2004/208/EC: Commission decision of 16 October 2003 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Cases COMP D3/35470 — ARA and COMP D3/35473 — ARGEV, ARO) (Text with EEA relevance) (notified under document number C(2003) 3703)
Date: 2003-10-16
Institutions: European Commission
Subjects: inter-company agreement, restriction on competition, waste recycling

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Official Journal of the European Union

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COMMISSION DECISION

of 16 October 2003

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA
Agreement (Cases COMP D3/35470 — ARA and COMP D3/35473 — ARGEV, ARO)

(notified under document number C(2003) 3703)

(Only the German text is authentic)

(Text with EEA relevance)

(2004/208/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the final report of the Hearing Officer in this
case (4),

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

Whereas:

Having regard to the Agreement on the European Economic
Area,

Having regard to the Act concerning the accession of Austria,
Finland and Sweden,

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 1/2003 (2),
and in particular Articles 2, 6 and 8 thereof,

Having regard to the applications for negative clearance or
exemption of the agreements underlying the ARA system
which were entered into by Alstoff Recycling Austria AG
(ARA)
and ARGEV Verpackungsverwertungs-Gesellschaft
mbH (ARGEV) on 30 June 1994 and by ARA, ARGEV
and Altpapier-Recycling-Organisations GmbH (ARO) on
31 August 2001,

Having regard to the complaint submitted by FRS Folien-
Rücknahme-Service GmbH & Co KG and Raiffeisen Umweltge-
sellschaft mbH on 8 May 1996 alleging infringements of
Articles 81 and 82 of the EC Treaty and asking the Commission
to put an end to the infringements, a complaint which was
taken up and elaborated on by EVA Erfassen und Verwerten
von Altstoffen GmbH on 27 April 2000,

Having regard to the decision of 24 July 2002 to initiate
proceedings in this case,

Having given the third parties concerned the opportunity to
make known their views in accordance with Article 19(3) of
Regulation No 17 (3),

Having consulted the Advisory Committee on Restrictive
Practices and Dominant Positions,

FACTS

I.

INTRODUCTION

(1) On 30 June 1994 Altstoff Recycling Austria AG (ARA)
and ARGEV Verpackungsverwertungs-Gesellschaft mbH
(ARGEV), both with their registered offices in Vienna,
notified various agreements to the EFTA Surveillance
Authority seeking negative clearance or alternatively
exemption from the ban on restrictive practices.

(2)

(3)

In a letter dated 21 March 1995 EFTA transferred
responsibility for examining these notified agreements
to the Commission.

ARA organises a countrywide collection and recycling
system for packaging in Austria. The system is designed
to meet the requirements laid down in the ordinance of
the Federal Minister for the Environment, Youth and
Family Affairs on the avoidance and recycling of packag-
ing waste and certain waste goods and the establishment
of collection and recycling systems (5) (Verpack VO —
Packaging Ordinance). To this end, ARA concludes waste
disposal contracts with sectoral recycling companies
(Branchenrecyclinggesellschaften — BRGs), assigning to
them the task of organising the collection, sorting,
transport and recycling of packaging. The BRGs, of
which ARGEV is one, are each responsible for specific
packaging materials or categories of material. They in
turn conclude contracts with undertakings or local
authorities, which then do the actual collection, sorting,
transport and recycling. ARA and the BRGs together
form the ARA system.

(1) OJ 13, 21.2.1962, p. 204/62.
(2) OJ L 1, 4.1.2003, p. 1.
(3) OJ C 252, 19.10.2002, p. 2.

(4) OJ C 64, 12.3.2004.
(5) BGB1. No 648/1996.

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(4)

By letter dated 28 August 2001, ARA notified further
agreements to the Commission with a view to obtaining
negative clearance or exemption. ARA and ARGEV also
sought to have their notifications joined. At the same
time Altpapier-Recycling-Organisations GmbH (ARO)
indicated that it was becoming a party to the notification
as it, too, wished to notify agreements.

(9)

ARA, together with the BRGs, organises and coordinates
the collection, sorting and recycling of transport and
sales packaging in Austria. It offers its services to all
Austrian and foreign businesses directly concerned by
the Packaging Ordinance.

(5)

The notification concerns agreements which together
form the basis of the way that the ARA system operates.

(6) On 8 May 1996 FRS Folien-Rücknahme-Service GmbH
& Co KG and Raiffeisen Umweltgesellschaft mbH lodged
a complaint with the Commission (COMP/A.36011/D3)
against the planned formation of a joint venture to set
up a collection and recycling system for packaging.
However, the original complainants did not pursue their
complaint, having abandoned their intention to take
part in setting up the system. In a letter dated 27 April
2000 the newly formed joint venture EVA Erfassen
und Verwerten von Altstoffen GmbH (EVA), with its
registered offices in Vienna, took up and elaborated on
the complaint against the companies in the ARA system
as a new complainant, citing the aspects complained of
by the previous complainants. EVA is now a wholly
owned subsidiary of INTERSEROH Aktiengesellschaft
zur Verwertung von Sekundärrohstoffen, with its regis-
tered offices in Cologne.

(7)

(8)

In addition, on 24 March 1994 the Federal Chamber of
Wage and Salary-earners (Bundeskammer für Arbeiter
und Angestellte)
lodged a complaint with the EFTA
Surveillance Authority and — when the case was handed
over to the European Commission — wrote to the
Commission Directorate-General for Competition on
19 February 1996 citing the above complaint and
submitted a statement on the ARA system, which it later
expanded, notably in its letter of 22 March 2002.

II. THE PARTIES

The ARA system is a countrywide system in Austria for
the collection and recycling of all packaging materials
and packaging (except bio packaging) from households,
businesses and industries that are subject to the Packag-
ing Ordinance. It was set up in 1993 on the initiative of
Austrian business and industry in order to implement
the Packaging Ordinance. It is a non-profit system and
consists of ARA and eight economically independent
BRGs.

1. ARA

(10) ARA is a public limited company (AG), privately owned,
founded in 1993. The owner and sole shareholder is the
Altstoff Recycling Austria Verein (ARA Association).
Any undertaking or association of undertakings directly
affected by the Packaging Ordinance can become a
member. This includes firms in the packaging industry,
the bottling and packing industry and the retail trade.
To avoid conflicts of interest, firms in the waste disposal
and recycling sector are excluded from membership.
The ARA Association comprises three constituencies
reflecting the interest groups of undertakings affected by
the Packaging Ordinance: bottlers/packers/importers,
retailers, and the packaging industry. The constituencies
are represented equally on the Association’s executive
board, which also forms ARA’s supervisory board. The
ARA Association currently has about 240 members.

2. The BRGs

(11) ARA does not take back or recycle used packaging itself.
Instead it relies on the BRGs, with whom it has concluded
‘waste disposal contracts’. Under these contracts the
BRGs undertake to ensure the collection, sorting and/or
recycling of used packaging under the terms of the
Packaging Ordinance.

(12) The following companies in the ARA system have
registered with the Austrian ministry responsible as
system operators pursuant to Section 45(11) or Sec-
tion 7a of the Waste Management Act (Abfallwirtschafts-
gesetz (6) — AWG): ARGEV for metal packaging (ferrous,
aluminium) and for ‘light packaging’ (wood, ceramics,
plastics, bonded materials, textile fibre), Österreichischer
Kunststoff Kreislauf AG (ÖKK) for plastic and textile-
fibre packaging, ARO for packaging made of paper,
cardboard, paperboard or corrugated board, and Austria
Glas Recycling GmbH (AGR) for glass packaging.

(13) By a decision pursuant to Section 7e of the Waste
Management Act
the Austrian ministry responsible
has established the existence of a monopoly or near
monopoly position in the case of ARO, ÖKK, ARGEV
and AGR and in the case of Öko-Box Sammel GmbH,
which cooperates with the ARA system.

(6) BGBl. No 102/2002.

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(14) The operation of the collection and recycling system
enables ARA’s licensees to be dispensed from their
obligations for the packaging in question under Sec-
tion 3(5) of the Packaging Ordinance. The rights of
licensees in relation to the BRGs are represented by ARA
acting as trustee.

(15) The BRGs do not perform the tasks of collection and
recycling directly either, but conclude contracts for
this purpose in every Austrian region,
i.e. political
subdivision, with private businesses (known as ‘regional
partners’) who take charge of the actual disposal. The
regional partners may in turn subcontract out their
work. In a few instances, especially in larger cities, the
regional partners are the municipal authorities. The
BRGs are:

ARGEV Arbeitsgemeinschaft Verpackungsverwertungs-
Gesellschaft mbH

ÖKK Österreichischer Kunststoff Kreislauf AG (ÖKK)

Aluminium-Recycling GmbH (ALUREC)

Arbeitsgemeinschaft Verbundmaterialien GmbH (AVM)

Verein für Holzpackmittel (VHP)

Ferropack Recycling GmbH (FERROPACK)

Altpapier-Recycling-Organisations-gesellschaft mbH

Austria Glas Recycling GmbH (AGR)

(19) ARGEV has concluded cooperation contracts with the

following BRGs responsible for recycling.

ÖKK Österreichischer Kunststoff Kreislauf AG (ÖKK)

(20) ÖKK is in charge of the recycling of plastic and textile
packaging. ARA holds 11 % of the shares in ÖKK. The
remaining 89 % of shares are held by the Österreichi-
scher Kunststoffkreislauf association. At 31 December
2000 the association had 51 members. The association’s
members are divided into constituencies of plastic
manufacturers and distributors, plastic goods manufac-
turers and distributors, users of plastic packaging, system
partners (in concrete terms ARGEV), organisations and
undertakings in the plastics recycling industry and
organisations and undertakings in the disposal industry.
To avoid conflicts of interest, organisations and under-
takings in the plastics recycling sector and the disposal
industry (some of whom have business dealings with
ÖKK) have no voting rights in the association’s com-
mittee and are completely excluded from meetings to
discuss legal business between association members and
ÖKK.

(21) To carry out recycling, ÖKK has concluded contracts
with recycling firms and transport companies. In 2001
there were 16 recycling companies for sorted plastics
and eight recycling companies for mixed plastics in
Austria.

ARGEV
Gesellschaft mbH

Arbeitsgemeinschaft

Verpackungsverwertungs-

Aluminium-Recycling GmbH (ALUREC)

(16) ARGEV is responsible for the collection, sorting and
conditioning of packaging made of plastic, metal, wood,
textile fibre, ceramics or bonded material. ARGEV
shareholders are ARA (11 %) and the ARGEV Associ-
ation. The ARGEV Association comprises around
(manufacturers/
110 members
importers, retailers, packaging industry/BRGs, disposal/
recycling firms). The waste disposal sector has no voting
rights in the association’s statutory bodies (executive
committee, general assembly).

categories

in four

(17) ARGEV collection systems comprise a household system
for light packaging, a household system for metal
packaging and a commercial system for light and metal
packaging.

(18)

In 2000 there were 57 regional partners — waste
disposal firms, municipal enterprises and consortia —
running the collection systems on behalf of ARGEV. At
regional
level there were 144 private and municipal
disposal companies involved in providing services as
collectors plus 47 sorting and shredder plants. In 2002
the number of regional partners was 64.

(22) ALUREC is responsible for the recycling of aluminium
packaging collected by ARGEV. The shareholders in
ALUREC are the aluminium producer Austria Metall AG
(AMAG) and Salzburger Aluminium AG (SAG). The
other shareholders are packaging manufacturers.

(23) The recycling of aluminium packaging is done in the
only two Austrian disposal plants, AMAG and SAG. The
proceeds from the aluminium are renegotiated each year
and linked by a percentage key to the secondary
quotation for aluminium on the London Metal Exchange.

Arbeitsgemeinschaft Verbundmaterialien GmbH (AVM)

(24) AVM is responsible for the recycling of packaging made
of bonded materials except for bonded drinks cartons.
The shareholders are ARO and ÖKK, each with 50 %.
AVM organises recycling of
the materials in close
cooperation with ÖKK.

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Verein für Holzpackmittel (VHP)

(25) VHP is responsible for the recycling and some collection
of wood packaging. The association currently has
16 members, who are the Austrian wood packaging
manufacturers and dealers.

ment and of the Council of 20 December 1994 on
packaging and packaging waste (7). The Packaging Ordi-
nance is an amended version of the first Packaging
Ordinance that came into force in October 1993 (8).

Ferropack Recycling GmbH (FERROPACK)

(26)

FERROPACK is responsible for the recycling of ferrous
metal packaging collected by ARGEV, in other words
tinplate and steel. The sole shareholder of FERROPACK
is the FerroPack Association for Metal Recycling (Verein
für Metallrecycling FerroPack). The association currently
has six members, who are the Austrian manufacturers
of tinplate and steel packaging.

(32) The aim of the Packaging Ordinance is to avoid or
reduce the impact of waste and packaging on the
the Ordinance states
environment. Section 1(1) of
that it applies to manufacturers,
importers, packers,
distributors and final consumers. Under Section 3,
manufacturers, importers, packers and distributors of
transport and sales packaging are obliged to take back
any packaging they put into circulation, free of charge
after use, and return it
to an upstream obligated
undertaking, or reuse it, or recycle it using the latest
technology.

Altpapier-Recycling-Organisations-gesellschaft mbH

(27) ARO is responsible for collection and recycling of
packaging made of paper, cardboard, board and corru-
gated board (the ‘paper and board’ category of materials).
ARA holds 11 % of the shares in ARO. The remaining
shares are owned by paper manufacturers (roughly
28 %), de-inking recycling firms (27 %) and the paper
processing industry (about 34 %). None of the 17 ARO
shareholders holds more than 17 %.

(28) ARO has concluded agreements with 538 local auth-
orities throughout Austria for near-household collection
and with 79 disposal companies for all services relating
to collection from retailers, business and industry.

Austria Glas Recycling GmbH (AGR)

(29) AGR is responsible for the collection and recycling of
glass packaging. ARA owns 11 % of AGR shares. The
remaining 89 % are owned equally by the two Austrian
glass producers Vetropack Austria GmbH and Stölzle
Oberglas GmbH.

(30) AGR’s countrywide collection system operates mainly
as a bring-it-yourself system, with bulk containers set up
at central locations. AGR operates in close cooperation
with municipalities and over 30 private waste-disposal
companies.

III. THE LEGAL CONTEXT

(33) Under the terms of Section 12 of the Packaging Ordi-
nance, manufacturers, importers, packers and distribu-
tors of outer packaging are also required to take back
any packaging they put into circulation, free of charge
after use, if they are not the final consumer, and to
return it to an upstream obligated returnee, or reuse it,
or recycle it using the latest
technology. Obligated
undertakings may use the services of third parties in
order to meet their obligations. Those obligations apply
from the final distributor through every stage of distri-
bution back to the domestic manufacturer or importer.
When purchasing packaged goods, final consumers can
leave outer packaging at or near the point of sale. If the
final consumer does not leave outer packaging behind,
the rules on sales packaging apply by analogy.

(34) Manufacturers, importers, packers and distributors are
required under Section 3(3) of the Packaging Ordinance
to take back sales packaging used by final consumers
near the point of sale free of charge. This obligation is
limited to packaging of the same type, shape and size as
used for the goods put into circulation.

(35) Owners of businesses that accumulate certain minimum
quantities of packaging can apply to be registered as
major sources. This means that they must ensure the
collection and reuse or recycling of the packaging within
the business (Section 8 of the Packaging Ordinance).

(31) On 1 December 1996 the Packaging Ordinance came
into force in Austria. It is based on the AWG and
implements Directive 94/62/EC of the European Parlia-

(7) OJ L 365, 31.12.1994, p. 10.
(8) BGBl. No 645/1992.

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(36)

Pursuant to Section 3(5) of the Packaging Ordinance, if
manufacturers,
importers and packers are part of a
collection and recycling system, the obligation to take
back and recycle transport and sales packaging, including
upstream and downstream in the distribution chain, is
transferred to the system operator. The same applies
under Section 4 of the Packaging Ordinance to distribu-
tors who supply transport and sales packaging to final
consumers (final distributors). In this case manufac-
importers and packers are commonly said to
turers,
be ‘dispensed from their obligations’ by the system
operator.

(37)

Pursuant to Section 11 of the Packaging Ordinance a
collection and recycling system of this kind for transport
and sales packaging must ensure the collection and
recycling of the packaging materials for which contracts
have been concluded with obligated undertakings.

(38) There is no general legal obligation to participate in any
such system set up (but see paragraph 43 below).
Undertakings not participating are still obliged to take
back packaging individually. However, within their field
of activity, collection and recycling systems are required
to conclude contracts with any obligated undertaking
that wishes to participate, provided this is objectively
justified. The field of activity of collection and recycling
systems comprises packaging accumulating both in
private households and in commerce and industry.
Packaging that comes under a collection and recycling
system does not have to be specially labelled.

(39)

(40)

Pursuant to Section 29(1) of the Waste Management Act
the establishment of a collection and recycling system
or any major alteration requires approval by the minister
responsible. Once the minister has given his approval,
the systems continue to be subject to his supervision
(Section 31 of the Waste Management Act). The minister
is supported in this task by an expert committee
(Section 34 of the Waste Management Act) and an
advisory board (Section 35 of the Waste Management
Act). The legal requirements applying to household and
commercial systems differ in some respects.

Section 32 of the Waste Management Act lays down
particular requirements for near-household collection
and recycling systems. These must endeavour to have as
high a participation rate as possible (Section 32(1) of the
Waste Management Act), must conclude contracts with
any undertaking obligated under the Packaging Ordi-
nance that wishes to participate, provided this is objec-
tively justified (Section 32(2) of the Waste Management
Act) and are subject to special reporting requirements
(Section 32(4) of the Waste Management Act). Under
Section 35 of the Waste Management Act, the state
authorities’ scope for supervising and monitoring these
systems is also substantially more far-reaching than in
the case of systems that provide collection and recycling
only in the commercial sector.

(41)

Section 32(3) of the Waste Management Act deals with
near-household collection and recycling systems whose
activity covers not only near-household waste, but also
waste accumulating in the commercial sector. In such
cases, the system must not cross-subsidise the commer-
cial sector and must, through appropriate organisational
and accounting separation of the two areas of activity,
ensure transparency in the flow of payments and goods
and services between the two areas.

(42) Both undertakings with a take-back obligation but not
participating in a system and collection and recycling
systems themselves have to meet specified collection and
recycling quotas. Under Section 11(7) of the Packaging
Ordinance, authorisations for collection and recycling
systems may lay down specific collection and recycling
quotas if this serves the requirements of environmental
protection and economic expedience and is appropriate.
Under Section 3(6) of the Packaging Ordinance, manu-
importers and packers as defined in Sec-
facturers,
tion 3(4) of the Packaging Ordinance, final distributors
as defined in Section 4, and all subsequent stages in the
distribution chain for packaging that does not come
under a collection and recycling system or has not been
granted exemption under Section 7 are subject to certain
record-keeping requirements regarding take-back and
recycling and to packaging-specific take-back and recyc-
ling quotas.

(43)

Pursuant to Section 3(9) of the Packaging Ordinance,
whoever does not supply records relating to his take-
back obligations under Section 3(6) has to participate in
a collection and recycling system.

(44)

(45)

In response to a Commission request for information,
Austria stated in its comments of 15 January 2003
that, under the Waste Management Act, the Packaging
Ordinance and the administrative decisions taken pursu-
ant to them, it is possible to authorise other systems in
addition to the already existing system for the collection
and recycling of packaging waste arising in private
households.

Similarly, under the abovementioned provisions, it is
permissible, in the collection of packaging waste from
private households, for competitors of the ARA system
to make use of the containers available. This is because
lack of
it is not possible, for practical reasons,
space and protection of the urban and countryside
environment, for competitors of the ARA system to
set up additional containers at the premises of final
consumers.

i.e.

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(46) However, Austria takes the view that each collection and
recycling system must demonstrate that it has collected
and recycled the packaging waste for which it
is
participating in the system. Consequently, following
collection in the common container, the packaging must
be sorted in accordance with the particular system to
which it belongs.

IV. THE NOTIFIED AGREEMENTS

(47) ARA, ARGEV and ARO have notified the following

agreements:

— the dispensation and licence agreements between
ARA and obligated undertakings under the Packag-
ing Ordinance (without list of charges),

1.1. Dispensation and licence agreement for transport pack-
aging, sales packaging and outer packaging (ELV)

(50) Article I.1 of the ELV spells out ARA’s role as trustee for
the licensees, representing licensees’ interests vis-à-vis
the BRGs. The licensees charge and authorise ARA
to conclude the lowest-cost waste disposal contracts
possible with the BRGs in their interest. The waste
disposal contracts are to require the BRGs to collect
and/or recycle (depending on the BRG concerned)
all packaging covered by collection and/or recycling
guarantees in a proper professional manner in accord-
ance with the Packaging Ordinance. Licensees’ rights vis-
à-vis the BRGs are exercised solely by ARA as the trustee,
acting in its own name but on behalf and in the interest
of licensees. ARA obtains services from the BRGs under
contracts with BRGs in its own name, but on behalf and
in the interest of licensees.

— the waste disposal contract between ARA and
ARGEV as a model for the waste disposal contracts
concluded between ARA and the following BRGs
listed in the Annex to the notification: ARGEV,
AVM, ARO, AGR, ALUREC, Verein für Holzpack-
mittel, Ferropack, ÖKK,

(51)

— the waste disposal or cooperation contract between
ARGEV and ÖKK, and between ARGEV and ALU-
REC, as models for the contracts concluded by
ARGEV with ÖKK, ALUREC, FERROPACK and
VHP, and

— the contracts concluded by ARGEV and ARO with

their respective regional disposal partners.

1. Dispensation and licence agreements

(48)

Participation in the ARA system arises through con-
clusion of the dispensation and licence agreement, as a
result of which the contracting undertaking transfers its
obligation under the Packaging Ordinance to the ARA
system against payment of a fee and is thus ‘dispensed’
from its obligation. The following variants of
the
standard contract exist:

— a dispensation and licence agreement for transport
packaging, sales packaging and outer packaging
(ELV), and

— a dispensation and licence agreement for service

packaging (ELVS).

(49)

Licensees with a low annual licence fee can conclude
for small quantities of
a ‘supplementary agreement
packaging’. Firms with their registered offices in Member
States can become licensees of ARA by concluding a
‘supplementary agreement for foreign licensees from EU
countries’.

Pursuant to Article I.2 licensees are obliged to participate
in the collection and recycling systems in the ARA
system in respect of all packaging covered by the
Packaging Ordinance for which collection and recycling
guarantees exist for the duration of the contract. The
sole exception concerns packaging where it can be
shown that there is already dispensation at another
economic stage or where the licensee himself or author-
ised persons charged by him carry out collection and
recycling demonstrably in accordance with the law
without direct or indirect recourse to the ARA system.

(52) ARA has stated that a confirmation of dispensation
issued pursuant to Section 3(5) of the Packaging Ordi-
nance by the operator of approved collection and
recycling systems to licensees suffices as evidence of
recourse to a parallel dispensation system. With regard
to self-disposed packaging, ARA contents itself with
presentation of the take-back records drawn up by self-
disposers themselves for submission to the environment
ministry in accordance with Section 3(6)(2) of
the
Packaging Ordinance.

(53)

Pursuant to Article I.4 ARA grants the licensee the right,
for the duration of the contract, to use the ‘Green Dot’
— the protected mark of the Duales System Deutschland
AG (DSD) — to indicate their participation in the
collection and recycling systems of the ARA system. The
right to use the mark can be withdrawn by ARA at any
time; it is geographically confined to Austrian territory
and is not transferable. Packaging must be marked so as
not to mislead. The mark must always be used in such a
way as to take account of the interests of the mark. The
licensee must take note that use of the logo abroad may
require the permission of an authorised user there. The
payment of
licence fees to ARA does not signify
permission by DSD or a foreign authorised user to use
the mark. There is no obligation to affix the Green Dot
mark on packaging participating in the ARA system.

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(54) Article II deals with calculation and payment of the
licence fee. Pursuant to paragraph 1, the fee payable by
the licensee is based on the volume of packaging that
the licensee puts into circulation within the country (cf.
Article I(2), see paragraph 51 above). The licensee
undertakes to determine the volume for each specific
type of packaging covered by the contract and to use
those figures for calculating the licence fee payable. The
licence fees are calculated using the rates published by
ARA, which, under paragraph 5, may be changed by
ARA no more than once a year subject to three months’
advance notice. In the event of substantial change in
the cost situation or the fundamental assumptions
underlying calculation of the size of the licence fees,
special adjustments in licence fees may be made. Pursu-
ant to paragraph 10, the licensee will receive a closing
annual statement from ARA by 1 March each year,
indicating all packaging reported by the licensee during
the previous calendar year, broken down by type of
packaging. The licensee has the right to make retrospec-
tive corrections to his reports for the previous calendar
year and to request a corresponding licence fee offset.
ARA has claimed that the annual closing statement thus
gives the licensee the opportunity to adjust his reports
to his actual situation in terms of self-disposal. ARA in
turn reserves the right
to make licence fee offsets
only on production of supporting documents for the
corrections to the annual statement.

(55) According to ARA, the licensee’s payment obligation
pursuant to Article II was never intended as payment for
the use of the logo (in other words as consideration for
the right to use the Green Dot on packaging), but as a
fee for
the dispensation provided via the system.
Article II.1 has to be understood accordingly, and is
applied in such a way that the licence fee is payable
only for packaging in respect of which licensees seek
dispensation through the system. The way in which this
principle is implemented is that the licensee makes
monthly or quarterly reports to ARA in accordance with
Article II.4 only in respect of packaging for which it
does not operate a self-disposal solution or does not
participate in a parallel dispensation system. This even
means that ARA sometimes has ‘blanks’, in other words
there are firms which maintain their ELV but do not
wish to participate with any packaging in the ARA
system over a certain period and enter ‘zero’ in their
reports on the amount of licensed packaging put into
circulation.

Ordinance, and ARA can verify this. On this question
ARA has entered into undertaking 2 referred to in
paragraph 5. Under Article III the contract is concluded
for an indefinite period. The licensee has the ordinary
right to terminate the contract at the end of each
calendar year after giving six months’ notice. ARA
waives its ordinary right to terminate the contract. Both
parties have the special right to terminate the contract
on grounds of major importance.

(57) Article IV deals with ARA’s rights and obligations
regarding information and monitoring. ARA monitors
the dispensation of licensees by the BRGs and their
disposal partners.
It can verify the accuracy of the
licensee’s reports, e.g. by checking the relevant business
documents.

1.2. Dispensation and licence agreement for service pack-

aging

(58) The dispensation and licence agreement

for service
packaging differs from the standard agreement
for
transport and sales packaging in that Article I.2 obliges
the licensee to participate in the ARA system in respect
of all packaging falling under the Packaging Ordinance
for which the BRGs have given collection and/or recyc-
ling guarantees or in respect of which its customers wish
to obtain dispensation through it. So, depending on
its customers’ wishes,
the licensee can conclude a
dispensation and licence agreement for only some of its
service packaging, without having to present evidence
in accordance with the second sentence of Article 1.2
ELV in respect of packaging for which dispensation has
already been obtained at another economic stage or
which is collected and recycled in conformity with
the law without recourse to the ARA system. The
dispensation and licence agreement for service packag-
ing is thus more open in its formulation.

1.3.

Supplementary agreement for small quantities of pack-
aging

(56) ARA has also indicated that it has no objection if the
Green Dot is affixed to packaging that is not licensed
with ARA, provided it can be shown that the packaging
is dealt with and recycled in accordance with the

(59) Where ARA and the licensee expect the licensee’s annual
licence fee under Article II of the ELV to amount to
less than EUR 1 817 (excl. VAT), a ‘supplementary
agreement for small quantities of packaging’ may be
concluded. This involves the agreement of simplified
administrative procedures regarding reporting packaging
quantities and payment of the licence fee.

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1.4.

Supplementary agreement for foreign licensees from EU
countries

(60)

Pursuant to Article 5 of the supplementary agreement
for foreign licensees from EU countries, ARA also enjoys
the ordinary right to terminate the ELV (Article III.1
ELV). The reason given by ARA is the increased difficulty
of carrying out checks on licensees abroad. ARA also
argues that enforcement abroad is more difficult. Ordi-
nary termination, it says, is a precaution for cases where
ARA has concrete grounds for suspecting that the party
concerned has not properly fulfilled its contractual
obligations, but cannot furnish proof for special termin-
ation of the contract under the ELV because of the
difficulties of gathering evidence abroad.

2. Waste disposal contracts

2.1. The relationship between ARA and BRGs

(61) ARA concluded waste disposal contracts with all BRGs,
covering the entire territory of Austria, between
25 August and 30 September 1993. It has notified the
contract with ARGEV as a model.

(62)

Pursuant to the terms of Article 1(1), the contract covers
the disposal of the packaging listed for each BRG in the
guarantee statements (Annex 2 to the waste disposal
contract). Disposal comprises collection and transport
as well as sorting and conditioning in accordance with
the Packaging Ordinance and with reference to the
Framework Agreement which ARA has concluded with
the local authorities (Annex 3 to the contract);
in
particular the objectives and quotas indicated in the
Packaging Ordinances must, at least, be attained pro-
portionally. ARA receives the disposal services provided
by BRGs pursuant to Article 1(3) in its own name, but
in the interest and on behalf of the licensee; it thus acts
as trustee for the licensee. Under Article 1(5) the BRGs
are required to take back or take in, free of charge, all
packaging for which a contract exists between ARA and
licensees. As authentication of payment of the licence
charge, ARA awards the protected Green Dot mark.
Regarding this point, ARA has explained that Article 1(5)
has no practical significance.
the dis-
tinguishing methods used by undertakings in the ARA
system in order to decide whether a given item of
packaging may be brought into the ARA system or not
are quite separate from the Green Dot. The provision, it
says, does not entail any legal consequences.

In particular,

(63) Where a BRG employs subcontractors to perform its
disposal tasks, it must, under Article 4, require them to
fulfil its relevant contractual obligations. When awarding
new contracts to subcontractors, BRGs must observe the
principles of free competition and apply reasonable

(64)

(65)

economic criteria. However, it must take account of the
provisions of the Framework Agreements concluded by
ARA with local authorities concerning the selection of
the collector/sorter. In addition, the BRG must put new
contracts with subcontractors out to tender. ARA has
the right to inspect the tender documents and bids.

Pursuant to Article 5, the BRG enjoys exclusive rights
for the duration of the contract in the territory covered,
i.e. the whole of Austria. The BRG undertakes not to set
up, operate or participate in any other collection or
recycling system within the meaning of the Packaging
Ordinance besides the ARA system or to carry out any
active disposal that falls under the responsibility of other
BRGs. The BRG recognises ARA’s position as the sole
intermediary between the BRGs and licensees, but is not
precluded from holding direct
talks or concluding
contracts with licensees where necessary to fulfil their
contractual obligations; the BRG may not conclude
contracts with licensees entailing dispensation of the
licensee.

Pursuant to Article 6, the fee for the disposal carried out
by BRGs is the share of the licence charges charged by
ARA for their services minus a mark-up for ARA. In
practical terms, the fee is based on the costs necessarily
incurred in the disposal of used packaging material.
Under Article 6(4) this must not result in cross-subsidies
between BRGs and ARA in the packaging-material-
specific calculation. Cross-subsidies are defined as fixing
a fee that does not correspond to the true costs, resulting
in one packaging material being treated more/less
favourably than another (Article 6(4)). The fee is set in
advance by ARA on a proposal by the BRG, as a general
rule for one calendar year at a time. Article 6(13)
contains a most-favoured clause, under which the BRG
grants ARA most-favoured treatment, meaning that it
undertakes not to offer or carry out services comparable
to contractual disposal services or parts of such compar-
able services to a third party on terms more favourable
than those it offers ARA or its licensees.

(66) Contracts between ARA and the BRG are concluded for
an indefinite period. The BRG is required to provide
disposal services under the contract from 1 December
1993. Under Article 7B the contract can be terminated
by either party at the end of the calendar year, with
12 months’ notice. The parties’ ordinary right to termin-
ate the contract does not apply until after 31 December
2000. If another ARA enterprise offered cheaper ser-
vices, ARA enjoyed the right to terminate in certain
circumstances even before 31 December 2000.

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(67)

(68)

Pursuant to an agreement of 23 January 2001 with
ARGEV and ARO, ARA agreed that the waste disposal
contracts concluded with the two BRGs between
24 August 1993 and 30 September 1993 could not
be terminated ordinarily before 31 December 2003.
Article 7C deals with the right to terminate the contract
without notice on serious grounds. For instance, the
contract can be terminated without notice if the contract
or the ARA system does not obtain a required authoris-
ation from the antitrust authorities.

Pursuant to Article 11, ARA is granted the right to
inspect the collection and disposal facilities or other
facilities of BRGs covered by the contract during normal
working hours after giving advance notice. This right to
inspect also applies to subcontractors working for BRGs.
to inspect BRGs’ business
ARA also has the right
documents, subject to advance notice, if it deems this
necessary to verify that the contract is being performed
properly by the BRG. Under Article 12 the BRG also
enjoys a right to information and a right of inspection.

(69) Article 13 lays down reciprocal reporting obligations for
the contracting parties:
the BRGs must give ARA
quarterly and annual reports on the disposal they carry
out; ARA is required to provide BRGs with regular
information on the number and size of contracts
concluded with licensees and on the quantity of packag-
ing put into circulation by licensees.

(70) Article 14 provides that disputes between the parties are

to be settled by an arbitrator or an arbitration tribunal.

(71)

Pursuant to Article 15, the recycling of packaging is to
be handled by the BRG responsible for the recycling of
the category of waste material
in question. For this
purpose, ARA is required to conclude an essentially
similar waste disposal contract with each of those BRGs,
defining the BRGs’ disposal tasks as the recycling of
the packaging specified. There is also provision for
conclusion of a contract between ARGEV and each BRG
responsible for recycling governing relations between
the two firms, specifically as regards the disposal services
owed to ARA by ARGEV and by the BRG responsible.
In particular, the contract should ensure that ARGEV
and the BRGs together provide complete disposal —
from collection, transport and sorting to recycling —
and that no gaps in disposal occur between ARGEV and
the BRGs.

2.2. BRG-BRG relations

(72)

Since ARGEV is responsible only for organising collec-
tion and sorting, it has concluded cooperation contracts

with other BRGs (ÖKK, ALUREC, FERROPACK, AVM
and VHP) responsible for organising recycling. ARGEV’s
contracts with ÖKK and ALUREC were notified as model
contracts.

(a) C o o p e r a t i o n

c o n t r a c t

b e t w e e n

A R G E V a n d Ö K K

(73) This contract, concluded on 9 March 1994, governs
relations between ARGEV and ÖKK as regards demar-
cation and the complete performance of the disposal
services due from ARGEV and ÖKK to ARA.

(74)

Pursuant to Article 1, point 1.2, ARGEV organises the
establishment and continuous operation of a country-
wide collection, sorting and conditioning system for
packaging; it undertakes to make available to ÖKK all
sorted packaging collected under the ARGEV collection
system. ÖKK organises adequate and suitable recycling
capacity or temporary storage facilities and transport
between the ARGEV partner concerned and the recycling
or storage facility.

(75) Under the terms of Article 2, ÖKK guarantees ARGEV
that it will accept packaging provided by ARGEV or its
contractors in accordance with the contract. The con-
tract also lays down obligations regarding the provision
and acceptance of used material and the quality of
packaging, proof of licensing, the principles for calculat-
ing the ARA licence fees, the duty to supply information
and to observe discretion, and an agreement on arbi-
tration.

(76) Article 4 stipulates that ARGEV becomes the owner of
the packaging collected through its system. From the
moment packaging in accordance with the specifications
is accepted by the storage or recycling facility, ownership
passes to ÖKK.

(77)

Pursuant to Article 15, the parties undertake not to set
up, operate or participate in any other collection and
recycling system within the meaning of the Packaging
Ordinance outside the ARA system during the lifetime
of the contract, except with the express consent of the
other party. ARGEV further undertakes not to pass on
the packaging to a third party without ÖKK’s consent
during the lifetime of
the contract. Similarly ÖKK
undertakes not to take packaging from a third party
without ARGEV’s consent. These exclusive provisions
expressly exclude reciprocal agreements with self-dis-
posers, provided this is compatible with the waste
disposal contracts concluded with ARA. The parties also
undertake not to perform any active disposal falling
within the area of responsibility of the other party.

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(78) Article 16 stipulates that the contract is to run for an
indefinite period from 1 October 1993. The contract
can be terminated by either party at the end of a calendar
year, subject to 12 months’ notice. Ordinary termination
is not possible before 31 December 2000. Under
Article 17 the contract may be terminated on serious
grounds.

(b) C o o p e r a t i o n

c o n t r a c t

b e t w e e n

A R G E V a n d A L U R E C

(79) This contract, concluded on 20 January 1994, governs
performance of the contractual obligations on ARGEV
and ALUREC vis-à-vis ARA. In terms of subject matter
and the terms and conditions it is broadly similar to the
contract between ARGEV and ÖKK.

(80)

to Article II, ARGEV undertakes to make
Pursuant
available all packaging collected by it or its subcontrac-
tors. In Article III, ALUREC undertakes to ensure the
proper recycling of the packaging accepted by ARGEV
or the sorting firms.

(81) Article V stipulates that ARGEV undertakes to pass on
all the packaging in question collected by it or its
subcontractors solely to ALUREC for the duration of the
contract. ALUREC in turn undertakes to accept and send
for recycling only packaging collected by ARGEV or its
subcontractors.

(82) As regards ownership the same applies as in the
cooperation agreement between ARGEV and ARO, even
though this is not specifically regulated in the contract
between ARGEV and ALUREC. Ownership of the goods
collected rests first with ARGEV, and then passes to
ALUREC when the goods are transferred to it.

(83)

Pursuant to Article VI, the contract is to run from
1 October 1993 for an indefinite period. The contract
can be terminated by either party at the end of a calendar
year, subject to 12 months’ notice. Ordinary termination
is not possible before 31 December 2000. Under
Article VII the contract can also be terminated on serious
grounds.

A R G E V a g r e e m e n t

(85)

In the original version of ARGEV’s agreement with the
regional partner (‘partner agreement’), which dates from
1994, the regional partner undertakes, in Article 2.2, to
set up a collection, sorting and conditioning system
under the terms of the agreement. Only one regional
partner is contracted per collection region.

(86) The collection of packaging waste from households
and establishments accumulating similar packaging is
organised by the regional partner in consultation with
the local authority. Subcontractors may be brought in
under Article 2.3 subject to ARGEV’s approval. Under
Article 2.7 waste is collected in containers provided
either by the regional partner or by the local authority.
Under Article 3 the costs for the containers and for
setting up a collection infrastructure are reimbursed
through a payment by ARGEV.

(87) Article 2.10 states that, since the regional partner collects
used material for ARGEV, it acquires ownership of the
used material through collection solely on behalf of
ARGEV. Consequently, the regional partner may not
treat
in any manner other than
that provided for in the agreement; any contravention
constitutes grounds sufficiently serious for ARGEV to
terminate the agreement without notice.

the used material

(88)

Pursuant to Article 2.16, ARGEV guarantees, by means
of bilateral contracts with recycling guarantors, to take
back the used material made available by the regional
partner in accordance with the agreement. The regional
partner must keep the used material in storage ready to
be taken back and inform ARGEV and/or the recycler
designated either by ARGEV or by the recycling guaran-
tor responsible without delay that it is ready to be taken
back.

(89)

Pursuant
to Article 2.18, agreement with the local
authority responsible should always be sought. In the
event of disputes, Article 2.21 provides for an arbitrator
to be called in.

2.3. Relations between BRGs and regional partners

(84) These are the contracts concluded by ARGEV and ARO
with the regional disposal companies or local authorities.
The contracts govern the actual disposal of used pack-
aging.

(90) The agreement started to run from 1994 for an indefinite
period, and can be terminated by either party at the end
of the calendar year, subject to 12 months’ notice.
Ordinary termination before 31 December 2000 was
not possible. If another enterprise offered the same
services to ARGEV more cheaply, ARGEV had the right
to ordinary termination before 31 December 2000
subject to certain conditions. Article 4.2 governs the
right to terminate without notice on serious grounds.

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(91) All ARGEV’s legal and contractual obligations listed
under Article C of the preamble to this agreement also
apply to the regional partner.

register for collection each year and show that the
packaging concerned will be 100 % ARA-licensed; if
licensing is less than 100 % the waste must be disposed
of as commercial waste.

(92) ARGEV had agreed most-favoured clauses under sup-
plementary agreements or addenda to the existing
waste disposal contracts with practically all the disposal
companies with which it has contractual ties. These
clauses provide that the disposal company must not
offer its services to a third party or carry out its services
for a third party on more favourable terms than for
in para-
ARGEV. Through undertaking 1 set out
graph 139, ARGEV waived the right to apply these
most-favoured clauses from 29 November 2000.

(93)

In the new version of the agreements governing relations
with disposers, a distinction is now made between
sorting and collection partners;
there is a separate
standard contract for each. The two agreements are
broadly similar to the original agreement, but are set out
in greater detail.

(94) Both standard contracts came into force on 1 January
2002, except in the case of three municipalities, Vienna,
Linz and Salzburg, where the contracts had already
come into force earlier; essentially they correspond in
substance to the standard contracts. The contracts dating
from 1993/94 are no longer in force.

A R G E V — c o l l e c t i o n p a r t n e r s

(95) The agreement with the collection partners governs
concrete reciprocal services between ARGEV and collec-
tion partners in implementing the Packaging Ordinance
as regards ‘collection’,
‘transhipment’ and ‘individual
enterprise disposal’. Only one regional partner is con-
tracted per collection region.

(96) According to Article 1.2, the agreement covers the
establishment and smooth operation of a collection
system for used packaging in a specified collection
region. Under Article 1.6 ARGEV reserves the right to
collect non-packaging waste under the collection system;
the provisions of the contract apply to such waste
mutatis mutandis.

(97)

Pursuant to Article 2.2, waste from the household sector
is collected together with waste from establishments
accumulating similar packaging. Such establishments
may be commercial or institutional sources; they must

(98)

(99)

Pursuant to Article 2.2.3, ARGEV must arrange the
provision of the necessary sites with the local authority
in a separate agreement. The collection containers and
sacks are provided by the collection partner or the local
authority after consulting ARGEV. Under Article 2.2.4,
the costs are borne by ARGEV only for containers
for the household sector, but not for establishments
accumulating similar packaging.

Pursuant
to Article 2.2.5, collection comprises the
regular emptying of containers and collection of sacks,
together with transport of the waste collected to the
specified sorting facility or to a transhipment station in
the catchment area covered by the contract. The volume
of collected waste to be supplied by the collection
partner is based on actual requirements, i.e. depending
on the behaviour of the local population or source,
subject
to an average utilisation rate of 80 % for
collection containers and sacks and a maximum error
rate for the waste collected of 20 % in terms of mass. If
commercial packaging is also collected together with the
household collection,
these are to be separated as
specified by ARGEV (Annex 2 to the agreement).

(100) For the commercial sector individual enterprise disposal
applies. Under Article 2.4.1 the collection partner oper-
ates a regional transfer point to take back, free of charge,
ARGEV-packaging from commercial sources, from con-
trolled material transferred from recycling yards and
from collected problem waste. Besides the basic infra-
structure of
transfer points, under
Article 2.4.2 the collection partner must offer pick-up
systems for licensed packaging from the point where
the waste occurs, especially in regions with a large
commercial sector.

regional

the

(101) Pursuant to Article 2.5.1, ARGEV’s prior consent is
required in order to subcontract out specific tasks under
the agreements.

(102) Article 2.5.2 stipulates that the collection partner merely
takes charge of the packaging on behalf of ARGEV and
so never acquires ownership of it. Consequently, the
regional partner may not treat the used material in any
manner other than that provided for in the agreement;
any contravention constitutes grounds sufficiently seri-
ous for ARGEV to terminate the agreement without
notice.

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(103) In reply to a Commission request

for information,
ARGEV stated that, in household collection, the disposer
is not prevented from keeping volumes in the same
container for another system, provided that this does
not affect the fulfilment of the disposer’s obligations to
ARGEV. In particular, the contractually agreed minimum
collection volume, in accordance with the specifications
set by ARGEV, must be made available for the collection
of ARA-licensed packaging without restriction to any
specific quota. If the disposer were, through the granting
of shared use, to jeopardise the dispensation of the ARA
licensees, this would be in breach of contract.

(104) In the commercial system, ARGEV does not set any
specifications as to the collection containers. The dis-
posers and/or sources are at liberty to collect externally-
licensed packaging as well in the collection containers.
However, it must be ensured through precise records for
each source that ARGEV’s transfer point receives only
in terms of quantity and quality,
packaging which,
corresponds to the ARA-licensed packaging actually
accumulating there.

(105) Pursuant to Article 3.1, the collection partner receives a
quarterly fee for the collection containers and sacks
provided and documented, based on container/sack
size. In return for emptying collection containers and
collecting sacks from households and similar establish-
ments, transporting and emptying collected waste at a
sorting facility or transhipment station and producing
the required reports, the collection partner receives a fee
based on the quantity in question. For the transhipment
of collected waste from households and similar establish-
ments in the area covered by the agreement and for
producing reports, the collection partner receives a fee
based on the quantity involved. There is a ceiling on the
collection and transhipment services chargeable annually
to ARGEV per collection region and type of waste
collected. The framework quantity for 2002 to 2004
inclusive was calculated on the basis of
the 2001
forecasts for the gross quantity to be collected from
households and similar establishments. In return for
taking over and collecting packaging waste accumulating
in businesses, including input control, re-sorting, con-
ditioning, temporary storage, making available, loading,
etc. of types of wastes taken by the recycler from
commercial,
industrial and institutional sources and
from controlled take-overs and collections of problem
materials, the collection partner receives output fees
based on quantity.

(106) Pursuant to Article 3.5, ARGEV guarantees, by means of
bilateral contracts with recycling guarantors, to take

back all used material made available by the regional
partner in accordance with the agreement.

(107) Pursuant to Article 5.1, the agreement began to run
from 1 January 2002. It was concluded for an indefinite
period and can be terminated by either party giving six
months’ notice, but not before 31 December 2004. Both
parties also have the special right to terminate on serious
grounds; such grounds include,
for instance, gross
disregard of the obligation to keep commercial waste
separate in household collection.

(108) Regarding the term of the contract, ARGEV has entered

into undertaking 4 set out in paragraph 139.

(109) ARGEV has also stated that

the collection partner
agreements do not contain any exclusive obligations on
disposers, either in the near-household or commercial
sectors. Disposal companies are free to provide similar
services for other dispensation systems or as part of self-
disposal solutions. As regards shared use of collection
containers, ARGEV has entered into undertaking 3 set
out in paragraph 139.

A R G E V — s o r t i n g p a r t n e r s

(110) The standard agreement for sorting partners very closely
resembles the agreement for collection partners.

(111) Pursuant to Article 1.5, ARGEV entrusts the task of
operating collection systems for light and metal packag-
ing from households and similar establishments in
defined collection regions (as a rule political subdivisions
or major cities) throughout the country to the collection
partner responsible. The quantities collected by collec-
tion partners are transferred direct or via a transport
company to the sorting partner. Only one sorting
partner is contracted per collection region.

(112) In order to optimise the collection, sorting and transport
system, the quantities collected by certain collection
partners or from certain collection regions are allocated
to certain sorting partners or sorting facilities under
Article 1.6. Through corresponding provisions in the
separate collection partner agreements, ARGEV will
ensure that the packaging collected by collection part-
ners from households and similar establishments in
certain collection regions (as specified in Annex 5 to the
agreement) are sorted only in the sorting partner’s
sorting facility.

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(113) Pursuant to Article 2.1.1, the sorting partner is required
to take and sort all quantities of packaging made
available or collected from households (Module 1) and
similar establishments (Module 2) by the collection
partner(s) in the collection regions. The sorting partner
must take unsorted waste collected under Modules 1/2
ARGEV collection only from collection partners or from
collection regions specified in Annex 5 to the agreement.
Under Article 2.2, the sorting partner must, at the site
of the sorting facility, operate a regional transfer point
where packaging from commercial sources (Module 3),
from recycling yards (Module 4) and problem material
collections (Module 5) is accepted free of charge.

types from households and similar establishments, the
sorting partner receives specific fees for each type of
material. These output fees also apply to the acceptance
input control, re-sorting, conditioning,
of deliveries,
loading etc. of
temporary storage, making available,
specified waste types from business sources, recycling
yards and problem material collections.

(118) ARGEV has also stated that the sorting partner agree-
ments do not contain any exclusive obligations on
sorting partners. Disposal companies are free to provide
similar services for other dispensation systems or as part
of self-disposal solutions. ARGEV has also entered into
undertaking 3 set out in paragraph 139 and has entered
into undertaking 4 regarding the term of the agreements.

(114) Pursuant to Article 2.4.2, the sorting partner merely
takes charge of the packaging for ARGEV and does
not, therefore, acquire ownership of the packaging.
Consequently, the sorting partner may not treat the used
material in any manner other than that provided for in
the agreement; any contravention constitutes grounds
sufficiently serious for ARGEV to terminate the agree-
ment without notice under Article 5.5.2(a).

A R O a g r e e m e n t

ARO — collecting partners

(115) In reply to a Commission request

for information,
ARGEV stated that the ownership clause did not entail
any prohibition on the use of the sorting facilities for
third parties. If, in any event, the disposer were, through
the granting of shared use, to jeopardise the dispensation
of the ARA licensees, this would be in breach of contract.

(116) The provisions concerning the engagement of subcon-
tractors (Article 2.4.1) and the duration/termination of
the contract (Article 5) are similar to those in the
collection partner agreement.

(117) Pursuant to Article 3.1, the sorting partner receives the
input fees indicated in Annex 6 to the contract within
the specified quantity ranges. The input fees constitute
the consideration for taking charge of the collected
waste from the ARGEV household system and near-
household system, input control, a share of the facility’s
fixed costs by reference to the agreed annual
input
quantities, removal and proper disposal of intrusive
material from collected waste, and the conditioning,
temporary storage, making available and loading of all
output waste types, free of intrusive material or posi-
tively sorted. A ceiling applies to the sorting input
quantity chargeable annually to ARGEV, being the sum
of the quantities collected from households in certain
collection regions. For positive sorting of output waste

(119) The agreement concerns the operation of a collection
system for paper packaging to satisfy the obligations
flowing from the Waste Management Act, the Packaging
Ordinance, the ARA/ARO waste disposal contract and
the official authorisations. Only one regional partner is
contracted per collection region.

(120) Pursuant to Article 1.1, the agreement does not cover
the collection of waste paper and paper packaging from
households and establishments accumulating similar
waste. Rather it covers commercial street disposal
(Article 2.4), transport of packaging from recycling
yards (Article 2.5) and individual enterprise disposal
(Article 2.6).

(121) Pursuant to Article 1.5, ARO’s take-back obligation is
confined to the quantity of paper, cardboard, board
and corrugated-board packaging licensed with ARA.
However, ARO is prepared to take the entire quantity of
packaging delivered to the collection and recycling
system. If this means that it exceeds its obligations
under the official authorisation, namely making available
sufficient take-back capacity for paper packaging, with a
collection quota of 90 % in the commercial sector and
80 % in the household sector, and a recycling quota of
85 % in the commercial sector and 75 % in the
household sector, and this conflicts with the licensee’s
economic and legal interests, ARO reserves the right to
adapt its take-back guarantee and the corresponding fee
payments to the requirements of the official authoris-
ations; it must inform the collection partner accordingly
in good time.

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(122) Commercial street disposal concerns the disposal of
pure-paper packaging from small business sources. What
are known as supervised take-back sites (recycling yards,
scrap collection centres, etc.) are run by the local
authority and take packaging from private individuals
and small business sources. The ARO collection partner
takes packaging from recycling yards and handles its
removal. For individual enterprise disposal the ARO
disposal partner operates what are known as ARO
transfer points, where business sources can bring their
packaging into the collection and recycling system free
of charge.

(123) Pursuant to Article 2.7, the collection partner is required
to take all paper packaging covered by the agreement at
the ARO transfer points. Article 2.7.4 stipulates that the
business source must confirm by appropriate means
that the packaging handed in is licensed with ARA.
Additional transfer points must be authorised by ARO.

(124) Pursuant to Article 2.8, ARO decides on the disposal
companies and the transport arrangements for packag-
ing. The partner must therefore secure written agreement
with ARO in this respect. The collection partner guaran-
tees ARO a certain minimum quality of paper packaging
on delivery to the recycler (Article 2.9).

(125) Article 2.10 states that the partner collects the paper
packaging for ARO and that the collected waste is
therefore the sole property of ARO. Consequently, the
material collected may not be treated in any manner
other than that provided for in the agreement; any
contravention constitutes grounds sufficiently serious
for ARO to terminate the agreement without notice.

(126) Pursuant to Article 2.15, ARO guarantees, by means of
its bilateral contracts with recyclers,
to take from
collection partners the paper packaging they present and
ensure its proper recycling according to the type of
packaging. Should the recycling guarantees given to
ARO be withdrawn, it must ensure an adequate substi-
tute for disposal companies.

(127) Pursuant to Article 4, the agreement started to run from
1 January 2002 for an indefinite period. Subject to six
months’ notice, it can be terminated with effect from
31 December 2004. It can also be terminated without
notice on serious grounds.

(128) Regarding the term of the contract, ARO has entered

into undertaking 4 set out in paragraph 139.

(129) ARO has also stated that the collection partner agree-
ments do not contain any exclusive obligations on

collection partners. Collection partners are free to pro-
vide similar services for other dispensation systems or as
part of self-disposal solutions.

ARO — local authorities

(130) The agreement concerns cooperation between ARO and
the local authority in the operation of the municipal
waste paper systems for paper packaging from house-
holds and establishments accumulating similar packag-
ing waste in the area covered by the agreement. Account
is taken of the obligations stemming from the Waste
Management Act, the Packaging Ordinance, the ARA-
ARO waste disposal contract and the official authoris-
ations.

(131) Pursuant to Article 2.1, ARO’s take-back obligation is
confined to the quantity of paper, cardboard, board
and corrugated-board packaging licensed with ARA.
However, ARO is prepared to take the entire quantity of
packaging delivered to the collection and recycling
system, subject to retrospective readjustment in line with
the obligations under the official authorisation, of which
the local authority must be informed in good time.

(132) In the municipal waste paper collection run by the local
authority, packaging together with non-packaging from
the same material (newspapers, magazines, catalogues,
etc.) is collected regularly pursuant to Article 2.2. The
share of the costs for collection of paper, cardboard,
board and corrugated-board packaging is borne by ARO;
the other costs of municipal waste paper collection are
borne by the local authority.

(133) Pursuant to Article 2.4, fundamental changes to the
collection system described in the collection scheme (e.g.
switch from a bring-it-yourself to a collection system)
must be agreed between the local authority and ARO if
it entails substantially higher costs for ARO. The local
authority takes charge of putting the collection services
out to tender or renegotiating them after consulting
ARO. Selection of the disposal company (collector) rests
with the local authority.

(134) The local authority must provide the following services:
collecting paper packaging as part of the municipal
waste paper collection (Article 3.1); providing sites for
collection containers together with the necessary permits
(Article 3.2); providing and maintaining the collection
containers (Article 3.3); taking packaging via supervised
recycling yards, used-material centres, etc. (Article 3.4);
and guaranteed quality of packaging plus bearing the
cost in the event of the need for re-sorting the packaging
taken over in the recycling yards (Article 3.5). For its

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part, ARO guarantees recycling in accordance with the
Packaging Ordinance through bilateral contracts with
recyclers (Article 3.6).

(135) Article 3.7 governs the transfer of ownership of the
packaging: as regards packaging waste collected from
households and establishments accumulating similar
waste, ownership passes from the local authority to
ARO on delivery of the packaging to the ARO transfer
point. Ownership of material collected under super-
vision in recycling yards, used-material centres, etc.,
passes to ARO when it is picked up by the ARO
disposal partner; if the local authority provides transport,
ownership does not pass from the local authority until
acceptance by the ARO transfer point.

(136) The local authority may not treat paper packaging in
any manner other than that stipulated by ARO; any
contravention constitutes grounds sufficiently serious
for ARO to terminate the agreement without notice.
Paper packaging may be recycled separately from non-
packaging material of the same type or mixed with such
material.

(137) Pursuant to Article 5.1, the contract begins to run from
1 January 2002 for an indefinite period and can be
terminated no earlier than 31 December 2003, subject
to six months’ notice. It can also be terminated without
notice on serious grounds.

(138) The contract contains no provision ruling out

the
possibility of another collection and recycling system
sharing use of the municipal waste paper collection
containers. ARO has stated that for the most part in the
sector of near-household paper collection it purchases
only quantities from municipal collection. There is no
obvious reason, it says, why the local authorities should
not conclude similar agreements with other dispensation
systems.

V. UNDERTAKINGS GIVEN

(139) The Commission indicated that

it had reservations
regarding the implications for competition of some
aspects of the contracts notified. In the course of the
procedure the parties have given the Commission the
following undertakings:

— (undertaking 1) with effect from 29 November
2000 ARGEV and ARO will refrain from invoking
the most-favoured clauses which were agreed in
supplementary agreements or addenda to the waste
disposal contracts concluded with the disposal
companies with which the company concerned
had contractual relations,

— (undertaking 2) ARA undertakes not to invoke its
licence rights to the Green Dot mark vis-à-vis firms
inside or outside Austria (a) that participate with

marked or similar packaging in collection and
recycling systems within the meaning of Directive
94/62/EC on packaging and packaging waste which
require the use of the Green Dot; or (b) that are
required by regulations to affix the Green Dot to
packaging. This obligation applies provided that
the firm concerned can show that it collects and
recycles the packaging marked with the Green
Dot in Austria in accordance with the Packaging
Ordinance (BGBl 648/1996, as amended) —
whether by means of a self-disposal solution within
the meaning of the Packaging Ordinance or by
participating in an authorised collection and recyc-
ling system — and grants ARA the corresponding
monitoring rights by contract. The monitoring
rights may not extend beyond the rights granted
under the standard ARA contract. In exercising
these monitoring rights, ARA will not impose
requirements stricter in terms of providing evidence
that collection and recycling comply with the
Ordinance than the obligations of the firms con-
cerned vis-à-vis the authorities responsible for
implementation of the Packaging Ordinance,

— (undertaking 3) ARGEV will not prevent

local
authorities and/or disposal companies from work-
ing for competitors of the ARA system. Further,
ARGEV will not prevent local authorities and/or
disposal companies from concluding and fulfilling
contracts with competitors of the ARA system
concerning the shared use of containers or other
facilities for the collection and/or sorting of used
packaging from households and similar establish-
ments. This undertaking does not restrict ARGEV’s
right to enforce contractual arrangements for the
shared collection and recycling system and to take
all necessary measures to fulfil its obligations as a
collection and recycling system, whether imposed
by the law or by the official authorisations, in spite
of shared use. Furthermore, this undertaking applies
only if:

(a)

the local authorities and/or disposal com-
panies declare their willingness to reduce the
charges to be paid by ARGEV for the provision
and operation of collection/sorting facilities,
and/or for collection/sorting, in proportion to
the use of containers and other facilities, and
to reimburse ARGEV an appropriate share
of
the other costs directly attributable to
collection/sorting (that is, costs for ongoing
engineering and management of the shared
collection system, costs for waste consultants,
costs for R & D, etc.); ARGEV will produce an
attestation from an independent chartered
accountant regarding the amount and charge-
ability of the costs charged;

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(b)

the local authorities and/or disposal com-
panies declare their willingness to reimburse
ARGEV for the additional costs incurred by
the companies in the ARA system and/or their
contractors as a result of shared use (for
instance, additional analysis costs or sorting
costs in order to maintain the quality of the
packaging collected and sent for recycling on
behalf of ARGEV). ARGEV will produce an
attestation from an independent chartered
accountant regarding the amount and charge-
ability of the costs charged. Additional costs
incurred by the companies in the ARA system
and/or their contractors simply by virtue of
reductions in the licenced quantity will not be
taken into account. This undertaking will be
implemented on a case-by-case basis through
supplementary agreements to individual ser-
vice contracts,

— (undertaking 4) ARGEV and ARO will terminate
their contracts with disposal partners when the
contracts have run for three years, unless the
contracting parties agree on extension of the con-
tract for no more than a further two years. No later
than at the end of a five-year contract period
ARGEV and ARO will again put the service con-
tracts out to tender through a competitive, trans-
parent and objective procedure (invitation to tender
of whatever kind, invitation to submit quotations,
etc.).

VI. THE RELEVANT MARKET

(140) For the purposes of assessing the agreements covered by
this proceeding, the relevant product and geographic
markets are defined as follows.

Product market

(141) The relevant product market comprises all those prod-
ucts and/or services which are regarded as substitutable
by the consumer by reason of their characteristics, their
prices and their intended use.

(142) The business purpose of the ARA system is the organis-
ation and operation of a countrywide take-back system
in Austria for used packaging. The agreements under-
lying the ARA system have economic effects at various
stages in the value-added process. Furthermore, a distinc-
tion is made in the contracts within the ARA system
between both individual types of packaging and different
sources of the packaging to be disposed of. The assess-
ment pursuant to Article 81(1) of the EC Treaty of the

individual contracts and of the relevant source of the
packaging must be carried out on the basis of different,
autonomous relevant markets.

1. Markets for systems or self-disposal solutions for the

collection and recycling of used packaging

(143) Through the operation of the collection and recycling
system, ARA makes it possible for its licensees to
be ‘dispensed’ from the obligations laid down in the
Packaging Ordinance for the contracted packaging (dis-
pensation system) and accordingly acts as a trustee for
its licensees vis-à-vis the BRGs obliged to take back and
recycle packaging. The demand-side customers are the
companies obligated under the Packaging Ordinance.

(144) Since ARA acts as a trustee for the obligated undertak-
ings, it is at the same time a customer for the organis-
ational management of a dispensation system. The
operation of a dispensation system is offered by the
BRGs, which hold the official notices of approval. Both
the trustee activity of ARA and the operation of the
dispensation system by the BRGs must be ranked on the
supply side at the same level of the value-added chain. If
ARA were not intervening as a trustee, the BRGs could
not offer the dispensation service direct to the obligated
undertakings. Since ARA and the BRGs thus operate on
a single market, discussion below will refer to the supply
of the dispensation service by the ARA system.

(145) Undertakings which do not wish to join a countrywide
collection and recycling system are still required under
their own responsibility to perform the obligations laid
down by the Packaging Ordinance. The same applies to
registered major sources as regards the packaging they
accumulate. However, the companies not participating
in systems can charge third parties with the task of
performing the disposal of used packaging incumbent
on them. As a result, such third parties offer to organise
the individual performance of the collection and recov-
ery obligations relating to used packaging under the
Packaging Ordinance (self-disposal solution).

(146) The question of whether dispensation systems and self-
disposal solutions operate on the same market or on
different, but neighbouring markets can be left open.
This is because, as explained below, with regard to the
agreements to be assessed here, neither of these two
definitions of
involves
any restriction of competition within the meaning of
Article 81(1) of the EC Treaty. The precise market
definition as regards the organisation of the taking-back
and recycling of used packaging can accordingly be left
open.

the relevant product market

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(147) The market on which dispensation systems and self-
disposal solutions operate can be referred to as a ‘system
market’. The system market is confined to packaging
waste, since this can be distinguished from other waste
on the basis of the specific obligations imposed on
customers in the Packaging Ordinance.

(153) It is not necessary to take the above differentiation any
further by breaking down the two relevant markets on
the basis of individual types of material (e.g. paper, glass,
etc.), since this would not produce any other competition
assessment pursuant to Article 81(1) of the EC Treaty.

(148) Within this ‘system market’,

the following relevant
markets should be distinguished as regards the source of
the packaging.

(149) The ARA system offers on the one hand participation in
a system for the disposal of used packaging that
accumulates in private final consumers’ households and
in near-household establishments. On the other, the
ARA system offers participation in a system for the
disposal of packaging that accumulates in trade and
industry. The ARA system has been given separate
authorisations for its household and commercial sys-
tems.

(150) A company wishing to be dispensed from the obligations
imposed by the Packaging Ordinance brings packaging
into circulation that accumulates either in the household
sector, or in the large-business industrial sector or, in
in both sectors. It can therefore
definable quantities,
participate only in a collection and recycling system that
is set up for the relevant sources. From the point of view
of the demand-side company, therefore, there is no
substitutability between participation with packaging in
a system for household packaging and in a system for
packaging in the trade and industry area for the purpose
of achieving dispensation from the obligations imposed
by the Packaging Ordinance.

(151) On the supply side, the organisation of a dispensation
system for the ‘dispensation’ of licensees must basically
be geared to the legal specifications, which distinguish
between household and commercial systems and impose
differing requirements. The fields of business must be
separated in organisational or at least accounting terms
(paragraph 41) and only household systems must
endeavour to have as high a participation rate as
possible, are obliged to enter into contracts, must meet
greater reporting requirements and are subject to more
far-reaching monitoring (paragraph 40).

(152) Against this background, the Commission concludes
that, from the point of view of the system operator, the
dispensation service offered to an undertaking within
the framework of a system for household packaging is
not functionally interchangeable with that offered to the
undertaking within the framework of a system for
packaging stemming from the trade and industry sector.

(154) The Commission therefore finds that, with regard to
the organisation of systems for the disposal of used
packaging (system market), the market for systems for
household packaging must be distinguished from the
market for systems for packaging stemming from the
trade and industry sector.

2. Markets for the collecting and sorting of used packaging

(155) Within the ARA system, a number of BRGs are respon-
sible for organising the collection and sorting of used
packaging. Since they do not themselves carry out
disposal, they are customers for this service. The sup-
pliers of the disposal service are disposal companies and
municipal authorities (referred to below as disposers).

(156) In the collection and sorting of used packaging, a
distinction must be made in terms of categories of
material on the one hand and between household and
commercial sectors on the other.

(157) Paper and board packaging accumulating in households
is collected jointly with similar non-packaging material
(newspapers, magazines, etc.). Collection is performed
by the local authorities. These therefore also enter into
contracts with the disposal companies. ARO purchases
only certain quantities of the local authorities’ used-
paper collection. The local authorities’ used-paper collec-
tion already existed before the setting-up of the ARA
system. For the most part, used paper fetches a favour-
able market price. As a rule, paper and board waste is
collected in the bring-it-yourself system in collection
containers set up on local authority land. Where re-
sorting has to be carried out, it is relatively simple. On
the basis of these features, the Commission assumes that
a separate market for the collection and sorting of
used-paper accumulating in households exists which
comprises paper and board packaging together with
newspapers, magazines and other used paper. Paper and
board packaging arising in the commercial sector is
taken either in recycling yards or used material centres,
collected at the transfer points set up by the systems or
collected direct from major sources. The disposer enters
into a contract with ARO, with competing systems
or with the major source. Overlaps with household
collection arise to only a limited extent.

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(158) Glass involves particular features which make it appro-
priate to identify this type of material as a subcategory
as well. Used-glass collection already existed before the
setting-up of the ARA system. As a rule, used glass is
collected in the bring-it-yourself system in collection
containers set up on local authority land. Where re-
sorting has to be carried out, this is relatively simple.
Used-glass collection is largely confined to used-glass
accumulating in households.

(159) The collection of light packaging (in particular plastic,
bonded material, aluminium, tin plate and steel), by
contrast, is carried out on a separate basis from house-
hold-waste collection only after the ARA system has
been set up. The collection is carried out mainly using a
pick-up system in containers or bags set up near
households. Light packaging made from plastic and
bonded material has predominantly a negative market
price. Consequently, the conditions for the collection
and sorting of household packaging waste made from
these types of material must,
in terms of disposal
logistics, be clearly distinguished from those applicable
both to the household collection of used paper and used
glass and those applicable to the collecting and sorting
of packaging in the trade and industry sector.

(160) Since in the collection of light packaging in the house-
hold sector all households must normally be serviced
direct, there are substantial network effects, i.e. substan-
tial economies of scale and scope. As a result of these
specific supply-side conditions, sources in the household
sector can as a rule be serviced on an optimum
cost basis only by a limited number of disposers.
Furthermore, as far as the latter are concerned, normally
only one collection container can be provided per
category of material. By contrast, the number of sources
in trade and industry is smaller and, because of the large
volume of waste to be disposed of, can also be serviced
by different disposers.

(161) Furthermore, the sales packaging arising in households
differs significantly in terms of its used-material value
from the packaging arising in trade and industry. Various
types of material accumulate in small quantities in the
case of private final consumers and are collected by
them with the result that the material must subsequently
be sorted in comparatively capital-intensive sorting
facilities. In the case of packaging in trade and industry,
which usually accumulates in large quantities and is
already sorted into individual types of materials, sorting
facilities are not necessary in this type of technical
configuration.

(162) Against this background, there is no functional inter-
changeability between collection and sorting services for
packaging collected from private final consumers and
those in trade and industry.

(163) The market

for the collection and sorting of used
household packaging must be differentiated from house-
hold waste and rubbish collection, which, following the
adoption of the Packaging Ordinance, has remained
within the sphere of responsibilities of the local auth-
orities that have to provide disposal services. The market
for the collection and sorting of used packaging differs
from the latter through a much broader service profile,
since the sorting of the collected packaging by type of
material provided on this market in accordance with
specific rules and the provision of the collected used
materials for further recycling involve an autonomous
value-added chain which as a rule requires extensive and
demand-specific investment in an appropriate sorting
infrastructure. Furthermore, a separate collection infra-
structure exists for each sector, since household waste
and rubbish in private households is collected in different
containers than used packaging.

(164) In the household sector, therefore, the following markets
can be distinguished: the market for the collection of
used paper, the market for the collection of used glass
and the market for the collection and sorting of light
packaging.

(165) In the commercial sector, the customers for disposal
services are the BRGs involved in collection (ARGEV
and ARO) and competing systems. Systems demand
only disposal services for packaging and, because of
requirements, cannot substitute other disposal services
for this demand. Other customers are self-disposers and
large sources. These accumulate both packaging waste
and other commercial waste. Because of the specifics of
the legal requirements applicable to packaging disposal,
however, this is, from the customers’ point of view not
interchangeable with the disposal of other commercial
waste.

(166) From the point of view of disposal service suppliers,
there are considerable differences between the collection
and sorting of commercial packaging and the disposal
of other commercial waste. Although in terms of
disposal
logistics the parameters are to some extent
comparable (source location, collection frequency, waste
characteristics), the differing legal requirements have an
effect at collection and sorting level. Packaging waste is
subject to reporting rules, which collectors and sorters
are responsible for fulfilling. They must therefore prove
and document to their clients that minimum amounts
have been collected and prepared for recycling. This
requires planning, not just in terms of the waste that
accumulates, but also to ensure a steady provision of
sufficient quantities of waste. Furthermore, because of
the reporting requirements, the collection of packaging
and non-packaging of similar types of material in the

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same container is difficult. This is either ruled out by
the contractor or a proportionate allocation must be
undertaken that meets the legal requirements as to quota
record-keeping.

(167) It must therefore be assumed that the market for the
collection and sorting of packaging accumulating in the
commercial sector must be distinguished from the
market for the disposal of other commercial waste. The
question of whether, on the market for the collection
and sorting of commercial packaging, a further distinc-
tion must be made in terms of types of materials can be
left open, since this is not relevant to the competition
assessment pursuant to Article 81(1) of the EC Treaty.

(168) For all that, in addition to the household markets, a
market must be distinguished for the collection and
sorting of used packaging from large business and
industry. There is no need to carry out any further
differentiation in terms of elementary value-added chains
(e.g. collecting, transporting, sorting) since the compe-
tition assessment pursuant to Article 81(1) of the EC
Treaty would not be any different.

3. Markets for recycling services and secondary raw materials

(169) The ARA system intervenes in the markets for recycling
services and/or secondary raw materials insofar as, with
regard to the reusable materials collected under the
system, the BRGs except for ARGEV organise, on a
long-term basis and regardless of the relevant market
situation, provision of the sorted used materials for
recycling, in line with the specifications of the Packaging
Ordinance. The recycling companies, as contract part-
ners of the BRGs, provide the reusable materials for
recycling in accordance with the Packaging Ordinance.

(170) It must be assumed that the markets here are separate
markets in line with the types of reusable material
involved. Furthermore, no differentiation is made at
recycling level between household and industrial packag-
ing of one and the same type of material, since
the technical and economic requirements involved in
recycling are largely identical. For the same reason, other
products of the same type of material
intended for
recycling can be included in the recycling market. In the
case of paper and board waste, for example, this would
include newspapers and magazines.

(171) Furthermore, the organisation itself of the recycling of a
given type of material by the BRGs and the actual
carrying-out of the recycling of the used material or the
supply of secondary raw materials are each different
levels of a given product market.

Geographic market

(172) The relevant geographic market comprises the area in
which the undertakings concerned are involved in the
supply of or demand for products and services,
in
which the conditions of competition are sufficiently
homogeneous and which can be distinguished from
neighbouring areas because the conditions of compe-
tition are appreciably different in those areas.

(173) It has to be assumed that the objective supply and
demand conditions on the relevant markets here differ
distinctly from those in other areas of the common
market. Consequently, in the application of the Com-
munity competition rules to the product markets
covered by the ARA system, the territory of Austria
must be taken as the relevant geographic market insofar
as system markets and the markets for collection and
sorting are involved.

(174) With regard to the markets for recycling services and
secondary raw materials, the Commission starts from
the assumption that these markets are, to some extent,
already clearly marked by internationalisation tendencies
and cross-border elements and that therefore the terri-
tory of the European Economic Area must be taken as
the relevant geographic market. However, the exact
definition of the relevant geographic market can ulti-
mately be left open here.

VII. MARKET STRUCTURE

(175) The number of

amounted

licensees in the ARA system was
10 994 in 1997, 11 479 in 1998, 12 027 in 1999,
12 295 in 2000 and 12 652 in 2001. ARA’s licensing
2 608,1 million/
to ATS
revenue
EUR 189,6 million in 1997, ATS 2 673,0 million/
EUR 194,2 million in 1998, ATS 2 694,2 million/
EUR 195,8 million in 1999, ATS 2 543,3 million/
EUR 184,8 million in 2000 and EUR 162,7 million in
2001.

(176) In the household sector, the ARA system is the only
countrywide collection and recycling system in Austria
that covers all types of materials (except for bonded
drinks cartons).

(177) In the household sector, in addition to ARA, Öko-Box
Sammel GmbH is the only other countrywide operator
of a collection and recycling system for used light drinks-
packaging, cooperating with ARGEV in order to ensure
countrywide collection. In addition, Bonus Holsystem
für Verpackungen GmbH & Co. KG operates a disposal
system in the building sector for packaging left at
building sites with private final consumers and in the
farming sector for packaging left with farmers.

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(178) In the household sector,

there are no self-disposal
solutions in operation pursuant to Section 3(6) of the
Packaging Ordinance on any significant scale.

(179) In the field of commercial and industrial packaging, the
ARA system has several competitors, though they bear
no comparison with the ARA system in terms of their
economic importance. They are:

— EVA Erfassen und Verwerten von Altstoffen GmbH
(EVA), a subsidiary of the INTERSEROH group in
Germany, which disposes of metal, plastic, paper,
wood and bonded materials,

— Bonus Holsystem für Verpackungen GmbH & Co
KG (Bonus — formerly FRS Folien-Rücknahme-
Service GmbH & Co KG), Kufstein, which disposes
of metal, plastic, paper, wood and textile packaging;
this is, however, confined to packaging left with a
commercial end-user (in the building sector also

with private final consumers at bare-shell buildings
and in the farming sector with farmers),

— RUG Raiffeisen Umweltgesellschaft mbH, Kornneu-
burg, which disposes of reusable wine bottles and
agricultural film,

— GUT Dr Klaus Galle Umwelttechnik & Ökoconsult-
ing (GUT), Klosterneuburg, which disposes of
metal, plastic, paper, wood, bonded materials and
bio-packaging,

— Pape Entsorgung GmbH & Co KG, Hannover,
Germany, which disposes of packaging for auto-
mobile OEM spare parts.

(180) Only EVA, Bonus and GUT have their own system

authorisation for the entire commercial sector.

(181) There are also some self-disposal solutions, including for

what are known as major sources.

(182) Tables on licensed and collected quantities

Packaging wastes, licensed volumes and system volumes, 2001 (9)

Market volume
(total volume of packaging
brought onto the market
in Austria)
(tonnes)

Licensed volume,
other systems
(tonnes)

Licensed volume,
ARA
(tonnes)

ARA-licensed packaging
as a proportion of
packaging brought onto
the market in Austria
(%)

13 300

0

1 600

0

900

34

7 100

23 600

54

46 700

[...]* (*)

[... 50-60 % ...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

[...]*

0

[...]*

[... 80-90 % ...]*

[... 65-75 % ...]*

[... 90-100 % ...]*

[... 50-60 % ...]*

[... 15-25 % ...]*

[... 50-60 % ...]*

[... 15-25 % ...]*

[... 0-10 % ...]*

[... 55-65 % ...]*

Paper and board

Glass

Wood

Ceramics

Metals

Textiles

Plastic

BM (10)

Other

535 000

230 000

70 000

28

85 000

—

210 000

40 000

—

— = no figures available.

Total

1 170 028

(*) The square brackets marked with an asterisk denote confidential

information which has been deleted from the text.

(9) Figures in this table are according to information from the
Austrian Federal Ministry for Agriculture and Forestry,
the
Environment and Water Resources, situation as at 2001.

(10) Bonded materials.

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Volumes of packaging wastes collected, 2001 (11)

Total volume
collected by ARA
(tonnes)

Volume collected
by other systems

Volume collected
Annex 3
(= commercial)

Landfill and
incineration

Total

Paper and board

297 400

11 500

102 200

92 000

503 100

174 400

0

900

39 000

214 300

15 600

600

12 100

40 000

68 300

9

29 500

7

0

700

27

0

0

9

100 %

4 600

27 000

61 800

48 %

300

0

334

102 800

6 000

6 900

78 000

193 700

5 000

17 200

0

45

100

200

5 000

27 300

0

245

ARA’s share of
total packaging
wastes collected
(%)

59 %

81 %

23 %

2 %

53 %

18 %

0 %

Glass

Wood

Ceramics

Metals

Textiles

Plastic

BM (12)

Other

Total

624 716

36 072

127 300

281 000

1 069 088

58 %

VIII. COMMENTS FROM THIRD PARTIES

of the collection infrastructure in the household sector.
They also regarded the scope of the undertakings as
being insufficient.

(183) Following publication of

a notice pursuant

to
Article 19(3) of Regulation No 17 and Article 3 of
Protocol 21 to the EEA Agreement, a total of eight
interested third parties submitted their comments to the
Commission. The comments focused on the following
points.

(184) Third parties suggested that the undertakings given
by ARA should be backed up by the imposition of
obligations. This concerned in particular the shared use

(11) Figures in this table are according to information provided by
the Austrian Federal Ministry for Agriculture and Forestry,
the Environment and Water Resources, situation as at 2001.
According to oral information provided by the official respon-
sible in the Austrian Federal Ministry for Agriculture and Forestry,
the Environment and Water Resources in June 2003, about one
third of the volume of paper and board collected by ARA is
accounted for by the household sector and about two thirds by
the commercial sector; about 7/10 of the volume of plastics
collected by ARA are accounted for by the household sector and
3/10 by the commercial sector.

(12) Bonded materials. Bonded materials include bonded drinks
cartons. Öko-Box collected 16 600 tonnes of bonded drinks
cartons, the ARA system did not collect any bonded drinks
cartons.

(185) It was also argued that

the ARA system used the
household sector to cross-subsidise the commercial
sector so as to drive competitors from the market. There
was no clear separation between the two sectors either
as regards charges or as regards calculation. ARA
should therefore be prohibited from operating in the
commercial sector.

(186) Lastly, it was alleged that ARA gave preferential treat-
licensees by selectively
ment
refunding these contributions, while other licensees were
allowed only the general reductions in charges.

to certain groups of

(187) The list of charges was not notified by ARA. Conse-
quently, the charge system and any cross-subsidising are
not covered by the Decision.

(188) The Commission has carefully examined the comments
submitted by third parties and, where necessary, taken
account of them in this Decision.

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IX. ARTICLE 81(1) OF THE EC TREATY AND ARTICLE 53(1)
OF THE EEA AGREEMENT

(189) Agreements between undertakings, decisions by associ-
ations of undertakings and concerted practices which
may affect trade between Member States and which have
as their object or effect the prevention, restriction or
distortion of competition within the common market
are prohibited as being incompatible with the common
market.

Agreements between undertakings

(190) ARA and obligated undertakings under the Packaging
Ordinance are engaged in economic activity. The dispen-
sation and licence agreements concluded between ARA
and obligated firms are therefore agreements between
undertakings.

(191) The BRGs are engaged in economic activity. Since ARA’s
shareholding in some BRGs is only 11 %, it cannot
exercise control over them under company law. And
since the firms participating in the ARA system are
linked through any group or parent-subsidiary
not
relationship (except for AVM, which is owned by ÖKK
and ARO, each with a 50 % stake), both the waste
disposal agreements between ARA and the BRGs and
the cooperation agreements between ARGEV and ÖKK,
ALUREC, FERROPACK and VHP constitute agreements
within the meaning of Article 81(1) of the EC Treaty.

(192) In order to provide the actual collection, sorting and
disposal services the BRGs in turn conclude contracts
with disposal undertakings. Some of these undertakings
are local authorities. They, too, are therefore engaged in
economic activity. All the contracts between the BRGs
and the collection/sorting and disposal undertakings are
therefore agreements between undertakings within the
meaning of Article 81(1) of the EC Treaty.

Restriction of competition

1.

System market for household packaging

1.1. R e s t r i c t i o n

c o m p e t i t i o n
o f
t h r o u g h d i s p e n s a t i o n a n d l i c e n c e
a g r e e m e n t s

(193) ARA operates on the household packaging market by
concluding dispensation and licence agreements with
firms that release them from their obligations under the
Packaging Ordinance to take back and recycle the
packaging material in question that is accumulated by
final consumers in private households.

(194) ARA uses several variants of the dispensation and licence
agreements.
the dispensation and
follows,
licence agreement for transport, sales, and outer packag-
ing (ELV) will serve as a model for closer examination.

In what

Evidence of use of a parallel dispensation system or self-
disposal solution

(195) Pursuant to Article I.2 of the ELV the only permitted
exception to the licensees’ obligation to participate in
the ARA collection and disposal systems is if they
can produce evidence that they are using a parallel
dispensation or self-disposal system. Regarding the
evidence required, ARA has indicated that a certificate
issued by the system operator pursuant to Section 3(5)
of the Packaging Ordinance suffices as evidence of use
of a parallel dispensation system, while the evidence of
return that has to be submitted to the Ministry of
the Environment pursuant to Section 3(6)(2) of the
Packaging Ordinance suffices as evidence of use of a self-
disposal solution (see paragraph 52).

(196) Pursuant to Article II.1 of the ELV the fee payable by the
licensee is based on the volume of packaging that the
licensee puts into circulation within the country. ARA
has indicated, however, that Article II.1 of the ELV is
applied in such a way that the fee is paid only for
packaging in respect of which the licensee is seeking
dispensation through the ARA system, in other words
for the volume notified to ARA pursuant to Article II.4
as the basis for calculating the licence fee (see para-
graph 55). Moreover licensees can correct the amounts
declared for the year just ended retroactively and apply
for a corresponding adjustment of their licence fee if
they have disposed of certain quantities by other means.
The danger with this flexible system for determining the
licence fee is that firms participating in the ARA system
could subtract a certain quantity of packaging material
from the licence fee calculation retroactively without
ensuring that it is disposed of by some other means.
As ARA accepts corrections to packaging material
declarations, and especially retroactive corrections, the
Commission considers it reasonable for ARA to require
licensees to produce evidence in order to prevent them
from undermining the flexible declaration system.

(197) In view of these facts, the requirement of Article I.2 of
the ELV for licensees to produce evidence is not contrary
to Article 81(1) of the EC Treaty.

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Use of the Green Dot mark

(198) There could be restriction of competition within the
meaning of Article 81(1) of the EC Treaty if licensees
had to pay a licence fee for all packaging carrying the
Green Dot mark. In that case problems would arise for
licensees who used ARA’s dispensation services only in
respect of part of their packaging, or who did not use
any dispensation service at all
in Austria, but who
distributed uniform packaging bearing the Green Dot in
other EEA Member States. They would then either be
forced to pay ARA a licence fee even for those quantities
in respect of which they were not participating in the
ARA system in addition to the fee paid to the competing
system; or they would have to introduce separate lines
of packaging and distribution channels, which would
not be practical or economic.

(199) The ELV does not contain any provision requiring
packaging that comes under the ARA system and is
brought into circulation in Austria to carry the Green
Dot mark. The Packaging Ordinance, too, makes no
provision for any such compulsory labelling of packag-
ing covered by a collection and disposal system.

(200) Furthermore, according to the information given by
ARA, Article II of the ELV is taken to mean that licensees’
payment obligation is not a consideration for the
right to use the Green Dot mark but rather for the
dispensation service provided by the ARA system. It is
thus a service fee and not a fee for the use of a mark.

(203) In the light of the foregoing, it has to be assumed that
the provisions of the ELV regarding the use of the Green
Dot on packaging brought
into circulation do not
hamper current or potential competing collection and
disposal systems or self-disposal solutions for household
packaging and therefore do not constitute a restriction
of competition within the meaning of Article 81(1) of
the EC Treaty.

Ordinary right
licensees from other Member States

to terminate contracts

for

foreign

(204) Pursuant to Article 7 of the Directive 94/62/EC, return
systems must also be open to imported products,
which may not be discriminated against. The detailed
arrangements and any tariffs imposed for access must
avoid discrimination. Section 32(2) AWG accordingly
makes contracting compulsory for the household sector.
in principle, exercise the
Consequently ARA cannot,
right to terminate agreements. Where this does occur in
the exceptional cases described by ARA (see point 60),
ARA is subject to control against abuse. Seen in this
light, the ordinary right of termination granted to foreign
licensees under the agreements cannot be deemed an
appreciable restriction of competition within the mean-
ing of Article 81(1) of the EC Treaty.

1.2. R e s t r i c t i o n
t h r o u g h
b e t w e e n A R A a n d B R G s

d i s p o s a l

o f

c o m p e t i t i o n
a g r e e m e n t s

(201) This means that firms can turn to a competing dispen-
sation system or a self-disposal solution for part or all of
their packaging bearing the Green Dot without having
to pay a licence fee to ARA provided that they can prove
to ARA that they have disposed of the packaging in
accordance with the Ordinance.

(205) Article 5 of the disposal agreement between ARA and
ARGEV, which was notified as a model for all the
agreements concluded between ARA and BRGs, includes
exclusive provisions for the benefit of both ARA and the
BRGs. Article 6(13) of the agreement also includes a
most-favoured clause for the benefit of ARA.

(202) To ensure that ARA does not take any other measures
against firms which are not ARA licensees but which are
obliged to mark the packaging they put into circulation
with the Green Dot either under a contract with a
collection and disposal system in another Member State
or under the national law of another Member State,
ARA has confirmed that it has no objection if packaging
not licensed with ARA carries the Green Dot provided it
can be shown to have been disposed of in accordance
with the Ordinance and that ARA is supplied with
the proof. This applies irrespective of whether non-
participation in the ARA system is partial or total. Even
in the case of total non-participation in the ARA system,
that fact does not have to be indicated on the packaging.

Exclusivity for the benefit of ARA

(206) The exclusive provisions for the benefit of ARA during
the lifetime of the agreement contained in Article 5(2)
of the disposal agreements between ARA and the BRGs
mean that potential competitors of ARA cannot contract
with BRGs, which hold the system operator licences.
However, this ability to contract is not an essential
requirement for access to the system market in terms of
competition law. The key factor is that competitors can
conclude contracts with the firms that do the actual
collection and sorting. This market, downstream of the
system market, will be examined in more detail below.

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(207) Scrutiny of the exclusive arrangement in Article 5(2) of
the disposal agreements leads to the conclusion that it
does not pose an appreciable restriction of competition
within the meaning of Article 81(1) of the EC Treaty.

ARA. Consequently the question of more favourable
terms does not arise at all. By itself, therefore, the most-
favoured clause cannot pose an appreciable restriction
of competition within the meaning of Article 81(1) of
the EC Treaty.

Exclusivity for the benefit of the BRGs

(208) The exclusive provisions in Article 5(1) for the benefit
of the BRGs for the lifetime of the agreement mean that
no other firm can become a BRG under the ARA system
and can avail itself of ARA’s trustee services. Since what
competitors want is precisely to conclude contracts with
obligated undertakings rather than with ARA,
is
impossible to see what interest they might have in
making use of ARA’s services. The Commission therefore
concludes that, here too, there is no appreciable restric-
tion of competition within the meaning of Article 81(1)
of the EC Treaty.

it

(209) Furthermore, each BRG is assigned certain categories of
material and stages of disposal. Pursuant to Article 5(3)
of the disposal agreement, each BRG undertakes not to
provide any disposal services that fall within another
BRG’s area of responsibility. This means that BRGs may
not compete with one another, which primarily affects
the organisation within the ARA system. Outside the
ARA system the arrangement has no impact beyond the
exclusivity discussed above. And although the BRGs’
freedom of action is further restricted within the ARA
system, this can be justified on the grounds of the need
for a clear allocation of responsibilities and reasonable
it
specialisation within the system. At system level,
would be effectively impossible to perform tasks such as
tendering with collecting, sorting and recycling firms
or ensuring that quotas are observed if the lines of
drawn. Another
responsibility were not
important point is that the commitment by BRGs to
keep to their own area of responsibility ceases to apply
after the agreement expires. The arrangement under
Article 5(3) of the disposal agreement is therefore not in
contradiction with Article 81(1) of the EC Treaty.

clearly

Most-favoured clause

1.3. R e s t r i c t i o n
t h r o u g h
m e n t b e t w e e n A R G E V a n d B R G s

c o m p e t i t i o n
a g r e e -

c o o p e r a t i o n

t h e

o f

(211) The exclusive clause agreed between ARGEV and ÖKK/
ALUREC could amount to a restriction of competition if
it prevented potential competitors from entering the
market. Pursuant to Article 15 of ARGEV’s disposal
agreement with ÖKK, which is responsible for organising
the recycling of plastic packaging, the parties undertake
for the lifetime of the agreement not to set up, operate
or participate in any collection and recycling system
within the meaning of the Packaging Ordinance other
than the ARA system, except with the other party’s
permission. Article V of the agreement between ARGEV
and ALUREC contains a similar exclusive provision.

(212) Potential competitors are therefore excluded from the
organisational arrangements for recycling or marketing
secondary raw materials, but not from access to the
market. Competitors could build up their own organis-
there is
ational structures themselves.
nothing to suggest that there might be any impediment
to potential competitors of the ARA system concluding
contracts with recycling firms. The exclusive clause for
the benefit of ARGEV does not constitute a restriction
of competition within the meaning of Article 81(1) of
the EC Treaty.

In particular,

2.

System market for packaging from the large-business and
industrial sector

2.1. R e s t r i c t i o n

c o m p e t i t i o n
o f
t h r o u g h d i s p e n s a t i o n a n d l i c e n c e
a g r e e m e n t s ( E L V s )

(210) A further point that has to be considered is whether the
most-favoured clause in Article 6(13) of the disposal
agreement between ARA and the BRGs, under which
BRGs are forbidden to offer or provide their services to
a third party on more favourable terms than for ARA or
its licensees, constitutes an appreciable restriction of
competition on the system market for the purposes of
Article 81(1) of the EC Treaty. The most-favoured clause,
like the exclusive clause, is incapable of any impact by
itself, as the BRGs are forbidden by the exclusive clause
from working with any collection system other than

(213) The ELV is used for licensing of household packaging

and large-business and industrial packaging.

(214) The analysis, in paragraph 193 et seq., of the ELV’s
provisions concerning existence of use of a parallel
dispensation system or self-disposal solution also applies
therefore to large-business for commercial and industrial
packaging. Consent to use of the Green Dot can be given
if an item of packaging occurs in the household sector
and therefore has to carry the Green Dot in at least one
other Member State.

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(215) The Commission therefore concludes that the relevant
provisions of the ELV do not result in a restriction of
competition on the system market for large-business
and industrial packaging and as such are not caught by
Article 81(1) of the EC Treaty.

c o m p e t i t i o n
3.1. R e s t r i c t i o n
t h r o u g h
p a r t n e r s
a g r e e m e n t b e t w e e n A R G E V a n d t h e
c o l l e c t i o n p a r t n e r s

o f
r e g i o n a l

t h e

2.2. R e s t r i c t i o n
t h r o u g h
b e t w e e n A R A a n d B R G s

d i s p o s a l

o f

c o m p e t i t i o n
a g r e e m e n t s

(216) The disposal agreements between ARA and the BRGs,
for which the agreement between ARA and ARGEV was
notified as a model, concern the disposal of packaging
not only from households but from the commercial
sector as well. The legal assessment of the problem of
exclusivity in respect of household packaging given in
paragraphs 206 et seq. applies equally to this sector. As
in the household sector,
the clauses examined do
not constitute a restriction of competition within the
meaning of Article 81(1) of
the EC Treaty in the
commercial sector.

2.3. R e s t r i c t i o n
t h r o u g h
m e n t s b e t w e e n A R G E V a n d B R G s

c o m p e t i t i o n
a g r e e -

c o o p e r a t i o n

t h e

o f

(217) The cooperation agreements between ARGEV and the
BRGs, for which the agreements between ARGEV and
ÖKK, and ARGEV and ALUREC were notified as models,
make no distinction between the household and com-
mercial sectors. The legal assessment is no different from
that arrived at as regards the market for the collection
and sorting of household packaging (paragraph 211 et
seq.). For the reasons stated there the reciprocal exclusive
arrangements contained in the agreements do not consti-
tute a restriction of competition within the meaning of
Article 81(1) of the EC Treaty.

Exclusivity for the benefit of collection partners

(220) The sorting partner agreement is concluded between
ARGEV and individual partners covering a particular
region for which the partner in question has sole
responsibility.

(221) Because of the obligation entered into by ARGEV to
seek all collection services during the lifetime of the
contract from one single disposal firm for the area
covered by the contract, and in view of ARGEV’s
dominant market position in terms of demand (see
paragraph 182), other suppliers of collection services
for light household packaging are denied substantial
supply opportunities.

(222) Contracting only a single collection partner per disposal
region amounts to a self-imposed restriction by ARGEV
in terms of demand for collection services for light
household packaging. The result of this restriction is to
exclude competing suppliers of collection services for
light household packaging from supplying the major
source of demand for such services and so restricting
competition on the supply side between collection
partners in the contract areas concerned. Even though
collection has been separated from sorting in the
contracts valid since 2002, bundling of demand does
occur through the ARA system. At the same time,
moreover, collectors are operating for the ARA system
in the commercial sector as well, on the basis of a
standard collection partners agreement.

3. Market for the collection and sorting of used household

packaging

(218) The ARA system operates on the market for collecting
and sorting used light packaging accumulating in house-
holds primarily through regional partner agreements
between ARGEV and collectors and sorters.

(219) Pursuant to the agreements valid from 1 January 2002
ARGEV concluded separate contracts with disposal firms
for the collection and sorting of packaging.

(223) ARGEV’s contracts with the collection partners are not
limited in time at all and merely provide for an ordinary
right to terminate after three years. In undertaking 4
described in paragraph 139, ARGEV has committed
itself to terminating its contracts with the disposal
partners after a period of three years unless the parties
jointly agree to extend them by a maximum of two years
in any event. ARGEV will put the service contracts up
for tender again through an objective procedure after a
period of five years. Although this undertaking prevents
parties from binding themselves for an indefinite period,
contracts can run for up to five years. This means that
excluded disposal firms are denied access to the main
source of demand for three to five years, noticeably
restricting competition in the contract region.

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Appreciable effect

(224) However, the exclusivity for the benefit of collection
partners is contrary to Article 81(1) of the EC Treaty
only if it affects competition to an appreciable extent.
How appreciable the restriction of competition is
depends primarily on the position of the contracting
parties on the relevant market and the duration of the
exclusive connection.

(225) Altogether ARGEV has concluded collection partner
agreements for 64 areas, creating a network of agree-
ments covering the whole of Austria. This means that
only the ARA system currently has a countrywide
collection and disposal system covering all categories of
material
in the near-household packaging sector in
Austria and is therefore the main customer for such
disposal services both in each collection area and
throughout Austria as a whole. In the light household
packaging sector, only Öko-Box has set up a competing
system. But it is confined to bonded drinks cartons,
which account for around 20 % of all light packaging
accumulating in households (see paragraph 182).

(228) An important factor in assessing the effects of the
exclusivity on competition is its duration. Under under-
taking 4 given by ARGEV (see paragraph 139), future
collection partner agreements will have to be put out to
tender again after a maximum of five years. This means
that other suppliers of collection services who are not
successful when contracts are awarded are excluded
from central supply opportunities for the same period
of time.

(229) The Commission therefore concludes that the exclusivity
in the collection partner agreements for the benefit of
the respective disposal partners does appreciably restrict
competition.

Access to collection partners’ collection facilities

(230) Because of the bottleneck in the near-household collec-
tion infrastructure, as described in paragraph 227, free
and unhindered access to these facilities by competitors
of the ARA system is especially important for compe-
tition. In particular, there would be a restriction of
competition within the meaning of Article 81(1) of the
EC Treaty if the collection partner agreement were so
worded as to exclude competitors of the ARA system
from access to the disposal infrastructure.

(226) As ARGEV has covered the entire relevant geographical
market with a network of similar contracts, the bundling
of exclusive arrangements that they contain prevents
third parties from entering the market for the lifetime of
the contracts. The cumulative impact of all the contracts
taken together has the effect of closing off the market to
excluded disposal firms.

(231) The service contracts contain no exclusive provision for
the benefit of ARGEV, which means that disposal firms
may offer their services to other dispensation systems or
as part of self-disposal systems.
In the undertaking
reproduced at paragraph 139, ARGEV confirmed that it
was not requiring an exclusive obligation for its own
benefit.

(227) On the supply side, moreover, spatial and logistic
reasons militate against the establishment of another
collection structure for final consumers alongside the
one set up by ARGEV’s collection partners (see para-
graphs 160 and 281 et seq.). Even Öko-Box makes
partial use of the ARGEV disposal firms’ collection
infrastructure. Alternative supply opportunities
for
excluded collection service providers must therefore be
regarded as rather unlikely for the moment. Realistically
any dispensation system wishing to compete with ARA
is more likely to work together with the collection
partners who already perform the collection of packag-
ing for the ARA system under the sorting partner
agreement. Against this background, it has to be con-
sidered unlikely that new supply opportunities will arise
on the relevant market for excluded collection service
providers to any appreciable,
i.e. substantial, extent
during the lifetime of the sorting partner agreement in
each area.

(232) The remaining question that has to be considered is
whether the sorting partner agreement frustrates shared
use of the collection partners’ containers by competitors
of the ARA system.

(233) A possible problematic point is the ownership clause in
Article 2.5.2 of the sorting partner agreement, under
which collection partners take charge of packaging on
behalf of ARGEV and may therefore deal with material
collected for ARGEV only in the way provided for in
the agreement. Furthermore ARGEV pays a fee in
consideration of container costs and reserves the right
to require their positioning to be decided in agreement
with it. Under these provisions ARGEV could claim to
have a certain degree of control over the containers, yet
they do not expressly rule out shared use. Also, ARGEV
has stated that disposal firms are not prevented from
making space in the same container available for another

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fulfilment of
system provided this does not affect
their obligations towards ARGEV (see paragraph 103).
Regarding the ownership clause, ARGEV has made it
clear that this applies only to the quantities of packaging
licensed for ARA and so does not prevent competitors
of the ARA system from making unrestricted use of
packaging collected through shared use of disposal
facilities. The ownership clause should therefore be
interpreted as meaning that it does not frustrate the
dividing up of the quantities of packaging collected in
one container for several systems.

(234) Consequently, it cannot be argued that provisions in
the sorting partner agreement prevent disposers from
concluding and fulfilling contracts with competitors of
the ARA system for shared use of
the collection
containers. However, the restrictions in undertaking 3
on shared use justify the fear that ARGEV could try to
make it difficult for collection partners to open up access
to containers for competitors without a specific link to
a provision of the sorting partner agreement. This risk
will have to be taken into account when deciding
whether the tests of exemption are satisfied in respect of
the exclusive arrangements for the benefit of collection
partners (see below, paragraph 278 et seq.).

3.2. R e s t r i c t i o n
t h r o u g h
a g r e e m e n t s
s o r t i n g p a r t n e r s

t h e

o f
r e g i o n a l

c o m p e t i t i o n
p a r t n e r
b e t w e e n A R G E V a n d

(235) Because of the distinction made in the collection and
sorting partner agreement since 1 January 2002, collec-
tion and sorting partners may in both cases be different
firms. In terms of their content, ARGEV’s contracts with
its sorting partners are similar to those with its collection
partners.

(236) Article 5 of the sorting partner agreement provides for
the same duration as the collection partner agreement.
In addition, only a single sorting partner per collection
region is contracted by ARGEV to sort used sales
packaging. Undertaking 4, which is reproduced at
paragraph 139 and concerns the duration of the contract
and re-tendering after no more than five years, also
applies to the sorting partner agreement. As regards the
legal assessment of the exclusive arrangement for the
benefit of sorting partners, reference should be made to
the explanation given concerning the collection partner
agreement. The end result is that the exclusive arrange-
ment contained in the sorting partner agreement
amounts to an appreciable restriction of competition on
the relevant market within the meaning of Article 81(1)
of the EC Treaty.

3.3. R e s t r i c t i o n

c o m p e t i t i o n
o f
t h r o u g h a g r e e m e n t s b e t w e e n A R O
a n d l o c a l a u t h o r i t i e s

(237) ARO has concluded an agreement with local authorities
on the operation of municipal wastepaper systems for
paper packaging from households and establishments
with similar volumes of waste packaging. Under the
agreement, however, the local authorities do not provide
their collection services for ARO but operate their own
municipal wastepaper collection and disposal system,
which also covers non-packaging (e.g. newspapers and
magazines). As regards near-household collection of
paper and board packaging, ARO confines itself to
buying up quantities from the municipal collection.
The agreement with the local authorities contains no
provisions excluding any other collection and disposal
system from sharing the municipal wastepaper collec-
tion containers. The local authorities are therefore not
prevented from making contracts with competitors of
ARO for the collection and disposal of paper packaging.

(238) Given these facts, the Commission has concluded that
the agreements concluded by ARO with local authorities
do not contain any clauses restricting competition and
are therefore not contrary to Article 81(1) of the EC
Treaty.

4. Market for the collection and sorting of commercial

packaging

(239) The ARA system operates on the market

for the
collection and sorting of
commercial packaging
especially through the regional partner agreements con-
cluded between the BRGs and collection/sorting part-
ners.

(240) The contracts concluded by ARGEV and ARO with
collection/sorting partners for the actual implementation
of the requirements for collection and recycling systems
laid down in the Packaging Ordinance cover commercial
packaging.

4.1. R e s t r i c t i o n

o f

c o m p e t i t i o n
a g r e e -
t h r o u g h r e g i o n a l p a r t n e r
m e n t s b e t w e e n A R G E V a n d c o l l e c -
t i o n p a r t n e r s

(241) The exclusive provision for the benefit of collection
partners also has to be examined in respect of commer-
cial packaging to determine whether it is compatible
with Article 81(1) of the EC Treaty.

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(242) In view of the undertaking given by ARGEV to seek to
obtain all collection services including in the commercial
sector from a single disposal firm, other competing
suppliers of collection services for commercial packaging
are denied supply opportunities and thus competition
between collection partners/disposers in the commercial
sector is restricted.

(243) Unlike in the household packaging disposal sector,
on the market for commercial packaging and other
commercial waste ARGEV is not the completely domi-
nant customer for disposal services. For commercial
packaging there are other systems that are also in the
market for disposal services. Disposal firms can also
offer their collection services to major sources of waste.

(244) Although ARGEV is not

the completely dominant
customer for disposal services in the commercial sector,
the competing collection and recycling systems and
major sources of waste in the field of commercial
packaging bear no comparison with the ARA system in
terms of their economic importance (see paragraph 182).
It must therefore be assumed that the exclusive arrange-
ments deny disposal
insignificant supply
firms not
opportunities and therefore have an appreciable impact
on the common market for disposal services for com-
mercial packaging.

(245) Since the collection partner agreements provide for a
standard contract for the collection of both household
and commercial packaging, disposal firms will be able
to become ARGEV collection partners for commercial
packaging only if they are also able to provide the
infrastructure for household collection. Smaller,
less
powerful disposal firms are thus at a disadvantage in
terms of the services they can offer to ARGEV. This kind
of arrangement in effect reinforces the restriction of
competition just described.

(246) Another important factor in assessing the effects of
the exclusivity on competition is the duration of the
collection partner agreements. Under the undertaking
given by ARGEV, the agreements will have to be put out
to tender again after, at most, five years. This means that
other suppliers of disposal services are denied significant
supply opportunities during that period.

(247) This leads to the conclusion that the exclusive arrange-
ments for the lifetime of the contract do amount to an

appreciable restriction of competition under the terms
of Article 81(1) of the EC Treaty on the market for the
collection and sorting of commercial packaging.

c o m p e t i t i o n
4.2. R e s t r i c t i o n
t h r o u g h
p a r t n e r
a g r e e m e n t b e t w e e n A R G E V a n d t h e
s o r t i n g p a r t n e r s

o f
r e g i o n a l

t h e

(248) The sorting partner agreement also covers both the

household and commercial sectors.

(249) As regards the exclusive arrangements for the benefit of
sorting partners, reference should be made to the
observations made above in paragraphs 241 et seq. The
outcome is that they do constitute an infringement of
Article 81(1) of the EC Treaty.

4.3. R e s t r i c t i o n
t h r o u g h
A R O a n d t h e c o l l e c t i o n p a r t n e r s

c o m p e t i t i o n
b e t w e e n

a g r e e m e n t

t h e

o f

(250) The agreement between ARO and collection partners
for paper and board packaging from the commercial
sector contains an exclusive provision for the benefit of
the collection partners, subject to the limitation of the
five-year maximum contract period under the commit-
ment given. This provision denies excluded suppliers of
collection services in the commercial sector access to
ARO, a major source of demand. For the collection of
paper and board packaging there are, admittedly, other
systems on the market which use disposal services. But
it is also true for this sector that the competing collection
and recycling systems are not comparable with the ARA
system in terms of their economic importance (see
It must therefore be assumed that
paragraph 182).
the exclusive arrangements deny disposal
firms not
insignificant supply opportunities. This amounts to an
appreciable restriction of competition on the relevant
product market within the meaning of Article 81(1) of
the EC Treaty.

5. Markets for recycling and marketing secondary raw

materials

(251) ARA is active on the market for recycling and marketing
secondary raw materials in so far as the BRGs organise
the recycling of the material in the packaging collected
under the system. ARGEV is responsible for light
and metal packaging from households and similar
establishments and for plastic, bonded metal, wood,
textile and ceramic packaging from commercial sources,
while ARO is responsible for packaging made of paper,
cardboard, board, and corrugated board from the house-
hold and commercial sectors.

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(252) The question to be considered is how far the control of
the packaging flow embodied in the contracts between
ARGEV/ARO and the collection partner has an impact
on the recycling and marketing market and whether it is
compatible with Article 81(1) of the EC Treaty.

5.1. A g r e e m e n t s b e t w e e n A R G E V / A R O

a n d c o l l e c t i o n p a r t n e r s

enterprise for the collection and recycling of plastic
packaging, motivated by environmental concerns. How-
ever, most of the plastic packaging collected under the
ARA system does not fetch much on the market, and so
ÖKK has to pay extra in order to recycle this material in
accordance with the Ordinance. In view of the structure
of the recycling market in respect of plastic waste, ÖKK’s
market share cannot be said to constitute a restriction of
competition.

(253) Pursuant to ARGEV’s and ARO’s agreements with the
the latter may only dispose of
collection partners,
packaging in the manner laid down in the agreement,
thus restricting their freedom of choice as regards sorting
facilities,
transhipment stations and recycling firms
(Article 2.5.2 read in conjunction with Article 2.2.5 in
ARGEV’s agreements and Article 2.8 in ARO’s).

(259) Account also has to be taken of the fact that the disposal
industry, in so far as it is part of the ARGEV association
committee, has no voting rights and is excluded from
meetings when legal business is discussed between the
recycling BRGs and association members. Consequently
the industry cannot exert any influence for its own
benefit.

(254) Pursuant to the agreement concluded by ARO with local
authorities, which mainly relates to the collection of
packaging from the household sector, the local auth-
orities are not allowed to dispose of paper packaging
in any other manner than that specified by ARO
(Article 3.7).

(255) The fact that the flow of packaging is controlled under
the contracts between ARGEV or ARO and the collection
partners does not restrict the latter’s scope for disposal
or recycling, since they never acquire ownership of the
packaging. ARGEV and ARO have the right to dispose
freely of the packaging which they own.

(256) Given the position of the BRGs on the relevant markets
for recycling and marketing secondary raw materials,
and bearing in mind the structure of those markets, the
agreements cannot be said to foreclose the market.

(257) The market share of Ferropack Recycling GmbH for
ferrous metal packaging (tinplate and steel) is under
10 %, while ALUREC’s market share for aluminium
packaging is only 1,7 %. The amount of paper, card-
board, board and corrugated board packaging recycled
by ARO each year amounts to 22 % of the total volume
for Austria. In view of these low market shares, the
arrangements cannot be said to foreclose the market in
these categories of material.

(258) Only in the plastics category does the competent BRG,
ÖKK, have a 40 % share of the annual recycling market.
However, it has to be borne in mind that until the
Packaging Ordinance was enacted and the ARA system
set up, this type of waste, unlike others such as glass or
paper, used to come under the ordinary domestic waste
collection and was not collected and recycled separately.
The Packaging Ordinance created a new field of

(260) In view of the above, the Commission has concluded
that the relevant provisions of the agreement between
ARGEV or ARO and the collection partners do not
constitute an appreciable restriction of competition
within the meaning of Article 81(1) of the EC Treaty on
the relevant product market for recycling and marketing
secondary raw materials.

5.2. A g r e e m e n t s b e t w e e n A R G E V a n d

B R G s

(261) The contracts between ARGEV and ÖKK/ALUREC also
contain an exclusive clause for the latter’s benefit, under
which ARGEV undertakes not to pass on collected
packaging to any third undertaking for the lifetime of
the contract. As a result, no other firm can operate in
the field of organising recycling for ARGEV. However,
this does not rule out performing actual recycling
services for the ARA system. The contracts between
recycling BRGs and recycling undertakings which actu-
ally perform the recycling itself are awarded annually by
competitive tender. Furthermore, the small market shar-
es of the recycling BRGs in the overall market for
recycling and marketing secondary raw materials tend
to suggest that the exclusive clauses do not have the
effect of foreclosing the market.

(262) The exclusive clause in the ARGEV’s contracts with ÖKK
and ALUREC for the benefit of the recycling BRGs
does not, therefore, pose an appreciable restriction of
competition on the market for the recycling and market-
ing of secondary raw materials within the meaning of
Article 81(1) of the EC Treaty.

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Effects on trade between Member States

1. Market for the collection and sorting of used house-
hold packaging

(263) Since the exclusive obligations in ARGEV’s and ARO’s
collection and sorting partner agreements have a restric-
tive effect on competition, the question arises whether it
is also liable to have an appreciable effect on trade
between the Member States.

(264) ARGEV and ARO have concluded exclusive collection
partner agreements for 64 contractual areas, thereby
establishing a disposal network for the collection of used
packaging that covers the whole of Austria. Throughout
the lifetime of the contract this makes market access
much more difficult for other collection service pro-
viders, especially those from other Member States of the
European Economic Area. The exclusive arrangement
has a very negative impact on the scope for foreign
disposal firms to establish themselves in the relevant
markets for the collection and sorting of household
packaging and commercial waste. Consequently the
exclusive arrangement in the collection partner agree-
ment is liable to have an appreciable effect on trade
between the Member States.

(265) For the same reasons, the exclusive arrangement con-
tained in the sorting partner agreement is liable to have
an appreciable effect on trade between Member States.

Conclusion

(266) Examination of the exclusive arrangement in the collec-
tion and sorting partner agreement for the benefit of the
undertakings providing collection and sorting services
shows that it makes it considerably more difficult for
domestic and foreign disposal firms to enter the relevant
market and therefore contributes significantly to fore-
closure of a substantial part of the common market. The
exclusive arrangement contained in the collection and
therefore caught by
sorting partner agreement
Article 81(1) of the EC Treaty.

is

X. APPLICATION OF ARTICLE 81(3) OF THE EC TREATY
AND ARTICLE 53(3) OF THE EEA AGREEMENT

(267) Since the exclusive arrangement under the collection
and sorting partner agreement for the benefit of collec-
tion and sorting partners is caught by Article 81(1) of
the EC Treaty,
it has to be examined whether the
provision satisfies the conditions for the application of
Article 81(3). In what follows, the potential positive
effects arising from the exclusive arrangement of the
collection partner agreement, which is prohibited under
Article 81(1), will be balanced against the arrangement’s
restrictive effect on competition.

1.1. Regional partner agreement between ARGEV and the

collection partners

I m p r o v i n g p r o d u c t i o n o r d i s t r i b u t i o n
a n d p r o m o t i n g t e c h n i c a l o r e c o n o m i c
p r o g r e s s

(268) ARA currently operates the only countrywide collection
and recycling system for household packaging in Austria
and its business aim is to implement national and
Community environmental policy in terms of pre-
venting, reusing and recycling packaging waste. The
collection partner agreement is therefore designed to
fulfil the requirements of the Austrian Packaging Ordi-
nance and to apply Community Directive 94/62/EC. The
purpose of these pieces of legislation is to prevent
and mitigate the impact of packaging waste on the
environment and thereby to secure a high level of
environmental protection.

(269) The collection partner agreements concluded between
ARGEV and the collection partners is intended to
implement these environmental requirements regarding
the collection of used light packaging in operational
terms. It is essential in order for ARA and ARGEV to be
able to fulfil the obligations they have entered into in
connection with their system activities. To this end the
collection partner agreement requires the establishment
of collection infrastructure that entails a considerable
investment (see paragraph 160 et seq.). The regular
collection of used sales packaging from final users,
broken down by type of reusable material, is therefore a
direct means of implementing environmental require-
ments.

(270) The exclusive arrangement examined allows the con-
tracting parties to undertake the long-term planning and
organisation of their services. Since the positive network
effects in the area of collecting used light household
packaging, as described in paragraph 160, allow con-
siderable economies of scale and scope to be achieved,
contracting a single disposal firm for each area for the
term of the contract leads to efficiency gains. At the
same time ARA/ARGEV, as the service customer, obtains
the assurance that its needs will be met regularly and
reliably in what is a sensitive sector formerly run by the
public authorities.

(271) In view of the above, the Commission has concluded
that the exclusive arrangement in favour of collection
partners
to
improving production and promoting technical and
economic progress.

in the service agreements contributes

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B e n e f i t s f o r c o n s u m e r s

(272) The purpose of the collection partner agreement is the
practical implementation of a countrywide system for
collecting the various types of sales packaging materials
from final consumers that come under the ARA system.
This is in line with final consumers’ past disposal habits
and can therefore be described as very consumer-
friendly. Secondly, because of the economies of scale
and scope described in paragraph 160, the participation
of manufacturers and distributors who are subject to the
take-back and recycling obligation in a countrywide
system dispensing them of that obligation is likely, when
viewed realistically, to result in cost savings compared
to the option of fulfilling their obligation individually. It
can therefore be assumed that, where there is compe-
tition on the markets for packaged products, the cost
savings attained over the term of the contract will be
properly passed on to the consumer.

(273) The Commission has therefore concluded that

the
collection partner agreement benefits consumers and
that they enjoy a fair share of the gains.

I n d i s p e n s a b i l i t y o f t h e r e s t r i c t i o n

(274) As its basis for examining the exclusive arrangement
contained in the collection partner agreement the Com-
mission took the revised duration of the contracts, as
given in undertaking 4 cited at paragraph (139), includ-
ing re-tendering after five years at most, and concludes
that this duration is indispensable.

(275) Assessing whether the exclusive arrangement is indis-
pensable or not depends on the economic and legal
circumstances in which the agreement under consider-
ation was made. From ARA’s point of view there are
management and efficiency considerations, but
the
prime argument in favour of contracting with only a
single partner per disposal region for the entire contract
period is to ensure lasting and reliable collection services,
which are indispensable for the success of the system as
a whole.

(276) Crucial to deciding whether the agreed exclusivity is
indispensable is the need for planning and investment
certainty for the investment required in order to fulfil
the collection partner agreement. To maintain the
system, ARA’s collection partners have to make substan-
tial
in setting up and maintaining the
collection infrastructure for used packaging. In particu-
lar, mention should be made of suitable collection
vehicles and containers.

investment

(277) Taking account of the special circumstances involved
in implementing the requirements of the Packaging
Ordinance and,
in that connection, establishing a
countrywide take-back and dispensation system, the
Commission has reached the conclusion that an exclus-
ive arrangement of at least three years is indispensable
on economic grounds. On the other hand, this is no
longer the case after a five-year contract period, and for
this reason putting the contracts out to tender again
after that period, as agreed in the undertaking given,
is justified and constitutes a necessary condition of
exemption under Article 81(3) of the EC Treaty.

N o n - e l i m i n a t i o n o f c o m p e t i t i o n

(278) Even if the market position of the ARA system on the
markets concerned is taken into account, the exclusive
arrangement in the collection partner agreement is not
such as to eliminate competition on the market for the
collection and sorting of household packaging.

(279) In assessing whether competition is likely to be elimin-
ated, the specific supply situation on the market in
question has to be considered. As described in para-
graph 160, the market for the collection and sorting of
light packaging accumulated by final consumers is
characterised by substantial economic network effects,
i.e. economies of scale and scope. From an economic
point of view, it is therefore reasonable, within one and
the same dispensation system at any rate, for a contract
to be concluded with only one disposal firm per area.

(280) While competition between collection service providers
within a given disposal area may be unlikely for the
reasons described above, there is every chance that the
new arrangements under the undertaking given, whereby
ARGEV will put its service contracts out to tender again
through an open, transparent and objective procedure
at the latest once contracts have run for five years, will
at least lead to ‘competition for disposal areas’ in the
course of such a tendering procedure. This makes
allowance for the special supply situation prevailing in
the market for the collection and sorting of household
waste.

(281) With regard to demand-side competition on the market
for the collection and sorting of household packaging, it
has to be borne in mind that it would be almost
impossible in practice and in economic terms to dupli-
cate the collection infrastructure in the household sector
across the whole of Austria.

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(282) First, setting up a further collection system would be
uneconomic. The cost of establishing one or even several
parallel collection systems would be unacceptably dis-
proportionate in economic terms to the relatively small
quantities of reusable waste material obtained from final
consumers when entering the market, so that
the
necessary incentives for competitors to enter the market
would be lacking. From a national economic perspective,
duplicating systems would simply mean higher costs,
while the volume of recyclable waste would not increase
significantly if competitors to the ARA system were to
enter the market. Firstly, that volume is dependent on
consumption by final consumers and, secondly, it is
probable that competitors would capture at least some
of the ARA system’s current customers.

(283) Moreover, setting up another parallel collection system
would be truly impossible because of local conditions
and final consumers’ traditional disposal patterns. In
private households there is often no room for additional
collection containers for light packaging. Similarly,
introducing collection sacks would not bring about any
fundamental change, as full sacks take up almost as
much space as solid receptacles. The same would apply
if an alternative bring-it-yourself system were introduced
at the public sites for glass and paper collection con-
tainers. This spatial constraint would become especially
marked if a third or fourth competitor were to enter the
market: whether on private or public sites, there is not
enough space for containers belonging to three or four
dispensation systems for collecting identical types of
material.

(284) Duplication of disposal systems would also give rise to
serious problems in terms of acceptance. It would be
for final consumers to understand — and
difficult
contrary to their current habits — if they were expected
to collect packaging of the same types of material in
different containers.
It would also be unclear what
criteria final consumers should apply in order to decide
what system they should use to dispose of their various
types of packaging.

(285) In its comments of 15 January 2003 (13), Austria points
out that setting up additional containers in the proximity
of final consumers had to be ruled out in practice
because of lack of space, to protect localities and the
countryside, and because of the greater volume of traffic
involved (separate trips to empty the containers) and
the greater environmental burden.
In addition, with
collection more complicated and the increased demands

(13) See Annex, pp. 4 and 5.

placed on consumers to separate their waste, proper
separation would be jeopardised. The increased burden
on the environment and the heavier demands in terms
of separation are considerations that also apply to
separate sack collections.

(286) There are, then, substantial practical, legal and economic
reservations that militate against setting up either
another parallel collection system or an alternative
bring-it-yourself system. Because of the special supply
situation on the relevant market the containers put in
place close to households for used sales packaging often
create a competitive bottleneck. Viewed realistically, the
likelihood is that dispensation systems entering the
market would often collaborate with disposal firms
already providing collection services for ARGEV. Free
and unhindered access to the collection infrastructure
set up is therefore a crucial precondition both for greater
competition in terms of demand for collection services
and for greater competition on the vertical upstream
market for organising the take-back and recycling of
used sales packaging from private final consumers.

(287) Competition in terms of demand for collection services
for used sales packaging can develop only if ARGEV
does not forbid its collection partners from concluding
contracts with competitors of the ARA system for shared
use of containers. Consequently ARGEV may not prevent
its partners from allowing shared use, whether on the
basis of specific provisions in the collection partner
agreement (see paragraph 230 above) or on any other
grounds.

O b l i g a t i o n s

(288) Although ARGEV has stated that disposers are not
prevented from making space available in the same
containers for competing systems, it wishes to impose
considerable restrictions in respect of shared use (see
undertaking 3, paragraph 139). In view of the key
importance of unhindered access to the disposal infra-
structure for the development of competition on this
market characterised by a special supply situation, it is
therefore necessary to impose certain obligations in
connection with the present decision. The aim is to
ensure that the competitive effects do indeed come
about and that competition in terms of demand on this
market
is made possible, so satisfying the tests of
exemption in Article 81(3) of the EC Treaty.

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(289) ARGEV is instructed not to prevent disposal firms from
concluding and fulfilling contracts with competitors of
ARA and ARGEV for the shared use of containers or
other facilities for the collection and sorting of used sales
packaging (obligation (a)).

not restrict ARGEV’s other contracting possibilities vis-
à-vis its collection and sorting partners. In particular,
they do not obstruct ARGEV’s right to determine the
categories of materials that are to be collected for it.

(290) In addition, ARGEV may only require disposal firms to
provide evidence of packaging quantities corresponding
to the ARA system’s share of the total quantities of
packaging licensed by systems in the household sector
for given types of material
(obligation (b)). ARGEV
may not require disposal firms to provide evidence of
quantities of packaging that are not collected for the
ARA system. This obligation is necessary to ensure that
ARGEV does not bind the entire volume of collected
packaging to itself and so make it
impossible for
competitors to meet their quotas, and to ensure that
competitors of the ARA system have unrestricted access
to the sales packaging collected for them.

(291) In this case ARGEV may reduce the fee provided for in
Article 3.1.1 of the collection partner agreement by the
proportion indicated in obligation (b). The fees pursuant
to Articles 3.1.2 and 3.1.3 of the same agreement are
determined by the quantities in respect of which evi-
dence is supplied to ARGEV. This is intended to prevent
collection partners from charging ARGEV for services
that can be shown to have been performed for third
parties. For that reason ARGEV can make a suitable
reduction in the fee in respect of its collection partners.

(292) Obligation (b) relates not only to disposal firms that
allow shared use but to all disposal firms with which
ARGEV has concluded a collection partner agreement.
This applies to the extent that a competing system in the
particular collection area wishes to obtain shared use
under obligation (a) at all and once the system licence
has been granted. As a result, disposers are given an
incentive to conclude a contract with a competing
system, and there is a guarantee that the competing
system can then access the packaging quantities, if this
is necessary for fulfilling its quota.

(294) ARGEV takes the view that there is no legal basis for
these obligations, that they cannot be implemented and
the legal
are disproportionate, and that
position of third parties.

they affect

N o l e g a l b a s i s

(295) ARGEV again emphasises that there is no exclusive right
to the packaging collected in the containers available.
Since ARGEV’s collection and sorting partner agree-
ments do not therefore restrict competition, the obli-
gation is not valid.

(296) The restriction of competition derives from the exclusive
arrangements for the benefit of the collection and sorting
partners (paragraphs (229) and (236)). For it to be
possible to exempt this restriction, competition must
not be eliminated from the market for the collection and
sorting of household packaging. Demand-side compe-
tition on this atypical market is possible only if ARGEV
does not prevent the collection and sorting partners
from concluding contracts with competitors of the ARA
system for the shared use of containers (paragraphs (281)
and (287)). ARGEV, however, does place considerable
restrictions on shared use and could obstruct it by so
doing (paragraphs (288) and (304) et seq.). The obli-
gation is therefore necessary,
the conditions for
exemption are to be restored; the legal basis for the
obligation is to be found in Article 8(3)(b) of Regulation
No 17.

if

I m p r a c t i c a b i l i t y a n d u n r e a s o n a b l e n e s s

(297) ARGEV contends that the obligations are impracticable,
since neither it nor the disposers know what the ARA
system’s share is of
the total volume of systems-
licensed packaging in the household sector for particular
categories of material.

(293) These obligations are essential in order to prevent the
elimination of competition on the relevant markets; they
constitute a clarification of the contractual relationship
between ARGEV and its collection and sorting partners
that serves to ensure legal certainty. The obligations do

(298) Competing systems will communicate to disposers the
licensed quantities for which they are trying to obtain
shared use. The disposer will pass that figure in anony-
mous forms) on to ARGEV. On the basis of
this
information, ARGEV will be able to calculate its licensing
share.

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(299) ARGEV also considers the obligations to be unreason-
able, since they would inevitably mean it could no longer
comply with its authorisation to operate a collection
and recycling system. If a competing system licensed
additional quantities of waste, ARGEV would not achieve
its collection quotas, since the available infrastructure
could not automatically absorb more packaging waste.
If a new system installed its own collection facilities
either wholly or in part, ARGEV would have to accept
that the quantities it collected would diminish, although
the competing system would have no need at all of the
packaging arising in the facilities make available by
ARGEV.

(300) Even if the containers were shared, ARGEV would still
be able to fulfil
its obligations towards the public
authorities. The Packaging Ordinance contains no indi-
cation that containers should be made available to one
system only. Austria has also stated, in its comments of
15 January this year, that the shared use of containers
for household collection was basically permissible under
the conditions of the licensing system set out in AWG
2002. It will also be noted that the significance attached
in the interpretation of the Packaging Ordinance to
shared use as a means of stimulating competition on the
basis of the Community competition rules should also
be taken into account (14).

(303) ARGEV’s legitimate interest in ensuring that it is not
charged for any services demonstrably supplied by the
collection partners to third parties is recognised, because
obligation (b) allows ARA to reduce the fee paid to its
collection partners by an appropriate amount.

(304) It is not necessary that disposers reimburse ARGEV for
any other costs directly attributable to collection, as
provided for in undertaking 3(a) (paragraph (139)). The
said other costs are system costs, which ARGEV incurs
by maintaining its system. As contractual partners of
ARGEV, collectors perform certain services and receive
remuneration for them. ARGEV’s other system costs are
not relevant to them and are not covered by the partner
agreement. Moreover, where shared use is permitted for
disposers, partial passing on would result in a non-
calculable financial risk. Competitors do not derive an
unjustifiable advantage from this, since they will also
incur costs from setting up their own system. Further-
more, it should be possible for competitors to conclude
agreements with local authorities direct and in an
independent manner on, say, the payment of waste
advisers.

(301) If a competing system licenses additional quantities, this
would be reflected in the instructions to such systems
regarding the volumes collected. Where appropriate,
container capacity would be adjusted in order to receive
a larger collection volume. If a competing system does
not seek shared use but builds its own collection
facilities, the obligations do not apply.

(305) Nor is it appropriate for disposers to reimburse ARGEV
for costs which the companies in the ARA system or
their contractual partners incur as a result of shared use
(see undertaking 3(b), paragraph (139)). Such costs are
not the reponsibility of the disposers. If disposers were
to assume them, they would incur a non-calculable
financial risk.

(302) ARGEV also submits that the obligations are grossly
prejudicial, since it would receive no compensation
for its current optimisation of the collection system,
although these services would also proportionately
benefit the competitor. Further, it is assumed that the
packaging material behaviour of competing systems in
the household sector would match that of the ARA
system; there is no empirical basis for this, and it is not
borne out by previous experience.

(14) See Commission Decision 2001/463/EC of 20 April 2001 in
Case COMP/34493 — DSD, OJ L 319, 4.12.2001, p. 1,
paragraph 171.

(306) Furthermore, the Commission assumes that shared use
does not give rise to any additional analysing and sorting
costs. Austria stated, in its comments of 15 January
this year, that the quotas should be substantiated by
reporting the collection and recycling of those packaging
wastes that were covered by the system. In particular,
the extent to which the packaging can be technically
recycled will be determined by the contents, the size of
the labels used and the volumetric proportion of plastic
packaging materials. It was therefore necessary to ana-
lyse the quantities collected in the individual containers
as accurately as possible and subsequently to separate
them. This leads to considerably higher costs, estimated
at up to 25 % of total costs.

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(307) The Packaging Ordinance contains no provision, how-
ever, that links quota recording to the collection and
recycling exclusively of the packaging belonging to a
particular system. Pursuant to Section 11 of the Packag-
ing Ordinance, a collection and recycling system for
transport or sales packaging must ensure the collection
and recycling of those packaging materials for which
contracts have been signed with the packaging manufac-
turers. Packaging materials are defined in Section 2(6) of
the Packaging Ordinance as certain categories of
materials from which the packaging is made, e.g. paper
and board, glass or plastics.

(308) Further, compulsory shared use would not be practicable
where quotas are recorded on the basis only of packaging
actually belonging to the system. The principle cannot
be made the subject of an obligation therefore. Instead,
it should be assumed that the quantities collected per
category of materials are divided between the systems in
proportion to the quantities licensed per category of
materials (15). Additional analysing and sorting stages
are then not needed. This impact of the obligation
should also be taken into account by Austria, since
shared use is crucial for stimulating competition as far
as interpreting the Packaging Ordinance and issuing
licences are concerned.

(309) The mechanism of the obligation, which is dictated
by competition law, does not place ARGEV at an
unjustifiable disadvantage. There is nothing to indicate
that,
in the event of shared use, there could be a
qualitative change generally in the categories collected.
It should be expected, rather, that systems which want
to establish themselves in the household sector as major
competitors and hence seek to achieve shared use will
try to offer contracts across the entire packaging range.
The bonus system mentioned by ARGEV as an example
focuses on commercial packaging and, in the household
sector, operates only on the periphery of the market at
quite specific sources (see paragraph (179)). Moreover,
when granting licences in accordance with the current
tariffs,
the ARA system too distinguishes only by
category of material and size of packaging, not by
content or industry.

E n c r o a c h m e n t o n t h e
p a r t i e s

r i g h t s o f

t h i r d

(310) Lastly, ARGEV claims that the obligations restrict dis-
posal partners’ rights, since their volume-dependent

(15) Further subdivision by specific types of packaging within each
category of materials would be conceivable if they were treated
separately at the licensing, collection and/or sorting stages.

remuneration might be reduced if they find no other
interested partners, and since they would then have to
accept a proportionate reduction in the remuneration
for providing containers. While this would basically be
legitimate, disposers should at least have an opportunity
to give their opinion.

(311) Obligation (b) relates to all disposers, so that — assuming
shared use is indeed the objective — disposers have an
incentive to contract with competing systems. Where a
disposer decides to allow shared use, the obligations will
not affect it more than the conditions provided for in
undertaking 3 (see undertaking 3(a) and (b), paragraph
(139)).

(312) Disposal partners were given an opportunity to express
their opinion before the decision was adopted. The
Association of Austrian Disposal Companies (Verband
Österreichischer Entsorgungsbetriebe — VÖEB) com-
mented on behalf of the majority of collection and
sorting partners that it was in favour of shared use. It
considers, however, that obligation (b) imposes adminis-
trative costs on disposers and could lead to a reduction
in the remuneration of those disposers which have not
concluded contracts with alternative system operators.

(313) As explained in paragraph (298), the competing system
will communicate to the disposer the licensed quantity,
which the disposer then passes on to ARGEV. This does
not involve excessive expense for the disposer. It would
also be conceivable, however, for both ARGEV and
disposers to notify licensed quantities to an independent
agency, which determines the licensed shares. Remuner-
ation will be reduced only if the competing system seeks
to obtain shared use in the particular collection region
and only once it has been granted a licence (see
paragraph (301)).

(314) The VÖEB also points out that the collection and sorting
infrastructure is provided in part by the municipalities.
It considers that the competing system should share the
the infrastructure facilities necessary for
use of all
collection and sorting,
irrespective of who provides
them. Dividing into quantities can take place only after
sorting.

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12.3.2004

(315) The obligations concern the relation between ARGEV
and collection and sorting partners. A competing system
has to create the conditions for shared use within its
area of responsibility. Dividing into quantities after
sorting seems particularly appropriate, if a category of
material is further subdivided by types of packaging and
these are separated only after sorting (see paragraph
(308)).

erable entry barrier for them. The introduction of
competition on the market for disposal services would
at least be considerably delayed. Further, because they
can offer their services to competitors of the ARA
system, ARA sorting partners are able to benefit from
the scale and scope effects on the market for sorting
sales packaging arising at private final consumers.

1.2. Agreement between ARGEV and the sorting partners

C o n d i t i o n s o f e x e m p t i o n

(316) The exclusive arrangements in the sorting partner agree-
ment likewise satisfy, for the reasons given, the tests of
exemption, taking into account the obligation attached
to exemption. Sorting partners must make a consider-
able investment in order to build/expand sorting infra-
structure for light packaging. The separation of light
packaging
technically
reusable materials
demanding. The necessary investment for construction
and expansion can be used for other sorting processes
to a limited extent only.

by

is

O b l i g a t i o n

(317) Although ARGEV has stated that disposers are not
prevented from making sorting facilities available to
competing systems, it would like to make shared use
conditional on substantial restrictions (see undertak-
ing 3, paragraph (139)). The Commission therefore
considers it necessary, since unimpeded access to sorting
facilities is important for stimulating competition, to
attach the following obligation to this Decision: ARGEV
should not prevent disposers from concluding and
fulfilling contracts with competitors of the ARA system
for the shared use of facilities for the sorting of used
sales packaging. Reference is made to the explanations
concerning ARGEV’s collection partner agreements.
Here too, the obligation is meant to ensure that the
effects on competition actually occur, demand-side
competition actually becomes possible on this market
and, hence, the tests of exemption in Article 81(3) of the
EC Treaty are satisfied.

(318) The ARA system’s competitors rely on shared use of
sorting facilities for fulfilling their sorting and recycling
obligations, in particular when they take up their activity.
The construction of new sorting facilities would require
large investment, which would constitute a not inconsid-

2. Market for the collection and sorting of commercial
packaging

2.1. Collection partner agreement between ARGEV and the

collection partners

(319) Since, in the commercial packaging field as well, the
exclusive provision for the benefit of collection partners
in the collection partner agreement is also caught by
Article 81(1) of the EC Treaty, it has to be examined
whether the provision satisfies the tests for the appli-
cation of Article 81(3).

I m p r o v i n g
t h e p r o d u c t i o n o r d i s t r i -
b u t i o n o f g o o d s o r p r o m o t i n g t e c h n i c a l
o r e c o n o m i c p r o g r e s s

(320) In the commercial sector too, ARA provides a country-
wide collection and recycling system for packaging in
Austria, which is governed by the Packaging Ordinance
and the Austrian Waste Management Act; these trans-
pose Directive 94/62/EC. The Directive applies to house-
hold packaging and commercial packaging. The regular
collection of used packaging in the commercial sector
broken down by specific categories of reusable material
therefore promotes the direct application of environ-
mental provisions.

(321) As in the household sector, the exclusive arrangements
examined enable the contract partners to plan and
organise for the long term the services they supply.
Expanding the logistics for the collection of commercial
inconsiderable
packaging and waste requires a not
investment. A certain period for amortisation is necess-
ary in order to stimulate such investment. Even if in the
commercial packaging sector the network effects are less
than in household packaging, economies of scale and
scope that lead to efficiency gains can be achieved by
commissioning a single disposer for the duration of the
contract. With regard to the obligations assumed by the
packaging manufacturers pursuant to the Packaging
Ordinance, it is important for the ARA system as a
services customer to ensure some planning certainty so
that demand can be satisfied on a regular, reliable basis.
Planning certainty thus ensures that all parties involved
will reliably meet their obligations under the Packaging
Ordinance.

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(322) The Commission therefore concludes that the exclusive
arrangements for the benefit of the collection partners
in the service contracts help to improve the production
of goods and promote technical or economic progress.

A d v a n t a g e s f o r t h e c o n s u m e r

(323) The collection partner agreement seeks to give practical
effect to the countrywide collection, differentiated by
reusable material, of ARA-system sales packaging,
including that from the large-business and industrial
sector.

(324) For the purposes of Article 81(3) of the EC Treaty,
consumers are not just final consumers of the services
provided but all direct or indirect customers for the
products or services in question,
including firms in
the large-business and industrial sector. The collection
partner agreement benefits these, since it ensures regular
disposal
the
packaging accumulating at them.

in compliance with the Ordinance of

contract. In the commercial sector, while the necessary
investment for building and expanding the infrastructure
is not so large as in the household sector, the restraint
of competition resulting from the exclusive obligation is
less, because ARGEV’s buyer power is limited. Where a
contract’s term is a minimum of three years and a
maximum of five, an exclusive obligation is indispens-
able in the commercial sector as well. After five years,
however, this is no longer the case, which is why a
new invitation to tender within the meaning of the
undertaking is justified and is also essential for an
exemption under Article 81(3) of the EC Treaty.

N o n - e l i m i n a t i o n o f c o m p e t i t i o n

(328) Even in the context of ARGEV’s position on the markets
in question, the exclusive obligation in the collection
partner agreement is not likely to eliminate competition
on the market for the collection and sorting of household
packaging.

(325) The Commission therefore concludes that the collection
partner agreement allows consumers a fair share of the
resulting benefit within the meaning of Article 81(3) of
the EC Treaty.

(329) The suppliers of collection services excluded by ARGEV
can offer their disposal activities both to other collection
and recycling systems in the commercial sector and to
self-disposal systems and large sources.

I n d i s p e n s a b i l i t y o f t h e r e s t r i c t i o n

(326) As its basis for examining the exclusive arrangements
contained in the collection partner agreement the Com-
mission took, for the commercial sector as well, the
revised duration of the contract, as given in undertak-
ing 4 cited at paragraph (139), including re-tendering
after five years at most, and concludes that this duration
is indispensable.

(327) The assessment of whether the exclusive obligation
is indispensable depends on the economic and legal
circumstances in which the agreement was concluded.
Crucial to the assessment is planning and investment
certainty for the investment needed to fulfil the collec-
tion partner agreement.
In the commercial sector,
regional take-back centres and a collection system have
to be set up, and the logistics of collection-rounds
have to be agreed. The collection partner is therefore
dependent on being able to plan its investment and
operations for a definite period. Likewise, from ARA’s
point of view, in order to provide a sustainable, reliable
collection service for commercial packaging, it is indis-
pensable for the success of the system as a whole to
commission only one collection partner per disposal
area for the ARA system during the lifetime of the

(330) In the commercial sector too, care should be taken to
see that disposers are allowed to collect licensed packag-
ing in their containers from competitors of the ARA
system and that, in contrast to the household sector,
joint collection is already taking place.

(331) It remains to examine what the effects on competition
are of linking the collection service for commercial
packaging to the collection of packaging in the house-
hold sector. In such circumstances a firm may become a
collection partner of ARGEV’s in the commercial sector,
only if it is able to make the necessary investment in
setting up a collection infrastructure for the household
sector. However, even the requirement to provide an
infrastructure for the household sector in order to
become an ARGEV collection partner in the commercial
sector does not lead to elimination of competition
on the market for commercial packaging and other
commercial waste. Disposal companies that are not
able to set up a suitable infrastructure for household
collection can, as already explained, offer their collection
services to other collection and recycling systems, for
whom it is not necessary to set up a collection infrastruc-
ture for the household sector, and to self-disposers and
large sources.

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12.3.2004

(332) It should also be noted that the ARA system has put out
separate tenders for the disposal of different categories
of material, so that bidders can offer their services for
specific categories in a limited fashion. In the commercial
sector this applies in particular to light packaging and
paper and board packaging.

(333) The residual competition will thus not be eliminated by
the exclusive obligation from the common market
for the collection of commercial packaging and other
commercial waste.

(334) The tests of exemption pursuant to Article 81(3) of the
EC Treaty are consequently satisfied where the term of
the contract is between three and five years.

2.2.

Sorting partner agreement between ARGEV and the
sorting partners

(335) For the reasons described, in view of the competitive
conditions on the market for sorting commercial waste,
the exclusive obligation in the sorting partner agreement
also satisfies the tests of exemption.

that since the date of their notification the collection
and sorting partner agreements satisfy the tests for the
application of Article 81(3) of the EC Treaty.

(338) Under Article 8(1) of Regulation No 17, exemptions
must be issued for a specified period and conditions
and obligations may be attached thereto. Pursuant to
Article 6 of the Regulation, the date from which such a
decision takes effect may not be earlier than the date of
notification in accordance with Article 81(1) and (3) of
the EC Treaty. The exemption should apply from the
entry into force of ARGEV’s and ARO’s current collec-
tion partner agreements until 31 December 2006, in
order to give ARA, ARGEV, ARO and the disposers
sufficient legal certainty under the Community’s compe-
tition rules to protect their investment.

(339) To ensure access by third parties to the disposal facilities
of ARGEV’s and ARO’s collection and sorting partners
and to prevent the elimination of competition on the
relevant markets, the obligations mentioned should be
communicated to ARGEV. The obligations are essential
for preventing the elimination of competition on the
relevant markets. They will remain in force for the
duration of the exemption. Pursuant to Article 8(3)(b) of
Regulation No 17, the Commission may revoke this
Decision if the parties do not fulfil the obligations.

2.3. Agreement between ARO and the collection partners

(340) This Decision is without prejudice to the application of

Article 82 of the EC Treaty.

(336) The exclusive obligation in the agreement between ARO
and the collection partners ensures a degree of planning
and investment certainty for the disposal companies
involved and, hence, that all parties involved regularly
and reliably fulfil their obligations under the Packaging
Ordinance. A contractual term of three to five years is
to be regarded as necessary, given the significance of the
restriction of competition resulting from the exclusive
obligation. For the reasons given (paragraphs (329) to
(332)), competition is not excluded on the market
concerned. Thus
exemption under
Article 81(3) are satisfied where the term of the contract
is, at most, five years.

tests of

the

(341) This Decision is issued, furthermore, irrespective of any
pending or future Commission proceedings against the
Packaging Ordinance or other State provisions,

HAS ADOPTED THIS DECISION:

Article 1

XI. RETROACTIVE EFFECT, DURATION OF THE EXEMP-
TION, OBLIGATIONS

(337) The collection and sorting partner agreements of ARGEV
and ARO were notified to the EFTA Surveillance Auth-
ority on 30 June 1994 and transferred to the Com-
mission in accordance with Article 172(3) of the Act of
Accession. The amended versions of
the collection
and sorting partner agreements were notified to the
Commission on 28 August 2001. The Commission finds

In the light of its current knowledge, and taking account of the
undertakings given by Altstoffrecycling Austria AG (ARA),
ARGEV Verpackungsverwertungs-Gesellschaft mbH (ARGEV)
and Altpapier-Recycling Organisationsgesellschaft mbH
(ARO), the Commission finds that it has no reason pursuant
to Article 81(1) of the EC Treaty and Article 53(1) of the EEA
Agreement to proceed against the dispensation and licence
agreements between ARA and the firms covered by the
Austrian Packaging Ordinance, the waste disposal contract
between ARA and the BRGs, the disposal or cooperation
contract between ARGEV and the BRGs, or against the contract
between ARO and the local authorities.

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Article 2

the EC Treaty and
The provisions of Article 81(1) of
Article 53(1) of
the EEA Agreement are declared to be
inapplicable, pursuant to Article 81(3) of the EC Treaty and
Article 53(3) of the EEA Agreement, to individual collection
and sorting contracts of ARGEV and ARO with their respective
regional disposal partners which contain an exclusive obli-
gation and expire at the latest on 31 December 2006.

with point 3.1.1 of the collection partner agreement in
the proportion mentioned in the first sentence of this
point. As regards the remuneration referred to in
points 3.1.2 and 3.1.3 of the collection partner agree-
ment, the quantities reported to ARGEV shall be authori-
tative. This obligation relates to all disposers with whom
ARGEV has concluded a collection partner agreement.

Article 4

The exemption shall run from 30 June 1994 to 31 December
2006.

This Decision is addressed to the following firms:

Article 3

The exemption in Article 2 is conditional on the following
obligations:

(a) ARGEV does not prevent disposers from concluding and
fulfilling contracts with competitors of the ARA system
for the shared use of containers or other facilities for the
collection and sorting of used sales packaging arising at
households;

(b) ARGEV may ask disposers for evidence only of those
packaging quantities that correspond to the ARA system’s
share of the total packaging quantities licensed by systems
in the household sector for specific categories of material.
In that case it may reduce the remuneration in accordance

Altstoffrecycling Austria AG
Mariahilfer Straße 123
A-1062 Vienna

ARGEV Verpackungsverwertungs-GmbH
Lindengasse 43/12
A-1071 Vienna

Altpapier-Recycling Organisationsgesellschaft mbH
Gumpendorfer Straße 6
A-1061 Vienna

Done at Brussels, 16 October 2003.

For the Commission

Mario MONTI

Member of the Commission