WRITTEN QUESTION P-1058/98 by Werner Langen (PPE) to the Commission (30 March 1998)

Subject: Decision to fine Volkswagen

In January of this year the Commission fined the German Volkswagen group ECU 102 million for serious breaches of competition law. Commission Van Miert's decision sends out a clear signal about the protection of consumers' interests in the internal European market. The decision imposing the fine included clear instructions to the VW group to cease its anti-competitive conduct forthwith. It is not yet clear how far the Commission's requirements entail the abolition of the selective distribution system.

My questions to the Commission are therefore:

1. How does it assess the legal consequences for dealers who do not belong to the authorised VW dealers' organisation?

2. Does it know how far VW can and must supply these dealers under national law?

3. What information does it have about the continuing validity of contracts concluded by the VW group with authorised dealers?

4. Under what conditions can VW forbid currently authorised dealers to supply resellers?

5. What requirements must VW satisfy in order to regain exemption?

Answer given by Mr Van Miert on behalf of the Commission (29 April 1998)

1. The Commission Decision of 28 January 1998 imposing a fine in Case IV/35.733 ((OJ L 124, 25.4.1998. )) has itself no legal consequences for independent dealers, i.e. those not belonging to the authorised Volkswagen (VW) dealers' network, since it contains no provisions establishing rights for independent dealers or imposing duties on authorised VW dealers, e.g. a duty to supply independent dealers. The Commission is not aware whether this results in legal consequences for independent dealers in the Member States' legal systems since this matter can be determined only by the competent national authorities, i.e. the courts and the competition authorities.

2. The Commission does not know how far VW can and must supply those dealers under national law. This can be determined only by the competent national authorities.

3. In Article 1 of its Decision, the Commission made the following finding:

'Article 1

Volkswagen AG and its subsidiaries Audi AG and Autogerma SpA have infringed Article 85(1) of the EC Treaty, by entering into agreements with the Italian dealers in their distribution network in order to prohibit or restrict sales to final consumers coming from another Member State, whether in person or represented by intermediaries acting on their behalf, and to other authorised dealers in the distribution network who are established in other Member States.'

Those agreements are automatically void under Article 85(2) of the EC Treaty.

The validity for the purposes of civil law of other anti-competitive agreements contained in dealership contracts is to be determined on the basis of Commission Regulation (EC) No 1475/95 of 28 June 1995 on the application of Article 85(3) of the Treaty to certain categories of motor vehicle distribution and servicing agreements ((OJ L 145, 29.6.1995. )). At paragraph 187 of its Decision of 28 January 1998, the Commission stated:

'Pursuant to Article 6(1)(3), (7) and (8) of Regulation (EEC) No 1475/95, the exemption is automatically inapplicable if the parties agree restrictions of competition that are not expressly exempted. In cases covered by Article 6(1)(3), the exemption does not apply to any of the clauses restrictive of competition contained in the agreement concerned; in cases covered by Article 6(1)(7) and (8), the exemption does not apply to those clauses restrictive of competition which are to the manufacturer's advantage (Article 6(2)). It is a matter for the national courts to determine the effects of Article 6 in civil law.'

4. VW can forbid authorised dealers to supply resellers provided that its distribution system complies with the terms of Regulation (EC) No 1475/95.

5. Article 2 of the Commission Decision contains a series of conditions to be met by VW. It requires VW to bring to an end the infringements indicated in Article 1 (for the terms of that Article, see point 3) immediately upon notification of the Decision and prohibits their replacement by restrictions having similar objectives.

In order to bring this about, the Commission ordered VW and its subsidiaries, Audi and Autogerma, within two months of notification of the Decision, to adopt measures including the revocation of the clauses on bonuses and margins in the contracts with Italian authorised dealers where those clauses represented a financial disadvantage for dealers selling to foreign final consumers or their intermediaries. It also ordered all dealers in the VW distribution network to be informed that all restrictions on cross-deliveries within the VW network were abolished and that no penalties would be imposed on dealers selling to foreign consumers and their intermediaries.

It is for the VW group to abolish all measures obstructing the parallel trade with final consumers and their intermediaries. This also applies to any measures to obstruct the parallel trade which are unknown to the Commission.