Case C-12/03 P: Appeal brought on 13 January 2003 by the Commission of the European Communities against the judgment delivered on 25 October 2002 by the First Chamber of the Court of First Instance of the European Communities in case T-5/02 between Tetra Laval BV and the Commission of the European Communities
Date: 2003-03-22
Institutions: Court of Justice
Subjects: European Commission, General Court (EU), action for annulment (EU), competition law, dominant position, economic concentration, preparation for market

22.3.2003

EN

Official Journal of the European Union

C 70/3

5. Does this apply also where it may be assumed that the
person will be released after an insignificant, reasonable
time, but must then submit to treatment for drug abuse
and will not be able to take up employment until he has
completed additional school education?

6.

Is Article 14(1) of Decision No 1/80 to be interpreted as
meaning that the court requires to take into account a
change in circumstances which occurs after the most
recent administrative decision and which is favourable to
the person concerned such that it would preclude the
application of any of the limitations in Article 14 of
Decision No 1/80?

Pleas in law and main arguments

— Infringement of Article 8(1)(b) of Regulation No 40/
94; the trade mark applied for,
‘MATRATZEN markt
CONCORD’, which consists of three words and a figurat-
ive element, and the opposing earlier trade mark, ‘Matrat-
zen’, are not similar, but completely different. The Court
of First Instance did not base its assessment on the overall
impression created by the marks and thus failed to have
regard to the principles established in the judgment of
the Court of Justice in Case C-251/95 (SABEL). The
finding that the word ‘MATRATZEN’ alone is the domi-
nant feature of the trade mark applied for is contrary to
the rules of logic and to experience.

— Breach of the principle of the free movement of goods
(Articles 28 and 30 EC); the opposition based on the
earlier mark is an abuse of a formal legal position. This
was not sufficiently assessed by the Court of First Instance.

Appeal brought on 7 January 2003 by Matratzen Concord
formerly Matratzen Concord AG, against the
GmbH,
judgment delivered on 23 October 2002 by the Fourth
Chamber of the Court of First Instance of the European
Communities in Case T-6/01 between Matratzen Concord
GmbH, formerly Matratzen Concord AG, and the Office
for Harmonisation in the Internal Market (Trade Marks
and Designs)

(1) OJ 2003 C 19.

(Case C-3/03 P)

(2003/C 70/06)

An appeal against the judgment delivered on 23 October 2002
by the Fourth Chamber of the Court of First Instance of the
European Communities in Case T-6/01 between Matratzen
Concord GmbH, formerly Matratzen Concord AG, and the
Office for Harmonisation in the Internal Market (Trade Marks
and Designs) was brought before the Court of Justice of the
European Communities on 7 January 2003 by Matratzen
Concord GmbH,
represented by Dr Wolf-W. Wodrich,
Rechtsanwalt, Huyssenallee 58-64, D-45128 Essen, with an
address for service in Luxembourg, assisted by Patentanwälte
Zenz, Helber, Hosbach & Partner, Huyssenallee 58-64, D-
45128 Essen.

The appellant claims that the Court should:

— set aside the judgment of the Court of First Instance of
the European Communities of 23 October 2002 in Case
T-6/01 (1),

— reject the opposition of the other party to the proceedings
before the Board of Appeal of 21 April 1998 (OHIM ref.:
B 32 500),

— order OHIM and the other party to the proceedings
before the Board of Appeal to pay the costs of the
proceedings before the Opposition Division and before
the Board of Appeal of OHIM, as well as the costs of the
proceedings on the action and on this appeal.

Appeal brought on 13 January 2003 by the Commission
of the European Communities against the judgment deliv-
ered on 25 October 2002 by the First Chamber of the
Court of First Instance of the European Communities in
case T-5/02 between Tetra Laval BV and the Commission
of the European Communities

(Case C-12/03 P)

(2003/C 70/07)

An appeal against the judgment delivered on 25 October 2002
by the First Chamber of the Court of First Instance of the
European Communities in case T-5/02 (1) between Tetra Laval
BV and the Commission of
the European Communities,
was brought before the Court of Justice of the European
Communities on 13 January 2003 by the Commission of the
European Communities, represented by Michel Petite, Anthony
Whelan and Per Hellström, acting as agents, with an address
for service in Luxembourg.

The Appellant claims that the Court should:

— annul the judgment of the Court of First Instance of
25 October 2002 in case T-5/02, Tetra Laval BV v
Commission;

— order Tetra Laval BV to pay the Commission’s costs.

C 70/4

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Official Journal of the European Union

22.3.2003

Pleas in law and main arguments

1. Error of law regarding the standards of proof and of

judicial review

The Commission submits that the Court of First Instance erred
in law on two related grounds:

1)

2)

that the standard of judicial review invoked by the Court
of First Instance in the contested judgment is self-
contradictory and inconsistent with both Article 230 EC
and Article 2 of the Merger Regulation (2);

that in the application of this standard of judicial review,
the Court of First Instance exceeded the role of the
Community Courts in reviewing the administrative acts
of the Commission, in particular by substituting its view
for that of the Commission on a number of central
points.

The Commission submits that the Court of First Instance
contradicts itself by purporting to apply a standard of review
in reality,
based on manifest error of assessment while,
applying a different standard.

The Commission also submits that the standard of proof
required by the Court of First Instance in the contested
judgment exceeds the standard of review of the legality of
Community acts. Article 230 EC grants the Community Courts
the competence to review the legality of acts of the institutions.
The Commission considers that the Court of First Instance,
whilst referring to ‘manifest error of assessment’
in the
judgment, has in fact significantly raised the level of standard
of proof required from the Commission to prohibit a conglom-
erate merger and has thereby gone beyond the review of
legality. In essence, the Court attempts to apply a standard
based on the need for the Commission to ‘convince’ the Court
rather than on the necessity for the Applicant to show either
an error of act or of law or a manifest error of assessment on
the part of the Commission. This standard leads the Court of
First Instance unlawfully to substitute its own assessment for
that of the Commission.

2. Error of law in requiring the Commission to assess the
impact of ‘the illegal nature’ of certain conduct on the
incentives of the merged entity to engage in leveraging
and to take account of purely behavioural remedies —
infringement of Articles 2 and 8 of the Regulation

The Commission respectfully submits that the Court of First
Instance erred in law and infringed, in particular, Articles 2

and 8 of the Regulation by requesting the Commission to take
into account the impact of the illegality of certain conduct and
to assess as potential remedies promises not to engage in
abusive behaviour.

The Court of First Instance’s interpretation is also inconsistent,
in part, with general principles of Community law (the
principle of equality and the presumption of innocence). In
reaching its findings, the Court of First Instance also distorted
the content of the Decision (3). The results of these errors of
law permeate the whole of the Court of First Instance’s
assessment of the Decision and affect the outcome of the
present case. As a result, the judgment should be set aside.

3. Error of law in not upholding the Commission’s market
definition of end-use-specific product markets for SBM
machinery

The Commission submits that the Court of First Instance erred
in law and infringed, in particular, Article 2 of the Merger
Regulation by holding that ‘the contested decision does not
provide sufficient evidence to justify the definition of distinct
sub-markets among SBM machines with reference to their
end-use’ and that ‘consequently the only sub-markets it is
necessary to consider are those for low and high capacity
machines’.

4. Error of law in not upholding the Commission’s finding
of strengthening of Tetra’s carton dominance —
infringement of Article 2 of the Regulation, distortion
of the facts and failure to take into account the
Commission’s arguments

The Commission respectfully submits that the Court of First
Instance erred in law by holding that the evidence relied on in
the contested decision does not establish to the requisite legal
standard that the effects of the modified merger on Tetra’s
position, principally on the aseptic carton markets, would, by
eliminating Sidel as a potential competitor, be such as to fulfil
the conditions of Article 2(3) of the Regulation.

The Decision was based on a horizontal-type of analysis
relating to elimination of potential competition. In the carton
market, Tetra is strongly dominant, with a market share above
80 % in aseptic carton. Competition is thus already severely
weakened. The main threats to Tetra as regards the packaging
of sensitive products in carton come from outside the carton
market and most notably from the growing market for PET,

22.3.2003

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Official Journal of the European Union

C 70/5

where Sidel, with 60 % market share for all SBM machines by
capacity, has a leading position. By buying Sidel, Tetra
eliminated the strongest independent competitive constraint
coming from the biggest supplier on the PET side and would
thus strengthen its carton dominance.

( 1) OJ C 68, 16.03.2002, p. 19.
( 2) Council Regulation (EEC) No 4064/89 of 21 December 1989 on
the control of concentrations between undertakings (OJ L 395,
30.12.1989, p. 1).

( 3) Commission Decision C (2001) 3345 final of 30 October 2001
declaring a concentration to be incompatible with the common
market, Case No COMP/M.2416 Tetra Laval/Sidel.

As the concentration had already been implemented, the
Commission issued a statement of objections, to which Tetra
replied, and held a hearing, with a view to taking a decision
setting out measures in order to restore conditions of effective
competition pursuant to Article 8(4) of the Regulation. On
30 January 2002, the Commission adopted such a decision
(‘the divestiture decision’).

Article 1 of the divestiture decision orders Tetra ‘to separate
itself from Sidel... in accordance with the provisions of the
Annex to this Decision’. Point 1(5) of the Annex requires Tetra
to divest itself of its entire shareholding in Sidel. Point 4(1) of
the Annex specifies a deadline for completion of the divestiture.

Appeal brought on 13 January 2003 by the Commission
of the European Communities against the judgment deliv-
ered on 25 October 2002 by the First Chamber of the
Court of First Instance of the European Communities in
case T-80/02 between Tetra Laval BV and the Commission
of the European Communities

By separate applications, Tetra sought the annulment of both
the prohibition decision (case T-5/02) and the divestiture
decision (case T-80/02). The Court of First Instance gave
judgment in both cases on 25 October 2002.

(Case C-13/03 P)

(2003/C 70/08)

In its judgment in case T-5/02, the Court of First Instance
annulled the prohibition decision.

An appeal against the judgment delivered on 25 October 2002
by the First Chamber of the Court of First Instance of the
European Communities in case T-80/02 (1) between Tetra
Laval BV and the Commission of the European Communities,
was brought before the Court of Justice of the European
Communities on 13 January 2003 by the Commission of the
European Communities, represented by Michel Petite, Anthony
Whelan and Per Hellström, acting as agents, with an address
for service in Luxembourg.

The Appellant claims that the Court should:

— annul the judgment of the Court of First Instance of

25 October 2002 in case T-80/02;

— order Tetra Laval BV to pay the Commission’s costs.

Pleas in law and main arguments

The Commission adopted a decision pursuant to Article 8(3)
of the Merger Regulation (2) on 30 October 2001 prohibiting
the notified concentration between Tetra Laval SA, a wholly
owned subsidiary of Tetra Laval BV (‘Tetra’) and Sidel SA (‘the
prohibition decision’) (3).

In its judgment in case T-80/02 (‘the contested judgment’), the
Court of First Instance observed that the concentration had
indeed been implemented and that the separation of the
undertakings involved in the concentration was the logical
consequence of the prohibition decision. It added that the
adoption of a divestiture decision presupposes that the preced-
ing prohibition decision is valid. Accordingly, the annulment
of the prohibition decision deprives the divestiture decision of
any legal basis. The Court of First Instance concluded that,
since it had annulled the prohibition decision by its judgment
in case T-5/02, the action for the annulment of the divestiture
decision had to be upheld, without examining the other pleas
raised by Tetra.

lead to the annulment of

The Commission has appealed on a number of points of law
against the judgment of the Court of First Instance in case T-
5/02. Should that appeal
the
judgment of the Court of First Instance in that case, the
judgment of the Court of First Instance in case T-80/02 will be
based on a premise vitiated by an error of law, that is, the
invalidity of the prohibition decision. Just as the annulment of
the prohibition decision was the sole ground for the annulment
of the divestiture decision, the invalidity of the judgment
annulling the former would entail the annulment of the
judgment pronouncing the invalidity of the latter.