France Télécom SA v Commission of the European Communities.
Date: 2009-04-02
29. The first point to be noted is that, according to settled case‑law, the statement of the reasons on which a judgment is based must clearly and unequivocally disclose the Court of First Instance’s thinking, so that the persons concerned can be apprised of the justification for the decision taken and the Court of Justice can exercise its power of review (see, inter alia, Case C‑259/96 P Council  v de Nil and Impens  [1998] ECR I‑2915, paragraphs 32 and 33, and Case C‑449/98 P IECC  v Commission  [2001] ECR I‑3875, paragraph 70).
30. However, as the Court has also pointed out, the requirement that the Court of First Instance give reasons for its decisions cannot be interpreted as meaning that it is obliged to respond in detail to every single argument advanced by a party, particularly if the argument was not sufficiently clear and precise and was not adequately supported by evidence (Case C-274/99 P Connolly  v Commission  [2001] ECR I‑1611, paragraph 121, and Case C‑197/99 P Belgium  v Commission  [2003] ECR I‑8461, paragraph 81).
33. In paragraph 224 of the judgment under appeal, the Court of First Instance first of all pointed out that in AKZO  v Commission , paragraphs 71 and 72, and Tetra Pak  v Commission , paragraph 41, the Court held, first, that prices below average variable costs must always be considered abusive and, second, that prices below average total costs but above average variable costs are only to be considered abusive if an intention to eliminate can be shown.
34. The Court, next, recalled, in paragraph 225 of the judgment under appeal, the circumstances of the case in Tetra Pak  v Commission . In particular, it referred to paragraphs 42 and 43 of that judgment, in which the Court specifically explained the following:
‘42 … For sales of non‑aseptic cartons in Italy between 1976 and 1981, [the Court of First Instance] found that prices were considerably lower than average variable costs. Proof of intention to eliminate competitors was therefore not necessary. In 1982, prices for those cartons lay between average variable costs and average total costs. For that reason, in paragraph 151 of its judgment, the Court of First Instance was at pains to establish – and the appellant has not criticised it in that regard – that Tetra Pak [International SA] intended to eliminate a competitor.
43 The Court of First Instance was also right, at paragraphs 189 to 191 of the judgment under appeal, to apply exactly the same reasoning to sales of non‑aseptic machines in the United Kingdom between 1981 and 1984.’
41. In the context of an appeal it is necessary to bear in mind that the purpose of review by the Court of Justice is, primarily, to examine to what extent the Court of First Instance took into consideration, in a legally correct manner, all the arguments upon which the appellant relies (see, to that effect, Case C-­185/95 P Baustahlgewebe  v Commission  [1998] ECR I‑8417, paragraph 128; Case C‑359/01 P British Sugar  v Commission  [2004] ECR I‑4933, paragraph 47; and Joined Cases C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P Dansk Rørindustri and Others  v Commission  [2005] ECR I‑5425, paragraph 244).
55. In that regard it should be pointed out that, in accordance with Article 58 of the Statute of the Court of Justice and Article 112(1)(c) of the Rules of Procedure, an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal.
60. According to settled case‑law, to allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the Court of First Instance would be to allow it to bring before the Court, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the Court of First Instance. In an appeal, the Court’s jurisdiction is confined to review of the findings of law on the pleas argued before the Court of First Instance (see, inter alia, Joined Cases C‑186/02 P and C‑188/02 P Romondín and Others  v Commission  [2004] ECR I‑10653, paragraph 60, and Case C‑68/05 P Koninklijke Coöperatie Cosun  v Commission  [2006] ECR I‑10367, paragraph 96).
69. According to the case‑law of the Court of Justice, an appeal cannot merely repeat the pleas in law and arguments already submitted to the Court of First Instance without putting forward arguments to establish that it erred in law (see order in Case C‑30/96 P Abello and Others v Commission  [1998] ECR I‑377, paragraph 45, and, to that effect, Case C‑248/99 P France  v Monsanto and Commission  [2002] ECR I‑1, paragraph 69).
93. In an appeal, the appellant may not rely on pleas in law declared inadmissible by that Court, where the finding that they are inadmissible is not contested (Case C‑354/92 P Eppe  v Commission  [1993] ECR I‑7027, paragraph 13).
103. In considering the merits of the first part of this ground of appeal, it is necessary to note at the outset that, according to settled case‑law, Article 82 EC is an application of the general objective of European Community action laid down by Article 3(1)(g) EC, namely, the institution of a system ensuring that competition in the common market is not distorted. Thus, the dominant position referred to in Article 82 EC relates to a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, its customers and ultimately of the consumers (Case 85/76 Hoffmann-La Roche  v Commission  [1979] ECR 461, paragraph 38).
104. In that context, in prohibiting the abuse of a dominant market position in so far as trade between Member States is capable of being affected, Article 82 EC refers to conduct which is such as to influence the structure of a market where the degree of competition is already weakened and which, through recourse to methods different from those governing normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition ( Hoffman-La Roche  v Commission , paragraph 91; Case 322/81 Nederlandsche Banden-Industrie-Michelin v Commission  [1983] ECR 3461, paragraph 70; AKZO  v Commission , paragraph 69; and Case C‑95/04 P British Airways  v Commission  [2007] ECR I‑2331, paragraph 66).
105. Therefore, since Article 82 EC refers not only to practices which may cause damage to consumers directly, but also to those which are detrimental to them through their impact on an effective competition structure (Case 6/72 Europemballage and Continental Can v Commission  [1973] ECR 215, paragraph 26), an undertaking which holds a dominant position has a special responsibility not to allow its behaviour to impair genuine undistorted competition on the common market ( Nederlandsche Banden-Industrie-Michelin  v Commission , paragraph 57).
106. As the Court has already stated, it follows that Article 82 EC prohibits a dominant undertaking from eliminating a competitor and thereby strengthening its position by using methods other than those which come within the scope of competition on the basis of quality. From that point of view, not all competition by means of price can be regarded as legitimate ( AKZO  v Commission , paragraph 70).
107. In particular, it must be found that an undertaking abuses its dominant position where, in a market the competition structure of which is already weakened by reason precisely of the presence of that undertaking, it operates a pricing policy the sole economic objective of which is to eliminate its competitors with a view, subsequently, to profiting from the reduction of the degree of competition still existing in the market.
108. In order to assess the lawfulness of the pricing policy applied by a dominant undertaking, the Court, in paragraph 74 of AKZO v Commission , relied on pricing criteria based on the costs incurred by the dominant undertaking and on its strategy.
109. Thus, the Court of Justice has held, first, that prices below average variable costs must be considered prima facie abusive inasmuch as, in applying such prices, an undertaking in a dominant position is presumed to pursue no other economic objective save that of eliminating its competitors. Secondly, prices below average total costs but above average variable costs are to be considered abusive only where they are fixed in the context of a plan having the purpose of eliminating a competitor (see AKZO  v Commission , paragraphs 70 and 71, and Tetra Pak  v Commission , paragraph 41).
110. Accordingly, contrary to what the appellant claims, it does not follow from the case‑law of the Court that proof of the possibility of recoupment of losses suffered by the application, by an undertaking in a dominant position, of prices lower than a certain level of costs constitutes a necessary precondition to establishing that such a pricing policy is abusive. In particular, the Court has taken the opportunity to dispense with such proof in circumstances where the eliminatory intent of the undertaking at issue could be presumed in view of that undertaking’s application of prices lower than average variable costs (see, to that effect, Tetra Pak  v Commission , paragraph 44).
111. That interpretation does not, of course, preclude the Commission from finding such a possibility of recoupment of losses to be a relevant factor in assessing whether or not the practice concerned is abusive, in that it may, for example where prices lower than average variable costs are applied, assist in excluding economic justifications other than the elimination of a competitor, or, where prices below average total costs but above average variable costs are applied, assist in establishing that a plan to eliminate a competitor exists.
112. Moreover, the lack of any possibility of recoupment of losses is not sufficient to prevent the undertaking concerned reinforcing its dominant position, in particular, following the withdrawal from the market of one or a number of its competitors, so that the degree of competition existing on the market, already weakened precisely because of the presence of the undertaking concerned, is further reduced and customers suffer loss as a result of the limitation of the choices available to them.