Remia BV and others v Commission of the European Communities.
Date: 1985-07-11
19 IF THAT WERE THE CASE , AND SHOULD THE VENDOR AND THE PURCHASER REMAIN COMPETITORS AFTER THE TRANSFER , IT IS CLEAR THAT THE AGREEMENT FOR THE TRANSFER OF THE UNDERTAKING COULD NOT BE GIVEN EFFECT . THE VENDOR , WITH HIS PARTICULARLY DETAILED KNOWLEDGE OF THE TRANSFERRED UNDERTAKING , WOULD STILL BE IN A POSITION TO WIN BACK HIS FORMER CUSTOMERS IMMEDIATELY AFTER THE TRANSFER AND THEREBY DRIVE THE UNDERTAKING OUT OF BUSINESS . AGAINST THAT BACKGROUND NON-COMPETITION CLAUSES INCORPORATED IN AN AGREEMENT FOR THE TRANSFER OF AN UNDERTAKING IN PRINCIPLE HAVE THE MERIT OF ENSURING THAT THE TRANSFER HAS THE EFFECT INTENDED . BY VIRTUE OF THAT VERY FACT THEY CONTRIBUTE TO THE PROMOTION OF COMPETITION BECAUSE THEY LEAD TO AN INCREASE IN THE NUMBER OF UNDERTAKINGS IN THE MARKET IN QUESTION .
20 NEVERTHELESS , IN ORDER TO HAVE THAT BENEFICIAL EFFECT ON COMPETITION , SUCH CLAUSES MUST BE NECESSARY TO THE TRANSFER OF THE UNDERTAKING CONCERNED AND THEIR DURATION AND SCOPE MUST BE STRICTLY LIMITED TO THAT PURPOSE . THE COMMISSION WAS THEREFORE RIGHT IN HOLDING THAT WHERE THOSE CONDITIONS ARE SATISFIED SUCH CLAUSES ARE FREE OF THE PROHIBITION LAID DOWN IN ARTICLE 85 ( 1 ).
22 TAKING FIRST THE CONDITION WITH REGARD TO THE EFFECT ON TRADE BETWEEN MEMBER STATES , THE COURT WOULD POINT OUT THAT , AS IT HAS CONSISTENTLY HELD , IN ORDER THAT AN AGREEMENT BETWEEN UNDERTAKINGS MAY AFFECT TRADE BETWEEN MEMBER STATES IT MUST BE POSSIBLE TO FORESEE WITH A SUFFICIENT DEGREE OF PROBABILITY ON THE BASIS OF A SET OF OBJECTIVE FACTORS OF LAW OR FACT THAT IT MAY HAVE AN INFLUENCE , DIRECT OR INDIRECT , ACTUAL OR POTENTIAL , ON THE PATTERN OF TRADE BETWEEN MEMBER STATES , SUCH AS MIGHT PREJUDICE THE REALIZATION OF THE AIM OF A SINGLE MARKET IN ALL THE MEMBER STATES . THE COURT HAS ALSO HELD ( JUDGMENT OF 17 OCTOBER 1972 IN CASE 8/72 , CEMENTHANDELAREN , ( 1972 ) ECR 977 ) THAT AN AGREEMENT OR PRACTICE RESTRICTING COMPETITION AND EXTENDING OVER THE WHOLE TERRITORY OF A MEMBER STATE BY ITS VERY NATURE HAS THE EFFECT OF REINFORCING THE COMPARTMENTALIZATION OF MARKETS ON A NATIONAL BASIS , THEREBY HOLDING UP THE ECONOMIC INTERPENETRATION WHICH THE TREATY IS INTENDED TO BRING ABOUT .
34 ALTHOUGH AS A GENERAL RULE THE COURT UNDERTAKES A COMPREHENSIVE REVIEW OF THE QUESTION WHETHER OR NOT THE CONDITIONS FOR THE APPLICATION OF ARTICLE 85 ( 1 ) ARE MET , IT IS CLEAR THAT IN DETERMINING THE PERMISSIBLE DURATION OF A NON-COMPETITION CLAUSE INCORPORATED IN AN AGREEMENT FOR THE TRANSFER OF AN UNDERTAKING THE COMMISSION HAS TO APPRAISE COMPLEX ECONOMIC MATTERS . THE COURT MUST THEREFORE LIMIT ITS REVIEW OF SUCH AN APPRAISAL TO VERIFYING WHETHER THE RELEVANT PROCEDURAL RULES HAVE BEEN COMPLIED WITH , WHETHER THE STATEMENT OF THE REASONS FOR THE DECISION IS ADEQUATE , WHETHER THE FACTS HAVE BEEN ACCURATELY STATED AND WHETHER THERE HAS BEEN ANY MANIFEST ERROR OF APPRAISAL OR A MISUSE OF POWERS .
35 IN THIS INSTANCE THE APPLICANTS HAVE CONFINED THEMSELVES TO CONTENDING THAT THE LIMITATION OF THE DURATION OF THE NON-COMPETITION CLAUSE TO FOUR YEARS IS BASED ON A NUMBER OF INCORRECT FINDINGS OF FACT AND , ESSENTIALLY , ON THE COMMISSION ' S INCORRECT APPRAISAL OF THE SPECIFIC CIRCUMSTANCES OF THE CASE .
38 BEFORE EXAMINING THE ARGUMENTS OF THE PARTIES ON THAT POINT , IT SHOULD BE POINTED OUT THAT AN AGREEMENT WHICH PROVES TO BE CONTRARY TO THE PROVISIONS OF ARTICLE 85 ( 1 ) MAY BE EXEMPTED UNDER ARTICLE 85 ( 3 ) ONLY IF IT SATISFIES THE FOLLOWING CONDITIONS :
IT MUST CONTRIBUTE TO IMPROVING THE PRODUCTION OR DISTRIBUTION OF GOODS OR TO PROMOTING TECHNICAL OR ECONOMIC PROGRESS ;

IT MUST ALLOW CONSUMERS A FAIR SHARE OF THE RESULTING BENEFIT ;

IT MUST NOT IMPOSE ON THE UNDERTAKINGS CONCERNED RESTRICTIONS WHICH ARE NOT INDISPENSABLE TO THE ATTAINMENT OF ITS OBJECTIVES ;

IT MUST NOT AFFORD SUCH UNDERTAKINGS THE POSSIBILITY OF ELIMINATING COMPETITION IN RESPECT OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION .
40 AS REGARDS THE SUBMISSION TO THE EFFECT THAT THE CONTESTED DECISION DOES NOT CONTAIN A SUFFICIENT STATEMENT OF THE REASONS FOR THE REFUSAL OF THE REQUEST FOR AN EXEMPTION UNDER ARTICLE 85 ( 3 ), IT SHOULD BE POINTED OUT THAT ALTHOUGH AT FIRST SIGHT THE REASONS WHICH THE CONTESTED DECISION GIVES , IN PARAGRAPH 41 , FOR THE REFUSAL OF AN EXEMPTION UNDER ARTICLE 85 ( 3 ) OF THE TREATY MAY APPEAR SOMEWHAT BRIEF , THEY SHOULD BE SET IN THE BROAD CONTEXT OF THE CONTESTED DECISION WHICH CONTAINS SEVERAL OTHER PARAGRAPHS THAT DEAL DIRECTLY WITH THE ARGUMENTS PUT FORWARD BY THE APPLICANTS IN SUPPORT OF THEIR REQUEST FOR AN EXEMPTION UNDER ARTICLE 85 ( 3 ).
45 AS REGARDS THE SUBMISSION ALLEGING THAT THE CONTESTED DECISION CONTAINS A MISTAKEN APPRAISAL OF THE FACTS OF THE CASE IN SO FAR AS IT REFUSES A REQUEST FOR AN EXEMPTION UNDER ARTICLE 85 ( 3 ), IT SHOULD BE OBSERVED THAT , AS THE COURT HELD IN ITS JUDGMENT OF 17 JANUARY 1984 IN JOINED CASES 43 AND 63/82 ( CITED ABOVE ), WHERE AN EXEMPTION IS BEING APPLIED FOR UNDER ARTICLE 85 ( 3 ) IT IS IN THE FIRST PLACE FOR THE UNDERTAKINGS CONCERNED TO PRESENT TO THE COMMISSION THE EVIDENCE INTENDED TO ESTABLISH THE ECONOMIC JUSTIFICATION FOR AN EXEMPTION .
47 IT IS CLEAR FROM ALL THE DOCUMENTS BEFORE THE COURT AND FROM THE ORAL ARGUMENT PRESENTED TO IT THAT THE APPLICANTS HAVE NOT SUCCEEDED IN ESTABLISHING THAT THE CONTINUANCE OF THE NON-COMPETITION CLAUSE BEYOND A PERIOD OF FOUR YEARS WAS OF SUCH A NATURE AS TO CONTRIBUTE TO AN IMPROVEMENT IN THE PRODUCTION OR DISTRIBUTION OF THE PRODUCTS CONCERNED OR TO THE PROMOTION OF TECHNICAL OR ECONOMIC PROGRESS , AND IT IS EQUALLY CLEAR THAT THEY HAVE NOT PROVIDED EVIDENCE ENABLING IT TO BE ESTABLISHED THAT THE CONTINUANCE OF THAT NON-COMPETITION CLAUSE DID NOT IMPOSE ON THE UNDERTAKINGS CONCERNED RESTRICTIONS ON COMPETITION GOING BEYOND WHAT WAS INDISPENSABLE TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRANSFER AGREEMENT .