Heintz van Landewyck SARL and others v Commission of the European Communities.
Date: 1980-10-29
47 NEVERTHELESS IT MUST BE OBSERVED IN THIS CASE THAT EVEN ASSUMING THAT THE THREE TABLES AMOUNTED TO TRADE SECRETS AND WERE THEREFORE WRONGLY DISCLOSED BY THE COMMISSION TO GB , THAT PROCEDURAL IRREGULARITY WOULD INVOLVE THE ANNULMENT IN WHOLE OR IN PART OF THE DECISION ONLY IF IT WERE SHOWN THAT IN THE ABSENCE OF SUCH IRREGULARITY THE CONTESTED DECISION MIGHT HAVE BEEN DIFFERENT . CONSIDERATION OF THE FILE HAS SHOWN THAT THE DISCLOSURES IN QUESTION SUPPLIED GB WITH NO ARGUMENT LIKELY TO HAVE HAD AN INFLUENCE ON THE CONTENT OF THE DECISION IN QUESTION .

SEVENTH SUBMISSION : EXEMPTION FROM NOTIFICATION
61 THE FORM , CONTENT AND OTHER TERMS OF NOTIFICATION PROVIDED FOR IN PARTICULAR IN ARTICLE 4 OF REGULATION NO 17 ARE GOVERNED BY ARTICLE 4 OF REGULATION NO 27 AS AMENDED BY THE SOLE ARTICLE OF REGULATION NO 1133/68 OF THE COMMISSION OF 26 JULY 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( II ), P . 400 ). IT FOLLOWS FROM THE TERMS OF THAT PROVISION THAT NOTIFICATIONS MUST BE SUBMITTED ON FORM A/B AS SHOWN IN THE ANNEX TO REGULATION NO 1133/68 AND MUST CONTAIN THE INFORMATION ASKED FOR THEREIN .
62 THE USE OF THAT FORM IS THEREFORE MANDATORY AND IS AN ESSENTIAL PRIOR CONDITION FOR THE VALIDITY OF THE NOTIFICATION . IT TAKES ACCOUNT , FOR THE PURPOSE OF LAYING DOWN DETAILED RULES FOR THE APPLICATION OF ARTICLE 85 ( 3 ), OF THE NEED , EXPRESSED IN ARTICLE 87 ( 2 ) ( B ) OF THE TREATY , TO ENSURE EFFECTIVE SUPERVISION AND TO SIMPLIFY ADMINISTRATION TO THE GREATEST POSSIBLE EXTENT . THE PRESENT CASE PROVIDES A STRIKING EXAMPLE OF THE CONFUSION AND MISUNDERSTANDINGS TO WHICH NOTIFICATION OTHERWISE THAN ON THE PRESCRIBED FORM MAY GIVE RISE . IT WAS ONLY IN ITS ANSWER OF 22 SEPTEMBER 1975 TO THE FIRST NOTIFICATION OF OBJECTIONS THAT FEDETAB STATED FOR THE FIRST TIME THAT THE LETTER OF 26 JANUARY 1971 CONSTITUTED NOTIFICATION .
68 AS THE COURT INDICATED IN ITS JUDGMENT OF 15 JULY 1970 IN CASE 41/69 ACF CHEMIEFARMA V COMMISSION ( 1970 ) ECR 661 AT P . 691 , PARAGRAPHS 91 TO 93 , THE DECISION IS NOT NECESSARILY REQUIRED TO BE A REPLICA OF THE COMMISSION ' S NOTICE OF OBJECTIONS . IN FACT THE COMMISSION MUST TAKE INTO ACCOUNT THE FACTORS EMERGING FROM THE ADMINISTRATIVE PROCEDURE IN ORDER EITHER TO ABANDON SUCH OBJECTIONS AS HAVE BEEN SHOWN TO BE UNFOUNDED OR TO SUPPLEMENT AND RE-DRAFT ITS ARGUMENTS BOTH IN FACT AND IN LAW IN SUPPORT OF THE OBJECTIONS WHICH IT MAINTAINS . THIS LATTER POSSIBILITY DOES NOT CONFLICT WITH THE PRINCIPLE OF THE RIGHTS OF THE DEFENCE PROTECTED BY ARTICLE 4 OF REGULATION NO 99/63 .
81 THE ARGUMENTS OF FEDETAB ARE IRRELEVANT . THE COMMISSION IS BOUND TO RESPECT THE PROCEDURAL GUARANTEES PROVIDED FOR BY COMMUNITY LAW AND HAS DONE SO , AS IS APPARENT FROM WHAT HAS GONE BEFORE ; IT CANNOT , HOWEVER , BE CLASSED AS A TRIBUNAL WITHIN THE MEANING OF ARTICLE 6 OF THE EUROPEAN CONVENTION FOR THE PROTECTION OF HUMAN RIGHTS .

IV - SUBMISSIONS ON A GENERAL PRINCIPLE OF LAW
86 THAT ARGUMENT CANNOT BE ACCEPTED . IN THE PRESENT CASE THE APPLICANT MEMBERS OF FEDETAB INFORMED THE COMMISSION THAT THEY WISHED TO BE PARTY TO THE NOTIFICATION OF THE RECOMMENDATION AND DURING THE PROCEEDINGS BEFORE THE COURT THEY ADMITTED THAT THEY HAD COMPLIED WITH IT SINCE 1 DECEMBER 1975 . IT FOLLOWS THAT THE RECOMMENDATION IS A FAITHFUL EXPRESSION OF THE APPLICANTS '  INTENTION TO CONDUCT THEMSELVES ON THE BELGIAN CIGARETTE MARKET IN CONFORMITY WITH THE TERMS OF THE RECOMMENDATION . THE NECESSARY CONDITIONS FOR THE APPLICATION OF ARTICLE 85 ( 1 ) ARE THEREFORE SATISFIED .
130 IT FOLLOWS FROM ALL THE CONSIDERATIONS SET FORTH ABOVE THAT IN THE MANUFACTURED TOBACCO SECTOR THE BELGIAN RULES ON CONSUMER TAXES AND PRICE CONTROLS AND THEIR APPLICATION PURSUANT TO THE REVENUE POLICY PURSUED BY THE STATE HAVE THE EFFECT OF MAKING IT PRACTICALLY IMPOSSIBLE FOR MANUFACTURERS AND IMPORTERS TO COMPETE IN SUCH A WAY THAT THERE WOULD BE AN EFFECT UPON THE AMOUNT OF THE RETAIL SELLING PRICE .
131 ON THE OTHER HAND IT IS NECESSARY TO POINT OUT THAT IT HAS BY NO MEANS BEEN SHOWN THAT THE SAID RULES OR THEIR APPLICATION PREVENT THE MANUFACTURER OR IMPORTER FROM ALLOWING PARTICULAR WHOLESALERS ON AN INDIVIDUAL BASIS A LARGER PROFIT MARGIN OUT OF THE MANUFACTURERS '  OR IMPORTERS '  SHARE OF THE RETAIL PRICE . IN TAKING CONCERTED ACTION REGARDING THE MAXIMUM LEVEL OF PROFIT MARGINS WHICH THEY ALLOW WHOLESALERS THE APPLICANTS JOINTLY PREVENT THEMSELVES FROM SO COMPETING AND AT THE SAME TIME DISCOURAGE THOSE INTERMEDIARIES FROM PURSUING A SALES POLICY WHICH WOULD BENEFIT THE PRODUCTS OF THE MANUFACTURER OR IMPORTER FROM WHOM THEY OBTAIN OR HOPE TO OBTAIN A MORE ADVANTAGEOUS PROFIT MARGIN .
132 IN THAT RESPECT IT IS NECESSARY TO POINT OUT THAT ARTICLE 85 ( 1 ) OF THE TREATY PROHIBITS ANY RESTRICTION ON COMPETITION AT ANY TRADING LEVEL BETWEEN THE MANUFACTURER AND THE ULTIMATE CONSUMER . THUS ARTICLE 85 ( 1 ) ( A ) SPEAKS IN GENERAL TERMS OF ' ' TRADING CONDITIONS ' ' ; ARTICLE 85 ( 1 ) ( B ) OF ' ' PRODUCTION ' '  AND ' ' MARKETS ' '  AND ARTICLE 85 ( 1 ) ( C ) WITHOUT ANY DISTINCTION BETWEEN THE RESPECTIVE STAGES OF TRADE OF ' ' MARKETS ' '  OR ' ' SOURCES OF SUPPLY ' ' .
133 FURTHER , IN THE PRESENT CASE EVEN IF THE SHARE OF THE RETAIL PRICE DUE TO THE REVENUE IS LARGE THERE REMAINS FOR THE MANUFACTURER OR IMPORTER A SUFFICIENT MARGIN TO ALLOW EFFECTIVE COMPETITION EVEN WITH REGARD TO MASS-PRODUCED PRODUCTS OF CURRENT CONSUMPTION IN RESPECT OF WHICH A VERY SMALL REDUCTION IN THE PRICE AT THE MANUFACTURING OR IMPORT STAGE MAY HAVE A SIGNIFICANT EFFECT AT THE CONSUMER STAGE .
134 THE CONCERTED ACTION IN RELATION TO PROFIT MARGINS INVOLVED BOTH IN THE RECOMMENDATION OF 1 DECEMBER 1975 AND IN THE MEASURES ADOPTED PRIOR THERETO RESULTING FROM AN AGREEMENT BETWEEN THE MAJORITY OF MANUFACTURERS AND IMPORTERS OF WIDELY CONSUMED PRODUCTS IN A SUBSTANTIAL PART OF THE COMMON MARKET , NAMELY BELGIUM , MUST THEREFORE BE REGARDED AS CONSTITUTING A RESTRICTION ON COMPETITION PROHIBITED BY ARTICLE 85 ( 1 ) OF THE TREATY , ON THE ASSUMPTION ON THE ONE HAND THAT IT IS LIKELY TO HAVE A SIGNIFICANT EFFECT UPON TRADE BETWEEN MEMBER STATES AND ON THE OTHER HAND THERE ARE NO OTHER FACTORS IN THE PRESENT CASE ALLOWING IT TO BE FOUND THAT THE DISTRIBUTION SYSTEM SET UP BY THE APPLICANTS IS NOT AS A WHOLE CAUGHT BY THE SAID PROHIBITION .
135 IN THE LATTER RESPECT THE APPLICANTS RELY ON THE JUDGMENT OF THE COURT OF 25 OCTOBER 1977 IN CASE 26/76 ( METRO SB-GROSSMARKTE GMBH V COMMISSION ( 1977 ) ECR 1875 ) AND ALLEGE THAT IN VIEW OF ITS BENEFICIAL INFLUENCE ON THE STRUCTURE OF THE MARKET THE AIM OF ENSURING A CERTAIN LEVEL OF INCOME FOR THE SPECIALIZED TRADE DOES NOT NECESSARILY FALL UNDER THE PROHIBITION IN ARTICLE 85 ( 1 ). THE COURT RECOGNIZED IN THAT JUDGMENT THAT MEASURES WHICH SERVE TO MAINTAIN TRADITIONAL TRADE BY DISTINGUISHING BETWEEN THE FUNCTIONS OF THE WHOLESALE AND RETAIL TRADES ARE NOT NECESSARILY RESTRICTIVE OF COMPETITION OR THAT IF THEY ARE THEY MAY QUALIFY FOR EXEMPTION UNDER ARTICLE 85 ( 3 ). ABOVE ALL THE COURT RECOGNIZED THAT PRICE COMPETITION DOES NOT HAVE ABSOLUTE PRIORITY OVER ALL OTHER EFFECTIVE FORMS OF COMPETITION .
138 MOREOVER , ALTHOUGH IT IS TRUE THAT THE COURT IN ITS JUDGMENT IN THE METRO CASE GAVE SOME CONSIDERATION TO THE QUESTION WHETHER A SELECTIVE DISTRIBUTION SYSTEM MAY BE COMPATIBLE WITH ARTICLE 85 ( 1 ) OF THE TREATY , THAT CASE WAS CONCERNED WITH A SYSTEM CONCEIVED , AS DISTINCT FROM THAT IN QUESTION IN THE PRESENT CASES , FOR THE PURPOSE OF DISTRIBUTING HIGHLY TECHNICAL , DURABLE CONSUMER GOODS SO THAT TRADERS HAD TO BE SELECTED ON THE BASIS OF QUALITATIVE CRITERIA .
140 IT THEREFORE APPEARS THAT THE APPLICANTS '  ARGUMENT TO THE EFFECT THAT THE COMMISSION WRONGLY FOUND THAT THE CONTESTED MEASURES RESTRICTED COMPETITION , PARTICULARLY IN RELATION TO TRADE MARGINS , FINDS NO SUPPORT IN THE REASONING OF THE COURT IN THE METRO CASE .
153 ALTHOUGH IT IS TRUE THAT THE BELGIAN TAXATION SYSTEM , WHICH MAKES THE MANUFACTURER OR IMPORTER ACCOUNTABLE FOR THE VERY HIGH TAXATION ELEMENT IN THE RETAIL PRICE , HAS A VERY DEFINITE INFLUENCE ON THE COMPETITION IN WHICH THE INDUSTRY MAY ENGAGE IN RELATION TO TERMS OF PAYMENT HAVING REGARD TO THE SPEEDY TURNOVER OF STOCK AND HIGH BANK INTEREST , IT DOES NOT MEAN THAT THERE IS NO OPPORTUNITY FOR EFFECTIVE COMPETITION IN THIS SPHERE . IT IS ALSO IMPORTANT NOT TO LOSE SIGHT OF THE FACT THAT IF THE MANUFACTURER ALLOWS THE TRADER CREDIT FACILITIES , THAT IS EQUIVALENT TO THE TRADER ' S RECEIVING AN ADDITIONAL PROFIT MARGIN , WHICH IS IN NO WAY PROHIBITED OR EXCLUDED BY THE BELGIAN RULES ON TAXATION OR PRICE CONTROL . THOSE FINDINGS ARE REINFORCED BY THE FACT THAT IT IS APPARENT FROM A TABLE ANNEXED TO FEDETAB ' S ANSWER OF 22 SEPTEMBER 1975 TO THE FIRST NOTICE OF OBJECTIONS THAT THE ACTUAL CREDIT FACILITIES ALLOWED BY THE OTHER APPLICANTS EXCEPT HVL VARIED FROM NONE AT ALL ( CASH PAYMENT ) TO 40 DAYS DEPENDING ON THE MANUFACTURER AND CUSTOMER .
170 IN THE FACE OF THOSE CONFLICTING ARGUMENTS IT IS RIGHT TO RECALL IN THE FIRST PLACE , AS THE COURT OBSERVED IN ITS JUDGMENT OF 30 JUNE 1966 IN CASE 56/65 SOCIETE TECHNIQUE MINIERE V MASCHINENBAU ULM GMBH ( 1966 ) ECR 235 , THAT IN ORDER THAT AN AGREEMENT , DECISION OR CONCERTED PRACTICE 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 THE AGREEMENT , DECISION OR CONCERTED PRACTICE IN QUESTION MAY HAVE AN INFLUENCE , DIRECT OR INDIRECT , ACTUAL OR POTENTIAL , ON THE PATTERN OF TRADE BETWEEN MEMBER STATES . THE INFLUENCE THUS FORESEEABLE MUST GIVE RISE TO A FEAR THAT THE REALIZATION OF A SINGLE MARKET BETWEEN MEMBER STATES MIGHT BE IMPEDED .
176 IN THAT RESPECT IT IS APPROPRIATE ALSO TO RECALL , AS THE COURT STATED IN ITS JUDGMENT IN THE METRO CASE ( AT PARAGRAPH 21 ), THAT THE POWERS CONFERRED UPON THE COMMISSION UNDER ARTICLE 85 ( 3 ) SHOW THAT THE REQUIREMENTS FOR THE MAINTENANCE OF WORKABLE COMPETITION MAY BE RECONCILED WITH THE SAFEGUARDING OF OBJECTIVES OF A DIFFERENT NATURE AND THAT TO THIS END CERTAIN RESTRICTIONS ON COMPETITION ARE PERMISSIBLE , PROVIDED THAT THEY ARE ESSENTIAL TO THE ATTAINMENT OF THOSE OBJECTIVES AND THAT THEY DO NOT RESULT IN THE ELIMINATION OF COMPETITION AS REGARDS A SUBSTANTIAL PART OF THE COMMON MARKET .
182 THE RECOMMENDATION , IT IS SAID , CONTAINS NO RESTRICTION WHICH IS NOT NECESSARY FOR THE ATTAINMENT OF THE ABOVE OBJECTIVE . IN PARTICULAR A SMALL ADDITIONAL PREMIUM MUST BE ALLOWED SPECIALIST WHOLESALERS AND RETAILERS TO ENSURE THEIR SURVIVAL IN THE FACE OF COMPETITION FROM OTHER TRADERS , ESPECIALLY SUPERMARKETS , WHICH DO NOT GIVE THE SAME SERVICE . THE ELIMINATION OF MANY SPECIALIST INTERMEDIARIES WOULD , IN THE APPLICANTS '  OPINION , INVOLVE NOT ONLY A REDUCTION IN THE NUMBER OF BRANDS AVAILABLE TO THE CONSUMER BUT ALSO SERIOUS SOCIAL CONSEQUENCES . IN THAT RESPECT IT IS PERTINENT TO OBSERVE THAT THE COURT STRESSED IN ITS JUDGMENT IN THE METRO CASE THAT CONSIDERATIONS OF A SOCIAL NATURE , AND IN PARTICULAR CONCERN TO SAFEGUARD EMPLOYMENT IN AN UNFAVOURABLE ECONOMIC CLIMATE , MAY BE TAKEN INTO ACCOUNT UNDER ARTICLE 85 ( 3 ).