C-149/78

JUDGMENT OF 12. 7. 1979 — CASE 149/78

3. The concept of force majeure must be maintain the transparency of the defined in each case in terms of the market. legal framework within which its application is invoked. 5. In fixing a fine pursuant to Article 64 4. It is clear from Article 60 (2) (b) of of the ECSC Treaty the Commission and the Court must take account of the ECSC Treaty that alignment constitutes an exception to the the seriousness of the infringement. principle concerning list prices and To that end, in the case of an that the offer made to the customer infringement of the obligation to must be aligned on a price list based publish price lists, account must be on another point which secures the taken, where appropriate, of the fact buyer more advantageous terms. that in times of disturbance, entailing Alignment is accordingly prohibited rapid changes in prices, the pub­ between undertakings quoting on the lication of price lists cannot so basis of the same basing points. That effectively ensure the transparency of prohibition, which has regard for the the market as in a period of relative general system of the Treaty, is stability, so that the damage caused intended to ensure compliance with by the infringement appears less the obligation to make public price serious than if it had taken place in lists and conditions of sale and to less unsettled times.

In Case 149/78

METALLURGICA LUCIANO RUMI, a limited liability company, having its registered office at 2 Via Dei Caniana, Bergamo, represented by Carlo Rumi, its Chairman and Managing Director, assisted by Giacomo Fustinoni, of the Bergamo Bar, with an address for service in Luxembourg at the Chambers of Fernand Faber, 15 Boulevard Roosevelt,

Advocate General: F. Capotorti Registrar: J. A. Pompe, Assistant Registrar

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the prices fixed in Commission Decision No procedure and the conclusions, sub­ 962/77/ECSC of 4 May 1977 fixing missions and arguments of the parties minimum prices for certain concrete may be summarized as follows: reinforcement bars (Official Journal 1977, L 114, p. 1) became applicable) large quantities of reinforcement bars had been sold and that the contracts for I — Facts and procedure sale, which were concluded at fixed prices, were not in accordance with the From 15 to 21 June 1977 the prices stated in Rumi's price list which Commission carried out checks on was in force at that time. The inspector Metallurgica Luciano Rumi S.p.A., here­ found in particular that the quotations at inafter referred to as "Rumi". The less than list prices related to sales in Commission informed Rumi by France. The group of contracts in registered letter of 20 September 1977 question is mentioned in the registered that it considered that certain sales of letter of 20 September 1977 and appears concrete reinforcement bars in France as an annex to the Commission's and in the Federal Republic of Germany defence. "do not appear to have been effected in accordance with the provisions in force In accordance with Article 36 of the in the common market". The inspector ECSC Treaty Rumi submitted written had found that between 15 April and 5 observations dated 15 October 1977 May 1977 (the date when the minimum which were supplemented by statements

" Principally, declare null and devoid Secondly, it considered that there was no of legal effect the contested decision infringement of Article 60 of the ECSC of the Commission of the European Treaty since the prices charged were Communities of 30 May 1978; arrived at by aligning them on the price lists of other producers in the — Alternatively, reduce the amount of Community (the undertakings Feralpi the fine imposed on the applicant; and IRO) for comparable transactions. — In any event, order the Commission of the European Communities to Thirdly, it explained that as the bear the costs and expenses of the reinforcement bars sold to a single present proceedings." customer in France and to three customers in the Federal Republic of In its application it further claimed that Germany have particular characteristics, the Court should: there can be no question of discrimi­ nation. "In the event of an inquiry, admit, if necessary, the evidence of witnesses as to However, since the Commission the following circumstances: considered that the facts were not in (1) That the reinforcement bars which dispute and that it could not accept the the undertaking Metallurgica Rumi arguments advanced in justification by produces for its sole French the applicant because, on the one hand, customer possess specific technical the former price list remained in force and mechanical characteristics, in since it had not been modified and, on order to satisfy the requirements of the other, the alleged alignment should the legislation in force in France and be considered merely as a retrospective the stringent checks, including those justification, ordered Rumi, by a decision of the customs authorities, to which of 30 May 1978 which was notified on they are at all times subject; 31 May 1978, to pay a fine amounting to 65 135 units of account, corresponding (2) That the product in question is a to a sum of Lit 68 800 040 within a steel displaying particular technical period of 30 days from notification of characteristics which, precisely the said decision. because of its specific nature, cannot

be sold in any other State of the Descours & Cabaud concern with Community; whom it concluded the contract of sale to which objection has been (3) That Metallurgica Luciano Rumi raised by the Commission; S.p.A. has and has always had only one customer in France, namely the (4) That Metallurgica Luciano Rumi customer with whom the under­ S.p.A. requested its own competitors taking concluded the contracts of to notify to it the bases of their price sale to which objection has been lists and that it drew up and agreed, in accordance with that information, raised by the Commission; the prices which were stipulated in the contracts of sale concluded (4) That Metallurgica Luciano Rumi between 15 April 1977 and 5 May S.p.A. requested its own competitors 1977 and which were noted by the to notify to it the bases of their price Commission of the European lists and that it drew up and agreed, Communities in the notification of in accordance with that information, the charges in question. the prices which were stated in the contracts of sale concluded between We submit as a witness Mr Franco 15 April 1977 and 5 May 1977 and which were noted by the Novara, sales manager of S.p.A. Metal­ Commission of the European lurgica Luciano Rumi, 2 Via Dei Communities in the notification of Caniana, Bergamo. the charges in question. B — Order an expert opinion, requiring the experts chosen to describe the We expressly reserve the right to Fe E 45 reinforcement bar produced by supplement the conclusions in relation to Metallurgica Luciano Rumi for the an inquiry and we now submit as a French market and to clarify the charac­ witness Mr Franco Novara, 2 Via Dei teristics, in particular the geometrical Caniana, Bergamo, of Metallurgica characteristics, which distinguish it from Luciano Rumi S.p.A." the other bars which Metallurgica Luciano Rumi produces for the other In its reply it altered the wording of its Member States of the European conclusions regarding the inquiry: Community." The Commission contended that the "A— Admit the evidence of witnesses Court should: as to the following circumstances: "(a) Dismiss the application; (1)- (2) That the Fe E 45 reinforce­ (b) Order the applicant to pay the ment bar with improved costs." adhesion is produced by Metallurgica Luciano Rumi exclusively for the French market and that this type of III — Summary of the sub­ bar has never been sold in missions and arguments of other countries of the the parties European Community; First of all the parties made three (3) That Metallurgica Luciano Rumi submissions as to law and then set out S.p.A. has and always has had only detailed remarks on three particular one customer in France, namely the points.

(A) Submissions as to law that, since the Commission failed to refer to these facts or "to their legal First submission: manifest failure to relevance", "the contested decision also appears to be vitiated by a lack of a observe the Treaty, in particular Article statement of reasons". 60 (2) (a); distortion of the facts; lack of a statement of reasons concerning a The Commission in its defence, whilst decisive point in the dispute concurring in the point that "the obligation to accord equal treatment in The applicant recalls that Article 60 of fact applies only to comparable the ECSC Treaty applies only to transactions and not to non-comparable comparable transactions, as is made clear transaction", recalls the definition given by the general structure of the article by the High Authority in Article 1 of and by the obligation to publish prices. Decision No 1-54 (Official Journal, The applicant produces a special type of English Special Edition 1952-1958, p. reinforcement bar to the specification of 14). Such non-comparable transactions its sole French customer. are contracts which do "not fall within the categories of transactions covered by Thus "it is automatically necessary to [the] price list"; they are accordingly rule out the argument that comparable "anomalous contracts" which constitute transactions can exist in respect of that exceptional features in the commercial special product, which consequently is operations of the undertaking. not covered by the obligation to publish prices since it cannot form the subject- The Commission considers that in the matter of comparable transactions". present case an "absolutely normal Furthermore, the applicant relies upon situation" is concerned: reinforcement Commission Decision No 72/440/ECSC bars fulfil the same functions in all of 22 December 1972 (Official Journal, countries and are identical in all cases; English Special Edition 1972 (30-31 the differences arise solely from "the December), p. 19), according to which disparity between national technical Article 3 (1) of Decision No 30-53 states standards which do not affect the that "Transactions shall be considered essential characteristics of the product comparable within the meaning of but only unimportant details". In order Article 60 (1) if to substantiate its argument the Commission considers the various

and to many other undertakings; as maintains that the case of force majeure evidence of this it refers to the list of must be taken into consideration, invoices annexed to the decision of the constituting in the present instance "a Comission. case where a rule has not been infringed". In conclusion it appears to the Commission that a more detailed examination would serve no purpose The applicant recalls that it has advanced since the material sold appeared on the that second submission only in case the price list and "it was a perfectly ordinary first should be rejected by the Court and material". then endeavours to show that it had no intention of committing fraud, main taining that it would have been very easy Second submission: manifest failure to for it to comply with the requirement as observe the Treaty, in particular Article to publication of prices by suspending 60 (2) (a); distortion of the facts, failure conclusion of the contract for two days to have regard to a circumstance in order to amend its price list and excluding liability and constituting force concludes that "a self-righteous attitude majeure; misuse of powers of formal respect for the rule" would have shielded it from that "heavy" pecuniary sanction.

For those two or three days at a time, thereby reasons the applicant considers that the constituting a case of force majeure; decision in question "appears to be ultra accordingly the applicant's liability is vires". The Commission intended to excluded. In face of the Commission's penalize the conclusion by Rumi of refusal to accept that argument, Rumi important contracts at prices lower than recalls that the High Authority and the the minimum prices fixed by the Commission have "on a number of Commission in its above-mentioned occasions authorized a flexible interpre

JUDGMENT OF 12. 7. 1979 — CASE 149/78

Thus, according to the applicant, since The applicant states first of all that it puts the conditions laid down concerning forward this third submission in the alignment were complied with — a fact alternative. It repeats the argument which is not disputed by the Commission concerning alignment which it has set — and since the alignment was effected out above in the observations concerning in good time, the charge of quoting Article 36 of the ECSC Treaty. It prices lower than those on its price list is considers, on the one hand, that it unfounded and "the whole matter now provided technical evidence concerning amounts to a purely formal charge", for the alignments effected and, on the which no provision is made either in the other, that that evidence was accepted by ECSC Treaty or in the relevant the Commission despite the fact that the implementing decisions. The applicant latter did not concede the legal concludes by recalling its arguments set significance of the facts set out. out in the foregoing submission,

RUMI v COMMISSION

"Undertakings shall keep, and make (B) Specific points available to the officials or agents of the High Authority carrying out checks or verifications as regards prices, business First point: the special nature of the books and accounting documents Fe E 45 reinforcement bar produced by including at least the following: Rumi for the French market

In its reply the applicant disputes the Commission's statement that the reinforcement bar sold in France does price and all other conditions of sale." not differ from that sold in Italy. In this connexion it produces Decision No 21 of 18 February 1975 published in the The Commission considers it clear that Bulletin Officiel du Ministère de the method of price-formation, and thus l'Équipement [Official Bulletin of the the alignment itself, must emerge from French Ministry of Supply] (lodged as an accounting documents and not from a annex) which "approves the Rumi justification ex post facto, which would Fe E 45 reinforcement bar and allocates furthermore render nugatory the to it identification card No 25 a". The decisions of the Court based on the applicant considers that this is sufficient above-mentioned judgment in Case to show that the reinforcement bar 16/61 by permitting an undertaking to produced for the French market differs

JUDGMENT OF 12. 7. 1979 — CASE 149/78

With regard to the documentary evidence (the decision of 18 February The applicant reaffirms that it has indeed 1975 lodged by Rumi) this merely only one customer in France: the means, according to the French Descours & Cabaud concern. That provisions, that that bar may be sold in concern has many warehouses in France, France; it by no means proves that Rumi which is the reason for the different alone is authorized to sell it: the names on the invoices. Nevertheless Commission observes in this connexion Rumi has only concluded a single that "various Italian undertakings are contract with Descours & Cabaud, authorized to sell reinforcement bars merely agreeing to make separate with improved adhesion in France". Nor, deliveries to the various warehouses. The furthermore, does that document applicant maintains that the inspector constitute proof of the exceptional and could have established this. "non-comparable" character of the product. The Commission, whilst concurring in The Commission returns to the substance those arguments in so far as the order of the dispute, observing that if, as the placed by Descours & Cabaud is applicant maintains, the transactions in concerned, observes that Inspector question were not comparable (or Lalitte, in his report, also noted that the anomalous) there would be no obligation undertaking Ferromontan, 20 Via Val­ concerning publicity. However, Rumi tellina, Milan, had ordered the same published a list of prices in which bar product from Rumi in order to market it Fe E 45 appears and "it is precisely that in France. Accordingly, even if Descours quotation at less than the list price which & Cabaud is Rumi's main customer it is was penalized by a fine". not its only customer in France.

The Commission points out that it is not What is meant by "alignment" was also the person of the witness which is at debated. The Commission made the issue "but the admissibility of evidence following points: concerning a factor in the formation of prices, such as alignment, which must, on the contrary, be established on the Even if the price lists of Feralpi and of basis of accounting documents". That is IRO existed, and even if the prices why it considers that such evidence charged by Rumi corresponded to those cannot be admitted. lists, "that fact would not be relevant" since, according to Article 60 of the ECSC Treaty, the alignment must "relate to the location of the basing point in relation to which the list was IV — Oral procedure drawn up". If prices are aligned on undertakings situated in Bergamo, like Feralpi and IRO, an aligned price may In the course of the oral procedure the be charged only in that area and not in parties adduced the following further France or Germany. In fact, if this is not particulars: the case, what occurs is an alignment on the actual price, which is contrary to the At the suggestion of the Judge-Rappor­ system prescribed by the Treaty: the teur and of the Advocate General the result is Rumi's practice, of "an Commission was requested to lodge, on alignment on an alignment on an the one hand, the administrative file alignment and consequently an end to concerning the case so that the Court transparency of prices and to orderly might acquaint itself with all the facts prices".

JUDGMENT OF 12. 7. 1979 — CASE 149/78

Decision

1 On 22 June 1978 Metallurgica Luciano Rumi S.p.A., hereinafter referred to as "Rumi", lodged at the Court Registry an action subject to the Court's unlimited jurisdiction in pursuance of Article 36 of the ECSC Treaty for the annulment or in the alternative the amendment of the individual decision of the Commission of the European Communities of 30 May 1978 ordering it to pay a fine of 65 135 units of account, corresponding to a sum of Lit 68 840 000 for having breached Article 60 of the Treaty and its implementing decisions.

2 That decision is based upon the fact, which is not in dispute, that Rumi sold between 15 April 1977 and 5 May 1977 (the date of the entry into force of Decision No 962/77/ECSC of 4 May 1977 (Official Journal 1977, L 114,

RUMI v COMMISSION

p. 1) fixing minimum prices for certain concrete reinforcement bars) large quantities of reinforcement bars in France to be delivered until the second quarter of 1978 at fixed prices not in accordance with the prices in its price list published on 6 February 1976 which was still in force throughout the period when those sales took place.

3 According to the decision the irregular sales amounted to Lit 1 678 688 435.29 for a total of 9 341.929 tonnes.

7 Furthermore, for an infringement which Rumi describes as trifling and of a purely formal nature, consisting solely in its failure to inform the Commission of the amendments made to its price list, the Commission imposed upon it a heavy fine in excess of those imposed at the same time on other undertakings which were guilty of infringements of a substantive

JUDGMENT OF 12. 7. 1979 — CASE 149/78

nature in failing to comply with the system of minimum prices prescribed by Decision No 962/77. Rumi maintains that, considered from this point of view, the decision appears to be vitiated by misuse of powers.

8 In view of those objections it is necessary to recall the function of the pub­ lication of prices, which constitutes one of the essential elements, in matters of competition between undertakings and of transparency of the market, of the ECSC Treaty.

9 It derives from Article 60 (2) (a) which requires the price lists and conditions of sale applied by undertakings within the common market to be made public.

10 The purpose of that compulsory publication is (1) as far as possible to prevent prohibited practices (2) to enable purchasers to learn exactly what prices will be charged and be able themselves to check whether any discrimi­ nation has taken place and (3) to enable undertakings to have an accurate knowledge of the prices of their competitors so as to enable them to align their prices.

15 It was established during the oral procedure that the other undertakings had, at more or less regular intervals, published their price lists without difficulty, which shows that a diligent and prudent undertaking could comply without undue sacrifice with the obligation concerning publication, which is a basic principle of the system established by the ECSC Treaty.

16 Furthermore, should further consideration of this aspect be thought necessary, it must be emphasized that the applicant, far from demonstrating that it was impossible for it to comply with the obligation to publish its price lists, has even conceded that it could have complied with that obligation by postponing conclusion of the contract for two days, had it considered that that was necessary to avoid a breach of Community law.

17 With regard to the second head of that principal submission the applicant complains that the Commission has extended the criteria set out in Decision No 962/77 to a commercial transaction prior to the entry into force of that decision, thereby misusing its powers.

18 However, the Commission did not refer to Decision No 962/77 either during the administrative procedure or in the course of the action. The fine was imposed for infringement of Article 60 of the Treaty and the amount thereof is within the limits laid down by Article 64 of the ECSC Treaty.

JUDGMENT OF 12. 7. 1979 — CASE 149/78

19 It must be concluded from the foregoing that the principal submission as a whole is not well-founded.

24 The applicant concludes from this that the product Fe E 45 cannot give rise to a situation of competition with other purchasers who do not exist, since it is manufactured exclusively for a single customer and that accordingly, "with regard at any event to the order G 20 RM of 28 April 1977", there was no

RUMI v COMMISSION

breach of the obligation to publish prices nor, in consequence, was there any under-pricing in relation to the binding price list, since there was no obligation to publish.

25 Those arguments fail to take account of the fact that the applicant entered the product Fe E 45 in its price list and conditions of sale which were duly communicated to the Commission and accordingly made public within the meaning of Article 60 (2) of the ECSC Treaty, whilst there is no requirement as to publicity in respect of transactions which are not comparable since they constitute contracts which by their nature are exceptional and therefore do not fall within the scope of the provisions governing publication.

26 The presence of that material in the price list therefore indicated that it was a product offered for sale and placed on the market in the normal way, with the result that Rumi was subject to the legal obligation to sell it at the prices stated to any purchaser who wished to buy it.

27 The fine was imposed precisely because that product was sold at a price lower than that appearing on the price list.

33 These arguments must accordingly be considered with regard to Article 60 (2) (b) which states that, for the purposes set out in paragraph (1) of that article, "the methods of quotation used must not have the effect that prices charged by an undertaking in the common market, when reduced to their equivalent at the point chosen for its price lists", result in reductions below the price shown in the price list in question for a comparable transaction "the amount of which exceeds ... the extent enabling the quotation to be aligned on the price list, based on another point which secures the buyer the most advantageous delivery terms".

34 That provision shows that alignment constitutes an exception to the principle concerning list prices and that the offer made to the customer must be aligned on a price list based on another point which secures the buyer more advantageous terms. Alignment is accordingly prohibited between under­ takings quoting on the basis of the same basing points. That prohibition, which has regard for the general system of the Treaty, is intended to ensure compliance with the obligation to make public price lists and conditions of sale and to maintain the transparency of the market.

35 Accordingly Rumi, whose basing point is Montello, could not align itself on the undertakings Feralpi and IRO, whose basing points are Lonato and Odolo respectively, which are situated in the same zone and do not entail more advantageous delivery terms for the French customer to whom the reinforcement bars were sold.

RUMI v COMMISSION

36 It is clear from those considerations that the third submission must be rejected, including that aspect of it claiming a misuse of powers, in support of which no argument was adduced.

40 Those considerations lead the Court to reduce the fine from 15% to 10% of the amount whereby the list prices exceeded the prices charged, that is 43 423 units of account corresponding to a sum of Lit 45 890 000, so that the amount of the fine is proportionate to the consequences of the infringements committed.

JUDGMENT OF 12. 7. 1979 — CASE 149/78

Costs

41 Since the applicant has been unsuccessful in all its submissions as to law it must be ordered to pay the costs pursuant to Article 69 of the Rules of Procedure.

On those grounds,

THE COURT

A. Van Houtte J. Mertens de Wilmars Registrar President of the First Chamber, Acting as President