C-14/68

JUDGMENT OF 13. 2. 1969 — CASE 14/68

natural justice demands that any the disparities in treatment or the previous punitive decision must be distortions which may result, for per­ taken into account in determining sons and undertakings subject to the any sanction which is to be imposed. jurisdiction of the Community, from divergences existing between the laws 3: Article 7 of the EEC Treaty which of the various Member States, pro­ prohibits each Member State from vided that these affect all persons applying its law differently on the subject to them in accordance with ground of the nationality of the par­ objective criteria and without regard ties concerned is not concerned with to their nationality.

In Case 14/68

Reference to the Court under Article 177 of the EEC Treaty by the Kammer­ gericht (Kartellsenat), Berlin, for a preliminary ruling on the interpretation of the EEC Treaty, in particular Articles 5, 7 and 85, and also of Regulation No 17 of the Council of 6 February 1962, in particular Article 9, in the action pending before that court between

1. Walt Wilhelm , Director of Farbenfabriken Bayer AG, Hahnwald, Hasengarten 31,

2. Hans Gölz , Director of Cassella-Farbwerke Mainkur AG, Frankfurt- am-Main, HammannstraBe 6,

Bundeskartellamt , Berlin,

THE COURT

composed of: R. Lecourt, President, A. Trabucchi (Rapporteur) and J. Mertens de Wilmars, Presidents of Chambers, A. M. Donner, W. Strauß, R. Monaco and P. Pescatore, Judges,

WILHELM v BUNDESKARTELLAMT

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

gives the following

I — Facts and procedure 1964 and January 1965; subsequently the Commission also included the new The facts and procedure in the present increases of 16 October 1967 among the case may be summarized as follows: complaints made against the undertak­ By an order of 28 November 1967 ings concerned in the proceedings, and the Bundeskartellamt (Federal Cartel they were informed of this by the Com­ Bureau), Berlin, fined the applicants mission during October 1967 in accord­ under head (i) of the first section of ance with Article 19(1) of Regulation paragraph 38, jointly with paragraph 1, No 17, in conjunction with Article 2 of of the GWB (Gesetz gegen Wettbewerbs­ Regulation No 99/63. beschränkungen—the German law The Commission claims that these re­ against restraint of competition of 27 peated and uniform price increases are July 1957). evidence of concerted practices within The Bundeskartellamt alleges that on 18 the meaning of Article 85(1) of the EEC July 1967 these undertakings agreed Treaty. amongst themselves, and with other The undertakings concerned alleged be­ manufacturers of dyestuffs from other fore the Berlin Kammergericht, inter Member States as well as from third alia, that the Bundeskartellamt was not countries, to raise the price of aniline competent under German law to take by 8% from 16 October 1967. This proceedings against a breach of law decision is the subject of the case pend­ which was simultaneously the subject of ing before the Kammergericht (Kartell­ parallel proceedings before the Com­ senat), Berlin. mission for infringement of Article 85(1) The Commission of the European Com­ of the EEC Treaty. munities had on its own initiative com­ By an order of 18 July 1968, entered in menced proceedings under Articles 9(3) the Court Registry on 25 July 1968, the and 3 of Regulation No 17 of 31 May Berlin Kammergericht asked the Court 1967, against four of the German under­ for a preliminary ruling under Article takings affected by the order of the 177, first and second paragraphs, of the Bundeskartellamt, as well as other ani­ EEC Treaty on the following ques­ line manufacturers from the Community tions: and third countries. These proceedings 1. Is it in accordance with Article 85(1) may, according to Article 15(2) of Regu­ and (3) of the EEC Treaty and Article lation No 17, result in the imposition 9 of Regulation No 17 of 6 February of fines. 1962 (on cartels), and with the pre­ At first the Commission proceedings vailing general principles of Community were concerned with verifying the com­ law, to apply concurrently to a situation patibility with the EEC Treaty of the capable of fulfilling the conditions set price increases for aniline of January out in Article 85(1) of the EEC Treaty

imposed by the Commission of the European Communities and by the na­ The observations submitted under tional authority with jurisdiction in car­ Article 20 of the Protocol of the Statute tel matters—in this case, the Bundes­ of the Court of Justice of the EEC may kartellamt? be summarized as follows: 3. Does Article 5 of the EEC Treaty, The first and third questions in conjunction with Article 3(f) of the EEC Treaty and with Article 9 of Regu­ The plaintiffs in the main action claim lation No 17 (on cartels) make this im­ that the general principles expressed by possible in particular because Member the EEC Treaty in Articles 3(f), 5(2) States must refrain from applying their and 7, the principle to be drawn from own law regarding competition when Article 9(3) of Regulation No 17, and the uniform legal assessment of a case the principle 'non bis in idem' all in­ would otherwise be placed at risk and/ dicate that when a situation fulfils both or when there would thereby result a the conditions for the application of distortion of competition in the com­ Article 85 of the EEC Treaty and those mon market to the detriment of those of paragraph 1 of the GWB, then it is subject to that law? exclusively the rules of Community 4. Does Article 7 of the EEC Treaty competition law which must be applied. make this impossible, in particular when According to the first, fourth and fifth the national authority with jurisdiction plaintiffs, to apply national cartel laws in cartel matters—in this case the Bun­ to cases of European importance would deskartellamt—addresses its measures create artificially specialized conditions exclusively to the nationals of its own of competition in a national market, state and thereby may place them at a thereby provoking distortion in the con­ disadvantage in comparison to the na­ ditions of competition in the common tionals of other Member States in a market contrary to Article 3(f) and comparable situation? Article 5(2) of the EEC Treaty. In accordance with Article 20 of the This incompatibility would occur not Protocol on the Statute of the Court of only when the prohibition in Article Justice of the EEC the plaintiffs in the 85(1) was applied but also where the main action together with the Govern­ Commission authorized a cartel under ments of the Federal Republic of Ger­ paragraph 3 of that Article. In the latter

case if national authorities could pro in the present instance, wholly covered hibit, under national law, the agree by the provisions of the Community ment authorized by the EEC Commis law on competition. There is no ques sion, the latter would be prevented from tion, therefore, of having to decide pursuing a uniform economic policy whether, apart from the prohibitions throughout the Community and a kind prescribed by Community law, other of island inside the common market prohibitions derived from national cartel would be created within which the ob laws may be applied to the actions com jectives of the competition policy pur plained of: the question to be answered sued would be other than those selec is which authorities are competent to ted by the Commission for the common apply the existing law on cartels to the market as a whole. plaintiffs in the main action. In all these cases the Community could According to this plaintiff, the idea that not pursue any competition policy unless the role of national law in competition the application of national law were set matters is subsidiary to that of Com aside where it was incompatible with the munity law is a dominating theme

The reference competition apply each exclusively of to the state of the law in the United the other within their respective spheres States is not conclusive because of sig of application) and of the 'double bar nificant divergences regarding the legal rier' (which holds that the cartel which concept of the cartel existing between has effects both within a Member State that country and the EEC, particularly and in trade between Member States is with regard to the approach to rules pro subject not only to Community law but viding for exceptions.

JUDGMENT OF 13. 2. 1969 — CASE 14/68

theory in the Common Market countries Article 28 of the Belgian Law of 27 has been limited to the Federal Repub­ May 1960. lic of Germany, but even in that country Nor is it possible to base the double the theory has provoked a number of barrier' theory on the supposed separa­ criticisms. The report by the Bundes­ tion of the interest protected by the tag's Economic Policy Committee on the national law from that protected by the draft law against restraint of competi­ Community laws on competition for, as tion expressly rejected the applicability the EEC Commission also concedes, no of this theory for the period following restrictive agreements on competition the entry into force of the rules imple­ affect solely trade between Member menting Articles 85 and 86 provided by States without at the same time adversely Article 87 of the EEC Treaty. affecting trade within at least one Mem­ ber State. The Spaak report (p. 55 in the French version) supports this. The main purpose of the criterion of the In addition to this, even the supporters adverse effect upon trade between Mem­ of the theory concerned acknowledge ber States is to define the limits of the

WILHELM v BUNDESKARTELLAMT

states. So, for instance, a specialization assimilated to, foreign law. agreement made between undertakings Nor would it be correct to say that from various Member States and author under German law the principle applies ized by the Commission under Article only to a penal measure adopted by the 85(3) would be frustrated completely if same power. On the contrary, support prohibited by national legislation. The can be found in the case-law of the adrninistration of a Member State would Bundesverfassungsgericht (the German thus be able to influence the direction Federal Constitutional Court) for the of Common Market competition policy argument that this principle is always simply by applying national law. If a applicable in the case of the exercise of cartel authorized by the Commission sovereign rights founded on the constitu contributes towards the realization of tional law of the Federal Republic of the Treaty's general objectives, then for Germany. However, EEC law was rati a Member State unilaterally to place at fied by the German legislature on the issue the Community's competition basis of the Constitution. policy could amount to a failure to fulfil The Governments of the Federal Repub the obligation imposed by Article 5 of lic of Germany, of the French Republic the EEC Treaty. and of the Kingdom of the Netherlands The said plaintiffs believe that certain cite Article 87(2)(e) of the EEC Treaty procedural points and, above all, the which reveals clearly that national laws principle 'non bis in idem' are also in can be applied to cases which also in opposition to the theory which they volve Community law.

E.C_R_ 585. In view of this, they draw cannot be authorized by the national the conclusion that the competent authorities. authorities must refrain from instituting The German Government considers that proceedings where there is reason to Article 85(1) is of limited scope and believe that the agreement or practice does not constitute an exhaustive set of concerned falls within the terms of rules, even for those cases it expressly Articles 85 and 86 of the EEC Treaty. covers.

JUDGMENT OF 13. 2.1969 — CASE 14/68

as the realization of the common market national law on competition, for the is concerned. In such a case the pro­ effect would otherwise be to disrupt the hibition prescribed by Community law Treaty's scheme of competition based could be disregarded. This proves—and on the principle of the co-existence, and this is also the view of the Netherlands parallel application, of national systems Government —that the public interest of of competition with the Community each Member State requires that the system. rule of Community law as it is at pres­ The three intervening Governments ent should not have exclusive effect, claim that Article 3(f) of the EEC even within its limited sphere of appli­ Treaty is not intended to establish a cation. uniform competition policy, but simply The German Government adds that to introduce a system which does not since Article 85 only seeks to safeguard distort the conditions of competition. the freedom of trade between Member As regards Article 9(3) of Regulation States against disturbances created by No 17 the German Government main­ agreements in restraint of competition, tains that this provision is not relevant its emphasis is purely on the fact of in­ to the application of the prohibitory compatibility with the common market, rules of national cartel law, for it is and it shows thereby that it is not de­ limited to setting out the conditions signed to protect those interests which governing the powers of national ad­ merit protection and which do not co­ ministrations in applying Articles 85 and incide with the concept of the common 86 of the Treaty, and says nothing as to market and that, therefore, such pro­ the power of the national authorities with tection can be left to national law. regard to the application of internal As regards the general principles of law.

WILHELM v BUNDESKARTELLAMT

Until a this provision is to mitigate the effects universal set of rules is introduced under of the prohibition pronounced in para a Community regulation, these conflicts graph 1. On the other hand, it does not must be resolved in each individual case allow the Commission to pursue an in on the basis of the general principles dependent policy on cartels by excluding of Community law. the application of the prohibitory rules On the other hand, there is usually no of law of Member States. If this were not conflict when these two sets of laws so—as the German Government points concur in prohibiting a particular course out—a national cartel could evade the of conduct. In this case, the national national anti-trust legislation by creating authorities remain competent, in prin an international connexion by taking in ciple, to take action against a restriction an undertaking from another Member of competition under national law.

ed. This consideration suffices to prevent Commission in the same individual case the applicability of Article 85(3) from have come to an end. In particular, automatically excluding national rules or national authorities may not make any measures which do not permit under decision the substance of which would takings to take advantage of it. This entail, as one of its practical effects, re conclusion is confirmed by the fact that vision of a decision already taken by in certain cases, according to the Nether the Commission in pursuance of Com lands Government, Article 87(2)(e) munity competition law. makes it possible, inter alia, to apply On a more general note the Commission Article 85(3) in such a way that its observes, however, that the fact that effect is to remove or limit the restric the undertakings concerned may, as a tions on applying it imposed by national result of the application of the national rules or measures. law of a Member State, find themselves The Commission of the EEC concedes placed at a disadvantage in relation to that, in principle, two legal systems— other undertakings situated in other

Member States and being parties to the The three Governments consider that same agreement in restraint of com the second question should be answered petition, is not sufficient by itself to in the negative. prevent the application of national The German Government says that the laws. principle 'non bis in idem' does not The distortion which might thus occur prevent the national authority from could only be eliminated by applying adopting a decision imposing a fine for Articles 100 to 102 of the EEC Treaty. a breach of national cartel law when the Commission has imposed, or may The second question impose, fines on the same parties for the same conduct.

On this argument, be contrary to this principle. the sanctions are therefore not doubled, The second, third, sixth and seventh but are merely designed to complement plaintiffs maintain that the condition one another. proposed by the German Government, Article 90 of the ECSC Treaty, more that the Commission should take into over, shows that Community law does account the fines imposed by the accept the notion that Community and Bundeskartellamt, is impossible to apply national sanctions may be applied con in practice because of the total lack of currently for the same breach. guidance to be found in the legal texts.

all parties concerned. The government claims that there is no

rule compelling the national authority of Article 5 of the EEC Treaty and of to take into account sanctions which the principle that Community law takes may be ordered by the Community precedence over national law, must not authority, but there is nothing to stop order sanctions under national cartel the authority which is the last to make law when the facts are to be evaluated its decision! from so doing. on the basis of legal criteria which are The Netherlands Government observes, identical or essentially similar in both for its part, that if a particular party national and Community law. has already suffered a sanction imposed But if, on the other hand, the Com by the national authorities under internal mission has imposed a fine and if, should law, the Community authorities would the parties appeal, the decision is con be well advised to take this into account firmed by the Court of Justice, then in deciding what sanction they should the Commission, whilst taking the view apply, and vice-versa. that the EEC Treaty does not provide The EEC Commission observes that the answer to the problem because it conflict could arise where, on the basis contains no provision similar to Article of national law, a Member State imposed 90 of the ECSC Treaty, considers, hav a penalty for conduct which under ing undertaken a comparative examina Community law, and for essentially the tion of the various principles and rules same reasons, could be the subject of a in force in each Member State, that the fine; that situation is one which might national authorities must be guided by correspond to the facts in the present a uniform criterion, that is to say, that

is one which is in harmony with the The second, third, sixth and seventh rules contained in Article 10(2) of that Regulation requiring close and constant plaintiffs in the main action consider that liaison between the Commission and if the argument that Articles 85 and 86 the national authorities. On the other apply exclusively within their own hand a counterpart of these rules is the sphere is accepted there is no need to Commission's duty to inform the answer this question, or the third ques national authorities as soon as it decides tion put by the Kammergericht. that the facts in question do not amount The first, fourth and fifth plaintiffs claim that the refusal of the Bundes to a breach of Community law on cartels, so that the authorities may be kartellamt, contrary to subparagraph 2 free to apply their own law.

JUDGMENT OF 13. 2. 1969 — CASE 14/68

Like the tion which produce effects within the other two governments, the Netherlands Federal Republic Government does not accept that the Particularly as regards the application of concept of discrimination can be used the national law on cartels to specific in the territorial sense. cases, it is not contrary to Article 7 The Commission of the EEC points out for a national administration to act, for that Article 7 contains a directly applic reasons of expediency and of the prac able prohibition which is equally tical applicability of internal law, solely capable of being used to protect against the firms principally concerned nationals of Member States from which are established in the Member measures taken by their own country.

gible. If this decision by the Bundes also to the application by a country of kartellamt is not addressed to foreign its own economic legislation. undertakings that, too, is because the The Commission concludes that in the persons in charge of those undertakings present case the Kammergericht will responsible for their participation in an have to consider, in the light of those international price-fixing agreement do principles, whether the Bundeskartellamt not tarry on German territory. treated the persons and undertakings The French Government observes that concerned in a discriminatory fashion on the 'double barrier' theory is not liable the ground of nationality, by imposing to bring about discrimination within fines only on the persons and under the meaning of Article 7 of the Treaty takings residing within the area of All it can do is to reveal the lack of application of the national provisions harmony between the various national which it has to apply.

3 Article 9(3) of Regulation No 17 is concerned with the competence of the authorities of the Member States only in so far as they are authorized to apply Articles 85(1) and 86 of the Treaty directly when the Commission has taken no action of its own. This provision does not apply where the said authorities are acting in pursuance not of the said articles but only of their internal law. Community and national law on cartels consider cartels from different points of view. Whereas Articles 85 regards them in the light of the obstacles which may result for trade between Member States, each body of national legislation proceeds on the basis of the considerations peculiar to it and considers cartels only in that context. It is true that as tie economic phenomena and legal situations under consideration may in individual cases be interdependent, the distinction between Community and national aspects could not serve in all cases as the decisive criterion for the delimitation of jurisdiction. However, it implies that one and the same agreement may, in principle, be the object of two sets of parallel proceedings, one before the Community authorities under Article 85 of the EEC Treaty, the other before the national authorities under national law.

4 Moreover this interpretation is confirmed by the provision in Article 87(2)(e), which authorizes the Council to determine the relationship between national

JUDGMENT OF 13. 2. 1969 — CASE 14/68

laws and the Community rules on competition; it follows that in principle the national cartel authorities may take proceedings also with regard to situations likely to be the subject of a decision by the Commission. However, if the ultimate general aim of the Treaty is to be respected, this parallel application of the national system can only be allowed in so far as it does not prejudice the uniform application throughout the Common Market of the Community rules on cartels and of the full effect of the measures adopted in implemen­ tation of those rules.

7 It follows from the foregoing that should it prove that a decision of a national authority regarding an agreement would be incompatible with a decision adopted by the Commission at the culmination of the procedure initiated by it, the national authority is required to take proper account of the effects of the latter decision.

8 Where, during national proceedings, it appears possible that the decision to

WILHELM v BUNDESKARTELLAMT

be taken by the Commission at the culmination of a procedure still in pro­ gress concerning the same agreement may conflict with the effects of the decision of the national authorities, it is for the latter to take the appropriate measures.

9 Consequendy, and so long as a regulation adopted pursuant to Article 87(2)(e) of the Treaty has not provided otherwise, national authorities may take action against an agreement in accordance with their national law, even when an examination of the agreement from the point of view of its compatibility with Community law is pending before the Commission, subject however to the condition that the application of national law may not prejudice the full and uniform application of Community law or the effects of measures taken or to be taken to implement it.

II — The second question

JUDGMENT OF 13. 2. 1969 — CASE 14/68

address their measures exclusively to the nationals of that state, thereby pos­ sibly placing the latter at a disadvantage in comparison with the nationals of other Member States who are in a comparable situation.

13 Article 7 of the EEC Treaty prohibits every Member State from applying its law on cartels differendy on the ground of the nationality of the parties con­ cerned. However, Article 7 is not concerned with any disparities in treatment or the distortions which may result, for the persons and undertakings subject to the jurisdiction of the Community, from divergences existing between the laws of the various Member States, so long as the latter affect all persons subject to them, in accordance with objective criteria and without regard to their nationality.

IV — Costs

14 The costs incurred by the Commission of the European Communities and by the governments, which have submitted observations to the Court, are not recoverable, and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the Kammergericht, Berlin, the decision on costs is a matter for that court.

On those grounds,

2. Article 7 of the EEC Treaty prohibits Member States from applying their laws on cartels differently on the ground of the nationality of the parties concerned, but it is not concerned with disparities in treatment resulting from divergences existing between the laws of Member States, so long as these affect all persons subject to them in accordance with objective criteria and without regard to nationality.

Lecourt Trabucchi Mertens de Wilmars

Donner Strauß Monaco Pescatore

Delivered in open court in Luxembourg on 13 February 1969.

A. Van Houtte R. Lecourt

Registrar President