CELEX: 31974D0016
Language: en
Date: 1973-12-21 00:00:00
Title: 74/16/EEC: Commission Decision of 21 December 1973 concerning proceedings under Article 85 of the Treaty (IV/223 - Transocean Marine Paint Association)

No L 19 / 18                            Official Journal of the European Communities                                 23 . 1 . 74
                                                   COMMISSION DECISION
                                                      of 21 December 1973
               concerning proceedings under Article 85 of the Treaty ( IV/223 — Transocean
                                                   Marine Paint Association)
                                                (Only the English text is authentic)
                                                           (74/ 1 6/ EEC)
 THE COMMISSION OF THE EUROPEAN                                       — Molijn & Co . NV, Rotterdam , Netherlands,
 COMMUNITIES,
                                                                      — J.C. de Coninck en Zonen NV, Antwerp, Belgium ,
 Having regard to the Treaty establishing the European                — Astral , Societe de Peintures, Vernis et Encres d'lm­
 Economic Community, and in particular Article 85                          primerie, Paris, France,
 thereof ;
                                                                      — Veneziani Zonca S.p.A., Trieste, Italy,
 Having regard to Council Regulation No 1 7 of 6                      — Farbenfabriken Hansa-Hoëg, Kiel , Federal Repub­
 February 1 962 ('), and in particular Articles 4, 6 and 8                 lic of Germany,
 thereof ;
                                                                      — Storry Smithson Group of Companies, Hull ,
 Having regard to the Decision of 27 June 1 967 (2 ),                      England ,
 whereby the Commission granted exemption until 31                    — Sadolin & Holmblad A/S, Copenhagen , Denmark,
 December 1972 to the Transocean Marine Paint Asso­
 ciation in accordance with Article 85 (3) ;                          — C. Ljungdahls, AB, Goteborg, Sweden ,
 Having regard to the application , lodged on 27                      — Urruzola SA, Madrid, Spain ,
 October 1972 by the General Secretary of the Associa­                — The National Lacquer and Paint Products Co . Ltd .,
 tion on behalf of the Members , for an extension of the                   Hongkong,
 exemption ;
                                                                      —- Pacific Products Inc ., Manila , Philippines,
 Having heard the undertakings concerned in accor­                    — Nippon Paint Co. Ltd ., Osaka , Japan ,
 dance with Article 19 ( 1 ) of Regulation No 17 and
 Regulation No 99/63 (3 ) ;                                           — Nippon Paint Ltd ., Singapore,
                                                                      — Nippon Paint, Malaysia ,
 Having regard to the publication of the essential
 content of the application for extension in pursuance                — Nippon Paint Co . Ltd ., Thailand ,
 of Article 19 (3) of Regulation No 17 in the Official
Journal of the European Communities, No C 98 of                       — Spartan Paints Pty. Ltd ., Melbourne, Australia,
 16 November 1973 ;                                                   — Patterson-Sargent, New Brunswick, USA,
 Having regard to the Opinion delivered on 5                          — Galleon Paints Co . Ltd ., Parow , South Africa ,
 December 1973 by the Advisory Committee on                           — Mauvilac & Co . Ltd ., Pailles , Mauritius ,
 Restrictive Practices and Dominant Positions pursuant
 to Article 10 of Regulation No 17,                                   — Antillian Paint Factory Ltd ., Netherlands Antilles.
                                 I                                    The object of the Association is to enable its members
                                                                      to compete effectively in the special circumstances of
                                                                      the world marine paint market . This requires that
 whereas :                                                            paint of standard description should be available in as
                                                                      many ports as possible . The members therefore have
The Transocean Marine Paint Association (hereinafter                  each agreed to manufacture marine paints of identical
called 'the Association ') is an association of medium­               composition and to market these in the same pack­
sized marine paint producers which was established in                 aging and under a common trade-mark . Each member
 1959 . It consists at present of the following 20                    is to promote the sale of these paints in the State in
producers :                                                           which it is established and the other territories specifi­
                                                                      cally allocated to it . The members are to maintain
(') OJ No 13 , 21 . 2 . 1962, p . 204/ 62 .                           stocks of the paints in the ports situated in these terri­
(2) OJ No 163 , 20 . 7 . 1967, p . 10 .                               tories and to be responsible for after sales service and
(3 OJ No 127, 20 . 8 . 196.3 , p . 2268 / 63 .                        promotion .
 ---pagebreak--- 23 . 1 . 74                       Official Journal of the European Communities                            No L 19/ 19
The members are bound to respect the uniform                — Pan World Paint Association , which has been esta­
quality formula, to submit to quality control and to              blished recently and to which Herberts, a subsid­
exchange licences and the benefits of experiences                 iary of Bayer, belongs,
acquired . They may export paints to another
member's territory, but in such case must pay a             — Camrex and W & J Leigh (UK).
commission to such member . A commission is also
payable in the case of delivery to a ship registered in      The share of the members of the Association amounts
another member's territory. A member's cooperation           to from 5 to 10 % of the marine paint world market.
in securing or executing orders also gives rise to a
claim for commission , for which a reference rate is
                                                             AKZO and BASF are also manufacturers of marine
given and the precise amount of which is fixed in indi­
vidual cases by the members concerned .                      paints. The AKZO Group includes the French Trans­
                                                             ocean      member    Astral and    the Netherlands   firm
The members are entitled to manufacture and sell
                                                             Sikkens, which manufactures marine paints but is not
                                                             a member of the Association . The BASF group
marine paints of other composition under their own           includes the Spanish member Urruzola and also the
individual trade-marks . Such paints may only be             German firm Glasurit, which is also a non-member
exported to the territory of another member with the         paint manufacturer. In the marine paints sector,
latter's consent . Such consent however may not to be
withheld unless the interests of the Association would       which must be distinguished from the general paints
                                                             sector — 80 % of marine paints cannot be used
be adversely affected .                                      outside the marine market — the firms AKZO/
                                                             Sikkens and BASF/Glasurit however, at present
Cooperation between the members and other marine             occupy positions of little significance, and do not exer­
paint producers is prohibited unless previously autho­       cise any influence on the policy of the two Trans­
rized . Membership requires a two-third majority. The        ocean members in the marine paints sector.
former requirement of a unanimous vote was abol­
ished in 1972 . In addition , reference is made to the
other facts and matters set out in the abovementioned        No observations from third parties were received by
Commission Decision of 27 June 1967 .                        the Commission following the publication of a
                                                             summary of the application for an extension of the
Since the Decision of the Commission in 1967 the             exemption .
total turnover of the members in all marine paints has
increased considerably. This may be attributed particu­
larly to the Nippon Paint Group which alone                                                II
accounts for 60 % of the turnover in marine paints of
members of the Association . The proportion of Trans­
ocean paint has also risen considerably in relation to       The Commission has already given its reasons, which
the total marine paint turnover of the members, rising       are set forth in detail in the Decision of 27 June 1967,
from one third before the Commission Decision in              for holding that the Agreement on which the Associa­
 1967 to about three-quarters in 1972.                       tion is based falls within the prohibition contained in
                                                             Article 85 ( 1 ). The Agreement obliges the members to
The members of the Association are , as was the case         concentrate their production and marketing activities
at the time of the former Decision , faced with              on their own contract territory and makes it difficult
genuine competition from other marine paints                  for them to engage in economic activity in the marine
producers who owing to their large size and interna­          paints sector within the contract territory of other
tional links, have a world wide sale's network . The          members . Such close cooperation gives rise to mutual
most important competitor is International Red Hand          consideration and observance of the member's own
with a world market share of approximatively 25 to           contract territories . The Agreement therefore restricts
30 % . Other important competitors are :                     competition between the members within the
                                                              Common Market and may affect trade between
— British Paints/ Federal Paint, which is today a             Member States .
     subsidiary of Hoechst ( FRG),
— Hempel ( Denmark),                                         The     Commission considers however that the exemp­
— Jotum , a group belonging to Nippon Oil and                 tion   already granted may be extended in accordance
     including the former Transocean Member Bjercke          with    Article 8 (2) of Regulation No 17, in view of the
     (Norway),                                                fact   that the conditions of Article 85 (3) remain
                                                              fulfilled . Coordination of the member's individual
— Sigma Coatings, a group of Marine paint producers           sales networks at present provides members with a
     belonging to Petrofina and comprising, within the        suitable means of improving supply and distribution
     Community, the companies Ripolin , Pieter                in the marine paints sector, and enables them to enter
     Schoen , Vettewinkel and Varrossieau ,
                                                              into more intensive competition with large producers
— Pinchin Johnson, belonging to Courtaulds,                  of marine paint. Consumers also share these benefits.
 ---pagebreak--- No L 19 / 20                       Official Journal of the European Communities                               23 . 1 . 74
In its Decision of 27 June 1967, the Commission               and AKZO/Sikkens and BASF /Glasurit on the other.
considered that the provisions of the Agreement,             The Commission has neverthelesss also considered
whereby a member may only deliver within the                  the fact that the position of the AKZO company
contract territory of another member or for a ship            Sikkens and the BASF company Glasurit in the
registered in such territory against payment of              specialized marine paint sector has until now
commission and may only export other marine paints            remained unimportant, although due to the size of the
to a country in which another member is established          companies concerned it may be considerably streng­
with the consent of the latter, were for ' an initial         thened in a relatively short time . Should the facts in
period' indispensable restrictions for the attainment of      this regard change the present exemption could be
the objects of the Association . In view of the fact that     reconsidered. The Commission considers it appro­
the total turnover of Transocean members has risen            priate in the circumstances to limit the decision to a
noticeably since the Commission Decision , as has the         fixed period ending on 31 December 1978 .
share of Transocean paints in the total turnover of
marine paints of the members, the maintenance of             Subject to the reservation expressed in the foregoing,
these restrictions no longer appears to be justified .        it may be said that the Agreement has advantages
                                                             which may well have the effect of compensating for
                                                              its disadvantages, and that a market share of 5 to
The Commission regards as unjustified the obligation          10 % in the Common Market does not present any
to pay commission in the case of the export of Trans­         opportunity to restrict competition significantly in the
ocean paints or delivery to a foreign ship, irrespective     goods in question .
of the role played by the member claiming such
commission in the obtaining or in the execution of            In order to examine thoroughly and with full know­
the order in question . The obligation to provide full        ledge of the facts whether the implementation of the
details to   the member entitled       to commission   in
                                                             Agreement affects competition within the Common
respect of each of the abovementioned transactions,           Market in a manner which is incompatible with the
for the purposes of calculating such commission ,             EEC-Treaty, the Commission is to be informed
hinders   the achievement of such deliveries to an
                                                             without delay of any amendment or addition to the
extent that is no longer justifiable . Transocean marine      Agreement, and of any decision or arbitration held
paints have become generally well known thanks to             pursuant to the restrictive provisions of the Agree­
the joint sales and promotion initiatives of the              ment, in particular Articles 3 to 9 thereof, as well as of
members ; the obtaining of an order to be executed in         any change in membership, participation or inter­
another territory can no longer be automatically attri­       locking directorates, and also to receive an annual
buted to the member established in that territory, or         report on the activities of the Association,
be assumed therefore to give a right to commission .
The Commission also regards as unjustified require­           HAS ADOPTED THIS DECISION :
ment to seek consent in the case of the supply of non­
Transocean paints . Even where such consent is
normally given as a matter of course, the requirement
                                                                                      Article 1
amounts to an unnecessary restriction on opportuni­
ties for export.
                                                             The declaration of exemption in accordance with
                                                              Article 85 (3) of the Treaty establishing the European
The Commission considers that both these provisions           Economic Community, which the Commission issued
in the present circumstances favour the creation of a         by its Decision of 27 June 1967 concerning the Agree­
preferential position within a territory, and to this         ment of 1 January 1959 establishing the Transocean
extent are no longer required for the attainment of the       Marine Paint Association is hereby extended from 31
objects of the Agreement. The Association should              December 1972 to 31 December 1978 .
therefore be instructed to revoke these provisions .
                                                                                      Article 2
The Commission has further examined whether the
fact that the Transocean members Astral and Urrazola         This Decision is subject to the condition that the
both belong to important and financially powerful             following provisions of the Agreement shall be
groups of enterprises (AKZO and BASF), which enjoy            rescinded and cease to have effect within six months
a strong position in the general paints market, mili­        of this Decision , that is to say :
tates against an unqualified extension of the exemp­
tion, and whether it is necessary to remove these close       1 . The provision in Article 5, whereby a member may
ties or to require the withdrawal of the members                  only export marine paint products bearing its own
concerned in order to guarantee genuine competition               trade mark to the contract territory of another
between the Transocean members on the one hand                    member with the latter's consent and
 ---pagebreak--- 23 . 1 . 74                          Official Journal of the European Communities                           No L 19 /21
2. The provision in Article 8 , whereby a member may                   member of the Association       in  such  outside
    only deliver uniformly marked marine paint                         companies or vicc-vcrsa including all changes
    products to the contract territory of another                      in such links or participations already in exist­
    member or for a ship from such a territory against                 ence .
    payment of a commission to the other member
    concerned irrespective of the services which the            2. A report is to be submitted by the Association
    latter has furnished in obtaining or in executing              annually to the Commission on the activities of the
    the order in question .                                        Association and in particular on improvements in
                                                                   the production and marketing of marine paint
                          Article 3
                                                                   products achieved .
This Decision is subject to the following obligations :                                Article 4
1 . That the Commission shall be informed without
                                                                   This Decision is addressed to the members of the
    delay of the following matters :                               Transocean Marine Paint Association through the
    (a) Any amendment or addition to the Agreement,                intermediary of the Secretary-General , Mr F. Th .
    (b) Any decision taken by the Board of Directors               Regnault, Delftse Plein 37, Rotterdam , the Nether­
                                                                   lands .
         or the result of any arbitration held, pursuant to
         the restrictive provisions of the Agreement, in
         particular Articles 3 to 9 thereof,
                                                                Done at Brussels , 21 December 1973 .
    (c) Any change in the composition of member­
         ship,
                                                                                         For the Commission
    (d) Any links by way of common directors or
         managers between a member of the Association                                        The President
         and any other company or firm in the paints
         sector or any financial participation by a                                     Francois-Xavier ORTOLI