C-75/69
ECLI:EU:C:1970:65
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JUDGMENT OF THE COURT 8 JULY 1970<apnote>1</apnote>
Ernst Hake and Co. v Commission of the European Communities<apnote>2</apnote>
Case 75/69
In Case 75/69
Ernst Hake & Co., Düsseldorf, represented by Jochen Hake, assisted by Peter Schambach, of Oberstedten/Taunus, Advocate of the Bars of Bad Homburg von der Höhe and Frankfurt-am-Main, with an address for service in Luxembourg at the office of Felicien Jansen, Huissier, 21 rue Aldringen, applicant,
v
Commission of the European Communities, represented by its Legal Adviser, Erich Zimmermann, acting as Agent, with an address for service in Luxembourg at the office of its Legal Adviser, Emile Reuter, 4 boulevard Royal,
defendant,
Application concerning the alleged failure of the Commission to take the appro priate measures to guarantee competition in the market in ferrous scrap,
THE COURT
composed of: R. Lecourt, President, R. Monaco and P. Pescatore, Presidents of Chambers, A. M. Donner, A. Trabucchi, W. Strauß (Rapporteur) and J. Mertens de Wilmars, Judges,
Advocate-General: J. Gaud
Registrar: A. Van Houtte
gives the following
1 —Language of the Case: German. 2 — CMLR.
JUDGMENT OF 8. 7. 1970 — CASE 75/69
JUDGMENT
Issues of fact and of law
I — Facts those undertakings which are both members of the cartel and the principal The facts may be summarized as follows : consumers of ferrous scrap in the The applicant is a firm dealing in ferrous Federal Republic of Germany, in scrap. On 16 September 1969 it sent a letter particular the German steelworks ; to the Commission (Directorate-General for Competition) in which it asked that (3) the limitation of purchases of ferrous institution : scrap to given quantities, divided according to a quota system among the '(1) to find ferrous scrap consumer undertakings which have concluded the cartel for the (a) that as from a time dating from at purchase of ferrous scrap ; least 1958 certain German steelworks and wholesale undertakings dealing in (4) the limitation of the total quantities ferrous scrap which formed part of which may be delivered by independent their group infringed the provisions dealers to a percentage fixed at between of Article 65 of the ECSC Treaty by 20% and 30% of the total tonnage as setting up an increasingly rigid cartel calculated from time to time by the for the purchase of ferrous scrap; and administrative bodies of the cartel, which has gradually prevented inde (b) that they continue to infringe these pendant dealers from supplying the provisions by agreements and con iron and steel undertakings directly; certed practices which are contrary to the Treaty; (5) discriminatory practices with regard to dealers outside the cartel, consisting (2) to impose on the undertakings forming in the granting of price advantages (for the cartel (the names of which are example, delivery premiums) to the known to the Commission through commercial companies linked to the documents in its possession), and undertakings which are members of the especially on the Wirtschaftsvereini cartel and resulting in the exclusion of gung Eisen- und Stahlindustrie of the independent dealers from the Düsseldorf, on the steelworks which market.' take part in the cartel and on the commercial undertakings within the This letter reached the Commission on 19 group, the sanctions which they incur September 1969. through having concluded and imple On 3 October 1969 the applicant wrote to mented, in particular on the initiative the same Directorate-General, setting out of the Wirtschaftsvereinigung Eisen- the following points : und Stahlindustrie, agreements con Hake & Co s. decisive interest' hes 'in cerning the following: seeing the normal conditions of competition on the German market in ferrous scrap '(1) the determination, fixing and control re-established and guaranteed, so that it of prices; again has access to the market which it has been gradually refused by the cartel for the (2) the sharing of markets, involving for purchase of ferrous scrap, with the result independent dealers a restriction and that it is now completely excluded'. abolition of their chances of supplying The requests contained in its letter of 16
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September 1969 may therefore be sum undertakings referred to by name 'have marized as follows: ... infringed Article 65 (1) of the [ECSC] The Commission of the European Commu Treaty from July 1959 to January 1969' nities is requested to take adequate and by 'entering into and applying agree appropriate measures in order to re ments with regard to purchase quotas, establish and guarantee normal conditions prices, parity points and minimum stocks of competition on the German market in for their purchases of steel scrap in the ferrous scrap, in particular: Federal Republic of Germany' and, as regards certain of these undertakings, (1) by prohibiting the agreements and 'by entering into agreements or by practices preventing normal competi indulging in concerted practices for the tion which have been implemented by purpose of covering a certain proportion the Wirtschaftsvereinigung Eisen- und of their ferrous scrap requirements by Stahlindustrie of Düsseldorf and certain commercial companies within the group iron and steel undertakings which are and the payment of special bonuses to the principal German consumers of certain companies' ; ferrous scrap, as well as by the commer cial companies belonging to that group, — it imposes on all but one of these under all of which are known to the Commis takings fines ranging from 1 000 to sion from the documents concerning the 29 000 units of account. cartel in its possession ;
(2) by imposing appropriate fines on the The preamble to the decision refers in par undertakings which, from a time dating ticular to 'the complaint submitted by a from at least 1954 and in the intervening German ferrous scrap dealer'. In its recitals years, have taken part in agreements and the Commission put forward the following practices which prevent competition points in particular: and which are known to the Commission A short time after the financial arrangement
from the documents concerning the made by the High Authority of the ECSC cartel which it has in its possession.' by Decision No 22/54 (OJ of 30.3.1954, p. 286) for the equalization of prices of The first point in the request is justified 'on ferrous scrap from third countries and the grounds of the methods ... which the domestic ferrous scrap was terminated in cartel for the purchase of ferrous scrap 1958/1959, a fresh increase in demand was agreed to adopt and has applied in practice recorded and it was feared that prices of for more than ten years'. ferrous scrap within the Community would The second point is more urgent in nature reach the level of prices on the world since the members of the cartel have taken market. The iron and steel industry of the no account of the instructions addressed Community attempted to resist this devel to them by the former High Authority, and opment (Recitals, Section I, No 1). in particular they have ignored the warning As from July 1959 the undertakings referred which it set out in its opinion of 24 February to in the decision resorted to a quota system 1960 (OJ of 12.3.1960, p. 551). in order to reduce their purchases of ferrous The letter in question also referred to scrap on the national market, so as to Article 35 of the ECSC Treaty and to the adjust demand to the supply available and possibility of instituting proceedings before to maintain prices of ferrous scrap at a the Court of Justice. It reached the Com relatively low level (ibidem, Section I, No 4 mission on 8 October 1969. and Section II, No 16). The application was brought on 15 The result of this system (which is described December 1969. by the Commission in detail) was to restrict On 21 January 1970 the Commission drew the possibilities open to independent up a decision (OJ of 6.2.1970, pp. 29 and 30) dealers to supply direct to steel producers, in which: so that they have become 'the sub-contrac tors of the commercial companies within — it notes that 26 German iron and steel the group' (this latter expression refers to
JUDGMENT OF 8. 6. 1970 — CASE 75/69
the wholesale dealers in ferrous scrap who 2) to impose appropriate fines on the formed part of the group made up of members and administrative bodies of certain iron and steel undertakings). this cartel, the names of which may be Competition between dealers in ferrous deduced from the abovementioned scrap has thus been restricted and distorted documents; (ibidem, Section I, Nos 12 and 13, and Section II, No 16). 3) to take the appropriate measures to Moreover, the fixing of uniform parity guarantee competition in the market points for freight has abolished all compe in ferrous scrap, such as, in particular, tition as regards prices between the dealers the fixing of a minimum quota of the (ibidem, Section I, No 10 and Section II, ferrous scrap requirements of the iron No 19). and steel undertakings, up to which The undertakings concerned have not amount supplies must be obtained from disputed the facts alleged but have main independent dealers (that is, those who tained that the aim of the system in question do not form part of the group). was to stabilize the market, an objective which the administrative bodies of the In its statement of defence, the defendant Community themselves had often declared contends that the Court should: to be desirable. The Deutsche Schrottverbrauchergemein — declare that it is no longer necessary to schaft (DSVG) played a decisive role in the take a decision on the first and second application of the agreements in question. heads of the conclusions in the appli It was wound up on 30 January 1969. The cation; trend of prices for ferrous scrap in the Federal Republic shows that as from that — as regards the third head, dismiss this as moment the undertakings in question inadmissible or alternatively as un ceased to infringe the provisions of Article founded, and order the applicant to pay 65 (1) of the ECSC Treaty (ibidem, Section the costs of the action. II, No 20). In its reply, the applicant declares :
II — Conclusions of the parties — that it maintains its claim that the defendant be ordered to pay the costs and adheres to the third head of the con In its application the applicant claims that clusions in the application, but states the Court should: that it is no longer necessary, to rule on order the Commission of the European the first and second heads of those Communities : conclusions.
1) to adopt a decision prohibiting certain In its rejoinder, the defendant maintains its agreements, decisions and practices conclusions set out in its statement of which prevent competition in the market defence and adds that as regards the first in ferrous scrap and to address it to the and second heads of the conclusions in the members of the cartel for the purchase application, it 'leaves the question of costs of ferrous scrap (steelworks and com to the wisdom of the Court'. mercial undertakings within the group), whose names may be deduced from the attached documents concerning the III — Procedure cartel, as well as to its administrative bodies, the Wirtschaftsvereinigimg Eisen- und Stahlindustrie, 69, Breite The procedure followed the normal course. Strasse, Düsseldorf, and the Deutsche Upon hearing the report of the Judge- Schrottverbrauchergemeinschaft GmbH, Rapporteur and the views of the Advocate- 11a, Grabenstraße, Düsseldorf; General, the Court decided to open the oral
HAKE ν COMMISSION
procedure without holding any preparatory obtained with a surprising rapidity certain inquiry. information which was to be found in the The parties submitted their oral observations exchange of correspondence to which this at the hearing on 13 May 1970. matter gave rise'. Although the Commission The Advocate-General delivered his opin has been aware of the events in question ion at the hearing on 16 June 1970. since 1967, it has as yet taken no serious measure and in particular has adopted no decision. IV — Submissions and arguments of It is this fact which led the applicant to make the parties his requests of 16 September and 3 October
1969. The period laid down in the third paragraph of Article 35 of the ECSC Treaty In its application, the applicant sets out expired at the latest on 9 December 1969. various considerations which may be As the Commission had taken no action in summarized as follows : spite of the obligations which were in From at least 1953 a cartel for the purchase cumbent upon it, it appeared necessary to of ferrous scrap has existed within the bring the present application. Community in contravention of the pro In support of its allegations the applicant visions of Article 65 (1) of the ECSC Treaty. has annexed to the application a very large The defendant has been provided with number of documents, in particular 48 files detailed information on this matter, with of 'documents relating to the cartel' as well numerous supporting documents.
Inde as a 'statement concerning the working of a pendent dealers have been gradually ferrous scrap cartel' and has given the names excluded from direct trade with the ferrous of numerous witnesses. scrap consumer undertakings which are In order to describe the origin of its decision members of the cartel and are still excluded of 21 January 1970, the defendant makes the at present. following points in its statement of defence: It is obvious' that the members of the cartel, In March 1967, a certain Mr Weber, re who were aware that their conduct was siding in Constance, lodged a complaint unjustifiable from a legal point of view, with the High Authority concerning certain were encouraged by the fact that the former practices contrary to the Treaty, which were High Authority only took 'inadequate becoming evident on the German market measures, which have consequently had no in ferrous scrap. Following this complaint effect' and that 'despite the very clear nature the High Authority carried out various of the reports and warnings given by the checks. In June 1967 Mr Weber sent a large Restrictive Practices Division' the Com number of documents to the High Authori mission took no measure to re-establish or ty; the 48 files which the applicant has guarantee normal conditions of compe produced before the Court give an idea of
tition. The applicant enumerates the the number of documents involved. The documents published in this connexion by Commission's Directorate-General for the High Authority and several internal Competition undertook to study these reports drawn up by the relevant depart documents in the autumn of 1967. On ments of the High Authority and the several occasions between 1967 and 1969 the Commission. Commission had conversations with Mr The undertakings concerned have acted in Weber and with the applicant's counsel. such a way as to hide their practices from Only in November 1968 did Mr Weber the Restrictive Practices Division of the make it clear that he was acting on behalf High Authority. of the undertaking which is the applicant in The applicant obtained more and more this instance. The applicant's representative clearly the impression that the efforts of the has been aware from July 1969, when the Restrictive Practices Division 'could not last conversation was held, that within a overcome the political influences affecting short period the relevant departments of the the machinery of the Commission and that, Commission would refer the matter to this moreover, the bodies within the cartel body. The departments in question brought
JUDGMENT OF 8. 7. 1970 — CASE 75/69
their inquiries to a conclusion in November effective measures to be taken in order to 1969. re-establish and guarantee normal condi On the basis of all these factors the detend tions of competition. ant concludes that the applicant's allegation In addition the applicant adds that this that it has failed to take action is unjustified. request is justified for the following reasons It points out that the decision answers the in particular: according to Article 3 (d), first and second heads of the conclusions Article 4 (b) and (d), the third indent of the in the application, on which a ruling is second paragraph of Article 5 and Article 14 therefore no longer necessary. of the ECSC treaty, the Commission is As regards the request contained in the third bound to take preventive measures in order head of these conclusions, the applicant to guarantee normal conditions of compe maintains that it is inadmissible because it tition.
As the Commission had been aware did not appear in the letters sent by the for 15 years of the practices existing in the applicant on 16 September and 3 October purchase of ferrous scrap, it knew that the 1969. prohibitions contained in the Treaty were It maintains, in addition, that this request continually evaded and that 'each time that is unfounded as it is not clear from the the associations which directed the cartel application on what provisions of the had been wound up, they had merely Treaty the applicant bases its contention changed their business name and had that the Commission is obliged to take the continued their activities with the same action requested. staff and at the same address'.
Thus, from The Commission claims that by its decision the point of view of both its essential terms of 21 January 1970 it fulfilled its obligation and the amount of the fines imposed, the to take action to deal with infringements decision of 21 January 1970 constitutes an of Article 65 (1), and maintains that it has inadequate measure which does not prevent no power to fix minimum quotas to cover the undertakings concerned from continu the needs of certain purchasers in favour of ing their former practices. certain undertakings which sell products The applicant maintains that both the governed by the ECSC Treaty. Commission's evasiveness and the inade In its reply, the applicant develops the quacy of its action have convinced it that, grounds on which it considers that the far from being disposed to take adequate defendant must also pay the costs relating action to guarantee normal conditions of to the first and second heads of the con competition in the market in ferrous scrap, clusions in the application (on which, as it is, on the contrary, clear that the defendant has been said, no ruling is necessary). It accepted the view held by business circles maintains, in particular, that it appeared that cartels are indispensable in the iron necessary to institute proceedings before and steel industry sector. the Court in order to compel the Commis The arguments set out by the defendant in sion to take rigorous action against the its rejoinder may be summarized as follows : cartel for the purchase of ferrous scrap and that, in addition, this body did not act The first and second heads of the conclusions within the period of two months laid down in the application
in the third paragraph of Article 35 of the ECSC Treaty. The Commission explains that although in As regards the request contained in the its statement of defence it put forward no third head of the conclusions in the appli conclusions as to costs relating to these two cation, after pointing out that this request requests of the applicant this is because the already appeared in general terms in the volume of the work required in the prepara letter of 3 October 1969 and that, therefore, tion of such decisions prevented its taking it is not inadmissible, the applicant claims action within the period laid down in the that, if it has been compelled to set out the third paragraph of Article 35.
It points out, subject-matter of its request in detail, this nevertheless, that the decision of 21 January is because the defendant has not put 1970 was adopted before the expiry of the forward any precise ideas concerning the period fixed for lodging the statement of
HAKE ν COMMISSION
defence. In accordance with Article 69 (5) lodging its application the applicant never of the Rules of Procedure it leaves the maintained that the Commission was re question of costs to the discretion of the quired to fix quotas in favour of independent Court. dealers. As regards the other points contained in The Commission also continues to maintain these heads of the conclusions, the Com that the request is unfounded. The decision mission puts forward detailed explanations of 21 January 1970 laid sufficient emphasis in answer to the applicant's allegations. on observance of the prohibition on cartels. The Commission has no reason to believe The third head of the conclusions in the that the iron and steel undertakings in application question will once again infringe the pro visions of the Treaty, thus exposing them The defendant maintains that this request selves to the risk of greatly increased fines. is inadmissible. It is too vague to be taken Furthermore, the demand for steel and, into consideration. The applicant has failed therefore, for ferrous scrap has greatly to set out precisely the measures which it increased during recent years, with the wishes to see taken. Its references to the result that good opportunities exist for the general provisions of the Treaty are disposal of ferrous scrap for all the dealers inadequate. in that product within the Community. The defendant adds that requests submitted Finally, the defendant maintains that the within the context of an application lodged measure sought by the applicant would on the ground of a failure to take action may represent a serious interference with the only concern questions which have already market conditions and would be contrary been referred to the Commission. This to the principles set out in the second condition is not satisfied in this instance. paragraphs of Articles 2 and 5 of the Treaty. Neither of the letters of 16 September and Moreover, as there is neither a 'manifest 3 October 1969 showed in any way that the crisis' (Article 58) nor a shortage (Article 59) applicant expected the Commission to take of either iron or steel there can be no measures more specific than those adopted justification for fixing a quota. in the decision of 21 January 1970. Before
Grounds of judgment
1 By an application lodged at the Registry on 15 December 1969 the applicant has brought before the Court an action for failure to act based on Article 35 of the ECSC Treaty, the purpose of which is to obtain an 'order' that the defendant take certain measures, the adoption of which the applicant had requested in its letters of 16 September and 3 October 1969, in order to ensure normal conditions of competition in the market in steel and ferrous scrap.
I — The first and second heads of claim
2 The parties agree in accepting that by the Commission's decision of 21 January 1970 (OJ L29, p. 30) concerning the agreement forming the subject-matter of the requests contained in the abovementioned letters the applicant obtained satis faction as regards the first and second heads of claim in his application, with the result that it is no longer necessary to give a ruling with regard to them.
JUDGMENT OF 8. 7. 1970 — CASE 75/69
3 The Court takes note of this fact.
II — The third head of claim
4 In the third head of claim the applicant requests the Court to order the Commission 'to take the appropriate measures to guarantee competition in the market in ferrous scrap, such as, in particular, the fixing of a minimum quota of the ferrous scrap requirements [of the iron and steel undertakings] up to which amount supplies must be obtained from independent dealers (that is, those who do not form part of the group)'.
As, according to Article 35, the sole object of an action for failure to act is the implied decision of refusal which results from the silence of the authority, this request can only be accepted in so far as its relates to the annulment of the implied decision rejecting the request contained in the letters of 16 September and 3 October 1969 of fix minimum quotas under the conditions defined in the present application.
5 The defendant contends that this head of the application is inadmissible, on the ground that no such request appeared in the letters of 16 September and 3 October 1969.
6 The letter of 16 September 1969 contained no reference to such a fixing of quotas, but merely requested the defendant to note the existence of the agreement con cluded between the German iron and steel producers and to impose sanctions upon those concerned, measures which the defendant in fact adopted in its decision of 21 January 1970.
7 In its letter of 3 October 1969 the applicant requested the defendant 'to take adequate and appropriate measures in order to re-establish and guarantee normal conditions of competition on the German market in ferrous scrap', in particular the measures already referred to in the letter of 16 September.
It cannot be concluded on the basis of this wording that the applicant requested the defendant to adopt not only the measures defined specifically in the letters in question, but also additional measures.
On the contrary, the letter of 3 October 1969 might as easily be interpreted to mean that as regards the possible adoption of such measures the applicant relied on the discretion of the defendant.
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8 Moreover, even if it is accepted' that the applicant formally requested the adoption of additional measures, it nevertheless omitted to give any details as to their con tent.
In these circumstances, the implied decision imputed to the defendant cannot be interpreted as the dismissal of a request for the fixing of minimum quotas in favour of independent ferrous scrap dealers.
9 Thus, the defendant cannot be regarded as having taken, within two consecutive months from being requested to act by the applicant, an implied decision refusing to fix minimum quotas in favour of independent ferrous scrap dealers as set out in the third head of claim.
10 This head of claim must therefore be declared inadmissible as being without purpose.
III — Costs
11 Under the terms of Article 69 (5) of the Rules of Procedure, where a case does not proceed to judgment the costs shall be in the discretion of the Court. It must be borne in mind in favour of the applicant that it was essentially upon its initiative that the defendant, realizing that the application was justified, adopted the meas ures requested in these heads of claim, although it did so both after the expiry of the period of two months referred to in the third paragraph of Article 35 of the ECSC Treaty and the lodging of the action for failure to act.
In these circumstances the defendant must be ordered to pay all the costs of the action.
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 Coal and Steel Community, especially Article 35 ;
OPINION OF MR GAND — CASE 75/69
Having regard to the Protocol on the Statute of the Court of Justice of the ECSC; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,
THE COURT
hereby :
1. Declares that no ruling need be given on the first and second heads of claim in the present application;
2. Dismisses the third head of claim;
3. Orders the defendant to pay the costs of the action.
Lecourt Monaco Pescatore
Donner Trabucchi Strauß Mertens de Wilmars
Delivered in open court in Luxembourg on 8 July 1970.
A. Van Houtte R. Lecourt
Registrar President
OPINION OF MR ADVOCATE-GENERAL GAND DELIVERED ON 16 JUNE 1970<apnote>1</apnote>
Mr President, have not ceased to cause serious difficulties Members of the Court, and have on several occasions necessitated the intervention of the High Authority. As The application which Mr Hake, a dealer in early as 19 May 1953, when authorizing the ferrous scrap established in Düsseldorf, has setting-up of the Caisse de Péréquation des made to the Court concerns the conditions Ferrailles Importées (Imported Ferrous of operation of the market in that product Scrap Equalization Fund), the High in the Federal Republic. Authority informed the German company Schrottvermittlung that its activities, which 1. Since the entry into force of the ECSC were essentially aimed at a division of the Treaty the practices prevalent in this market market in ferrous scrap, were contrary to
1 — Translated from the French.