to raw sugar imports for virtually all of the period under consideration' (point 95 of the contested decision).

88 Moreover, the applicant has not denied that its customers in the industrial sugar market have over the years equipped themselves with silos for stocking their sugar, entailing a constant decline in transport in bags (point 95).

89 Although it criticises the Commission's assessment in the contested decision of the competitive structure of the market in question, the applicant has not demonstrated that, on the facts, industrial sugar imports to Ireland had anything more than a marginal influence on its market share and competitive position (point 105 of the contested decision). In that respect, the figures it submitted to take account of the proportion of industrial sugar imports in the purchases of its customers Gem Pack and British Biscuits are not supported by any particular evidence.

90 Similarly, whilst the applicant argues that surplus production in other Member States could be exported to Ireland (also point 95), it does not deny that the small size of the Irish market constituted a hindrance to such imports, bearing in mind the particular requirements for profitability which importation of industrial sugar into that market implied (point 107).

91 Finally, the reference to Eridania v ISI is irrelevant, since the Commission's finding in that case rested on the low cost of transport and consequent threats of imports from neighbouring regions. In this case, the applicant has failed to demonstrate that transport costs were low and that there were credible threats of imports of that kind.

92 The applicant has therefore not succeeded in demonstrating that the Commission erred by not holding that its alleged lack of independence in relation to competitors constituted an exceptional circumstance within the meaning of the case-law cited in paragraph 70 above.

The alleged lack of independence of the applicant in relation to customers

93 The applicant emphasises its small share of the community market (1.4%) and the market strength of the international industrial groups to which some of its customers belong, especially two of them, ... . (1) Their membership of such groups made it easy for them to find other sources of supply in other Member States. In that respect, the applicant objects to the distinction apparently drawn by the Commission between, on the one hand, customers present in Northern Ireland and forming part of groups also established in Great Britain, which were capable of buying the sugar they needed from British producers (point 96 of the contested decision), and, on the other hand, the applicant's customers in Ireland.

94 That market strength, acknowledged by the Commission in the contested decision (point 107), thus limited the applicant's ability to influence industrial sugar prices. The applicant claims, moreover, that its two main customers can and actually do fix the price at which they purchase industrial sugar and thereby influence the price offered to other customers. In that respect, it cites numerous extracts from correspondence with its customers. The Commission was therefore wrong to state in the contested decision that the sales volume of its two main customers did not counterbalance its dominant position (point 108). The applicant argues that, to be able to conclude that it held a dominant position, the Commission should have compared the two groups of opposing forces (SIV, paragraph 366).

95 The applicant considers that its actual market position, which is not a dominant one, is most clearly demonstrated by comparing the average net prices of industrial sugar in Northern Ireland and Ireland. That comparison shows that average net prices are lower in Ireland than in Northern Ireland, whereas retail prices are higher in Ireland than in Northern Ireland.

96 In any event, the applicant maintains that it did not hold a dominant position in the industrial sugar market in Ireland before 1990, because of the financial difficulties it faced during the 1980s. Those difficulties made it extremely dependent upon its industrial clients, which, being aware of those difficulties, imposed their own prices. The applicant even maintains that it sold industrial sugar at that time at a price below the intervention price guaranteed by the common organisation of the market in sugar. It accuses the Commission of regarding those difficulties as irrelevant (points 103 and 108), and maintains that the Commission should have considered whether its conduct might have been different had it not encountered such financial difficulties at that time.

97 Although in the contested decision the Commission recognised to some degree (point 107) the commercial strength of the two customers of the applicant to which the latter refers, it considered that that power was not capable of affecting the dominant position of the applicant, for two reasons. First, the applicant's other customers, representing ...% of its sales volume, did not have such commercial strength. Secondly, it considered that the particular features of the community scheme applicable to sugar prevented those two customers of the applicant from finding other sources of supply in the short term (point 107).

98 The Court finds that the applicant's arguments do not vitiate the Commission's finding in the contested decision (point 107). First, the applicant does not deny that its other customers absorbed ...% of its industrial sugar production, which also represented a share of the industrial sugar market in Ireland of over ...%. The applicant can therefore hardly maintain that the Commission committed an error of assessment by stating that `despite the presence of two large customers, the demand side is composed of a number of buyers which are not equally strong and which cannot be aggregated to conclude that they may constrain the market power of the supplier with over 90 % of the market' (point 108). The same is true of its statement that `the share of sales of the two largest customers does not counterbalance the dominant position of Irish Sugar' (point 108). Points 107 and 108 of the contested decision show moreover that the Commission carried out an analysis of the relevant forces. Nor can the applicant rely in support of its argument on a contradiction between the Commission's analysis concerning British customers in Northern Ireland and that concerning the applicant's customers in Ireland, since Northern Ireland is one of the components of the United Kingdom whereas Ireland, which is itself a Member State, is not.

99 Although the applicant has insisted several times on the minor importance of the Irish market compared with other national markets in the Community, drawing attention to the small share of the Community market which it held during the period in dispute (1.4%), it cannot deny that the geographical market in question constituted a substantial part of the common market (point 97), since it corresponds to the territory of a Member State, as indeed the applicant acknowledged at the hearing.

100 Moreover, even if the correspondence on which the applicant relies to show the commercial strength of its two main customers does show that the sale price they were charged was aligned with the sale price of industrial sugar which they obtained in the United Kingdom, that does not justify the conclusion that fixing such prices influenced the prices which it charged its other industrial customers.

101 Nor can the applicant rely on the comparison of average net prices between Ireland and the United Kingdom to deny that it held a dominant position on the industrial sugar market in Ireland. The fact that the prices charged by the applicant were no higher than those in force in Northern Ireland, or even lower, does not support the conclusion that the applicant did not hold a dominant position on the industrial sugar market in Ireland (Case 322/81 Michelin v Commission [1983] ECR 3461, paragraph 59). In any event, such a comparison is not decisive, since these are averages which primarily reflect the prices granted to the applicant's two largest customers, whose commercial strength it emphasises. The presence of data relating to those two customers, representing ...% of its sales, distorts the analysis of the average prices actually charged to its other customers.

102 Finally, apart from the fact that the applicant has failed to produce the slightest evidence that its customers took advantage of its difficult financial situation at that time in the matter of pricing, the Court finds that the Commission did not ignore the applicant's argument based on its financial losses. On the contrary, it stated in point 103 of the contested decision that `the fact that [the applicant] made losses in the first half of the 1980s is not inconsistent with the existence of a dominant position', referring in that respect to the judgment in Michelin, in which the Court held that temporarily nil profitability and even losses are not incompatible with a dominant position (paragraph 59).

103 As the Commission rightly points out, losses recorded by an undertaking in a dominant position are not in themselves any more relevant than profits made by an undertaking which practises competition perfectly on an open market. The applicant has, moreover, neither alleged nor in any way demonstrated that those financial losses resulted from the existence of any particular competition on the industrial sugar market or any deterioration of its competitive position on the latter. As the Commission maintains, those losses could have arisen from the state-controlled way in which that undertaking was managed during the 1980s.

104 The applicant has therefore not succeeded in demonstrating that the Commission erred by not regarding its alleged lack of independence vis-à-vis its customers as an exceptional circumstance within the meaning of the case-law referred to in paragraph 70 above. It follows that the Commission has not committed the errors of assessment and of law complained of by the applicant by finding that it held a dominant position on the sugar market in Ireland between 1985 and 1995. The second plea in law must therefore be dismissed.

3. The abuses by the applicant of its dominant position in the industrial and retail sugar markets

105 In its third and fourth pleas in law, the applicant criticises the analysis of the six types of abusive conduct which it is accused of adopting both on the industrial sugar market in Ireland (selective low pricing to potential customers of ASI, PFAs and price discrimination against competing sugar packers) and on the retail sugar market (border rebates, product swaps and fidelity rebates, target rebates and selective prices).

106 The criticisms formulated by the applicant in its third plea concern the practices described in points 45 and 70 to 77 of the contested decision, analysed in points 123 and 136 to 150, and found in Article 1(1), (4) and (5) of the operative part; those formulated in its fourth plea concern the practices described in points 46 to 69 and 78 to 84, analysed in points 123 to 135 and 151 to 154, and found in Article 1(1), (2), (3) and (6)(i) and (ii) of the operative part.

107 In the contested decision, the Commission inferred the existence of abuses of dominant positions from the analysis of facts based on documentary evidence, which in its view demonstrate that `a major element of [the applicant's] commercial policy has been the shielding of its home market in Ireland from, on the one hand, imports from other Member States and, on the other hand, competing sugar packers within Ireland. In addition, for a period of at least the last 10 years, [the applicant's] commercial policy has involved the imposition of a discriminatory pricing policy within its home market ...' (point 114). The Commission thus accuses the applicant of having `had recourse to methods different from those which condition normal competition in products or services based on traders' performance, the effect thereof being that the maintenance of the degree of competition still existing in the market or the growth of that competition has been hindered' (point 114). It also states that `to defend its market, [the applicant] resorted to various forms of abusive conduct which were used alternatively or in combination with one another whenever it was felt necessary, throughout the period from 1985 onwards' (point 116).

108 The Commission then examines each of those illegal practices, which were `part of a sustained and comprehensive policy of protecting [the applicant's] home markets for both industrial and retail sugar' (point 118). First it examines `measures to protect the home market against competition from imports from other Member States', drawing a distinction between those aimed at imports from France and those aimed at imports from Northern Ireland (points 119 to 135). Then it examines `pricing behaviour that discriminates against particular categories of customer', drawing a distinction between sugar export rebates and active discrimination against competing packers (points 136 to 154). In Article 1 of the operative part of the contested decision, the Commission emphasises the fact that the conduct complained of was part of a sustained and comprehensive policy of protecting the applicant's position on the sugar market in Ireland.

109 The applicant denies infringing Article 86 of the Treaty by operating a sustained and comprehensive policy of protecting its position on the sugar market in Ireland. Its criticisms are intended to demonstrate either that it did not commit the abusive practices of which it is accused, or that those practices did not contravene Article 86.

110 Before examining the arguments of the parties concerning each of the practices referred to in Article 1 of the contested decision and penalised in Article 2, it will be useful to recall the criteria for establishing the abusive character of practices by an undertaking in a dominant position.

111 The case-law shows that an `abuse' is an objective concept referring to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is already weakened and which, through recourse to methods different from those governing normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition (Hoffmann-La Roche, paragraph 91; AKZO, paragraph 69). It follows that Article 86 of the Treaty prohibits a dominant undertaking from eliminating a competitor and thereby reinforcing its position by having recourse to means other than those within the scope of competition on the merits. From that point of view, not all competition on price can be regarded as legitimate (AKZO, paragraph 70). The prohibition laid down in Article 86 is also justified by the consideration that harm should not be caused to consumers (Case 6/72 Europemballage and Continental Can v Commission [1973] ECR 215, paragraph 26; Suiker Unie, paragraphs 526 and 527).

112 Therefore, whilst the finding that a dominant position exists does not in itself imply any reproach to the undertaking concerned, it has a special responsibility, irrespective of the causes of that position, not to allow its conduct to impair genuine undistorted competition on the common market (Michelin, paragraph 57). Similarly, whilst the fact that an undertaking is in a dominant position cannot deprive it of its entitlement to protect its own commercial interests when they are attacked, and whilst such an undertaking must be allowed the right to take such reasonable steps as it deems appropriate to protect those interests, such behaviour cannot be allowed if its purpose is to strengthen that dominant position and thereby abuse it (United Brands, paragraph 189; BPB Industries and British Gypsum, paragraph 69; Tetra Pak, paragraph 147; Compagnie Maritime Belge Transports, paragraph 107).

113 In this case, the Commission accuses the applicant, as part of a sustained and comprehensive policy, of two different types of abusive conduct. First, it finds a series of discriminatory practices by the applicant in relation to the fixing of prices on both the industrial sugar market (selective prices for potential customers of ASI, PFAs and price discrimination against competing sugar packers) and the retail sugar market (border rebates, fidelity rebates, target rebates and selective prices). Secondly, it identifies product swaps on the retail sugar market constituting abuse of a dominant position.

114 With particular reference to the applicant's practices in relation to price fixing, the case-law shows that, in determining whether a pricing policy is abusive, it is necessary to consider all the circumstances, particularly the criteria and rules governing the grant of the discount, and to investigate whether, in providing an advantage not based on any economic service justifying it, the discount tends to remove or restrict the buyer's freedom to choose his sources of supply, to bar competitors from access to the market, to apply dissimilar conditions to equivalent transactions with other trading parties or to strengthen the dominant position by distorting competition (Hoffmann-La Roche, paragraph 90; Michelin, paragraph 73). The distortion of competition arises from the fact that the financial advantage granted by the undertaking in a dominant position is not based on any economic consideration justifying it, but tends to prevent the customers of that dominant undertaking from obtaining their supplies from competitors (Michelin, paragraph 71). One of the circumstances may therefore consist in the fact that the practice in question takes place in the context of a plan by the dominant undertaking aimed at eliminating a competitor (AKZO, paragraph 72; Compagnie Maritime Belge Transports, paragraphs 147 and 148).

115 Finally, it should be noted that Article 86(c) expressly provides that abusive practices may consist of applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage.

116 It is in the light of those principles that the Court must assess the reality and the lawfulness of the practices found and penalised in the contested decision, and referred to in paragraph 113 above.

Practices in relation to the applicant's pricing

The industrial sugar market

- Application of selectively low prices to potential customers of ASI

117 According to the contested decision, a note of 8 March 1988 from SDL's sales director (point 45) setting out a policy of selective low pricing to potential customers of ASI (point 123) demonstrates that `in the period 1986 to 1988, [the applicant granted] selectively low prices to customers of an importer of French sugar' (Article 1(1)).

118 The applicant denies having granted such prices, and in any event disputes that a pricing policy designed simply to defend its market position was abusive.

119 The Commission maintains that, in attempting to justify the lawfulness of such selective prices, the applicant acknowledges their reality. Furthermore, the note of 8 March 1988 sufficiently demonstrates the reality of the applicant's conduct on the industrial sugar market towards potential customers of ASI.

120 The evidence adduced by the Commission in the contested decision does not, however, prove the reality of the infringement as found in Article 1(1) thereof.

121 Apart from the fact that the applicant denies having applied such prices to potential ASI customers on the industrial sugar market, the note from SDL's sales director does not indicate that the applicant actually adopted such conduct between 1986 and 1988. Whilst that note certainly reveals the pricing policy that SDL's sales director intended to pursue, it gives no account of the application of such a policy between 1986 and 1988, precisely because it was intended to outline future policy.

122 Moreover, the passage concerning SDL's attitude before that note was written does not in any way refer to selective prices being charged to ASI customers, since the note says: `In the meantime we have initiated increased vigilance at industrial customers level with a view to establishing the extent of any increased activity by ASI' (point 45). The applicant and SDL cannot be accused on that basis alone of abusing their joint dominant position on the industrial sugar market by charging selectively low prices to ASI customers before 8 March 1988. Such words merely refer to the analysis by the undertakings in a dominant position of the activity of one of their competitors, which does not in itself constitute an abuse within the meaning of Article 86 of the Treaty.

123 Furthermore, as the applicant points out, the analysis of the SDL sales director's note of 8 March 1988 occurs in the contested decision (points 45 and 123) in the paragraphs dealing with practices concerning the retail sugar market.

124 In those circumstances, Article 1(1) of the contested decision must be annulled in so far as it finds that the applicant infringed Article 86 of the Treaty by granting selectively low prices to ASI customers between 1986 and 1988.

- PFAs

125 The contested decision states that `since (at least) 1985, [the applicant has been] practising a system of "sugar export rebates", that is rebates granted on sugar exported in processed form to other Member States, which discriminate against customers of industrial sugar supplying the domestic Irish market' (Article 1(4)). The Commission states that throughout the period in question the applicant granted a rebate to its industrial customers intending to export their final product, primarily to other Member States. Those customers accordingly informed the applicant of the volume of their exports in order to obtain the rebate (point 70). The level of the rebate varied, moreover, according to the customer concerned, the period in question or the Member State to which export was made, without however corresponding to the volume exported (points 71 and 72). The Commission concluded that the applicant applied dissimilar conditions to equivalent transactions within the meaning of Article 86(c), both between exporting customers (point 137) and between them and customers who reserved their production for the Irish market (point 138), thereby placing certain customers at a competitive disadvantage (point 136). The disadvantage thus inflicted on non-exporting customers was all the more significant since, as the applicant itself maintained, the degree of competition on the Irish food market had significantly increased (point 139). The system of PFAs also placed other sugar packagers on an unequal footing vis-à-vis the applicant on the retail sugar market (point 143). Finally, `the discriminatory nature of the expo