John Deere Ltd v Commission of the European Communities.
Date: 1998-05-28
18 Article 168a of the EC Treaty and Article 51 of the EC Statute of the Court of Justice state that an appeal is to be limited to points of law and must be based on the grounds of lack of competence of the Court of First Instance, breach of procedure before it which adversely affects the interests of the appellant or infringement of Community law by the Court of First Instance.  Article 112(1)(c) of the Court's Rules of Procedure provides that an appeal must contain the pleas in law and legal arguments relied on.
19 It follows from those provisions that 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 (see the order in Case C-19/95 P San Marco v Commission [1996] ECR I-4435, paragraph 37).
20 That requirement is not satisfied by an appeal confined to repeating or reproducing word for word the pleas in law and arguments previously submitted to the Court of First Instance, including those based on facts expressly rejected by that court; in so far as such an appeal does not contain any arguments specifically contesting the judgment appealed against, it amounts in reality to no more than a request for re-examination of the application submitted to the Court of First Instance, which under Article 49 of the EC Statute the Court of Justice does not have jurisdiction to undertake (see, to this effect, in particular the order in San Marco v Commission, cited above, paragraph 38).
21 It also follows from the foregoing provisions that an appeal may be based only on grounds relating to the infringement of rules of law, to the exclusion of any appraisal of the facts.  The Court of First Instance has exclusive jurisdiction, first, to establish the facts except where the substantive inaccuracy of its findings is apparent from the documents submitted to it and, second, to assess those facts. When the Court of First Instance has established or assessed the facts, the Court of Justice has jurisdiction under Article 168a of the Treaty to review the legal characterisation of those facts by the Court of First Instance and the legal conclusions it has drawn from them (see, in particular, the order in San Marco v Commission, cited above, paragraph 39).
22 The Court of Justice thus has no jurisdiction to establish the facts or, in principle, to examine the evidence which the Court of First Instance accepted in support of those facts.  Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the Court of First Instance alone to assess the value which should be attached to the evidence produced to it (see, in particular, the order in San Marco v Commission, cited above, paragraph 40).  The appraisal by the Court of First Instance of the evidence put before it does not constitute, save where the evidence has been fundamentally misconstrued, a point of law which is subject, as such, to review by the Court of Justice (judgment in Case C-53/92 P Hilti v Commission [1994] ECR I-667, paragraph 42).
The first ground of appeal
28 The appellant claims that the Court of First Instance erred in holding, at paragraph 40 of the contested judgment, that the contested decision  contained sufficient reasoning as regards the Data System.  The Commission, it alleges, merely declared that the observations concerning the information exchange system arising from the first notification applied mutatis mutandis to the Data System, without taking account of the significant differences between the two versions.
29 At paragraph 40 of the contested judgment the Court of First Instance examined the appellant's argument that the Commission's assessment was materially incorrect as regards comparison of the information communicated by the two information exchange systems.  In its examination the Court of First Instance made findings of fact which the Court of Justice hearing an appeal does not have jurisdiction to review.
34 In this regard, it is appropriate to recall the case-law of the Court of Justice (see, in particular, Case 42/84 Remia and Others v Commission [1985] ECR 2545, paragraph 34, and Joined Cases 142/84 and 156/84 BAT and Reynolds v Commission [1987] ECR 4487, paragraph 62) according to which, although as a general rule the Community judicature undertakes a comprehensive review of the question whether or not the conditions for the application of Article 85(1) are met, its review of complex economic appraisals made by the Commission is necessarily limited to verifying whether the relevant rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of appraisal or a misuse of powers.
41 It must be observed that, as is apparent from paragraph 63 of the contested judgment, the appellant is repeating the same argument as that which it had already put before the Court of First Instance and that it is in fact seeking re-examination of its argument without even attempting to adduce legal arguments specifically establishing that the Court of First Instance erred in law by concluding that the parcelling out of dealers' sales territories by reference to the postcode system presupposed an agreement or at least a tacit agreement.
62 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 mean allowing that party to bring before the Court, whose jurisdiction in appeals is limited, a wider case than that heard by the Court of First Instance.  In an appeal the Court's jurisdiction is thus confined to examining the assessment by the Court of First Instance of the pleas argued before it (see, to that effect, Case C-136/92 P Commission v Brazzelli Lualdi [1994] ECR I-1981, paragraph 59).
76 According to the settled case-law of the Court, in order to determine whether an agreement is to be considered to be prohibited by reason of the distortion of competition which is its effect, the competition in question should be assessed within the actual context in which it would occur in the absence of the agreement in dispute (see, in particular, Case 56/65 Société Technique Minière [1966] ECR 337 and Case 31/80 L'Oréal v De Nieuwe AMCK [1980] ECR 3775, paragraph 19).
77 Article 85(1) does not restrict such an assessment to actual effects alone; it must also take account of the agreement's potential effects on competition within the common market (see, to this effect, Case 31/85 ETA v DK Investment [1985] ECR 3933, paragraph 12, and BAT and Reynolds, cited above, paragraph 54).  As the Court of First Instance correctly reiterated, an agreement will, however, fall outside the prohibition in Article 85 if it has only an insignificant effect on the market (Case 5/69 Völk v Vervaecke [1969] ECR 295, paragraph 7).
80 This relates in particular to paragraphs 51 and 81 of the contested judgment in which the Court of First Instance held, inter alia, that the effect of the information exchange system was to reduce, or even remove, the degree of uncertainty as to the foreseeable nature of competitors' conduct and that that consequence was likely to impair substantially the competition which existed between traders.
81 The appellant submits first of all that the Court of First Instance misinterpreted the words `restriction ... of competition' used in Article 85(1).  In its view, competition is restricted whenever undertakings cease to determine their market behaviour independently and thereby adversely affect competition.  In this instance, those two conditions were not satisfied.
82 As regards the first condition, the appellant puts forward several arguments, referring in particular to the data which are not disclosed to members of the AEA through the information exchange system, the time-lag in disseminating certain data and the conclusions which members can draw from such information.  It follows, according to the appellant, from those arguments that the members of the information exchange system do not acquire information about their competitors' market strategies.  It adds that the reasoning of the Court of First Instance, inasmuch as it is based on reduced uncertainty, is not compatible with the judgment in Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85 Ahlström Osakeyhtiö and Others v Commission [1993] ECR I-1307, paragraph 64.  That judgment makes it clear that the fact that an information exchange system lessens uncertainty is not sufficient for it to be considered to be restrictive of competition.
83 As regards the second condition, concerning adverse effects on competition, the appellant acknowledges that the information exchange system did affect competition on the United Kingdom tractor market.  However, that fact alone is not sufficient to support a finding that the system is anti-competitive.
84 It should be stated first of all that that last argument is inadmissible so far as the appellant thereby challenges the findings as to, and the assessment of, the information disclosed by the information exchange system, since those are findings and assessments of fact.
85 It remains to be considered whether the Court of First Instance correctly applied Article 85(1) in considering that the exchange of information reduced or removed the degree of uncertainty regarding the operation of the relevant market, which entailed a restriction of competition between manufacturers.
86 First of all, according to the case-law of the Court (Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73, Suiker Unie v Commission [1975] ECR 1663, paragraph 173, and Case 172/80 Züchner v Bayerische Vereinsbank [1981] ECR 2021, paragraph 13), the criteria of coordination and cooperation necessary for determining the existence of a concerted practice, far from requiring an actual `plan' to have been worked out, are to be understood in the light of the concept inherent in the Treaty provisions on competition, according to which each trader must determine independently the policy which he intends to adopt on the common market and the conditions which he intends to offer to his customers.
87 According to the same case-law (Suiker Unie v Commission, paragraph 174, and Züchner, paragraph 14), although it is correct to say that this requirement of independence does not deprive traders of the right to adapt themselves intelligently to the existing or anticipated conduct of their competitors, it does however strictly preclude any direct or indirect contact between such traders, the object or effect of which is to create conditions of competition which do not correspond to the normal conditions of the market in question, regard being had to the nature of the products or services offered, the size and number of the undertakings and the volume of the said market.
88 In the present case, in reaching the conclusion that a reduced degree of uncertainty as to the operation of the market restricts undertakings' decision-making autonomy and is consequently liable to restrict competition within the meaning of Article 85(1), the Court of First Instance, at paragraph 51 of the contested judgment, held in particular that, in principle, where there is a truly competitive market, transparency between traders is likely to lead to intensification of competition between suppliers, since the fact that in such a situation a trader takes into account information on the operation of the market, made available to him under the information exchange system, in order to adjust his conduct on the market, is not likely, having regard to the atomised nature of the supply, to reduce or remove for the other traders all uncertainty about the foreseeable nature of his competitors' conduct.  The Court of First Instance considered, however, that on a highly concentrated oligopolistic market, such as the market in question, the exchange of information on the market was such as to enable traders to know the market positions and strategies of their competitors and thus to impair appreciably the competition which exists between traders.
89 In making that assessment, the Court of First Instance took account of the nature of the information exchanged, the frequency with which it was disseminated and of the persons to whom it was disclosed.  As regards, first, the nature of the information exchanged, particularly that relating to sales made in the territory of each of the dealerships in the distribution network, the Court of First Instance found, at paragraphs 51 and 81, that those were business secrets and allowed the undertakings which were parties to the agreement to know the sales made by their dealers within and beyond their allocated territory, and also the sales made by the other competing undertakings and their dealers who were parties to the agreement.  Second, the Court of First Instance held, again at paragraphs 51 and 81, that the information on sales was disseminated systematically and at short intervals.  Last, at paragraph 51, the Court of First Instance found that the information was shared between the main suppliers, for their sole benefit, to the exclusion of other suppliers and of consumers.
90 In view of that reasoning, the Court of First Instance must be considered to have concluded correctly that the information exchange system reduces or removes the degree of uncertainty as to the operation of the market and that the system is therefore liable to have an adverse influence on competition between manufacturers.
91 In addition, this assessment does not conflict with the judgment in Ahlström Osakeyhtiö and Others v Commission, cited above, and referred to by the appellant.  It is true that in that judgment the Court held, at paragraph 64, that the system of quarterly price announcements on the wood pulp market did not in itself constitute an infringement of Article 85(1) of the Treaty.  However the system of quarterly announcements of paper pulp sale prices set up by the manufacturers involved the communication of information of use to purchasers, whereas the information exchange system in question in the present case enables information to be shared only by the undertakings which are members to the agreement.
99 Second, the appellant's argument concerning the consequences of joining the information exchange system on a new trader's decision-making autonomy is, in substance, identical to the argument already considered in connection with the first part of this ground of appeal.  It is sufficient in this regard to refer to paragraphs 80 to 91 of this judgment.
119 As regards the significance of the Court of First Instance's finding that the Commission had been unable to provide evidence that the information exchange system might have helped to maintain a high level of prices, the factors set out in paragraph 101 allow it to be affirmed with a sufficient degree of probability that the agreement may have an influence, direct or indirect, actual or potential, on the pattern of trade in tractors between Member States so as to give rise to the fear that the realisation of a single market between Member States might be impeded (see in particular Case 54/65 Société Technique Minière, cited above, and Case C-219/95 P Ferriere Nord v Commission [1997] ECR I-4411, paragraph 20).  First, the Court of First Instance pointed out that even if the Commission was unable to provide evidence that the information exchange system might have helped to maintain a high level of prices, the appellant had likewise not demonstrated that the prices of agricultural tractors on the United Kingdom market were lower than those charged on continental markets.  Second, in considering that the Commission had correctly found that the information exchange system necessarily influences the volume of imports into the United Kingdom, the Court of First Instance took into account the characteristics of the relevant market, and the fact that the main suppliers on that market also operated throughout the common market, and the large share (88%) of the relevant market controlled by the undertakings which were members of the agreement.