2002/758/EC: Case COMP/36.264 — Mercedes-Benz: Commission decision of 10 October 2001 relating to a proceeding under Article 81 of the EC Treaty (Text with EEA relevance.) (notified under document number C (2001) 3028)
Date: 2001-10-10
Institutions: European Commission
Subjects: competition law, dominant position, fine, motor vehicle industry, restriction on competition, trade regulations

25.9.2002

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Official Journal of the European Communities

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 10 October 2001

relating to a proceeding under Article 81 of the EC Treaty

(Case COMP/36.264 — Mercedes-Benz)

(notified under document number C (2001) 3028)

(Only the German text is authentic)

(Text with EEA relevance)

(2002/758/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European Com-
munity,

Having regard to Council Regulation No 17 of 6 February
1962, first Regulation implementing Articles 85 and 86 of the
Treaty (1), as last amended by Regulation (EC) No 1216/1999
of 10 June 1999 (2), and in particular Articles 3, 15(2) and
16(1) thereof,

Having regard to the Commission decision of 30 March 1999
to initiate proceedings in this case,

Having given the parties concerned the opportunity, pursuant
to Article 19(1) of Regulation No 17 and Commission
Regulation (EC) No 2842/98 of 22 December 1998 on the
hearing of parties in certain proceedings under Articles 85 and
86 of the EC Treaty (3), to make known their views on the
objections raised by the Commission,

1.

FACTS

1.1.

PROCEDURE

(1)

(2)

Since the beginning of 1995 the Commission had been
receiving letters from consumers complaining about
restrictions on the export of new motor vehicles of the
Mercedes-Benz make by affiliates of Daimler-Benz AG
in various Member States. The Commission thus had
indications that firms belonging to the Daimler-Benz
group were operating a foreclosure of the market in
contravention of Article 81(1) of the EC Treaty.

On 4 December 1996 the Commission issued a decision
ordering investigations pursuant to Article 14 of Regu-
lation No 17. These investigations were carried out on
11 and 12 December 1996 at the premises of the
following companies:

After consulting the Advisory Committee on Restrictive Prac-
tices and Dominant Positions,

— Germany: Daimler-Benz AG, Stuttgart; Mercedes-

Benz AG, Stuttgart,

Having regard to the final report of the Hearing Officer,

( 1) OJ 13, 21.12.1962, p. 204 (Special edition 1959 to 1962, p. 87).
( 2) OJ L 148, 15.6.1999, p. 5.
( 3) OJ L 354, 30.12.1998, p. 18.

— Belgium: Mercedes-Benz Belgium SA/NV; Van

Steen SA/NV, Mechelen,

— Netherlands: Mercedes-Benz Nederland NV,
Utrecht; Autocentrum Pordon BV, Utrecht; Van
Kooy BV, Hilversum,

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— Spain: Mercedes-Benz Espan˜ a SA, Madrid; Itarsa,

(8)

Madrid; Itra SL, Madrid.

(3)

(4)

(5)

On 21 October 1998 the Commission addressed a
request for information under Article 11 of Regulation
No 17 to Daimler-Benz AG. This was replied to on
10 November 1998. On 15 June 2001 the Commission
addressed a further request for information to Daim-
lerChrysler AG, which was replied to on 9 July 2001.

On 31 March 1999 the Commission sent a statement of
objections to DaimlerChrysler AG.

DaimlerChrysler AG commented on the Commission’s
objections in writing by letter dated 14 June 1999 and
orally at a hearing on 29 June 1999. Moreover, on
7 December 1999 it presented a report by Professor
Ulmer which assessed the marketing of motor vehicles
via dealers in Germany pursuant to Article 81(1). On
4 September 2000 DaimlerChrysler sent a further letter
on the subject of the assessment of evidence in which it
referred to the assessment of evidence by the Court of
First
Instance of the European Communities in its
judgment in Case T-62/98 Volkswagen v Commission
[2000] ECR II-2707.

(6)

This Decision is based on documents found during the
investigations, answers to requests for information and
the comments presented by DaimlerChrysler AG.

1.2. THE FIRMS IN QUESTION AND THEIR MARKETING
NETWORK

1.2.1. DAIMLERCHRYSLER AG

(7)

Daimler-Benz AG merged with DaimlerChrysler AG on
21 December 1998 on the basis of
the ‘Business
combination agreement’ of 7 May 1998. DaimlerChrys-
ler AG thus became the legal successor to Daimler-
Benz AG. Under section 20(1) of the Conversion Act
(Umwandlungsgesetz (UmwG)) (4), all of the latter’s rights,
liabilities and obligations were transferred to
assets,
DaimlerChrysler AG (5).
In 2000 DaimlerChrysler’s
worldwide turnover came to EUR 162,384 billion, and
its Community-wide turnover to EUR 50,348 billion.

In 2000, with world sales of 1 052 742 passenger cars,
the Mercedes-Benz make accounted for a turnover of
EUR 43,133 billion. In 2000, 666 198 Mercedes-Benz
passenger cars were sold in the Community, worth EUR
25,050 billion (6).

1.2.2. DAIMLER-BENZ AG AND MERCEDES-BENZ AG

(9)

Until 21 December 1998 Daimler-Benz AG was the
umbrella company of the Daimler-Benz group. Together
with its subsidiaries, it was active worldwide in manufac-
turing and marketing motor vehicles, motor-vehicle
electronics, railway vehicles, diesel engines, aircraft,
spacecraft and defence systems, and in the financial-
services, insurance-brokerage, information-technology,
telecommunications-technology, commercial and prop-
erty-management services sectors.

(10)

In 1997 the consolidated worldwide group turnover of
Daimler-Benz AG was ECU 64 963 million, while its
turnover in the Community was ECU 37 995 million. In
the same year, the group’s worldwide turnover in respect
of passenger cars was ECU 21 955 million.

(11) Until 1989, passenger cars and commercial vehicles
of the Mercedes-Benz make were manufactured and
marketed by Daimler-Benz AG and its subsidiaries.
From 1989 until 26 May 1997, passenger cars were
manufactured by Mercedes-Benz AG, a subsidiary of
In Germany, they were marketed
Daimler-Benz AG.
directly by Mercedes-Benz AG, in Belgium and in Spain
via the subsidiaries of Daimler-Benz AG, Mercedes-Benz
Belgium SA/NV and Mercedes-Benz Espan˜ a SA.

(12) Mercedes-Benz AG was merged into Daimler-Benz AG
on 25 May 1997. Since that date, Mercedes-Benz has
been the motor-vehicle division within Daimler-Benz
AG, now DaimlerChrysler AG. For the sake of simplicity,
the expression ‘Mercedes-Benz’
is used below where
appropriate, irrespective of whether the reference is to
Daimler-Benz AG (up to 1989), Mercedes-Benz AG (up
to 1997), Daimler-Benz AG (1997/98) or Daimler
Chrysler AG (from 1998).

(13)

In 2000 the turnover achieved with Mercedes-Benz
passenger cars, including sales to company employees,
in Germany came to EUR 15,494 billion (7).

(14) The car trade in Germany may be portrayed in figures as

follows (8):

( 4) Conversion Act of 28 October 1994, Bundesgesetzblatt I 1994,

(6) Reply from DaimlerChrysler AG to question 1.3 in the request for

p. 3210; corrigendum in Bundesgesetzblatt I 1995, p. 428.

( 5) See Commission decision of 22 July 1998 in Case IV/M.1204

Daimler-Benz/Chrysler (OJ C 252, 11.8.1998, p. 8).

information of 15 June 2001.

(7) Information supplied by DaimlerChrysler on 13 July 2001.
(8) Information supplied by DaimlerChrysler on 13 July 2001.

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L 257/3

Turnover
less sales to company employees

1998

1999

2000

(in EUR million)

10 900

12 291

13 154

Sales

1993

1994

1995

1996

1997

1998

1999

2000

Total sales
less sales to company
employees

[...] (*)

[...]

[...]

[...]

[...]

[...]

[...]

[...]

Sales by branches

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

— of which sales to DC-

Leasing

— of which sales to out-
side leasing companies

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

Sales through agents

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

— of which sales to DC-

Leasing

— of which sales to out-
side leasing companies

(*) Business secret.

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

(15) Mercedes-Benz passenger cars are marketed (9) in Germany essentially via 43 (1996), 41 (1998) or
35 (2000) branches belonging to the group, 237 (1996), 208 (1998) or 110 (2000) agents (also
known as contracting partners) with the status under German law of commercial agents appointed
to negotiate business transactions (section 84(1), first sentence, first alternative, of the Commercial
Code), and via three commission agents (‘principal agents’) (10), one of which is a firm within the
Mercedes-Benz group (11). Although the principal agents act in their own name, they operate on
the same footing(12) as the other agents in their internal relationship with Mercedes-Benz. Since
the contracts with principal agents and agents are broadly identical in content, the following
information concerning agents also applies, unless otherwise stated, to the principal agents. There
are also some 500 contracted workshops in Germany. These can act as commercial agents as a
sideline under section 92b of the Commercial Code, negotiating sales of new vehicles on behalf of
the agent or Mercedes-Benz branch responsible for their area.

Of all Mercedes-Benz passenger cars sold in Germany, on average during the period 1996-2000
around [...] % were sold through Mercedes-Benz branches and around [...] % through contracting
partners acting as commercial agents (hereinafter referred to as ‘agents’). Even if the criterion is the
level of turnover achieved with new vehicles sold through these marketing companies, the same
percentage figures are obtained (13). The sales/turnover of the German contracted workshops that
negotiate sales contracts for new vehicles on behalf either of a branch or of an agent are included
in these percentages and amount to some [...] % in all.

(9) See the note of the legal department of Mercedes-Benz AG, file, p. 594.
(10) Reply from Daimler-Benz AG of 10 November 1998 to question 1.6.
(11) Reply from Daimler-Benz AG of 10 November 1998 to question 1.6, file, p. 3253.
(12) Reply from Daimler-Benz AG of 10 November 1998 to question 1.6, file, p. 3253.
(13) Reply from DaimlerChrysler AG to the request for information of 15 June 2001.

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(16) The German (principal) agents of Mercedes-Benz bear a number of risks under the agency
agreement (14) which are intrinsically linked to their work in negotiating the sale of new vehicles.
These are described in detail in recital 153 et seq.

1.2.3. MERCEDES-BENZ BELGIUM SA/NV

(17) Mercedes-Benz Belgium SA/NV (hereinafter referred to as ‘MBBel’) was a subsidiary of Daimler-
Benz Holding Belgium SA, which was in turn controlled directly or indirectly by Daimler-Benz AG.
MBBel had since an unknown date been a wholly owned subsidiary of Daimler-Benz AG. Since
21 December 1998 it has been a wholly owned subsidiary of DaimlerChrysler AG.

(18) Turnover/sales with Mercedes-Benz passenger cars in Belgium:

Turnover

1997

353

1998

511

1999

560

(in EUR million)

2000

644

(individual vehicles)

Sales

1997

1998

1999

2000

12 572

17 587

19 300

20 394

(19) The passenger-car sales network in Belgium consists of the importer, MBBel, which during the
period at issue here itself sold new vehicles via at least two branches (15), and of approximately
45 dealers (16). There are also approximately 44 agencies/workshops in Belgium which also
negotiate new-vehicle sales contracts.

1.2.4. MERCEDES-BENZ ESPAÑA SA

(20) Mercedes-Benz Espan˜ a SA (hereinafter referred to as ‘MBE’) is a wholly owned subsidiary of the
national holding company Daimler-Benz Espan˜ a SA, 99,88 % of which was owned by Daimler-
Benz AG. Since 21 December 1998 this holding company has been a wholly owned subsidiary of
DaimlerChrysler AG. MBE operates body and assembly plants for transporters and V-class (large-
capacity) passenger cars, manufactures engines, transmissions and axle components for transporters,
and sells Mercedes-Benz vehicles and Daimler Benz products.

(21)

Passenger cars are sold in Spain via three branches of MBE and approximately 70 dealers. There are
also contracted workshops in Spain (17), although these do not sell vehicles but only negotiate sales
contracts.

(22) Turnover/sales with Mercedes-Benz passenger cars in Spain:

Turnover

1996

1997

1998

1999

2000

(in EUR million)

312

450

594

708

(14) File, p. 3360.
(15) The branches bearing the name MB Europa in Brussels and Anderlecht have always been in the ownership of
MBBel. In 1994 the branches in Antwerp, Ghent and Waterloo, which had hitherto been owned by MBBel, were
sold, as was (on 1 February 1995) the branch in Charleroi. On 1 February 1998 the dealer Dean Auto Brussels
was purchased by MBBel, as was (on 23 October 1999) the MB dealer in Mechelen and (on 31 March 2000) the
MB dealer in Ghent. These have since been run as branches.

(16) File, p. 3004: letter from MBBel to the Public Prosecutors Office at the Court of Appeal in Brussels, undated;
however, since Commission Regulation (EC) No 1475/95 (OJ L, 29.6.1995, p. 25) is mentioned, the letter must
have been written in 1995 or later; reply from Daimler-Benz AG of 10 November 1998 to question 1.6; reply
from DaimlerChrysler AG to the request for information of 15 June 2001.

(17) There were 58 contracted workshops in 1996, 63 in 1998 and 118 in 2000; see reply from DaimlerChrysler

AG to question 1.3 in the request for information of 15 June 2001.

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Sales

1996

1997

1998

1999

2000

(individual vehicles)

Total sales

11 572

15 843

20 186

21 943

— of which to group-owned leasing

companies (MB Credit)

[...]

[...]

— of which to non-group-owned leasing

companies ( 1)

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

(18) These figures are based on a DaimlerChrysler estimate according to which in Spain some [...] % of the new-car leasing
business is accounted for by the group member company MB Credit and [...] % by independent leasing companies.

1.3. THE IMPORTANCE OF THE COMPANIES INVOLVED IN THE AREA OF PASSENGER CARS

(23) The market for passenger cars can be divided into a number of segments based on factors such as
purchase price and vehicle length. By contrast, other factors, such as engine capacity, quality and
brand image play a smaller role in determining the segment to which a vehicle belongs. A
distinction is normally made between the following segments: A: very small cars; B: small cars; C:
medium cars; D: upper-medium cars; E: executive cars; F: luxury cars; and G: multi-purpose vehicles
and sports cars. Segment G is occasionally subdivided still further. The following tables show the
market share of Mercedes-Benz cars in the Community and in Member States on the basis of the
number of vehicles sold. There are strong indications that, if market share were calculated on the
basis of vehicle price, the share of Mercedes-Benz, which mainly offers expensive vehicles, would
be even larger.

(24) Market share of Mercedes-Benz cars in 1995

Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Luxembourg

0

0

0

0

0

0

0

0

0

0

[0-10] % [10-20] % [20-30] %

[0-10] % [10-20] % [30-40] %

[0-10] % [10-20] % [20-30] %

[0-10] % [10-20] % [40-50] %

[0-10] % [10-20] % [30-40] %

[10-20] % [20-30] % [30-40] %

[0-10] % [20-30] % [40-50] %

[0-10] % [10-20] % [30-40] %

[0-10] % [10-20] % [30-40] %

[0-10] % [10-20] % [20-30] %

0

0

0

0

0

0

0

0

0

0

[10-20] % [0-10] %

[10-20] % [0-10] %

[0-10] % [0-10] %

[0-10] % [0-10] %

[0-10] % [0-10] %

[20-30] % [0-10] %

[0-10] % [0-10] %

[30-40] % [0-10] %

[0-10] % [0-10] %

[0-10] % [0-10] %

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Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Netherlands

Portugal

Sweden

Spain

United Kingdom

EU total

0

0

0

0

0

0

[0-10] % [10-20] % [20-30] %

[0-10] % [10-20] % [40-50] %

[0-10] % [0-10] % [20-30] %

[0-10] % [10-20] % [20-30] %

[0-10] % [10-20] % [10-20] %

[0-10] % [10-20] % [20-30] %

0

0

0

0

0

0

[0-10] % [0-10] %

[0-10] % [0-10] %

[20-30] % [0-10] %

[0-10] % [0-10] %

[10-20] % [0-10] %

[10-20] % [0-10] %

(25) Market share of Mercedes-Benz cars in 1996

Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Austria

Belgium

Denmark

Finland

France

[0-10] % [30-40] % [20-30] % [0-10] % [10-20] % [0-10] %

[0-10] % [20-30] % [10-20] % [0-10] % [0-10] % [0-10] %

[0-10] % [20-30] % [10-20] % [0-10] % [0-10] % [0-10] %

[0-10] % [10-20] % [50-60] % [0-10] % [10-20] % [0-10] %

[0-10] % [10-20] % [20-30] % [0-10] % [10-20] % [0-10] %

0

0

0

0

Germany

[0-10] % [10-20] % [30-40] % [30-40] % [0-10] % [10-20] % [0-10] %

Greece

Ireland

Italy

Luxembourg

Netherlands

Portugal

Sweden

Spain

United Kingdom

EU total

0

0

0

0

0

0

0

0

0

0

[0-10] % [40-50] % [30-40] % [0-10] % [0-10] % [0-10] %

[0-10] % [20-30] % [30-40] % [0-10] % [20-30] % [0-10] %

[0-10] % [20-30] % [20-30] % [0-10] % [0-10] % [0-10] %

[0-10] % [10-20] % [20-30] % [0-10] % [10-20] % [0-10] %

[0-10] % [10-20] % [20-30] % [0-10] % [0-10] % [0-10] %

[0-10] % [30-40] % [20-30] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [20-30] % [0-10] % [10-20] % [0-10] %

[0-10] % [20-30] % [20-30] % [0-10] % [0-10] % [0-10] %

[0-10] % [10-20] % [10-20] % [0-10] % [0-10] % [0-10] %

[0-10] % [20-30] % [20-30] % [0-10] % [10-20] % [0-10] %

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(26) Market share of Mercedes-Benz cars in 1997

Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Austria

Belgium

[0-10] % [0-10] % [20-30] % [10-20] % [0-10] % [20-30] % [0-10] %

[0-10] % [0-10] % [20-30] % [10-20] % [0-10] % [20-30] % [0-10] %

Denmark

[0-10] % [0-10] % [10-20] % [20-30] % [0-10] % [10-20] % [0-10] %

Finland

France

[0-10] % [0-10] % [10-20] % [40-50] % [0-10] % [40-50] % [0-10] %

[0-10] % [0-10] % [10-20] % [20-30] % [0-10] % [20-30] % [0-10] %

Germany

[0-10] % [10-20] % [30-40] % [20-30] % [0-10] % [30-40] % [0-10] %

Greece

Ireland

Italy

[0-10] % [0-10] % [40-50] % [30-40] % [0-10] % [20-30] % [0-10] %

[0-10] % [0-10] % [20-30] % [30-40] % [0-10] % [20-30] % [0-10] %

[0-10] % [0-10] % [20-30] % [20-30] % [0-10] % [10-20] % [0-10] %

Luxembourg

[0-10] % [0-10] % [10-20] % [10-20] % [0-10] % [30-40] % [0-10] %

Netherlands

[0-10] % [0-10] % [20-30] % [10-20] % [0-10] % [20-30] % [0-10] %

Portugal

Sweden

Spain

[0-10] % [0-10] % [30-40] % [10-20] % [0-10] % [30-40] % [0-10] %

[0-10] % [0-10] % [0-10] % [10-20] % [0-10] % [20-30] % [0-10] %

[0-10] % [0-10] % [20-30] % [20-30] % [0-10] % [20-30] % [0-10] %

United Kingdom

[0-10] % [0-10] % [10-20] % [10-20] % [0-10] % [10-20] % [0-10] %

EU total

[0-10] % [0-10] % [20-30] % [20-30] % [0-10] % [20-30] % [0-10] %

(27) Market share of Mercedes-Benz cars in 1998

Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Austria

Belgium

[0-10] % [0-10] % [20-30] % [10-20] % [0-10] % [30-40] % [0-10] %

[0-10] % [0-10] % [10-20] % [10-20] % [0-10] % [20-30] % [0-10] %

Denmark

[0-10] % [0-10] % [10-20] % [10-20] % [0-10] % [10-20] % [0-10] %

Finland

France

[0-10] % [0-10] % [10-20] % [20-30] % [0-10] % [40-50] % [0-10] %

[0-10] % [0-10] % [10-20] % [10-20] % [0-10] % [20-30] % [0-10] %

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Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Germany

[0-10] % [10-20] % [20-30] % [20-30] % [0-10] % [20-30] % [0-10] %

Greece

Ireland

Italy

[0-10] % [0-10] % [30-40] % [20-30] % [0-10] % [20-30] % [0-10] %

[0-10] % [0-10] % [20-30] % [20-30] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [20-30] % [20-30] % [0-10] % [20-30] % [0-10] %

Luxembourg

[0-10] % [0-10] % [10-20] % [10-20] % [0-10] % [20-30] % [0-10] %

Netherlands

[0-10] % [0-10] % [10-20] % [10-20] % [0-10] % [10-20] % [0-10] %

Portugal

Sweden

Spain

[0-10] % [0-10] % [20-30] % [10-20] % [0-10] % [20-30] % [0-10] %

[0-10] % [0-10] % [0-10] % [10-20] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [10-20] % [20-30] % [0-10] % [10-20] % [0-10] %

United Kingdom

[0-10] % [0-10] % [10-20] % [0-10] % [0-10] % [0-10] % [0-10] %

EU total

[0-10] % [0-10] % [20-30] % [20-30] % [0-10] % [20-30] % [0-10] %

(28) Market share of Mercedes-Benz cars in 1999

Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Austria

Belgium

[0-10] % [10-20] % [20-30] % [40-50] % [0-10] % [10-20] % [0-10] %

[0-10] % [10-20] % [10-20] % [40-50] % [0-10] % [10-20] % [0-10] %

Denmark

[0-10] % [0-10] % [20-30] % [40-50] % [0-10] % [0-10] % [0-10] %

Finland

France

[0-10] % [0-10] % [10-20] % [60-70] % [0-10] % [20-30] % [0-10] %

[0-10] % [0-10] % [10-20] % [40-50] % [0-10] % [10-20] % [0-10] %

Germany

[0-10] % [10-20] % [30-40] % [50-60] % [0-10] % [20-30] % [10-20] %

Greece

Ireland

Italy

[0-10] % [10-20] % [30-40] % [70-80] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [30-40] % [30-40] % [0-10] % [10-20] % [0-10] %

[0-10] % [10-20] % [10-20] % [40-50] % [0-10] % [10-20] % [0-10] %

Luxembourg

[0-10] % [10-20] % [10-20] % [40-50] % [0-10] % [20-30] % [0-10] %

Netherlands

[0-10] % [0-10] % [10-20] % [30-40] % [0-10] % [10-20] % [0-10] %

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Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Portugal

[0-10] % [10-20] % [10-20] % [40-50] % [0-10] % [10-20] % [0-10] %

Sweden

Spain

[0-10] % [0-10] % [0-10] % [50-60] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [10-20] % [40-50] % [0-10] % [10-20] % [0-10] %

United Kingdom

[0-10] % [0-10] % [10-20] % [20-30] % [0-10] % [0-10] % [0-10] %

EU total

[0-10] % [10-20] % [20-30] % [40-50] % [0-10] % [10-20] % [0-10] %

(29) Market share of Mercedes-Benz cars in 2000

Country

Segment C
Medium

Segment D
Upper-
medium

Segment E
Executive

Segment F
Luxury

Segment M
Multi-
purpose

Segment S
Sports cars

All cars

Austria

Belgium

[0-10] % [0-10] % [20-30] % [50-60] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [10-20] % [50-60] % [0-10] % [10-20] % [0-10] %

Denmark

[0-10] % [0-10] % [20-30] % [50-60] % [0-10] % [0-10] % [0-10] %

Finland

France

[0-10] % [0-10] % [10-20] % [70-80] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [10-20] % [50-60] % [0-10] % [10-20] % [0-10] %

Germany

[0-10] % [10-20] % [30-40] % [50-60] % [0-10] % [10-20] % [10-20] %

Greece

Ireland

Italy

[0-10] % [0-10] % [50-60] % [70-80] % [0-10] % [10-20] % [0-10] %

[0-10] % [0-10] % [30-40] % [60-70] % [0-10] % [0-10] % [0-10] %

[0-10] % [0-10] % [20-30] % [50-60] % [0-10] % [10-20] % [0-10] %

Luxembourg

[0-10] % [10-20] % [10-20] % [60-70] % [0-10] % [10-20] % [0-10] %

Netherlands

[0-10] % [0-10] % [10-20] % [50-60] % [0-10] % [0-10] % [0-10] %

Portugal

Sweden

Spain

[0-10] % [0-10] % [20-30] % [60-70] % [0-10] % [0-10] % [0-10] %

[0-10] % [0-10] % [0-10] % [50-60] % [0-10] % [0-10] % [0-10] %

[0-10] % [0-10] % [10-20] % [50-60] % [0-10] % [10-20] % [0-10] %

United Kingdom

[0-10] % [0-10] % [10-20] % [30-40] % [0-10] % [0-10] % [0-10] %

EU total

[0-10] % [0-10] % [20-30] % [50-60] % [0-10] % [10-20] % [0-10] %

L 257/10

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25.9.2002

1.4.

PARALLEL TRADING IN MERCEDES-BENZ PASSENGER CARS IN GERMANY, BELGIUM AND SPAIN,

AND ITS CAUSES AND SCALE

1.4.1.

PRICE DIFFERENCES BETWEEN MEMBER STATES

(30) The Commission publishes a review of car prices in the Community (19) twice a year. Data are
provided by manufacturers. One of the aims of the Commission in publishing these reviews is to
increase price transparency so that final consumers are better able to purchase motor vehicles in
those Member States in which prices and other purchasing conditions are most favourable. The
Commission’s purpose is not to establish equal prices within the Community, but rather, on the
basis of price transparency, to reduce price differences through market forces.

(31) On the basis of these price data, differences in the prices of the most commonly sold models
between the various Member States can be represented as follows (the pre-tax price in the country
with the lowest prices is, in each case, 100):

(32)

Segment D model: Mercedes C 180

Year

B

D

E

F

FIN

IRL

I

L

NL

P

UK

DK

GR

A

S

1.5.1993
190E 1,8

127,8 126,6 124,0 118,9

110,1 100

127,8 108,8 122,8 118,9

1.11.1993

109,7 113,9 115,4 109,9

118,0 100,0 110,4 103,3 110,9 114,2

1.5.1994

108,9 107,2 106,8 109,6

108,5 102,5 111,6 100

104,0 107,6

1.11.1994

110,5 109,9 106,8 111,8

108,7 100,0 113,2 102,0 103,4 104,1

1.5.1995

127,2 126,6 118,9 123,8

117,1 100,0 130,3 118,9 121,6 109,0

131,1 108,8

1.11.1995

118,3 118,3 113,9 111,0

108,5 100,0 119,6 105,9 111,5 107,1

121,7 107,1

1.5.1996

109,1 109,0 104,3 105,0

104,1 101,9 108,5 100,0 106,7 100,6

110,6 105,9

1.11.1996

109,1 109,3 103,2 103,2

106,5 104,6 108,6 100,0 102,2 105,7

106,2 111,4

1.5.1997

109,9 108,3 100,0 104,7

108,4 101,8 106,4 100,8 106,4 103,6

106,6 117,4

1.11.1997

108,1 107,2 101,1 105,2

111,1 102,0 105,4 100,0 105,6 102,9

108,3 118,3

1.5.1998

104,7 105,8 100,0 106,3

106,6 103,9 104,3 100,3 105,3 105,8

109,4 115,8

1.11.1998

107,6 108,7 100,0 105,7

108,9 106,5 107,8 100,4 106,2 107,3

108,5 101,6

1.5.1999

109,9 110,2 100,0 105,7 106,8 109,8 103,6 109,1 100,5 109,5 113,8

99,3 109,6 110,0 104,6

1.11.1999

107,3 107,6 100,0 103,3 104,4 105,1 103,9 107,4 100,2 106,2 113,1

98,6 107,6 107,5 103,5

1.5.2000

105,2 105,4 100,3 102,3 100,0 — 102,1 105,4 102,7 100,2 No data

99,7 103,0 105,4 107,5

1.11.2000

107,1 105,4 100,3 102,3 100,0 102,9 102,1 105,4 102,4 103,2 111,5

99,9 102,0 105,4 103,3

(19) Car prices in the European Union, European Commission, DG Competition, various editions.

25.9.2002

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(33) Segment E model: Mercedes E 200

Year

B

D

E

F

FIN

IRL

I

L

NL

P

UK

DK

GR

A

S

1.5.1993

107,5 106,4 109,6 105,3

101,1 100

110,6 106,4 114,9 100

1.11.1993

108,4 112,0 111,8 108,1

115,0 100,0 111,5 113,6 121,8 110,6

1.5.1994

106,4 105,6 107,3 102,9

105,4 100,0 108,5 108,4 115,8 103,1

1.11.1994

111,7 110,3 108,9 104,8

109,0 100,0 113,7 111,6 118,6 103,8

1.5.1995

124,8 123,5 118,8 114,9

114,0 100,4 127,0 125,3 128,2 105,5

129,5 100

1.11.1995

111,9 110,5 112,3 107,2

102,9 100,5 113,6 108,5 112,4 100

114,2 108,8

1.5.1996

108,7 107,4 111,8 105,6

103,7 108,7 110,5 107,9 110,9 100

109,8 107,6

1.11.1996

101,8 100,7 106,2 102,3

100,0 103,9 103,4 100,9 109,6 100,6

103,0 101,4

1.5.1997

112,2 110,8 115,1 112,2

110,6 116,7 112,2 100,0 111,2 120,0

104,9 120,9

1.11.1997

111,1 109,6 114,7 111,7

112,4 116,7 111,0 100,0 112,2 118,1

112,4 126,2

1.5.1998
220 CDI

100,2 100,0 106,7 103,6

No data 104,2 100,2 100,6 101,8 108,0

105,9 No data

1.11.1998

101,9 101,8 110,0 105,4

103,5 105,8 102,0 101,8 109,8 110,0

103,6 100,0

1.5.1999

100,3 100,0 106,7 102,0 108,6 102,2 102,7 100,0 100,1 108,2 108,7 101,2 100,0 101,9

99,9

1.11.1999

100,3 100,0 104,0 101,1 104,6 103,8 103,0 101,0 101,3 103,7 110,8 101,8 101,7 101,9 101,7

1.5.2000

100,0 101,0 102,7 101,2 105,6 101,6 104,1 101,6 102,2 104,5 119,5 101,7 107,2 102,9 107,2

1.11.2000

100,0 100,6 103,5 100,8 105,1 100,6 103,7 101,2 101,6 105,2 110,1 101,5 103,9 102,6 102,9

(34)

Segment F model: Mercedes S 320

Year

B

D

E

F

FIN

IRL

I

L

NL

P

UK

DK

GR

A

S

1.5.1993

109,7 107,5 115,1 111,8

102,1 100,0 109,7 112,9 122,6 106,4

1.11.1993

107,8 111,2 116,5 111,7

105,1 100,0 108,0 120,0 126,0 110,2

1.5.1994

105,7 102,6 112,1 115,9

101,1 106,4 105,4 112,2 No data 100,0

1.11.1994

108,9 105,4 111,1 114,1

107,6 100,0 108,1 113,9 No data 103,5

1.5.1995

118,0 114,5 119,3 117,7

103,7 100,0 117,2 124,3 122,3 105,0

121,1 110,0

1.11.1995

111,9 108,2 113,5 114,2

102,1 101,1 110,4 113,3 116,7 100,0

113,6 115,4

L 257/12

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Official Journal of the European Communities

25.9.2002

Year

B

D

E

F

FIN

IRL

I

L

NL

P

UK

DK

GR

A

S

1.5.1996

111,0 106,6 117,7 117,3

105,5 113,6 108,8 113,6 118,6 100,0

111,9 120,7

1.11.1996

103,9 100,0 109,1 108,1

102,9 108,8 101,9 107,6 113,0 103,3

105,1 115,7

1.5.1997

104,4 100,0 108,0 111,5

107,1 109,7 100,1 107,5 104,5 112,1

110,3 115,9

1.11.1997

103,9 100,0 107,9 111,2

110,4 111,0 100,1 106,4 104,4 110,2

102,6 112,4

1.5.1998

105,4 102,8 108,7 112,7

108,2 100,0 101,5 107,9 105,8 111,3

104,5 116,3

1.11.1998

102,2 101,1 104,2 103,2

No data 104,2 101,9 102,6 108,0 103,9

103,0 100,0

1.5.1999

103,4 101,1 102,9 102,9 108,4 100,0 102,9 101,8 102,8 108,7 108,5 102,4 112,2 103,1 101,7

1.11.1999

102,3 100,0 102,4 102,1 107,2 100,7 103,1 100,7 101,8 106,6 110,1 101,3 105,3 102,0 102,6

1.5.2000

101,4 100,0 101,5 102,1 107,1 101,8 102,9 100,7 102,5 107,0 100,3 104,3 104,3 102,0 108,2

1.11.2000

101,7 100,0 103,0 102,8 107,1 100,3 103,3 101,0 102,7 107,2 108,3 100,4 103,3 102,0 102,6

1.4.2. CAUSES AND SCOPE OF PARALLEL TRADING IN
MERCEDES-BENZ PASSENGER CARS IN EUROPE, IN
PARTICULAR IN GERMANY, BELGIUM AND SPAIN

(37)

1.4.2.1. Germany

(35) Documents found during the investigations reveal that,
in 1995 and 1996, a substantial number of new and
new-value vehicles were sold by German Mercedes
branches either directly or through German commercial
agents to independent dealers not belonging to the
official sales network and,
to final
consumers, particularly from Belgium and Spain.

in some cases,

(36)

In all, [...] new Mercedes cars were supplied from
Germany to Belgium in 1992, [...] in 1993, [...] in 1994,
[...] in 1995 (20) and [...] in the first six months of
1996 (21). These vehicles were not delivered to Belgium
via the official importer MBBel, but were sold by German
branches/commercial agents to Belgian final consumers
or parallel dealers. This high level of parallel imports,
which MBBel openly denounced in 1996 (22), is attri-
buted by MBBel and the Belgian dealers to the following
circumstances.

In MBBel’s opinion, as expressed on 17 October 1995,
the Mercedes-Benz price strategy in Belgium, with an
index of 103 compared with the German index of 100,
was responsible for the high level of parallel trading. It
claimed that this was resulting in a price difference of
some 7 % above the parallel market in Belgium (23). Price
differences had already been regarded previously as a
cause of parallel
trading: as early as 1992 MBBel
pointed out to Mercedes-Benz that the sales planned by
Mercedes-Benz for the Belgian market could not be
achieved unless they succeeded in clearly suppressing
the grey market by adjusting their prices. MBBel assumed
that ‘this could be achieved by greater price harmonis-
ation, with a difference of only 2 % compared to
domestic prices for all makes including those with
special equipment’ (24). Apart from price differences,
other reasons for the widespread parallel trading in new
vehicles, particularly of class W 210 (new E-class), are
mentioned in the extensive correspondence between
MBBel and Mercedes-Benz, with MBBel speaking of ‘an
invasion of W 210s from Germany’. In MBBel’s opinion,
the reason for this was that various Mercedes branches
could not sell their W 124 (old E-class) models and were
offering them as a package together with new W 210s
at a discount of 30 % on the W 124 and 10 % on the
W 210. In addition, Belgian grey market dealers had a
stock of W 210s and could deliver custom-made new
vehicles within six to eight weeks, whereas the delivery
times of the official Belgian distributors were more than

( 20) File, pp. 2832, 2569; grey market Mercedes-Benz registrations

(only new cars).

( 21) File, p. 2663: Mercedes cars registered as ‘new cars’ and not

imported by MBBel.

( 22) File, p. 3031: ‘the ugly monster came back to life and represents

15 % of the Belgian market’.

(23) File, pp. 3000 et seq.: letter from MBBel to Mercedes-Benz AG of

17 October 1995.

(24) File, p. 529; note from department VP/VEV1 to Mr Rau of
Mercedes-Benz in preparation for the grey-market talks with
MBBel on 26 June 1992.

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Official Journal of the European Communities

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18 weeks (25). By April 1996, MBBel considered that the
W 210 situation had worsened still further: official
Belgian distributors were offering delivery times of six
months for this vehicle, while the parallel market dealers
could deliver vehicles with any equipment within four
weeks. They felt that explained why a total of 411
W 210s had been supplied by German distributors to
Belgium between June 1995 and the end of March
1996 (26).

vehicles sold in Germany and registered in Belgium (28).
In some cases, customers would only resell one vehicle,
while in others, they would repeatedly resell vehicles in
Belgium (29). However, some of the vehicles in question
were demonstration cars. Occasional sales to final
consumers were also identified in this research (30).

(38) The Belgian Mercedes Dealers Association also wished
to complain about the ‘harmful and parasitic effects of
the parallel market which have been experienced in
Belgium for years’. In the draft of the letter which MBBel
forwarded to Mercedes-Benz on 25 January 1993, they
stressed their disappointment at the fact that, of the
2 000 vehicles that had again been delivered to Belgium
1992, 800 had been supplied by German distributors.
Mercedes-Benz was asked to verify whether measures
had been taken within the German distribution organis-
ation to ensure the survival of
the Belgian dealer
network. The Belgian Dealers Association wrote several
letters to MBBel complaining of the large number of
grey imports and of the fact that the delivery times of
Mercedes dealers would have to be 12 months because
of small allocations, a fact which benefited the ‘hunters
of the grey market’. These delivery times, they said,
were much longer than in Germany. Moreover, parallel
importers could already ‘boast’ a new model (the Merced-
es 300 S D), which not even all Belgian dealers had
received (27).

(39)

It is to be assumed that these circumstances are also the
reason why German customers were purchasing new
vehicles and immediately reselling them in Belgium.
That
from a large
number of letters written in 1995 and 1996 about

this was happening is apparent

(40) German Mercedes branches also sold new vehicles
to Spanish final consumers. According to MBE, this
happened in 1994 in ‘enough cases’ with the knowledge
of Mercedes-Benz and on terms which the Spanish
distributors could not offer (31). New vehicles were
supplied directly to Spanish final consumers even more
in 1996, for example, an E 50 AMG was
recently:
supplied by the Munich branch (32) and Mercedes E 300
D vehicles by Mercedes-Benz agent Hirschvogel (33).

(28) File, p. 2899: memo from MBVD/VPP to VP/M1 VP of 10 Novem-
ber 1995 concerning ‘Belgium — W 210-deliveries in October
1995’; p. 2901: memo from LdB to Verkaufsst. concerning ‘Form
— vehicle deliveries, country of delivery: Belgium’; p. 2902: fax
from Mercedes-Benz in Nuremburg to Region Süd VP of
16 November 1995 concerning: ‘Vehicle deliveries to Belgium in
October 1995’; p. 2903: fax from Mercedes-Benz Region Süd to
Mercedes-Benz of 17 November 1995 concerning deliveries to
Belgium in October 1995; p. 2904: memo from the Munich
Branch to Region Süd concerning vehicle deliveries to Belgium
in October 1995; p. 2905: letter from Karl Ahrendt, Mercedes-
Benz agent, to Mercedes-Benz Region Nord of 22 November
1995; p. 2906: memo from the Bremen Branch of 27 November
1995 concerning vehicle deliveries to Belgium in October 1995,
in which it was confirmed that a vehicle had been sold to
Amsterdam in the Netherlands; p. 2907: memo from the Berlin
branch and MBVD/Region Ost of 27 November 1995 concerning
W 210 deliveries to Belgium; for further similar letters see
pp. 2909, 2910, 2913, 2914, 2915, 2916, 2919, for 1996:
memo from the Augsburg Branch to Region Süd of 29 November
1996 concerning deliveries to Belgium; p. 2930: letter from the
firm Anton Hirschvogel, Mercedes-Benz agent, to Mercedes-
Benz AG, Vertriebsorganisation Region Süd of 1 April 1996
concerning vehicle deliveries to Belgium; p. 2954: memo from
the Regensburg Branch to Region Süd of 12 March 1996 on
vehicle deliveries to Belgium in January 1996.

(29) See the vehicles which were initially sold to the firm Südfleisch
but which were then registered in Belgium: file, p. 2918: one
vehicle, p. 2931: seven vehicles; p. 2950: four vehicles, p. 2951
five vehicles; pp. 2961 et seq.: nine vehicles sold in January
1996 by Mercedes agent Auto-Henne in Munich to Südfleisch,
registered for the first time in May 1996 and which, in May
1996, also appeared in Belgium; pp. 2963 et seq.: 37 vehicles
supplied by the Munich branch to Südfleisch and which were
also delivered to Belgium in May; p. 2955: Attinger, 11 vehicles
delivered on to Belgium.

(30) File, p. 2976: fax from Region West to Mercedes-Benz AG of
10 November 1995, in which the sale of a vehicle to a Belgium
customer was confirmed; p. 2956: Memo from Region Süd on
W210 vehicle deliveries to Belgium in January/February 1996:
four vehicles were delivered to final consumers in Belgium.
(31) File, p. 1316: fax from MBE to Mercedes-Benz AG of 19 May

( 25) File, pp. 3000 et seq.: letter from MBBel to Mercedes-Benz AG of

17 October 1995.

( 26) File, p. 3032: fax from MBBel to Mercedes-Benz AG of 26 April

1996.

( 27) File, pp. 2471 et seq.: two undated letters from the Amicale des

Concessionnaires Mercedes-Benz.

1994.

(32) File, p. 1239: fax from VP/M Department to MBVD/VPP Depart-

ment in Mercedes-Benz AG of 9 October 1996.

(33) File, p. 1255: invoice from the firm Anton Hirschvogel, Mercedes-
Benz agent, to the Spanish customer in respect of a new MB
E 300 D vehicle; pp. 1257 et seq.: note from Mercedes-Benz AG,
Department VP/M2, fax from MBE to Mercedes-Benz AG, invoice
of the firm Anton Hirschvogel.

L 257/14

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Official Journal of the European Communities

25.9.2002

(41)

(42)

In a letter dated 2 September 1996 to the Spanish dealer
Itra SL (34), MBE expressed regret that the Mercedes-Benz
Berlin branch was advertising vehicles in Spain in the
newspaper El País, the largest-circulation Spanish daily,
and had even set up an ‘export service hotline’ on which
Spanish could be spoken.

In general, MBE assumes that 85 % of parallel vehicle
imports into Spain come from Germany (35). For imports
of new vehicles to Spain (see recital 52), this assumption
would mean that approximately [...] new vehicles from
Germany were subject to parallel import into Spain in
1993, approximately [...] in 1994, approximately [...] in
1995 and approximately [...] in the first 10 months of
1996.

1.4.2.2. Belgium

(43) According to the available documents, only a few
vehicles have been exported to Germany. In 1996, for
example, a Mercedes 290 TD estate car sold from
Belgium to Germany turned up at a parallel dealer’s
premises in Sörup (36). Two Mercedes 190 D cars were
exported from Belgium to Germany as early as in
1993 (37) DaimlerChrysler (38) does not rule out the
possibility that even more vehicles were supplied to
Germany.

(44) Vehicles have also been supplied from Belgium to Spain.
For example, according to its own data, the Garage
Etoile in Wavre supplied at least 10 vehicles to Spanish
final consumers in the first seven months of 1995 (39).

(45) As described, a considerable number of new vehicles
have been imported into Belgium. In this connection,
MBBel has drawn up monthly lists indicating the vehicles
subject to parallel import with the name and address of
the owner, the type, chassis number and country of
origin (40). A separate list indicates the German distribu-
tor via which a vehicle was delivered to Belgium or, in
the case of vehicles coming from other countries, the
country in question. In 1995, a total of 1 314 vehicles
were delivered, of which 599 came from Germany, 327

( 34) File, p. 1512.
( 35) File, p. 1316: fax from MBE to Mercedes-Benz AG of 19 May

1994.

( 36) File, p. 2128: Mercedes-Benz AG, Vertriebsorganisation Deutsch-
land, Gebietsleitung Vertrieb PKW, Hamburg Nord to MBVD/VP
of 6 November 1996.

( 37) File, p. 1027: fax from Mercedes-Benz to MBBel of 5 May 1993.
( 38) Point 103 of the reply to the statement of objections.
( 39) File, pp. 997 and 2879: letter from Garage de l’Etoile in Wavre
to MBBel of 11 July 1995, in which it is confirmed that the
transactions in question involved final consumers; p. 2878: fax
from MBBel to Mercedes-Benz AG of 12 July 1995; see also
p. 981: fax from MBE to Mercedes-Benz AG, forwarded to
in which enquiries are made concerning a vehicle;
MBBel,
p. 1222: memo from MBE to Mercedes-Benz AG of 28 November
1995.

( 40) For example, file, pp. 2735 et seq.

from Italy, 119 from the Netherlands, 105 from France,
97 from Luxembourg, six from Spain and two each
from Austria and Sweden (41). In the first six months of
1996, a total of 1 003 new vehicles was imported into
Belgium, of which 827 from Germany, 120 from Italy,
83 from the Netherlands, 102 from France, 45 from
Luxembourg, two from Spain and one vehicle from
Austria (42). DaimlerChrysler (43) confirms these figures
and has verified in an impressive manner the extent of
activity of some 45 unauthorised resellers operating in
Belgium and dealing in new Mercedes-Benz vehicles.

(46)

It is apparent from the available documents that new
vehicles were constantly being supplied to Belgium from
the Netherlands. In the first six months of 1996, there
were [...] cases of this happening, with [...] in 1995, [...]
in 1994, [...] in 1993 and [...] in 1992 (44).

(47) The reason for this was that prices in Belgium were 3 %

to 6 % higher than in the Netherlands (45).

1.4.2.3. Spain

(48) MBE has listed all vehicles exported abroad in 1994 and
1995, and for 1995 there is even data concerning
exports reported by dealers (78 vehicles) and exports
not reported (67 vehicles). According to the list 145
(243) vehicles were exported in 1995 (in 1994), of
which 51 (169) went to Portugal. In 1995, 76 vehicles
were also exported to the Netherlands, 10 to Austria
and two to France (46).

(49) After the checks had started on 11 December 1996, the
Spanish Mercedes dealer Louzao MBE stated in a fax of
11 December 1996 (47) that he had sold a total of eight
vehicles to Portuguese final consumers. The Spanish
Mercedes dealer Garza Automocio´ n likewise reported to
MBE in a fax of 11 December 1996 that four vehicles
had been sold to Portugal (48). At the end of the letter,
the dealer states that Mercedes-Benz does nothing to
impede such transactions.

(41) File, p. 2569: grey market Mercedes-Benz registrations (only new
cars) 1 January to 31 December 1995, Car sales division of Qui
à Qui M.B.Bel Woluwé.

(42) File, p. 2662: grey market Mercedes-Benz registrations (only new

cars) 1 January to 30 June 1996.

(43) Point 105 of the reply to the statement of objections.
(44) File, p. 2569: grey market Mercedes-Benz registrations (only new

cars) 1 January to 31 December 1995.

(45) File, pp. 3031 et seq.: fax from MBBel to Mercedes-Benz AG on

the ‘grey market’.

(46) File, p. 1447: memo from MBE on exports in 1994 and 1995;

p. 1159: fax from MBE to MBP of 23 May 1996.

(47) File, p. 1618.
(48) File, p. 1814.

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(50)

In 1995, a total of six new vehicles were further supplied
from Spain to Belgium, with 13 in 1994, and one in
both 1993 and 1992.

(51) To explain the considerable scale of parallel imports of
vehicles into Spain, MBE (49) recorded the registration
figures for the Cadiz registration district for the first nine
months of 1996. The following were registered in Cadiz:

are used in connection with such business: grey market,
parallel market and deliveries. For sales to foreign
customers from a country within the European Econ-
omic Area (EEA), the term Komm-Kunden (52) is also
used.

Total of new Mercedes car registrations:

[...]

1.5.1. THE TERM ‘GREY MARKET’

of which those sold by Spanish Mercedes dealer:

[...]

parallel imports of new Mercedes cars:

[...]

(52) According to documents found during the investi-
gations, the following numbers of new Mercedes vehicles
were sold in Spain from January 1993 to October
1996 (50):

Year

New cars sold by MBE

Parallel imports
of new cars

1993

1994

1995

1.1996-10.1996

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

(53) MBE generally assumes that 85 % of the vehicles subject
to parallel import into Spain come from Germany (51).
The documents do not indicate from which countries
the remaining vehicles were supplied.

1.5. TERMS RELEVANT TO CROSS-BORDER SALES OF MOTOR
VEHICLES

(54) This section examines the terms used in the notices to
the individual distributors or to the entire distribution
network of a Member State by the Mercedes-Benz group
to denote the sale of vehicles to customers abroad, i.e.
resellers and final consumers alike. Documents found
during the investigations reveal three different terms that

( 49) File, p. 1409: fax from MBE to Mercedes-Benz AG of 29 October

1996.

( 50) File, p. 1717: overview for parallel market.
( 51) File, p. 1316: fax from MBE to Mercedes-Benz AG of 19 May

1994.

(55) The term ‘grey market activities’ was defined in a
presentation given by Mr E. Herzog at a meeting of the
passenger car sector on 17 February 1989 (53). Mr Her-
zog observed that, ‘As we understand it, the defining
factor in grey market activities is that independent sellers
(and I deliberately use the term “seller” rather than
“trader”, as they may very well be private individuals:
many a diplomat and many a small supplier too has —
perhaps during an economic downturn — used this
method to earn himself a tidy little sum on the side), as
I was saying, that independent sellers sell vehicles abroad
outside the manufacturer’s official dealer network in
order to make a profit. The market segment served by
such sellers is the “grey market”.’ (54). He then went on
to explain why the grey market existed (differences in
prices and availability) and how big it was (around
30 000 units, including 14 000 in Italy and 8 000 in
Japan). He also alluded to the fact that, on the suppliers’
side, ‘the VOI (55) is clearly dominant with, as it happens,
also around 22 000 units per year’. Finally, making a
general assessment of sales policy, Mr Herzog stressed
that,
‘a strict ban on grey market transactions of any
kind, with the threat and application of extensive
penalties, seems to me neither practicable nor useful.
For one thing, each case would have to be proven
beyond doubt, which would generally require an effort
on the scale of a criminal investigation. Second, particu-
larly bearing mind our present situation regarding
capacity, we should be concentrating instead on a
Europe-wide fine-tuning exercise (price harmonisation).
One situation we can’t do very much about is where,
unbeknown to our organisation, individuals are actually
“front men” making intermediate purchases. In such
cases we are generally required to deliver. We can refuse
only if we are able to obtain evidence — usually after
arduous research — that the buyer is going to sell the
vehicle on. Here, data-protection rules now impose
tougher constraints on us than in the past’.

(52) File, p. 2318: memo from the DBAG Legal Department and PR/

P of 8 August 1995.

(53) File, pp. 2105 et seq.: presentation entitled ‘Zum Verständnis und
zur vertriebspolitischen Bewertung von Graumarktaktivitäten (Under-
standing grey-market activities — a sales policy perspective’).

(54) File, p. 2106.
(55) Commission note: VOI = Vertriebsorganisation Inland (domestic

sales organisation).

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(56) An internal letter from the VP/VEV1 department (56) to
Mr Rau mentions that sales to final consumers were also
discussed at the meeting on the grey market in Belgium
on 26 June 1992. Among other things, it was established
at the meeting that MBNL (57) had sold vehicles to final
consumers who were Dutch nationals living in Belgium.
It was also established that Meris, a Mercedes-Benz
dealer in Luxembourg, had sold vehicles to frontier
workers employed in Luxembourg, European officials
with two places of residence and rental firms with
registered offices in Luxembourg and Brussels (58).

(57)

In a internal memo dated 16 January 1996 (59),
Dr Schütz of Mercedes-Benz’s legal department wrote
that, on looking through the files of VP/M2, he was
‘(simply) struck by the fact that the term “grey market”
is used somewhat vaguely or that no clear distinction is
drawn between the activities of independent resellers
and those of final consumers’. However, at the end of
his memo, he stressed that, ‘in the countries of supply,
particularly Italy, the relevant circulars and instructions
do carefully distinguish between independent resellers
and final consumers’.

(58) The Commission believes that Mercedes-Benz’s failure
to distinguish clearly on all occasions between sales to
resellers and to final consumers is also evident from the
following facts. Two virtually identical handwritten
memos (60) from Mr Stolberg of the VP/EM1 department
of Mercedes-Benz to MBBel distinguish between grey
market transactions and other transactions with final
consumers. The first memo, dated 14 May 1995, calls
on MBBel to check ‘whether the parallel
import of
a vehicle into Spain may constitute a “grey market
transaction” by a Mercedes-Benz dealer in Wavre’. In the
second memo, dated 3 July 1995, MBBel is asked to
check information given in an annex to determine
‘whether these were purely tourist transactions or in fact
“grey market re-exports”. This might enable you to close
down a previously undiscovered grey-market channel’.
In both memos, the choice of words suggests that

( 56) VP/VEV denotes the sales companies in Europe within the
Directorate for Sales and operational marketing. This department
and its counterparts were responsible for directing sales; see
Daimler-Benz AG’s reply of 10 November 1998 to Question 1.5.

( 57) MBNL = Mercedes-Benz Nederland BV.
( 58) File, pp. 528 et seq., 531: documents for meeting with MBBel on

the grey market on 26 June 1992.

( 59) Memo from the legal department dated 16 January 1996 and

signed by Dr Schütz, file, p. 2309.

( 60) File, p. 3103: handwritten notes by Mr Stolberg on a translation
of a letter from MBE to MBD dated 14 May 1995, forwarded to
MBBel. Mr Stolberg forwarded this letter to Mr Uyttenhoven of
MBBel. See also p. 3107 of the file: handwritten note from
Mr Stolberg in reply to an internal letter addressed to him by
Mr Roth of VP/EM1 on 3 July 1995, which Stolberg also
forwarded to Mr Uyttenhoven of MBBel.

a distinction is being made between ‘grey market
transactions’ and other transactions, with final con-
sumers. Yet a letter from MBBel to Mr Roth of Mercedes-
Benz dated 19 July 1995 concerning the sale of a
second-hand Mercedes in Germany to a Rotary Club
member in Belgium,
i.e. a transaction with a final
consumer, describes that deal as ‘a grey import’ (61).

(59) To sum up, it can be established that the term ‘grey
market’ was sometimes used at Mercedes-Benz to denote
sales to unauthorised resellers and sometimes also used
to denote cross-border sales to final consumers. In any
event, to the extent that the term was used in the context
that is relevant here, it must be concluded from the
circumstances that Mercedes also meant the term to
cover sales to final consumers.

(60) Regarding the term ‘grey market’, DaimlerChrysler
admits that there was no consistent terminology within
the Mercedes-Benz organisation and no binding defi-
nition of the concept, which could have a wider or
narrow meaning in individual documents. The uncer-
tainty over the definition was compounded by the use
of different languages. The meaning of the term in each
individual case could be determined only from the
overall context of the documents and in the light of past
events. Thus,
the term ‘grey market’ was used to
describe sales to resellers or in classifying cross-border
transactions, where it was not known whether they
were admissible (‘white’) or inadmissible (‘black’) (62).
Moreover, the term was — most importantly — not
used in the countries of supply, but only in the countries
of receipt, i.e. where it was not known whether the
transaction was admissible or not. From a competition
angle, the important thing was what terms were used in
the country of supply.

(61) The Commission cannot agree with this last assertion.
In a letter dated 14 September 1994 (63), Mercedes-Benz
wrote that,
‘Naturally we are ready and willing to
investigate any further indications of professional grey
market transactions’, i.e. the term ‘grey market’ is used
here in the country of supply to describe sales to
independent resellers. By contrast,
in the fax from
Mercedes-Benz to MBE dated 29 July 1994 (64), the term
‘grey market import’ is used to describe two vehicle
transactions with the footballer R. The first concerns a
Mercedes 600 SEC, which was sold to him by Mercedes

(61) File, p. 3098: fax from MBBel

the VP/M1
department (Northern European Marketing) dated 19 July 1995
and headed ‘Grey import — H. Ludo Reynaert (Rotary)’.

to Mr Roth of

(62) Points 43 to 47.
(63) Annex to point 48/2 of the reply to the statement of objections

and file, pp. 1301 et seq.

(64) Annex to point 48/2 of the reply to the statement of objections

and file, p. 1305.

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in a company deal, while the second concerns a second-
hand SL 600 sold on to the footballer by a German
customer who had used it at his second residence in
Spain. These documents confirm that the term ‘grey
market’ was also used by Mercedes-Benz itself in the
countries of supply (the Mercedes 600 SEC was sold in
Germany to a Spanish customer) to denote cross-border
transactions with final consumers.

(63)

It can therefore be established that the term ‘delivery’
covers all kinds of cross-border transactions, including
sales to foreign final consumers from an EEA country,
who are known as Komm-Kunde (see recital 68).

(64)

In its reply to the statement of objections (70), Daim-
lerChrysler states that this term was used indiscrimi-
nately for all forms of cross-border trade.

1.5.2. THE TERM ‘DELIVERIES’

(62)

In many documents cross-border sales of vehicles are
described as Einlieferungen (deliveries) or Fahrzeugeinlie-
ferungen (vehicle deliveries) (65) to the country of import.
This term is used in subsequent inquiries into the
whereabouts of vehicles which were delivered in Germ-
any or in other Member States to foreign final con-
sumers, unauthorised resellers or domestic final con-
sumers who sold them on abroad (66). The general
report on ‘Vehicle deliveries to Belgium — Situation at
September 1995’ (67) indicates — for each individual
German region/branch — how many new vehicles and
demonstration vehicles were delivered to Komm-Kunde
or the ‘grey market’ in the first nine months of 1995.
The same terminology was used in a memo from the
Southern Region VP to the MBVD (68)/VP department of
Mercedes-Benz dated 23 April 1996. The memo —
headed ‘W 210 vehicle deliveries to Belgium in January
and February 1996’ — points out that two thirds of
vehicles delivered from the Southern Region to Belgium
are sold on by customers and around one third are
former demonstration vehicles. The memo states further
that,
‘In total only four vehicles were sold direct to
Komm-Kunde in Belgium’ (69).

( 65) File, p. 3107:

internal letter from MBD VP/EM1 dated 3 July
1995 concerning deliveries of vehicles
to non-European
countries; p. 2968: fax from MBVD/VP to Mercedes-Benz AG
Western Region dated 30 November 1995 concerning deliveries
to Belgium; p. 2929: letter dated 29 March 1996 from Mercedes-
Benz AG, Nürnberg Area Management
to the firm Anton
Hirschvogel concerning its deliveries to Belgium in February
1996; p. 2930: memo dated 29 March 1996 from GBL-VP to VP
concerning vehicle deliveries to Belgium in February 1996;
memos from Freiburg branch to Southern Region/VP dated
18 March 1996 and 27 March 1996 concerning vehicle deliveries
to Belgium; p. 2948: Memo dated 1 April 1996 from Würzburg
branch to Ms Ohlert, Southern Region/VP concerning reports of
vehicle deliveries to Belgium; p. 2951: Memo from Munich
branch to Southern Region VP concerning vehicle deliveries to
Belgium in January 1996; p. 2961: fax from Mercedes-Benz AG’s
principal agent in Munich, Auto-Henne, to Southern Region
dated 19 July 1996 concerning vehicle deliveries to Belgium in
May 1996.

( 66) File, p. 2956: memo dated 23 April 1996 from Southern Region

to Mercedes-Benz AG, MBVD/VP department.

( 67) File, p. 434: vehicle deliveries to Belgium — September 1995.
( 68) MBVD = Mercedes-Benz Vertriebsorganisation Deutschland (sales
organisation in Germany); see reply from Daimler-Benz AG
dated 10 November 1998 to question 1.5.

( 69) File, pp. 2982 et seq.: memo dated 15 March 1996 from MBVD/
RNP department, Mercedes-Benz AG to all VLPs via branches
and GBL-P of Northern Region.

1.5.3.

PARALLEL IMPORTS

(65) The term ‘parallel imports’ is used for example in an
information memo on the Commission’s proceedings in
Case IV/35.733 — VW, in which one of the points at
issue was that Volkswagen and Audi had forbidden
their Italian dealers from selling new vehicles to final
consumers from other Member States. The term was
also used in a letter from MBBel to MBF (71) in connection
with the sale of vehicles by French dealers to Belgian
customers (72).

(66) Thus, the term ‘parallel imports’ was used by firms in
the Mercedes-Benz group at least partly to describe
cross-border transactions with final consumers.

(67)

In its reply to the statement of objections (73), Daim-
lerChrysler states that this term was used indiscrimi-
nately for all forms of cross-border trade.

1.5.4. KOMM-KUNDEN

(68) An internal note dated 8 August 1995 from the legal
department of Daimler-Benz to the PR/P department (74)
suggests a text for an ‘official reply’ stating that Komm-
Kunde are foreign customers from EEA countries who
turn to a dealer on their own initiative. A letter from
Mercedes-Benz to MBNL dated 23 October 1992 (75)
and circular No 76/92 dated 9 November 1992 (76)
show that the term ‘Komm-Kunde’ is used in connection
with cross-border sales to final consumers from another
Member State of the Community.

(70) Point 48.
(71) MBF = Mercedes-Benz France.
(72) File, p. 3052: letter from MBBel to Mercedes-Benz France dated

21 June 1996.

(73) Point 48.
(74) File, p. 2318: memo from Daimler-Benz AG’s legal department

to Dr. Riecks, PR/P department dated 8 August 1995.

(75) File, pp. 2314 and 2315: letter from Mercedes Benz to MBNL

dated 23 October 1992.
(76) File, pp. 2312 and 2313.

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1.5.5.

SUMMARY

(69)

It can therefore be established that, within the Mercedes-
Benz group, the terms ‘deliveries’ and ‘parallel imports’
were used to describe sales of vehicles to all kinds of
foreign customers, i.e. sales to unauthorised resellers not
belonging to the distribution network, but also sales to
final consumers. The term ‘grey market’ also had this
wide meaning. By contrast, the term ‘Komm-Kunde’ was
clearly used only in connection with sales of vehicles to
final consumers from another Member State of the
Community or the EEA established outside the contract
territory.

1.6. THE ANTI-COMPETITIVE MEASURES IN DETAIL

1.6.1.

EXPORT RESTRICTIONS (GERMANY)

1.6.1.1. Instruction to German distributors not to sell

to customers outside their contract territory

(70)

It is apparent from documents in the Commission’s
possession that Mercedes-Benz has for a long time been
taking steps to restrict the parallel trade.

(71) A memo dated 28 October 1985 concerning ‘right-hand
drive car sales in Germany’ (77), sent by the VOI/VNM
department in reply to a note from the legal department,
states that:

‘Now that we are not allowed to stop our contracting
partners from arranging the sale of right-hand drive
vehicles to British Komm-Kunden, we should also
refrain from imposing any official ban on such deals
on our branches. However, we should make it clear
to both branches and contracting partners that they
are entitled, but not obliged, to deal in or sell right-
hand drive vehicles. We should also make it clear
that, ultimately, it is in the interests of every branch
and every contracting partner to use their available
quotas exclusively to serve customers and interested
parties from their own territory. Special emphasis
should be placed here on the following points:

— quality of service,

— workshop capacity, and

— market penetration.

( 77) File, p. 616.

If the legal department has no objections, these
instructions should be given in writing. Otherwise
the information should be passed on at the forth-
coming meetings for branch managers, sales man-
agers and district managers.

Klein

Dr Fahr’

(72) According to the minutes of an MBVD (78) department
meeting on 28 July 1995 (79) under the heading ‘Trans-
actions involving demonstration vehicles’, it was estab-
lished that ‘clear rules exist [for transactions involving
demonstration vehicles] including the requirement that
vehicles may be sold before the end of their useful life
only in exceptional cases and then only in the firm’s
own territory. This rule must be observed more strictly.
In exceptional cases the rules for new vehicle trans-
actions apply.’ These minutes prove that, even before
28 July 1995, there were clear rules for sales in Germany
under which demonstration vehicles could be sold only
after the end of their useful life and that, in exceptional
cases, new vehicles too could only be sold in the firm’s
own contract territory.

(73) The following facts confirm that, at least in individual
cases, Mercedes-Benz had directly impeded the sale of
new vehicles to final consumers from other Member
States already at an earlier date: in a fax from Mercedes-
Benz, Western Region, dated 10 November 1995, the
MBVD/VP department of Mercedes-Benz was informed
of the sale of a vehicle by Hess, the Mercedes-Benz
i.e. a final
agent in Trier, to a Belgian Komm-Kunde,
consumer (80). The fax includes the following passage:
‘Hess is requested by the area management to refrain
from such actions in future’.

(74) Another letter which is clearly directed against the sale
of new vehicles to foreign customers is that from
Mercedes-Benz, Vertriebsorganisation Deutschland,
Western Region, to Hess (the same agent in Trier) sent
on 17 November 1995 (81). The letter reads as follows:

‘Transactions with Belgium

Dears Sirs,

We have been informed by central office that in
September of this year your company supplied an
E 300 D (W 210) vehicle to a Belgian national
resident in Belgium.

(78) MBVD = Mercedes-Benz Vertriebsorganisation Deutschland (Mer-

cedes-Benz Sales Organisation Germany).

(79) File, p. 377: minutes of meeting of 28 July 1995 — Mercedes-

Benz AG, MBVD/VPP department.

(80) File, p. 2976: fax from Mercedes-Benz AG, MBVD/VP department
to Mercedes-Benz AG, Western Region, dated 10 November
1995.

(81) File, p. 2909.

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The order number concerned was 05 231 05231.

(77)

We strongly disagree with your view, as already
expressed by Mr Premm on the telephone, that this
was a transaction with a Komm-Kunde.

The term Komm-Kunde is clearly defined for the
purposes of MBVD, but not for other countries. As
in the past, the tourist rules should be applied for
new car purchases involving persons from other
countries.

We urgently request that you follow this procedure.

We are particularly surprised that you should act in
this way with a W 210, as you have always argued
that you had too few vehicles for the customers in
your territory.

Yours faithfully,

Mercedes-Benz Aktiengesellschaft

Western Region — Mannheim Office

Niedorff

Scheele’

(75) The instruction contained in this letter to apply the
instead of the Komm-Kunden rules laid
‘tourist rules’
down for sales to EU customers has the effect of raising
a serious practical obstacle to the sale of vehicles to EU
customers. A 1985 circular from Mercedes-Benz to the
entire German sales organisation (82) states that a tourist
must submit the order for a new car in person and pick
up the new car in person. Furthermore, in such cases,
the agent or branch carrying out the sale must pay a
customer service commission of 3 % (83). By contrast,
EU customers are covered by the much more lenient
Komm-Kunden arrangements (see recital 68), which allow
them to order a vehicle via an agent who has written
authorisation and to have it picked up by that agent.
Moreover, in this case the agent or branch carrying out
the sale need not pay any customer service commission
when the vehicle is brought into the contract territory
of another dealer within six months of the sale.

In a fax from Mercedes-Benz, Western Region, dated
24 November 1995, MBVD/VP was told with respect to
another new car sale by Hess to a Belgian: ‘This case
clearly involves inappropriate behaviour on the part of
Hess, the agent in Trier. The vehicle was delivered direct
to a Belgian. You will find attached a letter from Western
Region to the sales manager of Hess, clearly and
unambiguously reminding his company once again of
the rules’ (85). The annex was not found during the
investigations. A similar warning letter from Western
Region to Hess dated 17 November 1995 is mentioned
at recital 74, although it concerns a different transaction
involving a Belgian customer.

(78) On 6 February 1996 Mercedes-Benz proceeded to urge
all German distributors without exception to refrain
from selling outside their contract territory. In a memo
from Mercedes-Benz’s MBVD/VP department, written by
Mr Panka and Dr Fahr on 6 February 1996 and addressed
to heads of branches, owners/managing directors, agents
and principal agents, the entire German distribution
network was informed of the following (86):

‘Dear Sir/Madam,

Since its introduction on the market, demand for the
W 210 series has been high and stable. In 1995 we
received 390 orders for the new E-class per working
day. This year we have started well — with
326 orders per working day.

The worldwide picture is similar. We shall therefore
be suffering from a clear shortfall in production,
particularly in the first half of 1996, and there may
be considerable problems with delivery times.

In these circumstances we shall have no sympathy
for retail firms which, in selling their allocation of
the W 210 series, fail to concentrate on their own
territory and seek to attract customers not through
the service they provide but by engaging in compe-
tition on prices and conditions.

(76)

In its reply to the statement of objections (84), Daim-
lerChrysler admitted that the instruction to use the
tourist rules rather than the Komm-Kunde rules for the
sale of vehicles to final consumers from other Member
States of the Community was inappropriate.

We would therefore ask you, in your day-to-day
transactions, to consider the prices laid down in the
target agreements for 1996 as the mandatory basis
for your decisions in individual cases.

( 82) This is summarised in Daimler-Benz AG circular No 52/85 of
12 September 1985, which came into force from 1 July 1985;
see file, pp. 582 et seq.

( 83) Regarding the amount of the commission, see file, p. 671.
( 84) Point 62.

(85) File, p. 2911; see also p. 2966.
(86) File, p. 395 et seq.

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We are convinced that, by adhering strictly to this
policy, we can effectively combat internal compe-
tition not only in the W 210, but also in other series.
We therefore count on your unconditional support.

(81)

With respect to the W 210 series, we would also like
to draw your attention to the notable increase in
reselling activities. Already last year we detected
grey-market exports, particularly bound for Belgium
and Turkey, which caused appreciable problems for
our sales organisation there, especially as they have
very limited quotas of vehicles in the W 210 series.
The situation has not changed this year. We therefore
ask you to do your utmost to put a complete stop
to reselling transactions, particularly involving the
W 210 series. In the event of any clear breaches of
this ban on supplying vehicles to resellers, we reserve
the right to reduce the W 210 quotas of the retail
firms involved by the number of units that are
delivered abroad via resellers which could have been
recognised as such had the firms properly discharged
their duty of care.

Nothing would please us more than to see all firms
receive their full production allocations. But we shall
not hesitate to withhold vehicles in the W 210
series, should we discover that an allocation is not
warranted by the absorption capacity of a specific
territory. It is entirely up to you to prevent this
happening.

Yours faithfully,

Mercedes Benz Aktiengesellschaft

Panka

Dr Fahr’

(79) DaimlerChrysler points out that the first five paragraphs
of this memo, which are directed solely at the German
sales organisation, relate only to internal German com-
petition and that only the sixth paragraph relates to the
activities of resellers, inter alia, in Belgium. It claims that
the instruction in the last paragraph to stop such sales
and the threat to withhold vehicles in the W 210 series
when production allocations are not warranted by the
absorption capacity of individual areas, relate to the
activities of resellers and cannot therefore be the subject
of an objection (87).

(80) With regard to DaimlerChrysler’s claims that the text in
the sixth paragraph (‘With respect to ... duty of care.’)
relates to transactions with resellers, the Commission
does not contradict this (see paragraph 82, fourth indent
of the statement of objections).

( 87) Point 59 of the reply to the statement of objections.

In other respects, however, the Commission cannot
agree with DaimlerChrysler’s interpretation. The second
paragraph of the memo refers to ‘worldwide’ demand
for the W 210 and not to sales trends in Germany. The
third paragraph follows on from this statement (‘In these
circumstances we shall have no sympathy ...’) and calls
on distribution partners in Germany to concentrate on
their own areas and not to entice customers from outside
their contract territory by offering more favourable
conditions. The fourth paragraph too refers to the fact
that the target agreements (88), i.e. agreements on the
vehicles to be marketed by branches in their own
territory, should serve as a reference for day-to-day
transactions. As stated in the fifth paragraph,
this
would make it possible to ‘combat [effectively] internal
competition not only in the W 210, but also in other
series’. Thus, in the first five paragraphs of the memo,
German distribution partners are referred to their own
contract territory. The inevitable consequence of this is
that
they can also be encouraged to sell vehicles
belonging not only to the W 210 series, but also to
other series exclusively to customers from their own
contract territory, and not to customers from other
contract territories in Germany or abroad. The document
of 26 February 1996 cited in recital 84 confirms this.

(82) The seventh paragraph of the memo cannot in any way
refer solely to the previous, sixth paragraph criticising
transactions with resellers, which has not prompted any
objections from the Commission.

is found that

(83) This is because, in the last paragraph, the threat of
withholding W 210s is made in general terms for cases
where it
the absorption capacity of
individual territories does not warrant the production
allocation of W 210s. In terms of both wording and
meaning, this paragraph does not refer solely to the
transactions with resellers mentioned in the sixth para-
graph, but to all the statements that precede it, i.e. also
to paragraphs one to five, which call on distribution
partners to concentrate on their own contract territory
and to sell their vehicle allocation for all series there. In
this respect the memo contains at the very least an
instruction to distribution partners to avoid a reduction
in deliveries of new vehicles in the W 210 series in their
contract territory, i.e. not to sell them to customers who
do not reside in or are not established in their contract
territory. The document dealt with below, which refers
expressly to the memo of 6 February 1996 described in
recital 78, confirms the Commission’s interpretation.

(88) In reply 2.3 to the Commission’s request

for information,
DaimlerChrysler stated on 10 November 1998 that
target
agreements existed only in relation to branches. No central
targets were imposed on agents, although agents, who are
required systematically to exploit their own contractual territory,
taking Mercedes-Benz’s interests into account, are also included
in distribution and production plans.

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(84) At the LVP (89) meeting on 26 February 1996, attention
was once again drawn to the importance of abiding by
the memo of 6 February 1996. Under item 4(c) of the
minutes of the meeting (Deliveries to Belgium) the
following statement is recorded:

(87)

‘Mr Bruhn distributed the list of deliveries to Belgium
in January 1996 (over 100 W 210s) and spoke about
the plan to give MB Bel 200 W 210s to cut
delivery times. If the reductions were carried out, the
breakdown by region would be determined by MB
Bel. Each region would then break the cuts down
further by individual branches.

Attention was once again explicitly drawn to the
need to comply with the memo from Mr Panka and
Dr Fahr.’ (90).

(85) As described at recital 63, the term ‘delivery’ covers all
including sales to final
kinds of cross-border sales,
consumers. All passenger car sales managers (VLPs) and
passenger car area managers (GBL-Ps) in the Northern
Region — with branches in Bielefeld, Braunschweig,
Bremen, Dortmund, Emden, Hamburg, Hannover, Kas-
sel, Kiel and Lübeck — were informed in an annex to a
memo dated 15 March 1996 from the MBVD/RNP
department (title of annex — ‘Grey market registrations
(new cars) — Deliveries to Belgium at 2/96’) (91) that,
once again, a total of 23 vehicles were delivered to
Belgium in January and February 1996. The annex goes
on to state that:

‘Once again we call on you urgently to do everything
in your power to prevent such deliveries. If evidence
is found that branches in the Northern Region are
responsible for any future deliveries, such infringe-
ments will be punished accordingly.’

(86) Although the memo was addressed only to branches in
the Northern Region, the wording suggests that the aim
was not just to prevent branches dealing with Belgium
— an internal company matter and hence not a valid
reason for objections under restrictive practices law.
Instead, the expression ‘If ... branches in the Northern
Region are responsible’ suggests that the ban should also
extend to transactions conducted by contracting partners
or agents with Belgian customers of any kind, i.e. also
with Belgian final consumers.

( 89) LVP = Leiter Vertrieb Personenwagen (passenger car sales managers).
( 90) File, p. 3534
( 91) File, p. 2982.

It is possible for branches to take such action, since they
check offers to customers for the purchase of new cars
— which must be passed on to them by the contracting
partners/agents — and, where appropriate, confirm
them by sending the purchaser an order confir-
mation (92). The memo also targets these order confir-
mations by branches, thereby ensuring that branches do
not confirm orders from foreign final consumers (known
as Komm-Kunden) submitted by agents.

(88) This is not contested by DaimlerChrysler in the reply to
the statement of objections (93). DaimlerChrysler claims,
however, that the term ‘deliveries’ used indiscriminately
in both documents refers only to sales to resellers and
that the memo to branches in the Northern Region
relates only to sales to Belgian resellers. These branches
are said to have supplied Belgian resellers on a large
scale. There was no reason for any measures whatever
against final consumers.

(89) The Commission would point out here that, at the LVP
meeting on 26 February 1996, reference was made to the
memo of 6 February 1996 to the German distribution
network (see recital 84). Indeed,
‘attention was once
again explicitly drawn to the need to comply with [that]
memo’, which, as pointed out above (recital 81), relates
to cross-border transactions of any kind. The message
conveyed in the memo of 6 February 1996 was therefore
reinforced by the instructions given on 26 February
1996.

(90) The instruction in the memo of 15 March 1996 to
‘prevent deliveries’ to Belgium also means that all types
of
transactions with a foreign country were to be
stopped. The question of whether or not there were
substantive reasons for such an instruction is irrelevant
to the interpretation of the content of such a memo,
which was addressed to a broad circle of recipients, who
were not necessarily familiar with the background. Nor
did the memo contain any allusion to that background
or explain clearly that deliveries to Belgium only meant
sales to independent resellers.

(92) File, p. 2954: memo from the Regensburg branch to Southern
Region of 12 March 1996 concerning vehicle deliveries to
Belgium, last paragraph. See also in this connection the corre-
spondence between Mercedes-Benz and German branches,
according to which only branches can determine which cus-
tomers are supplied with a particular vehicle, of which the order
number is known. If Mercedes-Benz were aware of the names
of customers, because it had confirmed their orders, such
investigations by the branches would be pointless. See also for
example the letters from branches (case file pp. 2954, 2955, 2960
et seq., 2963, 2965, 2968, 2980); and internal correspondence
between Mercedes-Benz and branches or regions on the identity
of vehicle buyers.

(93) Point 60 of the reply to the statement of objections.

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(91) The Commission considers that a memo advising against
the supply of independent resellers must be clearly and
unambiguously worded. Only then can its recipients
establish immediately and with the requisite clarity what
they must cease to do and what is still permitted. The
Commission notes that DaimlerChrysler itself admits (94)
that it cannot be ruled out that measures directed against
sales to resellers were worded in a way that ‘overstepped
the mark’ and, with hindsight at least, could be construed
as covering admissible sales to final consumers.

(92)

It is apparent, moreover, from the abovementioned
documents that Mercedes-Benz repeatedly reinforced
these instructions to German agents directed against
parallel exports by advising the German distribution
network,
including agents, to avoid ‘internal compe-
tition’ between distributors as much as possible.

Thus in the memo — reproduced in its entirety above
(recital 78) — of 6 February 1996 from Mercedes-Benz’s
MBVD/VP department to heads of branches, owners/
managing directors, agents and principal agents (95), the
addressees were informed that there would be ‘no
sympathy for retail firms which ... fail to concentrate on
their own territory and seek to attract customers not
through the service they provide but by engaging in
competition on prices and conditions.’ The memo goes
on to say: ‘We are convinced that, by adhering strictly to
this policy, we can effectively combat internal compe-
tition not only in the W 210, but also in other series.
We therefore count on your unconditional support.’

(93) The rule, already mentioned above in recital 72, on
transactions involving demonstration vehicles is referred
to in a letter dated 26 June 1996 from BVMB eV (the
Federal Association of Mercedes-Benz Agents) (96) to
Mercedes-Benz, which mentions the sale of an S 500
demonstration vehicle by the Regensburg branch to a
customer from the contract territory of a Mercedes agent
at a 31,5 % discount (apparently discounts of up to 38 %
are granted in comparable cases). BVMB argues that such
discounts restrict or rule out the possibility of agents
using S-class vehicles as company or demonstration

( 94) Point 27 of the reply to the statement of objections.
( 95) File, p. 395.
( 96) File, pp. 409 et seq.:

letter from the Federal Association of
Mercedes-Benz Agents (Bundesverband der Vertreter der Merced-
es-Benz AG eV) to Mercedes-Benz AG dated 26 June 1996
concerning ‘Internal competition — Offer/delivery of new Mer-
cedes-Benz cars to unauthorised resellers’. The passages quoted
are concerned with internal competition. Only the last para-
graph of the letter relates to an offer of a new car to a second-
hand car dealer by Regensburg branch at an extremely large
discount.

territory.

cars. This also reduces their scope for concluding deals
in their own contract
In the interests of
maximum geographical coverage of the S-class and the
safeguarding of sales as a result, Mercedes-Benz is asked
‘to take specific action to ensure compliance with the
agreed rules in order to thwart internal competition in
the retail organisation as a whole.’

The letter adds:

‘Once again we would stress that the agents’ com-
mittee has always supported measures to curb
internal competition and appropriate steps against
retail firms, whether they be branches or agents,
which pursue other aims and in so doing undermine
exclusive marketing rights by engaging in aggressive
competition.’

(94)

In the reply from Mercedes-Benz dated 22 July 1996 (97),
BVMB was informed that the sale of demonstration
vehicles on attractive or excessively attractive terms was
allowed only in individual cases and must be confined
to an agent’s own territory: ‘Otherwise there will indeed
be internal competition, which we firmly reject and
oppose as much as you do. We believe we have already
proven this on several occasions in the past.’

(95)

that

In its reply to the statement of objections (98), Daim-
lerChrysler claims
the restrictions mentioned
referred only to domestic sales, not to sales abroad and
that, consequently, the facts in question are not relevant
to the export restrictions being investigated by the
Commission.

(96) The Commission cannot agree with this view:

the
instructions to agents to sell the vehicles in question
only in their own contract territory are designed to
prevent all customers whose place of residence lies
outside the agent’s contract
territory — including,
therefore, foreign customers — from acquiring such
advantageously priced vehicles; that is to say, Mercedes-
Benz wishes to avoid a situation where Mercedes
customers are induced by attractive prices and con-
ditions to purchase a vehicle from a distributor other
than that in whose contract territory they reside. As is
apparent from the wording of Mercedes-Benz’s reply of
22 July 1996, the ‘internal’ competition was duly rejected
and combated, as was already alluded to, moreover, in
the fifth paragraph of the memo of 6 February 1996 (99).

(97)

In order to emphasise the above instructions to German
distributors, Mercedes-Benz also reduced, or at least
threatened to reduce, vehicle deliveries to German
distributors, as is apparent from the following:

(97) File, pp. 404 et seq.
(98) Point 68.
(99) See recital 78.

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(98) The memo from Mercedes-Benz, MBVD department,
dated 5 March 1996 (100) to all regions and car sales
managers runs:

‘W 210 cuts

for MB Belgium

As agreed at the LVP meeting on 26 February 96,
allocations of series W 210 to a number of branches
are being cut.

This is because of deliveries of vehicles to Belgium
in January.

The attached document gives an overview of the
cuts for June and July.

Unless deliveries to Belgium are reduced, we will
extend this measure to the new series.’

(99)

In its reply to the statement of objections, DaimlerChr-
ysler stated that this memo was addressed only to the
branches, which raised no legal problems (101). It asserted
that the deliveries to Belgium were almost exclusively
sales to unauthorised resellers and that cuts were applied
only to branches that had done business with resellers.
It denied having taken measures against agents, as the
Commission asserts in paragraph 114 of the statement
of objections.

(100) In response the Commission would point out that the
Regensburg branch, as already stated in paragraph 102
of the statement of objections, informed the Southern
Region in a memo dated 12 March 1996 that a vehicle
that had arrived in Belgium had been sold on by a
German customer. This customer had never previously
sold on a vehicle. The branch therefore contested the
cut (102). This document clearly shows that Mercedes-
Benz made general and sweeping cuts in the allocations
of new vehicles to branches on the basis of exports to
Belgium without clearing up the details in advance,
rather than only in cases where new vehicles had been
proved to have been sold on to resellers.

(101) DaimlerChrysler’s assertion that measures had not been
taken against agents (103) is not valid. In view of the
interests involved it is inconceivable that foreign sales
lead only to reductions of supplies at the branches and
not also at agents. The following documents confirm
this. In documents obtained during the investigations,
the principal agents in Munich (Auto Henne) and
Karlsruhe (Schönperlen) were also described as ‘branches’

( 100) File, p. 2953.
( 101) Point 64 of the reply to the statement of objections.
( 102) File, p. 2954.
( 103) End of point 64 of the reply to the statement of objections.

the order numbers of

that had delivered vehicles to Belgium (104). Secondly, a
comparison of
the vehicles
delivered to Belgium by the agent Hirschvogel in Straub-
ing (105) with the lists drawn up by MBBel shows that
the vehicles delivered by the agents are attributed by
MBBel on the basis of the order numbers to the branches,
even if a vehicle sale was negotiated by an agent (106).
the handwritten note from Mr Bruhn dated
Lastly,
4 March 1996 (107) indicates that 200 additional W 210
vehicles were to be delivered to Belgium, and that they
would be deducted from the allocations for the branches
or agents: ‘Cuts agreed with the LVPs must be applied to
branches/agents that deliver to Belgium!’. All this serves
to refute DaimlerChrysler’s objection that only the
allocation to the branches, but not to the agents, was to
be cut.

1.6.1.2. Instruction to agents to require a 15 % deposit

in cases of parallel exports

(102) The instructions to agents to require in cases of parallel
exports, i.e. business with Komm-Kunden, a 15 % deposit
is also a measure which makes parallel exporting more
difficult.

(103) It can be seen from Mercedes-Benz circular No 52/
85 (108) (Effects on the domestic sales structure) on the
EC block exemption Regulation, dated 12 September
1985 and sent, among others, to the principal agents
and agents and to the authorised workshops, that, in
cases of sales to Komm-Kunden from the Community or
the EEA, a deposit of 15 % of the purchase price was to
be required. This applies to nearly all transactions with
Komm-Kunden, as can be seen from the circular, where it
is stated:

‘...

In the case of EC customers, in accordance with the
new agency contracts and in conformity with the
provisions of the EC block exemption Regulation
the following rules apply:

...

...

(104) File, pp. 2970, 3034, 3058 where under the heading ‘branches’
two principal agents in Germany are also listed; also p. 2929,
where the order numbers of four vehicles are listed with the
number xx 203 xxxx. In the overviews of vehicles delivered to
Belgium on p. 2984 of the file, these orders were attributed to
the Regensburg branch (see first four vehicles on p. 2984),
although these four new vehicles were sold via the Mercedes
agent Hirschvogel
in Straubing. See also the overview on
p. 2918.
(105) File, p. 2929.
(106) See, for example, overview in file, p. 2918.
(107) File, p. 2912.
(108) File, pp. 582, 585 and 2088.

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Deposits for business with EC customers

1.6.2. RESTRICTIONS ON SUPPLY TO LEASING COM-

PANIES (GERMANY AND SPAIN)

As was previously customary in tourist transactions
worldwide, we think that a deposit should be
required in the following cases — including from EC
customers.

(105) Article 2(1)(d) of Mercedes-Benz’s German agency agree-
ment in the July 1987 version (110) contains the follow-
ing rules on the procurement of vehicles for leasing
companies (111). It states:

1. Orders of non-domestic specification vehicles,
on account of the difficulty of selling the vehicle
at home if it is not purchased by the customer.

2. Multiple orders by an EC customer for his own

commercial use.

3.

For vehicles with extensive special fittings, as in
the event of non-purchase, a discount might
have to be granted on resale. This corresponds
to established practice for domestic customers.

4. We also think a deposit should be required
from EC customers who order vehicles in
domestic specifications. This is because it is
necessary to have evidence of a foreign cus-
In
serious
tomer’s
in view of his residence abroad,
addition,
the financial risk is higher if,
for example,
difficulties arise with the purchase of the vehicle
and its payment such as may entail more
extensive processing for us and the possibility
of proceedings for collection of the debt.

intention to purchase.

In all of the above cases, a deposit of 15 % of the
purchase price must be required (corresponding to
the fixed amount for non-purchase in the terms of
sale for new vehicles).

...

We would ask you to inform all your sales staff of
the new rules in full.
If you have any further
questions, please contact us.’

(104) DaimlerChrysler confirms the accuracy of the comments
in recital 103 on the content of the circular (109).

‘The agent is not authorised to procure business with

...

(d)

leasing companies, except in the following
circumstances:

— the vehicle is intended for the leasing

company’s own use,

— the vehicle is for a lessee (final consumer)

within the contract territory,

— a purchase contract negotiated by the
agent with a final consumer within the
contract territory is subsequently changed
to a leasing contract,

— the lessee contacted the branch/agent on

his own initiative.’

(106) On 6 August 1996 the Mercedes-Benz MBVD/VP depart-
ment sent a memo to the branch heads and all agent
owners and managing directors regarding outside leasing
companies (112). These are leasing companies which are
independent of the Daimler-Benz group. The memo
runs:

‘Dear Sirs,

Outside leasing companies

We are unfortunately increasingly finding that out-
side leasing companies are making leasing offers to
Mercedes-Benz customers and potential buyers that
include discounts even in individual transactions,
which we would not be prepared to grant in the
respective cases. We have evidence and specific
examples of
leasing offers that are granted on
condition that the customer obtain the vehicle from
the leasing company and not from his distribution
intermediary.

( 109) Points 73 et seq. of the reply to the statement of objections.

(110) File, p. 1099.
(111) File, p. 1099 (Mercedes-Benz AG’s agency agreement); file,

p. 3360 (Daimler-Benz AG’s agency agreement).

(112) File, pp. 2882 et seq.

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The attractiveness of the outside leasing company’s
offer is therefore not derived from its being granted
on terms agreed between intermediary and customer
or from the fact
that high residual values and
low own margins confer advantages over leasing
companies belonging to MB or its agents. Rather, it
derives from the fact that outside leasing companies
acquire stocks of vehicles or have general supply
agreements with intermediaries belonging to our
organisation, under which corresponding discounts
are also granted.

We would remind you that supplies to leasing
companies are permitted only in the following cases:

— the vehicle is intended for the leasing company’s

own use,

— the vehicle is for a lessee (final consumer)

within the contract territory,

— a purchase contract concluded on the instruc-
tions of a branch or negotiated by an agent
with a final consumer within the contract
territory is subsequently changed to a leasing
contract,

— the lessee contacted the branch/agent on his

own initiative.

In cases where these conditions are not met, we
will deduct
the branch’s or agent’s full vehicle
commission and reserve the right to take action at a
personal level or under contract law.

We are sure that you share our basic position and
will unreservedly support us in implementing it in
the market.’

(107) The Spanish dealer agreement has also contained at least
since 1 October 1996 a corresponding rule on the sale
of
at
to
vehicles
Article 4(d) (113).

companies,

outside

leasing

(108) In the new version of Daimler-Benz AG’s agency agree-
ment (July 1997 version), these rules are also set out,
albeit in an expanded form: the agent may also negotiate
the sale of a new vehicle to a leasing company in the
following case:

‘— the leasing company contacted an agent on
behalf of a specific final consumer on its own
initiative.’

( 113) File, p. 1748.

(109) The

principal

agency

agreement

contains,

in

Article 2(1)(d), a similar set of rules(114).

(110) It should be pointed out first of all that these contractual
provisions on the supplying of leasing companies do
not take account of whether under the leasing contracts
used by the leasing company a leased vehicle may be
acquired by the lessee immediately or only at the end of
the leasing contract.

(111) The rules on the supplying of leasing companies mean,
inter alia, that there can be no supplying of such
companies with ‘stocks’ of vehicles. They thus prevent
leasing companies from offering at short notice to a
customer who needs a leased vehicle a vehicle which has
already been ordered (and which may or may not have
already been delivered).

(112) These rules, to which the memo of 6 August 1996
expressly refers, mean moreover that leasing companies
do not receive quantity discounts because it is not they
but the lessee that Mercedes-Benz regards as the final
consumer. The quantity discount is accordingly deter-
mined by the number of vehicles needed by the individ-
ual lessee, which is considerably smaller than the number
of vehicles which a leasing company acquires from
Mercedes-Benz in the course of a single transaction.

1.6.3.

SETTING SALES PRICES IN BELGIUM

(113) On 20 April 1995 nine members of

the Belgian
Association of Mercedes-Benz Dealers (Amicale des
Concessionnaires Mercedes-Benz) met with the MBBel
management, whose representatives included Dr Pfahls,
Managing Director/Chairman, Mr Uyttenhoven, Director
for passenger cars and eight other members of the MBBel
management (115). At the meeting, ‘action against price
the dealers present
slashing’ was discussed. One of
reported that this action had improved relations between
the dealers, although another complained about the
price slashing practised by the Mercedes branches in
Brussels. As a result of the discussion, it was agreed that
an external agency would carry out test purchases (‘ghost
shopping’) in order to check the level of discounts for
the W 210. If this should reveal that discounts of more
than 3 % were being granted, the vehicle allocation for
the rest of 1995 would be cut (116).

(114) File, p. 3411.
(115) File, pp. 2449 et seq.
(116) The original French states:
‘Action anti-bradage
Monsieur Kalscheuer estime que les relations entre concessionnaires se
sont améliorées grâce à cette action.
Monsieur Goosens accuse les succursales de Bruxelles de bradage.
Il sera fait appel à une agence extérieure pour faire du “ghost
shopping” pour tester les niveaux des remises sur la W 210. S’il y a
plus de 3 % de remise accordée, la quantité de véhicules attribués
jusqu’à fin ’95 sera diminuée.’

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(114) DaimlerChrysler argues that this action was a dealer
initiative. MBBel, it said, had always rejected proposals
by the Amicale to set sales prices. The proposal to
commission an external agency to ghost shop and cut
the vehicle allocation until the end of 1995 if discounts
of more than 3 % were found was also suggested by the
dealers and was not implemented.

(116) DaimlerChrysler’s objection that

this was merely a
suggestion by the dealers’ association is at all events
not convincing. Mr Rauw clearly distinguished in the
minutes between statements made by individuals present
and decisions or outcomes of
the meeting. At the
passage in question, he did not record that this was a
proposal from the dealers’ association. That the minutes
were kept very precisely is clear from the way the
previous statements are recorded, since they are even
attributed to specific, named participants in the meeting.

(115) The Commission points out that a number of senior
representatives of MBBel, which, according to the
minutes, runs branches under the name Mercedes Euro-
pa in Brussels (117) and Antwerp (118), took part in this
discussion (119). In the minutes of this meeting between
MBBel and the Belgian dealers’ association on 20 April
1995, drawn up by MBBel’s manager for dealer develop-
ment (120), Mr Rauw, it was stated that an independent
agency should be commissioned to carry out ghost
shopping. Mr Rauw also noted in the minutes that if
discounts of more than 3 % were found, the vehicle
allocation would be reduced. According to the minutes,
it was decided at this meeting to commission an agency
to carry out ghost shopping. MBBel was involved in this
decision as the importer present at the meeting, but also
as the owner of two branches, i.e. of companies with
dealers’ interests. Mercedes’s active participation is evi-
dent from the fact that the penalties mentioned in the
decision (reduction of the quota of new cars) could be
applied only by MBBel as supplier of the dealers. It is
also evident that MBBel was ready to actively support
this price fixing, the price checks and any sanctioning of
non-observance and that it did not reject the action, as
subsequently claimed by DaimlerChrysler.

( 117) File, p. 2450 states: Monsieur Goossens accuse les succursales de

( 118) See file, p. 3106, MBBel and Mercedes-Benz fax dated 12 July

Bruxelles de bradage.

1995.

( 119) See file, pp. 2406 and 2449: those present were Dr Pfahls,
Chairman (Président Administrateur Délégué) of MBBel,
Mr Uyttenhoven, passenger car sales and marketing manager
(Vente & Marketing PKW), Mr Coppens, Dr Schneider, respon-
sible for finance, control and administration (Finance, con-
trolling et administration), Mr S. Geurts, Mr Urbain, responsible
for spare parts (pièces détachées), Mr Baddé, responsible for
communication and dealer development, as well as advertising
and promotional campaigns (publicité et promotion), Mr Sala-
mon, responsible for organisation and IT, Mr Ambrosi, respon-
sible for technical aspects (technique) and Mr Rauw, responsible
for dealer development.

( 120) File, p. 2406.

(117) It

is apparent

from various documents that ghost
shopping formed a perfectly normal part of MBBel’s
practices and that the announcement
to that effect
therefore had to be taken seriously. The minutes of the
meeting of Mercedes dealers in the Antwerp region on
27 March 1996 (121), in which MBBel’s district manager
for the Antwerp region, Koen Van Hout, took part,
reveal that prior to 27 March 1996 five Mercedes dealers
from the region and a parallel trader had been visited by
a ghost shopper. Their discount policy was checked and
it was found that the dealers granted discounts of
between 5 % and 7 % for the W 210 (Mercedes
E 290 TD).

(118) Another check on discount practice covered the C-Class:
on 26 November 1996 MBBel commissioned Tokata
SA to carry out
test purchases at all 47 Belgian
dealerships (122). Discount practice in relation to the C-
Class Estate 220 diesel and Estate 250 turbodiesel was
to be checked. The ghost shopper was to try to obtain a
discount of at least 7 %, irrespective of delivery times.

(119) The following are illustrations of the considerable store
set by MBBel on moderate discounting by Belgian
Mercedes dealers. In a message from MBBel to Mercedes-
Benz dated 17 October 1995 it was stated that: ‘we are
doing all we can to carry out our work correctly (we are
avoiding exports), we are attempting to keep our average
price at a high level...’ (123). A letter from MBBel to the
Belgian dealer Garage de l’Avenue in Charleroi on
14 March 1996 (124) concerned a Mercedes W 210
model, type E 200 sold during the Brussels Car Show.
The letter first criticises the conduct of the dealer’s sales
representative, who had introduced himself as the sales
representative for the Namur region, which led the
customer to order the vehicle from him. When it later
turned out that the purchase contract was with the
dealer in Charleroi, the customer complained to MBBel.
In the abovementioned letter, MBBel not only complains
about these facts, but also takes the opportunity to point

(121) File, p. 3187.
(122) File, p. 2576.
(123) File, pp. 3061 et seq.
(124) File, p. 2755.

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out the discount of 6 % on the price of the new car.
From the context it is clear that MBBel considers this
discount to be too high.

that

(120) DaimlerChrysler confirms, moreover, in the reply to the
statement of objections (125)
this discount was
unusually high and that the Namur dealer responsible
for the area had to take over this disadvantageous
contract. In short, the Commission assumes that at the
meeting of 20 April 1995, in which MBBel and nine
representatives (126) of the Belgian dealers’ association
took part, a decision was taken on the monitoring of the
discounts on the W 210 practised by the Belgian
Mercedes dealers by a ghost shopper. Discounts of more
than 3 % were not to be granted, otherwise supplies
would be cut (127). MBBel, according to the minutes,
supported this procedure, including the imposition of
penalties.

2. LEGAL ASSESSMENT

2.1. ARTICLE 81(1)

2.1.1. UNDERTAKING

2.1.1.1. DaimlerChrysler and the Mercedes dealers

in Belgium and Spain

(121) DaimlerChrysler AG and its predecessors Daimler-Benz
AG/Mercedes-Benz AG, the companies MBBel and MBE
belonging to the group, and the Mercedes-Benz dealers
in Belgium and Spain all constitute undertakings within
the meaning of Article 81(1).

2.1.1.2. Mercedes-Benz agents in Germany

(122) Mercedes-Benz distributes cars in Germany via its own
branches and via commercial agents in the form of
agents appointed to negotiate business transactions
(Vermittlungsvertreter) within the meaning of section
84(1), first sentence, first alternative, of the German
Commercial Code.

( 125) Point 130 of the reply to the statement of objections.
( 126) For their position in the dealers’ association see file, p. 3125.
( 127) The original French states:
‘Action anti-bradage
Monsieur Kalscheuer estime que les relations entre concessionnaires se
sont améliorées grâce à cette action.
Monsieur Goosens accuse les succursales de Bruxelles de bradage.
Il sera fait appel à une agence extérieure pour faire du “ghost
shopping” pour tester les niveaux des remises sur la W 210. S’il y a
plus de 3 % de remise accordée, la quantité de véhicules attribués
jusqu’à fin ’95 sera diminuée.’

(123) The Mercedes-Benz agents are undertakings within the
meaning of Article 81(1). An undertaking is any legal
subject which independently exercises a commercial or
economic activity and, in so doing, bears the associated
financial risks (128). An agent appointed to negotiate
business transactions is defined in Articles 1(2)(7) and
84(1), first sentence, first alternative, of the German
Commercial Code as a trader and, as such, pursues
an economic activity. The Mercedes-Benz agents also
exercise their activity independently. DaimlerChrysler
shares the view that the agents are independent busi-
nesses (129).

2.1.2. AGREEMENT BETWEEN UNDERTAKINGS

(124) The agreements concluded between Mercedes-Benz and
its agents in Germany constitute agreements between
undertakings. The same applies to the dealer agreements
concluded between the subsidiary MBE linked to Merced-
es-Benz on the one hand and its Mercedes-Benz contrac-
tual dealers on the other.

(125) Account should also be taken of the fact that the agency
or dealer agreements between the companies belonging
to the Mercedes-Benz group on the one hand and the
agents and dealers on the other form part of an exclusive
and selective marketing system which, as long-term
commitments, often exist for several decades. Since,
for example, the development of the model range,
maintenance strategies or marketing strategy are not
foreseeable when a commercial agency or dealer contract
is concluded, agreements must of necessity leave certain
aspects to a subsequent decision by the manufacturer.
The licensing of an agent or dealer as business partner
presupposes that each business partner is in agreement
with the evolving sales policy of the manufacturer (130).
This applies to changes to the range of vehicles supplied
to the dealer or agent for sale, but also to other changes
to the manufacturer’s sales policy affecting the dealer’s
or agent’s sales opportunities, which are usually com-
municated to the sales partner by means of manufac-
turer’s circulars or instructions, which the partner
expressly or tacitly accepts. These circulars and instruc-
tions have therefore become part of Mercedes-Benz’s
agreements with agents since they form part of an
ongoing business relationship based on an existing
general agreement (agency agreement).

(128) See Case C-266/93 Bundeskartellamt v Volkswagen AG und VAG

Leasing GmbH [1995] ECR I-3477, at paragraph 19.

(129) See the reference in the legal report by Professor Ulmer, p. 12,
to Council Directive 86/653/EEC of 18 December 1986 on the
coordination of the laws of the Member States relating to self-
employed commercial agents (OJ L 382, 31.12.1986, p. 17).

(130) See Case 107/82 AEG v Commission [1983] ECR 3151, at 3195;
Joined Cases 25 and 26/84 Ford-Werke AG and Ford of Europe
Inc. v Commission [1985] ECR 2725, at 2743.

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(126) DaimlerChrysler

that

itself

the circulars

it
states
addressed to distributors have become part of the
contractual agreements. This is apparent from the fol-
lowing: under section 15(3) of
the agency agree-
ments (131) and the principal agency agreement (132) in
the July 1997 version, original spare parts cannot be
sold to resellers with their place of business outside the
agent’s contract territory, even if they require these spare
parts for the repair or maintenance of vehicles. The
Commission objected to this wording in the statement
of objections of 31 March 1999 (133).

(127) DaimlerChrysler commented on this point (134) that the
misleading wording of this clause had been recognised
since 1988. That is why it was made clear in a letter
dated 10 October 1988 to the German agents and a
letter dated 31 August 1988 to the general agents that
the wording of the agreement was misleading and that
original spare parts could be supplied to all resellers in
the Community and associated countries. A situation
corresponding to Article 3(10)(b) of Commission Regu-
lation (EEC) No 123/85 of 12 December 1984 on the
application of Article 85(3) of the Treaty to certain
categories of motor vehicle distribution and servicing
agreements (135)
and 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 (136) was
brought about by the dispatch of the abovementioned
letters to the German distribution network.

(128) The Commission agrees with this argument and assumes
that the above letters did bring about a situation that
substantively complied with Article 81(1) to the extent
that the sales companies received the circular.

(129) The fact that circulars and instructions become part of
the contractual relations is also apparent from the fact
that failure to comply with them might result in the
imposition of severe sanctions, including the possibility
of the supply of new vehicles being cut.

(130) In the light of these principles, all the practices that are
of relevance here are to be regarded as agreements, as is
explained in greater detail below.

( 131) For the agency agreement with exclusive dealing rights: file,
p. 3367; for the agency agreement with shared dealing rights:
file, p. 3405.
( 132) File, p. 3427.
( 133) See, in particular, paragraphs 136, 183, 219 and 241.
( 134) Point 76 of the reply to the statement of objections.
( 135) OJ L 15,18.1.1985, p. 16.
( 136) OJ L 145, 29.6.1995, p. 25.

2.1.2.1.

Export restrictions (Germany)

(131) The instruction in the memo of 6 February 1996 to
German agents to the effect that they should concentrate
on their own territory and refrain from selling vehicles
to customers from outside that territory if they did not
want to jeopardise their vehicle allocation (see recital 78),
which was essentially repeated in the memo of 15 March
1996 to the Northern Region with the threat that
(see
infringements would be ‘punished accordingly’
recital 85), and the various instructions to the effect that
internal competition should be avoided, are indicative of
marketing policy in Germany, which agents agreed to
by concluding their agency agreement. The memos have
thus become part of the agreements between Mercedes-
Benz and its agents.

(132) In its letter of 22 July 1996 to the Federal Association
of Mercedes-Benz Agents Mercedes-Benz not only com-
mented on demonstration vehicle sales, but it also
confirmed that it
too firmly rejected and opposed
internal competition, adding that ‘we believe we have
already proven this on several occasions in the past’ (see
recital 94). This letter confirms in general terms the
intention, already declared on 6 February 1996, of
excluding ‘internal competition’. It renews the agreement
of that date, at least vis-à-vis those agents who had
knowledge of it.

(133) The fact that, according to circular No 52/85 of 12 Sep-
tember 1985 (see recital 103), which was addressed to,
inter alia, branches, principal agents and agents in
Germany, a deposit of 15 % is payable in practically all
cases of sale to Komm-Kunden is indicative of business
policy regarding the sale of vehicles to final customers
from other Member States of the Community. This
rule therefore forms part of the agreements concluded
between Mercedes-Benz and the German agents.

(134) This is also apparent from point 4 of the circular, where
express reference is made to the supply conditions for
parallel exports in the Community, which were amended
after Regulation (EEC) No 123/85 entered into force and
which were incorporated in the agency agreements and
set out once more in the circular. It is stated there that
‘Under the new agency agreements, and in accordance
with the provisions of the EC block exemption regu-
the following rules apply to EC customers:
lation,
the new
...’.
agreements in the agency agreement, reference is made
to the need to pay 15 % of the purchase price. Lastly, it
is clear from the circular’s penultimate sentence that, in
Mercedes-Benz’s view, the contents of the circular for-
med a binding part of the distribution agreements since
it described them as ‘rules’ (‘We would ask you to inform
all your sales staff of the new rules in full’).

Immediately after the enumeration of

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(135) DaimlerChrysler

takes

the view that

the measures
referred to are unilateral measures and do not form part
of the distribution agreements between Mercedes-Benz
and its distribution partners. Moreover,
it continues,
they were not inserted in the distribution agreements
because they would have contradicted the rules laid
down in those agreements (137). Mercedes-Benz also
claims that it has not reserved the right to amend
the distribution agreements by means of unilateral
declarations. In this respect, it argues, this case differs
from the distribution agreement which was the subject
of the dispute in Ford v Commission (138). In the Ford
dealer agreement, Ford expressly reserved the right to
determine which models of vehicle would be supplied.
Mercedes Benz, so it claims, has, by contrast, not
reserved that right.

(136) The Court of First Instance made it clear in its judgment
in the Volkswagen case, with express reference to the
judgments in Ford and BMW, that a call by a manufac-
turer to its authorised dealers constitutes an agreement
if it is ‘[intended] to influence the ... dealers in the
performance of their contract with [the manufacturer or
importer]’ (139). This condition was clearly met in this
case. It is therefore irrelevant whether the agreement
contained a specific clause on which basis the Mercedes-
Benz’s call was made or whether this call was inconsist-
ent with another clause in the agreement.

(137) Mercedes-Benz’s agency agreements contain a rule
according to which instructions are binding on agents:
section 4(1) of the agency agreement (140) and of the
principal agency agreement (141) stipulate that the agent
is required to negotiate vehicle transactions in accord-
ance with the current prices determined by Mercedes-
Benz and ‘according to its instructions’. On the basis of
these contractual provisions, as illustrated by the memos
described in recitals 78, 103 and 106, new rights (142),
but also new obligations (143), have been created by
Mercedes-Benz for the distribution partners and the
distribution agreement has thus been supplemented.
Express provision is thus made in the Mercedes-Benz
distribution agreements, in a similar way as in the Ford
distribution agreements, for introducing amendments to
the agreement to take account of changing circum-
stances by means of circulars from the manufacturer or
importer and other instructions.

( 137) Point 50 of the reply to the statement of objections.
( 138) Joined Cases 25 and 26/84 Ford-Werke AG and Ford of Europe

Inc. v Commission [1985] ECR 2725, at 2743.

( 139) Case T-62/98 Volkswagen v Commission [2000] ECR II-2707, at

paragraph 236.

( 140) File, p. 3362.
( 141) File, p. 3414.
( 142) For example, under section 2(1)(a) of the agency agreement, an
agent is not entitled to sell vehicles to ‘tourists’, i.e. foreigners
who are not resident in the Community. However, they are
entitled to do so according to the Agents’ Manual, and this
entitlement was clarified by circular 112a/85 of 1 August 1985.
( 143) For example, the requirement that a middleman acting on behalf
of an EU customer must submit to the agent a written power of
attorney from the final consumer in question; see circular 112a/
85 of 1 August 1985.

2.1.2.2. Restrictions on supply to leasing companies

(Germany and Spain)

(138) The ban on supplying leasing companies where there is
no lessee is laid down by the agency agreements
(section 2(1)(d)) (144) and the Spanish dealer agreements
(section 4(d)) (145) and thus forms part of the agreements
between Mercedes-Benz and its distribution partners.
German agents were reminded of these agreements once
more by the memo of 6 August 1996. This circular’s
penultimate paragraph reads:
‘In cases where these
conditions are not met, we will deduct the branch’s or
agent’s full vehicle commission and reserve the right to
take action at a personal level or under contract law.’
(underlining added). The threat of action under contract
law demonstrates that the circular also forms part of the
contractual relationship and is not merely a one-sided,
non-binding appeal for agents and others to change
their business practices.

2.1.2.3.

Setting sales prices in Belgium

(139) On 20 April 1995 nine representatives of the Belgian
Association of Mercedes-Benz Dealers met with the
MBBel management and reported on ‘action against
price slashing’ by dealers (see recital 113). The dealers
indicated that they were satisfied with the outcome of
this action. It had improved relations among them. This
indicates that the implementation of such action had
already been agreed upon on an earlier occasion. At
the meeting, MBBel supported the agreement, and a
maximum rate of 3 % for discounts was decided on. To
continue the action,
it was agreed that a test buyer
should check discounting conduct on the new E-class
vehicle, the W 210, and that if discounts of more than
3 % were being granted, the vehicle allocation for the
rest of 1995 would be cut.

(140) The decision of 20 April 1995 constitutes an agreement

between MBBel and the association of dealers.

(141) In this connection MBBel behaved both as a competitor
of the dealers, namely as operator of two branches, and
as a supplier to the dealers. The latter, vertical aspect
was clearly the focal point of the agreement, as is
illustrated by various elements. Firstly, MBBel was rep-
resented at
its board.
the meeting by members of
Secondly, it agreed to back and enforce the policy of
limiting discounts with a cut in vehicle supplies to all

(144) File, p. 3361.
(145) File, p. 1748.

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dealers (and not only to the nine association members
present at the meeting). MBBel confirmed this, moreover,
to Mercedes-Benz AG on 17 October 1995 (see
recital 119: ‘we are attempting to keep our average price
at a high level’).

(142) These express agreements were also binding on all
Belgian dealers in their capacity as importers of Merced-
es-Benz vehicles and as competitors of MBBel’s branches.

2.1.3. RESTRICTION OF COMPETITION

2.1.3.1. Market definition

2.1.3.1.1. Relevant product market

(143) The measures established in this case relate to the

retailing of Mercedes passenger cars.

(144) The broadest relevant product market might be deemed
to be the market for all cars. The relevant market would
then extend from very small cars through luxury cars to
sports cars. However, this cannot be accepted. It is
obvious that, from the point of view of the buyer, very
small cars are, for example, not interchangeable with
medium-sized or luxury cars: a buyer (private customer,
commercial user of passenger vehicles) will not regard
the various segments to be interchangeable if the focus
is on the characteristics relevant to the selection of a
certain vehicle. The characteristics of a very small car are
its small external dimensions, small engine, relatively
low purchase price, low prestige value and the fact that
many of these vehicles are purchased as second cars or
for short journeys. Small cars are larger, have a more
powerful engine, cost more and offer greater comfort.
The same applies mutatis mutandis to the next category.
Executive and luxury vehicles are, for example, pur-
chased primarily by drivers who drive frequently and
wish to cover large distances comfortably. The price,
prestige value and comfort of these vehicles is decidedly
greater than in the case of cars of the lower categories.
Sports cars, whether coupé or cabriolet, differ from
passenger cars primarily in the sporty design of their
bodywork and the fact that they have only two doors.
From the buyer’s point of view, the general car market
is therefore not the relevant product market.

(145) The automobile industry and market analysts tradition-
ally categorise cars into ‘segments’ on the basis of
objective criteria such as car length, purchase price, body
type, performance, in particular engine performance,
and brand image (146). A distinction is normally made
between the following ‘segments’: A: very small cars; B:
small cars; C: medium cars; D: upper-medium cars; E:
luxury cars; and G: multipurpose
executive cars; F:
vehicles and sports cars. segment G is occasionally
subdivided still further, sometimes into the segments
low-priced sports cars, high-priced sports cars, multipur-
pose vehicles and off-road vehicles (147), and sometimes
into the segments multipurpose vehicles, coupes, cabri-
olets and off-road vehicles (148). The Commission’s six-
monthly reports on car prices in the Community are
also based on this classification and contain price data
on car models grouped according to the abovemen-
tioned seven segments A to G so as to be able to
represent together models which are comparable from
the consumer’s standpoint.

(146) In its reply to the Commission’s request for information
of 21 October 1998, Daimler-Benz AG indicated that it
did not agree with the subdivision of the car market into
segments.

(147) However, a brochure on the Daimler-Chrysler merger
entitled ‘Expect the extraordinary’ (149), issued by Mer-
cedes-Benz on 17 November 1998, presents the broad
product range of the new company and divides it into
individual segments, whereby yet a further distinction is
made regarding the pricing of vehicles in the individual
segments (premium, mid-price and economy). More-
over, MBE documents found during the investigations
reveal that an assumption is made within the company
that there are certain categories of comparable vehicles
with regard to the positioning of C-, E- and S-class
models compared with the competition. In 1996, in a
comparison of Mercedes volume models (the A-class
was not yet on sale), MBE distinguished between three
different segments: the lowest segments contained the
C-class, the Audi A4, the BMW 3-series and the Volvo
400 series, followed by a segment containing the E-class,
the Audi A6, the BMW 5-series and the Volvo 800/900.
The highest segment contained the S-class Mercedes, the
Audi A8 and the BMW 7 and 8-series (150). In addition,
a price comparison between Spain, Germany and Italy
prepared by MBE for volume models also divided

(146) See Commission decision of 24 May in Case IV/M.741 — Ford/
Mazda (OJ C 179, 22.6.1996, p. 3); Commission decision of
14 March 1994 in Case IV/M.416 — BMW/Rover (OJ C 93,
30.4.1994); Intra-EC car price differential report, 1992, p. 29.

(147) Intra-EC car price differential report, 1992, p. 29.
(148) Auto, Motor und Sport, Volume 22, 21.10.1998, pp. 126 et seq.
(149) Pages 16 et seq.
(150) File, p. 1492.

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vehicles into three segments. The first segment com-
prises the Mercedes C 180, the Audi A4 and the BMW
316, the second the Mercedes E 200, the Audi A 6 and
the BMW 520 i, and the third the Mercedes S 320, the
BMW 730 I and the Volvo 960 (151). Mention should
also be made of the 23rd best-car survey conducted by
the magazine ‘Auto, Motor und Sport’ (152). This shows
that the segmentation of the passenger vehicle market is
relevant
In it,
from the consumer’s point of view.
277 passenger vehicle models are divided into a total of
10 categories (153). The six categories A (very small cars),
B (small cars), C (lower medium-sized cars), D (medium-
sized cars), E (upper medium-sized cars) and F (luxury
cars) correspond to the first six of the segments referred
to in recital 144, as can be seen from a comparison of
the passenger car models listed in the respective category
or segment. Coupés, cabriolets, off-road vehicles and
vans were listed separately in separate segments.

(148) The fact that there may be a degree of overlapping or
difficulty in distinguishing between vehicles at the edge
of adjoining segments and that vehicles must be allocated
on the basis of an analogy between similar vehicle types,
as Daimler-Benz states in its letter of 8 December 1998,
does not contradict the assumption that the car models
allocated to a given segment form a relevant product
market in each case.

(149) It

is not necessary in these proceedings to decide
conclusively what the exact segmentation between mar-
kets is. As will be explained, a restriction of competition
is appreciable not only if account is taken of the market
position of Mercedes-Benz in the individual segments. It
is also appreciable if account
the fact
that competition exists between each of the segments
relevant to these proceedings and one or both of the
adjoining segments, particularly at the edge of each
segment, or if the segments relevant in this case are even
combined with both adjoining segments to form one
relevant product market.

is taken of

2.1.3.1.2. Relevant geographic market

(150) There are grounds for considering the relevant geo-
graphic market to comprise the Community. The techni-
cal barriers between Member States have, for example,

disappeared since the introduction of the Community
certificate of conformity. Any passenger vehicle pur-
chased in the Community can now be registered in any
Member State without being resubmitted for technical
checks.

(151) However, there is much to be said in favour of the view
that, from a geographic standpoint, every Member State
forms a separate relevant market in the case of passenger
cars. There are still considerable differences between
Member States as regards the competitive and material
conditions of passenger car supply. This is apparent
from the Commission’s six-monthly price surveys, in
which car prices, adjusted for differences in equipment
levels, are compared. Although price differentials have
recently narrowed, as can be seen from the comparison
of prices for three Mercedes models in recitals 32 to 34,
they remain sizeable. They stem partly from national
rules and regulations, such as the heavy registration,
luxury and environmental taxes that are imposed in
some countries, and partly from the fact that, in the
event of currency fluctuations between Member States,
manufacturers make no, or insufficient, price adjust-
ments. They can also be explained in terms of manufac-
turers’ marketing strategies with regard to customers’
differing purchasing power. In addition, manufacturers
offer very different standard equipment and equipment
packages for new cars from one Member State to
another. What is more,
it remains difficult for final
consumers or their appointed agents to purchase new
cars in a Member State other than that in which the
customer is resident or domiciled, the expense always
being greater than when buying from a dealer belonging
to the domestic network. Many agents and dealers prefer
to serve local customers, especially if they consider a
sale possible to customers in their contract territory and
even more so in the case of popular models. Moreover,
they often require large deposits from foreign customers,
as is apparent from the large number of complaints
submitted to the Commission from consumers wishing
to buy a car abroad. All this suggests that the relevant
geographic markets for passenger cars are still national
markets.

( 151) File, p. 1716, Estudio Precios CE.
( 152) Auto, Motor und Sport, Volume 22, 21.10.1998, pp. 126 et seq.
( 153) Mini cars, small cars, lower-medium cars, medium cars, upper-
luxury cars, sports cars, cabriolets, off-road

medium cars,
vehicles and vans.

(152) The question whether the markets for passenger cars
are Community-wide or whether each Member State
constitutes a separate relevant geographic market can be
left open here since the restriction of competition is
appreciable irrespective of the definition of the geo-
graphic market.

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2.1.3.2.

The applicability of Article 81 to the restric-
tions agreed with the Mercedes-Benz agents

(153) In the statement of objections (point 152), the Com-
mission indicated that the Mercedes-Benz agents have to
bear a number of commercial risks (154)
inextricably
linked to their function as agent which result
in
Article 81 being applicable to the agreements between
Mercedes-Benz and the agents in the same way as with
regard to dealers.

(154) In DaimlerChrysler’s view (155), even if account is taken
of the aspect of risk allocation, the Mercedes-Benz agents
should not be equated with dealers. It claims that agents
do not bear any of the contractual risks associated with
new-vehicle business, such as the risks of marketing,
transport, storage, price, guarantee or default. If the
contracting partner offers customers concessions by
passing on some of its commission or accepting used
vehicles in part exchange at inflated prices, it does so in
the context of the leeway it is granted in respect of its
commission. Agents therefore bear only the commission
risk and thus not any other price risk directly associated
with the sale of new vehicles, as dealers do. Agents do
not bear the guarantee risk either since claims made by
the buyer under the guarantee exist solely vis-à-vis
Mercedes-Benz and not against the contracting partner.
Even the fact that the contracting partner is required to
buy and sell demonstration and business vehicles for its
own account and at its own risk does not constitute a
contractual risk associated with the negotiation of
contracts concerning the purchase of new vehicles but
is one of the obligations entered into by the contracting
partner under Article 7 (156) of
the agency agree-
ment (157). It is one of the advertising and sales-develop-
ment activities which an agent has to perform at his
own risk. This also applies to the business vehicles used
by the agent’s staff for business purposes. The fact that
21,66 % of the turnover of branches and agents can be
attributed to demonstration and business vehicles (the
percentage is, according to DaimlerChrysler, even higher
for agents) means that an agent with a turnover of

( 154) See Case C-266/93, referred to at recital 19; Commission notice
— Guidelines on Vertical Restraints (OJ C 291, 13.10.2000,
p. 1), at points 12 et seq.

( 155) Point 89 of the reply to the statement of objections.
( 156) Article 4(7) states that: ‘The agent is required to keep demon-
stration vehicles himself and for his own account. Where the
parties fail to agree on the stock of vehicles necessary, Mercedes-
Benz may determine what that stock should be on the basis of
its experience and be proportional to the agent’s turnover on
new vehicles, taking account of his financial capabilities. The
agent is obliged to use Mercedes-Benz vehicles as business
vehicles unless he is authorised to deal also in the vehicles of
another make.’

( 157) Point 92 of the reply to the statement of objections.

500 vehicles per year buys 70-80 vehicles per year and,
in view of the fact that they are kept for three months
and are driven for 3 000 km, an agent will always have
approximately 20 vehicles in his possession so that he
can allow all customers to use a demonstration vehicle
on an hourly or daily basis. They form part of his
fixtures and of his expenses as an independent trader.
The associated risks are borne by the contracting
partners even if vehicles are intended for use in their
business to satisfy the intermediary and workshop
functions (158).

(155) This argument must be rejected. The Mercedes-Benz
the price risk

agent bears a considerable share of
associated with the vehicles whose sale he negotiates.

(a)

If an agent makes price concessions on the sale of
new vehicles to which Mercedes-Benz agrees, these
are deducted entirely from the agent’s commission
(see list of commissions under the agency agree-
ment (159). The same applies where, in connection
with the sale of a new vehicle, the agent uses his
commission in order to be able to accept a used
vehicle in part exchange at a price higher than the
market price (160).

(b) Volume or user discounts granted by agreement
to large and certain other buyers, e.g. car-hire
companies, taxi firms or journalists, can amount to
as much as 6 % plus bonuses, and these are
deducted from the agent’s commission (see list of
commissions under the agency agreement (161).

(156) According to these rules, in the first case the agent bears
all, and in the second case a very considerable part, of
the risk that the list price set by Mercedes-Benz cannot
be enforced against a customer. Even if the agent does
not have to keep any stocks of new vehicles, he is
approximated by these payment rules from a financial
point of view to a car dealer who by way of remuneration
is granted by the manufacturer a margin (162) which he

(158) Report, p. 39.
(159) File, p. 3374.
(160) Point 89 of the reply to the statement of objections.
(161) File, p. 3374.
(162) In the car trade it is common practice for a dealer to be granted
a margin which corresponds to a certain percentage of the list
price and which may differ according to the model. Dealers are
often also granted a ‘variable margin’ the amount of which may
depend on such things as sales volume, customer satisfaction or
compliance with the manufacturer’s performance standards.
See, for example, Commission of the European Communities,
report on the evaluation of Regulation (EC) No 1475/95 on the
application of Article 85(3) of the Treaty to certain categories
of motor vehicle distribution and servicing agreements,
COM(2000) 743 final, published on the
at:
http://europa.eu.int/comm/competition/car–sector/distribution/
eval–reg–1475–95/report/

Internet

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uses not only to finance his new-car sales business in
general but also and above all to grant price concessions
to car buyers.

(157) The agent also bears the transport and transport cost
risk in respect of new vehicles. Pursuant to Article 4(4)
of the agency agreement, he must deliver to the customer
a new vehicle ready for delivery which the customer
does not wish to collect at the factory. The agent has to
agree with the customer the level of remuneration
payable in order to cover the expenditure incurred in
connection with the delivery, and in particular the cost
of transport. Under the agency agreement, therefore,
Mercedes-Benz does not assume the transport and
transport cost risk, this being borne by the agent. Like a
dealer, the agent is required to pass on the costs and the
transport risk contractually to the customer.

(158) The agent must also use to a very considerable extent
his own resources for purposes of sales promotion. In
particular, he must acquire demonstration vehicles for
his own account (Article 4(7) of the agency agreement).
Either Mercedes-Benz and the agent have to agree on the
number and type of these vehicles, or Mercedes-Benz
stipulates the number itself. In so doing, it takes account
of what is appropriate in its experience and what can be
expected of the agent financially (Article 4(7) of the
agency agreement). Including agents’ business vehicles
— these must be Mercedes-Benz vehicles and they are
also used as demonstration vehicles — in 1998 an
average of [...] % (163) of the turnover of branches and
agencies was accounted for by demonstration and
business vehicles. According to DaimlerChrysler, the
share of these vehicles in turnover is somewhat higher
for agents than for branches. Mercedes-Benz grants
special conditions for the purchase of demonstration
and business vehicles, and they are therefore subject to
a minimum retention period of three to six months and
a minimum running distance of 3 000 km. Thereafter,
the agent can resell the vehicles second-hand, bearing
the sales risk for this not inconsiderable number of
vehicles.

(159) The activity of a Mercedes-Benz agent is also inevitably
associated with a series of other commercial risks,
acceptance of which is a precondition for becoming a
Mercedes-Benz agent.

(a)

Such contractual risks arise from the rules concern-
ing the manufacturer’s guarantee for new Mercedes-
Benz vehicles (irrespective of whether their sale is
arranged by an agent or the vehicle is purchased
from another distributor). Under these rules, the
the Mercedes-Benz dealer
agent
outside Germany) is not liable for any claims which

likewise,

(and,

the buyer of a new vehicle may have under the
guarantee. Under general civil law, such claims are
effective vis-à-vis Mercedes-Benz as the guarantor.
However, a different situation emerges from point
VII.2(A) of the general terms of trade applicable to
the sale of new vehicles by Mercedes-Benz (164).
Under that provision, Mercedes-Benz grants buyers
of new vehicles a right to have any defects rectified
within the manufacturer’s guarantee period of one
year from delivery of the vehicle. This right may be
exercised ‘with the seller [Commission note: i.e.
in this case, Mercedes-Benz] or other operators
approved by the manufacturer for the purpose
of attending to the sold article ...’. This clause
corresponds
to the agent’s obligation under
Article 13(1) of the agency agreement ‘to carry
out guarantee work on the vehicles supplied by
Daimler-Benz irrespective of where and via whom
they have been sold’. When an agent carries out
repairs under guarantee, the customer may not be
invoiced any ‘charge for the expenditure required
to rectify defects’
the agency
agreement). If an agent has carried out such repairs,
he receives a ‘guarantee indemnity’ calculated on
the basis of the average customer cost rate and the
cost price of materials he has used, plus a materials
cost premium (165). The agent has to provide the
necessary equipment and staff at his own cost and
risk and initially to carry out the work also at his
own cost and risk. Moreover, he is not completely
discharged of the risk associated with providing
this service: for carrying out defect-rectification
work, he receives an indemnity based on standard
rates which differ from and do not necessarily
cover the currently applicable wages for carrying
out ordinary repairs and the spare-part sales prices
applicable to ordinary repairs which the agent
himself fixes in the light of his commercial and
competitive situation.

(Article 13(2) of

(b) Agents must set up a workshop for their own
account and offer customer and guarantee services
and, on request, take part in the emergency service.
The workshop must be large enough, have suf-
ficient staff and be adequately equipped to meet the
requirements of the agent’s contract. Agents must
also acquire the necessary special equipment and
to the latest production technology
adapt

it

( 163) File, pp. 641 et seq; according to circular No 5/91 of 11 January
1991, in the case of agents entitled to sell passenger cars the
share of annual deliveries accounted for by demonstration
vehicles may as of 1 January 1991 be no higher than [...] %.

(164) File, p. 3447.
(165) See Article 13 of the agency agreement; file, p. 3366.

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(Article 12(1) of the agency agreement). Agents
must offer repair services and spare parts not only
in respect of the vehicles sold via them but also in
respect of the entire range of vehicles indicated in
the agency agreement belonging to customers from
the agent’s own contractual area (see Article 12(1)
the agency agreement) or from a district outside
that area (Article 12(2) of the agency agreement).

cial agent (167) cannot be accepted. The position would
be different only if the agent could choose whether to
assume in particular the considerable risks connected
with demonstration and business vehicles, carrying out
guarantee work, setting up maintenance and repair
facilities and supplying spare parts, or simply to nego-
tiate new-vehicle sales contracts. This is, however, not
the case.

The agent must also keep a stock of spare parts
for his own account (Article 14 of the agency
agreement). The agent uses these parts to carry out
repairs in his workshop. Under Article 15 of the
agency agreement he may sell them to resellers.

(161) In DaimlerChrysler’s view, the agents form an integral
part of DaimlerChrysler AG and are therefore genuine
commercial agents.

(c)

(d)

It should be pointed out lastly that from a financial
point of view the agent’s revenue from activities
pursued on a self-employed basis exceeds many
times over that from negotiating new-vehicle sales
contracts. For his activity as an intermediary the
agent receives a commission which in the case of
passenger cars is made up of a basic commission
of [...] % (166) and a service commission of up to
[...] %. This commission income of at most [...] %
constitutes the revenue from the agency activity.
Out of this revenue the agent has to finance the
discounts he grants to car buyers. The revenue
actually earned from agency business is therefore
lower than the abovementioned [...] %.

According to information supplied by Mercedes-
Benz at the hearing on 29 June 1999 the revenue
from acting as an intermediary amounts, if vehicle
prices are regarded as part of this revenue, to
approximately 50 % of the total revenue of an
agent. But the agent’s actual revenue from acting as
an intermediary per se is the mentioned com-
mission. If this is compared with the agent’s revenue
from activities contractually linked to dealing in
new vehicles in respect of which the agent bears
the entire risk, it becomes apparent that only about
[...] of total revenue is derived from acting as an
agent proper.

(160) In view of

the number and quantitative scope of
the risks that Mercedes-Benz agents have to bear,
DaimlerChrysler’s argument that the risks borne by
agents are typical of those borne by a genuine commer-

( 166) As at July 1997, see file, pp. 3378 et seq.

(162) This stems from the requirements which the agent has
to meet personally and commercially (his business
activity generally involves selling exclusively Mercedes-
Benz vehicles, acting as a ‘Mercedes-Benz agent’, setting
up, equipping and staffing his business, advertising,
maintaining a certain image, representing the interests
of DaimlerChrysler, and complying with the Mercedes-
Benz identification guidelines). Professor Ulmer’s report
stresses that agents form an integral part of Daimler
Chrysler AG also by dint of the fact that, under the
agency agreement (168), the parties sell only Mercedes-
Benz vehicles and not those of its competitors (169), and
are consequently agents of a single company (170).

(163) This argument must be rejected. The criterion of inte-
gration is, unlike risk allocation, not a separate criterion
for distinguishing a commercial agent from a dealer (171).

(167) Point 89 of the reply to the statement of objections.
(168) Article 9(3)(c).
(169) Under Article 9(3)(c), the agent may ‘deal in new vehicles and
chassis other than those offered by Mercedes-Benz only where
all of the following conditions are met:
— other vehicles and chassis must be dealt in separate sales

premises,

— by undertakings having their own legal personality,
— with neither fully nor partly identical management,
— in a manner which excludes the possibility of makes being

confused, and

— the requirement to safeguard interests under Article 86(1) of

the Commercial Code may not be undermined.

Mercedes will release the agent from this requirement if the
agent demonstrates that there are objective grounds for so
doing, whereby account should be taken of his legal status as
commercial agent.’

(170) See points 87 et seq. of the statement of objections; see also

Ulmer report, pp. 5 et seq., 27 et seq. and 43 et seq.

(171) See Case C-266/93 Bundeskartellamt v Volkswagen AG and VAG
Leasing GmbH [1995] ECR I-3477, at paragraphs 4 and 19.

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(164) The contractual rules cited by DaimlerChrysler as dem-
onstrating that its agents do form an ‘integral part’ of
the undertaking are, in substance, entirely the same and,
even in their wording, sometimes the same as those in
the dealer agreements of Mercedes-Benz and other car
manufacturers. For example, Article 9(3)(c) of the agency
agreement (172) contains provisions concerning brand
exclusivity the wording of which is practically identical
to that of, for example, Article 6(2)(b) of the Belgian
MBBel dealer contract(173) and can also be found in
Article 3(3), of Regulation (EC) No 1475/95. The same
applies to the requirement on the part of commercial
agents, as set out in the first sentence of Article 9(1) of
the agency agreement, to take any action necessary to
market Mercedes-Benz vehicles, which corresponds to
the second sentence of Article 2(1) of the MBBel dealer
agreement. Under the first sentence of Article 9(1) of
the agency agreement, agents must also represent the
interests of Mercedes-Benz. While such a requirement is
not expressly contained in the MBBel dealer agreement,
it is in, for example, the VW dealer agreements (174).
Under Article 8 of the agency agreement, agents are
required to described themselves to the outside world,
on all documents and in advertising as Mercedes-Benz
agents and to represent the Mercedes brand. Articles 10
and 12(2) of the MBBel agreement contain the same
requirements. Moreover, the requirements on the part of
agents contained in Article 10(1) and (4) of the agency
agreement under the heading ‘Integration’ on the layout
of business premises, technical equipment and staff and
the use of computer systems in accordance with the
DaimlerBenz guidelines and standards are also largely to
be found in the MBBel dealer agreement in Annex III,
sections 2, 3 and 4. The requirements contained in
Article 10(2) and (3) of the agency agreement to provide
information on individual transactions, cases in which
the guarantee has been invoked and the agent’s annual
results are also dealt with in Annex III, section 5, of the
MBBel dealer agreement. The prohibition contained in
Article 10(5) of the agency agreement on setting up
branches and display premises outside the agent’s main
premises without prior written authorisation from
DaimlerChrysler is the same in terms of content as
Article 5(2) of the MBBel dealer agreement. On the basis
of all of the above, it can be assumed that all of the rules
contained in Article 10 of the agency agreement can be
found in the DaimlerChrysler dealer agreements or in
the dealer agreements of other manufacturers. It can
therefore not be deduced from those rules that the
German agents of Mercedes-Benz form an integral part
of the principal’s undertaking. Lastly, the requirement
on the agent’s part, as set out in Article 16 of the agency
agreement, to support Mercedes-Benz in its advertising
efforts, to handle advertising material carefully and to
use it correctly, and the right on DaimlerChrysler’s part
to lay down minimum requirements for advertising

by the agent or for participation in exhibitions and
competitions are regulated to an objectively equal extent
in Annex III, Articles 10 and 11, of the MBBel dealer
agreement. In particular, the wording of Article 16(3) of
the agency agreement, whereby

‘It is in the common interests of Daimler-Benz and
the agent to present a uniform image of the sales
organisation’,

also appears in a word-for-word translation in Annex
III, section 10(1), first sentence, of the MBBel dealer
agreement. The same applies to the subsequent text of
the paragraph.

(165) In conclusion, a comparison of the terms of the agency
agreements with those of the dealer agreements reveals
that the requirements placed on agents are identical to
those placed on dealers and that both forms of distribu-
tor form an equally integral part of the Mercedes-Benz
sales organisation. This aspect is thus not a suitable
basis for distinguishing between commercial agents and
dealers.

(166) Lastly, DaimlerChrysler points out (175) that the fact that
an agent offers customer services and is required to
purchase spare parts for his own account and at his own
risk does not preclude his forming an integral part of
the company because it constitutes a complementary
and back-up activity which is closely linked to the
agent’s main activity and is carried on independently
thereof.

(167) In the Commission’s view, the contractual link between
negotiating the sale of cars, on the one hand, and
offering customer and spare parts services, on the other,
contributes to the commercial agent activity, which
typically involves only limited risks (in particular the
commission risk in the event of failure of the activity of
intermediary), being associated with the risks of a
principal, unusual as these are for a commercial agent.
The argument put forward by DaimlerChrysler must
therefore be rejected.

(168) Consequently, Article 81(1) is applicable to the agree-
ments between Mercedes-Benz and its German agents to
the same extent as it is to an agreement with a dealer.
Restrictions imposed on an agent must therefore be
assessed in the same way as for a dealer.

( 172) File, p. 3364.
( 173) File, p. 3668.
( 174) See Case C 266/93 Bundeskartellamt v Volkswagen AG und VAG

Leasing GmbH [1995] ECR I-3509, at paragraph 21.

(175) Points 87 et seq. of reply to statement of objections; Ulmer

report, pp. 27 et seq., 39 et seq. and 46.

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2.1.3.3. Anti-competitive object of the measures

2.1.3.3.1. Export restrictions (Germany)

tition’, as the memo itself put it, i.e. ‘intra-brand compe-
tition’ between German agents and between them and
the German and foreign branches, was to be limited.
The memo of 6 February 1996 thus set out to restrict
intra-brand competition.

(169) The available documents show that Mercedes-Benz
was already interested before 1996 in restricting or
preventing ‘internal’ competition (176). Even before that
time Mercedes-Benz had instructed its agents on several
occasions not to sell vehicles outside their contract
territory (177) and had tried to make it more difficult for
them to engage in parallel exporting (178).

(170) In connection with the introduction of the new W 210
(new E-class), clear instructions were sent as from
6 February 1996 to all members of the German distri-
bution network, and in particular German agents. The
instructions did not apply only to the W 210 model, but
to sales of new vehicles in general. As is clear from the
memo of 6 February 1996, agents were referred to their
contract territory as follows:

‘In these circumstances we shall have no sympathy
for retail firms which, in selling their allocation of
the W 210 series, fail to concentrate on their own
territory and ...

We would therefore ask you, in your day-to-day
transactions, to consider the prices laid down in the
target agreements for 1996 as the mandatory basis
for your decisions in individual cases.

We are convinced that, by adhering strictly to this
policy, we can effectively combat internal compe-
tition not only in the W 210, but also in other series.
We therefore count on your unconditional support.’

At the end of the memo of 6 February 1996 Mercedes-
Benz threatened that it would not ‘hesitate to withhold
vehicles in the W 210 series, should we discover that an
allocation is not warranted by the absorption capacity
of a specific territory’. This lent particular emphasis to
the instructions.

(171) The purpose of this memo was to ensure that contracting
partners would sell the W 210 and other vehicles
allocated to them solely within their contract territory.
Komm-Kunden not from the agent’s contract territory
‘internal compe-
should not be supplied. In this way,

(172) The cuts to supplies of the W 210 to branches in
Germany, as threatened in the memo of 6 February
1996 and implemented at the LVP meeting on 26 Febru-
ary 1996 (see recital 84), which also restricted supplies
to agents, were used to enforce this restriction of
competition. The same applies to the threat to extend
this measure if necessary to (other) new series.

(173) The instruction that Komm-Kunden from other Member
States be required in almost all cases to pay a deposit of
15 % of the purchase price (see recital 102 et seq. above)
makes parallel trading even more difficult as it restricts
the freedom of agents to pursue their own marketing
policy and, for example, to waive this deposit for the
Komm-Kunden they know.

(174) DaimlerChrysler claims (179) that the 15 % deposit is
merely a ‘requirement’ that does not have to be enforced
in each case. It was necessary in order to reduce risk, in
particular to offset possible claims for damages in the
event of non-purchase, which, it claims, are difficult to
enforce with foreign customers, and to serve as evidence
of the customer’s serious intention to purchase and,
later, take delivery of the vehicle. The level of the deposit
was equivalent to the 15 % non-acceptance payment
customary in German terms of sale. It was based on
reasonable business considerations, namely that the risks
of sales to foreign customers, particularly in relation to
legal action, were greater.
It was therefore certainly
lawful. Moreover, DaimlerChrysler could, it maintained,
not bring a claim against the agents for losses that could
have been avoided by payment of a deposit. This general
instruction applies only to the sale of vehicles to foreign
customers. Even if such deposits may sometimes be wise
from a commercial point of view, it must be pointed out
that such an instruction does not exist for domestic
transactions despite the fact that, here too, there may in
some cases be comparable justified concerns. The rule
accordingly discriminates against parallel trading com-
pared with German vehicle sales.

( 176) See recitals 71 et seq., memorandum of the VOI/VNM depart-

ment of 28 October 1985.

( 177) See recitals 72 and 73 above.
( 178) See recital 74 above.

(179) Points 73 et seq. of the reply to the statement of objections.

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(175) The object of all of these measures is a partitioning of

2.1.3.4. Anti-competitive effect of the measures

the market incompatible with Article 81(1).

2.1.3.3.2. Restrictions on supply to leasing com-
panies (Germany and Spain)

(176) The purpose of prohibiting supplies to outside leasing
companies in cases where there is no specific lessee is to
restrict competition between the leasing companies
of the Mercedes-Benz group (180) and outside leasing
companies in Germany and Spain. The aim is to ensure
that outside leasing companies receive Mercedes vehicles
only on a case-by-case basis, i.e. when a specific lessee is
already available, and cannot lease out vehicles from
stock. This makes it impossible for leasing companies to
supply a vehicle quickly. The marketing rules governing
supplies to leasing companies also lead to their not
receiving the same price advantage on the purchase of
vehicles for leasing as other operators running a fleet of
vehicles. As a result, discounts in favour of leasing
companies are automatically restricted: as part of a
single transaction, they can never acquire more vehicles
than are allocated to a specific customer. On the whole,
the relevant clauses worsen the conditions under which
outside leasing companies can obtain supplies of Mer-
cedes vehicles and hence can enter the neighbouring
leasing market in competition with the leasing compani-
es of the Mercedes-Benz group. The rules governing the
leasing business of dealers and agents thus have as their
object a restriction of competition on prices and delivery
conditions for leasing vehicles.

2.1.3.3.3.

Setting sales prices in Belgium

(177) An assessment is made below of the agreement reached
on 20 April 1995 between MBBel and the dealers’
association to limit discounts to 3 % and to have a test
buyer check the level of discounts on E-class vehicles,
whereby larger discounts would lead to cuts in allo-
cations of the new E-class (see recital 113 et seq.
above). The agreement had as its object a restriction of
competition on prices in Belgium.

( 180) For example, MBL Mercedes-Benz Leasing GmbH & Co. oHG,
Hennigsdorf, or Mercedes-Benz Leasing Nederland BV,
Nieuwegen.

(178) It is established case-law that,

for the purposes of
Article 81(1), it is sufficient that the relevant measure, as
in this case, has the object of restricting competition. It
is not necessary to show that it also has the effect of
restricting competition (181).

2.1.3.5. Appreciability of the restriction of compe-

tition

(179) The restrictions described above were aimed at eliminat-

ing essential factors of competition.

(180) This applies firstly to all the export-restricting measures.
Their object was to restrict the cross-border sale of new
passenger cars to final consumers by way of export from
Germany and hence to grant territorial protection to
distributors in the other Member States (and, in the case
of
to sell outside the contract
territory, to the other German distribution partners as
well).

the instruction not

(181) Likewise:

(a)

the restrictions on sales of new vehicles to leasing
companies; and

(b)

the setting of sales prices in Belgium;

were aimed at eliminating essential factors of compe-
tition (182). Sales prices, which in Belgium were set, are
for the final consumer one of the decisive factors when
it comes to making a choice. The same applies to the
restrictions concerning leasing companies. The latter
were to be prevented from competing on prices with the
leasing companies of the Mercedes-Benz group and from
making vehicles quickly available (see recitals 118 et seq.
above).

(182) From a quantitative point of view, the following should

be noted:

(181) See, for example, Case T-143/89 Ferriere Nord v Commission
[1995] ECR II-917; Case T-62/98 Volkswagen v Commission
[2000] ECR II-2707, at paragraph 178; Case T-176/95 Accinauto
v Commission [1999] ECR II-1635, at paragraph 106; Com-
mission notice on guidelines on vertical restraints (OJ C 291,
13.10.2000, p. 1), point 7.

(182) See in this connection the study by Taylor Nelson Sofres,
Perception de la distribution automobile en Europe, Rapport Europe,
Phase Quantitative, Décembre 2000, chapter on competition and
prices in the motor industry: b. Les pratiques de mise en concurrence,
answer to question 44: 65 % of all European consumers who,
before buying a new vehicle, visited more than one dealer gave
as their reason for so doing price comparisons or comparisons
of discounts.

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(183) Mercedes-Benz’s market share in the segments of particu-
lar importance for this case, E and F, was [20 to 30] %
within the Community (see tables at recitals 24 et seq.
above). Even if the two segments were combined to
form a relevant market, the market share would still be
around this size. If segment D were also taken into
account, Daimler-Benz’s market share in the Community
would still be more than [10 to 20] % and thus
significant.

(184) It should also be borne in mind that Mercedes-Benz is a
very renowned supplier of passenger vehicles, and in
segments E and F was the largest or second-largest
vehicle supplier in most Member States and in the
Community as a whole in the years between 1995 and
1997 (183). In segment D, Mercedes-Benz was one of the
10 largest suppliers of passenger vehicles in most
Member States, while in the Community as a whole it
was in fifth place in this segment in these three years.
Given the market shares of Mercedes-Benz and its
position in the various market segments, the restrictions
of competition established in this case are appreciable in
the upper-medium, executive and luxury classes.

(185) Also when account is taken of the market situation in
the three Member States where measures were taken
either to prevent exports to other Member States or
otherwise to restrict competition (see recital 118), it is
evident that Mercedes-Benz had a market position of
considerable importance. Mercedes-Benz’s market share
in Germany in the segments of particular importance
for this case, E and F, in the years from 1995 onwards
was always above [10 to 20] %, reaching a maximum of
nearly [50 to 60] % (see recitals 24 to 29), and in
segment D, above [10 to 20] %. In Spain, its share in the
years from 1995 onwards in segments E and F was
generally around [20 to 30] %, and in segment D, [0 to
its share in the years from 1995
10] %. In Belgium,
onwards in segment E was above [20 to 30] %,
in
segment F, between [20 to 30] % and approximately [40
to 50] %, and in segment D, generally around [0 to
10] %, although in 2000 it was more than twice as high
at nearly [10 to 20] %. Even if segments E and F were
taken together, the market share in these countries
would still be considerably more than [10 to 20] %. If
its position in segment D were also taken into account,
its market share in Germany would be around [20 to
30] %, and in Spain and Belgium around [0 to 10] %.

(186) In those Member States to which new Mercedes vehicles
were parallel exported, i.e. primarily Belgium and Spain,
Mercedes had substantial market positions, as can be
seen from recital 185.

( 183) See tables, file, pp. 3645 et seq.

(187) As can be seen from the description of the facts, the
parallel trade from Germany to Belgium relied mainly
for example,
on the shorter delivery times
recital 37), but also on the fact that purchase prices were
in practice clearly much lower in Germany (184).

(see,

(188) The volume of parallel trade was considerable and, even
in so far as it
took place legally, was viewed by
companies in the Mercedes-Benz group as a major
interference in the distribution system, as is evident from
a number of documents found during the investigations.
Thus MBBel complained over a number of years about
the ‘ugly monster’ of parallel imports from Germany
(see recitals 36 et seq.). MBE stated that Spain had been
suffering for some time from parallel imports; these had
always been disapproved of by MBE (185).

(189) The restrictions on competition in the area of leasing
were also appreciable. As is apparent from the survey in
recital 14, each year during the period from 1996 to
2000 about [...] % of all new Mercedes passenger cars
were sold in Germany by branches and agents to leasing
companies, of which amount between [...] % (186) (1996)
and [...] % (187) (2000) were sold each year to outside
leasing companies. Whereas in 1996 over [...] % of the
vehicles supplied to outside leasing companies were
supplied by agents, this share fell to approximately [...] %
in 1999 and [...] % in 2000, bearing in mind, however,
that up until 1998 the number of agents was still in
excess of 200 whereas in 2000 there were on average
only 110 agents in Germany (recital 15). The German
Mercedes-Benz agents are therefore an important sup-
plier of Mercedes passenger cars to outside leasing
companies in Germany. In Spain too the restriction of
competition was considerable from a quantitative point
of view, inasmuch as between [...] % (1997) and just
under [...] % (2000) of all new vehicles were sold each
year to leasing companies, with approximately [...] %
thereof being supplied by the Spanish distribution
network, consisting as it does largely of dealers, to
outside leasing companies (recitals 21 and 22).

(184) See also in this connection the tables at recitals 32 et seq.;
the actual price differences were, however, according to the
document found during the investigation, in some cases con-
siderably higher (see recital 37).

(185) File, p. 1339. The original Spanish reads ‘... Por ello, consideramos
que tampoco la Red Oficial debe hacer estas operciones en Portugal.
Por otra parte, exportar vehiculos de la clase C cuando existe una fuerte
demanda en el mercado nacional nos parece ún más inconveniente. Les
informamos por el presente que, a partir de la pro´xima programacio´n
mensual recibirán únicamente 4 vehicluos de la clase C, conforme a
nuestro escrito de 4 de novembre de 93, y les rogamos su utilizacio´ n
exclusiva para clientes pertenecientes a su zona contractual, abstenién-
dose de vender vehiclulos a empresas o ciundadanos portugueses’.

(186) [...] vehicles.
(187) [...] vehicles.

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(190) The restrictions on competition were therefore at all

events appreciable (188).

2.1.4.

LIKELIHOOD OF THE MEASURES HAVING AN
APPRECIABLE EFFECT ON TRADE BETWEEN
MEMBER STATES

have switched export demand at least to some extent to
lawful channels. The protests from distributors in other
Member States, and in particular the Belgian and Spanish
main importers MBBel and MBE, about the parallel trade
from Germany also show that parallel trading was
having an enormous impact on their sales and on the
pursuance of different price and supply strategies. The
measures designed to prevent this parallel trading there-
fore constitute measures capable of having an appreci-
able effect on trade between Member States.

(191) A further prerequisite

applicability of
Article 81(1) is that the contested measures must be
capable of having an appreciable effect on trade between
Member States.

the

for

(192) That is the case if, on the basis of a set of objective
elements of law or fact, it is possible to foresee with a
sufficient degree of probability that they may have an
influence, direct or indirect, actual or potential, on the
pattern of trade between Member States capable of
hindering the attainment of the objectives of a single
market between Member States (189).

(193) All the measures listed in recital 180 were capable of
hindering cross-border trade in new motor vehicles to
an appreciable extent. Their purpose was to prevent or
restrict as far as possible the export of vehicles from
Germany to other Member States where prices were
higher and/or supply conditions less favourable (e.g.
long delivery times). The imposition on parallel exports
of a 15 % deposit which was not required for equivalent
domestic sales was likewise intended to curb these
transactions. The very nature of these measures therefore
affects cross-border trade in new Mercedes passenger
cars. As indicated in recitals 35 et seq. above, there was
trading due among other
appreciable actual parallel
things to differences in prices and delivery times or, in
any event, considerable scope for potential parallel
trading.

(194) Even if a certain proportion of the parallel trading that
was actually taking place involved the sale of vehicles to
unauthorised resellers (see recitals 36 et seq.),
the
measures were designed to prevent any parallel trading
which, in view of the differences in prices and delivery
times, was of interest not only to unauthorised resellers
but also to final consumers. Mercedes-Benz was at
liberty, moreover, to take action exclusively against the
transactions (with unauthorised resellers) which agents
and dealers were forbidden to engage in, which would

( 188) See Case 19/77 Miller International Schallplatten GmbH v Com-
mission [1978] ECR 131, at paragraphs 9 et seq.; Case 107/
82 Allgemeine Elektrizitäts-Gesellschaft AEG-Telefunkten AG v
Commission [1983] ECR 3151, at p. 3201.

( 189) Established case-law, see in particular Joined Cases C-215/96
and C-216/96 Bagnasco [1999] ECR I-135, at paragraph 47;
Case T-62/98 Volkswagen v Commission [2000] ECR II-2707, at
paragraph 179, and the case-law there cited.

(195) The measures listed in recital 181 have the object
and effect of restricting competition on prices and
conditions. They cover all or a large part of the exclusive
and selective distribution of Mercedes passenger cars in
one Member State or two Member States.

(196) The restrictions on supplies to outside leasing companies
are deliberately aimed at leasing companies which wish
to acquire a larger number of vehicles or whole leasing
fleets for which they have not yet found any identifiable
customers. Even more so than export transactions with
(private) buyers of individual vehicles — where Germany
and Spain are both actually and potentially exporting
countries (see recitals 35 et seq. and 48 et seq.) — this
type of larger-volume transaction is by its very nature
capable of leading to cross-border parallel trade. The
contractual provisions objected to systematically pro-
hibit all distribution partners independent of Mercedes-
Benz in two large Member States from engaging in such
transactions and are therefore capable of having an
appreciable effect on trade between Member States.

(197) The agreement on price setting by the Belgian distri-
bution partners keeps the level of prices throughout
Belgium high. As illustrated by the number of new
vehicles imported from Germany to Belgium (to some
extent, it is true, via unauthorised resellers), a measure
designed to uphold high prices in Belgium has an
appreciable effect on trade between Member States. As
already indicated, in vehicle retailing price is one of the
essential factors of competition. The Court of Justice of
the European Communities has ruled that trade between
Member States is affected not only where a measure
restricts interState trade or compartmentalises markets,
but also where an agreement leads to an increase, even
a large one, in the volume of trade between Member
States (190). Accordingly, it only needs to be shown that

(190) Joined Cases 56 and 58/64 Grundig/Consten v Commission [1966]
ECR 299; Commission decision of 18 july 1988 (Napier Brown
— British Sugar), OJ L 284, 19.10.1988, p. 41, at paragraph 80.

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an agreement
Member States (191), which is manifestly the case here.

is capable of affecting trade between

(201) Sales of vehicles to leasing companies may likewise not
be restricted to the extent that such companies are to be
regarded as final consumers.

(198) Overall, it can therefore be established that the above
measures affect trade between Member States to an
appreciable extent (192).

2.2. ARTICLE 81(3)

2.2.1.

BLOCK EXEMPTION REGULATIONS (EEC) No 123/
85 AND (EC) No 1475/95

(199) Commission Regulation (EEC) No 123/85 (OJ L 15,
18.1.1985, p. 16) was in force from 1 July 1985 to
30 June 1995. It was replaced on 1 July 1995 by the
new Regulation (EC) No 1475/95. Under Article 7 of
Regulation (EC) No 1475/95, the provisions of Regu-
lation (EEC) No 123/85 continued to apply until 30 Sep-
tember 1996 to distribution agreements that were
already in force on 1 October 1995 and that met the
requirements of Regulation (EEC) No 123/85. The
precise delimitation between the periods of application
of the two Regulations can be left open in the present
case since the assessment of the case does not depend
thereon.

2.2.1.1.

The export restrictions and the prohibition
companies:
to
sales
of
Article 3(10)(a)
of Regulation (EEC)
No 123/85 and Regulation (EC) No 1475/
95

leasing

(200) Article 3(10)(a) of the above Regulations allows Merced-
es-Benz to prohibit its distribution partners from supply-
ing contract goods or corresponding goods to resellers
outside its distribution system. However, sales to final
consumers or, where applicable, to intermediaries com-
missioned by them and to other members of
the
distribution network may not be prohibited or otherwise
prevented or impeded. This means in particular that
export transactions with such customers may not be
restricted in any way, as happened in the present case in
Germany.

( 191) Case T-62/98 Volkswagen v Commission [2000] ECR II-2707, at

paragraph 179, and the case-law there cited.

( 192) Joined Cases 100 to 103/80 Musique Diffusion Française (Pioneer)

v Commission [1983] ECR 1825, at paragraph 86.

(202) The Commission bases its assessment of whether leasing
companies are to be regarded in the present case as final
consumers or as ‘resellers’ on Regulation (EC) No 1475/
95. With respect to the agreements which such compani-
es conclude, for the purposes of the present Decision
only the period since 1 October 1996 is considered to
be the infringement period (see recital 222 and Articles 7
and 13 of Regulation (EC) No 1475/95).

(203) Generally speaking,

leasing companies become the
owners of the vehicles and remain so for the entire
duration of the leasing contract. They sell on the vehicles
as second-hand cars only once the leasing contract has
expired (or been terminated early). Sale as a second-hand
car does not as such constitute resale (by a ‘reseller’)
within the meaning of Article 3(10)(a) of Regulation
(EC) No 1475/95. This follows clearly from Article 10(4)
and (12), first sentence, of that Regulation.

(204) As far as the ‘leasing contract’ itself is concerned (i.e. the
contract between the leasing company that has acquired
the vehicle from a member of the distribution network
and a lessee), reference must be made to the second
sentence of Article 10(12) of Regulation (EC) No 1475/
95. Such a contract can be equated with a ‘resale’ only
where it ‘provide[s] for a transfer of ownership or an
option to purchase prior to the expiry of the contract’.
Otherwise, no ‘resale’ can in fact be said to take place.
The lessee does not acquire ownership of a new vehicle,
the vehicle being instead made available to him for use
for a given period in return for a fee.

(205) The relevant contractual clauses, however, make a
distinction only according to whether the vehicle has
been purchased for stock. In this case, the prohibition to
sell applies even if the leasing contract does not provide
for a transfer of ownership or for an option to purchase
before the end of the leasing contract.

(206) For the purposes of Regulation (EC) No 1475/95, what
matters is not whether the leasing company has bought
the vehicle concerned ‘for stock’ or for an already
identified lessee. The criterion used in the contracts
with German and Spanish distribution partners cannot
therefore be justified by the need to prevent sales to
‘resellers’ not belonging to the distribution system.

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(207) Article 10(13) of Regulation (EC) No 1475/95 gives rise
to the same conclusion: while ‘distribute’ and ‘sell’ are
defined as including other forms of supply by the dealer
such as leasing, DaimlerChrysler is right to point out
that this definition relates exclusively to the relationship
between manufacturer and dealer. It is meant to prevent
dealers from resorting to leasing in order to circumvent
some of their contractual obligations.

(208) DaimlerChrysler’s argument that a leasing company,
unlike a final consumer, does not bear the investment
risk for the acquired vehicle and is thus, in economic
terms, not the final consumer must be rejected. Regu-
lation (EC) No 1475/95 focuses, not on the existence of
an ‘investment risk’, but only on whether the person
concerned disposes of a motor vehicle which is still in a
new condition and which he had previously acquired in
his own name and on his own behalf (see recital 203).
Moreover, every purchaser bears an ‘investment risk’
irrespective of whether he is a private final consumer, a
business final consumer or a reseller. The same applies
to leasing companies. As the owner of the object to be
leased the leasing company bears the investment risk
from the time the vehicle is acquired, throughout the
duration of the leasing contract and up to the time the
vehicle is sold as a second-hand vehicle. Thus in the
event of the lessee’s inability to pay, and at the end of
the leasing contract, it must take back the vehicle and
either lease it again or sell it as a second-hand vehicle. In
this respect, there is no relevant difference for the
purposes of Regulation (EC) No 1475/95 between a
leasing company and a car rental firm, which Daimler-
Chrysler accepts to be a final consumer (193).

(209) Nor is it relevant for the purposes of Regulation (EC)
No 1475/95 that leasing companies generally pass on
certain costs (in particular insurance costs) to lessees
under agreements to that effect. As is clear from
Article 10(12) of the Regulation, this does not make the
leasing company a reseller (any more than it does a
rental firm which, for example, passes certain [insurance]
costs on to the hirer). Moreover, this general feature of
leasing contracts has nothing to do with the question
whether the leasing company acquires a vehicle ‘for
stock’ or for a customer determined in advance.

( 193) As does Advocate General Tesauro in his opinion delivered on
8 June1995 in Case C-70/93 BMW v ALD Auto-Leasing [1995]
ECR I-3439, at paragraphs 27 et seq. and 41 et seq.

(210) It may be the case that lessees today often decide what
type of vehicle they wish to lease with what type of
engine. There may also be lessees, however, who are
prepared to limit their choice to one of the vehicles
which the leasing company has available. These are
especially people who are interested in obtaining a
vehicle at short notice. A policy of preventing outside
leasing companies from making such offers cannot be
justified by the criteria in Article 10(12) of Regulation
(EC) No 1475/95 or more generally by the desire to
prevent the on-selling of new vehicles by resellers not
belonging to the distribution system.

(211) As far as advertising by leasing companies is concerned,
this concerns first and foremost the leasing conditions.
These conditions naturally always relate to a specific
model of vehicle. To this extent the advertising of the
conditions and of the model cannot be separated. It
follows from the clear wording of Regulation (EC)
No 1475/95 that such practices, common as they are in
the leasing business, do not make a leasing company a
reseller.

(212) The argument must also be addressed according to
which it follows from the explanations given by the
Court of Justice (194) that a leasing company constitutes
a reseller if it builds up stocks of vehicles for leasing (195).
Then its advertising activities would cover not only its
leasing services but also, according to DaimlerChrysler,
the vehicle itself, making the leasing company a resell-
er (196). This means that contracting parties can be
forbidden from carrying on such business.

(213) This argument cannot be upheld. As the Court of Justice
expressly held in the judgments cited by DaimlerChrysl-
er,
the exceptions contained in a block exemption
regulation should not be interpreted widely (197). In the
present case, however, the interpretation advocated by
DaimlerChrysler goes further than the clear wording of
the second sentence of Article 10(12) of Regulation (EC)
No 1475/95. It should be noted in this context that

(194) Case C-70/93 BMW v ALD Auto-Leasing [1995] ECR I-3439, at
paragraph 29 and Case C-266/93 Bundeskartellamt v VW and
VAG Leasing [1995] ECR I-3477, at paragraph 34.

(195) End of points 165 and 166 of the reply to the statement of

objections.

(196) End of point 165 of the reply to the statement of objections.
(197) Case C-70/93 BMW v ALD Auto-Leasing [1995] ECR I-3439, at
paragraph 28 and Case C-266/93 Bundeskartellamt v VW and
VAG Leasing [1995] ECR I-3477, at paragraph 33.

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the Court’s reflections on the building-up of ‘stocks’
concerned only the legal position under Regulation
(EEC) No 123/85, where such a clear wording was
lacking (198).

2.2.1.2.

Scrutiny of the remaining agreements in the
light of Regulation (EEC) No 123/85 and
Regulation (EC) No 1475/95

(214) The remaining restrictions of competition listed in
recitals 180 and 181 are not exempt under any of the
provisions of the block exemption regulations covering
motor vehicle distribution.

2.2.2.

INDIVIDUAL EXEMPTION

(215) There is no question of an individual exemption for the

agreements concerned.

(216) In the case of the export restrictions on new vehicles,
this is apparent from the fact that, even if it were argued
that a restriction on exports would help to improve
the distribution of goods within each Member State,
consumers would not share in the resulting benefit.
They are deprived of the possibility of exploiting the
benefits of the single market and acquiring their vehicles
in another Member State on more favourable terms.

(217) The obligation on agents to require a 15 % deposit in
nearly all cases of parallel export does not always lead
to an improvement in the distribution of goods. In
particular where the customer is known to the agent or
has purchased vehicles from him on several occasions,
there is, as with a domestic transaction, no good
economic reason for a deposit. Systematically requiring
such a deposit is not imperatively connected with the
justified concern to ensure that the vehicle will be
purchased and the purchase price paid in full.

(218) The restrictions on the sale of new vehicles to leasing
companies and the setting of prices in Belgium have as
their object the restriction of competition on prices and
conditions and seriously interfere with the freedom of
contract of agents and dealers. It is not obvious that
these restrictions could help to improve the distribution
of goods or that consumers will have a fair share of the
benefit resulting from the agreements.

2.3. DURATION OF THE INFRINGEMENTS

(219) The measures identified in this case were of differing
durations. In some cases, they have already ended, in
others they are still continuing.

(220) The direct restrictions on exports (199) were put into
place on 6 February 1996 with the dispatch of the
memorandum to the entire German distribution net-
work. The cuts in supplies which were decided on
26 February 1996 at the LVP meeting and notified on
5 March 1996 to regions and passenger car sales
managers were intended to enforce these restrictions.
The exchange of letters between Mercedes-Benz and the
Federal Association of Mercedes-Benz Agents (BVMB
eV) on 26 June 1996 with the reply dated 22 July 1996
confirms the export restrictions. These measures ended
in the main with the memo sent on 10 June 1999.

(221) The rules on deposits payable by Komm-Kunden on the
basis of circular No 52/85 dated 12 September 1985
(see recital 103), which likewise restrict parallel exports,
can be proved to have existed from that date. They have
not yet been abolished.

(222) The German agency agreements and the Spanish dealer
agreements have contained, since 1 August 1987 and
1 October 1996 respectively, provisions prohibiting
supplies to leasing companies for the purpose of building
up stocks. Distribution agreements falling under Regu-
lation (EC) No 1475/95 are prohibited, as from 1 Octo-
ber 1996 at the latest, from containing such restrictions.
The infringement
the latest on
1 October 1996. It has not been terminated to date.

therefore began at

(223) The setting of sales prices in Belgium can be proved to
date from 20 April 1995. It was terminated only with
the sending of the circular dated 10 June 1999.

(224) On the duration of the infringements DaimlerChrysler
points to the managing board’s letter of 7 May 1998 to
the Member of
the Commission, Karel Van Miert,
regarding the setting up of a hotline for complaints from
final consumers (200). It said that from this point in time
the Commission could no longer claim that any

( 198) See the express references in the judgments in the abovemen-
tioned Cases C-70/93 BMW v ALD Auto-Leasing [1995] ECR I-
3439, at paragraphs 25 and 30, and C-266/93 Bundeskartellamt
v VW and VAG Leasing [1995] ECR I-3477, at paragraphs 30
and 35.

(199) Recitals 70 et seq.
(200) Point 174 of the reply to the statement of objections and

enclosure.

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infringements existed. This objection must be rejected.
While the hotline is a sort of complaints office, it has no
right to supervise or instruct the agents and dealers
belonging to the Mercedes-Benz distribution system. In
this respect, the setting-up of the Mercedes-Benz hotline
did not put an end to the infringements.

Daimler-Benz AG was also responsible for the conduct
of its subsidiaries in Belgium (MBBel) and Spain (MBE),
since it had a stake of at least 99,88 % in these
companies (203). Furthermore, the activities of the above
subsidiaries of Daimler-Benz were known to Daimler-
Benz AG/Mercedes-Benz AG and, to a large extent, even
actively promoted by it.

(225) The following table summarises the duration of each of

the individual infringements established.

2.5. ARTICLE 3(1) OF REGULATION No 17

Measure

Start

End

Export
tions (201)

restric- 15 % deposit rule: 15 % deposit obli-
yet

12.9.1985;

not

gation:
ended

export Circular 10.6.1999

Other
restrictions:
6.2.1996

leasing

Prohibition on sales 1.10.1996
com-
to
panies in Germany
and Spain

Not yet ended

Setting sales prices 20.4.1995
in Belgium

Circular 10.6.1999

(201) Recitals 70 et seq.

there is

(229) Under Article 3(1) of Regulation No 17, where the
Commission finds
infringement of
that
Article 81(1), it may by decision require the undertakings
concerned to bring to an end infringements that are still
continuing. As explained, DaimlerChrysler sent a circular
on 10 June 1999 to its distribution partners putting an
end to some of the infringements established in this
Decision. The agreements objected to by the Com-
mission regarding the need for deposits of 15 % in
parallel export
transactions and the restrictions on
supplies to leasing companies, however, were not ter-
minated. In this respect, the infringements have therefore
not been brought to an end. DaimlerChrysler must
therefore be required to end the above measures immedi-
ately and not to replace them by other comparable
restrictions.

(230) In view of the serious nature of the continuing infringe-
ments, a fine should be imposed in order to ensure the
effectiveness of the measures prescribed.

2.4.

PARTY TO WHICH THIS DECISION IS ADDRESSED

2.6. ARTICLE 15(2) OF REGULATION No 17

(226) This Decision is addressed to DaimlerChrysler AG.

(227) DaimlerChrysler AG became the legal successor to
Daimler-Benz AG as a result of the abovementioned
merger on 21 December 1998. Daimler-Benz AG
became the legal successor to Mercedes-Benz AG on
26 May 1997 by way of a merger. Pursuant to section
20(1) of the Conversion Act (Umwandlungsgesetz) (202),
these two mergers resulted in all rights, assets, liabilities
the company taken over being
and obligations of
transferred to its legal successor.

(228) Daimler-Benz AG was responsible for the conduct of its
wholly-owned subsidiary, Mercedes-Benz AG, since the
latter’s dependence under company law meant that it
could not pursue an autonomous distribution policy.

( 202) Conversion Act of 28.10.1994, Bundesgesetzblatt

I 1994,

p. 3210; corrigendum in Bundesgesetzblatt I 1995, p. 428.

(231) Article 15(2) of Regulation 17/62 empowers the Com-
mission to impose fines, within the stated limits, on
undertakings which have infringed Article 81(1) either
intentionally or negligently.

(232) In the present case, the Commission considers it necess-
ary to impose a fine on DaimlerChrysler AG. Daimler-
Chrysler AG is the direct legal successor to Daimler-
Benz AG, which is the direct legal successor to Mercedes-
Benz AG. DaimlerChrysler AG is therefore legally
responsible for all the infringements of competition law
perpetrated by Daimler-Benz AG and Mercedes-Benz
AG themselves or by the Daimler-Benz subsidiaries
MBBel and MBE.

(203) Case 107/82 AEG v Commission [1983] ECR 3151, at para-
graph 50; Case 48/69 Imperial Chemical Industries Ltd v Com-
mission [1972] ECR 619, at paragraphs 132/135; Emmerich in
Immenga/Mestmäcker,
Wettbewerbsrecht
Article 85(1), paragraph 59, with further references in footnote
120.

Europäisches

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(233) Although the members of the Mercedes-Benz distri-
bution network (i.e. the German agents and the Belgian
and Spanish dealers) were likewise party to the anti-
competitive agreements, it does not appear appropriate
to impose fines on these undertakings also. The initiative
in respect of the export restrictions and the restrictions
on supplies to leasing companies lay with Mercedes-
Benz; the observance of these restrictive agreements was
urged upon the German agents, in some cases repeatedly.
The setting of prices in Belgium was actively supported
by Mercedes-Benz, cuts in vehicle supplies being threat-
ened as a penalty should test purchases reveal that the
Belgian dealers were granting discounts of more than
3 % on purchases of an E-class Mercedes. This shows
that, without the initiative and the active cooperation of
Mercedes-Benz against the financially weaker distri-
bution partners, the infringements at issue here would
not have been committed or at
least would have
remained largely ineffective. This finding is not altered
by the fact that the German Federal Association of
Mercedes-Benz Agents generally approved the measures
to restrict internal competition. As far as the Belgian
dealers are concerned, although a certain initiative on
their part seemingly came out of the meeting of 20 April
1995, MBBel clearly took the lead on that date and
agreed additional sanctions which only it could impose.

classified as very serious by its nature, since the measures
infringed against a basic principle of the single market.
The memo of 6 February 1996 (see recital 78) made
particular reference to the W 210 series, but also to
other series. This also applies to the memo of 15 March
1996, in which it is threatened to cut supplies of other
series in addition to the cuts in the W 210 series. The
importance of complying with this memo was again
stressed at the LVP meeting on 26 February 1996.
The Northern Region was again separately urged on
15 March 1996 to do all in its power to avoid deliveries
to Belgium. The measure covered the territory of a large
Member State, in which just under a half of all new
vehicles are sold via independent contracting partners
of DaimlerChrysler who are agents. The distribution
partners outside the contract territory of an agent,
especially in the potential target States of exports, were
granted territorial protection.

(237) The same applies to the rule whereby in the case of
parallel exports a 15 % deposit should normally be
required from customers. This likewise results in parallel
exports being discriminated against compared with
domestic transactions, and this concerns all models.

(234) In fixing the amount of the fine under Article 15(2) of
Regulation No 17, the Commission has to take account
of all relevant circumstances, and in particular the
gravity and the duration of the infringement.

(238) The share of Mercedes-Benz in the main relevant seg-
ments D (upper medium class), E (executive class), and F
(luxury class) in the period 1995 to 1997 was between
about 13 % and about 36 % (for details see recitals 23 et
seq. and 183 et seq. above).

(235) In determining the gravity of the infringement, the
Commission takes account of the nature of the infringe-
ment, its actual effects on the market, in so far as these
can be measured, and the size of the relevant market.
Depending on the duration, the amount initially deter-
mined for the gravity of
the infringement may be
increased. In what follows the Commission draws the
necessary conclusions from these criteria for each of the
three infringements.

(236) In the Commission’s view,

the measures aimed at
restricting exports constitute a single infringement con-
sisting of two elements (the instruction not to sell
outside the contract territory and the 15 % deposit rule)
which for a time had a cumulative effect. The same idea
underlay these measures, namely that agents should
restrict their sales activities as far as possible to their
contract territory and should not compete with the other
distribution partners in Germany, or with the branches
and the distribution partners in other Member States of
the Community. The measures had the object of
restricting parallel trade. This infringement must be

(239) The infringement was intentional since Mercedes-Benz
could not have been unaware that by their very nature
the abovementioned arrangements had as their object
the restriction of competition (204).

(240) Furthermore, there are numerous documents proving
that Mercedes-Benz knew that the sale of new vehicles
to final consumers in other Member States should not
be hindered directly or indirectly. That is why, from
the mid-1970s,
it abandoned the ‘customer service
commission’ charged to a dealer or agent that had sold
a vehicle to an EU customer (205). Mercedes-Benz also
knew with regard to German agents ‘that MB can have

(204) Case 19/77 Miller International Schallplatten GmbH v Commission

[1978] ECR 131, at paragraph 18.

(205) File, p. 1183; memo from the VP/A2 department to Mr Schmitt
on the grey market discussion of the previous day. The memo
the VP/M-4 department dated
bears the receipt stamp of
16 November 1995; likewise the letter from the VMC depart-
ment on 16 October 1995 on Komm-Kunden business, file,
p. 375.

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the exemption withdrawn by the Commission if even
so much as one distribution partner continuously or
systematically hinders purchases by Komm-Kunden from
EU Member States or associated countries’ (206). Refer-
ence must also be made to the longstanding decision-
making practice on export restrictions (207).

(241) Overall, the Commission views the infringement as
particularly serious. It considers a starting amount of
EUR 33 million to be appropriate.

(242) As regards the duration of the infringement, the follow-
ing should be pointed out.
If both elements of the
infringement are taken together, the infringement began
on 12 September 1985 and has not yet ended. It is
therefore an infringement of long duration. However,
the potential
impact of the deposit rule was much
smaller than that of the instructions aimed directly
against exports. The latter were in force only during the
period from 6 February 1996 to 10 June 1999, i.e. for
three years and four months. The Commission therefore
considers it appropriate to increase the starting amount
by only 42,5 %, i.e. by EUR 14,025 million. The basic
amount is therefore EUR 47,025 million.

(243) The ban on selling vehicles to leasing companies for
stock, as contained in the German agency and Spanish
dealer agreements, that covers all series and is today still
considered by DaimlerChrysler to be lawful, restricts
procurement possibilities for leasing companies. The
measure has the object and effect of preventing leasing
companies from being able to provide customers with
immediately available vehicles and from benefiting from
quantity discounts by ordering several vehicles, as is
clear from the memo of 6 August 1996. It also has the
effect of restricting price competition both for Mercedes-
Benz agents and dealers and for the leasing companies.
Although the measure concerns the sale of new vehicles
in two large Member States, it extends only to vehicles

( 206) See footnote 239.
( 207) Commission decision 83/367/EEC of 2 December 1981 in Case
IV/25.757 Hasselblad (OJ L 161, 12.6.1982, p. 18) confirmed
by the judgment of the Court of 21 Febraury 1984 in Case 86/
82 Hasselblad v Commission [1984] ECR 883, at paragraph 35;
Commission decision 85/79/EEC of 14 December 1984 in Case
IV/30.809 John Deere (OJ L 35, 7.2.1985, p. 58); Commission
decision 85/617/EEC of 16 December 1985 in Case IV/30.839
Sperry New Holland (OJ L 376, 31.12.1985, p. 21); Commission
decision of 17 July 1987 in Sandoz, (OJ L 222, 10.8.1987,
p. 28); Commission decision 98/273/EC of 28 January 1998 in
Case IV/35.733 Volkswagen (OJ L 124, 25.4.1998, p. 60).

intended for ‘outside leasing companies’ (208). On the
importance of Mercedes-Benz on the market, reference
is made to recitals 23 et seq. and 183 et seq. In respect
of this infringement also, Mercedes-Benz has been acting
intentionally within the meaning of the case-law. As an
illustration, reference is made to the memo of 6 August
1996, which states that the failure to observe contractual
provisions meant that outside leasing companies had
‘include[d] discounts in individual transactions, where
we would not be prepared to grant discounts in the
respective cases’. Overall, this infringement must be
classified as serious. As a starting amount the Com-
mission considers an amount of EUR 10 million to be
appropriate.

(244) The infringement of Article 81 began on 1 October
1996 and has not yet ended. Its duration therefore
amounts to five years, which corresponds to a medium
duration. The Commission therefore considers it appro-
priate to increase the starting amount in the light of the
duration of the infringement by 50 %, i.e. by EUR
5 million, to a basic amount of EUR 15 million.

(245) The measures adopted with the active involvement of
MBBel with a view to setting sales prices in Belgium by
their very nature constitute a very serious infringement
of the competition rules. Account should be taken of
the fact that the measure first demonstrably covered the
W 210 model, but that subsequently discount practice
in relation to other models was also checked. The
measure was taken across an entire Member State of the
Community, i.e. Belgium, which is, however, not a big
Member State. On the importance of Mercedes-Benz on
the market, see recitals 23 et seq. and 183 et seq. above.
In respect of
this infringement also, Mercedes-Benz
acted intentionally within the meaning of the case-
law. Overall, the Commission therefore regards this
infringement as serious. It considers a starting amount
of EUR 7 million to be appropriate.

(246) These measures were in force from 20 April 1995 to
10 June 1999, i.e. for a period of medium duration.
The Commission therefore considers it appropriate to
increase the starting amount by 40 %,
i.e. by EUR
2,8 million, to EUR 9,8 million.

(247) Aggravating and mitigating circumstances must also be

taken into account in calculating the fine.

(248) No aggravating circumstances are apparent.

(208) In Germany approximately 7 % of the vehicles sold via agents
are sold to outside leasing companies. In Spain dealers sell
approximately 10 % of vehicles to outside leasing companies.

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(249) DaimlerChrysler argues that a mitigating circumstance
is the fact that members of the managing board and
managers of the subsidiaries were not themselves among
those taking action in the cases which are to be
viewed critically. Those responsible were in subordinate
positions. The sales,
legal and contract departments
always worked towards avoiding infringements of the
law.

(250) The Commission rejects this argument. If staff at Merced-
es-Benz or its subsidiaries send circulars or letters in the
course of their duties to agents or dealers or even other
distribution companies, then the manufacturer must
take responsibility for this. This cannot be construed as
a mitigating circumstance.

(251) DaimlerChrysler further argues that between 1995 and
1998 the Commission sent DaimlerChrysler only
27 consumer complaints. Four of them could not be
examined owing to an insufficient description of the
facts, 16 were unjustified and only seven were wholly or
partly justified (209).

(252) Setting a fine depends on the points of view set out in
recitals 232 et seq. and in particular on whether a
company has
taken measures with the object of
restricting competition. The fact that these measures
may not have been noticed by the final consumers
concerned and that the latter may not have complained
to the Commission about them is not an argument
constituting a mitigating factor in the setting of the fine.

(253) The abovementioned amounts when added together give

a total fine of EUR 71,825 million,

HAS ADOPTED THIS DECISION:

— as of 12 September 1985 their agents in Germany were
instructed to require a deposit of 15 % of the vehicle price
for orders for new vehicles placed by Komm-Kunden; this
measure has not yet been terminated,

— restricting, from 1 October 1996 until the present time,
the supply of passenger cars to leasing companies for
stock,

— participating in agreements to restrict the granting of
discounts in Belgium, these agreements having been
concluded on 20 April 1995 and terminated on 10 June
1999.

Article 2

DaimlerChrysler AG shall, immediately after this Decision is
notified, bring to an end the infringements established in
Article 1 to the extent that they are still continuing and shall
not replace them with restrictions having the same object or
effect; in particular, it shall at the latest within two months of
notification of this Decision:

— withdraw circular No 52/85 of 12 September 1985 by
sending a circular to the German agents and principal
agents, in so far as it instructs them to require Komm-
Kunde to pay a deposit of 15 % when ordering a passenger
car,

— remove from the German agency agreements and the
Spanish dealer agreements the rules prohibiting the sale
of new vehicles to leasing companies for stock. It shall
also inform its German agents by memo of the withdrawal
of the memo of 6 August 1996.

Article 1

A fine of EUR 71,825 million is imposed on DaimlerChrysler
AG in respect of the infringements referred to in Article 1.

Article 3

DaimlerChrysler AG and its legal predecessors Daimler-Benz
AG and Mercedes-Benz AG have themselves or through their
subsidiaries Mercedes-Benz Espan˜ a SA and Mercedes-Benz
Belgium SA/NV infringed Article 81(1) of the EC Treaty by
taking the following measures to restrict parallel trade:

— as of 6 February 1996 all agents in Germany were
instructed as far as possible to supply new vehicles
supplied to them, and in particular those in the W 210
series, only to customers in their own contract territory
and to avoid internal competition; these measures were
in force until 10 June 1999,

( 209) End of point 178 of the reply to the statement of objections.

Article 4

The fine determined in Article 3 shall be paid in euro within
three months following the date of notification of this Decision
into the following bank account of the Commission of the
European Communities:

642-0029000-95 (Code IBAN: BE76 6420 0290 0095)
Banco Bilbao Vizcaya Argentaria (BBVA) (SWIFT Code:
BBVABEBB)
Avenue des Arts/Kunstlaan 43
B-1040 Brussels

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After expiry of that period, interest shall become payable. The
rate applicable shall be that which the European Central Bank
applies to its main refinancing operations. The interest shall be
payable from the first working day of the month in which this
Decision was adopted. A supplement of 3,5 percentage points
shall be charged. In total, the interest rate shall be 7,26 %.

Article 6

This Decision is addressed to DaimlerChrysler AG, D-70546
Stuttgart.

This Decision shall be enforceable pursuant to Article 256 of
the EC Treaty.

Article 5

Done at Brussels, 10 October 2001.

In respect of the obligations laid down in Article 2, Daimler-
Chrysler AG shall be fined a penalty of EUR 1 000 for every
day’s delay in implementing this Decision. The delay shall be
calculated from the expiry of the two month period laid down
for implementation.

For the Commission

Mario MONTI

Member of the Commission