C-44/69

JUDGMENT OF 15. 7. 1970 — CASE 44/69

mitted infringements other than those of periodic penalty payments. Their referred to in the notice of complaints object is to suppress illegal activity and and only takes into consideration facts to prevent its recurrence so that their on which the persons concerned have application is not restricted to current had the opportunity of making known infringements alone. The Commission's their views orally or in writing. power to impose penalties is in no way If the doubt arises as to whether com­ affected by the fact that the conduct municating documents necessary for the constituting the infringement and its defence of a party might be incompatible effect have ceased. with the requirement to protect the business secrets of other undertakings 5. For the purpose of fixing the amount- the Commission may not refuse such of the fine, the gravity of the infringement communication without first consulting is to be appraised by taking into account the latter. in particular the nature of the restrictions on competition, the number and size of 3. A gentlemen's agreement constitutes a the undertakings concerned, the respec­ measure which may fall under the tive proportions of the market controlled prohibition contained in Article 85(1) if by them within the Community and the it contains clauses restricting competition situation of the market when the infringe­ in the Common Market within the ment was committed. meaning of that article and its clauses amount to a faithful expression of the 6. In fixing the fines provided for under joint intention of the parties. Article 15 of Regulation No 17, the Commission is not required to take into 4. The penalties provided for in Article 15 account the differences existing between of Regulation No 17 are not in the nature the national revenue laws.

BUCHLER v COMMISSION

Application for the annulment or amendment of the decision of the Commission of 16 July, published in the Official Journal of the European Communities L 192 of 5 August 1969, p. 5 et seq., and relating to proceedings under Article 85 of the EEC Treaty,

THE COURT

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

Advocate-General: J. Gand

Registrar: A. Van Houtte

JUDGMENT OF 15. 7. 1970 — CASE 44/69

Chemische Industrie, Amsterdam (here­ at the option of the parties, to arbitration inafter referred to as 'Nedchem'). or to the ordinary courts of law.

scope. Following this request Boehringer of which Nedchem would, for the purposes and Nedchem concluded a new agreement of quantitative compensation, make per on 14 July 1959 excluding supplies to other iodic calculations of the deliveries in excess States of the EEC. of or below the quota of each of the under Negotiations entered into in 1959 between takings. Buchler, Boehringer, Nedchem, the group Apart from this agreement, which governed of French quinine producers (Nogentaise, the problem of Buchler's adherence to the Pointet-Girard, Taillandier and Pharmacie agreement concluded on 8 and 14 July 1959 Centrale) together with Carnegies of between Boehringer and Nedchem, another Welwyn Ltd and Lake & Cruickshank Ltd agreement was concluded on 7 April 1960 of the United Kingdom resulted in an between Boehringer, Buchler, Nedchem, agreement between all those undertakings. the abovementioned French group and the First of all on 10, 24 and 31 March 1960 two British undertakings, Carnegies and Boehringer (acting also in the name of its Lake & Cruickshank, in order to settle the abovementioned subsidiary), Buchler and conditions for the adherence of the French Nedchem (acting also in the name of all the and British undertakings to the above- abovementioned Netherlands undertakings) mentioned agreement of 10, 24 and 31 concluded an agreement providing for : March 1960, in so far as it related to quinine.

Market. Furthermore, they laid down the — the prohibition of collaboration outside principle of protection of domestic markets the Common Market with undertakings for each of the producers. The two British which were not parties to the agreement undertakings agreed not to manufacture with regard to the production or sale quinidine without the approval of the of quinine or quinidine; German and Netherlands parties and to purchase this product exclusively from the — application to be made, in case of dispute, German and Netherlands parties and to

dine. Derogations from the gentlemen's In the course of a meeting on 29 October agreements could take place only with the 1962 difficulties arose between the parties agreement of all the parties and disputes on the question of the 'bark-pool'. As a were to be settled exclusively by arbitration. preliminary condition to concluding an It was further decided that failure to comply agreement on bark, Nedchem requested the with or termination of the gentlemen's abolition of the prohibition on exporting agreements wouldautomatically beregarded bark which was in force in the Congo as failure to comply with or termination although Pharmakina, Boehringer's Congo of the formal export agreements relating to lese subsidiary, was in favour of this quinine and quinidine, and vice versa. prohibition.

signed. The association relating to the joint Lake & Cruickshank with regard to the purchase of raw materials terminated on 'bark-pool' and the fixing of the new sales 31 October 1962. quotas were contrary to the spirit of the said During a meeting on 2 May 1962 a general agreements. increase in prices was decided upon. The other members did not accept those Agreements were also concluded for the reasons and at the meeting on 14 October purchase of reserves from the American 1963, at which all the parties to the agree stockpile which the General Service Ad ment were present except Carnegies (which ministration had decided to sell. In this ceased producing quinine in the same connexion, it was decided during the month and intimated its withdrawal by meeting on 20 and 21 April 1962 that the letter of 28 October 1963), the parties quantities purchased by Nedchem would concerned reached a compromise the be divided amongst the members in a purpose and scope of which are disputed specific ratio and that in return Nedchem by the parties to the present proceedings. would receive a commission of 2%; this In the course of 1964 the abovementioned commission would be increased to 7% if the undertakings twice made joint decisions to other agreements (the export agreement and raise the price of quinine, first by 15% at the the gentlemen's agreements) were termi meeting on 12 March and subsequently by nated in advance. On 4 September 1964 the 25% at the meeting on 28 October, whilst American General Service Administration the prices of quinidine were raised by 20%. gave a definite refusal to make any further An agreement modifying the length of the deliveries to Nedchem alleging that military validity of the export agreement (which was requirements had arisen. Following each in the meantime extended for 12 months delivery Nedchem divided it amongst the only instead of the five years initially other members. provided for) was concluded in December The commission was always fixed on the 1964 and January 1965 between Boehringer, basis of the rate of 2%. When on 13 March Buchler, Nedchem, the French group and 1962 the first regulation in implementation Lake & Cruickshank.

JUDGMENT OF 15. 7. 1970 — CASE 44/69

In addition to recording the investigations. hearings held by the sub-committee, this The undertakings concerned were given a document has annexed to it a large number period of two months within which to define of minutes of the meetings of the cartel, the their positions with regard to the objection correspondence exchanged by the parties made against them. concerned, the agreements drawn up At the request of tour of those undertakings, between them and reports from the director including the applicant, the Commission of a British company which was a party to subsequently extended that period to 15 the agreements.

Com of the State directly concerned in the munications were exchanged in May and international quinine cartel, such as Bel June 1967 with the competent authorities gium, the Federal Republic of Germany, with regard to cartels in the Federal France and the Netherlands, were also Republic of Germany, France and the present at the hearing. Following dis Netherlands in connexion with the in cussions with the parties concerned, the vestigations to be undertaken on the Commission withdrew its objections con undertakings concerned.

. . to on the Buchler undertaking a fine of 65 000 establish whether or not the activities of units of account for infringement of the the international cartel in the quinine provisions of Article 85(1) of the Treaty industry have infringed the provisions of which this undertaking committed until Article 85 of the Treaty establishing the the beginning of February 1965, 'by con European Economic Community'. On the cluding and implementing the agreement basis of those authorizations investigations on exports of 8 and 14 July 1959, the were carried out on the six undertakings and additional agreements of 10 and 31 March as a result the decision of the Commission 1960 and of 7 April 1960 (the period of of 16 July 1969 was sent to the said under validity of which was extended by the agree takings on the dates indicated at No 17 of ment of 14 December 1964 and 19 January

BUCHLER v COMMISSION

of quantity compensation and the limitation 1969 (File No IV/26623) in so far as it of the production of quinidine'. refers to the applicant; For the same reasons this decision imposed : (2) Order the defendant to pay the costs; (1) on Nedchem, a fine of 210 000 units of account, Alternatively :

(2) on Boehringer Mannheim GmbH, a fine (1) Amend the decision of the Commission of 190 000 units of account, of the European Communities of 16 July 1969 by making a considerable reduc­ (3) on the Société Chimique Pointet-Girard tion in the fine imposed on the applicant ; SA, a fine of 12 500 units of account, (2) Order the defendant to pay the costs. (4) on the Sociéte Nogentaise de Produits Chimiques, a fine of 12 500 units of In its statement of defence, the defendant account. contended that the Court should:

(5) on the Pharmacie Centrale de France, — dismiss the application as unfounded; a fine of 10 000 units of account.

JUDGMENT OF 15. 7. 1970 — CASE 44/69

It was thus takings concerned. unable to defend itself on this point. In its reply the applicant maintains that it The defendant replies that the outcome of does not recall being informed by the these investigations was clearly shown on Commission of the content of certain page 37 of the notice of complaints : 'The documents referred to by that institution prices fixed in common have been uniformly in its statement of defence. Moreover, it applied within the Common Market by the complains that it was not aware of the members of the cartel .

By requiring the production of evidence on (d) Objections concerning the minutes of receiving notification of the statement of the undertakings concerned complaints the applicant is confusing the Commission's obligations as an adminis The applicant maintains that the Commis trative authority with its obligations as the sion has not properly taken into account defendant in the present case. the full minutes of the hearing of the (c) Failure to provide the applicant with applicant on 11 and 12 February 1969. documents Only on 11 August 1969, almost one month after the decision was taken, did the appli The applicant complains that it was not cant receive a final version of the minutes allowed access to the documents on which which took into account the amendments the decision is based. which it had suggested to the Commission In this respect the defendant states that, at in its letter of 4 July 1969. As a result of the the applicant's request, it allowed it to period of 14 days provided for between its consult all the documents referred to in the convening and the formulation of its statement of complaints, with the exception opinion, the Advisory Committee on of the four documents which specifically Restrictive Practices and Monopolies was

unable to act on the basis of the final Member of the Commission empowered to version of the minutes of the hearing of the act in this matter, Mr Sassen, was kept up undertakings concerned. If the Commission to date with the proceedings. convened the Committee before receiving The applicant acknowledges that it approved the applicant's reply and before a definitive the minutes of the hearing. However, it version of the minutes was finally prepared, observes that the manner in which the it committed a fundamental infringement Commission refers to the points involved of the law, since the Committee had sub in the amendments to the minutes which mitted its opinion on the Commission's were suggested by the undertakings con draft decision on the basis of wrong in cerned might conceal the importance of

Commission. The amendments requested content of the statements' made by each by the applicant in its letter dated 4 July person heard, in accordance with the 1969, concerning 'specific questions without provision in Article 9(4) of Regulation fundamental importance', were given full No 99/63/EEC. consideration by the Commission, and, on Secondly, the Advisory Committee was set this ground, the applicant was regarded as up in order to ensure a link between the having approved the minutes. Commission and the authorities of the It alleges that the objections concerning the Member States and was not intended to consultation of the Advisory Committee protect the individual rights ofundertakings, and the proceedings of the Commission are as is shown by the fact that its opinion is neither admissible nor justified.

mission's proceedings, both the Members of that body and their colleagues were able 2 — The period of limitation to study the content of the file at the Directorate-General for Competition. The The applicant maintains that the possible

infringements of Article 85 of the Treaty are judgment in Joined Cases 7/56 and 3 to time-barred, since the applicant's alleged 7/57 regarding the common legal principles infringements ceased by October 1964 at the concerning time-limits for the revocation latest and the period of limitation had of illegal administrative measures which been interrupted at the earliest by the create individual rights, the applicant Commission's decision of 29 July 1968. emphasizes that the Court did not follow Since Community law does not govern the the Italian regulations which were un period of limitation it is necessary, as favourable to the parties concerned, but regards the applicant, to have recourse in favoured the legal systems which restricted this instance to German law, in accordance revocability. The applicant considers that with the criteria followed by the Court in this instance a period of limitation of Justice in Case 18/57 regarding the of two years enables the interests of the capacity of the applicant. In the case Community and of those whom it ad of fines imposed by the administration, ministers to be reconciled. German law lays down a period of limita The defendant observes that the fact that

The judg carried out by the Commission's inspectors ment of the Court in Case 18/57 cannot in 1967 cannot interrupt the period of support this argument, as the capacity limitation, as the nature of the proceedings to institute proceedings referred to in that and the number of parties involved was decision in no way relates to Community not then finally established and the law. The consequence of the applicant's commission had not decided to take argument would be that the uniform proceedings for infringement of Article 85. application of Community law would be To accept that administrative measures, hampered in the sphere of competition such as an investigation, are sufficient to law. interrupt the period of limitation is not On the other hand, the defendant concedes in accordance with either the requirements that the question is admissible whether, of the rule of law or the general principles with regard to time-limits, there is a common to the laws of the Member principle common to the legal systems

curred. There is no reason to accept the diverse. existence of a more severe system in Taking into account the extreme diversity Community law. Referring to the Court's in the various Member States of the

nature of infringements, of sanctions, of limitation was only interrupted when the the periods of limitation and of the acts Commission initiated the administrative interrupting them, the defendant concludes procedure on 29 July 1968, the period that no criterion can be derived common of three and a half years which had thus to the law of the Member States with elapsed is insufficient to establish a bar regard to the detailed rules of application under Community law since, within the of the general principle of limitation. In framework of the EEC, the rules on those circumstances, in order to establish competition assume a greater importance a period of limitation for infringements than under national law, as is clear from of Articles 85 and 86 of the EEC Treaty the fact that 'the institution of a system only the requirements of Community law ensuring that competition in the Common may be taken as a basis, taking account Market is not distorted' constitutes one also of the importance and the function of the objectives of the EEC Treaty. of the rules on competition under the

Director-General for Competition indi As regards the interruption of the period cating in detail the object and the aim of limitation, the applicant observes that of the check to be made in connexion it is not correct to maintain that the official with specific infringements. If the applicant who was responsible for the investigation had refused, as it was entitled to do, to in December 1966 gave evidence of his submit to the investigation on the basis status by showing a written authority to of that authorization, the Commission carry it out. The applicant was thus unable would immediately have ordered the to understand that this procedure could investigation by a decision. Consequently, result in a fine. Moreover, the decision with regard to the interruption of the of 29 July 1968 shows that only then did period of limitation different effects cannot the Commission resolve to take official be attributed to investigations made by action which could result in a fine. the Commission depending on whether they were carried out on the basis of an The defendant considers that the uniform authorization or a decision. application of the German law on limita tion periods is impossible, since in relation Between the point when the infringements to comparable facts the laws of the other were discounted and the investigations Member States provide for periods of by the Commission a period of less than

years. compatibility with Articles 85 and 86 of the Even if it is conceded that the period of EEC Treaty.

3 — As regards other infringements of the dated 19 February 1960, according to law to which the applicant refers in the which 'the agreement prevails over the alternative contract', confirms that the export agree ment was dependent on the gentlemen's (a) Prohibition on the export agreement agreement. The applicant replies that the origin of the The applicant questions whether the export export agreement concluded approximately agreement formed one 'indissoluble entity' nine months before the gentlemen's agree with the gentlemen's agreement. This ment demonstrated its independence of agreement was already in existence in 1959 the latter. Although the parties considered and only nine months later, in April 1960, that the non-observance of the gentlemen's was the gentlemen's agreement concluded. agreement would constitute a breach of The provisions of the agreement do not the export agreement, it in no way follows concern the territory of the EEC and thus that an indissoluble link existed between do not fall within the context of Article the two agreements. The fact that for

cannot be considered in isolation, since the fact that the prohibition provided the origin and application of the agree for in Article 85 of the Treaty requires ments on exports to third countries show competition to be generally and appreciably them to be indissolubly linked to the restricted, it must bé concluded that, in gentlemen's agreement. As is shown by accordance with the opinion of the Bundes the minutes of the meeting held on 2 kartellamt, the export agreement is not December 1959, the idea of concluding covered by that prohibition. such a gentlemen's agreement in relation The defendant maintains that the system to the Common Market had been put constituted by the export agreement and forward for the first time at that meeting the gentlemen's; agreement formed one by Nedchem's representative. indissoluble entity. The fixing in common

Market. Any breach of the gentlemen's their national market. The existence in law agreement was to be equivalent to a breach of the export agreement was subject to of the export agreement and the termination the condition that the undertakings con of the gentlemen's agreement was to result cerned respect thé obligations which arose in èhe termination of the export agreement. for them out of the gentlemen's agreement, As is shown by the minutes of the meeting which confirms that these two measures held on 2 March 1960, the gentlemen's form one entity. agreement also applied to the sharing The separate communication of the quan out, of the national markets. The 'Note tity of the deliveries to the EEC was only about the equalization' from Nedchem intended to keep secret the fact that the

system of quantitative compensation had particular, in the middle of 1964 bitter been extended to the territory of the rivalry developed between Buchler and Common Market. As an example, the Boehringer to obtain the raw materials defendant refers to two statements sent in the Congo, which made all cooperation by Nedchem on 20 July 1962, one con impossible. cerning the deliveries made under the The fact that in 1964 Boehringer had sold export agreement and the other, which was Lake & Cruickshank a process for con described as 'private and confidential', verting quinine into quinidine, contrary concerning all deliveries of quinine. to the gentlemen's agreement of 9 April As regards the intervention of the Bundes 1960, shows that that company considered kartellamt, the defendant observes that that the cartel had finally come to an end. that agency only considered the amended The applicant questions the statement agreement of 14 July 1959 in the light of contained in the contested decision to the

In export agreement. fact, according to the applicant, cooperation was interrupted after Nedchem's with The defendant emphasizes that during the drawal on 2 November 1962 and had meeting in Brussels on 14 October 1963 the members of the cartel found that the only been resumed sporadically in 1964. The figures concerning exports to third export agreement was still to be regarded countries had alone continued to be ex as in force and that its 'abeyance' for changed 'for formal reasons'. approximately one year had not resulted The applicant maintains that the minutes in increasing from 2% to 7% the commis of the meeting held on 14 October 1963 sion payable to Nedchem for deliveries show that at that time the parties had from the American stockpile, as was considered all these agreements as void, provided if the members of the cartel including the agreement concerning the failed to cooperate. Although the 'abey

The quantitative Italy shows that at least as regards this compensation was paid voluntarily by the undertakings concerned. company, cooperation finally came to an end in October 1964 after a short resump The fact that the undertakings willingly tion. observed the provisions of an agreement The decision of the United States Govern 'in abeyance' might justify the conclusion ment to 'cease to perform the 'stockpile' that the parties continued to act on the contract with Nedchem and to buy large basis of the above-mentioned agreements. quantities of quinine led in 1964 to a At all events, the mutual consent agreement desperate struggle between the manu necessary to the voluntary application facturers to obtain raw materials. In of agreements 'in abeyance' justifies the

view that what is involved is at the least a continued to exist until the end of 1965, concerted practice. but it was only applicable to deliveries The defendant contests the argument that, covered by the system laid down in the in dealing with a concerted practice, the export agreement, to the consequent ex actual repercussions of such practice on clusion of deliveries within the Common the market must be examined on each Market. occasion. If it is shown that the purpose The applicant replies that the suspension of the concerted practice is to restrict of the agreement did not signify that prices competition, no such examination is re were to remain fixed, as the parties were quired, as the Court confirmed in its not prohibited from acting individually to judgment in Joined Cases 56 and 58/64 in alter them. The Commission's argument relation to the agreements concerned in that the mere fact that the undertakings that case. had worked in concert might be sufficient In addition, the defendant recalls that to constitute an infringement of Article 85 cooperation between the undertakings is incompatible with the wording of that concerned took place during 1964 in the provision. form of two joint decisions concerning As regards the scope of the abovementioned price increases. letter which the applicant sent on 4 January According to the defendant, these two 1965 to its sole representative in Italy, the price increases do not amount to a sporadic applicant observes that it had no reason resumption of interrupted cooperation, but to hide any information from him.

It maintained an agreement was still in operation. It therein that no official quotations existed would be difficult to hold this belief if no at that time for quinine or quinidine, which agreement had been in 'force for a long showed that cooperation had ceased much period. The price difference between Lake earlier than the Commission believes. The & Cruickshank and the other members of decision to increase prices, taken on 28 the cartel to which the applicant refers was October 1964, only existed on paper.

Thus, co In its rejoinder, the defendant emphasizes operation on the fixing of prices only came that during the meeting on 14 October 1963 to an end on that date, as is also shown Mr Buchler had raised the question by the letter from Boehringer to the whether the prices could henceforward be Bundeskartellamt of 15 August 1966. fixed freely, to which Nedchem replied The possibility of quantitative compensa 'During the suspension of the agreement tion being paid if the quota was exceeded the prices will not be changed'. Within the

context of the discussion which had just technical and political difficulties affecting taken place, this reply signified that none the raw materials in question. Almost seven of the undertakings had any freedom of years were required to gather quinquina action and that the prices fixed in common bark of a sufficient quality for processing. continued to apply until new prices were the fact that the activities of the parties fixed by common agreement, which they to the cartel depend on an agricultural were in May and October 1964. product, with all the uncertainties and risks The statements made by those present at involved therein, is a decisive factor in this meeting, concerning the territories understanding the conduct of such indus protected under the export agreement and tries. Added to this is the political in the protection of the national markets, security of the countries of cultivation, for are also significant as regards the concerted example, the Congo.

The The evidential value of the letter sent by planters were also in difficulties, which led the applicant to Mr Budel on 30 November certain governments, in particular in the 1964 is minimal. That letter is not clear. Congo and Guatemala, to encourage the In addition, it shows that the price indicated grubbing-up of quinquina and its replace for delivery in Italy corresponds almost ment by other crops. exactly to the common export proce. In this chaotic situation a planned produc As regards the possibility of selling on the tion of quinine was necessary in order to British market, the defendant observes avoid a shortage of raw materials a few that the non-British members were bound years later. In order to encourage planters to observe the prices applied on that market to cultivate quinquina, the quinine manu by the British members of the cartel. This facturers agreed to restrict their competi shows that the applicant's objection in this tion, by increasing the prices which had respect is without foundation. fallen well below the pre-war world market As regards the gentlemen's agreement in prices and thus giving the quinquina particular, the defendant maintains that planters the necessary confidence to replant. it was through this agreement that the The attitude of the American Government undertakings concerned were able to charge after 1964, as shown by its refusal to sell the prices which they regarded as reasonable the stockpile to the quinine manufacturers on the national markets, as is shown by and by its massive purchases of quinquina, the fact that the internal prices ruling on led to a fresh disturbance in the market the German, French and British markets which was then becoming more stable, were higher than those fixed in common by causing enormous price rises which and that, moreover, until the beginning finally resulted in the crisis of cooperation of 1965 they applied the export prices fixed among the quinine manufacturers. in common in the Community countries The applicant maintains that it is only after which were not producers of quinine or this cooperation had come to an end that quinidine. there was an uncontrolled rise in prices. In this connexion it refers to the table (c) Objections concerning the agricultural showing the trend in quinine prices from nature and special position with regard

JUDGMENT OF 15. 7. 1970 — CASE 44/69

Moreover, the applicant criticizes were not an adequate means of making the Commission for having failed to take up for the lack of a common policy for into account the fact that the parties to the purchase of bark among the members the cartel had voluntarily ceased their of the cartel whose interests were opposed cooperation several years before; in this respect. The defendant objects that the undertakings The undertakings participating in the concerned only ceased their cooperation cartel clearly followed a common policy as a result of the situation on the market, in the fixing Of selling prices, but practised as is shown by their conduct during the totally different purchasing policies. previous period. These factors make it impossible to accept According to the applicant the Commission the applicant's statement that the existence is only entitled to impose a fine after of stable selling prices constituted the verifying that the undertaking concerned appropriate means of stabilizing the has continued with its unlawful action, situation on the market in quinquina bark. even though the infringement was formally Also in this recital of its decision, the established by way of decision. Commission refers to the example of The applicant also observes that it is much Nedchem, which in 1964 only increased smaller in size than Boehringer and that, its prices, which it wished to maintain at compared with the fine imposed on that a low level, on pressure from the other undertaking, the amount of the fine which

were restrained and modest. Had the applicant's rights by making a wrong Commission taken into consideration the finding as to the facts and by failing to take trend of prices in the sector in question, into account circumstances which justified it would either have concluded that the its action. This represents not only an public interest did not require the agreement infringement of the EEC Treaty and of the to be condemned or at the least it would rules of law concerning its application but have been led to impose a smaller fine. also misuse of powers, as in so acting the The defendant objects that it has not Commission has wrongly exercised its claimed that the prices applied by the discretionary power. members of the cartel were too high and Finally, the applicant maintains that if the that as a result this comparison is irrelevant. alleged infringements are not time-barred, the Court must still consider the fact that 4 — Objections regarding the fine there is no longer any sufficient public interest to justify the imposition of fines The applicant maintains that the Commis

BUCHLER v COMMISSION

cartel. It was this consideration which led terms of the agreement, the applicant the Commission to fine the applicant less should have paid a fine of 83 500 units of than Nedchem and Boehringer, despite the account. The Commission fixed it at important position of the applicant in 65 000 units of account because Buchler relation to the other members of the cartel. carried on business in the shadow of the two The defendant also emphasizes that the principal members of the cartel, Nedchem same objection was also put forward by and Boehringer. Buchler's turnover in the Nechem and Boehringer, each of which quinine and quinidine sector is not quite considers that the fine imposed upon it is one third that of Nedchem. too high in relation to that imposed on the The defendant acknowledges that in the other undertakings in the cartel. case-law of the Hooge Raad fines must be The applicant replies that in fixing the regarded as a trading loss.

Moreover, this ques also of the fact that a fine of an identical tion is irrelevant, in the light both of the amount in absolute figures affects a com Commission's obligation to apply Com pany established in Germany to a greater munity law uniformly and the Court's extent than if it had been established in the judgment in Joined Cases 7 and 9/54, which Netherlands, as, contrary to the rules ac laid down that: 'The persistence of differ cepted in the latter country, in Germany ences in conditions of competition is a fines and expenses incurred in the defence necessary and inevitable consequence of the of an offender are not deducted from the partial nature of the integration brought amount assessable to tax. about by the Treaty and does not involve Finally, the fixing of the amount of the fine discrimination forbidden by the Treaty'. must also take into account the fact that in As regards the existence of criminal pro the United States the applicant is at present ceedings in the United States, the defendant involved in criminal proceedings on the maintains that, as no final decision has been basis of the same facts, and'that it is forced taken with regard to the applicant, these to seek a settlement in order to escape, proceedings cannot be taken into account.

3 Since the Commission considered that the restrictions on competition therein provided for were capable of affecting trade between Member States, it imposed on the applicant a fine of 65 000 units of account by a decision of 16 July 1969 (OJ L 192, pp. 5 et seq.).

4 By an application lodged at the Court Registry on 25 September 1969 the Buchler undertaking initiated proceedings against this decision.

A — The submission relating to the limitation period

5 The applicant complains that the Commission did not take into account the fact that proceedings in respect of the alleged infringement are barred having regard to the period which elapsed between the date of the acts and the initiation of the administrative procedure by the Commission.

6 The provisions governing the Commission's power to impose fines for infringement of the rules on competition do not lay down any period of limitation. In order to

BUCHLER v COMMISSION

10 In the present case the Commission has clearly set out the essential factors on which it based the complaints listed, referring expressly to statements contained in the minutes of certain meetings of the undertakings concerned and to correspond­ ence relating to the protection of domestic markets which was exchanged between those undertakings in October and November 1963. Furthermore, maintaining on the basis of its investigations that the undertakings concerned had continued to exchange information on their sales with a view to possible quantitative com­ pensation and that up to the end of 1964 they had maintained a policy of uniform prices, the Commission thereby deduced that after 1962 they had continued to apply the gentlemen's agreement on production and sale in the Common Market.

JUDGMENT OF 15. 7. 1970 — CASE 44/69

11 Consequently the objections raised with regard to the notice of complaints are unfounded.

II — The objection relating to consultation of the administrative file

12 The applicant maintains that the Commission infringed the rights of the defence by refusing in the course of the administrative procedure to allow it to consult essential documents on which the contested decision was based. The defendant

replies that it had enabled the applicant to consult the documents which were of importance for the appraisal of the complaints.

BUCHLER v COMMISSION

III — Complaints relating to the drawing up of the minutes of the hearing

16 The applicant maintains that both the Advisory Committee on Restrictive Practices and Monopolies and the Commission acted on the basis of a preliminary version of the minutes of the hearing, which did not take into account the amendments which it had suggested. Such action is incompatible with the principles of the rule of law governing the guarantee of the fundamental rights of an undertaking threatened with sanctions.

JUDGMENT OF 15. 7. 1970 — CASE 44/69

by the Members of the Commission at its hearing cannot amount to a defect in the contested decision.

21 The applicant maintains in addition that the administrative procedure is vitiated by the fact that the file of the case was not sent in its entirety to each Member of the Commission.

22 However, the Members of the Commission received complete and detailed in­ formation regarding the essential points of the case and had access to the entire file;

23 Therefore, the applicant's complaint is unfounded.

C — Substance

BUCHLER v COMMISSION

ment of the export agreement. In those circumstances account must be taken of this connexion in assessing the effects of the gentlemen's agreement with regard to the categories of acts prohibited by Article 85 (1).

26 The defendant bases its view that the gentlemen's agreement was continued until February 1965 on documents and declarations emanating from the parties to the agreement the tenor of which is indistinct and indeed contradictory so that it is impossible to conclude whether those undertakings intended to terminate the gentlemen's agreement at their meeting on 29 October 1962. The conduct of the undertakings in the Common Market after 29 October 1962 must therefore be considered in relation to the following four points: sharing out of domestic markets, fixing of common proces, determination of sales quotas and prohibition against manufacturing synthetic quinidine.

II — Protection of the producers' domestic markets

27 The gentlemen's agreement guaranteed protection of each domestic market for the producers in the various Member States. After October 1962 when significant supplies were delivered on one of those markets by producers who were not nationals, as for example in the case of sales of quinine and quinidine in France, there was a substantial alignment of prices conforming to French domestic prices which were higher than the export prices to third countries. It does not appear that there were alterations in the insignificant volume of trade between the other Member States referred to by the clause relating to domestic protection in spite of considerable differences in the prices prevailing in each of those States. The divergences between the domestic legislation of those States cannot by itself explain those differences in price or the substantial absence of trade.

III — The joint fixing of sales prices

32 With regard to the joint fixing of sales prices for the markets which were not shared out, that is to say, the Belgo-Luxembourg Economic Union and Italy, the gentlemen's agreement provided for the application to such sales of the current prices for exports ot third countries fixed by mutual agreement, in accordance with the export agreement. The joint fixing of sales prices by the producers of virtually all the quinine and quinidine distributed within the Common Market is capable of affecting trade between Member States and seriously restricts competi­ tion within the Common Market. If, as the defendant maintains, the parties to the •export agreement continued until February 1965 to apply their current export prices to supplies to the abovementioned Member States, it would follow that they continued to abide by that part of the gentlemen's agreement relating to the joint fixing of sales prices.

33 With regard to the period from November 1962 to April 1964, the figures supplied by the defendant show a substantial and constant identity between the current prices fixed for export within the framework of the agreement and the prices maintained by the undertakings concerned, including the applicant, for their sales in unprotected domestic markets in the Community.: Where such prices deviate from the scale of export prices they do so in terms of rebates or increases corre­ sponding generally to those agreed on under the gentlemen's agreement. The applicant has neither supplied nor offered to supply any evidence relating to the abovementioned period capable of proving that this argument of the Commission is unfounded, although it has done so in respect of a part of the year 1964. More­ over the increase in prices of 15%, which was jointly decided upon on 12 March

35 The action taken by the parties to the agreement with regard to prices from May 1964 was only discussed in depth as a result of the questions put by the Court to the defendant during the oral procedure. It is clear from the oral procedure, taking into account the information supplied by the parties, that during 1964 and in particular from May onwards, a party to the agreement applied prices which in an increasing number of cases deviated from the current export prices, and that the defendant has been unable to give a convincing explanation as to how this might be reconciled with the continuation in force of the agreement in question. The failure to communicate to the undertakings concerned the results of the investiga­ tions carried out in Italy and Belgium, which excluded any possibility of clarifica­ tion and discussion at the stage of the administrative procedure, may have con­ tributed to leaving unexplained facts which ought to have been clarified.

36 In these circumstances proof has not been sufficiently established in law that the applicant by mutual agreement with the other producers, maintained uniform prices for its sales in the Belgo-Luxembourg Economic Union and Italy after May 1964. Consequently the period from May 1964 to February 1965 must be omitted from the infringement.

IV — The sales quotas

37 With regard to the fixing of sales quotas for the Common Market, which was linked to a system of compensation and which constituted a supplementary guarantee of the sharing out of domestic markets, the applicant maintains that the necessary condition for the functioning of such a system, namely the reciprocal notification of all sales including those effected within the Community, was no longer fulfilled subsequent to October 1962.

V — Restrictions on the manufacture of synthetic quinidine

41 The gentlemen's agreement prohibited the group of French undertakings from manufacturing synthetic quinidine. Owing to the stringency of the restrictions imposed on undertakings from one Member State for the benefit of undertakings in other Member States and taking into account the importance of such under­ takings on the market in question, these prohibitions clearly have as their object the restriction of competition within the Common Market and are capable of affecting trade between Member States. The fact relied upon that, when the gentlemen's

BUCHLER v COMMISSION

agreement was concluded, the French undertakings were not in a position to manufacture synthetic quinidine does not render lawful such a restriction which entirely precluded them from taking up this activity.

VI — General appraisal of the agreement within the Common Market

44 It is clear from the foregoing that the applicant participated with other producers of quinine and quinidine in an agreement prohibited by Article 85 of the EEC Treaty. This agreement continued in most of its forms even after the meeting on 29 October 1962. Serious doubts as to the continuation of the agreement after 1962 exist only with regard to the application of sales quotas. Nevertheless, the fact that the undertakings did not continue to apply the system of quotas does not seem perceptibly to have improved the conditions of competition, since they continued jointly to fix prices, to apply uniformly to their deliveries in the Common Market joint price increases arranged in March and October 1964 and decided within the framework of the export agreement and finally to maintain protection of their respective domestic markets and the prohibition on the French under-

JUDGMENT OF 15. 7. 1970 — CASE 44/69

takings' production of synthetic quinidine. However, the application of uniform prices for deliveries to Italy, Belgium and Luxembourg has only been proved to exist up to April 1964.

45 Finally, even if it must be conceded that the export agreement could have operated independently of the agreement relating to the Common Market, it must be found that in fact the members of the cartel attributed great importance to the joint application of both agreements.

Although from October 1963 the export agreement was declared to be 'in abey­ ance', it is clear from the declarations made by the undertakings concerned at their subsequent meetings together with their subsequent conduct ás a whole that they continued to have an interest in upholding that agreement, in particular with regard to its possible employment within the Common Market.

conduct constituting the infringement has ceased and that it can no longer have detrimental effects. For the purpose of fixing the amount of the fine the gravity of the infringement is to be appraised by taking into account in particular the nature of the restrictions on competition, the number and size of the undertakings takings concerned, the respective proportions of the market controlled by them within the Community and the situation of the market when the infringement was committed.

so The applicant complains that the Commission did not take into account the actual economic effect of the fine imposed upon it in relation to that imposed on Nedchem, as, contrary to the practice followed in the Netherlands, the fines and expenses incurred in the defence of an offender in Germany are not deductible from the amount under the national revenue laws from the amount assessable to tax.

51 In fixing the fines provided for under Article 15 of Regulation No 17, the Com­ mission is not required to take into account the differences existing between the national revenue laws. Therefore, this complaint is unfounded.

52 The applicant maintains that the fine ought to be reduced in relation to the sum which it will be required to pay as a result of proceedings in which it is at present involved on the basis of the same facts in the United States of America.

53 Those proceedings concern restrictions on competition which have taken place outside the Community. There is, therefore, no reason to take them into account in these proceedings.

54 The applicant maintains that the amount of the fine imposed upon it is excessive as compared to the fine imposed on Boehringer, taking into account the respective sizes of the two undertakings and the applicant's dependent position as regards Boehringer and Nedchem.

Costs

59 Under the first subparagraph of Article 69 (2) of the Rules of Procedure of the Court of Justice, the unsuccessful party shall be ordered to pay the costs if they have been asked for in the successful party's pleading. Since the applicant has failed in the essential part of its conclusions, it must be ordered to pay the costs.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 85; Having regard to Regulations Nos 17/62 of the Council and 99/63 of the Com­ mission of the European Economic Community; Having regard to the Protocol on the Statute of the Court of Justice of the Euro­ pean Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

BUCHLER v COMMISSION

THE COURT

Donner Trabucchi Strauß Mertens de Wilmars

Delivered in open court in Luxembourg on 15 July 1970.

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL GAND

(See Case 41/69 p. 704)