C-154/78

227/78 S . P A . ACCIAIERIA DI DARFO, whose registered office is in Darfo-Boario Terme (Brescia, Italy), represented by Giuseppe Marchesini, Advocate at the Italian Corte di Cassazione, with an address for service in Luxembourg at the Chambers of Ernest Arendt, 34 B Rue Philippe II;

228/78 S.P.A. SIDER CAMUÑA, whose registered office is in Berzo Inferiore, (Brescia, Italy), represented by Giuseppe Marchesini, Advocate at the Italian Corte di Cassazione, with an address for service in Luxembourg at the Chambers of Ernest Arendt, 34 B Rue Philippe II;

263/78 S.P.A. METALLURGICA LUCIANO RUMI, whose registered office is in Bergamo (Italy), represented by Manlio Brosio and Adriano Bolleto, Advocates at the Italian Corte di Cassazione, and Ernest Arendt, of the Luxembourg Bar, with an address for service at the latter's Chambers, 34 B Rue Philippe II;

JUDGMENT OF 18. 3. 1980 — JOINED CASES 154,205,206, 226 TO 228,263 AND 264/78,39,31, 83 AND 85/79

264/78 S.P.A. FERALPI, whose registered office is in Lonato (Brescia, Italy), represented by Antonio Liserre and Giuseppe Gelona, of the Milan Bar, with an address for service in Luxembourg at the Chambers of Georges Margue, 20 Rue Philippe II;

39/79 O.L.S. OFFICINE LAMINATOI SEBINO — ACCIAIERIE E FERRIERE LAMINATOI E TRAFILATI, whose registered office is in Pisogna (Brescia, Italy), represented by Vito Landriscina and Giuseppe Marchesini, Advocates at the Italian Corte di Cassazione, with an address for service in Luxembourg at the Chambers of Ernest Arendt, 34 B Rue Philippe II;

— In Case 83/79 by H. Matthies, acting as Agent,

VALSABBIA v COMMISSION

with an address for service in Luxembourg at the office of Mario Cervino, Jean Monnet Building, Kirchberg, defendant,

APPLICATION principally for the annulment of the individual decisions imposing pecuniary penalties, adopted by the Commission against each of the applicants for selling concrete reinforcement bars below the minimum prices, or alternatively either the annulment of Commission Decision N o 962/77/ECSC of 4 May 1977 (Official Journal L 114 of 5 May 1977, p. 1) fixing the said mimimum prices, or a declaration that the said Commission decision does not apply, or, in the further alternative, a reduction in the amount of the said fines,

THE COURT

composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges,

minimum prices for hot-rolled wide and the social situation in Italy which strips, merchant bars and concrete made redundancies impossible. reinforcing bars" (Official Journal L 352 of 31 December 1977, p. 1). The Commission did not accept those arguments and imposed the following fines on the nine applicants: In Cases 154/78 Valsabbia, 206/78 AFIM, 227/78 Di Dar/o and 228/78 — Valsabbia (154/78): LIT 25 840 000 Sider Camuña the Commission also accused the undertakings concerned, at — Stefana Fra. (205/78): LIT the time of its investigation, of failing to 30 332 000 make monthly statements contrary to Commission Decision N o 3017/76/ — A.F.I.M. (206/78): LIT 46 917 000 ECSC of 8 December 1976 concerning the obligation of undertakings pursuing a — Ant. Stefana (226/78): LIT production activity in the steel sector to 50 852 000 supply certain data on deliveries of steel (Official Journal L 344 of 14 December 1976, p. 24), but having recognized the — Di Darfo (227/78): LIT 27 830 000 validity of the companies' observations on that matter, the Commission fined the — Sider Camuña (228/78): LIT undertakings only for the infringements 55 423 000 of Decision No 962/77 laying down the minimum prices. — Rumi (263/78): LIT 51 936 000

— Feralpi (264/78): LIT 55 110 000 In each case the Commission gave the companies an opportunity to submit their — O.L.S. (39/79): LIT 9 500 000 comments in accordance with Article 36 of the ECSC Treaty. It also summoned each company to a hearing; only the Di It is against those decisions of the Darfo company (Case 227/78) claims Commission that the applicants that its right to defend itself was submitted the present applications, which infringed on the ground that the were received at the Registry of the Commission refused to give it an extra Court respectively on : fifteen days' notice of the hearing. — 14 July 1978: Valsabbia (154/78)

— 15 December 1978: Rumi (263/78) which was received at the Registry of the Court on 24 February 1979. However, by an application of 5 March 1979, the — 21 December 1978: Feralpi (264/78) applicant asked the Court to order the suspension of the operation of the — 9 March 1979: O.L.S. (39/79) Commission's Decision of 10 January 1979 pending the decision on its main application. By Order of 27 March 1979 the President of the Court dismissed the By an order of 27 July 1979 the Court application for suspension on the ground decided, pursuant to Article 43 of the that, as the Commission had stated that Rules of Procedure, to join the present it did not wish to proceed to an cases for the purpose of the oral enforcement of the contested decision as procedure. The procedure took its long as the main action was pending, the normal course. After hearing the report suspension of the operation of the of the Judge-Rapporteur and the views decision was "neither urgent nor of the Advocate General, the Court justified" and reserved costs until final dismissed the applicants' claim for an judgment. expert's report, but it added the reports of the Consultative Committee to the file and decided to open the oral procedure without holding a preparatory inquiry. Having heard the report of the Judge- Rapporteur and the views of the Case 31/79 Advocate General, the Court decided to open the oral procedure without holding a preparatory inquiry. The Société des Aciéries de Montereau, a French limited liability company, formed on 25 April 1973, produces concrete reinforcement bars and does not deny that it sold its products at prices lower than those laid down by Case 83/79 Commission Decision No 962/77. On 10 January 1979 the Commission adopted an individual decision in relation to it, which was notified to it on 18 January 1979, and imposed upon it a fine of The Eisenwerk-Gesellschaft Maxi- 115 896 units of account, that is FF milianshütte (hereinafter referred to as 670 000, for having issued credit notes "Maximilianshütte"), a German limited and given illegal discounts in respect of liability company, produces concrete sales of concrete reinforcement bars reinforcement bars and does not deny between June and December 1977 which that it sold its products below the involved underpricing amounting to a minimum prices fixed by Decision N o total of FF 11 730 216. The total value of 962/77/ECSC. On 9 April 1979 the unlawful sales amounts to FF 61 663 456 Commission adopted an individual in respect of a total quantity of decision in relation to it, which was 49 912.475 tonnes of concrete notified on 23 April 1979, ordering it to reinforcement bars. pay a fine of 94 068 units of account, that is D M 237 000, for having issued credit notes to its customers between The Société des Aciéries de Montereau 14 June and 30 September 1977 which thereupon submitted an application, reveal underpricing totalling DM

The applicants claim that the Court should: Case 85/79 1. In Case 154/78 Valsabbia: The company Korf Industrie and Handel (hereinafter referred to as "Korf"), " 1 . Annul the individual decision of a German Kommanditgesellschaft, 30 May 1978 adopted by the produces concrete reinforcement bars Commission with regard to it under and does not deny that it sold its Decision N o 962/77 which involves products in the Federal Republic of a manifest failure to observe the Germany at prices lower than those fixed provisions of Article 2, Article 3 (c), by Commission Decision N o 962/77/ (d), (f) and (g), and Articles 5 and ECSC of 4 May 1977 (Official Journal 61 of the ECSC Treaty and misuse L 114 of 5 May 1977, p. 1) "fixing of powers and, alternatively, minimum prices for certain concrete infringement of essential procedural reinforcement bars" extended by requirements; Commission Decision N o 3000/77/ ECSC of 28 December 1977 "fixing , 2. Order the Commission of the minimum prices for hot-rolled wide European Communities to pay the strips, merchant bars and concrete costs; reinforcing bars" (Official Journal L 352 of 31 December 1977, p. 1). 3. Admit the evidence of technical experts on the situation in the concrete reinforcement bar industry On 9 April 1979 the Commission in 1976 and 1977 and on the adopted an individual decision penalizing structure of costs and prices that company, notified on 20 April 1979, obtaining in that sector at that time." and imposed on it a fine of 95 260 units of account, equivalent to D M 240 000, for having sold concrete reinforcement 2. In Case 205/78 Stefana Fratelli: bars during the second half of 1977 at prices lower than the minimum prices by " 1 . Annul the individual decision of 27 giving credit notes which reveal under- July 1978 taken by the Commission pricing totalling D M 2 401926.55. The of the European Communities with total value of unlawful sales amounts to regard to it under Decision No D M 9 364 586 in respect of a quantity 962/77 which manifestly fails to of 17 669.032 tonnes of concrete observe the provisions of Articles 2, reinforcement bars. 3 (c), (d), (f) and (g), 5 and 61 of the ECSC Treaty and which involves misuse of powers and, alternatively, Having heard the report of the Judge- infringement of essential procedural Rapporteur and tho· views of the requirements;

By way of preparatory inquiry: 4. In Case 226/78 Antonio Stefana: (a) In the application: 4. Admit the evidence of technical experts on the situation in the " 1 . Primarily, annul the decision of concrete reinforcement bar 18 August 1978 imposing a industry in 1976 and 1977, on the pecuniary sanction on the structure of costs and prices company on the grounds that charged, on the state of supply Decision No 962/77, the breach and demand and on the quantities of which is alleged in this case, is imported and exported by manu- illegal and that it is vitiated by facturers in each of the Member violation and manifest failure to States; observe the provisions of the

JUDGMENT OF 18. 3.1980 — JOINED CASES 154,205,206,226TO 228,263 AND 264/78,39,31,83 AND 85/79

Treaty, misuse of powers and Rules — on the question of the infringement of essential proce- financial situation of the dural requirements; company at the time of the disputed offences (Mr E. Broli, 3 Piazza Duomo, Brescia) and on 2. Alternatively annul the decision the question of the sales policy of 18 August 1978 on the pursued by the company during ground of illegality arising from the period in question (Ragionier its own defects, involving Guizzi, 3 Via Conicchio, infringements of the Treaty and Brescia." of the rules of law relating to its application;

5. In Cases 227/78 Di Darfo and 3. In the further alternative, amend 228/78 Sider Camuña: the contested decision by providing for a purely symbolical penalty; " 1 . Primarily, annul the decision of 18 August 1978 imposing a pecuniary 4. By way of preparatory inquiry, sanction on the company on the admit technical evidence on the grounds that Decision No 962/77, situation and composition of the breach of which is alleged in this costs and prices in the concrete case, is illegal and that it is vitiated reinforcement bar industry in by violation and manifest failure to 1977 in Italy and in the observe the provisions of the Treaty, Community; misuse of powers and infringement of essential procedural requirements;

6. In Case 263/78 Rumi: — Order the Commission to pay compensation for the damage, to be "After admitting, if necessary, experts' assessed separately; reports on the general situation of the concrete reinforcement bar industry and Alternatively of the steelworks Metallurgica Luciano Rumi in particular, for the years 1977 and 1978, and on the costs and prices — Having taken note that the applicant prevailing at the time of the alleged acted in good faith, or at least that its infringement; conduct was caused by excusable errors, reduce appreciably the penalty imposed; 1. Annul the individual decision of the Commission of the European Communities of 18 October 1978 and By way of preparatory inquiry declare that as against the applicant Decisions Nos 962/77 and 3000/77 — Order the Commission to make are also inapplicable on the grounds available to the Court all the of infringement of the provisions of documents relating to the meetings Articles 2, 3 and 4 (b) of the Treaty and agreements (promoted by the of Paris, misuse of powers and Steel Directorate of the EEC) for the infringement of essential procedural so-called channelling of the requirements; production of concrete reinforcement bars for the purpose of allowing the 2. Alternatively, reduce the amount of Court, and through it the the fine imposed on the applicant; Competition Directorate of the EEC, to form a due and appropriate 3. In any event, order the Commission evaluation in the light of Article 65 of of the European Communities to pay the Treaty; the costs." — If necessary, to obtain the opinion of 7. In Case 264/78 Feralpi: an expert on the situation in the concrete reinforcement bar industry "As a preliminary matter in order to ascertain whether the conditions laid down in Article 61 (b) of the Treaty were satisfied; — Order the joinder of this case with Cases 154/78, 205/78 and 206/78 and with any case which has the Costs same subject-matter as this application; — Make an order for the payment of the applicant's costs." Primarily

plicable in relation to the applicant those occasioned by the expert company; evidence; 2. Annul the individual decision of Without prejudice to any other 10 January 1979 whereby the submissions of fact and law." Commission of the European Communities imposed a fine of 8 513 The Commission contends that the Court units of account on the applicant should: company; 1. In Cases 154/78 Valsabbia, 205/78 In the alternative, in the unlikely event Stefana Fratelli, 206/78 AFIM, 263/78 of the principal claim being dismissed Rumi and 29/79 O.L.S. : 3. Reduce the fine imposed to a purely "— Dismiss the applications as symbolical amount; unfounded; By way of preparatory inquiry — Order the applicants to pay the 4. Admit technical evidence in order to costs." ascertain: 2. In Cases 226/78 Antonio Stefana, (a) In general, the situation in the 227/78 Di Darfo and 228/78 Sider concrete reinforcement bar Camuña: industry in 1976 and 1977, the "— Declare the applications structure of current costs and inadmissible as regards the claims prices, the state of supply and alleging misuse of powers and demand and the quantities infringement of essential proce- imported and exported by dural requirements and dismiss producers in each of the Member them as unfounded; States; — Order the applicants to pay the (b) In particular, the minimum and costs." average level of prices charged at the time of the entry into force of 3. In Case 264/78 Feralpi: Decision No 962/77 by producers "— Declare the application submitted operating above the margin; the by S.p.A. Feralpi inadmissible as level of prices actually charged regards the claims alleging within the Community before the illegality and dismiss it as entry into force of the said unfounded; decision, and during the whole period of its application; the — Order the applicant to pay the composition of production costs costs." and industrial costs of producers in the various Member States; the In Case 31/79 prices charged, at the time when Decision N o 962/77 was adopted, The applicant claims that the Court by the applicant company and by should: the other Community under- " 1 . Declare that the decision of the takings in the sector which were Commission of the European operating above the margin; Communities of 10 January 1979 In any event concerning a fine imposed under Articles 61 and 64 of the ECSC 5. Order the Commission of the Treaty on the Société des Aciéries de European Communities to pay to Montereau, Montereau Fault, O.L.S. the costs of the action and Yonne, is null and void;

2. Alternatively: 2. The considerations which Reduce the fine imposed on the guided the defendant in the applicant; development of its policy 3. Order the defendant to pay the concerning the initiation of costs ; supervisory procedures and infringement procedures; 4. Declare that the decision on costs is provisionally enforceable." 3. The effect of such action on the market in concrete rein- In a supplement to the application, the forcement bars; applicant claims that the Court should: — The said inquiry to be carried out "Order the defendant to pay the costs by: occasioned by the claim for the suspension of the operation of the 1. Requesting information on Decision of the Commission of the that matter from the European Communities of 10 January defendant; 1979." 2. Ordering the responsible In its defence the defendant contends that official of the relevant Direc- the Court should: torate General of the " 1 . Dismiss the application; Community to appear in 2. Order the applicant to pay the person; costs." — Order measures of inquiry in order to ascertain whether: In its rejoinder, the defendant amplified the second point of its conclusions in 1. Between the entry into force these terms: of Decision No 962 and 23 tt January 1978 the minimum prices laid down by the 2. Order the applicant to pay the costs defendant for concrete of the proceedings including the costs reinforcement bars were of the proceedings for the suspension largely disregarded by the of the operation of the contested market because transactions decision." by dealers and imports did not come within the scope of the In Case 83/79 decision and because that The applicant claims that the Court decision was not complied should: with to a sufficient degree by (a) In its application: the persons to whom it was addressed; "Annul Decision K (79) 419, taken by the defendant with regard to the 2. For that reason, a supplier applicant on 9 April 1979 and who complied with the notified on 23 April 1979, and order minimum prices was forced to the defendant to pay the costs of the accept the loss of a action; considerable volume of sales; — Order measures of inquiry 3. Such a supplier could avoid concerning: losing sales only by himself 1. The number of supervisory charging prices lower than the procedures and infringement minimum prices; procedures which the defendant carried out during — The said inquiry to be carried out each week between the entry by: into force of Decision No 962 Seeking the opinion of an expert to and 23 January 1978; be appointed by the Court; .

— Order the defendant to convey to Requesting information on that it all the preliminary documents matter from the defendant." concerning the proceedings now pending." The defendant contends that the Court (b) In its reply: should: — "Order measures of inquiry "— Dismiss the purported offers of concerning: evidence; 1. The number and results of the — Dismiss the application and order supervisory procedures and the applicant to pay the costs." infringement procedures car- ried out in relation to the In Case 85/79 steelworks of northern Italy in The applicant claims that the Court relation to Decision No 962 should: and the dates on which those proceedings were initiated and " 1 . Declare that the decision of the completed; and Commission of the European Communities of 9 April 1979 2. The question whether the concerning a fine imposed under defendant offered the steel- Articles 61 and 64 of the ECSC works of northern Italy Treaty on the company Korf guarantees, and if so in what Industrie und Handel GmbH & Co. form, in return for an under- KG, Baden-Baden, is null and void; taking that they would comply with Decision No 962; 2. Alternatively: Reduce the fine imposed on the — The said inquiry to be carried out applicant; by: 3. Order the defendant to pay the Requesting information on that costs." matter from the defendant; — Order measures of inquiry in The defendant contends that the Court order to ascertain : should: 1. Whether and during what " 1 . Dismiss the application; period the undertakings, and 2. Order the applicant to pay the in particular the producers of concrete reinforcement bars in costs." the North of Italy, complied with the delivery conditions laid down by the defendant I l l — S u m m a r y of t h e s u b m i s - for concrete reinforcement s i o n s a n d a r g u m e n t s of t h e bars; and parties 2. Whether and when the under- In Joined Cases 154, 205, 206, 226 to 228, takings, and in particular the 263 and 264/78 and 39/79 manufacturers of concrete reinforcement bars in the North of Italy, declared their A — By way of introduction: actual deliveries as required by Considerations regarding the Commission Decision No market for concrete reinforcement 3017/76 of 8 December 1976 bars and the situation of the (Official Journal L 344 of 14 undertakings in Brescia following December 1976, p. 24); Decision N o 962/77/ECSC — The said inquiry to be carried out All the applicants followed a similar by: scheme in setting out their submissions

— In the first place, they are completely (a) The applicants start by describing the integated "mini-steelworks" which characteristics of the product which they convert the raw material (ferrous manufacture: the concrete reinforcement scrap and not ore, which would be bar does not require high technology, "it much more difficult) directly into is obtained by the hot-rolling of ferrous liquid steel, requiring less investment material of different types (ingots, and also a smaller work force; thus minerals, etc.)" and it has two production costs are relatively low in fundamental qualities: hardness and relation to those of the large steel- elasticity. It is a product which is used making concerns; essentially in the building industry, where, incorporated into concrete, it becomes "reinforced concrete". — Secondly, those mini-steelworks Following the last World War, many generally produce only one product; small and medium-sized undertakings started producing concrete reinforcement bars because, in the first place, the — Thirdly, they have retained a family potential market seemed limitless (it was structure, the family being necessary to rebuild everything that had responsible for the management and been destroyed between 1939 and 1945) general organization of the under- and, secondly, since it did not require a taking; high level of technology, unlike the production of special materials (rolled products, sheets, etc.), very little investment was required in order to set — Fourthly, they have succeeded in up a factory for the production of perfecting a short cycle between the concrete reinforcement bars. Thus that purchase of the scrap and the product is currently manufactured prin- collection of payment for the cipally by small and medium-sized material produced; thus they have undertakings. Further, those under- limited the amount of finance takings are concentrated mainly in Italy, required. and in particular around the town of Brescia, where there exists an old steel- making tradition. All that explains the extraordinary upsurge in the production All those characteristics show that those of concrete reinforcement bars in that undertakings in Brescia are capable of

In the circumstances, the applicants maintain that Decision No 962/77 fixed minimum prices at too high a level in During the negotiations, points 2 and 4 relation to the production costs of the were examined by the Commission, point undertakings in Brescia, that they were 1 was rejected and, as for point 3, forced to sell at prices below the according to Feralpi, the Bresciani minimum prices, and that, further, that agreed not to export to France, Belgium decision is politically bad for Italy where and the Federal Republic of Germany there exists a strong demand for housing quantities in excess of 2 0 % of demand in which is not met because the prices are those countries, which proves that the too high; Decision No 962/77 has Bresciani accepted a reduction of 30% in contributed to an increase in the price of their exports as regards the Federal housing in view of the importance of Republic of Germany and 4 0 % as reinforced concrete in modern buildings. regards France. That system of Faced with that "untenable situation" "channelling" and quotas, which was caused by Decision No 962/77, the sought by Commissioner Davignon, led undertakings in Brescia asked the to the creation of the "Ufficio Coordi- Commission on the occasion of meetings namento e Ripartizione Ordini" in Milan and Brussels in the autumn of (UCRO) which came into operation 1977 to take action on the following officially on 1 July 1978 and was auth- four points: orized by the Commission decision of 28 July 1978 (Official Journal L 238 of 30 August 1978, p. 28) with the sole task of 1. Adjust the minimum prices in seeking out new export sales outlets and accordance with developments on the centralizing the administrative and stat- market, that is to say reduce them. istical operations.

2. Steps taken by the Commission prior The applicants conclude these arguments to Decision No 962/77 by declaring that they "would be quite content to sell at the minimum prices", but that it is the market which compels them to sell below those prices; some of From the end of 1974, noting with them, such as Feralpi, had even advised concern market trends for iron and steel the Commission that they were going to products in the Community, and in be forced to sell below the minimum particular the considerable decline in prices. They also call in support the fact demand, the deterioration in prices, and that "Europeans and non-Europeans are the consequent effects on employment, selling below the minimum prices", and the Commission decided on the measures that Decision No 962/77 has thus failed which would have to be taken. to achieve its aims. As proof they rely on the fact that the exports of the Bresciani were maintained only because Decision No 962/77 was not adhered to by the undertakings and the increase in prices — As from May 1975 it put the under- which took place in 1977 was not the takings on notice by a communication of result of "increased earnings" due to the 2 May 1975 (published in the Official growth in sales receipts, but to an Journal C 100 of 2 May 1975, p. 1) and increase in costs, especially labour and informed them that it would be vigilant energy costs. over prices and would carry out regular checks.

— In order to have at its disposal all the (b) The Commission submits an analysis information concerning forecast and containing three points: actual production of crude steel and

— Finally, at the end of 1976, two communications, one dated 23 December 1976 (Official Journal C 303 of 23 December 1976, p. 1) and the other That system was introduced in order to dated 24 December 1976 (Official ensure that the undertakings had Journal C 304 of 24 December 1976, p. sufficient resources to be able to re- 5) relating to the application of crisis structure themselves and safeguard their measures on the steel market, announced productive capacity and thus on the one hand the Commission's employment, and "not in order to intention to make detailed forecasts, by benefit certain undertakings or prejudice undertakings or groups of undertakings, others", since that decision was taken as regards concrete reinforcement bars in application of the principle of (and other products) and, on the other "solidarity, which constitutes one of the hand, its intention to invite each under- guiding principles of the ECSC Treaty", taking or group of undertakings to enter and in order to: into an engagement to limit voluntarily its deliveries to the level which would be communicated to it individually. — avoid distortions by benefiting the iron and steel industry in relation to other sectors; 3. Situation on the market for concrete reinforcement bars and minimum prices (Decision No 962/77)

— take into account the interests of the In the general context of the steel market undertakings and their competitive the concrete reinforcement bar was a situation (for example, between 1975

VALSABBIA v COMMISSION

and 1977, the price of ore had The Parliament also approved the increased by between 8 and 3 3 % Commission's decision in a resolution of whilst the price of scrap had fallen by 26 April 1977 (Official Journal C 118 of between 37 and 47%); 16 May 1977, ,p. 56) in which it "supports the position of the Commission in trying to overcome the European steel crisis". — avoid disturbing exports and imports.

JUDGMENT OF 18. 3. 1980 — JOINED CASES 154,205,206, 226TO 228,263 AND 264/78,39,31,83 AND 85/79

record the reality of the situation States operates by using methods constitutes the best proof that the action entirely contrary to the specific rules taken was contrary to the principles contained in Articles 4 (c) and 75 inherent in the system of free of the ECSC Treaty, and the competition adopted by the ECSC Commission has failed to take the Treaty and proves that Decision No necessary measures under Article 88 962/77 constitutes a "protectionist policy of the Treaty and insists on the on the part of the Commission in favour legality of the sanctions imposed, of the steel-making giants, which had trying to resolve the "alleged crisis become unprofitable as a result of their affecting the steel-making giants" own managerial incompetence". The with a system of minimum prices applicants rely on four objections to that which has lasted for two years decision: (which, according to the applicant, is long for a "limited period") and measures which have been shown to be "superfluous".

VALSABBIA v COMMISSION

European countries: 3 % growth, simply a reflection of the choice effected failing to attain the Community by the Commission between the aims laid average of 4.3%. Thus it is wrong to down by Article 3 of the ECSC Treaty. say that Italy retained its share of the market and AFIM concludes that Decision No 962/77 constituted "a retajiatory measure designed to penalize the Italian producers of On the second point, "the Commission is concrete reinforcement bars for their conscious of the limited effectiveness of refusal to accept a full system of that decision" which "is a necessary but quotas for their respective production not sufficient condition for the re- and the forced direction of sales structuring of the Community steel which is the corollary of such a industry"; thus the intervention by the system, which objectives the Member States in favour of their Commission (contrary to Article 4 of national steel industries cannot demon- the ECSC Treaty) had been strate the illegality of Decision No attempting to impose for some time 962/77. and which it had even succeeded in attaining for 50% of the industry".

JUDGMENT OF 18. 3. 1980 — JOINEDCASES 154,205,206, 226TO 228,263 AND 264/78, 39,31,83 AND 85/79

B — The first submission: Decision N o The Commission contests that argument, 962/77 manifestly failed to observe declaring in the first place that there is the provisions of the Treaty and in no proof that employment would have particular the rules contained in been threatened if Decision N o 962/77 Article 61 (b) in conjunction with had been applied normally by the Brescia Articles 2, 3 and 4 of the ECSC undertakings as a whole; secondly, that Treaty and with the Convention the contingency of "fundamental distur- for the Protection of Human bances" is not a proper argument on Rights which to claim the illegality of the specific course of action adopted by the Commission; thirdly, that the existence of a relationship of cause and effect A summary of all the arguments between the "disturbances" apprehended developed in support of this claim may and the non-compliance with Decision be set out in the following way: N o 962/77 has not been proved at all.

1 . Infringement of Article 2 of the ECSC Treaty

VALSABBIA v COMMISSION

As a factual point, it should be noted further maintains that Article 3, which that the production of bars in the also stipulates that those "lowest prices" Community as a whole fell by 9.8% must allow "necessary amortization" and between 1976 and 1977 and by 3 % a "normal return" on capital, seeks to between the first half of 1977 and the attain other objectives namely to avoid first half of 1978; Italian production rose bankruptcies and factory closures. Thus, by 3.4% between 1976 and 1977, then it in the crisis situation through which the remained stable. From that it may be steel market was passing, the inferred that the disastrous effect proc- Commission pursued Treaty objectives laimed by the applicants did not occur. neglected by the applicants, which consisted in enabling undertakings to obtain that minimum of financial resources which is essential · in order to 2. The infringement of Article 3, the survive and to carry out necessary aims of which must be attained in the restructuring. event of minimum prices being fixed under Article 61

2.1. The applicants raise a number of (b) The protectionism introduced by arguments which may all be that decision in disregard of grouped under the following Article 3 (f). headings:

JUDGMENT OF 18.3. 1980 — JOINED CASES 154,205,206,226TO 228,263 AND 264/78,39, 3 !, 83 AND 85/79

VALSABBIA v COMMISSION

objective laid down is extraneous to economic facts and circumstances in the relationships between Community iron light of which those choices are made". and steel undertakings It submits that it is in those conditions that it gave priority to three main (e) The Commission's obligation to objectives in the preparation of Decision "ensure an orderly supply to the No 962/77: Common Market. . .", laid down by Article 3 (a). — First, in application of Article 3 (c), The applicants declare that this objective to enable undertakings to obtain a could be attained by the Brescia under- minimum of financial resources in takings at market prices under conditions order to carry o u t the necessary of free competition and that thus restructuring; Decision No 962/77 does not serve the objective laid down by Article 3 (a). — Secondly, in application: of Article In reply to that argument the 3 (e), to maintain, the level of Commission relies on the difference employment in order to avoid a existing between the situation of the deterioration in the working Bresciani and the Italian situation as a conditions and standard of living of whole, on the one hand, and between the workers; that situation and the European situation, on the other hand, and — Thirdly, in application of Article emphasizes that the supply to the 3 (a) and in the long term·, to main- Common Market must be considered as tain sufficient productive capacity. a whole.

JUDGMENTOFI8.3. 1980 — JOINED CASES 154,205,206, 226TO 228, 263 AND 264/78,39,31,83 AND 85/79

sacrificed by the decision in question. possessions (the Convention). Moreover, Finally, they submit that the Commission that system requires the Commission to does not enjoy a margin of discretion in intervene only exceptionally for "the the adoption of a preventive measure. establishment, maintenance and observ- ance of normal competitive conditions" (Article 5). It is alleged that the The Commission replies, first, that no Commission disregarded all those grounds are given in support of the provisions. applicants' proposition that all the objectives referred to by Article 3 of the ECSC Treaty were disregarded. (a) Decision No 962/77 entailed discrimination between producers, prohibited by Article 4 (b). It then insists on the need to make a choice which most closely accords with the common, institutional interest of the The applicants maintain that at the organization, and submits that the request of France and Belgium, countries discretionary power does not apply in which concrete reinforcement bars are solely to the extreme case in which produced at higher cost, the Commission several courses of conduct are equally had used "all means" to obtain voluntary valid, that is to say, in this case, all undertakings to limit production equally appropriate; it is for that reason covering 50 % of the industry as a that the applicants' proposition "amounts whole, and that, not satisfied with that essentially to a claim that the result, it introduced the system of Commission undertook a legal procedure minimum prices which was not an egali- which as impossible". It adds that its tarian means of assisting the under- policy has brought progress, since the takings in the sector to recover, but a fall in the level of employment is device to protect the less competitive relatively smaller than before the producers in order to restore their prof- adoption of Decision No 962/77, and itability. that the restructuring has begun.

quantitative restriction on the free They maintain that that system makes movement of products, prohibited exports to other member countries by Article 4 (a). impossible, since they are deprived of their principal weapon, a competitive price, and are prevented from relying on delivery periods owing to the high level The applicants consider that the of stocks throughout the Community, consequence of the minimum prices which enables all the undertakings in the system is that, as the user's only Community to deliver within a very short remaining choice was between products period, or on extras for quality, since sold at the same price, he was forced to Article 4 of Decision No 962/77 froze turn to his national market, and they them at the level of the prices contained submit that his free choice of supplier in price lists published or notified to the was thus impaired. Further, that is an Commission at the date of the entry into obstacle to the free movement of goods, force of the aforesaid decision. and as such it is illegal on the ground that "any provision or system capable in fact of restricting the free movement of goods or partitioning the Common They declare that as a result their share Market" is contrary to the Treaty. of the market fell, as is proved by the evolution of the situation during the first nine months of 1978 (see supra, III A (c)), and that if during 1977 their share The Commission maintains that a of the market remained stable, that was measure steering users towards national due only to the commercial dynamism of producers cannot constitute an obstacle the Italian producers and to their general either to the purchaser's free choice of practice of underpricing; thus the Italian supplier or to the free movement of producers' retention of their market goods in the Common Market. share was due mainly to the fact that they did not apply Decision No 962/77.

situation, there always remains the fundamental right was infringed in this possibility — for the most productive case and that the Convention does not of undertakings — of alignment, which itself form part of Community law. In enables them to sell by finessing the any case, the Court of Justice has transport costs. already dealt with this question, deciding in a similar case (Case 4/73 Nold [1974] ECR 491) that there is no infringement As for the arguments about the market of those fundamental rights when it is a share, the Commission recalls that the question of "mere commercial interests 1978 figures are not relevant to this case, or opportunities". being subsequent to the events in question and incomplete, and that for 1977 the applicants themselves recognize that their share of the market did not 4. Infringement of Article 61 (b) of the fall. Finally, it disputes that underpricing ECSC Treaty was practised generally.

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The applicants submit that the objectives Finally, they declare that the minimum laid down were never attained, in the prices could not be applied because they first place, because the prices were fixed were rejected by the market: Rumi even at the wrong level, making the decision offers evidence in proof of that argument impossible to apply, and secondly, by adding to the file on the case a telex

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Finally, it rejects the applicants' Finally, in Italy itself, the Commission argument to the effect that the market decided upon the channelling of concrete rejected the minimum prices, stating, in reinforcement bars through the U C R O , the first place, that between 15 June which, although its task was officially 1977 and 8 November 1978 officials of stated to be one of co-ordination, has as the Community carried out 129 its principal function the fixing of quotas inspections in relation to iron and steel for exports by the Bresciani to the other undertakings (76 in Italy), which led to member countries; according to Feralpi, the establishment of infringements in the Bresciani agreed to the creation of 14 cases only; and, secondly, that the U C R O only because in return the Mr Slawik is not in its service and that creation of that office involved the repeal he alone is responsible for his statements. of Decision No 962/77 as regards Italy

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according to the case-law of the injures their individual interests Court, an infringement of an specifically and directly, and submit that essential procedural requirement. the connexion existing between Articles 36 and 33 of the Treaty — which the Commission overlooked — does not The Commission recalls that it is not provide the slightest degree of support necessary to give reasons for the various for a restrictive interpretation of that provisions of a general decision, and that sort. it is sufficient that the statement of reasons should contain the essential elements of the logical process, and it The Commission repeats that the Court cites the case-law of the Court in support cannot deal with the two submissions of that argument: alleging misuse of powers and an infringement of essential procedural requirements until the applicants have — Case 2/57 Compagnie des Hauts proved that the general decision injures Fourneaux [1957 and 1958] ECR their individual interests specifically and 199; directly, and it continues to maintain that those two submissions are "partially — Joined Cases 3 to 18/58, 25 and inadmissible or unfounded in the absence 26/58 Barbara Erzbergbau and Others of any interest on the part of the [1960] ECR 1973; applicants".

reflecting the attitude of the Commission The Commission replies in the first place which, acting automatically, merely that the applicants have not contested the imposed the fine laid down by Decision complaints made (only three of them No 962/77; in support of that argument dispute the calculations carried out) and Rumi cites the reasons on which the that the inquiry took place in a proper individual decision imposing the fine on manner. It then recalls that it is clear that it was based: "taking into account the the reasons given for an individual nature of the infringements, the amount decision cannot deal with the validity of of sales below the minimum prices and the general decision on which it is based, the real taxable capacity of the under- but must be confined to consideration of taking . . . " and maintains that the the particular case in question. It follows Commission fixed what it called an that, as the reasons on which the "adequate penalty", without further individual decisions were based: comment. Thus, with such a spurious statement of reasons, the Commission could decide on whatever figure it chose, whether higher or lower. — referred to the articles of the Treaty and the general decisions applied;

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— First, is inconceivable, whether it be — Thirdly, the Community penalties with regard to a legal rule or with would lose their coercive force as a regard to a factual situation, such as result of the aberrant behaviour of a the evolution of the market; private entity;

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hearing and, aware pf delays in the post, the agency of S.p.A. Darma, it sent a telex on 26 June in which it Milan; stated that the registered letter was "following", instead of saying that it had — The second group corresponds to already been sent. The only reply from Invoices Nos 1660, 1661 and the Commission was a telegram dated 1662 in respect of deliveries to 28 June, which was not received by Di S.p.A. Baraclit (Italy) following Darfo until 29 June, rejecting the request confirmations of orders of 28 for a postponement of the hearing. It April 1977 from the agent under- was then obvious that Di Darfo could no taking Albani di Merate. longer attend that hearing. On account of that -"procedural defect" the applicant requests the annulment of the individual decision of 18 August 1978 imposing a The Commission points out in the first pecuniary sanction. place that the hearing which it grants to the parties is not a compulsory requirement and that as the written stage The more so as the applicant states that of the procedure finished on 13 May the it had wished to raise at that hearing the fixing of the hearing for 29 June gave Di factual points which it still contests to Darfo a reasonable period of notice. this day: Besides, there is no mandatory period of notice for such hearings; hence there was no procedural defect, nor was the — First, it considers that Invoices Nos applicant prevented from presenting a 1626, 1628 and 1630 do not concern proper and effective defence. concrete reinforcement bars, but rolled products of ST 37 quality, and so do not come within the scope of As regards the factual points, it Decision No 962/77; maintains that:

The applicant observes first that, as the channelling agreements "promoted" by the Commission through the U C R O (c) Feralpi were not complied with by German buyers, it was forced to sell below the minimum prices in the Federal Republic of Germany. It then submits that the 1. In the first place, the applicant extent of the underpricing was wrongly submits that, as alignment on an offer calculated by the Commission: in its from outside the Community was lawful view, the inspector calculated the value until 15 March 1978, the date of the of the underpricing practised by Rumi in entry into force of Commission Decision relation to a price of D M 540 per tonne; No 527/78/ECSC of 14 March 1978 those sales were carried out by way of (Official Journal L 73 of 15 March 1978, alignment on the Saarbrücken and Ober- p. 16) prohibiting alignment on offers of hausen basing points and Rumi considers iron and steel products originating in that, when transport costs are brought certain third countries, an alignment on into play, "the Davignon price is in a price which had itself been aligned on reality reduced from D M 540 to DM an offer from outside the Community 451.87". Consequently, it considers that was also lawful. Similarly, it could not be the extent of the underpricing is reduced argued that alignment on unlawful from 2 0 % to 10%, that is to say conduct, that is to say on a price which from LIT 200 000 000 to approximately was already contrary to the minimum LIT 100 000 000 and that the fine should prices, is unlawful. Consequently, Feralpi be calculated on the basis of underpric- submits that all the sales at prices aligned ing amounting to LIT 100 000 000. on offers which had themselves already been aligned on offers from outside the Community are exempt from the penalties laid down by Decision No 962/77. The applicant then goes on to The Commission points out that it never challenge certain facts established at the entered into any undertaking and that it time of the investigation: never lent its support to channelling agreements. As regards the price of the sales made in the Federal Republic of Germany between 7 and 27 April 1978, the price on the invoices was D M 400 — First, in the table relating to sales in per tonne, whereas the price fixed for Italy the Commission made a mistake the Saarbrucken or Oberhausen basing concerning the quantity in respect of point is D M 451.87 and the telex of which the pecuniary sanction was

— Secondly, the Commission calculated 2. The Commission rejects the the difference between prices charged applicant's argument concerning and the minimum prices without alignment, maintaining that Feralpi was taking into account the extras, which under a duty to align its prices on a — including the extras for diameter price-list and that therefore it could not — should be included in the align its prices on an offer made by an minimum prices; undertaking which had already aligned its prices on an offer originating in a non-member country; further, such — Thirdly, as regards the sales in the alignments should be apparent from the Federal Republic of Germany, the accounting documents and should be applicant shows that it aligned its notified individually to the Commission prices "on the price-lists used by in accordance with the combined competitors from the purchaser's provisions of the last subparagraph of region, deducting transport costs Article 60 (2) of the ECSC Treaty and accordingly", and rejects the Decision N o 23/63 (Official Journal, argument which the Commission English Special Edition 1963-1964, developed at the time of the p. 74); consequently, such alignments administrative procedure to the effect cannot be relied on to justify prices that the alignment on German prices lower than the minimum prices. should be calculated in German marks on the ground that the As regards the four specific criticisms, alignment should be calculated in the the Commission observes: currency of the seller, otherwise — in the event of a revaluation of the competitor's currency — the price of — First, that "the alleged error in the the undertaking making the calculation of the quantity does not alignment would be higher than the exist", quite simply because the price expressed in its own currency: invoice number was illegible and may that would be "an upwards have been wrongly reproduced; but alignment", and thus "absurd"; that all the other details were reproduced correctly; — Fourthly, the Commission accused the applicant of having charged — Secondly, that it does not deny prices below the minimum prices by having calculated the value of the means of a group of invoices on under-pricing in the manner which those disputed prices were described by the applicant, since handwritten. The applicant denies "Article 2 of Decision N o 3000/77/ that such documents have any ECSC provides that the minimum probative value, submitting that they prices shall be basic prices ex basing are of no value as between the parties point, including extra for quality" and are used only for tax purposes and extras could not be varied and that in any event in Italy "no following the adoption of Decision invoice may be submitted for the No 962/77;

3. The applicant contests the Commission's view on alignment, observing that if undertaking A aligns its 4. The Commission rejects the prices on undertaking B, those two applicant's argument on alignment; the undertakings have a common price and latter cannot occur as the result of that if undertaking C aligns its prices on hypothetical reasoning, but must take A it would be absurd to say that it aligns place at the time when the contract is on A rather than on B, and therefore made and must be apparent from the that form of alignment is lawful. As for accounting documents; and although the requirement of notification, that two undertakings may admittedly align exists only if the alignment is subject to their prices on a third, Article 60 (2) (b) limits laid down for each type of of the ECSC Treaty provides that product. Such limits were not fixed until reductions (below the list price) may not 15 March 1978, and in any event the fine exceed "the extent enabling the was imposed because of the failure to quotation to be aligned on the price list, observe minimum prices and not for a based on another point". Finally, the failure to notify legitimate alignments. obligation to notify the Commission of alignments made on offers from non- member countries arises as a result of Decision N o 23/63 of the High It then criticizes the Commission for Authority of 11 December 1963 replying to the point about the extras requiring Community iron and steel only in relation to the alteration of the undertakings to make returns to the price thereof. The applicant simply High Authority of the transactions in maintains that the "minimum price which they align their quotations on includes the extra for quality and that for those of undertakings outside the this purpose the extra for diameter must Community (Official Journal, English also be regarded as an extra for quality" Special Edition 1963-1964, p. 74), and

As regards the sales in the Federal Although the applicant does not deny Republic of Germany, the Commission having sold concrete reinforcement bars repeats that the prices at which those at prices below those fixed in Decision sales were carried out are clearly below No 962/77/ECSC, it considers that it the minimum prices. By way of proof it was compelled to act in that way owing adds to the file on the case the telexes to the evolution of the steel market, its which state on each occasion "selling competitors' selling prices being price": D M 420 or D M 430 and appreciably lower than the minimum "invoice price": LIT 205 000 (that is to prices. It attempted to obtain orders at say D M 550 at that time), and the the minimum prices, but it was always statement of Mr Petersen who carried confronted by competing offers at sub- out the inspection and who declares that stantially lower prices. After difficult and it was indeed the price marked in ruinous attempts to obtain sales at the German marks which constituted the prices laid down it was able to restore its actual price applied to the various level of production only by acting as it transactions. did, which enabled it to avoid ceasing production, incurring further losses and making its 450 employees redundant. Case 31/79 The applicant puts in evidence its order books and the opinion of an auditor and an expert. A — Admissibility

The defendant describes the general The applicant makes an application for phenomenon of the steel crisis and the annulment on the basis of the second action taken by it in the concrete paragraph of Article 33 of the ECSC reinforcement bars sector, where it found Treaty. It does not deny having sold itself faced with a sharper fall in prices concrete reinforcement bars at prices than in other sectors, on account of the below the minimum prices laid down, recession in the building industry, the fall but "it does not regard its conduct as an in exports, an increase in imports and a infringement of Decision No 962/77/ more pronounced lack of solidarity on ECSC", because it could not reasonably the part of the undertakings. Before the

adoption of Decision No 962/77/ECSC The defendant replies, on a point of law, the main features of the situation were that the applicant's argument amounts to an average rate of plant utilization of questioning — although it does not state 5 5 % , massive redundancies and short- clearly whether it is constesting the time working for almost 50% of the legality of the decision fixing the workforce. Hence the conditions to minimum prices in accordance with the which Article 61 of the ECSC Treaty third paragraph of Article 36 of the subjects the introduction of minimum ECSC Treaty — the minimum prices prices were satisfied. device provided for by the Treaty itself. "However numerous the infringements may be, they do not in any way affect

In cases. Moreover, the requirement of fact, in using its powers under Article 61 "certificates of conformity" (under of the ECSC Treaty, the Commission General Decision No 3003/77/ECSC — should observe the principle of propor- Official Journal L 352 of 31 December tionality, which is recognized in the legal 1977, p. 11) stating that the invoice systems of all the Member States, which prices conformed to the minimum prices "requires that action on the part of the and the requirement that such certificates public authorities must be appropriate should accompany deliveries made it and necessary in order to attain the possible after an investigation to initiate

takings. On the contrary, it caused a The applicant replies that the appropri- substantial deterioration in the structure ateness of the delayed imposition of of the market; besides, it turned out to penalties, when certain offenders be ineffective against the action of the disregard the minimum prices from the "Bresciani" who did not comply with it. first day, is all the more doubtful when The Commission's failure to take action the market is opposed to such a policy, led to the inapplicability of the said as Commissioner Davignon himself decision and "renders illegal any recognized. coercive action against the undertakings which adapted their conduct in accordance with a development to which The defendant emphasizes that those the Commission contributed". criticisms do not call in question the

According to the applicant, the ECSC Treaty, which is based on the tenet of free competition, must, as is evidenced D — The abuse of the power of by the fact that the practice of alignment appraisal conferred by Article 64 is permitted, enable undertakings to face of the ECSC Treaty competition at lower prices and thus maintain their competitive capacity. In this case there was alignment on competitors selling at prices lower than the minimum prices fixed by the The applicant is of the opinion that the Commission; in such a situation, to power of appraisal attributed to the require some to comply with a decision Commission by Article 64 of the ECSC infringed by others amounts to accepting Treaty must not, as regards the discrimination, thus infringing the imposition of sanctions, be exercised principle of equality. without due reflection; that is parti- cularly true when the general decision which if is necessary to enforce was inadequate. Besides, the Commission's The defendant replies that the possibility exercise of its power of appraisal was of alignment provided för in the Treaty distorted, in view of the discrimination constitutes a narrowly-defined dero- to which it gave rise (see below). gation from the prohibition on discrimi- nation and, moreover, allows only an alignment on the prices of a competitor which comply with the provisions in The defendant replies that the exercise of force. Moreover, the existence of a a power of appraisal need not necessarily minimum price has nothing to do with

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protect employment, cannot of necessity satisfied in this case. Other undertakings attain those objectives simultaneously in took the necessary measures (fewer, but each individual case. profitable, sales at the minimum prices, short-time working, partial redun- dancies). In the event of a general crisis, when an appeal for solidarity is made to The parties use again, in support of or in all concerned, a defence of legitimate opposition to this sixth submission, the self-protection cannot be accepted with arguments advanced with regard to the regard to an individual infringement, for economic situation of the applicant in that would entail the risk of justifying all relation to the market. infringements of the same type more or less automatically.

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Finally, there was, as was stated above, submitted for suspension of the discrimination in the amount of the fines operation of the decision was occasioned imposed on the various undertakings by the defendant's conduct, that is to say which were in breach of General by the peremptory terms of the letter of Decision No 962/77/ECSC. 17 January 1979, which offered favourable terms for the payment of only part of the fine and which did not guarantee the applicant against enforced The defendant recalls that Article 64 of implementation of the decision, and by the ECSC Treaty empowers it to impose the fact that it was not until the fines not exceeding twice the value of the proceedings for the adoption of interim sales effected unlawfully. In all the measures had commenced, when it was decisions imposing fines taken until now too late for the applicant to withdraw its by the Commission under Articles 64 and claim, that the defendant stated that 61 for infringement of the provisions on there was no question of enforcing the minimum prices, the basis chosen for the contested decision as long as the main calculation of the fine has been the value action was pending; the Court has of the underpricing established, that is to already taken such circumstances into say an amount well below the value of consideration (the judgments in Joined the unlawful sales. Cases 16, 17 and 18/59 [1960] ECR 17, and in Joined Cases 79 and 82/63 [1964] ECR 259).

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Commission. Finally, even if the in Bavaria — where "it achieves ap- Commission had not declared that it proximately two thirds of its sales in would not seek enforcement during the Germany" — "fell by 90%, dropping proceedings, the applicant's claim for from 9 415 tonnes to 963 tonnes" and in suspension should have been dismissed the Federal Republic of Germany as a for lack of proof as to its financial whole its sales fell by 87%. The problems and the extent of its economic applicant explains that, taking into difficulties. account its production organization and working on the most favourable assumptions, the sales recorded in July Case 83/79 represented 7.5% of its productive capacity.

A — The application by Maxi- The applicant maintains, with the milianshütte support of figures, that in Bavaria, as in the rest of the Federal Republic of The applicant begins by submitting a Germany, the drastic fall in its sales in long account of the facts concerning the July was not due to "a general drop in reasons why it sold goods below the sales" but to the fact that buyers minimum prices, before going on to state "purchased in July not from the the grounds of its application. applicant, but from other suppliers" and thus Maximilianshütte lost an important part of its market: its market share in (a) ne facts Bavaria fell from 36% to 5 % and in Germany as a whole from 10% to 2%. The applicant maintains that its failure to observe the minimum prices was caused by a drastic fall in sales. 1 (2) The "cause of the applicant's loss of sales"

for "its measures to have an impact on The applicant demonstrates that imports the market". In fact, the dealers, who of concrete reinforcement bars from held stocks equivalent "to the quantity Switzerland, particularly into Southern consumed in approximately two Germany, rose appreciably between months", could thus charge prices lower August and October 1977, which, it is than the minimum prices imposed upon claimed, proves that "imports from Italy the producers and to that end they had to Bavaria, routed through Switzerland, so much room for manoeuvre that they were used to circumvent the rules on could, as it were, starve the producers minimum prices applicable to out. In order to achieve that, all they had Community production" and that the to do was to avoid exhausting their applicant was "the main victim" of that stocks — and the evolution of stocks in practice. 1977 shows a fall of 15% from July to October — using a relatively small quantity to manipulate the market in concrete reinforcement bars, which "is 1 (2) (2) (2) Failure to supervise keenly competitive". properly the application of Decision No 962/77/ ECSC The problem is even more serious in the case of large groups which produce and sell through a subsidiary, The parent company sells at the minimum prices to The applicant maintains that immediately the subsidiary (the dealer) and the latter after the introduction of the minimum re-sells below the minimum prices, and prices the Commission "did absolutely as the subsidiary's loss is borne by the nothing to ensure their application in parent company that practice means that practice", relying "solely on the "Decision N o 962/77/ECSC also creates authority of the Official Journal". It discrimination between producers recognized that fact itself, stating that it according to whether they do or do not "had reinforced the infringement possess their own distribution company". procedure . . . only progressively" in the Eleventh General Report, No 151. According to the applicant, "supervision on a massive scale" should have been — Non-application to imports carried out as from 9 May 1977 in order to induce traders to observe the minimum prices, which represented an By failing , until the end of 1977, to take increase of 34%, and subsequently the measures — other than compulsory scale of the supervision could have been consultations and declarations — reduced. concerning imports of concrete reinforcement bars, the Commission allowed certain producers, especially those in Italy, to circumvent the rules on 1 (2) (2) (3) The defendant's recog- minimum prices. In fact, all they had to nition of the impossibility do was to export their bars to of charging the minimum Switzerland and then import them into prices the Federal Republic of Germany — the more so as "for imports into the Federal Republic of Germany from Switzerland it is not necessary to establish whether The applicant maintains that, by taking a the goods were manufactured within the large number of decisions in order to Community or outside it". reinforce "appreciably" the provisions on

The applicant concludes its account of 2. The consequences for the sub- the facts with a submission that "all the sequent conduct of the applicant figures show that if the applicant had continued to adhere to the defendant's 2 (1) In general minimum prices, that would have constituted a display of blind confidence The applicant maintains that it tried to which would have been rewarded by the apply the minimum prices until August, closure of the applicant's business". but its observance of the law had earned it the reprobation of the market, that is to say, a drastic fall in its sales in July. (b) The grounds relied on in the Faced with that danger, it followed application market prices, granting credit notes. Consequently, the applicant regards itself as merely a "victim", which suggests that After submitting that it is entitled to the Commission "could not impose a bring this action, the applicant pleads fine upon it". that the decision attacked is illegal on the ground that it infringes the ECSC Treaty and is based on General Decision 2 (2) Effects on the applicant's sales No 962/77/ECSC, which is likewise illegal. 2 (2) (1) Market shares

As 'soon as the applicant granted the 1. Defects in the decision attacked credit notes its market share again rose without, however, reaching the level 1(1) Article 1 of the ECSC Treaty attained in the second quarter of 1977. In fact, in the second quarter of 1977 it held 3 6 % of the Bavarian market and Article 1 of the ECSC Treaty establishes 10% of the market in the Federal the principle which constitutes the basis Republic of Germany. For the years 1977 for the legal concept of the Common and 1978 it was not able to exceed 2 3 % Market, according to which the and 8% respectively. competitive conditions of undertakings

must result from the natural production penalty imposed by it, the Commission conditions (judgment in Joined Cases 17 based "the distribution on an objective to 29/58 [1960] ECR 241). The criterion which is in breach of the Commission's inability to enforce the Treaty", since by selling below the minimum prices led to a "distortion of minimum prices certain producers were the conditions of competition". In those able to "increase their sales to the circumstances, by deciding to align its detriment of the other suppliers". prices on the market prices, the applicant "contributed to the restoration of the The decision impugned is also alleged to basic idea inherent in the legal concept be contrary to the duty to safeguard of the Common Market and helped to "continuity of employment" (second eliminate the distortion of the conditions paragraph of Article 2), since by means of competition". of the penalty imposed it seeks to compel the applicant to abandon sales of concrete reinforcement bars completely 1 (2) Article 2 of the ECSC Treaty and to dismiss its staff whilst its competitors seize its share of the market by not complying with Decision The applicant maintains that the first N o 962/77/ECSC. paragraph of Article 2, providing that the Community shall accomplish its task "through the establishment of a common 1 (3) Article 3 of the Treaty market as provided in Article 4 " , has been infringed because the decision attacked is contrary to Article 4. (See 1 That article, it is claimed, is applicable (4) infra). not only to the general decision by virtue of Article 61, which provides that minimum prices may be fixed only if But it is above all the second paragraph they are necessary to attain the objectives of that article which has been infringed. set out in Article 3, but also to "all sub- sequent decisions enforcing a decision In the first place, the decision attacked introducing minimum prices". hinders "the most rational distribution of production at the highest possible level The individual decision is contrary to of productivity", that is to say — Anicie 3 (c) which places the according to the interpretation of the Commission under a duty — in its prices Court of Justice in its judgment in Joined policy — to allow necessary amorti- Cases 27 to 29/58 [1960] ECR 241 - a zation and a normal return on invested distribution which is "based in particular capital. That is not the case here, since upon the composition of production the applicant could no longer sell costs resulting from output, that is, from anything at the minimum prices which the physical and technical conditions in the Commission "did not manage to which the various producers operate and enforce". from their individual efforts". For that same reason the decision According to the applicant, when Article impugned is also contrary to Article 3 61 is applied that distribution is (d), because it "destroys the conditions produced by fixing minimum prices, but which induce undertakings to improve always in compliance with the first their production potential", and to paragraph, that is to say, on the basis of Article 3 (g), because it constitutes a objective criteria. But as a result of the protective measure in favour of the

undertakings which did not comply with — If the factual situation — in the light the minimum prices. of the principle of non-discrimination — of the applicant is compared with The decision impugned is also contrary that of a hypothetical undertaking to Article 3 (e) because it compels the which observed the minimum prices, applicant to dismiss a part of its work- "a value judgment based on the force and thus brings unemployment to ECSC Treaty and on the case-law of the undertakings which complied with the Court" leads to the conclusion Decision N o 962/77/ECSC, whilst that the two situations are identical; sparing the undertakings which did not observe the decision. — The application and observance of fundamental rights, which constitute 1 (4) Article 4 of the ECSC Treaty a primary objective both for the Commission and for the Court of 1 (4) (1) Unequal treatment of similar Justice, entitle the applicant "to be situations protected against unjustified distortions in competitive conditions as a result of action taken by the It is alleged that the Commission, by defendant". taking the individual decision imposing a fine, infringed the prohibition on discrimination laid down by Article 4 (b) of the Treaty, in that it did not treat comparable situations in an equal The applicant states that these arguments manner and the applicant submits that do not amount to "taking the law into that decision "prescribed unequal one's own hands" but rather that they conditions for comparable cases". raise "the question whether the old rule of western law known as venire contra /actum proprium forms part of The applicant maintains that by the Community law". Further, it does not decision imposing a fine the Commission rely on the fact that other undertakings discriminated against it and that the which sold goods below the minimum Commission should, on the contrary, prices were not fined, which "impedes have treated it as "someone who has not the application of Community law", but infringed the law". In this context it it wishes on the contrary to be treated in develops at great length a series of the same way as the undertakings which arguments which in its submission lead did not infringe the law. to the conclusion that it should have been treated in the same way as the undertakings which did not contravene the provisions on minimum prices, as follows: 1 (4) (2) Equal treatment of dissimilar situations — The Commission itself brought about the state of necessity in which the applicant was placed, through its The applicant takes the view that the inability to enforce its own general Commission discriminated against it by decision, and it "cannot as a result of treating it in the same way as the other that act of self-protection, induced by undertakings which sold goods below the it, acquire rights as against the person minimum prices, on the ground that its who takes steps to protect himself"; situation was different. In fact, whereas

2. Defects in Decision No 962/77 1 (5) Other articles 2 (1) Plea of illegality 1 (5) (1) Articles 5 and 8 of the ECSC Treaty The applicant takes the view that in assessing the contested decision it is also In failing to observe various articles of necessary to take into account, under a the Treaty, the Commission thereby plea of illegality, the illegality of infringed the first paragraph of Article 5 Decision No 962/77, in accordance with and Article 8 of the Treaty. the case-law established since the judgment in Case 1/58 [1959] ECR 17. As the contested decision tended "to perpetuate the gross distortion of 2 (2) Article 4 (b) of the ECSC Treaty competition which the defendant brought about", Article 5, second paragraph, third indent, of the ECSC The applicant submits that Decision Treaty was also infringed. No 962/77 discriminated between producers, in the first place, because it did not apply to dealers, which allowed 1 (5) (2) Article 64 of the ECSC the very large groups to avoid applying Treaty the minimum prices (see supra 1 (2) (2) (1)), and, secondly, because it did not apply to imports, which allowed the The Commission 'disregarded the Italian producers to circumvent the "bounds of its power of appraisal" Community legislation (see supra, loc.cit.) because "it did not succeed in harmonizing the various aims of Articles 2 to 4 of the ECSC Treaty". 2 (3) Article 4 (d) of the ECSC Treaty

By forcing certain undertakings to 1 (6) Submissions based on lack of adhere to the minimum prices, whilst competence and infringement of others were able to avoid doing so, essential procedural require- Decision N o 962/77 deprived the former ments undertakings of the market and thus introduced a "restrictive practice. . . It is argued that the reasons on which which tends towards the partitioning of the contested decision was based do not markets".

2 (4) Other articles of the ECSC 1. The size of the undertaking Treaty The applicant further submits that the The Commission objects to the general decision is contrary to: applicant's comments seeking to project Maximilianshütte as a small undertaking — Article 1 of the Treaty, on the and relies on the fact that "the assets ground that by "its unjustified shown on its balance sheet exceed D M differentiation it is contrary to the 500 million and the number of workers essential nature and aims of the employed is over 6 000". Common Market"; — The first paragraph of Article 2 of 2. The applicant's observance of the the Treaty, on the ground that it minimum prices "at the beginning". "imposes a one-sided and unjustified burden in particular on southern Germany and the smaller steel The Commission submits that the producers"; applicant intended from the beginning to apply, not the minimum price, but a — The second paragraph of Article 2 of "market price" since it had admitted that the Treaty, on the ground that it "is it informed its customers as early as detrimental to continuity of August 1977 that it was going to take employment and provokes distur- action. That promise was realized when bances in the economies of the it subsequently allowed its customers Member States"; credit notes. The Commission further states that "the failure to comply with — Article 3 (c), (d) and (g), on the the decision on minimum prices cannot ground that it does not allow the be justified either by reference to so- applicant to achieve necessary called 'market prices' — precisely those amortization and to obtain a normal which should have been raised — or by return on its capital, and thus reliance on infringements committed by removes "any incentive to improve other undertakings". production potential and to promote the orderly expansion and moderni- zation of production"; 3. The fall in sales and the other stat- istical data provided by the — The second paragraph of Article 5 of applicant the Treaty, on the ground that it led to "a serious distortion of normal competitive conditions"; The Commission prefaces its remarks with a general observation to the effect — Subparagraph (b) of the first that the invoicing of the minimum price, paragraph and the second paragraph in conjunction with a promise to rectify of Article 61 of the ECSC Treaty, on it, could not have led to a fall in the the ground that it "infringed Article applicant's sales, since the prices thus 3 of the ECSC Treaty". charged were those of the other suppliers selling below the minimum prices. B — The Commission's defence The Commission does not dispute the (a) ne facts figures put forward by the applicant (pages 21 to 24 of its application), but The Commission emphasizes that the comments that the applicant "always applicant does not dispute the facts. refers to one· particular month, namely

July 1977". Since the introduction of the Moreover, Article 61 does not empower minimum prices had been anticipated the Commission to extend the measure since April 1977, since contracts made to other dealers; for that purpose it before those prices were introduced were would have been necessary to apply the performed until June, since dealers and first and second paragraphs of Article 95. buyers had made contracts "which At the time when Decision No 962/77 greatly exceeded their normal needs", was being prepared it did not seem that and since "the holidays in factories and the necessity for such a decision in order the building trade fall mainly in July", it to attain the objectives set out in Articles was thus logical that sales would drop in 2, 3 and 4 of the ECSC Treaty "had July 1977. been proved". On the contrary, as stocks cover only two months of sales, it might have been expected that the transition Quoting only the figures for the total would be swift and that the dealers deliveries effected by Maximilianshütte would replenish their stocks at the between January 1977 and March 1978, minimum prices. Thus the undertakings the Commission considers that there can which infringed Decision No 962/77 hardly be any question of a "disastrous were responsible for enabling the dealers slump". to undercut those minimum prices themselves, and their reliance on under- pricing by the dealers amounts to venire It emphasizes, further, that the sale of contra factum proprium, the more so as concrete reinforcement bars — which the applicant has, since its collaboration depends on a large number of factors with the company Klöckner AG, itself and not only on the price — is subject to become associated with a marketing considerable seasonal and conjunctural company belonging to a Konzern, fluctuations. Thus, the fact of applying namely Klöckner Stahl GmbH of Essen, or not applying the minimum prices was and it already owned three marketing not decisive in the event, the more so as companies. it was eliminated by the applicant when it granted a "rectification" and "an adaptation in accordance with market conditions". 5. The failure to apply the minimum prices to imports Finally, it points out that the fall in the applicant's sales may also be explained by the fact that its competitors produce The Commission disputes the allegation concrete reinforcement bars more that imports from Switzerland were economically, in electric furnaces. diverted imports from Italian producers and emphasizes that it made use of the possibilities granted by the Treaty to intervene in that respect by means of a 4. The failure to apply the minimum number of measures. prices to dealers

It points out that "long before the (b) The legal situation adoption of Decision No 962/77 the applicant's price-list showed a price of The Commission considers that its DM 600", that is to say, higher than the remarks above on the facts "have minimum prices. destroyed the substance of the applicant's legal submissions" and that only a few Finally, the Commission refutes the additional remarks are required. applicant's claim that the minimum prices were reduced by 5 % ; on the contrary, the said Decision No 1483/78 main- 1. The applicant's arguments against tained the same level of prices expressed the decision imposing a fine in units of account, but adjusted those prices in accordance with changes in the According to the Commission, the rates of exchange, which explains the method used by the applicant consists in reduction in those prices in German setting out first the content of a marks and the increase in pounds sterling provision of the Treaty, then repeating a and in lire. passage from "the account of the facts", allegedly bearing some relationship to the rule of law cited and then concluding 7. The Commission's inability to that the rule of law was infringed. That secure compliance with its decision method leads to a repetition both of the passages concerning the facts and of the The Commission recalls that all it can do arguments; for that reason the is "to rely on the solidarity of the under- Commission "considers it useful to use takings" and exercise control ex post as its point of reference not the articles facto by imposing fines upon offenders of the Treaty, but the arguments put where necessary, and that it does not forward". possess "any means of direct coercion".

The Commission recalls that in its 1 (2) Equality of treatment between judgment of 12 July 1962 in Case 16/61 the applicant and the under- [1962] ECR 289 the Court of Justice laid takings which did not infringe down the conditions for the application the rules on minimum prices of the concept of legitimate self- protection : The Commission rejects the applicant's lengthy explanations seeking to prove that its situation is identical — for the — "The threat must be immediate"; purpose of the principle of non-discrimi- nation — to that of an undertaking — "The danger must be imminent"; which did not infringe Decision No 962/77, because "the essential point in this matter is the question whether an — "There must be no other lawful undertaking has or has not observed the means of avoiding it". minimum prices". As the fall in the applicant's deliveries It also rejects the argument to the effect was "slight" and "largely seasonal in that the applicant's situation is identical nature", the applicant could have by reason of the fact that it observed the reduced its production. Also, Maxi- minimum prices initially, because, in the milianshütte belongs to a Konzern, is not first place, the applicant was not fined a "one-product undertaking" and had a for that, and, secondly, because "that list containing prices higher than the statement is not materially accurate". minimum prices before the application of the decision on those minimum prices, Finally, it rejects the argument to the with the result that those prices should effect that the contested decision violates not have caused the applicant any

1 (5) The alleged insufficiency of the 3. Preparatory inquiries statement of reasons The Commission rejects all the As "it is not true that the applicant applicant's claims for measures of observed the minimum prices initially inquiry. and that it suffered damage as a result", the Commission submits that there was no need to refute that claim in the C — Maximilianshiitte's reply statement of the reasons on which its decision was based. On the other hand, (a) The facts those reasons took into account the "undertaking's financial and economic situation at the time" in order to The applicant repeats and enlarges upon determine the level of the fine. the arguments set out in the application. It suffered a considerable fall in sales in July 1977, of which only 4 0 % was due 2. The alleged illegality of Decision to "general market conditions" and 6 0 % No 962/77 to "special reasons", which reside in the fact that unlike its competitors, it The Commission rejects the applicant's observed the minimum prices in June and argument to the effect that Decision No July 1977. 962/77 created discrimination by not applying the minimum prices to dealers and imported goods, since it "has 1. "First: exclusion of the sales lost by already shown that those complaints are the applicant on account of general unfounded" (supra, B (a) (4) and (5)); market conditions" the more so as that argument leads to the conclusion that every undertaking Reproducing in a table the figures given may circumvent the law and that those in the application (p. 9 of the reply), the

It also denies that its manufacturing — Seasonal and conjunctural variations, process is more costly than the process using electric furnaces, claiming that that would only be the case if scrap-iron were is only approximately 4 0 % of the total sold very cheaply, since the electric (39% in Bavaria and 4 1 % for the furnace process uses scrap, whereas the Federal Republic of Germany as a OBM process (the Maximilianshütte whole). Consequently, it lost approxi- oxygen blasting process) uses only 25 to mately 6 0 % of its market share for 7 5 % scrap. Therefore the use of that special reasons not connected with process does not constitute a cause of the general market conditions. fall in the applicant's sales either, that fall being due to the failure of other In a further attempt to prove that the fall producers to comply with Decision No in its sales was not caused in the main by 962/77. the general fluctuation of the market, the applicant ascertains by means of two different methods of calculation that the drop in its sales was actually greater than 2 (2) Cases of the fall in sales peculiar in the case of its competitors and that the to the applicant relative variation coefficient (already used in the application) "shows that the 2 (2) (1) "The applicant's observance fluctuation in sales was appreciably of the minimum prices in greater in its case than in the case of its June and July" competitors".

As it made concessions on prices "as from mid-August", it was compelled — Consequently, the Commission is wrong for commercial reasons — to "act in the to claim that by Decision N o 3002/77 it same way ex post facto in respect of merely extended the minimum prices earlier transactions", that is to say, those scheme to "the other dealers", since "no concluded in July, although admittedly it dealer on the German market in concrete was not legally "obliged" to grant price reinforcement bars was concerned pre- concessions on transactions concluded at viously". the minimum price.

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The applicant rejects the arguments 1(1) The general problem raised adduced by the Commission in this regard. It maintains that the figures The applicant maintains in its view that it quoted with regard to the supervision is in the same situation as the under- carried out by the Commission until 23 takings which complied with Decision January 1978 "are not such as to support No 962/77. In reply to the Commission's its statement tó the effect that it took all arguments rejecting that submission it measures necessary to enforce Decision states that its view "derives from the fact No 962/77". that the applicant was placed in a state of

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Consequently, the infringement committed by the applicant "does not provide objective justification for the It also states that "it is not relying on the inequality of treatment". That inequality difficult situation in the steel industry, derives from the decision to impose a but on its own difficult situation"; nor is fine although the applicant was in the it relying on "the actual advantage which same situation as the undertakings which those undertakings [which infringed complied with the minimum prices, since Decision No 962/77 from the beginning] it "acted in a state of necessity". obtained by undercutting the prices", but on the damage which it suffered; nor does it rely on a "deterioration" in competitive conditions, but on "the damage which it suffered as a result of 1 (2) "The applicant's state of that deterioration". It concludes this line necessity" of argument by protesting at the Commission's statements alleging that the applicant expressed the opinion that The applicant recalls that 6 0 % of the fall by Decision No 962/77 the Commission in its sales derived from special causes "wished to harm the applicant". which lie essentially in the fact that it observed the minimum prices whilst others disregarded them. That conduct entailed very heavy losses due to the 1 (3) "Effects of a decision upholding utilization of its productive capacity at a the action on the future rate of 17-6 % , which was in essence the application of Article 61 of the result of the fall in sales and the Treaty" worsening of its average percentage of short-time working, which rose from 13-5% in the first half of 1977 to 2 4 - 2 % in the third quarter of 1977 at its As regards the fears expressed by the factory in Haidhof. In view of the Commission that such an argument analysis of the causes of that slump in (concerning the state of necessity) would July, the applicant submits that its "only entitle every undertaking to disregard salvation" was to increase its market Decision No 962/77 and thus lead to the

Consequently, the annulment of the As regards proof of the cause of its loss decision impugned would not jeopardize of sales, the applicant considers that if the application of Article 61 of the the Court accepts the evidence which it ECSC Treaty, but on the contrary "such has itself put forward in its pleadings no a decision would confirm the supremacy inquiry is required. of the rule of law in the Community". Finally, it points out that as regards the documents which it requested the 2. "Evidence" Commission to produce, the latter is, by the terms of Article 23 of the Protocol on the Statute of the Court, auto- The applicant considers that the matically obliged to "transmit to the Commission, contrary to its statements, Court all the documents relating to the disputes the facts with regard to which a case before the Court"; the more so as in preparatory inquiry was requested and this case the production of those that consequently such an inquiry is documents would serve to establish that necessary, the more so as the facts which the Commission knew that the Bresciani must thus be established are relevant to "were in every case deliberately under- the outcome of the dispute. cutting the minimum prices" and that consequently the other undertakings observing those minimum prices were Thus it is of primary importance for the losing sales and that the only remedy for outcome of the dispute to ascertain the those undertakings was to undercut the number of cases investigated by the minimum prices also.

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D — The Commission's rejoinder adds that that sales policy, "conducted without excessive scruples", is confirmed by the failure to adhere to the delivery (a) The facts programme established by the Commission for the whole of the northern group in which Maxi- The Commission considers that the milianshütte has a share of 3 7 % ; that applicant has attempted essentially to programme was exceeded by 3 2 % in the prove the existence of. a causal link second quarter of 1977. leading to the alleged state of necessity. In the Commission's view such a causal link does not exist for the following reasons : 3. There is no relationship of cause and effect involving the price factor

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due to undercutting of the minimum also to sell below those prices since it is prices. difficult to imagine a dealer selling below his purchase price.

4. "Irrelevance of the figures" It considers that "it is not true that all sales of concrete reinforcement bars are All the figures concerning the alleged made through dealers" and maintains decrease in sales are "absolutely that in 1977 the German steel producers unnecessary from the legal point of sold 15· 3 % of their total deliveries of view" on the ground that it is only concrete reinforcement bars directly to necessary to prove the applicant's failure the consumers. It also disputes the to observe the minimum prices, which applicant's claim that no dealer on "has been proved by the Commission the German market in concrete and is not contested by the applicant". reinforcement bars was concerned before the adoption of Decision No 3002/77, because the applicant omitted to mention 5. "Irrelevance of production costs" the selling agencies of undertakings from other Member States which also operate in the Federal Republic. It was not the fact that the applicant "did not charge sufficiently low prices in July" which caused the fall in its market share in July, but "the saturation of Finally, it points out that the applicant demand" due essentially to the sales omitted to include amongst the effected by the applicant in May and marketing companies with which it was June 1977 at the old prices. The connected "Maxhütte Eisenhandels- Commission points out that Mill III (for gesellschaft mbH, Sulzbach-Rosenberg", the manufacture of concrete rein- which is controlled by it "according to forcement bars) had already caused paragraph 7 of Decision No 77/135/ losses before the entry into force of ECSC of 22 December 1976 (Official Decision N o 962/77, whilst the Bresciani Journal L 43 of 14 February 1977, p. were able to sell at the old prices without 32)". incurring losses.

includes imports from other member It also disputes the applicant's arguments countries, since in 1977 the market share blaming it for its failure to establish taken by imports from third countries preventive supervision, maintaining that represented only 9 - 2 % of total sales in "inspections and penalties can only bring the Federal Republic. [infringements] to light after the event and punish them". Thus it is not the Those remarks apply also to the Commission's conduct, but that of the particular case of Switzerland; the undertakings which is in issue. Commission further emphasizes that imports from that country were As regards the accusation levelled at the abnormally high only in October and Bresciani, the Commission maintains — December 1977, and not during the relying on the figures drawn up in order period which is in issue here (June to to measure the degree of compliance September 1977). with the delivery programmes established by it — that "the Bresciani displayed greater discipline in production than 6 (3) Inspections some of their northern competitors".

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difference existing between Maxi- prices, but above all to the increase in milianshütte and the undertakings which sales carried out in May and June observed the minimum prices. The 1977; Commission maintains that the discrim- ination relied on does not exist, since the — Each of those two grounds alone applicant's situation is not the same as enables the conclusion to be reached that of the undertakings which observed that the applicant did not accept any the minimum prices. particular sacrifice and that consequently it cannot plead a state of necessity". It further observes that the rate of utilization of productive capacity of 17-6%, put forward by the applicant, 3. The so-called evidence concerns only the month of July and solely the production of concrete In essence, the Commission "disputes the reinforcement bars; for the whole of relevance of the evidence, without 1977 "a rate of 5 6 % is recorded for the examining facts which manifestly lack applicant", whereas for the German relevance". The irrelevance of the undertakings as a whole it was only evidence results particularly from the 50%, which proves that the applicant absence of a relationship of cause and "was affected to a lesser extent than effect between the facts complained of other producers by the fall in demand". and the alleged state of necessity. Since there is no state of necessity and the It also observes that, although the figures applicant's situation "reflects the general for the average rate of short-time over-capacity and the contraction in working "are also rather impressive at demand in the concrete reinforcement first sight", in comparison with other bars sector", the undertakings' problems undertakings "it can be seen that Maxi- could not be remedied by supervision on milianshütte was relatively little the part of the Commission, but solely by affected". their own willingness to make the adjustment.

(a) The facts conquered large shares of the German market to the detriment of the German undertakings, especially the applicant, The applicant recognizes that as from which "observed the minimum prices 1975 the steel industry in the European fixed by the Commission" and which as Community has been in a state of crisis, a result suffered very high losses (DM 68 but considers that a solution to that crisis million in 1977 as against 34 million in "required measures to adjust the 1976) due particularly to a fall in orders structure of the industry". The main- in the third quarter of 1977. tenance in production of obsolete plant "in England, France, Belgium and Italy" creates "excessive supply" leading to "a fall in prices". In those circumstances, the applicant pointed out to the Commission that it could not comply with Decision N o On the concrete reinforcement bars 962/77 if "it was not possible to contain market, the Commission — despite the situation and call the steelworks in Decision No 962/77 — did not manage northern Italy to order by means of to overcome existing difficulties and appropriate measures". suffered "a setback" because it did not "at the same time require dealers in iron and steel products not to undercut the producers' list prices". The Commission As the Commission "did nothing until 30 had itself recognized that loophole, since September 1977" and Commissioner by Commission Decision N o 3002/77/ Davignon made a statement at a meeting ECSC of 28 December 1977 (Official of the Chambre Syndicale in Paris, Journal L 352 of 31 December 1977, interpreted by the German participants as p.'8) it required dealers to observe the a concession to the German undertakings minimum prices and by Commission allowing them to sell below the minimum Decision No 3003/77/ECSC of 28 prices, the applicant issued credit notes December 1977 (Official Journal L 352 and immediately informed the Com- of 31 December 1977, p. 11) it required mission thereof. undertakings in the iron and steel industry "to issue certificates of conformity in respect of certain iron and steel products". (b) The "legal appraisal"

means chosen bear a reasonable brought under control by the relationship to the aim sought". Commission either". In imposing the fine, "the Commission disregarded the fact that a penalty can never be an end in General Decision No 962/77/ECSC is itself", as was demonstrated in this case inapplicable, since, in the first place, it where the undertaking in question, after was not necessary in order to attain the trying to sell at the minimum prices, objectives set out in Article 3 of the infringed them only in order to avoid Treaty and, secondly, it "rested on an "the risk of having to cease production". erroneous basis", because it was "clearly doubtful from the beginning" that the Bresciani — who had already frustrated the voluntary commitments to limit The applicant is further of the opinion production — would display solidarity, that the Commission's decision was whereas the decision "pre-supposed clearly taken "because it hoped thereby solidarity on the part of all manufac- to create a deterrent effect for the turers". future", which was not necessary as regards the applicant.

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5. The "disproportionate nature" of B — The Commission's defence the measure

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observe the minimum prices from the application of Decision No 962/77, and beginning. secondly, that when such rules are adopted "it must be expected that they will be infringed" and a "legal obligation The Commission takes the view that the does not cease to be binding because it is Bresciani did not conquer sections of the market because they sold below the not observed". minimum prices — since the applicant did the same — but because since before As regards the alleged failure of the the entry into force of Decision No Commission to impose the minimum 962/77 they had been producing at prices, that institution recalls the favourable cost and were able to sell inspections carried out and submits that their products at advantageous prices; at "the rigour with which the observance of the same time "the applicant's price-list a binding provision is supervised and which was valid until 1 June 1977 infringements are dealt with does not indicated prices for concrete affect the binding nature of that reinforcement bars which were higher provision". than the minimum prices laid down". Thus the losses incurred by the applicant Finally, as regards the right of alignment, "cannot be imputed without more ado to that is possible only if carried out with the introduction of minimum prices, reference to a competitor's prices which which in truth could scarcely have are calculated in accordance with the caused the applicant difficulties". provisions in force, and it does not allow an infringement committed to be justified "by reference to the wrongful conduct of (b) Law other undertakings".

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accepted that infringements should be 4. The amount of the fine regarded as justified by a state of necessity, every infringement committed by a producer would justify the next The defendant recalls that Article 64 of producer's infringements almost auto- the ECSC Treaty empowers it to impose matically".' fines not exceeding twice the value of the unlawful sales. In all the decisions imposing fines taken by the Commission until now in the field of minimum prices, 3. The alleged misuse of powers the basis chosen for the calculation of the amount of the fine has been the value of the underpricing, that is to say an amount well below the value of the Here the Commission replies to what the unlawful sales. In general, and in the applicant has called "the infringement of absence of special mitigating circum- the discretionary power conferred upon stances, the fines were fixed at 25 % of the Commission by Article 64". the amount of the underpricing, which would have led to a fine of D M 600 000 in this case. However, in view of the In the first place, it notes the ambivalent economic and financial circumstances of attitude of the applicant, which re- the undertaking in question, the rate proaches it both for its leniency — with applied was 10% of the underpricing, regard to the Bresciani — and its lack of which "proves that there is no manifest flexibility — with regard to Korf. lack of fairness".

who holds a responsible post in the field inspections until June and regular of sales", the applicant sold 10 000 inspections were not carried out until tonnes delivered in July and August 1977 July, and by that stage "the undertakings at the minimum prices and without any in northern Italy" had already imposed promise of subsequent compensation. It their own market price. Following the was only later that its attempts to obtain Commission's reply that it' has only sales at the minimum prices came to • limited powers to supervise compliance nothing, because the dealers "required with its decisions, the applicant submits either an adjustment in the prices for that that argument constitutes quantities already sold or the can- recognition by the Commission itself that cellation of the orders". it was not able to enforce the minimum prices.

That fact also explains why the applicant maintained in its application that it had As regards solidarity — which according no orders on the books in July 1977; in to the Commission is essential to the fact, the orders recorded — and referred success of the minimum prices system — to by the Commission — were not the applicant considers that the definite, as each order had to be re- Commission should have expected that negotiated with a reduction in the prices, not all the producers in the sector would so that those orders remained unchanged show solidarity, and there was thus a in the documents, but, commercially, further reason for the Commission to "the effective level of orders at that time "take measures in order to ensure that was nil". all undertakings observed the minimum prices from the beginning", the more so as those minimum prices were fixed at an unrealistic level.

beginning in order to ensure the success imports — "exported their products of Decision No 962/77/ECSC". to Switzerland in order to import them from there into the Federal Republic of Germany", thus The applicant is surprised that the circumventing the said decision; Commission no longer wishes "to attach importance to the fact that the uncer- tainty which gripped the market in 1977 — Secondly, the large undertakings — is inseparably linked to the ruthless taking advantage of the fact that the conduct and lack of solidarity of the decision was not applicable to dealers Bresciani", the more so as it was — were able to dispose of their informed thereof — by the applicant, production through trading amongst others — and "it had even companies owned by them, thus considered that it was essential to find a circumventing Decision No 962/77; solution to that problem". That attitude on the part of the Commission — which even treats the Bresciani as serious — Thirdly, as a result of these competitors — "shows that it is no possibilities of circumventing longer prepared to take as the basis for Decision N o 962/77 and the absence its legal appraisal the situation which of control on the part of the existed in the past and which it itself administration, there arose considered intolerable". This is parti- "considerable inequality in the cularly so as the important point is not treatment accorded tö undertakings the question why the Bresciani are in a formally subject to the same position to sell below the minimum constraints". prices, but the fact that those sales, by creating a market price lower than the minimum prices, were the cause of the dealers' refusal to obtain supplies from (b) The "legal conclusions" undertakings which applied those' minimum prices. It is against that activity that the Commission should have intervened "directly", failing which it is Analysing the facts set out above, the responsible for the situation and thus applicant submits that not only was cannot impose fines on undertakings Decision No 962/77 "unsuitable for which abandoned the minimum prices attaining the objectives pursued, but on only in order to prevent other under- the contrary it cast unfair and unequal takings — disregarding those minimum burdens upon the undertakings which prices — from seizing shares of the submitted to the minimum prices market at their expense. discipline during a certain period".

It also submits that the contested concerning the claim that it applied the decision is "incompatible with the minimum prices from the beginning "are principle of proportionality" which also likely to create a misunderstanding", "requires that any action on the part of on the ground that the applicant does the public authorities must be appro- not make any clear distinction between priate and essential in order to attain the the 10 000 tonnes (called a goodwill desired result"; thus "action entailing order) ordered at the minimum price burdens disproportionate to the aim and subsequently cancelled, and the pursued and unduly onerous to the quantities actually sold below the individuals concerned" is contrary to the minimum price. Admittedly, the principle of proportionality. And it seems "goodwill orders" may bear witness to clear — in the applicant's view — that the applicant's willingness to sell at the Decision No 962/77 meant a reduction minimum prices, but the fact cannot be in turnover for some undertakings, and denied that the minimum prices were not thus "considerable losses", whilst other actually applied, as those orders were undertakings increased their market cancelled. And in any event, that share. quantity of 10 000 tonnes is not involved in the dispute. As regards the other orders — the only ones in respect of which the fine was imposed — the The applicant insists that it is of little applicant infringed Decision N o 962/77, importance that that development could and did so from the beginning, since it is have been foreseen at the time of the inconceivable that the dealers, who had adoption of Decision No 962/77, but cancelled "the so-called goodwill order" that "the consequences which the in May 1977, should have been prepared decision actually had" are the important to place orders at the minimum prices as factor, the more so as they were possibly from 7 June 1977, the conclusion being foreseeable in view of "the attitude prev- that they did so only "in return for a iously adopted by the Bresciani". promise, made contemporaneously, of a 'subsequent alignment' on 'market prices' ". The applicant's "allegations", (c) The amount of the fine which are "not particularly clear", do not enable the conclusion to be drawn that the dealers did not demand that alignment on "market prices" until a The applicant submits that, as it acted later stage; on the contrary, everything "solely to avoid further damage to its indicates that the promises of an business", the imposition of a fine is not "alignment" were made at the beginning. justified. At the very least, the fine Thus "there is reason to conclude that should be considerably reduced, since it the applicant did not actually apply the is guilty of only "a very minor offence". minimum prices at any time".

concerned only the amount of the not "an admission that the fixing of "alignment" on the market price and minimum prices was inappropriate", but that the distinction between orders on the contrary "an appeal to the under- recorded in the accounting documents takings to display solidarity". and orders "from the commercial point of view" cannot be relied on, because in its inspections the Commission "may take into account only the commercial and accounting documents" which the As regards the activities of the Bresciani, undertakings are required to make the Commission disputes the applicant's available to it. argument, pointing out that their prices were clearly the lowest before the entry into force of Decision No 962/77 and that "the reason for the introduction of the minimum prices" was the low level of The Commission also maintains its market prices, and maintaining that by submission that "only practical presenting the facts "in a false light" the experience revealed the justification for applicant is merely seeking "to give the including dealers as a whole in the impression that it applied the minimum minimum prices system", since certain price for quite some time", whereas "in dealers — extensions of producer under- fact it did not apply the minimum price takings — and agents within the at any time". meaning of Decision Nos 30 and 31/53 were already included in Decision No 962/77 and since in any case, as regards the independent dealers, "there was no proof" at the time that it was necessary The Commission also rejects the to include them also, and to do so only applicant's argument to the effect that Article 95 could be used. On the the Bresciani circumvented Decision No contrary, it was the conduct of the 962/77 by exporting their products to undertakings which sold below the Switzerland, whence they imported them minimum prices which created that into the Federal Republic of Germany, necessity. "That is why it is a venire on the grounds that not only has no contra /actum proprium for the applicant specific information been supplied in that to rely on the underpricing practised by regard, but moreover the truth of that the dealers." statement has not been established (see below). It points out that it took numerous measures concerning imports, and in particular in conjunction with Switzerland, which at the beginning of As regards the level of the minimum 1978 "promised to comply with the prices, which is considered unrealistic by minimum prices in its exports of concrete the applicant, the Commission points out reinforcement bars to the Community". that a minimum price must necessarily be higher than the market price previously charged in order to be able to attain the objectives laid down and that in this case the price was fixed taking into account Finally, it states that it has "difficulty in the various factors involved and the understanding the applicant's position different basic prices for the product with regard to the unequal effects said to concerned. It also maintains that be produced by the decision on minimum Commissioner Davignon's statement was prices as a result of the diversity of

Similarly, it maintains that "the binding nature of a prohibition is not affected by It contends that Decision N o 962/77 the extent to which compliance with that "does not infringe" the objectives set out prohibition is supervised". In this regard in Article 3 of the Treaty, that the it states that in any event inspections "gloomy picture" painted by the were carried out, but that they could applicant "never represented the reality deal only with "transactions actually of its case" and that the existence of the carried out, that is to say deliveries state of necessity has not been proved. which were invoiced". In the steel sector there is a relatively long delay between Finally, it maintains that Decision No order and delivery, and as regards 962/77 is not contrary to the "principle concrete reinforcement bars in particular of equality" on the ground that, the undertakings, in anticipation of the although the situations of two interested minimum prices scheme, "had performed parties are different if one of them does as many orders as possible before the not comply with the decision, "the entry into force of the decision"; in obligation itself — and that alone is at those circumstances inspections as early issue — treats them both in the same as May would have been pointless. way".

With regard to the question of the Italian exports to Switzerland, re- (c) The amount of the fine exported to the Federal Republic of Germany, it goes on to submit that "the fact that a legal obligation has been The Commission considers that "the circumvented by legal means does not in arguments set out by the applicant do any way affect the binding nature of that not contain any new material". obligation", with the result that it is not Consequently, it repeats that as the important to ascertain the truth of the applicant did not apply the minimum applicant's claim. prices even at the beginning, its conduct

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3 The parallel considerations dealt with in the course of the written procedure and at the hearing all concern one of the two aspects common to all the cases: the reliance on the illegality of the general decision, pursuant to the third paragraph of Article 36, and the action in which the Court has unlimited jurisdiction brought against the individual decisions imposing pecuniary sanctions, under the second paragraph of Article 36.

4 The first aspect raises the question of the admissibility of the plea of illegality and of the submissions of manifest failure to observe Treaty provisions and misuse of powers relied on in support of that plea. Therefore it is necessary to dispose of this problem as a preliminary matter.

5 It will then be necessary to examine the grounds on which the applicants impugn the legality of General Decision N o 962/77, which will have to be examined both with regard to Article 61, which constitutes its legal basis, with regard to the other provisions of the ECSC Treaty and in the light of the general principles of law which govern the interpretation and application of the said treaty, and, finally, with regard to adherence to the objectives presupposed by the use of the powers which the Commission exercised in adopting the said general decision.

6 Only after the legality of. the general decision has been examined will it be appropriate, where necessary, to undertake under the second aspect, a study of the individual decisions imposing fines. With regard to the latter, the applicants, pleading force majeure, legitimate self-protection or a state of necessity, all claim justifying circumstances, and it will be necessary to study the scope of the latter in Community law and their possible application in the field of minimum prices. It will then be necessary to consider whether the applicants were able to take advantage of a legitimate option to align their prices. Finally, it will then be possible to consider the amount of the fines the imposition of which was the cause of these actions.

9 It is necessary to draw a distinction between, on the one hand, an interest in bringing proceedings against an individual decision and, on the other hand, an interest in raising, in that context, a plea of illegality in relation to the general decision which constitutes the legal basis of the said individual decision. It is beyond doubt that the applicants may, by means of an action in which the Court has unlimited jurisdiction under the second paragraph of Article 36 of the ECSC Treaty, attack the individual decisions imposing pecuniary sanctions addressed to them. Further, the third paragraph of that article provides that, in support of such an action, they may contest the legality of the general decisions which they are alleged not to have observed; but they may do so only "under the same conditions as in the first paragraph of Article 33", that is to say, in the first place, in the circumstances in which a declaration of illegality may be sought, and on proof of an interest in taking legal proceedings. As the applicants have pleaded an infringement of essential procedural requirements, an infringement of the law and misuse of powers, their applications are admissible, since their plea of illegality clearly makes submissions relating to the legality of the general decision, which they are permitted to do by the combined effects of Articles 36 and 33. Further, it cannot be doubted that they have an interest in taking legal proceedings, since the application of the disputed general decision on which the decisions

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11 The first part of the second sentence of Article 33 thus states the limits upon the power of the Court, in its examination of the legality of a measure, to review the choices of economic policy made by the Commission; the second part removes those limitations, provided that the applicant alleges a manifest failure to observe the Treaty or a misuse of powers. According to the case-law of the Court (judgment of 21 March 1955 in Case 6/54 Government of the Kingdom of the Netherlands v High Authority of the ECSC [1954 to 1956] ECR 103) "Article 33 does not require that the objection raised be supported by full proof in advance; this moreover would immediately entail the annulment of the decision". Therefore, when considering the admissibility of the arguments intended to induce the Court to examine the evaluation of the situation resulting from the economic facts or circumstances of the case, it is necessary and sufficient that the objections of manifest failure or misuse of powers be supported by appropriate evidence. A stricter requirement would amount to confusing the admissibility of the argument with the proof of its substance; a more liberal interpretation, whereby the mere assertion of one of the claims referred to would be sufficient to open the way to review by the Court of the economic evaluation, would reduce that claim to a mere formality.

i2 In this case the arguments pursued in the course of the written and oral procedures have provided sufficient proof of the difficult nature of that issue

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to compel recognition of the fact that the grounds relied on are prima facie supported by appropriate evidence. That finding is sufficient, on this point, to render the actions admissible.

is According to Articles 5 and 15 of the ECSC Treaty, the Community must make public the reasons for its action and the decisions of the Commission must state the reasons on which they are based and refer to any opinions which were required to be obtained.

i6 Certain of the applicants submit that the stating of reasons constitutes a fundamental requirement, especially in the context of a legislative measure involving the exercise of a discretionary power. According to them, the statement of reasons accompanying Decision N o 962/77 is "distorted,

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incomplete and insufficient", and not in accordance with the aims of the Treaty. The decision, it is argued, rests on a series of unsubstantiated statements and fails to take into account the economic situation and the conditions of production of those applicants. Also, the Commission did not mention the fact that the Consultative Committee referred to Article 54 and not to Article 61 as a means of finding a solution to the crisis.

i7 The Commission rejects those arguments, pointing out that in the preamble to the decision the statement of reasons observed that the steel industry had been in serious difficulties for some years and that the concrete reinforcement bars sector was experiencing an even greater deterioration than the steel industry in general.

is It is true that the general provisions of Articles 5 and 15 of the Treaty lay down requirements which must be observed by the Commission, but neither the form nor the extent of those requirements is specified. On a reasonable construction, when it is a question of a measure intended to apply generally, those requirements oblige the Commission to mention in the reasons on which its decision is based the situation as a whole which led to the adoption of the decision and the general objectives which it seeks to attain.

24 It follows from these findings that, although the statement of reasons given for Decision No 962/77 may have been concise, it was legally sufficient for a general decision and the requirements of Articles 5 and 15 of the Treaty were satisfied.

Paragraph 2: Compliance with the specific requirements of Article 61 as to the statement of reasons

25 Article 61 provides that the Commission may adopt minimum prices within the Common Market only if it finds that a manifest crisis exists or is imminent and that such a decision is necessary to attain the objectives set out in Article 3. It provides further that in fixing prices, the Commission must take into account the need to ensure that the coal and steel industries and the consumer industries remain competitive, in accordance with the principles laid down in Article 3 (c). Those provisions of Article 61 lay down the conditions of substance which must be satisfied by the decision to fix minimum prices. However, it is clear that as a result the reasons given for the decisions must refer to the fulfilment of those conditions, precisely in order to facilitate judicial review on questions of substance.

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26 Thus the reasons stated for a decision fixing minimum prices must mention and briefly give evidence of:

— the existence or imminence of a manifest crisis;

30 Finally, with regard to the fixing of the prices, the need to ensure that producer and consumer undertakings remain competitive is referred to by the sixth recital, which evinces a concern to retain "flexibility in the market" in the choice of basis prices ex basing point as minimum prices, and also in the

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tenth recital, where it is stated that undertakings remain free to publish basis prices above the minimum prices set. Moreover, it may be deducedt a contrario from the eleventh recital that there exists the option of alignment on the most favourable Community prices, provided that they are in accordance with the decision on minimum prices. On this point, although the statement of reasons could doubtless have been more explicit, it is none the less sufficient.

3i Thus the specific requirements laid down by Article 61 with regard; to the stating of reasons were complied with to a degree which was sufficient in law.

Paragraph 3: Compliance with the special formal conditions laid down by Article 61

32 U n d e r Article 61 the drafting of a decision concerning the introduction! of a prices system which has the effect of temporarily suspending the n o r m a l ' r u l e s governing the working of the ECSC common market is surrounded by proc- edural requirements designed to ensure that such measures are adopted circumspectly and with caution, which requirements must be regarded as essential and which the Court must therefore examine with a view to ascer- taining whether they were observed.

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According to the applicants, an essential procedural requirement was none the less infringed because the said studies and consultations were not carried out with sufficient care.

35 (1) The Italian applicants consider that, in the first place, the Commission did not undertake serious preliminary studies, which would have revealed in particular that 50% of the concrete reinforcement bars sector was not in crisis and, secondly, that if studies were made they were not made jointly with them.

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situation, the Commission did not persevere with that course of action and decided that satisfactory results could be obtained through non-compulsory intervention, guiding production and prices policy by means of voluntary commitments undertaken in the context of the forecasting programmes. In the context of that economic choice, the Commission published a general Communication (Official Journal C 303 of 23 December 1976, p. 3) describing the lines of action which it contemplated following. That communication covered all aspects of the problem: analysis and monitoring of the market, investments, specific crisis measures relating to production and prices, relations between the Community and non-member countries on the steel market and social and regional problems. That communication was followed by another issued pursuant to Article 46 of the ECSC Treaty (Official Journal C 304 of 24 December 1976, p. 5) in which, after recalling that in its forward programme for the first quarter of 1977 it had made forecasts for deliveries subdivided into six categories of products, including concrete reinforcement bars, the Commission announced its intention to make detailed estimates of deliveries of those products for the interior of the Community, dividing them by undertakings or groups of undertakings which would be invited to sign an "individual and confidential" engagement to limit voluntarily their deliveries to the level which would be communicated to them.

37 It emerges from this account of the Commission's action prior to Decision No 962/77 that the iron and steel undertakings could not have been unaware of the specific measures which the Commission intended to take and that thus informed they were in a position, either individually or through their trade organizations, to make their suggestions known to it.

42 It follows from all those considerations that the procedural requirements imposed upon the Commission by the Treaty were observed and that there was no disregard of any requirement such as would entail the invalidity of the measure.

Section 2: Compliance with the conditions of substance laid down by Article 61

43 In o r d e r t o fix m i n i m u m prices it is necessary that the Commission should: (1) r e c o g n i z e the existence or imminence of a manifest crisis, (2) recognize the need t o a d o p t such a decision in o r d e r t o attain the objectives set o u t in Article 3, and (3) take into account the need to ensure that the steel industry and the consumer industries remain competitive, in accordance with the principles laid down in Article 3 (c).

Paragraph 1 : The existence or imminence of a manifest crisis

44 The Italian applicants maintain that the small and medium-sized under- takings manufacturing concrete reinforcement bars were not in a state of crisis at the beginning of 1977, by virtue of their structure, their degree of specialization and their choice of technique.

45 Those applicants maintain that the judgment to be made on the existence of a "crisis" should cover not only the difficulties encountered by the large iron and steel producing undertakings in the North, but also the satisfactory

so Consequently, by analysing the imbalance between production and consumption of concrete reinforcement bars as a state of manifest crisis,

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observing that the German undertakings confirmed that view and that the Italian undertakings which disputed it were not able to adduce sufficient proof of their argument, the Commission did not base its decision on materially inaccurate facts or circumstances, or on a mistake of law, or on a manifestly erroneous assessment of the situation. Thus it was entitled to recognize the existence of a manifest crisis.

Paragraph 2: Compliance with Article 3 of the Treaty

si The applicants have insisted that in their opinion the Commission simul- taneously disregarded all the objectives of Article 3 listed in paragraphs (a) to (g), in particular paragraph (c) to the extent to which that provision requires it to ensure the establishment of the lowest prices, an objective which runs counter to the fixing of minimum prices. Decision N o 962/77 is, they add, a protectionist measure which is contrary to economic progress, since the Commission requires that higher prices be charged for the sake of undertakings which have higher production costs.

52 By calling for the simultaneous observance of practically all the objectives set out in Article 3, the applicants are postulating an excessive and contradictory requirement.

— To maintain the level of employment so as to avoid a deterioration in the working conditions and standards of living of the workers, in application of Article 3 (e) ;

— In the long term, to maintain sufficient production capacity, in application of Article 3 (a);

those being objectives which it found to be justified by the general interests of the trade in view of the economic circumstances at the relevant time. Thus it was proper for the Commission, faced with the state of crisis in the concrete reinforcement bars industry, within the decision-making framework created for the purpose of implementing an iron and steel policy designed to alleviate a manifest state of crisis, to determine the objectives which it considered appropriate for the establishment of a social and structural programme in accordance with the scale of the problems which had arisen.

57 All these considerations lead to the conclusion that there exists sufficient evidence to maintain that — in the circumstances of the case and at the time when the decision was taken — that decision complied with the objectives set out in Article 3 which accorded with the economic and social policy chosen by the Commission.

58 For the projected decision to be lawful it is also necessary that the Commission should have recognized the need to take such a decision in order to obtain the objectives set out in Article 3.

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60 In pursuance of that principle the Commission considered taking non- compulsory measures designed t o bring the supply of iron and steel products more into line with demand; those measures — as already explained — relied inter alia upon commitments by Community steel undertakings to adhere to the delivery limits set by the Commission and notified to each undertaking or group of undertakings. In contrast to the position for other rolled products, for which voluntary commitments to reduce production covered 9 0 % of the amount fixed by the Commission, only 50% of the delivery target set for concrete reinforcement bars was covered by voluntary commitments, which figure was clearly insufficient to enable the sector to achieve the recovery hoped for. That led to a more pronounced deterioration of the market for concrete reinforcement bars. Thus the need for a compulsory system of prices for concrete reinforcement bars was demonstrated by the failure of the system of voluntary commitments aimed at reducing production, whilst for the other rolled products the Commission published guidance prices (Official Journal L 114 of 5 May 1977, p. 18).

6i Certain applicants, in particular Rumi (Case 263/78), consider that the Commission made an erroneous assessment of the economic situation amounting to a manifest failure to observe the rules of the Treaty by intro- ducing a minimum prices scheme when "it should have had recourse to Article 58 of the Treaty and set up a scheme of production quotas in conjunction with a range of ancillary measures".

65 The last condition concerning the propriety of a decision on minimum prices relates to the fixing of the level thereof.

66 The penultimate paragraph of Article 61 provides that: "In fixing prices, the [Commission] shall take into account the need to ensure that the coal and steel industries and the consumer industries remain competitive, in accordance with the principles laid down in Article 3 (c)". According to that article it is necessary to ensure the establishment of the lowest prices, while allowing necessary amortization and normal return on invested capital.

67 In order to achieve the objective of putting in order the financial situation of the undertakings in the sector in crisis, whilst observing the objectives of Article 61, the Commission considered that:

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(a) The minimum prices must be higher than the market prices, but fixed at a level such as to avoid distortions in competition in favour of the iron and steel industry and to the detriment of other economic sectors, to take into account the general objectives of economic policy and in particular the interests of undertakings consuming steel and their competitive situation and to avoid disturbances in exports and imports;

(b) It was important to take into account production costs, which vary appreciably according to the production techniques employed by the different undertakings, half of whom used iron ore, which between 1975 and 1977 had increased in price by between 8 and 3 5 % depending on the Member State, whilst the other half used scrap iron, which had fallen in price by between 37 and 47% depending on the Member State.

7i With regard to these criticisms it must be pointed out that the method used to fix the level of the prices is a discretionary and technical matter governed by the principle of solidarity, adherence to the criteria laid down by the penultimate paragraph of Article 61 and compliance with the formal requirements consisting in consultations with the Consultative Committee and the Council.

72 Only when the economic assessment discloses a manifest infringement of a legal rule may the Court review the choices made by the Commission under the last paragraph of Article 36 and, in this particular case, inquire whether the price level adopted prevented the attainment of the objectives set out in Article 3.

73 In fact, as the level of production costs showed appreciable differences within the Community, the prices could not be aligned on the costs of the undertakings having the highest productivity, for that approach would have nullified the use of minimum prices in view of the objectives which are accorded to them by the Treaty and the scheme set up by Decision No 962/77.

74 As regards the need to ensure the competitiveness of the steel undertakings, it may be noted that only the undertakings in Brescia had list prices lower than the minimum prices, whilst their competitors had list prices higher than the minimum prices imposed. By selling exactly at the minimum prices, the Brescia undertakings were still able to sell at prices lower than or at least equal to the prices of their competitors affected by the crisis; moreover, the minimum prices system did not create appreciable distortions in traditional trade patterns in relation to the total volume of trade in those products.

Chapter 2: Compliance with the other articles of the Treaty and with the general principles relied on by the applicants

Section 1 : Compliance with Articles 2, 4 and 5 of the Treaty

79 The applicants maintain that Articles 2, 4 and 5 were manifestly disregarded by Decision N o 962/77. Articles 2 and 5 lay down in broad terms the task which the Community is called upon to perform and Article 4 stipulates the principle restrictions connected with the establishment and maintenance of the common market in coal and steel; it is alleged that the attainment of the general aims set out in those articles, towards which all the Community's activity must strive, was frustrated by Decision N o 962/77.

so In making that submission, the applicants forget that by providing for intervention by means of coercive action in certain defined circumstances the Treaty derogates from the normal rules governing the working of the Common Market, which are based on the principle of the market economy.

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si In that it authorized the adoption of a measure such as the fixing of minimum prices, the Community legislature clearly accepted the possibility of derogating temporarily from the mechanisms of competition, provided only that the objectives set out in Article 3 (c) are adhered to.

83 That is true of Article 53, concerning the financial arrangements which are authorized when the Commission recognizes that they are necessary for the performance of the tasks set out in Article 3 and are compatible with the Treaty, and in particular with Article 65; of Article 58, concerning quotas which may be established, taking account of the principles set out in Articles 2, 3 and 4; of Article 66, concerning certain authorizations granted to cer- tain undertakings on condition that the principle laid down in Article 4 (b) is observed; of Article 74, whereby in relation to dumping the Commission is empowered to take any measures which are in accordance with the Treaty and in particular with Article 3; and of Article 95, concerning cases where a decision or recommendation not provided for in the Treaty is necessary, in relation to which observance of the principles laid down in Articles 2, 3, 4 and 5 is mandatory. Moreover, it is apparent from that list that the requirements of the Treaty provisions with regard to the principles and objectives which must be adhered to in order for a derogative measure to be in order correspond to the importance of the derogations impinging upon the rules and mechanisms governing the normal working of the market or upon the independence of the undertaking.

84 It follows that as a result of the very nature of the exceptional measures provided for by the Treaty, which derogate in one or more particulars from the normal working of the market and affect it more or less profoundly, such

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ss According to certain applicants, the minimum prices scheme — if it had been applied — would have created conditions such that the operators would have been deprived of the businesses belonging to them contrary to the guarantee given with regard to the right to property by the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms.

89 As the Court has already emphasized in its judgment of 14 May 1974 in Case 4/73 Noldv Commission [1974] ECR 491 the guarantee afforded to the ownership of property cannot be extended to protect commercial interests,

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the uncertainties of which are part of the very essence of economic activity. Moreover, it should be noted that no closure of an undertaking as a result of the application of Decision N o 962/77 has been recorded.

90 This submission must therefore be dismissed.

Paragraph 2: As regards compliance with the principle of proportionality

93 According to the applicants, the fact that in spite of Decision N o 962/77 certain Member States took national measures granting aid to their iron and steel industries proves that that decision was inadequate.

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94 In reply the Commission states that Decision N o 962/77 was indeed necessary, but insufficient, for the re-organization of the whole of the Community iron and steel industry; thus that decision, which is itself only a part of a broader anti-crisis plan, by no means prevents the Member States from adopting measures granting aid for the purpose of restructuring their national iron and steel industries.

95 Consequently, the existence of separate national policies does not prove that the measures taken by means of Decision N o 962/77 are inadequate and inappropriate in relation to the objectives laid down by that decision; therefore the applicants' reliance on that complaint is unfounded.

(2) The compatibility of the measure with the channelling of trade through the U C R O

96 The applicants infer from the creation of the U C R O not only that the Commission admitted that Decision N o 962/77 was inadequate, but further that the creation of that body entailed the repeal de facto of Decision N o 962/77 as regards the undertakings which were member of it.

101 In fact, between June 1977 and September 1979 it carried out 181 inspections (including 19 in June and July 1977), and in addition it examined 122 797 certificates of conformity during the same period, which also enabled it to learn of the infringements.

102 Consequently, in the context of the search for possible defects in the minimum prices system this complaint must be dismissed; at most it may be re-examined during the discussion as to the facts which the applicants claim justified their conduct.

(4) The failure to apply the measures to the dealers

103 The applicants argue that by not extending its Decision N o 962/77 to the independent dealers the Commission permitted those dealers to sell below the minimum prices quite legally, the more so as they held stocks equivalent to two months' turnover and were able to continue to obtain supplies on the external market since imports were not subject to the legislation on minimum

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prices; that practice was further facilitated in the case of the large vertically integrated groups in which the parent producer company sells to its dealer subsidiary at the minimum prices, whilst the latter resells at a loss below the minimum prices; that uneconomic conduct is made possible by the fact that the parent company bears the losses of its subsidiary and makes up for them through its own profitable sales.

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were able to bring pressure to bear with regard to the level of prices and induce the producers to grant prices below the minimum prices. These circumstances obliged the Commission to extend the system of minimum prices to dealers by Decision N o 3002/77 of 28 December 1977 (Official Journal L 352, p. 8). Therefore the applicants are correct in their submission that the system established by Decision No 962/77 was defective by reason of its failure to require the independent dealers to observe the minimum prices immediately.

(5) The failure to apply the measure to imports from non-member countries, entailing the attendant possibility of alignment

ios According to the applicants, Community purchasers were able to obtain supplies at prices below the minimum prices quite legally by recourse to imports from non-member countries. According to the German applicants, the Italian producers had used the freedom thus granted in respect of such imports to sell their concrete reinforcement bars in Bavaria below the minimum prices by routing them through Switzerland, which, it is alleged, had a considerable influence on the level of prices in Bavaria, where it was no longer possible to sell at the minimum prices; further, the freedom actually granted to the Community undertakings to align their prices on offers from non-member countries which were lower than the minimum prices is said to have lasted until 14 March 1978, the date of Decision N o 527/78 (Official Journal L 73, p. 16) prohibiting alignment on offers orignating in certain third countries.

112 Therefore it appears that in this particular case and in the circumstances at the time the Commission used the means at its disposal and that it cannot be accused of having made no effort to prohibit such imports from May 1977, especially since such a prohibition could be laid down only within a negotiated system.

in None the less, the fact remains that imports from non-member countries disturbed the market temporarily, influencing prices in particular, and more so as certain Community undertakings claim to have aligned their prices on offers below the minimum prices originating in non-member countries, such offers being lawful.

IM It must be borne in mind that Article 6 (2) of Decision No 962/77 was already designed to deal with such alignments on offers for concrete reinforcement bars from any country which is not a Member State of the Community, which are authorized only in so far as the delivered prices are not lower than the delivered prices "based on a more favourable Community price list"; in effect, therefore, that provision prevented sales below the minimum prices, since all Community price lists had to contain prices in accordance with Decision No 962/77.

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ns Despite that article, it seems that alignments were carried out below the minimum prices since in the second recital of the preamble to Decision N o 527/78 the Commission admitted that experience had shown that compliance with those minimum prices could not be secured if offers at lower prices and for only small quantities could be used as a basis for alignments and that it was that experience which made it necessary to abolish the option of alignment on offers originating in certain non-member countries.

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119 It appears that, on the whole, the system established by Decision N o 962/77 worked despite the omissions disclosed and in the end attained the objectives pursued by that decision. Although it is true that the burden of the sacrifices required of the applicants may have been aggravated by the omissions in the system, that does not alter the fact that that decision did not constitute a disproportionate and intolerable measure with regard to the aim pursued.

120 In those circumstances, and taking into consideration the fact that the objective laid down by Decision N o 962/77 is in accordance with the Commission's duty to act in the common interest, and that a necessary consequence of the very nature of Article 61 of the ECSC Treaty is that certain undertakings must, by virtue of European solidarity, accept greater sacrifices than others, the Commission cannot be accused of having imposed disproportionate burdens upon the applicants.

Chapter 3: The complaint of misuse of powers

1 2 1 According t o the. applicants, Decision No 962/77 i s vitiated by misuse of powers since the Commission pursued an aim different from that for which Article 61 authorizes it to fix minimum prices within the Common Market.

122 In their submission, the real aim of the decision was to protect those large iron and steel concerns which were unprofitable on the concrete reinforcement bars market, by helping them to retain their market share by means of minimum prices.

127 It points out that its objectives were clearly set out and it objects to the allegations of the Bresciani.

128 From the preamble to Decision N o 962/77, the pleadings lodged by the Commission and the oral hearings it emerges that the Commission intended by that measure to redress the situation of the concrete reinforcement bars market, by seeking in particular to bring about a better balance between demand and the abundant supply, and also between prices, so as to increase the average rate of utilization of the productive capacity of the undertakings as a whole.

129 The effect of the decision concerning minimum prices on the small and medium-sized undertakings and its repercussions with regard to the large iron and steel concerns are the necessary outcome of that measure, which was adopted lawfully in a situation held to constitute a manifest crisis and in accordance with the objectives set out in Article 3 of the Treaty, as has already been demonstrated. What is at issue is an inevitable consequence of a lawful measure and not the result of an intention to harm certain under- takings individually. Moreover, the applicants have not assembled the body of concordant evidence which might justify a finding of misuse of powers.

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130 Therefore the applicants have not adduced proof that the Commission's powers were used for ends other than those envisaged by Article 61.

S e c o n d p a r t : T h e l e g a l i t y of t h e i n d i v i d u a l d e c i s i o n s i m p o s i n g penalties

134 The drafting of the individual decisions shows that the Commission used the same formula for all the undertakings: after referring to the provisions of the Treaty and the decisions applicable, it indicates the circumstances in which the infringements of the said provisions were found to have taken place, the

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manner in which they were brought to the notice of the undertakings and how the latter submitted their observations. The facts constituting the infringement are then set out and the resulting fine is announced.

us In view of that formula, it might be concluded that if the applicants compared the individual decision penalizing them with General Decision N o 962/77 they could not fail to be aware of the precise infringements of which they were being accused; therefore the Commission cannot be accused of failing to supplement the individual decisions by stating the special reasons for the general decision which was implemented by them, which must have been known to the persons concerned. Moreover, the breadth of the submissions relied on by the applicants during the written and oral procedure shows that the existing statement of reasons did not in any way handicap the presentation of their defence.

136 Therefore this submission is unfounded.

Chapter 2: Exonerating factors pleaded

139 The applicants state that as a result of the conduct "of other producers" who did not comply with the decision on minimum prices they were placed in a situation of force majeure which compelled them to infringe Decision No 962/77 in order to avoid exclusion from the concrete reinforcement bars market.

HO But recognition of circumstances of force majeure presupposes that the external cause relied on by individuals has consequences which are inexorable and inevitable to the point of making it objectively impossible for the persons concerned to comply with their obligations and, in this case, leaving them no alternative but to infringe Decision N o 962/77.

HI It emerges from the documents put in evidence that of 181 undertakings investigated between June 1977 and September 1979, only 29 infringed the rules on minimum prices. Consequently, it appears that a majority of under- takings effectively adjusted to the situation, either by seeking new customers or manufacturing different products or by maintaining production at a certain level whilst complying with the minimum prices. Since, therefore, the external cause relied on by the applicants did not place them in a situation from which there was no escape the concept of force majeure cannot be applied in their favour.

Necessity

142 The applicants rely on the state of necessity in which they claim to have been placed and by virtue of which they were forced not to comply with the obligations imposed by General Decision N o 962/77. In particular, the Italian applicants state that in practice they had no means of reducing their fixed costs in view of the risks of strikes and social upheaval in the event of redundancies and that therefore because of the loss of turnover their very

Chapter 3: Alignment

ns The applicant Feralpi, in company with the other Italian applicants on this point, submits that its conduct was lawful on the ground that it sold concrete reinforcement bars at minimum prices resulting from alignments undertaken in accordance with the Community rules.

ne In this regard Feralpi maintains in the first place — relying on Article 6 of Decision N o 30/53 of 2 May 1953 (Official Journal, English Special Edition 1952-1958, p. 9), as amended by Article 2 of Decision No 72/440/

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ECSC of 22 December 1972 (Official Journal, English Special Edition 1972 (30-31 December), p. 19) — that it was entitled to align its prices on prices actually applied by other Community undertakings, and not only on competitors' list prices.

147 But the Commission rightly submits that the said Article 6 provides that that right of alignment exists only for products for which "there exists no obligation or there exists only a limited obligation to publish prices", that is to say for products listed in Article 8 of Decision N o 31/53 of 2 May 1953 (Official Journal, English Special Edition 1952-1958, p. 11), as amended by Decision N o 72/441/ECSC of 22 December 1972 (Official Journal, English Special Edition 1972 (30-31 December), p. 22), which list does not include concrete reinforcement bars.

accept the validity of such an alignment or, a fortiori, the validity of an alignment on an intra-Community offer which was itself previously aligned — although there is no proof of that — on an offer originating in a third country.

153 Lastly, Feralpi submits that, as regards the sales effected in the Federal Republic of Germany, it aligned its prices on lists published by German undertakings and that therefore it did not commit infringements of the rules on minimum prices, but at most, if those alignments were improper, infringements of Article 60 of the ECSC Treaty.

154 It is necessary to point out in the first place that Article 6 (1) of Decision No 962/77 does not prevent alignments "on more favourable delivered prices based on the price-lists of other producers in the Community". However, all the price-lists of undertakings in the Community must comply with the decision introducing the minimum prices and no alignment on Community prices enables sales to be made below the minimum prices. It follows that any sale below the minimum prices constitutes not only an improper alignment on other Community prices, contrary to Article 60 of the ECSC Treaty, but also an infringement of the rules on minimum prices.

iss By deducting from the German price-list on which it claimed to have aligned its prices the transport costs from Lonato (Feralpi's basing point) to the destination basing point, Feralpi obtained an "aligned" selling price which was lower than the price resulting from the application of a Community undertaking's list, a practice prohibited by Article 6 (1); consequently the sales effected in the Federal Republic of Germany below the minimum prices constitute infringements of Article 61 of the ECSC Treaty.

159 But by deciding to apply a relatively low coefficient for the calculation of the fines, namely 25 % of the value of the underpricing in the case of the under- takings without particular financial problems, 10 % of that value in the case of the medium-sized undertakings operating at a loss, and 1 % of that value in the case of the insolvent undertakings, having regard to the rate which it may apply under Article 64 of the Treaty — twice the value of the unlawful sales — the Commission properly took account of the circumstances of the cases.

ICO Consequently, the applicants' claims for the fines to be reduced are unfounded, except for the claims which are examined below concerning an incorrect application of the rates fixes by the Commission or reductions in the value of the underpricing.

Chapter 2: Particular cases

1. Antonio Stefana

ici This undertaking has submitted that at the time when the fine was imposed on it, its financial situation was extremely critical, which submission has not been called in question by the Commission; consequently, in accordance with the criteria laid down by the Commission, the rate of 10 % of the value of the underpricing must be applied to that undertaking and not the rate of 25 % , with the result that the fine imposed upon it must be reduced from 50 852 000 lire to 20 340 800 lire.

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164 Although it is true that Article 36 of the Treaty, to which Di Darfo refers, merely requires the Commission to give the party concerned the opportunity to submit its comments before a pecuniary sanction is imposed, and although in this case the undertaking was able to submit written observations, it must none the less be said that the period of notice given by the Commission to Di Darfo — in relation to its invitation to a hearing at Brussels — could have been more generously calculated so as not to affect that undertaking's oppor- tunity to make known its point of view in good time with regard to certain disputed documents. However, that conduct does not ipso facto entail the annulment of the contested decision, in as much as the applicant had pre- viously had an opportunity to submit written observations, but the documents which it failed to rely on in its written observations to the Commission, and which it claims to have wished to submit at the hearing which it was not able to attend, must be taken into consideration by the Court.

165 The applicant goes on to submit that Invoices Nos 1626, 1628 and 1630 — all three of 2 September 1977 — did not concern concrete reinforcement bars, but ST 37 rolled products, and that those invoices are not therefore covered by Decision N o 962/77. But since the Commission has rightly pointed out that the invoices (bear a stamp stating: "partial alignment on the

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AFIM price-list", and that that price-list concerns only concrete reinforcement bars, the applicant's argument must be dismissed.

(b) Rumi

170 The applicant submits that the Commission was wrong to calculate the value of the underpricing by reference to the price of D M 540 per tonne of

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concrete reinforcement bars, on the ground that it sold its concrete reinforcement bars by alignment on the basing points Saarbrücken and Ober- hausen and that as a result of transport costs the price per tonne should, have been reduced to D M 451.87; thus it considers that the value of the under- pricing falls from 200 to approximately 100 million lire and that the fine should be calculated only in relation to the latter sum.

171 The Commission is right to point out, in the first place, that the document produced in support of this claim relates to sales subsequent to those taken into consideration for the calculation of the underpricing and, secondly, that the final destination of the goods in question was the Netherlands; in those circumstances an alignment on German basing points was contrary to Article 60 of the Treaty and, as that unlawful alignment enabled the applicant to sell below the minimum prices, it also constituted an infringement of the rules on minimum prices, with the result that the submission relied on by Rumi must be dismissed.

(c) Feralpi

177 As the infringements were committed between 3 March and 3 May 1978, the underpricing must be equal to the difference between the minimum price (including extras for diameter) and the selling price at which the transaction was effected, which includes the basis price and the extras for quality.

178 Consequently, taking into consideration the situation described above, the Court decides that the fine shall be reduced from 55 110 000 lire to 50 000 000 lire.

Costs

179 Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

iso Under Article 69 (3), where each party succeeds on some and fails on other heads, or where the circumstances are exeptional, the Court may order that the parties should bear their own costs in whole or in part.

isi In Cases 154/78 (Valsabbia), 205/78 (Stefana Fratelli), 206/78 (A.F.I.M.), 227/78 (Di Darfo), 228/78 (Sider Camuña), 263/78 (Rumi), 264/78 (Feralpi), 31/79 (Montereau) — including the application for the adoption of interim measures — 39/79 (O.L.S.), 83/79 (Maximilianshütte), 85/79 (Korf), the applicants have basically failed in their applications and they must be ordered to pay the costs.

— In the case of Antonio Stefana (226/78) to 19 042 European units of account, that is 20 340 800 lire;

— In the case of Di Darfo (227/78) to 25 168 European units of account, that i s 2 6 8 8 3 7 8 0 lire;

— In the case of Feralpi (228/78) to 46 298 European units of account, that is 50 000 000 lire;

2. Dismisses the remainder of the applications;

3. Orders the applicants in Cases 154/78 (Valsabbia), 205/78 (Stefana Fratelli), 206/78 (A.F.I.M.), 227/78 (Di Darfo),228/78 (Sider Camuña), 263/78 (Rumi), 264/78 (Feralpi), 31/79 (Montereau), 39/79 (O.L.S.), 83/79 (Maximilianshütte) and 85/79 (Korf) to pay the whole of the costs;

4. Orders the parties in Case 226/78 (Antonio Stefana), to bear then- own costs.

I — Facts and procedure 913 Joined cases 154, 205, 206, 226 to 228, 263, 264/78 and 39/79 913 Case 31/79 915 Case 83/79 915 Case 85/79 916

II — Conclusions of the parties 916 Joined cases 154, 205, 206, 226 to 228, 263 and 264/78 and 39/79 916 Case 31/79 920 Case 83/79 921 Case 85/79 922

III — Summary of the submissions and arguments of the parties 922 Joined cases 154, 205, 206, 226 to 228, 263 and 264/78 and 39/79 922 A — By way of introduction: considerations regarding the market for concrete reinforcement bars and the situation of the undertakings in Brescia following Decision No 962/77/ECSC 922 B — The first submission: Decision N o 962/77 manifestly failed to observe the provisions of the Treaty and in particular the rules contained in Article 61 (b) in conjunction with Articles 2, 3 and 4 of the ECSC Treaty and with the Convention for the Protection of Human Rights 930 1. Infringement of Article 2 of the ECSC Treaty 930

2. Infringement of Article 3, the aims of which must be attained in the event of minimum prices being fixed under Article 61 931

3. Infringement of Articles 4 and 5 of the ECSC Treaty and of the Convention for the Protection of Human Rights and Fundamental Freedoms 934

4. Infringement of Article 61 (b) of the ECSC Treaty 936 C — The second submission: Decision N o 962/77 constitutes a misuse of powers on the part of the Commission 940 D — The third submission: Decision N o 962/77 constitutes an infringement of essential procedural requirements owing to the absence of a sufficient statement of reasons 942 E — The fourth submission: the illegality of the individual decisions 944 F — The particular cases of Di Darfo, Rumi and Feralpi as regards the calcu- lations effected by the Commission 948 Case 31/79 953 A — Admissibility 953 B — The economic situation of the applicant in relation to the market 953 C — The infringement of Article 61 of the ECSC Treaty and of Decision No 962/77/ECSC 954 D — The abuse of the power of appraisal conferred by Article 64 of the ECSC Treaty 955

Preliminary chapter. The admissibility of the plea of illegality in relation to General Decision No 962/77 and of the submissions and arguments raised by the applicants in support of the said plea 990 First part: The legality of General Decision No 962/77 993 Chapter 1: With regard to Article 61 of the ECSC Treaty 993 Section 1 : Compliance with the formal conditions which must be observed when a measure is adopted under Article 61 993 Paragraph 1 : Compliance with the general conditions as to form (Articles 5 and 15 of the Treaty) 993 Paragraph 2: Compliance with the specific requirements of Article 61 as to the statement of reasons 995 Paragraph 3: Compliance with the special formal conditions laid down by Article 61 997 Section 2: Compliance with the conditions of substance laid down by Article 61 1000 Paragraph 1 : The existence or imminence of a manifest crisis 1000 Paragraph 2 : Compliance with Article 3 of the Treaty 1002 Paragraph 3: The level of the prices as regards compliance with the last part of Article 61 of the Treaty 1005

Chapter 2: Compliance with the other articles of the Treaty and with the general principles relied on by the applicants 1008 Section 1 : Compliance with Articles 2, 4 and 5 of the Treaty 1008

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Section 2: The legality of Decision No 962/77 in relation to the general principles of law 1010

Paragraph 1 : As regards compliance with the right to property 1010 Paragraph 2: As regards compliance with the principle of proportionality . 1011 (a) The examination of the various complaints ' 1011 1. The compatibility of the measure with national aid 1011 2. The compatibility of the measure with the channelling of trade through the UCRO 1012 3. The lack of control 1013 4. The failure to apply the measures to the dealers 1013 5. The failure to apply the measures to imports from non-member countries, entailing the attendant possibility of alignment 1015 (b) The disproportionate nature of the sacrifices demanded, in view of the omissions thus disclosed 1017