2000/475/EC: Commission Decision of 24 January 1999 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case IV.F.1/36.718.CECED) (notified under document number C(1999) 5064) (Only the English text is authentic) (Text with EEA relevance)
Date: 1999-01-24
Institutions: European Commission
Subjects: competition, energy consumption, energy saving, household electrical appliance, inter-company agreement

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Official Journal of the European Communities

L 187/47

COMMISSION

COMMISSION DECISION

of 24 January 1999

relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement

(Case IV.F.1/36.718. CECED)

(notified under document number C(1999) 5064)

(Only the English text is authentic)

(Text with EEA relevance)

(2000/475/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European
Community,

I. THE FACTS

Having regard to the Agreement on the European Economic
Area,

A. THE PARTIES

Having regard to Council Regulation No 17 of 6 February
1962, First Regulation implementing Articles 85 and 86 of the
EC Treaty (1), as last amended by Regulation (EC) No 1216/
1999 (2), and in particular Article 6 thereof,

Having regard to the notification of 22 October 1997 for
negative clearance or exemption submitted by the Conseil
Européen de la Construction d'Appareils Domestiques (CECED)
pursuant to Articles 2 and 4 of Regulation No 17 on 22
October 1997,

Having regard to the summary of the application published
pursuant to Article 19(3) of Regulation No 17 and to Article 3
of Protocol 21 to the EEA Agreement (3),

After consultation with the Advisory Committee for Restrictive
Practices and Dominant Positions,

(1) OJ 13, 21.2.1962, p. 204/62.
(2) OJ L 148, 15.6.1999, p. 5.
(3) OJ C 382, 9.12.1998, p. 6.

(1)

(2)

(hereinafter: CECED)

The Conseil Européen de la Construction d'Appareils
Domestiques
is an association
under Belgian law, established since 1959 and based in
Brussels. It comprises manufacturers of domestic appli-
ances and national trade associations. Whilst being itself
party to the agreement that it notified on behalf of the
parties other than itself, CECED is entrusted with several
tasks regarding its implementation.

CECED members include manufacturers who produce
and sell a wide range of domestic appliances under
various brands in various Member States. Parties to the
agreement include national associations and manufac-
turers that are either directly party to the agreement or
are committed through membership of a national asso-
ciation.

Manufacturers that are a direct party to the agreement
include Atag Kitchen Group BV, Bosch Siemens
Hausgeräte GmbH, Brandt SA, Candy Elettrodomestici
Srl, Electrolux Holdings Ltd, Merloni Elettrodomestici
Spa, Miele & Cie GmbH&Co and Whirlpool Europe Srl.

Manufacturers that are a party through a National Trade
Association include Antonio Merloni Spa, Dolmar SA,
Fagor Electrodomésticos S.Coop. and Smeg SpA.

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trade associations that are a party include
national
AMDEA (United Kingdom), ANFEL (Spain), FAPE (Spain)
ANIE (Italy), EHA (Sweden), Fabrimetal (Belgium), FEEI
(Austria), FEHA (Denmark), GIFAM (France), Vlehan
(Netherlands), ZVEI
(Germany), BESD (Turkey), FEA
(Switzerland) and NEL (Norway).

B. RELEVANT MARKET AND POSITION OF THE PARTIES

1. Product market

(3)

The agreement concerns the market for private washing
machines that are used by households to wash textiles
for private use (‘domestic washing machines’). No altern-
ative method of washing such as hand-washing, laun-
dries, dry cleaning and collectively owned machines can,
to any significant extent, be substituted for washing
machines in Western countries. Accordingly, no other
broader product market that would include other appli-
ances within a single product market can be delineated.

(4) Washing machines can be segmented according to their
load capacity, spinning speed, water and energy use,
sophistication of programming, and so on. Nonetheless,
owing to the similarity in their intended use from a
demand standpoint, the various segments do not stand
individually as separate product markets.

2. Geographic market

(5)

(6)

There are no noticeable technical and economic barriers
to trade. Despite low transport costs and unsophisticated
technology, imports into the EEA are not considerable
and account for 5 to 7 % of final sales. Major producers
hardly have more than three factories in the EEA, from
which they supply throughout the whole market. Similar
distribution channels are used in different Member
States,
including specialised chains and department
stores, though to differing extents.

Although some brands are predominant
in some
Member States, the same major producers are present
across the EEA. Moreover, the acquisition of a local
brand is a widespread practice designed to enhance
market penetration. Accordingly, potential competition
from groups present in other Member States directly
threatens those present in each national market.

(7)

The relevant market is therefore for domestic washing
machines in the EEA (4).

3. Position of the parties, market situation

(8)

The manufacturers having signed the agreement hold
around 90 % of the EEA market. Their market shares in
follows: Electrolux (17,9 %), Bosch-
1996 were as
Siemens
(10 %), Candy (9,2 %),
Brandt (9 %), Merloni (9 %), Miele (4,8 %), Fagor (2,6 %),

(11,5 %), Whirlpool

(9)

(10)

(11)

(12)

Atag (0,3 %), Dolmar (0,1 %), Smeg (0,1 %), third party
production from CECED members (16 %).

As with other traditional domestic appliances, saturation
is apparent for washing machines. Equipment to house-
hold ratios in the Community are becoming stagnant,
within a range from 96 % in Spain to 77 % in Sweden.
Renewal of installed equipment and sociodemographic
trends, like the number and size of households, are the
main driving forces of demand.

The market is characterised by competition from several
large competitors and considerable bargaining pressure
from large distribution or buying groups (5). In previous
years, sales of machines have been stable, whilst sales
values have dramatically shrunk. Production capacities
have been widely rationalised. On average, production
capacities of up to 75 % are currently being achieved in
the Community. Overall, the situation in the market,
depressed
which
compared with both the past and other fast growing
markets for other domestic appliances. There are no
indications that the situation is any different in the wider
EEA market.

fragmented,

relatively

looks

is

4. Energy efficiency in the relevant market

Pursuant to Article 2 and Annexes I to IV to Commis-
sion Directive 95/12/EC of 23 May 1995 implementing
Council Directive 92/75/EEC with regard to energy
labelling of household washing machines (6), as amended
sold
by Directive 96/89/EC (7), washing machines
throughout the Community are classified and labelled
according to their energy efficiency (kWh/Kg, or Kilo-
watt-hours/kilograms of load) into seven categories from
A to G (‘energy categories’). Such categories are used in
the agreement.

Electricity consumption is essential in the operation of
washing machines. It also accounts for a major share of
operating costs during their long lifetime (12 years on
average in the Community). Through the EC energy
label, consumers can easily assess the cost-effectiveness
of a choice amongst different energy categories. In addi-
tion to economic factors, advertising campaigns often
stress energy performance, thereby differentiating prod-
ucts, in a context where environmentally friendly prod-
ucts attract more and more consumers. Thus, energy-
efficiency has an influence on purchasing decisions, and
hence on competition between manufacturers.

(4) This view is also consistent with Case IV.M.458 Electrolux-AEG,

point 21, (OJ C 187, 9.7.1994, p. 14).

(5) See footnote 4.
(6) OJ L 136, 21.6.1995, p. 1.
(7) OJ L 338, 28.12.1996, p. 85.

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(13)

In 1997, about 10 to 11 % of washing machines sold in
the EEA belonged to classes D to G. For some important
manufacturers,
the share of such machines in their
product range was higher than one-third. However, no
party manufactures machines exclusively in categories D
to G.

of 0,23 kWh/Kg, the estimated price increase would be
around 1 to 2 % in northern Europe and 8 to 14 % in
southern Europe and the United Kingdom, where the
share of categories between D and G is the highest.

(14) According to CECED, between 1978 and 1994 the
energy consumption of washing machines was reduced
by 40 % per unit in the European market. Despite such
improvements, consumption due to the operation of
washing machines accounts on aggregate for 2 % of
total electricity consumption in the Community. There is
no indication that market
factors other than energy
prices have played a significant role in spontaneously
bringing about such results for the industry as a whole.

(15)

(16)

The most direct way of improving energy-efficiency, and
thus of raising the energy category, is through a reduc-
tion in the amount of water used in the washing cycle. A
further way is to reduce the amount of ‘free water’ at the
bottom of the drum. Other improvements that contri-
bute indirectly to energy efficiency are more accurate
water-level sensors and more sensitive controls. Various
upgrades of mechanical parts also result in an overall
improvement in efficiency. These include replacement of
induction motors with universal motors, upgrading of
pressure switches, use of an adjustable thermostat or a
more sophisticated timer, use of a lower-powered
heating element and modification of the drum, tub and
balancing of
the machine. No further improvements
which raise the energy efficiency of machines currently
in category A are likely in the medium term, owing to
technological constraints.

The energy-efficiency of washing machines, itself posi-
tively correlated with spin speed, appears directly
proportional to their price. Owing to the functional
interdependence between different product characteris-
tics, it is not possible to isolate completely the effects of
upgrading energy efficiency, other parameters being
constant. All technical means of improving energy-effi-
ciency are
translated into higher production and
purchase costs. The approximate unit-cost increase of
shifting to category C from categories G to D, including
apportioned R&D costs and changes in the production
process or components, is estimated in a range between
EUR 6,3 and 60 per machine (1,2 and 11,5 % of
average selling prices in the Community) at the produc-
tion stage.

(17) However,

the distribution of such costs is uneven,
depending on the composition of production and sales
in each Member State. For instance, according to infor-
mation submitted by the parties, were all machines sold
in the Community to reach a weighted average efficiency

C. THE AGREEMENT

(18)

The agreement basically covers three sets of objectives:
(i) production and imports of washing machines,
(ii)
monitoring and reporting, and (iii) promotion of techno-
logical development as well as consumer education. It
includes the following provisions.

1. Production and imports

(19)

The parties agree to cease producing and/or importing
into the Community the
following categories of
machines:

— after 31 December 1997 (as a first step) machines
belonging to categories E, F and G, excluding
machines under category E with load capacity lower
than 3 kg and vertical axis machines,

— after 31 December 1999 (as a second step) machines
belonging to category D, excluding load capacity
lower than 3 kg and machines with a spin speed
lower than 600 rpm (revolutions per minute).

(20) Moreover, each party agrees to contribute to reaching a
weighted average efficiency of 0,24 kWh/kg by 31
December 2000 for all the machines produced.

2. Monitoring and reporting

(21)

CECED will establish and update a database, monitored
by an independent consultant who will report annually
to CECED and to the Commission on the fulfilment of
the objectives by category class and in the terms of the
overall target of 0,24 kWh/kg. The independent consul-
tant will aggregate the individual data submitted by each
manufacturer.

3. Consumer

education

and

technological

improvement

(22)

The parties agree to improve the availability of informa-
tion on the environmentally conscious use of washing
machines (how to operate the machine with less energy,
detergent, and water) and to promote a wider dissemina-
tion of energy-saving technology (hot-fill
installations,
improving load dependence) and techniques (use of low
washing temperatures).

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4. Effective date of implementation and new parties

(23) According to CECED, from as early as 1996 onwards,
the parties to the agreement had felt obliged to act in the
spirit of the terms that were being negotiated between
them. During its enquiry, the Commission has gathered
data showing that, prior to the entry into force of the
agreement, a number of manufacturers being party to
the agreement effectively diminished or ceased their
production of machines belonging to energy categories
that would have been phased out, had the agreement
been signed in 1996.

(24)

The agreement is open to new participants and remains
valid until 31 December 2001. Since its entry into force,
other manufacturers like Arçelik (Turkey) and Iar Siltal
Srl (Italy) have joined it. The initial market coverage is
thereby extended to 95 % of the relevant market.

II. LEGAL ASSESSMENT

A. ARTICLE 81(1) OF THE EC TREATY AND ARTICLE 53(1)

OF THE EEA AGREEMENT

(25) Article 81(1) of the EC Treaty and Article 53(1) of the
EEA Agreement prohibit all agreements or concerted
practices between undertakings and associations of
undertakings which may affect trade between Member
States and which have as their object or effect
the
prevention,
restriction or distortion of competition
within the common market or the EEA, and in particular
those which control production or technical develop-
ment.

1. Agreements and/or concerted practices between
undertakings or associations of undertakings

(32)

(26)

(27)

CECED is an association of undertakings. Those of its
members that are parties to the agreement are manufac-
turers or importers of domestic appliances, or associa-
tions of such manufacturers or importers.

The agreement which is the subject of this Decision is
therefore an agreement between undertakings and asso-
ciations of undertakings within the meaning of Article
81(1) of the EC Treaty and Article 53(1) of the EEA
Agreement. The collective implementation of some of its
provisions from 1996 onwards, in so far as the parties
have felt obliged to act in the spirit of the terms that
were being negotiated between them, is also an agree-
least, a concerted practice, within the
ment or, at
meaning of those provisions.

submitted in the notification, by quota allocations or by
the individual contribution of each
specification of
manufacturer or importer to the attainment of
the
common target.

(29)

Consequently, this provision does not have as its object
or effect the restriction of competition.

(30)

(31)

(b) Restriction of production and imports

R e s t r i c t i v e o b j e c t

CECED members agree no longer to manufacture or to
import washing machines that do not meet the criteria
that
they have agreed upon. The agreement sets a
standard of energy efficiency, with which all the washing
machines that the parties manufacture or import have to
comply. By this obligation, the parties are no longer free
to produce or to import machines under categories D to
G, as they were free to do, and actually did, before the
agreement.

Some manufacturers focused their production exclu-
sively on categories A to C, and partly D, prior to the
agreement. The agreement guarantees to them that other
parties will not meet consumer demand for machines in
categories D to G. Such a guarantee is important in a
stagnant market with strong competitors and research of
sales opportunities. The agreement therefore prevents
from competing
importers
manufacturers
throughout the full range of energy categories, as they
did before the agreement.

and

The agreement narrows down consumer choice, from
category A to C, and partly D, compared to current A to
G. It is unlikely that a range of energy efficiency as
broad as that currently prevailing will reoccur in the
affected market in the short term, because of technolog-
ical constraints. Thus, the agreement prevents distribu-
tors, retailers and, ultimately, consumers from choosing
amongst different categories of machines otherwise
available. Technical diversity and consumer choice are
thereby reduced.

(33) Accordingly, the agreement, which restricts the parties'
autonomy in producing or importing the machines of
their choice, has the object of controlling one important
product-characteristic on which there is competition in
thereby restricting competition
the relevant market,
between the parties.

2. The object or the effect of preventing, restricting

(34)

or distorting competition

(a) Joint target

(28)

The agreement sets forth an obligation whereby the
parties will use their best endeavours to contribute to a
sector-wide target. This target is largely achieved by the
fulfilment of the specific obligation to comply with a
minimum efficiency standard. This general obligation is
the information
not accompanied, on the basis of

The agreement will inevitably raise the production costs
of those manufacturers that used to produce machines
which are no longer allowed. Estimates of costs for
adapting washing machines
to the new minimum
standard would suggest that production and unit costs
would increase appreciably, albeit not excessively, for
those models which need upgrading. Therefore, in the
short term, the agreement is likely to increase the price
of those models, and hence the prices of some manufac-
tuers' product ranges, thereby raising their costs and
bringing their prices closer to those of competitors,
thereby distorting price competition.

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(35)

The agreement does not directly impose any reduction
of output, since more efficient machines would, in prin-
ciple, replace those being phased out. Limited effects on
output, if any, may only arise indirectly through reduced
demand, depending on price elasticity, which is low for
washing machines, when viewed separately from other
factors.

(36) Nonetheless,

the agreement

the agreement will have the effect of
reducing electricity demand, electricity being essential in
the operation of washing machines. According to
is likely to reduce electricity
CECED,
the estimated 38 TWh
output by 7,5 TWh, out of
the
attributed
(1995)
Community once the machines already installed are
totally replaced. Production capacities which have been
devised to meet foreseeable demand, and hence elec-
tricity producers, are thereby affected and their output
restricted, by up to 2 % of the total.

to washing machines

in

(37)

The agreement to prevent the parties from producing or
importing categories of washing machines under energy
labels D to G has thus the object of restricting or
distorting competition within the meaning of Article
81(1) of the EC Treaty and Article 53(1) of the EEA
Agreement.

(c) Exchange of information

(38)

The agreement compels the parties to submit data on
annual sales of washing machines, broken down by
category of energy-efficiency class. The information is
exchanged through an independent notary, entrusted
with the task of collating data confidentially submitted
by each individual manufacturer on production and
sales. Only aggregated data on sales made on the
Community market in the previous year will be made
available to competitors in an otherwise fragmented
market.

(39)

The exchange of
information, which is necessary to
review the progress achieved and relevant to the func-
tioning of the overall agreement, does not have the
object or the effect of restricting competition.

(d) Consumer information and dissemination of energy-saving

technology

(47)

(40)

The undertaking included in the agreement sets the
general goal of
improving consumer information on
more economic patterns in the use of the appliances.
The wider dissemination of energy-saving technology
does not specify any particular expedients imposing
restrictions on the parties.

(41)

Such undertakings are not restrictive of competition.

(42)

(43)

3. Appreciable effects on competition and trade

between Member States

Electricity consumption is not negligible as a purchase
criterion, and hence as a basis on which there is
competition in the relevant market, of which the parties,
as was noted in recital 24, jointly hold in excess of 95 %.

is

agreement

The
also likely to have dissimilar
geographic effects within the EEA. Since producers have
only a few plants from which they currently supply
the agreement will affect
throughout
the
composition of
imports from one Member State to
another,
those manufacturers who produced
machines in classes D to G, before 1996.

the EEA,

for

(44) Depending on the composition of sales, price increases
due to up-grading current product
ranges will be
unevenly distributed amongst Member States. As a
result, demand will be affected, in direct proportion to
the share of machines being phased out in each national
market. Such share is the highest in those five Member
States where the efficiency of washing machines is below
the Community average.

(45)

Following full implementation of the agreement by the
year 2001, 1 718 models in energy classes G, F, E and D
(i.e. just less than 63 %) would no longer be produced or
imported, out of a total Community range of 2 730
models in 1995. In terms of unit sales, the number of
machines that would no longer be allowed in the market
accounted for 10 to 11 % of the Community total in
1997. As an order of magnitude, this is nearly the size
of
the Austrian, Swedish and Benelux markets alto-
gether.

(46) Accordingly, the agreement is likely to have an appreci-
able effect on competition and trade between Member
States within the meaning of Article 81(1) of the EC
Treaty and Article 53(1) of the EEA Agreement.

B. ARTICLE 81(3) OF THE EC TREATY AND ARTICLE 53(3)

OF THE EEA AGREEMENT

1. Contribution to economic or technical progress
and conferment of benefits on the consumer

The agreement is designed to reduce the potential energy
consumption of new washing machines by at least 15 to
20 % (relative to 1994 data on models of washing
machines). According to CECED, were models of
phased-out machines to be replaced by an equivalent
number of machines in categories A, B and C, currently
available on the market, 7,5 TWh would be saved in
2015 out of the estimated 38 TWh consumed by the
operation of washing machines in the Community in
1995.

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(48) Washing machines which, other factors being constant,
consume less electricity are objectively more technically
efficient. Reduced electricity consumption indirectly
leads to reduced pollution from electricity generation.
The future operation of the total of installed machines
providing the same service with less indirect pollution is
more economically efficient than without the agreement.

price. Therefore, while the minimum price of washing
machines is likely to increase, it cannot be ruled out that
products in categories A and B may become available at
a lower price.
In a market characterised by strong
competition amongst manufacturers and bargaining
these benefits are likely to
power from distributors,
accrue to consumers.

(49)

(50)

(51)

improvement in four years of

imple-
Such potential
mentation of the agreement is remarkable, compared to
improvements in the past. Were energy efficiency to
improve at the same rate as it did between 1978 and
1994 without any agreement, the attainment of a 20 %
improvement would require eight years, instead of four.
In addition to faster and more certain results, there is no
evidence that changes in behaviour may nullify the
improvement of the efficiency ratio (8).

The agreement is also likely to focus future research and
development on furthering energy efficiency beyond the
current
thereby
allowing for increased product differentiation amongst
producers in the long run (9).

limits of category A,

technological

CECED estimates the pollution avoided at 3,5 million
tons of carbon dioxide, 17 000 tons of sulphur dioxide
and 6 000 tons of nitrous oxide per year in 2010,
working on the basis of average emission values.
Although such emissions are more efficiently tackled at
the stage of electricity generation, the agreement is likely
to deliver both individual and collective benefits for
users and consumers.

(a) Individual economic benefits

(52)

The level at which the minimum performance standard
is set provides a fair return within reasonable pay-back
periods to a typical consumer for higher initial purchase
costs derived from the more stringent standard in fact
set out by CECED. Savings on electricity bills allow
recouping of increased costs of upgraded, more expen-
sive machines within nine to 40 months, depending
mainly on frequency of use and electricity prices.

(53) While the agreement will eliminate certain models which
are in category D and below, it is not possible to deter-
mine in advance its effect on the average selling price of
those models of washing machines which are not
directly affected. Indeed, the restriction in one product-
dimension,
increase
competition on other product characteristics, including

consumption, may

energy

(54) Were these competition-enhancing effects to take place,
the narrowing of the price range and the increase in
average selling prices would be less pronounced than
would otherwise be foreseeable.

(b) Collective environmental benefits

(55) According to Article 174 of the EC Treaty, environ-
source. The
mental damage should be rectified at
Community pursues the objective of a rational utilisa-
tion of natural resources, taking into account the poten-
tial benefits and costs of action. Agreements
like
CECED's must yield economic benefits outweighing their
costs and be compatible with competition rules (10).
Although electricity is not a scarce resource and
consumption reductions do not
tackle emissions at
source, account can also be taken of the costs of pollu-
tion.

(56)

The Commission reasonably estimates the saving in
marginal damage from (avoided) carbon dioxide emis-
sions (the so-called ‘external costs’) at EUR 41 to 61 per
ton of carbon dioxide. On a European scale, avoided
damage from sulphur dioxide amounts to EUR 4 000 to
7 000 per ton and EUR 3 000 to 5 000 per ton of
nitrous oxide (11). On the basis of reasonable assump-
tions,
the benefits to society brought about by the
CECED agreement appear to be more than seven times
greater
than the increased purchase costs of more
energy-efficient washing machines. Such environmental
results for society would adequately allow consumers a
fair share of the benefits even if no benefits accrued to
individual purchasers of machines.

(57)

The expected contribution to furthering energy effi-
ciency both within the current technological
limits of
categories A to C and beyond the limits of category A,
the cost-benefit ratio of the standard and the return on
investment for individual users point to the conclusion
that the agreement is likely to contribute significantly to
technical and economic progress whilst allowing users a
fair share of the benefits.

(8) Purchasers are interested in the service that washing machines
provide. When frequency of use and hence absolute electricity
consumption (total kg of
are
constrained by operating costs, decreases in such costs stimulate an
increase in use. Such increase may outweigh the reduction in rela-
tive consumption (i.e. kWh per kg of clothes washed).

clothes washed per kWh/kg),

(9) This would allow the current energy categories under the EC energy

label being reviewed in the light of technical progress.

(10) Articles 3(1)(f) and 7 of EP and Council Decision 2179/98/EC of
24 September 1998 on the review of the European Community
programme of policy and action in relation to the environment
and sustainable development
(OJ L 275,
10.10.1998, p. 1).

‘Towards sustainability’

(11) These values reflect the current state of knowledge and may need

to be reviewed in the light of future research.

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L 187/53

(58)

(59)

(60)

2. Indispensability of the restrictions

The agreement does not impose on the parties restric-
tions that are unrelated or unnecessary to the fulfilment
its objective benefits. The outright prohibition of
of
some energy categories does not prescribe any specific
technical means for the achievement of the minimum
standard, to the exclusion of others, nor does it impose
other limitations on any other aspect of the proper or
commercial behaviour of the parties.

reflected in consumer's calculations when contemplating
a purchase, the provision of information is not sufficient
to realise the agreement's environmental benefits to their
fullest possible
information
extent. Moreover,
stressed in the agreement relates to the conditions on
the use of the machine, which allow for further reduc-
tion of electricity consumption besides the technical effi-
ciency ratio of the machine. Such campaigns are there-
fore complementary to the standard, rather than being a
substitute for it.

the

Regarding the reduction of total electricity consumption
through the operation of washing machines, the agree-
ment opts for an approach based on individual product
characteristics. The Commission has examined whether
it would be possible to devise less restrictive alternatives
that would be capable of delivering similar reductions
based on other approaches. For instance, the parties
could theoretically limit the agreement to the under-
taking to contribute to an industry-wide target, informa-
tion campaigns and a greater focus on fulfilling EU
eco-label criteria.

(63)

(a) Industry-wide target

The setting of a more stringent industry-wide target
could in theory lead to more indirect pollution abate-
ment whilst allowing manufacturers or importers more
flexibility than the application of a mandatory minimum
standard. Provided that each party complied with the
common target, it would be free to decide on the share
of different energy categories within its total product
range, by compensating a minor proportion of machines
below category C through a predominant proportion of
top categories A and B.

(c) Eco label

Commission Decision 96/461/EC (12) of 11 July 1996
establishing ecological criteria for the award of
the
Community eco label
to washing machines covers
energy consumption (categories A and B being eligible),
water and detergent use as well as consumer informa-
tion. Some manufacturers have been awarded the eco
label. However, it should be remembered that the eco
label has as one of its main features its selective char-
acter. The label is only awarded to those products with
the lowest environmental impact in a product range. It is
an instrument that rewards the top environmental class.
On the other hand,
the CECED agreement aims at
phasing out the least energy-efficient products (catego-
ries D to G). The eco label is therefore not intended to
apply to products such as the ones envisaged in the
agreement. The agreement and the eco label are comple-
mentary and reinforce each other. The parties to the
agreement will always have the possibility, in addition to
the agreement, of applying for the award of an eco label,
as a supplementary way of enhancing the environmental
benefits achieved by their washing machines.

(61) However, such a system would face difficulties that
would jeopardise the attainment of the expected results.
In the specific market context, purchasers that have
bargaining power could focus their orders on machines
below category C. Whilst the unilateral decision to cease
it
production of such machines could remedy this,
would,
to applying the
minimum standard. Only a joint agreement with distrib-
utors and retailers would help to overcome this
problem. If at all workable, such an agreement would
have higher transaction and monitoring costs and could
be even more restrictive.

in practice, be tantamount

3. No elimination of competition

(64) Major distributors agree that other factors like price,
brand image, and technical performance may have more
weight
in purchase decisions than energy efficiency.
Meanwhile, three energy categories, from A to C, and
part of D, will still remain available to manufacturers,
once the agreement is fully implemented.

(b) Information campaigns

(62) Mere information campaigns, which are a separate part
of the agreements, are also plainly less effective than a
standard. As previously stated, the existing Community
energy label already provides consumers with the neces-
efficiency. However,
sary
fully
evidence shows that, as external costs are not

information on energy

(65) Moreover, whilst not imposing unnecessary restrictions
de jure, the agreement does not de facto impose any
particular means of improving energy efficiency. The
technology needed to produce machines under catego-
ries A to C is available to all manufacturers. The parties
have therefore a wide variety of technical choices, on
which they can effectively compete,
the
minimum energy efficiency standard.

to meet

(12) OJ L 191, 1.8.1996, p. 56.

L 187/54

EN

Official Journal of the European Communities

26.7.2000

(66)

(67)

(68)

Though machines pertaining to categories D to F
account for a significant volume of final sales, about
90 % of the market (1996) will fall outside the scope of
the agreements. Since third parties
remain free to
produce and to import machines below such categories,
the agreement does not appreciably raise barriers to
entry into the EEA market.

it can be concluded that

Therefore,
the cumulative
conditions of Articles 81(3) of the EC Treaty and 53(3)
of the EEA Agreement are fulfilled.

4. Duration of the exemption

Pursuant to Article 8(1) of Regulation No 17, a decision
is to be issued for a
in application of Article 81(3)
specific period. As notified, the obligations agreed by the
parties remain binding upon them until 31 December
2001. It is therefore appropriate to define the duration
of this exemption accordingly,

declared inapplicable for the period from 22 October 1997 to
31 December 2001, to the agreement entered into on 24
September 1997 by the Conseil Européen de la Construction
d'Appareils Domestiques and some of its members, regarding
production and imports of domestic washing machines falling
within energy categories D to G as defined by Directive 95/
12/EC.

Article 2

This Decision is addressed to:

Conseil Européen de la Construction d'Appareils Domestiques
(CECED)
Diamant Building
Boulevard A. Reyers/A. Reyerslaan 80
B-1030 Brussels

HAS ADOPTED THIS DECISION:

Done at Brussels, 24 January 1999.

Article 1

Pursuant to Article 81(3) of the EC Treaty and Article 53(3) of
the EEA Agreement, the provisions of Article 81(1) of the EC
Treaty and Article 53(1) of the EEA Agreement are hereby

For the Commission

Mario MONTI

Member of the Commission