1 . THE SUBMISSIONS OF THE PARTIES THE APPLICANTS REQUEST THE ANNULMENT OF DECISION N . 16/60 ON THE GROUNDS OF INSUFFICIENCY OF REASONS, ERRONEOUS FINDINGS OF FACT, MISINTERPRETATION AND MISAPPLICATION OF THE TREATY AND MISUSE OF POWERS . IN THE REPLY THEY STATED THAT 'IT IS NO LONGER NECESSARY TO PURSUE THE SUBMISSION OF A MISUSE OF POWER '. IT WILL THEREFORE NOT BE DEALT WITH IN THIS JUDGMENT . THE FIRST SUBMISSION COMES UNDER THE HEAD OF 'INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT' AND THE SECOND AND THIRD SUBMISSIONS UNDER THAT OF 'INFRINGEMENT OF THIS TREATY OR OF ANY RULE OF LAW RELATING TO ITS APPLICATION '. IN THIS JUDGMENT THEY WILL BE DEALT WITH SEPARATELY UNDER THESE TWO HEADS BUT IN REVERSE ORDER TO THAT GIVEN ABOVE .
2 . RESPECTIVE POSITIONS OF THE HIGH AUTHORITY AND OF THE COURT WITH REGARD TO ARTICLE 65 OF THE TREATY ARTICLE 65 ( 2 ) STIPULATES THAT THE HIGH AUTHORITY MAY AUTHORIZE CERTAIN AGREEMENTS IF IT FINDS THAT THEY FULFIL THE CONDITIONS LAID DOWN IN THE TREATY . THIS WORDING STRICTLY LIMITS THE SUBJECT MATTER OF THE PRESENT ACTION CONCERNING ESSENTIALLY THE VALIDITY, WITH REGARD TO THE TREATY, OF THE REASONS WHICH LED THE HIGH AUTHORITY TO FIND THAT THE AUTHORIZATION OF A JOINT-SELLING AGENCY, AS SOUGHT BY THE APPLICANTS ON 20 MAY 1960, COULD NOT BE GRANTED . THESE REASONS ARE SET OUT IN DECISION N . 16/60 OF 22 JUNE 1960 .
3 . INFRINGEMENT OF THE TREATY UNDER THIS HEADING THE APPLICANTS PUT FORWARD TWO COMPLAINTS : FIRST, INACCURATE INTERPRETATION AND APPLICATION OF THE TREATY; SECOND, INACCURACIES IN THE FINDINGS OF FACT . UNDER THE FIRST HEADING THEY MAINTAIN THAT THERE HAS BEEN AN EVIDENT MISINTERPRETATION OF THE TREATY'S PROVISIONS . A - MISINTERPRETATION AND MISAPPLICATION OF THE TREATY THE APPLICANTS COMPLAIN THAT THE HIGH AUTHORITY 'INTERPRETED AND APPLIED IN A MANNER THAT WAS WRONG IN LAW ': P . 101 ( A ) THE CONCEPT OF 'THE POWER TO DETERMINE PRICES'; ( B ) THE CONCEPT OF 'THE CONTROL OF MARKETING'; ( C ) THE CONCEPT OF 'A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET '. ( A ) THE CONCEPT OF 'THE POWER TO DETERMINE PRICES' BOTH THE APPLICANTS AND THE INTERVENER STATE THAT IN THE PARTICULAR CIRCUMSTANCES OF TIME AND PLACE IN WHICH THE PROBLEM BEFORE THE COURT MUST BE SEEN, THERE EXISTS A PROFOUND DIFFERENCE BETWEEN THE POWER TO FIX AND THE POWER TO DETERMINE PRICES . THIS ASSERTION IS EXPRESSED ABOVE ALL IN THE APPLICATION IN THE FOLLOWING FORM : 'A PERSON WHO MERELY FORMULATES THE EFFECTS OF MOVEMENTS OF THE MARKET ON PRICE LEVELS DOES IN FACT FIX PRICES, BUT CANNOT DETERMINE THEM . IT IS NOT THIS FIXING OF PRICES IN THE FORMAL SENSE WHICH ARTICLE 65 ( 2 ) ( C ) PROHIBITS, BUT RATHER THE EFFECTIVE POWER WHICH ALLOWS DETERMINATION OF PRICES INDEPENDENTLY OF MOVEMENTS OF THE MARKET '. FROM THE APPLICANTS' POINT OF VIEW, EVEN IF THE SINGLE SALES ORGANIZATION, REFERRED TO IN THIS CASE, HAS THE POWER TO FIX PRICES, IT CANNOT HAVE THE POWER TO DETERMINE THEM IF IT IS OBLIGED TO ALIGN ITS PRICES POLICY ON THE PRICES OF COMPETING PRODUCTS, NOTABLY, IN THIS CASE, THE PRICES OF COAL IMPORTED FROM THIRD COUNTRIES AND OF FUEL OILS . THE HIGH AUTHORITY CONSIDERS, ON THE CONTRARY, THAT A JOINT-SELLING ORGANIZATION GIVES THE PARTIES CONCERNED THE POWER TO DETERMINE PRICES . THIS DIFFERENCE OF INTERPRETATION IS AT THE BASIS OF THE PRESENT LITIGATION . IN ORDER TO ASSESS THE COMPARATIVE MERITS OF THE OPPOSING CONTENTIONS IT IS NECESSARY TO MAKE SOME ELABORATION OF THE SUBTLE DISTINCTION, IN WHICH THE APPLICANTS' PRINCIPAL ARGUMENT RESIDES, BETWEEN THE 'POWER TO FIX PRICES' AND THE 'POWER TO DETERMINE PRICES '. SUCH A DISTINCTION IS NOWHERE EXPLAINED IN THE TREATY OR IN THE DOCUMENTS PUBLISHED AT THE TIME OF ITS RATIFICATION . AN EXAMINATION OF THE MEANING OF THE WORDS 'FIXER' ( FIX ) AND 'DETERMINER' ( DETERMINE ) FURNISHES NO DECISIVE GROUNDS FOR THIS DISTINCTION . ALTHOUGH ARTICLE 65 ( 1 ) PROHIBITS ALL AGREEMENTS TENDING TO FIX OR DETERMINE PRICES, ARTICLE 65 ( 2 ) PERMITS THE HIGH AUTHORITY TO AUTHORIZE, IN SOME CIRCUMSTANCES, CERTAIN AGREEMENTS, PROVIDED IN PARTICULAR THAT THEY ARE NOT LIABLE TO GIVE THE UNDERTAKINGS THE POWER TO DETERMINE PRICES . THE DIFFERENCE IN WORDING BETWEEN ARTICLE 65 ( 1 ) AND ( 2 ) REQUIRES AN EXPLANATION, WHICH THE DISTINCTION ASSERTED BY THE APPLICANTS IS ABLE TO PROVIDE . P . 102 ALTHOUGH CLEARLY THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY CANNOT PROVIDE A DECISIVE ANSWER IN THE PRESENT CASE, IT DOES GIVE SOME INDIRECT SUPPORT TO THE APPLICANTS' ARGUMENT, IN SO FAR AS ARTICLE 85 ( 3 ) OF THAT TREATY, WHICH DEALS WITH MATTERS ANALOGOUS TO THOSE GOVERNED BY ARTICLE 65 OF THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY, DOES NOT REQUIRE THAT AGREEMENTS CAPABLE OF QUALIFYING FOR AUTHORIZATION MUST NOT CONFER ON UNDERTAKINGS THE POWER TO DETERMINE PRICES, BUT PROVIDES THAT THEY MUST NOT AFFORD THEM THE POSSIBILITY OF ELIMINATING COMPETITION IN RESPECT OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION '. IF IT IS ACCEPTED THAT A COMMON INTENTION INSPIRED THE DRAFTING OF ARTICLE 65 OF THE ECSC TREATY AND ARTICLE 85 OF THE EEC TREATY, THE POWER TO DETERMINE PRICES WOULD BE MORE OR LESS EQUIVALENT TO THE POWER ENJOYED BY UNDERTAKINGS UNDER A SYSTEM WHERE COMPETITION HAD BEEN ELIMINATED . THIS IS CLEARLY THE APPLICANT'S ARGUMENT . THIS INTERPRETATION OF THE EXPRESSION 'POWER TO DETERMINE PRICES' IS SUPPORTED BY ARTICLE 2 OF THE TREATY, WHICH REQUIRES THAT THE COMMUNITY SHALL 'PROGRESSIVELY BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY .' IT IS AGAIN SUPPORTED IN ARTICLE 5, WHERE THE COMMUNITY IS ENJOINED TO 'ENSURE THE ESTABLISHMENT, MAINTENANCE AND OBSERVANCE OF NORMAL COMPETITIVE CONDITIONS '. IN THE LIGHT OF THESE CONSIDERATIONS, THE APPLICANTS APPEAR TO BE JUSTIFIED IN THEIR ARGUMENTS IN FAVOUR OF A DISTINCTION IN PRINCIPLE BETWEEN 'POWER TO FIX PRICES' AND 'POWER TO DETERMINE PRICES '. FOR THE UNDERTAKING WHICH IS IN A POSITION TO EXERCISE IT, THE POWER TO FIX PRICES IS AN OBJECTIVE FACT ARISING OUT OF AN EASILY PERCEPTIBLE ORGANIZATIONAL STRUCTURE . THE POWER TO DETERMINE PRICES, HOWEVER, RESIDES IN A POWER, GIVEN TO THE UNDERTAKING IN A POSITION TO EXERCISE IT, TO ESTABLISH PRICES AT A LEVEL APPRECIABLY DIFFERENT FROM THAT WHICH WOULD BE ESTABLISHED BY THE EFFECT OF COMPETITION ALONE . THUS, TO SHOW THE EXISTENCE OF A POWER TO DETERMINE PRICES, IT IS NECESSARY TO ESTABLISH THAT THE ACTUAL PRICES ARE, OR COULD BE, DIFFERENT FROM WHAT THEY WOULD HAVE BEEN IN THE ABSENCE OF ANY POWER TO FIX PRICES . SUCH A PROPOSITION INVOLVES A SUBTLE COMPARISON BETWEEN THE ACTUAL AND THE POTENTIAL, OF A KIND WHICH MUST REST TO A CONSIDERABLE EXTENT ON INFORMED SPECULATION . THE HIGH AUTHORITY MADE SUCH A COMPARISON WHEN CONSIDERING THE APPLICANTS' REQUEST FOR AUTHORIZATION OF 20 MAY 1960, AND IN THE PREAMBLE TO DECISION N . 16/60 IT STATED THE REASONS WHICH CAUSED IT TO FIND THAT THE POWER TO FIX PRICES RESULTING FROM THE EXISTENCE OF THE JOINT-SELLING ORGANIZATION WITH WHICH THE PRESENT APPLICATION IS CONCERNED, WAS EQUIVALENT TO A POWER TO DETERMINE PRICES . P . 103 IT IS, THEREFORE, APPROPRIATE TO EXAMINE THE VALIDITY OF THESE REASONS IN THE LIGHT OF THE TREATY . IT IS NOT DISPUTED THAT A JOINT SELLING ORGANIZATION ENABLES THOSE WHO CONTROL IT TO EXERCISE A LIMITED INFLUENCE UPON PRICES AND TO WARD OFF THE DANGER OF DESTRUCTIVE COMPETITION ( REQUEST OF 20 MAY 1960, P . 25 ), BY MEANS OF IMPOSING UPON ALL THE UNDERTAKINGS UNDER THEIR CONTROL, SUBJECT TO CERTAIN RESERVATIONS, A UNIFORM LIST OF PRICES . THIS IS STATED MORE PRECISELY IN THE APPLICATION ( PARAGRAPH 39 ): 'A JOINT SELLING ORGANIZATION HAS, OF COURSE, BY ITS VERY NATURE THE DUTY TO SUBSTITUTE ITSELF FOR THE INDIVIDUAL MEMBERS OF THE CARTEL ... IN ORDER TO PREVENT COMPETITION BETWEEN THE PRICES CHARGED BY MEMBERS OF THE CARTEL .' THE SAME CONTENTION IS STRESSED IN THE APPLICANTS' REPLY ( PARAGRAPH 86 ): 'NATURALLY IT IS TRUE THAT AFTER THE AMALGAMATION INTO A JOINT-SELLING AGENCY...PRICE COMPETITION BETWEEN MEMBERS OF THE CARTEL DISAPPEARS .' ( THE WORD 'BETWEEN' IS UNDERLINED IN THE TEXT .) THIS ELIMINATION OF COMPETITION BETWEEN MEMBERS OF THE CARTEL IS THE INTERNAL EFFECT OF THE AGREEMENT . THROUGH THE ELIMINATION OF COMPETITION BETWEEN ITS MEMBERS, PRICES WITHIN THE CARTEL ARE FREED NOT ONLY FROM 'DESTRUCTIVE' COMPETITION BUT ALSO FROM THE PRESSURE OF COMPETITION WHICH WOULD OTHERWISE HAVE BEEN EXERTED BY THOSE PRODUCERS WITH THE LOWEST PRODUCTION COSTS AGAINST THOSE WHO HAVE, FOR WHATEVER REASON, HIGHER PRODUCTION COSTS . ON THIS POINT THE COURT ACCEPTS THE OPINION OF THE HIGH AUTHORITY TO THE EFFECT THAT THE JOINT-SELLING AGREEMENT, 'ACCORDING TO THE VERY TERMS USED BY THE APPLICANTS BOTH IN THEIR REQUEST AND IN THEIR APPLICATION...GIVES THEM THE OPPORTUNITY TO FIX OR TO MAINTAIN, IN THEIR PRINCIPAL SALES AREA, LIST PRICES WHICH DIFFER FROM WHAT THEY WOULD HAVE BEEN IN THE ABSENCE OF A CARTEL AGREEMENT,...AND WHICH GUARANTEE PROTECTION OF THEIR PRICES TO THE UNDERTAKINGS CONCERNED IN ORDER THAT THEY MAY BE FREE TO CARRY OUT RE-ADAPTATION MEASURES .' ( STATEMENT OF DEFENCE, PARAGRAPH 19 ). P.104 THE USE OF THIS POWER IS OBVIOUSLY SUBJECT TO EXTERNAL COMPETITION, TO BE EXAMINED LATER, BUT, WITH THAT RESERVATION, IT INVOLVES A CERTAIN POWER TO DETERMINE PRICES . SUCH POWER WILL BE EFFECTIVE IN SO FAR AS IT ELIMINATES THE COMPETITIVE PRESSURE WHICH WOULD HAVE REDUCED LIST PRICES - THAT IS TO SAY, THEREFORE, IN SO FAR AS THE PROCEDURE OF JOINT SELLING MAKES IT POSSIBLE TO NEUTRALIZE THE EFFECT WHICH WOULD HAVE BEEN EXERTED BY OFFERS FROM THOSE MEMBER PRODUCERS OF THE JOINT-SELLING AGENCY WHO ENJOY THE LOWEST PRODUCTION COSTS . SUBJECT TO THE RESULTS OF AN EXAMINATION OF THE EFFECTS OF EXTERNAL COMPETITION JUST MENTIONED, IT CANNOT BE DENIED THAT THE INTERNAL EFFECT OF THE JOINT-SELLING ORGANIZATION INVOLVES A CERTAIN POWER TO DETERMINE PRICES, AND THAT THE EXTENT OF SUCH A POWER NATURALLY DEPENDS UPON THE VOLUME OF PRODUCTION UNDER ITS CONTROL . TO OBTAIN SOME IDEA OF THIS VOLUME IT IS SUFFICIENT TO NOTE, WITHOUT HERE MAKING THE DISTINCTION BETWEEN QUANTITIES PRODUCED AND QUANTITIES SOLD ( THIS DISTINCTION WILL BE MADE IN PARAGRAPH ( C ) BELOW ), THAT THE RUHR VALLEY PRODUCED, IN 1960, 115 441 000 METRIC TONS OF COAL ( THE HIGH AUTHORITY'S STATISTICAL BULLETIN, 9TH YEAR, N . 4 OCT/DEC . 1961, TABLE C, PP . 4 AND 5 ). THIS WAS PRODUCED ALMOST ENTIRELY BY THE THIRTY-EIGHT MINING COMPANIES WHICH ARE MEMBERS OF THE JOINT-SELLING ORGANIZATION . THESE FIGURES SHOW THE EXTENT OF INTERNAL COMPETITION ELIMINATED BY THIS JOINT-SELLING ORGANIZATION IN THE RUHR VALLEY . THE FOREGOING IS ENOUGH TO SHOW THAT THE HIGH AUTHORITY WAS JUSTIFIED IN FINDING THAT THIS ORGANIZATION, BY FIXING, SUBJECT TO CERTAIN CONDITIONS, THE LIST PRICES APPLIED BY THE UNDERTAKINGS UNDER ITS CONTROL, HAD TO SOME EXTENT THE POWER TO DETERMINE PRICES . HOWEVER, SUCH A POWER WOULD REMAIN PURELY POTENTIAL IF THE COMPETITION FROM COAL FROM OTHER COALFIELDS WITHIN THE COMMUNITY, COAL FROM THIRD COUNTRIES AND FROM FUEL-OIL, OBLIGED THE JOINT-SELLING ORGANIZATION TO FIX ITS LIST PRICES BELOW THE LOWEST LEVEL AT WHICH THEY WOULD HAVE BEEN FIXED UNDER THE ORDINARY MUTUAL COMPETITION BETWEEN RUHR VALLEY UNDERTAKINGS, IF THIS COMPETITION HAD NOT BEEN ELIMINATED BY THE JOINT-SELLING ORGANIZATION . IT IS, THEREFORE, APPROPRIATE TO EXAMINE THE EFFECTS OF THIS EXTERNAL COMPETITION . THIS WAS DONE BY THE HIGH AUTHORITY IN PARAGRAPHS ( B ) ( C ) AND ( D ) OF ITS DECISION N . 16/60 . IN PARAGRAPH ( B ) OF RECITAL N . 12 OF THE PREAMBLE TO THAT DECISION, THE HIGH AUTHORITY LISTS THE REASONS FOR WHICH IT FOUND THAT THE POWER OF THE JOINT-SELLING ORGANIZATION TO DETERMINE PRICES WAS NOT EXCLUDED BY COMPETITION FROM OTHER UNDERTAKINGS WITHIN THE COMMUNITY . THIS CONCLUSION IS CORROBORATED BY THE VERY STRUCTURE OF THE RUHR VALLEY COALFIELD . IN FACT, ALL UNDERTAKINGS PRODUCING HEAVY GOODS ENJOY, IN PRINCIPLE AND SUBJECT TO CERTAIN RESERVATIONS WITH REGARD TO COMPETITION FROM GOODS WHICH ARE LIGHTER OR LESS COSTLY TO PRODUCE, A MARGIN OF GEOGRAPHIC PROTECTION WITHIN WHICH THEY HAVE THE POWER TO DETERMINE PRICES . THE PROXIMITY BETWEEN PRODUCERS AND CONSUMERS OF FUEL IN THE RUHR VALLEY GIVES TO THE FORMER AN APPRECIABLE PROTECTION AGAINST MANY OTHER PRODUCERS IN THE COMMUNITY . THE ARGUMENT OF THE HIGH AUTHORITY, ACCORDING TO WHICH 'IT WOULD NOT APPEAR THAT SO FAR THE UNDERTAKINGS OF THE RUHR COALFIELD HAVE FOLLOWED THE PRICE FLUCTUATIONS OF OTHER UNDERTAKINGS WITHIN THE COMMUNITY FOR THE PURPOSE OF FIXING THEIR PRICE LEVELS, BUT THAT ON THE CONTRARY IT CAN BE SHOWN THAT THE PRICES OF RUHR VALLEY COAL HAVE AN APPRECIABLE EFFECT UPON CALCULATION OF PRICES IN THE NEIGHBOURING COALFIELDS OF THE COMMUNITY,' RAISES A PRESUMPTION IN FAVOUR OF THE EXISTENCE OF A POWER TO DETERMINE PRICES . THE ARGUMENT OF THE APPLICANTS, THAT IF THE PRICE LISTS OF THE RUHR HAVE NOT BEEN REDUCED OR ALIGNED ON THE PRICE LEVELS OF COMPETING PRODUCTS 'THIS IS BECAUSE THEY ARE VIRTUALLY WITHOUT EXCEPTION THE LOWEST PRICES IN THE COMMON MARKET' ( APPLICATION, PARAGRAPH 35 ), IF CORRECT, GIVES RISE TO THE PRESUMPTION THAT, WHATEVER THE CAUSE, THE PRODUCTS OF THE RUHR ARE NOT IN IMMEDIATE DANGER FROM COMPETITION FROM THE OTHER COALFIELDS OF THE COMMUNITY . THIS CONCLUSION IS CONFIRMED BY THE VOLUME OF SALES OF RUHR COAL IN ITS PRINCIPAL SALES AREA . IN 1959 THESE AMOUNTED TO 88.4 MILLION METRIC TONS OF COAL OR COAL EQUIVALENTS, INCLUDING AMOUNTS SUPPLIED FOR THE NEEDS OF THE COLLIERIES THEMSELVES, OUT OF 120.9 MILLION METRIC TONS, WHICH IS THE TOTAL COAL CONSUMPTION OF THE FEDERAL REPUBLIC OF GERMANY - IN ALL 73.1 %. THE UNQUESTIONED FACT THAT THE RUHR VALLEY UNDERTAKINGS HAVE SCARCELY MADE ANY USE OF THEIR POWER TO ALIGN THEIR PRICES ON THOSE OF OTHER UNDERTAKINGS IN THE COMMUNITY LENDS FORCE TO THE PRECEDING ARGUMENT . IN PARAGRAPH ( C ) OF RECITAL N . 12 OF THE PREAMBLE TO DECISION N . 16/60, THE HIGH AUTHORITY STATES THE REASONS WHICH LED IT TO FIND THAT THE COMPETITION FROM COAL FROM THIRD COUNTRIES, HOWEVER APPRECIABLE, DOES NOT CONSTITUTE AN IMMOVABLE BARRIER DEPRIVING THE JOINT-SELLING ORGANIZATION OF THE RUHR COALMINING COMPANIES OF A MEASURE OF FLEXIBILITY IN ITS PRICE POLICY . ALTHOUGH THERE IS SOME DIFFERENCE OF OPINION BETWEEN THE PARTIES AS TO THE CALCULATION OF THE RATIO BETWEEN TONNAGES IMPORTED FROM THIRD COUNTRIES INTO THE APPLICANTS' PRINCIPAL SALES AREA, THAT IS TO SAY THE FEDERAL REPUBLIC OF GERMANY, AND THE TONNAGES OF COAL PRODUCED BY THE APPLICANTS - ACCORDING TO THE HIGH AUTHORITY 6.3%, AS AGAINST MORE THAN 15% ACCORDING TO THE APPLICANTS - JUST AS THERE IS DISAGREEMENT AS TO THE BASIS TO BE USED FOR ASSESSING THE SIGNIFICANCE OF THESE FIGURES, NONETHELESS IT IS CLEAR THAT THESE FIGURES DO NOT SUPPORT THE VIEW THAT COAL IMPORTED FROM THIRD COUNTRIES HAS AN IRRESISTIBLE EFFECT UPON THE MARKETS FOR RUHR COAL WITHIN ITS PRINCIPAL SALES AREAS . P . 106 THIS SITUATION IS DUE BOTH TO THE GOEGRAPHIC PROTECTION WHICH THE MAJORITY OF THESE SALES AREAS AFFORD TO THE RUHR AS OPPOSED TO MOST OF THE SOURCES OF PRODUCTION IN THIRD COUNTRIES, AND TO THE CUSTOMS DUTIES IMPOSED BY THE GOVERNMENT OF THE FEDERAL REPUBLIC ON COAL IMPORTED FROM THIRD COUNTRIES . THE HIGH AUTHORITY RIGHTLY OBSERVES THAT, IN SO FAR AS ANY SYSTEMATIC PRICE POLICY PRACTISED BY PRODUCERS IN THIRD COUNTRIES DID NOT TAKE ACCOUNT OF THE MARKET SITUATION AND THE SITUATION WITH REGARD TO PRODUCTION COSTS, SUCH DANGERS COULD BE COUNTERED BY MEASURES OF COMMERCIAL POLICY . EVEN BEFORE A CUSTOMS DUTY ON COAL ORIGINATING IN THIRD COUNTRIES WAS INTRODUCED BY THE FEDERAL REPUBLIC OF GERMANY, THE SELLING PRICES OF RUHR COAL HAD NOT BEEN DIRECTLY DETERMINED BY THOSE OF COMPARABLE IMPORTED COAL . THIS SHOWS THAT THE POWER TO ALIGN PRICES ON THOSE OF PRODUCTS IMPORTED FROM THIRD COUNTRIES GIVES THE JOINT-SELLING ORGANIZATION, WITH WHICH THE PRESENT APPLICATION IS CONCERNED, THE MEANS TO DEFEND ITS POSITION WITHOUT ALTERING ITS PRICE LISTS THROUGHOUT ITS ENTIRE SALES AREA . THE EQUALIZATION, WITHIN A POWERFUL JOINT - SELLING ORGANIZATION, OF DIMINISHING RETURNS AS A RESULT OF PRICE ALIGNMENTS AND OTHER COMPETITIVE MEASURES, MULTIPLIES THE OPPORTUNITIES PROVIDED BY THESE MEASURES OF DIRECTING COMPETITION, SINCE IT ALLOWS THE SELECTION IN EACH CASE OF THE MINE MOST FAVOURABLY PLACED FOR MAKING THE DELIVERY FROM THE POINT OF VIEW OF TYPE OF COAL AND TRANSPORT COSTS . FOR ALL THESE REASONS THE HIGH AUTHORITY WAS JUSTIFIED IN FINDING THAT THE JOINT-SELLING AGREEMENT GIVES THE PARTIES TO IT SUCH EXTENSIVE OPPORTUNITIES FOR DIRECTING COMPETITION, THAT THE EXISTENCE OF COMPETITION FROM PRODUCERS IN THIRD COUNTRIES DOES NOT DEPRIVE THE JOINT - SELLING ORGANIZATION OF THE OPPORTUNITY OF DETERMINING PRICES IN ITS PRINCIPAL SALES AREAS ( CF . DECISION N . 16/60, OFFICIAL JOURNAL N . 47, P . 1024/60, FIRST COLUMN, LAST PARAGRAPH ). IN PARAGRAPH ( D ) OF RECITAL N . 12 OF THE PREAMBLE TO DECISION N . 16/60 THE HIGH AUTHORITY STATES THE REASONS WHICH LED IT TO FIND THAT COMPETITION FROM FUEL-OIL, ALTHOUGH STRONG AND INCREASING, DOES NOT DEPRIVE THE JOINT - SELLING ORGANIZATION OF SOME MEASURE OF FREEDOM IN SELECTING ITS LIST PRICES . P . 107 THERE IS NO DOUBT THAT COMPETITION FROM FUEL - OIL AFFECTS THE DIFFERENT CATEGORIES AND TYPES OF COAL IN VARYING DEGREES, AND THAT THE LEAST AFFECTED ARE PRECISELY THOSE WHICH FORM THE GREATER PART OF THE APPLICANTS' OUTPUT . SIMILARLY, IN SO FAR AS COAL IS SUPPLIED FOR BURNING, THE POSITION OF FUEL-OIL IN RELATION TO COAL VARIES IN STRENGTH ACCORDING TO THE USE TO WHICH IT IS PUT . THE LINE DIVIDING THE SPHERES OF INFLUENCE OF FUEL-OIL AND COAL SHIFTS IN PROPORTION TO THE RELATION BETWEEN THEIR PRICES . CONSEQUENTLY, AS REGARDS THE COMPETITION FROM FUEL-OIL, THERE EXISTS A RANGE OF PRICES WITHIN WHICH THE JOINT-SELLING BODY MAY CHOOSE, IF NOT FREELY AT LEAST WITH A DEGREE OF FREEDOM, ITS SALES POLICY AND, WITHIN CERTAIN LIMITS, ITS LIST PRICES . THE POWER TO DETERMINE PRICES RESULTING FROM THIS IS EXTENDED AND STRENGTHENED BY THE INTRODUCTION OF A FUEL-OIL TAX IN THE APPLICANTS' PRINCIPAL SALES AREA . THE CONCLUSIONS TO BE DRAWN FROM THESE REMARKS ARE IN FACT CONFIRMED BY THE DIFFERENCE IN PRICE ALTERATIONS IN THE VARIOUS CATEGORIES AND TYPES OF COAL ACCORDING TO THE EXTENT TO WHICH THEY ARE IN COMPETITION WITH FUEL-OIL . THE ABOVE CONSIDERATIONS LEAD TO THE VIEW THAT THE JOINT-SELLING ORGANIZATION WOULD HAVE SOME POWER TO DETERMINE PRICES . THIS CONCLUSION IS THE OPPOSITE OF THAT OF THE APPLICANTS WHO STATE THAT 'A PERSON WHO MERELY FORMULATES THE EFFECTS OF MOVEMENTS OF THE MARKET ON PRICE LEVELS DOES IN FACT FIX PRICES, BUT CANNOT DETERMINE THEM'; ( APPLICATION, PARAGRAPH 26 ) AND THAT IF A CARTEL CONTROLLING A SUBSTANTIAL PART OF PRODUCTS ON THE MARKET IS 'MADE TO BRING ITS PRICE POLICY INTO LINE WITH COMPETING PRODUCTS, ONE CANNOT SPEAK OF THE CARTEL AS CONTROLLING THE MARKET'; ( APPLICATION, PARAGRAPH 22 ) AND AGAIN, THAT 'A CARTEL CAN EXERT A DECISIVE INFLUENCE ON THE MARKET ONLY WHEN IT IS IN NO WAY SUBJECT TO THE LAW OF SUPPLY AND DEMAND,' THAT IS TO SAY, WHEN IT DOMINATES THE MARKET ( APPLICATION, PARAGRAPH 24 ). FROM THESE QUOTATIONS IT APPEARS THAT IF THE APPLICANTS' VIEW THAT THE JOINT-SELLING ORGANIZATION DOES IN FACT CREATE A POWER TO FIX PRICES IT STILL DOES NOT GIVE THE POWER TO DETERMINE THEM SINCE, AS IT DOES NOT DOMINATE THE MARKET, IT WOULD BE UNABLE TO FIX PRICES AT LEVELS APPRECIABLY DIFFERENT FROM THOSE IMPOSED BY THE LAWS OF SUPPLY AND DEMAND . THUS IN 'FIXING' LIST PRICES THE JOINT-SELLING ORGANIZATION WOULD HAVE NO OTHER COURSE THAN TO ASCERTAIN MARKET PRICES, THESE BEING 'DETERMINED' BY THE LAW OF SUPPLY AND DEMAND, AND MORE SPECIFICALLY, WITHIN THE FRAMEWORK OF THAT LAW, BY THE PRICES AT WHICH PRODUCTS OF OTHER MINING AREAS OF THE COMMUNITY, COAL FROM THIRD COUNTRIES AND FUEL-OIL ARE OFFERED ON THE MARKET . P . 108 THIS CONCEPTION INEVITABLY RECALLS THE ATOMISTIC MARKETS DESCRIBED BY LIBERAL ECONOMICS, WHERE EACH PARTICIPANT WAS CONFRONTED BY A MARKET PRICE WHICH HE COULD IN NO WAY AFFECT BY HIS OWN POLICIES . THIS WAS A STATE OF PERFECT COMPETITION WHERE, CLEARLY, NO SUPPLIER HAD THE POWER TO 'DETERMINE' A PRICE, BUT WAS FACED SIMPLY WITH THE OPTION TO SELL OR NOT TO SELL AT THE MARKET PRICE, OR TO VARY THE VOLUME OF HIS SUPPLY IN TERMS OF MARKET PRICES WHEN HIS PRODUCTION COSTS VARIED WITH THE QUANTITY PRODUCED . TO SEE THE COAL OR ENERGY MARKETS AS PERFECTLY COMPETITIVE ATOMISTIC MARKETS WOULD BE TO IGNORE REALITIES . THEY ARE NOT FORMED BY A SWARM OF INDIVIDUAL PRODUCERS, UNABLE TO AFFECT MARKET CONDITIONS BY THE WEIGHT OF THEIR INDIVIDUAL SUPPLIES, BUT ARE MADE UP RATHER OF A LIMITED NUMBER OF UNDERTAKINGS, WHOSE PRODUCTION IS ALMOST ALWAYS SUBSTANTIAL . IT IS THE NATURE OF THINGS WHICH MAKES OF THE ENERGY MARKET A MARKET IN WHICH LARGE UNITS CONFRONT ONE ANOTHER . IN SUCH A MARKET THE PRODUCERS ARE NOT SPARED COMPETITION FROM THEIR RIVALS BUT THEY DO EXERT BY THEIR VERY SIZE A CONSIDERABLE INFLUENCE UPON MARKET PRICES AND ARE BY THIS VERY FACT FORCED INTO A GENUINE SALES POLICY . THE APPLICANTS THEMSELVES DESCRIBE THEIR BEHAVIOUR THUS : 'A CONSIDERABLE PROPORTION OF RUHR COAL IS SOLD ACCORDING TO PRICE LISTS, WITH SPECIAL REBATES ( LONG-STANDING CUSTOM AND QUANTITY REBATES ). THESE REBATES, WHICH BENEFIT ALL CONSUMERS WHO FULFIL THE REQUIRED CONDITIONS, ARE A FORM OF REDUCTION OF LIST PRICES ADAPTED TO MEET THE COMPETITIVE SITUATION . THIS ALTERATION OF LIST PRICES AFFECTS A CONSIDERABLE PROPORTION OF THE TOTAL TONNAGE SOLD BY THE JOINT-SELLING AGENCY . FURTHER, TO RETAIN TRADITIONAL MARKETS, DISPOSE QUICKLY OF CURRENT STOCK AND IF POSSIBLE TO REDUCE THE HIGH LEVEL OF STOCKS, THE RUHR TOOK ADVANTAGE OF THE POSSIBILITY OF ALIGNING ITS PRICES ON THOSE OF THIRD COUNTRIES, IN THE FIRST PLACE, AND, TO A LESSER DEGREE, ON THOSE OF OTHER COALFIELDS OF THE COAL AND STEEL COMMUNITY . TO THIS MAY BE ADDED BUYING-IN OPERATIONS CARRIED OUT ON THE BASIS OF A MUTUAL AID PROGRAMME AND OTHER POLICIES EFFECTED TO A LARGE EXTENT WITHIN THE FRAMEWORK OF THE SO-CALLED "ERHARD PLAN"; IN THIS CONNEXION IT MAY BE OBSERVED THAT THE HIGH AUTHORITY ITSELF REFERRED TO THIS BUYING-IN AS "A POSTERIORI ALIGNMENTS",' ( APPLICATION, PARAGRAPH 35 ). P . 109 THE APPLICANTS CLAIM STILL MORE STRONGLY THAT THE COAL PRICES OF THIRD COUNTRIES ARE NOT MARKET PRICES BUT ARTIFICIAL PRICES WHICH ARE FIXED STRATEGICALLY TO CONQUER MARKETS . THE APPLICATION GOES ON TO CLAIM THAT 'IT IS NOT POSSIBLE WHEN FIXING PRICE LISTS FOR RUHR COAL TO TAKE INTO ACCOUNT POLITICAL DUMPING PRICES, AS PRACTISED BY THE STATES OF THE EASTERN BLOC, OR THE PRICES OF COAL IMPORTED FROM THIRD COUNTRIES WHERE TRANSPORT CHARGES COVER ONLY 60% OF THE COSTS OR ( AS, FOR EXAMPLE, ENGLISH COAL ) WHEN THE EXPORT PRICES ARE CONSIDERABLY BELOW THOSE OF THE ( ENGLISH ) HOME MARKET' ( APPLICATION, PARAGRAPH 35 ). THE APPLICANTS ALSO STATE THAT THE PRICES OF FUEL-OIL ARE SPECIALLY FIXED SO AS TO SUPPLANT COAL FROM ITS SALES AREAS, AND THUS ARE DETERMINED ACCORDING TO COAL PRICES IN THESE AREAS; THEY SAY IN PARTICULAR THAT 'THE OIL INDUSTRY PRACTISES SUBSTITUTION COMPETITION ( GENERALLY BELOW COST PRICE )'; THAT ALREADY 'THE FACT THAT THE PRICES OF FUEL-OIL, AS DISTINCT FROM THE LIST PRICES OF COMMUNITY COAL, ARE COMPLETELY INDIVIDUAL AND VARIABLE, NATURALLY MAKES IT IMPOSSIBLE TO COMPETE WITH FUEL-OIL BY A GENERAL LOWERING OF LIST PRICES . IT IS INTERESTING TO NOTE HERE THE VIEW EXPRESSED BY THE COAL COMMITTEE OF THE O.E.E.C . IN ITS FOURTH REPORT ( THE COAL INDUSTRY IN EUROPE, 1960, HEADINGS 5 AND 31 ). THE COMMITTEE REMARKS THAT THE COMPETITIVE ADVANTAGE OF PETROLEUM PRODUCERS OVER COAL PRODUCERS IS THAT THE FORMER KEEP THEIR PRICES FLEXIBLE, ARE ABLE, ACCORDING TO THE STATE OF THE MARKET, TO DISCRIMINATE BETWEEN DIFFERENT CONSUMERS, AND CAN, ACCORDING TO CIRCUMSTANCES, SACRIFICE THEIR PRICES IN ORDER TO CONQUER TO ANY EXTENT THE MARKET' ( APPLICATION, PARAGRAPH 35 ). MORE GENERALLY THE APPLICANTS ASSERT THAT 'IT IS IMPOSSIBLE TO STATE IN ABSTRACTO WHETHER OR NOT THERE IS ANY DOMINATION OF THE MARKET . SUCH A QUESTION DEPENDS MORE ON THE ACTUAL STATE OF THE MARKET, AND PARTICULARLY UPON THE STRUCTURE OF COMPETITION IN THE ENERGY MARKET .' ( APPLICATION, PARAGRAPH 32 ). THESE QUOTATIONS SHOW CLEARLY THAT WITHIN THE ENERGY MARKET NONE OF THE SELLERS IS CONFRONTED WITH UNCHANGEABLE PRICES BUT EACH SEEKS TO 'DETERMINE' THEM AND TO A LARGE EXTENT, ALTHOUGH THIS VARIES ACCORDING TO CIRCUMSTANCES, SUCCEEDS . THUS IT CAN BE SEEN FROM THE FOREGOING ANALYSIS THAT THE COMPETITION WHICH IN FACT EXISTS IN THE ENERGY MARKET IS UNLIKE THAT OF THE ATOMISTIC MARKETS, WHERE EACH PARTICIPANT IS FACED WITH A MARKET PRICE WHICH IT CANNOT INFLUENCE BY ITS OWN BEHAVIOUR, BUT IS A COMPETITION BETWEEN LARGE UNITS, EACH ENDOWED WITH A CERTAIN POWER OVER PRICES AND THE ABILITY CONSCIOUSLY TO ADAPT THEIR MARKET BEHAVIOUR TO THAT OF THEIR PARTNERS . SUCH A MARKET IS CHARACTERISTIC OF A STATE OF OLIGOPOLY, WHICH IS ALSO ONE OF IMPERFECT COMPETITION . THE THEORY OF IMPERFECT COMPETITION HAS NOW PASSED INTO DOCTRINE, WHICH SEES IN OLIGOPOLY A SYSTEM WITHIN WHICH EACH SELLER, WHEN MAKING HIS ECONOMIC CALCULATIONS, TAKES INTO ACCOUNT THE PROBABLE MARKET BEHAVIOUR WHICH HIS COMPETITORS WILL ADOPT IN RESPONSE TO HIS OWN DECISIONS, FOR THE SIMPLE REASON THAT WHAT THEY DO IS A DIRECT REACTION TO WHAT HE DOES . THE CONTRAST OF THIS WITH A STATE OF PURE COMPETITION IS FUNDAMENTAL IN THIS MATTER . A NOTED AUTHOR DEFINES THIS OLIGOPOLISTIC MARKET AS A MARKET IN WHICH 'PRICES CAN BE FIXED BY THE DIFFERENT UNDERTAKINGS THEMSELVES, AND THUS BECOME A PART OF THEIR MARKET STRATEGY '. HE ADDS THAT 'IT IS PARTICULARLY IMPORTANT THAT THE COMMUNITY'S POLICY WITH REGARD TO COMPETITION SHOULD AIM TO LIMIT THE STRATEGIC SCOPE WHICH ANY SUCH OLIGOPOLIES MAY HAVE IN THE MARKET '. ( BULLETIN OF THE EUROPEAN ECONOMIC COMMUNITY, N . 7-8, JULY-AUGUST 1961, PP . 21 AND 22 ). P . 110 THESE ANALYSES APPLY EXACTLY TO THE COAL MARKET AND EVEN TO THE ENERGY MARKET AS THE APPLICANTS THEMSELVES HAVE DESCRIBED IT . IN SUCH MARKETS THE POWER TO FIX PRICES IS NOT FACED, AS IT WOULD BE IN THE CASE OF PURE COMPETITION, WITH THE IMMOVABLE BARRIER OF MARKET PRICES, BUT HAS AN ILL-DEFINED AREA OF MANOEUVRE WITHIN WHICH THE AUTHORITY FIXING THE PRICES MAY CHOOSE THE LEVEL AT WHICH IT ESTABLISHES THEM . THE FIXING OF PRICES WITHIN THIS ILL-DEFINED AREA IS A PRODUCT OF THE STRATEGY OF THE LARGE UNITS WHICH CONFRONT EACH OTHER IN THE MARKET, NOT THE RESULT OF A SIMPLE ASCERTAINMENT BY THEM OF A MARKET PRICE, WHICH IS ITSELF DEPENDENT ON THEIR DECISIONS . IF THE FUEL MARKET IS INDEED AN OLIGOPOLY, OFFERING TO ITS PARTICIPANTS THE OPPORTUNITY OF A REAL ECONOMIC STRATEGY, IT MUST NECESSARILY CONFER A CERTAIN POWER TO DETERMINE PRICES . THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY TAKES INTO ACCOUNT THE TECHNICAL AND COMMERCIAL EVOLUTION WHICH CONSTANTLY AUGMENTS THE SIZE OF ECONOMIC UNITS, INCREASINGLY GIVING THE COAL AND STEEL MARKETS THE CHARACTER OF AN OLIGOPOLY . THE PROVISIONS OF ARTICLE 65 ( 2 ) AND ARTICLE 66 ( 2 ) EVIDENCE THE INTENTION OF THE AUTHORS OF THE TREATY NOT TO RESTRICT THIS EVOLUTION, PROVIDED THAT IT SERVES THE OBJECTIVES OF THE TREATY AND PARTICULARLY THAT IT ENABLES THE NECESSARY MEASURE OF COMPETITION BETWEEN THE LARGE UNITS TO EXIST, IN ORDER TO SAFEGUARD THE BASIC REQUIREMENT OF ARTICLE 2, NAMELY, THAT THE COMMUNITY SHALL 'PROGRESSIVELY BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY, WHILE SAFEGUARDING CONTINUITY OF EMPLOYMENT AND TAKING CARE NOT TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE ECONOMIES OF MEMBER STATES .' P . 111 THIS INSISTENCE UPON THE SAFEGUARDING OF A CERTAIN MEASURE OF COMPETITION WITHIN A SYSTEM OF IMPERFECT COMPETITION, SUCH AS THAT OF THE COAL AND STEEL MARKET, HAS CLEARLY INSPIRED ONE OF THE CONDITIONS IMPOSED BY ARTICLE 65 ( 2 ) UPON JOINT-SELLING AGREEMENTS QUALIFYING FOR AUTHORIZATION, NAMELY, THAT THEY SHOULD NOT GIVE THE UNDERTAKINGS CONCERNED THE POWER TO DETERMINE THE PRICES OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET . THE TREATY GOES EVEN FURTHER THAN ARTICLE 65 IN ITS CONCERN NOT TO STAND IN THE WAY OF NECESSARY EVOLUTION SINCE IT GOES SO FAR AS TO ACKNOWLEDGE IN ARTICLE 95 THAT 'FUNDAMENTAL ECONOMIC OR TECHNICAL CHANGES' COULD 'MAKE IT NECESSARY TO ADAPT THE RULES FOR THE HIGH AUTHORITY'S EXERCISE OF ITS POWERS '. ON 20 JULY 1961, THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS OF THE EUROPEAN COAL AND STEEL COMMUNITY SOUGHT THE OPINION OF THE COURT PURSUANT TO ARTICLE 95 ON A DRAFT AMENDMENT TO THE TREATY, DESIGNED TO COUNTER FUNDAMENTAL AND PERSISTENT CHANGES IN MARKETING CONDITIONS IN THE COAL AND STEEL INDUSTRIES . THE COURT NOTED IN ITS OPINION 1/61 OF 13 DECEMBER 1961 THAT 'IN PRINCIPLE, ARTICLE 95 DOES NOT PREVENT AN ADAPTATION OF THE RULES RELATING TO THE POWERS CONFERRED BY ARTICLE 65 UPON THE HIGH AUTHORITY BY A MODIFICATION OF ARTICLE 65 ( 2 ), WITH A VIEW TO GIVING THE HIGH AUTHORITY POWER TO AUTHORIZE EITHER AGREEMENTS OF A DIFFERENT NATURE FROM THOSE PROVIDED FOR IN THE PRESENT PARAGRAPH, BUT WITH A SIMILAR OBJECTIVE, OR AGREEMENTS OF THE SAME NATURE AS THOSE PROVIDED FOR IN THE PARAGRAPH PRESENTLY IN FORCE BUT WITH A DIFFERENT OBJECTIVE, OR, FINALLY, AGREEMENTS DIFFERING BOTH IN NATURE AND OBJECTIVE', AND THAT 'AMENDMENTS TO THE FIRST PART OF THE FIRST SUBPARAGRAPH OF PARAGRAPH ( 2 ) WHICH ALLOW THE AUTHORIZATION OF TYPES OF AGREEMENT NOT PROVIDED FOR BY THE PARAGRAPH NOW IN FORCE AND OF ARTICLE 65 ( 2 ) ( A ), CONCERNING THE OBJECTIVES OF AGREEMENTS QUALIFYING FOR AUTHORIZATION, MAY CONSTITUTE AN ADAPTATION OF THE RULES RELATING TO THE HIGH AUTHORITY'S EXERCISE OF ITS POWERS OF AUTHORIZATION, BUT ON THE OTHER HAND THE DELETION OF ARTICLE 65 ( 2 ) ( C ) WOULD GO BEYOND THE BOUNDS OF ANY ADAPTATION .' P . 112 THUS THE COURT HAS SHOWN THAT IT INTENDS, IN ACCORDANCE WITH THE APPLICANTS' WISHES, TO 'INTERPRET AND APPLY THE RULES OF LAW, BEARING IN MIND THE NEW ECONOMIC SITUATION ( AND ) ...THE NEW BURDEN IMPOSED BY THE DYNAMICS OF ECONOMIC LIFE', ( REPLY, PARAGRAPH 53 ) BUT THAT IT CANNOT ACCEPT THE ELIMINATION OF THE BASIC REQUIREMENTS OF ARTICLE 65 ( 2 ) ( C ), DESIGNED AS THEY ARE TO SAFEGUARD, IN THE OLIGOPOLISTIC MARKET IN COAL AND STEEL, THE MEASURE OF COMPETITION WHICH IS INDISPENSABLE IN ORDER THAT THE BASIC REQUIREMENTS SET FORTH IN ARTICLES 2, 3, 4 AND 5 OF THE TREATY MAY BE OBSERVED AND IN PARTICULAR THAT 'THE MAINTENANCE AND OBSERVANCE OF NORMAL COMPETITIVE CONDITIONS' MAY CONTINUE TO BE ENSURED . THE HIGH AUTHORITY CONSIDERED THAT THIS INDISPENSABLE MEASURE OF COMPETITION WAS ADEQUATELY ENSURED BY THE THREE JOINT - SELLING AGENCIES AUTHORIZED IN ITS DECISIONS N.S 5/56, 6/56 AND 7/56 OF 15 FEBRUARY 1956, BUT NOT BY THE CONTINUED EXISTENCE OF THE COMMON MACHINERY AUTHORIZED BY DECISION N . 8/56 OF 15 FEBRUARY 1956 OR BY THE JOINT-SELLING ORGANIZATION PROHIBITED BY DECISION N . 16/60 OF 22 JUNE 1960 . THE COURT SEES NO REASON FOR ACCEPTING THAT, BY INSISTING UPON MAINTAINING THIS MINIMUM MEASURE OF COMPETITION WITHIN THE RUHR COALFIELD, THE HIGH AUTHORITY HAS FAILED TO OBSERVE THE LETTER AND THE SPIRIT OF THE TREATY, AND PARTICULARLY THE OBLIGATIONS IMPOSED UPON IT BY ARTICLES 2, 3, 4 AND 5 . ONCE IT HAS BEEN FOUND THAT THE JOINT-SELLING ORGANIZATION HELD A CERTAIN POWER TO DETERMINE PRICES, THE ISSUE IN THE PRESENT APPLICATION IS REDUCED IN THE LAST ANALYSIS TO THE QUESTION WHETHER THIS POWER APPLIES TO A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET . THIS QUESTION WILL BE EXAMINED IN PARAGRAPH ( C ) BELOW . ( B ) THE CONCEPT OF 'THE CONTROL OF MARKETING' IN RECITAL N . 13 OF THE PREAMBLE TO DECISION N . 16/60, THE HIGH AUTHORITY FINDS THAT, IN TRANSFERRING TO THE JOINT-SELLING ORGANIZATION THE SOLE RIGHTS OVER THE MARKETING OF THEIR PRODUCTS ( EXCEPT FOR THE RESERVED TONNAGES ), THE UNDERTAKINGS CONCERNED GIVE TO SUCH AN ORGANIZATION THE POWER TO DIRECT, ACCORDING TO THE REQUIREMENTS OF ITS OWN SALES POLICY, THE TONNAGES TRANSFERRED TO IT FOR SALE . P . 113 THIS FINDING IS ENOUGH TO SHOW THAT BY SECURING CONTROL OF A PART OF THE COAL AND COKE IN THE COMMON MARKET, THE UNDERTAKINGS CONCERNED ACQUIRE THE POWER TO DETERMINE THE QUANTITIES, AREAS AND BUYERS WHICH THEY CONSIDER ESSENTIAL IN ORDER TO PREVENT THE PENETRATION OF COMPETITORS INTO THEIR MAIN SALES AREA . THE CONTROL EXERCISED BY THE SALES AGENCY ON THE POLICY OF PRICE ALIGNMENT ALSO GIVES THE AGENCY THE OPPORTUNITY, BY DIRECTING SUPPLIES AT WILL EVEN IN COMPARATIVELY SMALL AMOUNTS IN RELATION TO ITS TOTAL SALES, OF AFFECTING PROFOUNDLY THE MARKETING OF ITS COMPETITORS, AND THEREBY REINFORCES THE CONTROL OF ITS OWN MARKETING . IT IS IMPOSSIBLE NOT TO SEE IN THIS POWER TO REGULATE MARKETING, WHICH IS VESTED IN THE JOINT-SELLING AGENCY, A CERTAIN POWER OF CONTROL OVER MARKETING WITHIN THE MEANING OF ARTICLE 65 ( 2 ) ( C ). THE COMPLAINTS FORMULATED BY THE APPLICANTS, WHICH RAISE THE ISSUE OF THE INCLUSION OF THE RESERVED QUANTITIES ARE NOT OF SUCH A NATURE AS TO ALTER THIS QUALITATIVE CONCLUSION OF THE COURT, AS WILL BE SHOWN IN PARAGRAPH ( C ) BELOW . ( C ) THE CONCEPT OF 'A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET' THE FINDING THAT A JOINT-SELLING AGREEMENT GIVES THE UNDERTAKINGS CONCERNED A POWER TO DETERMINE PRICES OR TO CONTROL MARKETING IS NOT SUFFICIENT IN ITSELF TO ENABLE THE HIGH AUTHORITY TO REFUSE AUTHORIZATION . IT MUST FURTHER BE SHOWN THAT THIS POWER APPLIES TO A SUBSTANTIAL PART OF THE GOODS IN QUESTION WITHIN THE COMMON MARKET . IT IS, THEREFORE, NECESSARY TO EXAMINE WHETHER THIS IS THE CASE WITH REGARD TO THE POWER TO DETERMINE PRICES AND TO CONTROL MARKETING WHICH THE JOINT-SELLING ORGANIZATION IN THIS CASE HAS BEEN SHOWN TO HAVE . THE TREATY DOES NOT LAY DOWN THE CRITERIA FOR ESTABLISHING WHETHER A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION IS SUBJECT TO THE CONTROL OF THE JOINT-SELLING ORGANIZATION . THE PROVISIONS OF THE TREATY TAKEN AS A WHOLE POINT TO THE VIEW THAT A POWER TO DETERMINE PRICES OR TO CONTROL MARKETING APPLIES TO A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET WHEN THE FULL EXTENT OF THE EFFECTS WHICH IT EXERTS IS NOT OF SECONDARY OR MINOR IMPORTANCE BUT IS SUCH AS TO JEOPARDIZE, WITHIN THE COMMON MARKET, THE MEASURE OF COMPETITION INTENDED BY THE TREATY, AND THE TASK WHICH ARTICLES 2, 3, 4 AND 5 ASSIGN TO THE COMMUNITY . P . 114 IT HAS BEEN SHOWN ALREADY THAT THERE ARE NO GROUNDS FOR CLAIMING THAT THE TREATY INTENDED TO PROHIBIT THE EXISTENCE OR CREATION OF THE LARGE PRODUCTION OR SALES UNITS WHICH ARE A CHARACTERISTIC FEATURE OF THE COAL AND STEEL MARKET . IT WOULD BE UNREALISTIC AND CONTRARY TO THE REQUIREMENTS OF TECHNICAL DEVELOPMENT TO WISH TO REESTABLISH AN ATOMISTIC MARKET WHICH WOULD BE QUITE UNTHINKABLE IN THE CASE OF THE PRODUCTS AT ISSUE HERE . THE PROBLEM TO BE RESOLVED IN THIS SECTION IS : AT WHAT POINT DOES THE VOLUME OF OFFERS FOR SALE UNDER THE CONTROL OF A CARTEL CONSTITUTE A SUFFICIENTLY SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET FOR IT TO RENDER THE COMPETITION EXISTING WITHIN THE MARKET IMPERFECT, THEREBY JEOPARDIZING THE AIMS OF THE TREATY? THE HIGH AUTHORITY GAVE, AT RECITAL N . 9 OF THE PREAMBLE TO DECISION N . 16/60, A TABLE SPECIFYING FOR THE YEAR 1959 THE PROPORTION OF TONNAGES OF COAL, BRIQUETTES AND COKE SOLD ON THE COMMON MARKET BY THE APPLICANTS . THESE PROPORTIONS VARY BETWEEN 26.1% AND 43.7 %. THE APPLICANTS CONTEST THESE FIGURES ON THE GROUNDS IN PARTICULAR THAT CERTAIN RESERVED TONNAGES AND SUPPLIES TO ASSOCIATED UNDERTAKINGS HAVE BEEN WRONGLY INCLUDED IN THE CALCULATIONS . THE COURT CANNOT UPHOLD THE APPLICANTS ON THIS ISSUE . IT WAS CORRECT TO INCLUDE THESE FACTORS IN THE STATEMENT OF QUANTITIES SOLD, SINCE NO OTHER BASIS OF CALCULATION WOULD HAVE GIVEN AN ACCURATE PICTURE OF THE PART PLAYED BY THE APPLICANTS IN THE MARKET AS A WHOLE . EVEN IF IT WERE TO BE CONCEDED THAT A SUBSTANTIAL PART OF THE RESERVED TONNAGES IS NOT INVOLVED IN ESSENTIALLY COMMERCIAL TRANSACTIONS, SUCH A CONCESSION WOULD NOT INVALIDATE THE ACCURACY OF THE HIGH AUTHORITY'S CALCULATIONS . IN FACT, TONNAGES IN THE SAME CATEGORY DERIVING FROM OTHER PRODUCERS IN THE COMMON MARKET SHOULD IN THIS CASE EQUALLY BE EXCLUDED FROM CONSIDERATION AND THIS WOULD ALTER THE ABSOLUTE VALUE OF THE FIGURES, BUT WOULD ONLY ALTER TO A NEGLIGIBLE EXTENT THE PROPORTION OF TONNAGES SOLD WHICH IS THE SOLE IMPORTANT FACTOR IN THIS CASE . IN ANY CASE THE COURT CANNOT ACCEPT THE APPLICANTS' ARGUMENT WHICH WOULD EXCLUDE FROM THEIR CALCULATIONS DELIVERIES TO ASSOCIATED UNDERTAKINGS . IN FACT, AS THE HIGH AUTHORITY HAS RIGHTLY HELD IN THE CONTESTED DECISION AND THROUGHOUT THESE PROCEEDINGS, THE QUESTION CONCERNS QUANTITIES THE PRICES OF WHICH ARE FIXED, WHETHER DIRECTLY OR INDIRECTLY, BY THE JOINT-SELLING ORGANIZATION . WHATEVER IMPORTANCE IS ATTACHED TO CRITICISMS OF THE FIGURES SUBMITTED BY THE HIGH AUTHORITY, THE RESULTS SHOW CLEARLY, EVEN IF CERTAIN CORRECTIONS WERE TO BE MADE TO THEM, THAT THE QUANTITIES SOLD BY THE JOINT-SELLING ORGANIZATION CONCENTRATE UNDER THE DIRECT OR INDIRECT INFLUENCE OF THIS ORGANIZATION A SUBSTANTIAL FRACTION OF THE PRODUCTS IN QUESTION SOLD IN THE COMMON MARKET AND THAT THEREFORE THE POWERS VESTED IN THIS ORGANIZATION EXTEND TO A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION IN THE MARKET . P . 115 HOWEVER, IN THE COMPETITION OF LARGE INDUSTRIAL UNITS, SUCH AS CHARACTERIZE THE COMMON MARKET IN COAL, THE INFLUENCE OF A SALES ORGANIZATION DEPENDS NOT SO MUCH UPON THE VOLUME OF PRODUCTS IT CONTROLS AS UPON THE VOLUMES CONTROLLED BY THE RIVAL ORGANIZATIONS WHICH CONFRONT IT ON THE MARKET . IT IS APPROPRIATE TO NOTE IN THIS RESPECT THAT ARTICLE 66 ( 2 ) PROVIDES THAT, IN ORDER TO MEASURE THE EFFECTS OF A CONCENTRATION, EITHER AS A BARRIER TO EFFECTIVE COMPETITION OR AS A MEANS OF EVADING THE RULES OF COMPETITION INSTITUTED UNDER THE TREATY, THE HIGH AUTHORITY SHALL 'TAKE ACCOUNT OF THE SIZE OF LIKE UNDERTAKINGS IN THE COMMUNITY, TO THE EXTENT IT CONSIDERS JUSTIFIED IN ORDER TO AVOID OR CORRECT DISADVANTAGES RESULTING FROM UNEQUAL COMPETITIVE CONDITIONS '. THIS OBLIGATION DEMONSTRATES THE IMPORTANCE WHICH THE TREATY ATTACHES TO THE RELATIVE SIZE OF UNDERTAKINGS IN THE STRUCTURE OF COMPETITION . THE FACT, HOWEVER, THAT THE HIGH AUTHORITY SCARCELY TOUCHED UPON THIS POINT IN THE RECITALS OF THE PREAMBLE TO ITS DECISION N . 16/60 IS OF LITTLE CONSEQUENCE . IT IS IN FACT WELL KNOWN THAT, FOR EXAMPLE, THE COAL PRODUCTION OF THE UNDERTAKINGS GROUPED TOGETHER IN THE SALES ORGANIZATION IN QUESTION IS ROUGHLY FOUR TIMES AS GREAT AS THAT OF ANY OTHER COALFIELD IN THE COMMON MARKET AND IS MORE THAN TWICE THE TOTAL PRODUCTION OF CHARBONNAGES DE FRANCE, THE ONLY ORGANIZATION OF COMPARABLE SIZE . THE ABOVE-MENTIONED ORDERS OF MAGNITUDE, WHATEVER CORRECTION OF DETAIL MIGHT BE NECESSARY, LEAVE NO DOUBT THAT THE 'SIZE' OF THE RUHR COALFIELD, TAKEN AS A WHOLE, IS IN MARKED DISPROPORTION TO THAT OF OTHER FIELDS WITHIN THE COMMUNITY . SUCH DISPROPORTION CANNOT BUT BESTOW GREAT INFLUENCE UPON THE SALES ORGANIZATION WHICH CAUSES IT IN THE COMPETITION BETWEEN THE LARGE UNITS WHICH CONFRONT EACH OTHER WITHIN THE COMMON MARKET . DECISION N . 16/60, REFUSING AUTHORIZATION FOR THE ASSOCIATION OF THE THREE JOINT-SELLING AGENCIES OF THE RUHR COALFIELD INTO A SINGLE SALES ORGANIZATION, HAD THE EFFECT OF RESTORING THE RUHR SALES ORGANIZATIONS TO A SIZE WHICH NO DOUBT DIFFERS FROM THAT OF THE LARGEST SALES ORGANIZATIONS IN THE COMMUNITY OUTSIDE THE RUHR COALFIELD, BUT IS OF THE SAME ORDER OF MAGNITUDE . P . 116 THESE FINDINGS CONSTITUTE A MORE THAN ADEQUATE BASIS FOR HOLDING THAT, IRRESPECTIVE OF ANY STATISTICAL SUBTLETIES, THE SALES ORGANIZATION WHICH WAS THE SUBJECT OF DECISION N . 16/60 CONTROLS A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET . B - ERRONEOUS FINDINGS OF FACT THE APPLICANTS SUBMIT THAT THE HIGH AUTHORITY'S DECISION WAS FOUNDED ON INACCURATE OR INCOMPLETE FINDINGS OF FACT . IT HAS STATED ITS VIEW IN PARAGRAPH ( C ) ABOVE, WITH REGARD TO THE MOST IMPORTANT OF THEM, NAMELY THOSE RELATING TO THE INCLUSION OF CERTAIN RESERVED TONNAGES AND DELIVERIES TO ASSOCIATED COMPANIES IN THE CALCULATION OF QUANTITIES SOLD BY THE SALES ORGANIZATION . OTHER SUBMISSIONS, FOR EXAMPLE THOSE WHICH REFER TO THE INFLUENCE OF PRICES OF COAL FROM OTHER COALFIELDS, OF IMPORTED COAL, OF ANTHRACITE AND FUEL-OIL ON THE RUHR PRICES, BELONG TO THE REALM OF THE EVALUATION AND INTERPRETATION OF ECONOMIC CIRCUMSTANCES RATHER THAN OF FINDINGS OF FACT . OTHERS, SUCH AS THAT RELATING TO THE DIFFERENCE BETWEEN THE FIGURE OF 47% AND THAT OF 53% AS THE PERCENTAGE OF COMMUNITY COAL SOLD WITHIN THE FEDERAL REPUBLIC, RAISE DISCREPANCIES TOO TRIFLING TO CALL FOR ANY ALTERATION IN THE CONCLUSIONS WHICH HAVE BEEN REACHED ON THE BASIS OF THE CONTESTED FIGURES . FINALLY, OTHERS SUCH AS THAT REFERRING TO THE HIGH AUTHORITY'S FAILURE TO CONSIDER THE 'TREND' OF ECONOMIC DEVELOPMENT, MIGHT POSSIBLY BE OF RELEVANCE TO THE QUESTION OF INSUFFICIENCY OF THE STATEMENT OF REASONS FOR THE DECISION, BUT NOT TO THAT OF AN ERRONEOUS FINDING OF FACT . MOREOVER, THIS ARGUMENT COULD NOT HAVE ALTERED THE DECISION SINCE IN 1960 THE TREND OF ECONOMIC DEVELOPMENT WAS CONTRARY TO WHAT IT HAD BEEN IN 1959 ( REJOINDER, PARAGRAPH 41 ). IN ANY CASE NO CONCLUSION CAN BE DRAWN FROM THIS AREA OF DISAGREEMENT . THE APPLICANTS THEMSELVES REMARK, HAVING ACCUSED THE HIGH AUTHORITY OF ERRORS IN ASCERTAINING THE PROPORTION OF COAL IMPORTED FROM THIRD COUNTRIES THAT 'THE LEVEL OF THE IMPORT QUOTA IS NOT OF DECISIVE IMPORTANCE...AND IN FACT THE AMOUNT OF IMPORTS UNDER THE QUOTA DOES NOT FULLY REFLECT THE INFLUENCE EXERTED UPON THE MARKET BY COAL FROM THIRD COUNTRIES' ( APPLICATION, PARAGRAPH 35 ). THE COURT FULLY ACCEPTS THIS VIEW BUT GIVES IT A WIDER APPLICATION . IT ALSO AGREES WITH THE APPLICANTS WHEN THEY CONSIDER 'THAT A PURELY QUANTITATIVE VIEW IS INCOMPATIBLE WITH THE SPIRIT OF ARTICLE 65 ( 2 ) ( C ) AS IT APPEARS IN THE LIGHT OF THE OBJECTIVES OF THE TREATY' ( REPLY, PARAGRAPH 50 ). P . 117 IT HAS BEEN SHOWN THAT WHAT ARTICLE 65 ( 2 ) ( C ) DESCRIBES AS A 'SUBSTANTIAL PART' IS NOT A PURELY QUANTITATIVE CRITERION, BUT A REFERENCE TO THE WHOLE COMPETITIVE STRUCTURE OF THE COMMUNITY . SUCH ERRORS AND OMISSIONS IN THE FINDINGS OF FACT AS ARE REFERRED TO BY THE APPLICANTS DO NOT IN FACT OR IN LAW AFFECT DECISION N . 16/60, AND CANNOT THEREFORE CONSTITUTE GROUNDS FOR ITS ANNULMENT . C - MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY THE APPLICANTS SUBMIT THAT THERE HAS BEEN A MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY IN THE FAILURE BY THE HIGH AUTHORITY TO CONSIDER THE INTERDEPENDENCE OF VARIOUS FACTORS AFFECTING RUHR COAL, WHICH THEY DESCRIBE AS A 'MANIFEST VIOLATION OF AN ELEMENTARY ECONOMIC PRINCIPLE '. THIS REVEALS A 'CLEAR FAILURE TO OBSERVE THE PROVISIONS OF THE ECSC TREATY' ( APPLICATION, PARAGRAPH 35 ( 4 ) ( D )) IN THE 'GROSS VIOLATION OF THE PRINCIPLES OF LOGIC' REPRESENTED BY THE GENERAL APPRECIATION SET OUT IN RECITAL N . 12 ( C ) OF THE PREAMBLE TO DECISION N . 16/60 . THE COURT HAS NOT BEEN ABLE TO FIND IN THE PART OF THE PREAMBLE REFERRED TO ABOVE THE INFRINGEMENTS OF THE TREATY WHICH THE APPLICANTS CLAIM TO HAVE DISCOVERED, NOR CAN IT FIND THEREIN THE RESULT OF A MANIFEST FAILURE TO OBSERVE THE TREATY . ACCORDINGLY, IT CANNOT ON THESE GROUNDS ORDER THE ANNULMENT SOUGHT BY THE APPLICANTS .
4 . INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT THE APPLICANTS SUBMIT UNDER THIS HEAD THAT INSUFFICIENT REASONS WERE STATED FOR THE DECISION . THE COURT HAS STATED IN SECTIONS 2 ( A ) ( B ) AND ( C ) OF THIS JUDGMENT THAT THE GROUNDS SET OUT IN THE PREAMBLE TO DECISION N . 16/60 ADEQUATELY JUSTIFIED IN LAW THE CONCLUSIONS BASED UPON THEM . THE COURT IS UNABLE TO FIND IN THE PREAMBLE TO DECISION N . 16/60 THE CONTRADICTIONS WHICH THE APPLICANTS CLAIM TO HAVE DISCOVERED . THE COURT CONSIDERS THE STATEMENT OF REASONS IN DECISION N . 16/60 TO BE DECISIVE . ALL OTHER CONSIDERATIONS, INCLUDING THOSE WHICH THE APPLICANTS REGARD AS CONTRADICTORY OR INADEQUATE, MUST BE CONSIDERED AS SUPERFLUOUS AND CANNOT THEREFORE JUSTIFY THE ANNULMENT OF THAT DECISION . FOR ALL THESE REASONS THE APPLICATION MUST BE DISMISSED .