C-1252/79

JUDGMENT OF 11. 12. 1980 — CASE 1252/79

which it is addressed has participated been informed of the method of in the procedure whereby the decision calculating the disputed under- in question was drawn up and has pricing.

In Case 1252/79

S P A ACCIAIERIE E FERRIERE LUCCHINI, having its registered office at Brescia (Italy), represented and assisted by Giuseppe Marchesini, Advocate at the Italian Corte Suprema di Cassazione, with an address for service in Luxem- bourg at the Chambers of Ernest Arendt, 34 B Rue Philippe II, applicant, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by Mr Prozzillo, acting as Agent, 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 decision of the Commission of the European Communities of 31 October 1979, notified on 16 November 1979, imposing on the applicant a fine for infringement of the Community rules on compulsory minimum prices for certain iron and steel products and, in the alternative, for the reduction of that fine,

Facts and Issues

The facts of the case, the course of the particular for size and length, and extras procedure and the claims, submissions for quantity. and arguments of the parties may be summarized as follows: Under the provisions of Article 36 of the ECSC Treaty, the Commission gave Lucchini the opportunity to submit its observations. Having obtained expla- I — Facts and p r o c e d u r e nations and heard the director of the undertaking at a hearing in Brussels on 7 May 1979, the Commission abandoned the complaints relating to the sales in This case concerns the sale of merchant Austria; however, those relating to the bars by the Italian undertaking Acciaierie sales in France and in the Federal e Ferriere Lucchini SpA (hereinafter Republic of Germany were maintained referred to as "Lucchini") by way of and led to the imposition on Lucchini of export to other countries of the a fine of 25 000 European units of Community at prices lower than those account, in other words LIT 28 770 000, fixed by Commission Decision No 3000/ by decision of 31 October 1979, which 77/ECSC of 28 December 1977 fixing was notified on 16 November 1979. The minimum prices for hot-rolled wide applicant lodged this application against strips, merchant bars and concrete that decision; the application was reinforcing bars (Official Journal L 352, received at the Court Registry on 21 pi) December 1979.

— In the alternative, annul the said Ill — Summary of the sub- decision of 31 October 1979 on the m i s s i o n s a n d a r g u m e n t s of ground of illegality consisting in the parties defects pertaining to that decision in the form of failure to observe rules of law relating to the application of Taking note, in its reply, of the the Treaty, violation of the general judgment of 18 March 1980 in the joined principles of law and infringement cases known as "the concrete of essential procedural require- reinforcement bars cases" in which the ments; and Court dismissed the submission based òn the illegality of Decision N o 962/77/ ECSC of 4 May 1977 (Official Journal — In the further alternative, amend the L 114, p. 1), Decision N o 3000/77/ contested decision by making ECSC merely prolonging that decision as provision for a purely nominal fine; regards concrete reinforcing bars and extending the system of minimum prices — In any case, order the defendant to to hot-rolled wide strips and merchant bear the costs". bars, the applicant abandoned its first submission based on the illegality of Decision No 3000/77/ECSC and merely In its reply, the applicant claimed that contests the individual decision imposing the Court should: the fine.

" — Annul the individual decision of 31 October 1979 on the ground of A — Submission based on the failure to illegality consisting in defects observe rules of law relating to the pertaining to that decision in the application of the Treaty and form of failure to observe rules of violation of general principles of law relating to the application of the law Treaty, violation of the general principles of law and infringement (a) Alignment in general of essential procedural require- ments; Decision N o 3000/77/ECSC laid down in respect of each producing country a — Amend the contested decision by minimum selling price for iron and steel making provision for a purely products, each undertaking being nominal fine; obliged, on this basis, to publish the price-list of the goods which it markets. — Order the defendant to bear the These price-lists lay down a basic price costs". which is affected by various additional

charges or extras according to the argument of the flexibility which the quality, size and quantity of the product Commission must show towards under- sold, it being specified that in no case takings but simply to show that the may the prices be lower than the Commission was "the first to abandon minimum prices. the reference to a specific price-list of another producer with regard to alignment". As regards exports to Community countries, Decision No 3000/77/ECSC has maintained the already existing The Commission formally contests this possibility for a producer to use the argument and states that it did not alignment procedure which enables him authorize alignment on the minimum to apply, rather than his own price-list, price of the country of destination. It that of an undertaking in the country of only permitted the seller to take as a destination. reference not the basic price of a producer (which may be considerably higher than the minimum price) but the minimum price of the producing country The applicant claims that, contrary to the in so far as that seller also applied the Commission's allegations, it complied extras which, in the case of the Federal with the functioning of the alignment Republic of Germany, are substantially mechanism. In order to show this, it identical in all price-lists. It showed maintains that when Decision No 3000/ flexibility in not requiring the under- 77/ECSC was adopted the Community taking to prove on what price-list it authorities, having regard to the special aligned itself if it complied with the situation of the industries in Brescia general conditions of sale applied in the already described in the concrete Federal Republic of Germany, and in not reinforcement bars cases, formally taking action against undertakings which assured Italian producers that they took as the basic price for their sales the should apply, in cases of alignment, not minimum price even if they did not abide the price-list of an undertaking in the by the basic price of foreign producers, country of destination, but the minimum riowever, although it did not penalize prices of that same country "and no infringements of Article 60, the more". Commission always required "that all the components of the alignment price-list which were significant as regards the Moreover, the Commission itself application of decisions on minimum acknowledged that it acted preater legem prices should be abided by". in this field since it admitted that it had "closed its eyes" to the infringements of the rules relating to the alignment procedure and agreed not to impose any (b) Extras for quality fine where prices were lower than those of foreign price-lists where the prices thus obtained. were still higher than the minimum prices. The applicant maintains first of all that the extra for quality is included in the minimum prices, as follows from Article 2 (1) of Decision No 3000/77/ECSC. The applicant states that its objective is This argument is confirmed by the fact not to turn against the Commission the that in the following decision, Decision

N o 3139/78 of 29 December 1978, the from this that the minimum price Community legislature took care to contains solely any extra provided for delete the expression "including extra for quality on the basis of which that quality". minimum price is fixed. It quotes by way of example the price-list of the London Works and Cockerill undertakings in Moreover, it considers that by auth- support of its argument. orizing this special application of . alignment on the minimum national price, the Commission at the same time abandoned the requirement that extras (c) Extras for quantity for quality which may only be laid down in the producers' price-lists should be The applicant emphasizes first of all that taken into account; thus, by not Italian producers do not bear any penalizing a sort of alignment which the additional charge when supplying their applicant describes as "unlawful", the clients small quantities and that it is Commission cannot on the other hand therefore "neither fair nor just" to require the persons under · its require an additional charge on the basis administration to apply rigidly rules of something which does not exist which it itself has failed to apply. especially since, conversely, it grants them discounts for large supplies.

In fact, it is listed in Article 1" of that decision: thus, necessary to take into account the if, prior to Decision No 3000/77/ECSC, quantity of goods supplied during the a price-list had laid down a price of LIT year, not at each delivery, since 198 000 for concrete reinforcing bars customers prefer to receive what they and an extra of LIT 7 000 for improved need immediately rather than to stock adhesion concrete reinforcing bars, that materials and use them over a period of extra should not have been maintained, time. since the minimum price for improved adhesion concrete reinforcing bars was LIT 205 000 and thus included that Next, it calls in question the very extra. principle of extras for quantity because of "the statements made by the

LUCCHINI v COMMISSION

JUDGMENT OF 11. 12. 1980 — CASE 1252/79

of the sales in question whereas "as no reason in a system of minimum regards the major proportion of the cases prices; consequently, it was possible to of under-pricing, only the total amount take action on the ground of an under-priced was stated without further infringement of minimum prices as a explanation". It points out moreover that result of improper alignment. It adds that the explanations supplied by the . until now it has only initiated procedures Commission in its defence, apart from relating to the infringement of minimum the fact that they are not complete prices but that it is ready to examine either, were given after the adoption of whether another fine is appropriate the individual decision imposing the fine: under Article 60. it is therefore impossible to deny that there has been an infringement of essential procedural requirements. D — In the further alternative, the applicant requests that the contested decision should be amended and that it The Commission replies that its letter of should be ordered to pay a nominal fine. 14 December 1978 sent under Article 36 of the ECSC Treaty clearly set out each component of the under-pricing and that additional information as to the methods The Commission contends that the fine, of calculation used with regard to each which was fixed at 2 5 % of the under- infringement were supplied to Lucchini pricing, should be upheld, as in the other by letter of 18 January 1979. Moreover, concrete reinforcing bars cases. It the representative of that undertaking, at emphasizes that the applicant's conduct the hearing on 7 May 1979, did not ask caused considerable damage to all the questions in this connexion which means undertakings in the ECSC which must be that the allegations were clear to him. punished by a substantial fine, as the The Commission adds that schedules Court emphasized in its judgment of 12 listing the sales complained of were July 1979 (Rumi, Case 149/78 [1979] annexed to the decision imposing the ECR 2523). fine.

1 By application lodged at the Court Registry on 21 December 1979, the Italian company Acciaierie e Ferriere Lucchini SpA brought, under Artide 36 of the ECSC Treaty, proceedings for the annulment and, if necessary, the amendment of the individual decision of 31 October 1979 by which the Commission imposed on it a fine of 25 000 European units of account, in other words Lit 28 770 000, for infringements of general Decision No 3000/ 77/ECSC of 28 December 1977 fixing minimum prices for hot-rolled wide strips, merchant bars and concrete reinforcing bars (Official Journal L 352, p. 1). The contested decision was taken after an investigation had been carried out at the Lucchini undertaking; the Commission complained that, as regards sales of merchant bars in France, it sold below the minimum prices fixed by Decision No 3000/77/ECSC, and as regards sales of the same product in the Federal Republic of Germany, that, by not charging certain extras for quality and quantity laid down in the German price-lists, it charged effective selling prices below the alignment prices which should have been equal to or higher than the minimum prices.

In this respect it emphasizes that, in calculating the alignment, it did not take into account extras for quality on the ground that it follows from Article 2 (1) of Decision No 3000/77/ECSC that minimum prices are basic prices ex- basing point "including extra for quality" and that the meaning of these words is emphasized by the fact that the Community legislature deleted the expression "including extra for quality" in the subsequent decision, Decision No 3139/78/ECSC of 29 December 1978 (Official Journal L 370, p. 79). The Commission, for its part, maintains that alignment cannot be carried out on the minimum'price in force in the Member State of destination but on the prices contained in the price-lists of the producers in that Member State and that the general conditions of sale which are applied in that State must be complied with;· in particular, it claims that it was impossible to ignore the price differences corresponding to extras for quality and quantity.

s In this connexion, it is appropriate to recall that it follows from Article 4 (2) and (3) of general Decision No 3000/77/ECSC that surcharges or extras of any sort must in fact be shown in price-lists and conditions of sale. Alignment on the price-lists of producers of the Member State of destination can therefore1 only be carried out on the effective prices listed therein for similar products corresponding to precise specifications, including all extras. Otherwise the option of alignment on the actual prices of competitors referred to in'Article 6 of general Decision No 3000/77/ECSC would be meaningless.

9 It is necessary to observe first of all that a concession on the part of the authorities cannot make an infringement legitimate, still less justify making that infringement more serious. The fact that the Commission may have

JUDGMENT OF 11. 12. 1980 — CASE 1252/79

shown some laxity as regards alignment not on specific price-lists but on a basic price formed by the minimum price in no way justifies selling at prices lower than the minimum prices or the failure to take into consideration extras for quality or quantity. Moreover, it has not been shown that producers in other Member States benefited from a concession enabling them not to charge the extras for quality or quantity.

io With regard to the alleged discrimination, which the applicant claims follows from the concession to certain undertakings in respect of considerable under- pricing as regards extras for quantity, it is necessary to state that such discrimination only occurred before the coming into force of the rules the infringement of which forms the basis of the contested decision. The second submission is therefore unfounded.

1 1 Thirdly, the applicant maintains that it acted out of necessity so as not to lose traditional markets of vital importance to it.

i2 Without its being necessary to examine whether this threat could have given rise to a state of necessity justifying its conduct, it is sufficient to state that the applicant has not shown that it was in danger of bankruptcy or winding-up, especially since, as the applicant itself states, the amount of the improper sales relates only to a tiny proportion of its turnover. This submission must therefore be dismissed.

i6 The applicant has not put forward any arguments which may, even partially, justify its conduct on the basis of circumstances particular to it, and the Commission, by taking into account the amount of the improper sales and the present financial resources of the undertaking, took the facts of the case into consideration fairly. It is therefore unnecessary to uphold the request for reduction of the fine.

Costs

i7 Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

is Since the applicant has failed in its submissions, it is necessary to order it to pay the costs.

OPINION OF MR CAPOTO RTI — CASE 1252/79

On those grounds,

J. A. Pompe P. Pescatore Deputy Registrar President of the Second Chamber

O P I N I O N OF MR ADVOCATE GENERAL CAPOTORTI DELIVERED O N 12 NOVEMBER 1980 ·

Mr President, Commission imposed on Acciaierie e Members of the Court, Ferriere Lucchini SpA (hereinafter referred to as "Lucchini") a fine for the infringement of general Decision No 1. This application, which was lodged 3000/77/ECSC of 28 December 1977 under the second paragraph of Article 36 establishing minimum prices for certain of the ECSC Treaty, is principally for iron and steel products. In its application the annulment of the individual decision the applicant had in the first place of 31 October 1979 whereby the contested that general decision, claiming

1 — Translated from the Italian.