C-8/66

1. When a Community (institution un­ and that application of Article 85 (3) equivocally adopts a measure the is not justified. The Commission legal effects of which are binding must consider the facts of the case, on those to whom it is addressed and apply to 'them the terms of and affect their interests, this Article 85 (1) (3). It must expressly measure by its very nature con­ find that the agreement in question stitutes a decision. contains all the constituent elements 2. The Commission must proceed by prescribed by Article 85 (1) and way of a decision when it excludes that application of Article 85 (3) is an agreement from the benefit of an not justified. The Commission must exemption from a fine under Article give reasons for this decision with 15 (5) of Regulation No 17 and sufficient clarity to allow the Court declares on the basis of Article 15 and all parties concerned to ascertain (6) of the said Regulation that whether the provisions mentioned Article 85 (1) of the Treaty applies, above have been applied correctly.

In Joined Cases

8/66

SOCIÉTÉ Anonyme Cimenteries CBR Cementbedrijven NV, SOCIÉTÉ Anonyme Ciments D'OBOURG, Societe Anonyme des Ciments Portland LIÉGEOIS,

1 — Languages of the Case: German, French and Dutch. 2 — CMLR.

JUDGMENT OF 15. 3. 1967 — JOINED CASES 8 TO 11/66

11/66

The undertakings:

Alsen'sche PORTLAND-CEMENT-FABRIKEN KG, Ost-West-Straße, 69, Hamburg 11, Anneliese PORTLAND-CEMENT- und WASSERKALKWERKE AG, Ennigerloh i .W., Postfach 65,

CIMENTERIESvCOMMISSION

BECKUMERPORTLAND-ZEMENTWERKBOMKEundBLECKMANN,Beckum,Bez. Munsteri.W.,Postfach31, BONNERPortland-ZementwerkAG,Zementfabnk,Oberkassel(Siegkreis), BreitenburgerPortland-Cement-Fabrik,Burchardstraße8,Hamburg1, BuraniaPORTLANDZEMENT-undKalkwerkeGmßH,Büren,i.W., DyckerhoffZementwerkeAG,Wiesbaden-Biebrich,Postfach9139, ElsaCEMENT-undKalkwerkeAG,Neubeckumi.W.,Postfach65, EversPORTLANDZEMENT-undKalkwerkeGmbH,Erwittei.W., 'FELSENFEST'WestfälischePORTLAND-ZEMENT-undKalkwerkeGMBH, Erwittei.W., 'FORTUNA'Portland-ZementwerkeGMBH,Gesekei.W.,Postfach6, PORTLAND-undCementfabrikGermaniaAG,MisburgbeiHannover, Postfach29, HannoverschePortland-CementfabrikAG,MisburgbeiHannover, Bahnhofstraße2, Portland-ZementwerkeHeidelbergAG,Heidelberg,Postfach1328, Portland-Cementwerk'HELLBACH'FeldmannundCo.,Beckum,Bez. Munsteri.W., PortlandCementfabrikHemmoor,Basbeck,Postfach20, PORTLAND-ZEMENT-undKalkwerkeHesslingundCo.,KG,Beckum, Bez.Münsteri.W., Holsteinische Portland-Cement-Fabrik GMBH, Burchardstraße8, HamburgI, Zementwerk'ILSE'Friedrich-WilhelmMohn,Paderborn,Postfach560, W.KalthönerPORTLAND-ZEMENT-undKalkwerke,Ennigerloh,i.W., Postfach25, Klöckner-WerkeAG,HutteBremen,Postfach5023,Bremen18, CMersmannPortlandZementwerk,Beckum,Bez.Münsteri .W.,Post­ fach36, HermanMILKEKG,Soesti.W.,Postfach404, MontanzementVERTRIEBS-GMBH,Düsseldorf1,Postfach5731, PORTLAND-ZEMENT-UNDKalkwerk'Nord',RuhrundCo.,Beckum,Bez. Munsteri.W., nordcementAG(V/Hnorddeutscheportlandcement-fabrikenAG), Postfach4540,Hannover1, Portland-Zementwerke'NORDSTERN'JosefSpenner,Erwittei.W., PHŒNIXZementwerkeKrogbeumker,KGBeckum,Bez.Münsteri.W., E.RenfertKG,Beckum,Bez.Münster,Postfach30, E.SchwenkZementwerkeGMBH,Ulm/Donau,Hindenbergring11/15, TeutoniaMisburgerPortland-Cementwerk,MisburgbeiHannover, Postfach49, TubagTRASZ-ZEMENT-undSetinwerkeAG,KruftbeiAndernach,

THE COURT

composed of: A. Trabucchi (President of Chamber), President, R. Monaco, President of Chamber, A. M. Donner, R. Lecourt (Rapporteur) and W. Strauß, Judges,

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

CIMENTERIES v COMMISSION

JUDGMENT

I — Facts their representatives and officials of the Commission, followed by an exchange On 6 July 1956 74 undertakings (44 of letters. In particular on 11 June 1965 German, 28 Belgian and 2 Dutch) a meeting took place at which the pro­ entered into an agreement called the tagonists seem to have drawn different conclusions about the result which cer­ 'Noordwijks Cement Accoord' (herein­ after referred to as 'the NCA'). tain proposed amendments to the This agreement divided up the market clauses of the agreement notified might in respect of the supply of cement and have had on the validity of the said clinker by means of quotas. It also agreement. On 14 December 1965 the Commission contained clauses concerning the build­ ing of new cement works, the collective decided to pursue 'the matter in writing fixing of prices and conditions of sale, and to send to the parties to the agree­ obligations as to exclusive sales and ex­ ment notices under Article 15 (6) of clusive purchases, and certain prohibi­ Regulation No 17. For this purpose the Commission conferred on the Presi­ tions on exports. The last-mentioned aspects of this dent of the Working Party on Com­ agreement formed the subject-matter of petition, Mr von der Groeben, authority a later agreement, which is not in issue to assign to the Director General for in the present proceedings, made be­ Competition the task of signing and tween the members of the original cartel despatching the said notices. on the one hand and the 'trade organiza­ On 3 January 1966 the Director tion concerned on the other. General for Competition sent a register­ On 31 October 1962 the NCA agree­ ed letter which after describing the ment was notified to the EEC on Form agreement in question, ended with the B in accordance with the provisions of following paragraphs: Regulation No 17. 'The Commission has subjected the On 8 April 1965 the member under­ agreement in question to a preliminary takings of the NCA received, directly examination. It has reached the con­ or indirectly, a letter signed by Mr von clusion that 'the requirements for apply­ der Groeben, a member of the Com­ ing Article 85 (1) of the Treaty are met mission. This letter stated that it did and that there is no justification for not constitute a notice under Article applying Article 85 (3) to the agree­ 15 (6) of Regulation No 17, and ment in the form in which it has 'been amongst other matters informed the notified. This preliminary examination undertakings to which it was addressed is notified to you by the Commission that the agreement notified was prob­ pursuant to Article 15 (6) of Regula­ ably prohibited under Article 85 (1) tion No 17 (First Regulation imple­ and could not be authorized under menting Articles 85 and 86 of the Article 85 (3). The said letter advised Treaty, dated 6 February 1962, Official that it was desirable to strike out a Journal of the European Communities, certain number of clauses of the agree­ 1962, No 13, p. 204 et seq.). ment, and invited the undertakings to The Commission takes this opportunity state their views. of informing you that the provisions of At the request of the undertakings a Article 15 (5) of the aforesaid Regula­ number of meetings took place between tion No 17, whereby the application

I should be obliged if you would let In its statement of defence relating to me know within a period of six weeks the joined cases the defendant has con­ (from the receipt of this letter) whether tended that the Court should: you have ceased to apply the agreement '— dismiss the applications as inadmis­ in question.' sible or alternatively as unfounded; This notice forms the subject-matter of — order the applicants to pay the the applications made to the Court costs'. which were joined by an order of the In their reply the applicants have main­ Court of 4 May 1966. tained their previous conclusions; furthermore the applicants in Case 8/66 have claimed that the Court should: II — Conclusions of the parties 'alternatively, as a preliminary step, make an order for the holding of either In Case 8/66 the applicants have the one or the other of the two inquiries claimed in their application, that the mentioned in paragraphs 36 and 37 Court should: hereof (inquiries into the nature and scope of the discussions held prior to '1. declare the present application admissible and well-founded; 3 January 1966). In its rejoinder to the joined cases the 2. annul the decision of 3 January 1966 in its entirety; defendant has "proposed" that "Rene Jaume", a director, be summoned to 3. order the defendant to pay the costs'. give evidence'. In Cases 9 and 10/66 the applicants have claimed, in their applications, that the Court should: III — Digest of the sub­ 'first: missions and argu­ annul the decision contained in the ments of the parties letter; second: A — Admissibility declare that Article 15 (6) of Regula­ tion No 17 of the Council is inapplic­ The applicants in Cases 9, 10 and able, and acordingly annul the measure 11/66 have stated first of all that what contained in the letter of 3 January they seek from a decision of the Court 1966; is 'a definitive ruling on the question third: whether the contested notice does or in any event annul the measure con­ does not produce the legal effect intend­ tained in the letter of 3 January 1966 ed by the defendant, namely that as and order the defendant to pay the from the date of that letter any further costs'. implementation of the amended "Noord­ In Case 11/66 the applicants have wijks Cement Accoord" by the parties claimed, in their application, that the may be penalized by a fine'. The said Court should: applicants consider that in view of '1. annul the decision of the Commis­ Article 173 of the Treaty one of the sion of 3 January 1966 relating to following alternative propositions must

be true in their case: either the con Commission will impose a fine should tested notices are to be considered as it be decided not to grant an exemp decisions producing legal effects and the tion'. The notice does not bind those applications axe admissible, or these to whom it is addressed to refrain applications are inadmissible and the from carrying out their agreement and said notices are not decisions and in it does not therefore impose any legal capable therefore of producing legal obligation on them, nor does it con effects. clusively affect any individual interest. The applicants cite the case-law of the It is merely an opinion which the Court (judgments in Joined Cases 1 undertakings may freely disregard.

The system created by which agreements are valid until such Article 85 and by Regulation No 17 time as a decision finds to the contrary) (especially Articles 1, 6, 7, 15 (5) and and therefore should have been subject (6)) proves this. Thus it would be to review by the Court under Article contrary to the Treaty for a cartel to 173 (2) of the Treaty. To accept the be considered as valid without reserva contrary view would be tantamount to tions during the period prior to the agreeing that Article 15 (6) of Regula Commission's decision.

The second paragraph of Article 173 of the validity of such as agreement is not Treaty; neither the form of these definitive 'because the agreement would notices—a letter which was neither become definitively void, with effect signed nor transmitted by a member of from the entry into force of Regulation the Commission—nor their content No 17, should the Commission refuse (that of a measure not producing to grant an exemption under Article definitive legal effects and not con 85 (3). Thus the applicants have stituting the final stage of the internal advanced a proposition contrary to the administrative procedure) raises any legal situation created by the Treaty doubts on this point. The notice under when they claim that the undertakings Article 15 (6) of Regulation No 17 concerned must observe agreements leaves 'open the question whether the restricting competition during the period

preceding the Commission's decision on or may not be followed by a fine. a notification. So far as civil law is In their reply the applicants in Case concerned the notice does not affect 8/66 have first of all described the the validity of an agreement notified to rules laid down by Article 15 of Regula the Commission. tion No 17, and expressed the opinion A comparison between Regulations Nos that when an agreement is duly notified 17/62 and 99/63 proves that a clear the legal position of this agreement is distinction exists between mere 'notices' that it is provisionally valid from the from the Commission and 'decisions' point of view of civil law (judgment made by it concerning cartels. in Case 13/61). From the point of As part of the existing system the pro view of fines the effects of notification visions of Article 15 (5) and 15 (6) of preclude any discussion of the validity Regulation No 17 are of special signi of the agreement. ficance. When it appears that an In fact if the parties proceed to notifica infringement is so serious that an tion in due and proper form they know exemption seems out of the question, as a certainty that they cannot be fined the Commission should use Article 15 in respect of a period prior to the

Commission can only apply Article 15 Finally it is argued that 'since the (6) in instances of 'manifest and unmis Commission must issue a notice under takable' infringements of the Treaty. Article 15 (6) before imposing a fine If this is correct there are three periods for an action taken after notification and to consider: a period of total and un before the decision relating to the assailable immunity running from the application of Article 85 (3), the appli date of the agreement to the date when cants could complain of any defects in notice is given of the decision taken this notice before the Court of Justice by the Commission pursuant to Article by contesting the decisions imposing 15 (6); a period between the provisional fines on them'. Furthermore, by using decision of the Commission and the final such a procedure the applicants could, decision, during which there is no in reliance upon Article 184, invoke longer any immunity; finally there is the inapplicability of Article 15 (6) as the period starting when notice of the an incidental plea. In the present pro Commission's final decision is given. ceedings this is impossible since there During this latter period the immunity is no decision but only a notice based has also gone, but the nature of the on a preliminary examination which may offence to be penalized is different

(duringthesecondperioditisthe effectsbecausethechangeinthelegal implementationoftheagreementin positionoftheundertakingsconcerned questionwhichcan,iftheCommission isirreversible.Thereasonforthisis sochooses,bepenalizedunderArticle thattheseundertakingssufferadefini­ 15(2)(a);duringthethirdperiodit tivelossoftheimmunitywhichthey isthefailuretoobeytheCommission's enjoyedpriortothenotice,andthis decisionwhichispenalizedunder weakenstheirpositionbecausethat Article16). positionchangesfromoneofsecurity AnoticeunderArticle15(6)mustof toinsecurityandtheundertakingsare itsverynaturebeameasurewhichcan provisionallyheldtobeinthewrong. becontestedbyanapplicationtothe Itwouldbeanuntenableargumentto Court.ForinemployingArticle15 saythatthesameauthoritytakesa (6)theCommissioniswieldingapower decisionwhenitgivesitsopinionas whichundertakingshavegoodreason regardsaninfringementoftheTreaty tofear.Itdeprivestheundertaking andwhenitfixestheamountofthe concernedofthestatuswhichhadpro­ fine,butthatitdoesnottakeadecision tecteditfromallfinesandimposeson whenpursuanttoamerepreliminary itanotherstatuswhichlaysitopen examinationitdeclaresthattheinfringe­ tothepossibilityofbeingfined.Thus mentis'manifest,unmistakableand thenoticepresupposesanunfavourable indisputable'. preliminaryopinion.Admittedlyafine Theapplicantshavealsostatedthata doesnotautomaticallyfollowbutthis considerationofthewordingofthe doesnotalterthefactthatinorderto legalprovisionsconcernedleadtothe imposeafineforwhathashappened sameconclusions.Ifthenoticeprovided priortothefinaldecision,theCom­ forbyArticle15werenotadecision missionmust,beforedoingso,stateits thewordingofthisArticleshouldhave viewsinthemannerlaiddownunder saidso,havingregardtothegeneral Article15(6)andstatethemonthe descriptiongivenbyArticle9ofRegula­ basisofthisprovision.IftheCom­ tionNo17('decision')toanyresolu­ missioncouldissuethisfirstjudgment tionsoftheCommissionconcerning withouthavingtojustifyit,theposi­ theapplicationofArticle85.Theuse tionoftheundertakingtowhichitis oftermssuchas'preliminaryexamina­ addressedwouldbeseriouslyaffected. tion'and'oftheopinion'donotmean Fortheguaranteesattachingtothefinal thatthereisnodecision.Aninterim decisionwouldfoeofnoavailbecause decisioninjudicialproceedings,which oftheintimidatingeffectsofthenotice. istypicallyprovisionalinnature,can ItwouldbeillogicalfortheCommission beappealedagainstwhenitputsa tobeabletoexerciseitspowersbased partyatadisadvantage,andtheexpres­ onArticle15(6)withoutbeingsubject sion'to'beoftheopinion'mayvery toanysupervisionbytheCourt. wellrefertoanexpressionofintention. Thecase-lawshowsthatwhenthe ThefactthattheAdvisoryCommittee Commissionusesthesepowersitis neednotbeconsultedbeforetheCom­ takingadecision.FortheCourthas missionappliesArticle15(6)isofno infactdecidedthatthetestfordeter­ consequencebecausecertainmeasures miningwhetherameasurecanfoecon­ whichareundeniablydecisions(Articles testedbeforeitisnotaformalone, 11(5)and14(3)ofRegulationNo17) butistobefoundinthelegaleffects canalsobetakenwithoutthiscom­ thatthismeasureproduces(therele­ mittee'sbeingconsulted.Finally,the vantcasesarecitedintheoriginating referencetoRegulationNo99/63is applicationsinCases9to11/66).The notrelevant.Thusthelegalprovisions noticedoesproducedefinitivelegal citedinthestatementofdefencedo

notcontainanythingwhichsupports Theapplicantshavestressedthefact theCommission'sarguments.Onthe thatinasubsequentactionnoreliance otherhandthelegalprovisionswhich couldbeplacedonArticle184ofthe theCommissiondoesnotmention Treatyasregardsthenoticesbecause stronglycontradictitsarguments.Thus, Article184onlyappliestoregulations forexample,Article3(3)ofRegula­ andnottodecisions.Theypointout tionNo17envisagestheuseofrecom­ thatthefactthatthenoticecouldbe mendations.Sincethereisnomeasure subjectedtoreviewlater—supposinga whichishalfwaybetweenarecommen­ fineweretobeimposed,apossibility dationandadecision,themeasureof envisagedbythedefendantitself—does whichnoticewasgivenunderArticle notnecessarilyprovethatthepresent 15(6)canonlybeadecision.What applicationispremature. makesthisparticularlyobviousisthat Asregardstheinfringementsofpro­ eventhemeasuresbywhichtheCom­ ceduralrequirementstheapplicants'have missionmayrequireanundertakingto allegedthatArticles2and11ofthe furnishinformationortosubmititself Commission'sRegulationof9January toaninvestigation—measureswhichdo 1963havebeeninfringed. notanticipatethefinaldecisioninany TheapplicantinCase11/66have way—aredecisionswhichcanbecon­ statedthattheysharetheopinionsput testedbeforetheCourt.However,such forwardandsupportedinthereplies measuresarelesslikelytoaggravate inCases8to10/66. thesituationoftheundertakingscon­ Theyhaveemphasizedinparticularthe cernedthanisanoticeunderArticle systemoflegalprotectionestablished 15(6). bytheTreatyandhavecomplainedthat inthepresentcase,thewordingofthe theCommissionhasnotexplaineditself letterof3January1966,inparticular onthissubject.Theyhavearguedthat thepenultimateparagraphthereof, theCommissionisclaimingtheright provesthatthesubject-matterofthe totakemeasuresotherthanthosemen­ decision,whichisinfactwhatitis, tionedinArticle189,andissimul­ takeseffectimmediatelyandthatthe taneouslyrelyingonthesecondpara­ administrationdoesnotinanyway graphofArticle173,theeffectofwhich reservetoitselfthepossibilityofre­ isthatnomeasureswhichdonotcon­ consideringitsposition. stitutedecisionswithinthemeaningof TheapplicantsinCase9and10/66 Article189(andinparticular'notices' haveadvancedverysimilarargumentsto underArticle15(6)ofRegulationNo thoseputforwardbytheapplicantsin 17),maybecontestedbeforetheCourt. Case8/66.Theyfilloutandaddde­ ThustheCommissionisinfringingthe tailtotheargumentsintheirapplica­ elementaryprincipleaccordingtowhich tions,andstressthatthecontested theuseofaprocedureforwhichthe measureadverselyaffectsthembecause lawdoesnotprovidecannothavethe itintroducesanewelementinlegal effectofreducingtheprotectionavail­ relationshipswhichplacesthemina ablefromtheCourtforthosecon­ lessfavourablelegalpositionthan'be­ cerned.InrealitytheCommissionis fore.TheysaythattheCommissionis merelytryingtoexcludeanyreviewof nolongerfreetotakeadecisionas thelegalityofitsactionbytheCourt. regardsthelegalpositionthuscreated, Inassertingthatitwillonlymakeuse sinceitcouldonlyrestoretheprevious ofthepossibilitiesavailabletoitunder situationbywithdrawingthemeasure Article15(6)inparticularlyserious andthereforethismeasurecontainsall cases,itissettingitselfupasaltsown thesubstantialcharacteristicsofade­ judgeofhowfarthelimitsonits cision. powersaretoberespected,andthisis

another way of dispensing with all legal to the fines mentioned in Article 15 (2), guarantees. and the reason for this is the very When the quasi-penal nature or the fact of notification. provisions of the law on cartels con The applicants have mentioned the con cerning fines is considered, the argu sequences in civil law which notices ment that review by the Court should similar to the ones which they have only start after sanctions have been received might have; they have also imposed is contrary to the laws of all mentioned the conflicts which such

If the Com subject to review by the Court. This is mission's system were followed it would as it should foe, as is proved by com raise the objective doubt whether there parative law and by the spirit of the is the risk of a fine or not. The case- Community system as already expressed law of the Court of Justice (Judgment to a certain degree in the case-law of in Case 13/61 [1962] E.C_R_ 45) takes the Court. the view that the principle of legal cer Finally the applicants have taken up the tainty is a rule of law to be respected points in the statement of defence re in the application of the Treaty. lating to the procedure under Article As regards the definitive nature of the 184, and have argued that the objective contested measure, the Commission's of the present application is not an ab line of reasoning requires acceptance of stract test of legality, 'but is an applica the concept that measures are only de tion based on the second paragraph of cisions when they are the culmination Article 173, and is brought against the of an administrative procedure taken as notices at issue.

JUDGMENTOF15.3.1967—JOINEDCASES8TO11/66

personstowhomtheywereaddressed undertakingsfrominfringingthepro tomakepayments.Thejudgmentscited hibitionlaiddownbyArticle85(1) bytheapplicantsinCases9and10/66 throughinadvertenceandtodrawtheir onlyregardedasdecisionsthoseadmin attentiontotheriskswhichmaybe istrativemeasureswhichconferrightsor incurredunderthecivillawasregards imposedutiesonthosetowhomthey restrictionsoncompetition.TheCom areaddressed.Thisinterpretationis missionhasstatedthatifsanctionsare confirmedbyexamplescitedbythe imposedlater,thenoticescanthenbe applicantsinCase11/66.Ontheother subjected,togetherwiththepreliminary handitwouldneitherbeinaccordance procedureasawhole,toreviewbythe withtheTreatynorwiththecase-law Court,actingwithunlimitedjurisdic oftheCourtofJustice(inparticular tion,atthesametimeascanthede thejudgmentinCase54/65of16June cisiontoimposeasanction.Theobliga 1966)toconsideranyadministrative tionsofundertakingsariseunderArticle

risetothethreatofafine,orthat berStates. thereisaninfringementoftheprinciple Asregardsthenatureofthenoticesof nullapoenasinelege,orthatthesaid 3January1966,thedefendanthas Article15(5)diveststheprohibitionset maintaineditspointofviewaccording outinArticle85(1)ofitsstatusas towhichthesaidnoticesdonotsatisfy alegalobligation.InCase13/61,the thetestlaiddownbythecase-lawof CourtofJusticedidnotdeclarethata theCourtfordecisions.First,these retroactivecomingintoforceofthe noticesdonotproduceanylegaleffect prohibitionandthusthepossibilityof withinthemeaningofthecase-lawand runningtheriskofafinewasimproper

tocarryoutlegalmeasuresnotpro thisnullitymight'beremovedretro videdforbyArticle189oftheTreaty. actively.Evenifithadtobeadmitted Ithasmerelyassertedthatthenotice thatthenoticesbringaboutlegaleffects, doesnotsatisfythetestforadecision. theotherrequisitesofadecisionare

not met. The external form of the state of affairs in which the Court of notices alone is enough to prove that Justice would have to examine the legal the defendant did not intend to adopt ity of an opinion of the Commission, a decision. based on a preliminary examination, at Referring to the wording of Regulations a time when the Commission had still Nos 17/62 and 99/63 the defendant has not taken a definitive decision on the emphasized that as regards the exemp application of Article 85 (1) and (3) or tion provided for by Article 85 (3), the on the imposition of a fine. French and Dutch texts of Regulation As regards the application or Article 184 No 17 use words corresponding to the of the Treaty, the defendant has re German word 'Entscheidung' (decision). minded the Court that this provision The fact that the German text uses the does not open up any additional avenue word 'Erklärung' (declaration) can ap

In such a case, the Court that to apply those rules of a decision refusing to grant an exemp procedure which are in force for de tion could foe contested before the Court cisions to notices under Article 15 (6) of Justice toy the undertakings in accord would inevitably lead to a state of affairs ance with the general provisions of the in which such a notice could scarcely Treaty. If, however, the Commission de be given sooner than a decision bringing cided to grant an exemption or if the a procedure to a final close. This would Court of Justice annulled any decision particularly be so where undertakings refusing so to do, the undertakings could delay the conclusions of this procedure. bring an action for damages against the Furthermore, the defendant has argued Community under Articles 178 and 215 that, contrary to the opinion of the ap of the Treaty. plicants, when Regulation No 17 came into force the Commission was not re B — The substance of the case quired to desist from applying its pro visions to already-existing restrictions on The applicants have pleaded that the competition, for amongst these might be notices of 3 January 1966 are void on found particularly harmful agreements the basis of a series of arguments, which from the point of view of the Common can be grouped under three headings of

Furthermore experience official of the EEC stating that he is act proves that it is not too difficult to make ing within his duly authorized powers, a restriction on competition seem rela they are decisions addressed to the ap tively innocuous when it is notified. Ac plicant by a person other than the com cording to the defendant, the interpre petent authority. The said notices are tation of the applicants would lead to a clearly intended to produce legal effects,

and therefore the judgment in Case to Article 15 (6) of Regulation No 17. 28/63 of 5 December 1964 (Rec. 1963, The notices do not describe the true p. 481) should be applied to them. Since economic effect of the agreement of the notices are given under Article 15 which complaint is made. Therefore the (6) of Regulation No 17, they should applicants are placed in a position in have had regard to Article 163 of the which they have no means of knowing Treaty and to Article 12 of the Com

Commission, acting as a body. No dele it is opposed to them. gation of the power to sign has been A second infringement of an essential published. It may be deduced from the procedural requirement arises from the Commission's own minutes that the fact that in disregard of Article 10 (3) Director-General for Competition took it of Regulation No 17 the Commission, upon himself to choose the content and which is required to hear the Advisory form of the notices. It is possible to Committee on Restrictive Practices and point out still further irregularities in the Monopolies, composed of representatives Commission's own procedure. Thus the of the Member States, failed to observe German text of the notices is simply a this essential formality, which applies translation which is, the applicants have equally to decisions taken under Article argued, contrary to Article 12 of the 15 of Regulation No 17.

More particularly, 15 (6) of Regulation No 17, and the the course of the negotiations proves that notices do not comply with the case-law offers made by the parties to the NCA of the Court on the subject of giving to make amendments to this agreement reasons for decisions in general (judg and to the supplementary distribution ments in Cases 2/56 of 20 March 1957, agreements have not been taken into Rec. 1957, p. 36; 18/57 of 20 March account.

CIMENTERIES v COMMISSION

In rules of procedure (published in the fact the applicants were heard and had Official Journal, 1963, p. 181/63). Not meetings with the competent officials at withstanding the fact that under this the stage when enquiries were being Article it is usually the President who made and following a letter of 8 April gives notice of resolutions adopted by 1965 signed by Mr von der Groeben. the Commission, this power may be Nevertheless the concessions made dur delegated or suib-delegated under Article ing the course of these negotiations did 27 of the rules of procedure. In any not affect the substantial content of the event the Commission's own procedure agreement. Thus upon completing its does not affect the rights of undertak preliminary examination the Commis ings concerned by the measures taken sion took the view that none of the re by the Commission. On this point it strictions on competition listed in its should, however, also be pointed out notices of 3 January could be the sub that the file was submitted to the Com ject of an exemption under Article 85 mission in the two working languages (3). (French and German) and that it already The applicants in Cases 9, 10 and 11/66 contained a proposal for a notice to be have claimed alternatively that, on the signed by the Director-General for Com basis of Article 184 of the Treaty, petition. should it be held that Article 15 (6) of As regards the complaint concerning Regulation No 17 does give the Com infringement of essential procedural re mission power to take a decision, then quirements, the defendant has expressed the said Article 15 (6) is inapplicable. the opinion that reasons need not be Accordingly they have claimed that the stated for a notice given under Article notices of 3 January 1966 therefore lose 15 (6), as they should be for decisions their legal basis and that they should concluding a procedure. Even for the be annulled. The applicants base this latter, the case-law accepts the proposi alternative claim on an infringement by tion that it is not necessary to refute the the Council, the author of Regulation objections of the persons concerned, ox No 17, of Article 189 of the Treaty in

JUDGMENTOF15.3.1967—JOINEDCASES8TO11/66

apreliminaryexaminationandbythe C—Costs factthatthenotificationofsuchare­ strictioncannotconferarighttopractise Theapplicantshaveclaimedthatthe it. defendantshouldbeorderedtobear Theapplicantshaveclaimedinthe thecostseveniftheirapplicationsbe furtheralternativethatifitisheldthat heldinadmissibleonthegroundthatthe thenoticesatissuecanproducelegal contestedmeasuresareinstruments effects,thentheyshouldbeannulled havingnorecognizedlegalexistence. forlackofcompetenceandinfringe­ Suchanorderforcostswouldbejusti­ mentofanessentialproceduralrequire­ fiedonthebasisthatthenoticeshad ment. theappearanceofdecisions. Thedefendantreplieswiththesame Thedefendanthasclaimedmatthe argumentsasthosewhichithasalready applicantsshouldbeorderedtobear putforwardwhendealingwiththe thecostsbecausethenoticeswerenot principalcomplaints. andcouldnotbedecisions.

Groundsofjudgment

The effect of the measure of 14 December 1965 and 3 January 1966 was that the undertakings ceased to be protected by Article 15 (5) which exempted them from fines, and came under the contrary rules of Article 15 (2) which thenceforth exposed them to the risk of fines. This measure deprived them of the advantages of a legal situation which Article 15 (5) attached to the notifi­ cation of the agreement, and exposed them to a grave financial risk. Thus the said measure affected the interests of the undertakings by bringing about a distinct change in their legal position. It is unequivocally a measure which produces legal effects touching the interests of the undertakings concerned and which is binding on them. It thus constitutes not a mere opinion but a decision. Any doubt which might be raised by the question whether the noti­ fication of the said decision was made in proper form in no way alters the nature of that decision and cannot affect the admissibility of the application.

It is also necessary to consider whether the two requirements under Article 15 (6) of Regulation No 17 concerning 85 (1) and Article 85 (3) of the Treaty consecutively do not necessarily imply that the Commission must proceed by way of a decision.

Finally, the procedure under Article 15 (6) calls for a decision within the meaning of the Treaty subject to the legal guarantees which the Treaty pro­ vides, all the more so because it is not disputed that the said procedure leads in practice to the question whether there clearly exists such a serious infringe­ ment of the prohibition laid down by Article 85 (1) that an exemption under Article 85 (3) appears to be out of the question.

Neither the fact that the word 'decision' is not used in Article 15 (6), nor the fact that the procedure provided for therein is of a preliminary nature justifies the conclusion that the Commission is empowered to proceed by a mere opinion, especially since the words 'deliver an opinion' are not found in the said provision either. The silence of the text in a matter which affects the protection of the rights of individuals cannot be construed in the manner most unfavourable to them. Notwithstanding its preliminary nature, the measure by which the Commission takes a decision in such a case constitutes the culmination of a special procedure which is distinct from the procedure under which, after Article 19 has been applied, a decision on the substance of the case can be taken. Therefore it is not possible to find, either in the absence of any express reference in Article 15 (6) to one of the measures set out in Article 189 of the Treaty or in the preliminary nature of the Com­ mission's examination, sufficient grounds for excluding the necessity for a decision.

The argument that the undertakings can exercise their right to institute pro­ ceedings when the final stage of the procedure provided for by Article 6 is reached also fails. If the preliminary measure were excluded from all review by the Court, there would be no other alternative for the undertakings, how­ ever righteous their cause might be, than to take the risk of a serious threat of a fine or to terminate against their own interests an agreement which, if proceedings had been instituted, might have had a chance of escaping the

The applicants submit inter alia in support of their applications for annulment that no reasons are given for the decision.

According to the wording of the minutes of the 343rd meeting of the Com­ mission, the decision of 14 December 1965 quoted above is unaccompanied by any statement of the reasons on which it is based. The letter of 3 January 1966, by which notice of this decision was given to the parties, contains a mere summary of the agreement followed by the statement that the Com­ mission 'has reached the conclusion' that Article 85 (1) of the Treaty has to be applied and that 'there is no justification' for applying Article 85 (3). Thus there is no means of knowing from the contested decision what were the reasons for using Article 15 (6) of the Regulation. Nor is it any the more possible to check the correctness of the factors taken into account by the Commission according to which the requirements for applying Article 85 (1)

JUDGMENT OF 15. 3. 1967 — JOINED CASES 8 TO 11/66

are 'met' and with reference to which there is no justification for applying Article 85 (3).

Even though such an assessment may be explained by a concise statement of reasons in view of the preliminary nature of the procedure, the reasons must nonetheless appear from the decision itself with sufficient clarity to allow the Court and all parties concerned to ascertain whether the provisions have been applied correctly. It is not disputed that the Commission would be infringing the Treaty if it made use of Article 15 (6) of the Regulation in cases where the requirements for applying this provision were not clearly met. Such a risk of violating the Treaty thus presupposes the need for a statement of reasons so that appropriate judicial review may be carried out. Furthermore, the necessity to reach a finding that the infringement of Article 85 (1) was ob­ viously of a serious nature, far from reducing this obligation, makes it all the more imperative.

THE COURT

hereby :

I. Annuls the decision of 14 December 1965, notice of which was given to the applicant undertakings by letter dated 3 January 1966; 2. Orders the Commission to pay the costs.

Trabucchi Monaco

Donner Lecourt Strauß

Delivered in open court in Luxembourg on 15 March 1967.

Legal consideration 98

I — Admissibility of the applications 98

1. From a theoretical point of view can the notices under Article 15 (6) of Regulation No 17 be classi­ fied as decisions? 99

2. Does an infringement of essential procedural re­ quirements and of rules concerning competence mean that in this case the existence of a decision cannot be admitted? 107

II —Substance 109

III — Costs 110