CELEX: C1997/199/79
Language: en
Date: 1997-06-28 00:00:00
Title: Action brought on 22 April 1997 by the Coca-Cola Company against the Commission of the European Communities (Case T-125/97)

No C 199/32            EN                 Official Journal of the European Communities                                  28 . 6 . 97
Action brought on 22 April 1997 by the Coca-Cola                     joint venture in question — Amalgamated Beverages Great
Company against the Commission of the European                       Britain ('ABGB') — was formed in 1986 by Cadbury
                           Communities                               Schweppes ('CS') and The Coca-Cola Company ('TCCC'),
                        ( Case T-125/97)                             owners of a variety of soft drink brands sold in Britain
                                                                     and elsewhere . Throughout its existence, ABGB's sole
                          ( 97/C 199/79 )                            business was to bottle, distribute, market and sell the soft
                                                                     drinks of its owners ( and others ) throughout Great
                                                                     Britain. That business was carried out through ABGB's
                (Language of the case: English)                      wholly-owned subsidiary, Coca-Cola & Schweppes
                                                                     Beverages (' CCSB').
An action against the Commission of the European
Communities was brought before the Court of First
Instance of the European Communities on 22 April 1997                The current proceeding began when CS and TCCC
by the Coca-Cola Company, represented by Mario                       informed the Commission of their agreement to dissolve
Siragusa of Cleary, Gottlieb, Steen & Hamilton, with an              ABGB by selling their respective interests therein to Coca
address for service in Luxembourg at the Chambers of                 Cola Enterprises (' CCE'), an independent bottling
Elvinger & Hoss, 15 Cote d'Eich.                                     company with no prior activities in Britain . After receiving
                                                                     Commission approval, the parties consummated the
                                                                     transaction in February 1997. TCCC does not contest the
The applicant claims that the Court should:                          Commission's approval of the transaction. Rather, it
                                                                     challenges the Decision's extensive adverse findings on the
                                                                     issues of product market definition, dominance and
— declare Commission Decision 97/180/EC of 22 January                control of CCE by TCCC, and an undertaking, apparently
     1997 void in so far as it finds that: ( i ) the supply of       based on the dominance finding, that places limits on
    cola-flavoured carbonated soft drinks in Great Britain            CCSB's competitive conduct. These findings and the
    comprises a relevant market; ii ) CCSB holds a                   undertaking will have enduring effects on the legal
    dominant position on that market; and iii ) TCCC                 positions and businesses of both TCCC and CCE,
    controls CCE within the meaning of Article 3 ( 3 ) of             notwithstanding their obvious lack of influence on the
     Council Regulation ( EEC ) No 4064/89 ,                          ultimate decision to clear the transaction .
alternatively,                                                        The applicant points out that the Commission's
                                                                      determination that colas form a separate relevant product
— declare Commission Decision 97/180/EC of 22 January                 market, or that TCCC or a Coca-Cola bottler is a
     1997 void in its entirety in so far as such a declaration        dominant undertaking, would have important legal and
     is necessary to annul the findings mentioned in the              business ramifications for TCCC and its European
     preceding paragraph and to declare the acquisition of            bottlers . The legal standard governing their conduct would
     ABGB by CCE approved in accordance with Article 10               be more restrictive, and the precedent would undoubtedly
     ( 6 ) of Regulation ( EEC ) No 4064/89,                          be followed by national competition authorities and
                                                                      courts . In particular, the dominance finding purports to
                                                                      impose commercial restrictions on CCSB's conduct that in
                                                                      turn limits CCSB 's freedom to bottle and distribute
 and in either case,
                                                                      TCCC's products . Moreover, TCCC runs a concrete and
                                                                      demonstrable      risk   that  the  Commission 's   decision
 — declare void the undertaking given to the Commission               regarding these matters will be considered res judicata by
     by CCE on 17 February 1997, and also the finding on              national courts and agencies without TCCC's having had
     the basis of which the Commission requested and                  the opportunity of review by a Community Court.
     obtained that undertaking, namely that CCSB holds a
     dominant position on a relevant market comprising
     the supply of cola-flavoured carbonated soft drinks in           In this context it cannot be claimed that the extensive
     Great Britain,                                                   Commission findings on the issues of market definition,
                                                                      dominance and control are intended as idle dicta. To every
                                                                      appearance, the Commission took great care to support
 — order the Commission to pay TCCC's legal fees and                  its findings and to present them as it would present
     expenses .                                                       the resolution of precedential issues essential to the
                                                                      competitive assessment of the transaction. Because these
                                                                      findings are rendered in a decision granting unconditional
 Pleas in law and main arguments adduced in support:                  clearance, they threaten to attain the force of precedent
                                                                      without benefit of the required legal safeguards if not
                                                                      reviewed by the Court.
 This application concerns Commission Decision 97/ 180/
 CE of 22 January 1997 ('the Decision'), which was issued
 pursuant to Council Regulation ( EEC ) No 4064/89 ('the
 Regulation') and which approved the dissolution of a joint           The applicant submits that the Commission ignored
 venture pursuant to Article 8 ( 2 ) of the Regulation . The          extensive credible evidence of consumer substitution,
 ---pagebreak--- 28 . 6 . 97           EN                 Official Journal of the European Communities                               No C 199/33
ordinarily regarded as highly material to market                    Pleas in law and main arguments adduced in support:
definition. It adopted a highly selective approach to other
evidence on market definition and dominance, and placed
inordinate weight on untested or subjective views and on
evidence of factors having limited probative value.                 The applicant challenges the Commission's decision
Furthermore, the Commission invoked an irrelevant legal             reducing the amount granted for a training programme
provision, namely Article 3 ( 3 ) of Regulation ( EEC )             undertaken by it in 1989 .
No 4064/89 ( OJ No L 395 , 30 . 12 . 1989, p. 1 ), in
analysing TCCC's relationship to CCE, and literally
ignored uncontested testimony by a renowned authority
on the applicable corporate governance standards supplied           In support of its claim the applicant alleges breach of the
by US law.                                                          principles of stability, legal certainty and legitimate
                                                                    expectation, together with breach of the principle of
                                                                    proper administration of justice and of the duty of care .
                                                                    The contested decision is vitiated by a lack of an adequate
The applicant states in this regard that TCCC does not              statement of reasons and abuse of rights on the ground of
own, or have the right to use, any of CCE's assets; it does         venire contra factum proprium, in view of the manifest
not own or control a majority shareholding in CCE, has              breach of the protected rights of individuals — acquired
no preferential shares giving it a majority of the voting           rights — legal certainty and legitimate expectations .
rights in CCE, has no veto rights, has no right to appoint
any members of CCE's board, and has no agreement with
other shareholders to confer majority voting power or               In particular, following approval for the training project to
permit the appointment of directors.                                be organized by the applicant, DAFSE considered that the
                                                                    applicant was not complying with the rule that the hours
                                                                    timetabled for practical training cannot exceed those for
                                                                    theory training. This finding was based on the fact that,
                                                                    despite the applicant having submitted identical timetables
                                                                    for the theory training ( 200 hours ) and the practical
                                                                    training ( 200 hours ), DAFSE doubted whether the 'theory
                                                                    training sessions' consisted of theory at all . Moreover, the
Action brought on 22 April 1997 by Sonasa, Sociedade                theory sessions provided in the training project at issue
Nacional de Segurança, Lda. against the Commission of               were absolutely identical with those provided in the
                 the European Communities                           training project undertaken the previous year ( 1988 ),
                                                                    which neither DAFSE nor the Commission had challenged,
                       ( Case T-126/97)                             despite its having been observed by DAFSE inspectors .
                         ( 97/C 199/80 )
                                                                    The applicant points out the fact that, two years after the
                                                                    submission of the claim for payment of the outstanding
              (Language of the case: Portuguese)                    balance, the applicant was informed by DAFSE that there
                                                                    was to be a factual and accounting verification of the
                                                                    projects undertaken in the framework of the procedure
                                                                    relating to the ESF contributions for 1989 . However, only
An action against the Commission of the European                    two years after that announcement and, therefore, four
Communities was brought before the Court of First
                                                                    years after the submission of the claim for payment of the
Instance of the European Communities on 22 April 1997
                                                                    outstanding balance, the applicant was made aware of an
by Sonasa, Sociedade Nacional de Segurança, Lda ., having           audit report which considered ineligible, among other
its registered office at Av. Infante D. Henrique, Lote 328­         expenditure which is not considered here, expenditure in
C, Cabo Ruivo, 1800 Lisboa, represented by Dr Nuno
                                                                    respect of the theory sessions, thus further reducing the
Morais Sarmento, of the Lisbon Bar, with an address for             total amount of the contributions from the ESF and the
service in Luxembourg at the Chambers of Victor Gillen,             OSS from Esc 27 841 049 ( total expenditure incurred ) to
13 Rue Aldringen, Luxembourg.                                       Esc 15 591 329 .
The applicant claims that the Court should:                         The applicant now finds itself, nearly seven years after the
                                                                    final payment claim and after all the advances paid by
                                                                    DAFSE and the Commission, in an unjustly uncertain
                                                                    situation inasmuch as the Commission gave rise to an
— annul        Commission      Decision  C(96 )    3451    of       expectation that it would pay the outstanding balance
     16 December 1996,                                              which it now refuses to do .
— order the defendant to pay the costs.