C-86/82

applicant, ν

C O M M I S S I O N O F T H E E U R O P E A N C O M M U N I T I E S , r e p r e s e n t e d b y its Legal Adviser, J o h n T e m p l e Lang, w i t h a n address for service in L u x e m b o u r g a t t h e office of O r e s t e M o n t a k o , a m e m b e r of its Legal D e p a r t m e n t , J e a n M o n n e t Building, Kirchberg,

defendant,

supported by

CAMERA CARE L T D , r e p r e s e n t e d b y M a r k Barnes, Barrister, of Lincoln's I n n , instructed b y Pollard & C o . , Solicitors, w i t h a n address for service in L u x e m b o u r g a t 50 R o u t e d'Esch,

intervener,

JUDGMENT

Facts and Issues

The facts of the case and the submissions the agreement: an export prohibition and arguments of the parties may be contained in clause 1 (2), and clause 8 summarized as follows: which stipulated that the sole distributor had to take account of the manufac­ turer's recommendations regarding sales I — Facts and written procedure policy, prices and discounts. Clause 1 (2), according to the Commission, offended against the rules on the free movement of goods whilst clause 8 Victor Hasselblad AB ("Victor Hassel­ constituted an infringement of the blad") whose registered office is in competition provisions laid down by the Gothenburg, Sweden, manufactures Treaty of Rome. Victor Hasselblad photographic equipment of a high agreed to comply with the Commission's quality. recommendations. Accordingly, a new version of the distributorship agreement was sent to the Commission on 6 March Victor Hasselblad has exclusive distri­ 1978. This met with the Commission's bution arrangements with dealers in approval and Victor Hasselblad was many countries. On 28 June 1985 informed by letter of 20 February 1979 it notified its standard distribution that the agreement fell within the scope agreement to the Commission. The of Regulation No 67/67/EEC (Official Commission, in a letter of 23 December Journal, English Special Edition 1967, 1976, objected to two provisions of p. 10).

JUDGMENT OF 21. 2. 1984 — CASE 86/82

Hasselblad (GB) Limited ("HGB") is a namely Hasselblad (GB) Ltd, Ilford company incorporated in the United (Ireland) Ltd, James Polack Aps, Têlos Kingdom. HGB signed a sole distribu- SA, Prolux Sprl, and Nordic Im- und torship agreement with Victor Hassel- Export Handelsgesellschaft mbH. blad on 1 January 1958. On 2 December 1975 a new agreement was signed be- tween the same parties. That agreement For the purpose of these proceedings the was amended on 20 November 1977. relevant provisions of the decision are : Neither agreement provides for any form of export prohibition but both were notified to the Commission on 25 "Article 1 January 1980.

Camera Care Ltd is a company (a) The sole distributorship agreements registered in Northern Ireland. Its covering Hasselblad equipment business premises are in London. Camera between Victor Hasselblad and Care signed a dealer agreement with Hasselblad (GB), Telos, Ilford, Pro- HGB on 7 January 1976. That agree- lux, Polack and Nordic constitute, in ment was terminated in May 1978. so far as they grant exclusivity of distribution of Hasselblad equip- ment, infringements of Article 85 (1). The contested decision (b) An exemption pursuant to Article 85 Camera Care complained to the Com- (3) for the concerted practices and mission about the practices of Victor sole distributorship agreements re- Hasselblad and its sole distributors, ferred to in Article 1 and in (a) alleging violations by them of Article 85 above is refused. (1) of the Treaty of Rome. The Commission investigated the complaint and initiated proceedings under Regu- Article 3 lation No 17 (Official Journal, English Special Edition 1959-1962, p. 87). (a) The selective distribution system On 2 December 1981 the Commission applied since 1974 by Hasselblad addressed a decision to Victor Has- (GB) infringes Article 85 (1) by selblad and six of its sole distributors, clauses 6, 23 and 28 of the dealer

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agreement, the quantitative selection whom and on what date it supplied of dealers and the influence on resale Hasselblad goods. Although Victor prices. Hasselblad's annual production of cameras and equipment is small in terms (b) The application for exemption of annual world-wide production of pursuant to Article 85 (3) for the reflex cameras, it represents a significant selective distribution system is share of the market segment in which refused. Victor Hasselblad is active, that is to say, reflex cameras taking medium format roll film.

Price competition and currency fluc­ The Commission based its decision with tuations within the EEC for photo­ respect to HGB upon the following graphic equipment are such that it is in facts : the interests of wholesalers and retailers to purchase Hasselblad equipment at the best possible price even in other Member 1. The Victor Hasselblad distribution States and to pass on the price difference system to their customers. The fact that Hasselblad sole distributors grant their Victor Hasselblad is the world's leading major customers quantity discounts and manufacturer of single lens 6 x 6 format bonuses is an incentive to Hasselblad roll-film reflex cameras. Its product dealers to increase their sales figures by range includes four different models of exporting. camera and nearly three hundred camera accessories. Victor Hasselblad exports In an effort to stem the tide of parellel 4 0 % of its production to the European imports a sales strategy paper entitled "A Economic Community. Victor Hassel­ Policy for Europe", drawn up at the blad has independent sole distributors in beginning of 1980 by HGB, condemns every Member State except Luxembourg. the practice as being disruptive of retail price levels and, consequently, Hassel­ Victor Hasselblad affixes a serial number blad's entire distribution system. In a to every major item of equipment, memorandum to the HGB management including all cameras, lenses and dated 23 May 1979 a sales representative magazines and keeps a register of all complained of the detrimental effect of sales to sole distributors. Victor Hassel- parallel imports, mentioning Camera blad is thus able to determine exactly to Care as one of the main culprits.

(a) Serial number checks By an application registered at the Court on 10 March 1982, Hasselblad (GB) appealed against the decision in so far as The Victor Hasselblad distributorship it was concerned. By an application of 14 agreement requires distributors to keep a June 1982, Camera Care requested register of the serial numbers of permission to intervene in the pro- equipment it sells together with the name ceedings. By an order of 29 June 1982 and address of the buyer and to allow Camera Care's application to intervene Victor Hasselblad to inspect its register was allowed. The proceedings followed whenever it so wishes. Victor Hasselblad, the normal course. acting in conjunction with the United Kingdom, French, Belgian and Danish sole distributors, used the serial number After hearing the report of the Judge- checks and its right of access to each Rapporteur and the views of the sole distributor's register to identify the Advocate General the Court decided to distribution channels and to trace the open the oral procedure without any exporting dealer in order to discourage preparatory inquiries. The parties were, exports. however, asked to answer certain questions.

(b) Exchange of price lists and terms of business II — C o n c l u s i o n s of t h e p a r t i e s

Victor Hasselblad and its sole distri- The applicant claims that the Court butors have for many years provided one should declare void Articles 1, 2, 3 and 8 another with price lists and terms of of the Commission's decision with business applicable in each Member respect to HGB and order the State. Commission to pay the costs.

III — Submissions and argu­ In its decision the Commission defined m e n t s of t h e p a r t i e s the relevant market as the market of "6 χ 6 format roll-film reflex cameras". This definition, according to HGB, would include only cameras such as HGB advances eight main arguments in Bionica, Mamiya, Rollei and one Pentax support of its application. It queries the model but would exclude all 35 mm Commission's assessment of the market cameras. FIGB does not agree with the and rejects the Commission's allegation Commission's assessment of the relevant that Camera Care's distributorship market. It argues that Hasselblad agreement was terminated because of its cameras compete not only with other pricing policy. HGB denies partitioning cameras of the same kind, of which there the market for Hasselblad products or are very few, but with 35 mm cameras. that it was a party to a conspiracy to HGB points out that 35 mm cameras are partition the market. Furthermore, it at least as complex as Hassclblad rejects the Commission's assertion that cameras; they have the same or indeed the sole distributorship agreement signed sometimes a better standard of between it and Victor Hasselblad and technology; their range of accessories is the selective distribution system operat­ comparable to that of the Hassclblad ing within the United Kingdom infringe camera and high quality enlargements Article 85 (1) of the Treaty. can be obtained from 35 mm cameras. In support of its arguments it refers to advertising material and to other evidence which it claim's clearly show HGB raises several objections with that the Hasselblad camera and the respect to the Commission's procedure 35 mm camera compete seriously and during its investigations and its treatment indeed form a single market. of evidence furnished by HGB both in reply to the statement of objections and at the subsequent hearing. The Commission maintains in its defence that medium format cameras form a Finally, HGB complains that the amount separate market which consists of high of the fine imposed by the Commission is quality cameras bought only by a few excessive and it pleads inability to pay it. professional photographers and a few wealthy skilled amateurs. These cameras take medium format film, that is to say film which is 6 cm wide, so that the (a) Market share negatives are larger and therefore need less enlargement than those taken with 35 mm film. Even though some 35 mm cameras may be as good as medium HGB argues that even if restrictions on format cameras, the Commission argues trade existed, they would not fall within that this does not affect its finding that the scope of Article 85 (1) because they medium format cameras form a market

An advertisement in a professional Camera Care disputes the quality of the newspaper in autumn 1977 was entitled evidence introduced by HGB in support "Swedish massage by Victor Hasselblad of its assessment of the relevant market. tones up your pictures". HGB was shocked when it appeared. Mr Barnard of HGB contacted the owner of Camera Care, a Mr Hodes, and explained to him that HGB considered the advertisement (b) Camera Care to be in bad taste and a personal affront to Dr Victor Hasselblad who was still alive at the time. Mr Hodes promised that the advertisement would not reappear. However, the same ad- HGB claims that it terminated its dealer vertisement subsequently appeared in the agreement with Camera Care for three "Industrial and Commercial Photo- reasons: graphers 'Directory and Buyers' Guide" for 1978. When Mr Barnard telephoned to demand an explanation for the appearance of the offending ad- (i) Camera Care made unreasonable vertisement Mr Hodes said that when demands of HGB with respect to Mr Barnard had made his objections delivery of supplies. Camera Care known it had been too late to withdraw telephoned HGB frequently, criti- the advertisement. HGB does not accept cizing HGB's management and this explanation. However, the Com-

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mission accepts Mr Hodes' explanation to delete references to other dealers' for the appearance of the advertisement prices from its advertisements. without question.

Camera Care says that the dealer agreement was terminated because of The Commission argues that Camera prices. The advertisements to which Care's dealer agreement was terminated HGB objected were merely an excuse to because of its pricing policy. In support terminate the agreement. HGB's of its arguments it refers inter alia to arguments as to Camera Care's bad correspondence between HGB's lawyers servicing are not supported by evidence. and the United Kingdom Department of Trade and between HGB and Ilford (Ireland) Ltd from whom Camera Care had obtained supplies of Hasselblad products. In these letters HGB expressly (c) Partitioning of the market • mentioned Camera Care's price-cutting. The Commission supports its contention further by drawing attention to discussions between HGB and Camera HGB claims that it did not attempt to Care in which HGB asked Camera Care partition the market for Hasselblad

JUDGMENT OF 21. 2. 1984 — CASE 86/82

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HGB alleges that the Commission by Camera Care and to turn it into a quoting in its decision only part of the general policy . . . " . document "A Policy for Europe" misre­ presents the contents of that document which, it says, were intended to encourage the advertising and promotion The Commission points in its defence to of Hasselblad products. The document correspondence between Victor Has­ acknowledges that "an absolute ter­ selblad and HGB and between Victor ritorial protection" in the EEC is Hasselblad and Ilford (Ireland) Ltd prohibited and HGB alleges that the which, it says, shows that Victor Has­ document stated that HGB intended to selblad was anxious to stop all export work within the perimeters of EEC law. sales by Ilford and not only sales to Camera Care.

JUDGMENT OF 21. 2. 1984 — CASE 86/82

The Commission states that the distribu- professional use) and shall not (save as torship agreement is unlawful because aforesaid) under any circumstances be: the parties took steps to protect the allotted territory, and to prevent parallel imports. HGB's interference with parallel imports into the United Kingdom (a) supplied by or with the approval of automatically deprives HGB's distribut- the dealer to any other person, firm orship agreement of the benefit of Regu- or corporation dealing in or lation No 67/67 and Article 85 (3). specializing in the sale of cameras and photographic equipment in the United Kingdom or elsewhere, or

In its reply HGB reiterates that it did not apply export bans but only tried to stop supplies to an unauthorized dealer, (b) sold from any other address than the Camera Care. Even if HGB's actions vis- franchised premises à-vis Camera Care were interpreted as enforcing export bans or hindering imports, this would not invalidate block without the prior consent in writing of exemption under Regulation N o 67/67. the Company."

The Commission says in its rejoinder that there is no basis for the proposition HGB says that clause 6 was inserted into that a "single case" of export bans the dealer agreement on 1 January 1979 cannot render Regulation N o 67/67 to prevent sales of Hasselblad products inapplicable. Moreover, Regulation No by unauthorized dealers. An increase in 67/67 does not allow interference with such sales led HGB to fear that they supplies to unauthorized dealers. might harm the reputation and goodwill of Hasselblad products. It was not intended to impose import bans.

The Commission in its defence does not HGB estimates that an effective dealer accept HGB's interpretation of clause 23. would have to sell at least UKL 6 000 It maintains that the two advertisements worth of goods annually in order to of Camera Care to which HGB objected finance the minimum amount of stock both offered low retail prices and that which he would have to carry. HGB says was the primary reason for HGB's that it does not limit quantitatively the objection to them. number of its dealers. Any quantitative limitation is a consequence of the cost of maintaining stocks of Hasselblad products. HGB admits that it did try to prevent Ilford, Têlos and Prolux from supplying Camera Care with Hasselblad products but only because Camera Care was no The Commission does not accept that longer an authorized dealer. argument and argues that HGB restricted trade by means of its quantitative selection criteria. HGB reproaches the Commission for portraying the dispute between it and Camera Care as a general policy designed to prevent parallel imports. HGB has approximately 110 dealers in This, HGB says, is not true. The the United Kingdom. But for the Commission has not produced any other quantitative selection criteria, 2 000 evidence that HGB prohibited imports dealers would be qualified to be to, or exports from, the United Hasselblad dealers. Since, according to Kingdom. the Commission, Hasselblad distributors have enforced export bans and have tried to keep national price levels similar, it is impossible to say what the volume of HGB states that it did not oblige dealers imports or exports would be if to sell Hasselblad equipment at any competition was unrestricted. particular price. The Commission has not produced any evidence to show that it did so. Camera Care points out that even if quantitative selection is inevitable this does not explain why HGB felt it The Commission points in its defence to necessary to prohibit cross-supplies. Such correspondence between Victor Hassel- a prohibition in itself constitutes a blad and Ilford (Ireland) Ltd and quantitative selection. Moreover, the between HGB and Ilford which discusses refusal to supply or to allow cross- pricing policy and it deduces from this supplies to "grey" importers is a sub- that HGB tried to maintain certain price stantial deterrent to any dealer who was levels. considering importing Hasselblad products.

HGB makes several objections to the Commission's method of investigation. The Commission says that HGB has never claimed damages for the loss it claims to have sustained as a result of disclosure by the Commission of It alleges that the statement of objections privileged information and business sent to Victor Hasselblad and HGB secrets. Moreover, HGB has never contained an excerpt from corre- specified exactly what loss it suffered. spondence between HGB and its solicitor which was privileged and which HGB's solicitor had refused to hand over during investigations by the Commission. Worse Camera Care argues that the re- still, the Commission, in breach of its quirements of Article 190 have been met obligations under Article 20 (2) of Regu- in this case. The Commission is only lation No 17/62, supplied highly obliged to state the reasons for its confidential business information relating decision, not the reasons for rejecting the to HGB, including market strategy and applicant's arguments as to law or fact. details of its turnover, loss and profits, to Camera Care. This caused HGB sub- stantial loss and damage. The Fine

after Victor Hasselblad had been to the Commission when it adopted informed that the export ban must be its decision — in which the applicant removed and had agreed to do so. refused to repair, or delayed the HGB's argument implies that an under­ repair of, Hasselblad cameras. taking could mislead the Commission In reply the Commission stated that into believing that the export ban had the only case of refusal of which it been lifted by the undertaking and yet was aware was that involving Mr remain protected from fines. Orbison and that it had not HGB says that the fine imposed by the considered it necessary to investigate Commission is not justified. Even if a specific cases of delay in as detailed a violation of Article 85 (1) is established manner as that which the answer to the fine is disproportionate. If HGB is the Court's question would require. obliged to pay the fine, especially if it is required to do so in one lump sum, it 2. The Commission was requested to might have to cease trading. specify how long it took, on average, at the material time to carry out the The Commission states that HGB has repairs in question in the other given no reasons for its inability to pay Member States? the fine. The Commission says that it has asked HGB for information about its The Commission replied that it had financial situation with a view to giving it no information at its disposal concerning the average time needed enough time in which to pay the fine but to repair Hasselblad cameras in other it has not received any information. Member States. Camera Care feels that the fine is modest given HGB's annual turnover. IV — Oral procedure Questions put to the Commission The parties presented oral argument at 1. The Commission was requested to the sitting on 2 June 1983. provide the Court with a detailed list The Advocate General delivered his enumerating every instance — known opinion at the sitting on 13 July 1983.

2 Victor Hasselblad AB (hereinafter referred to as "Victor Hasselblad"), whose registered office is in Gothenburg, Sweden, manufactures high-quality photographic equipment. It has concluded exclusive distributorship agreements with dealers in many countries. On 28 June 1965 it notified its standard sole distributorship agreement to the Commission. By letter of 23 December 1976 the Commission objected to two clauses of the agreement which, in its view, were incompatible with the principle of the free movement of goods and with the competition rules contained in the EEC Treaty. By letter of 10 February 1977 Victor Hasselblad agreed to comply with the Commission's recommendations. Accordingly, on 6 March 1978 a new version of the distributorship agreement was sent to the Commission, which informed Victor Hasselblad by letter of 20 February 1979 that the agreement came within the scope of Commission Regulation N o 67/67/EEC of 22 March 1967 (Official Journal, English Special Edition 1967, p. 10).

3 Hasselblad (GB) Ltd is a company incorporated in the United Kingdom. It signed a sole distributorship agreement with Victor Hasselblad on 1 January 1958. On 2 December 1975 a new agreement differing from the standard agreement notified to the Commission was concluded between the same parties. That agreement was amended on 20 November 1977. The agreement, as amended, was notified to the Commission on 25 January 1980.

4 The applicant made its own distribution arrangements in the United Kingdom for Hasselblad cameras and equipment. In 1975 there were ap- proximately 26 Hasselblad dealers in the United Kingdom, but in 1982 the number had risen to over 100. The dealer agreement used by the applicant since 1 January 1976 was amended on 1 January 1979 and notified to the Commission in December 1979.

9 According to Article 3 of the decision, the selective distribution system applied by the applicant since 1974 infringes Article 85 (1) of the Treaty by clauses 6, 23 and 28 of the dealer agreement, the quantitative selection of dealers and the influence of that system on resale prices. The application foi- exemption of the selective distribution system under Article 85 (3) of the Treaty was refused.

10 Article 4 of the decision provides that the undertakings to which the decision is addressed are to bring to an end forthwith the infringements referred to in Articles 1, 2 and 3 and are to refrain in future from taking any measures having the same object or effect.

1 1 Article 6 of the decision requires the applicant to inform within three months of the date of notification of the decision and in a form previously approved by the Commission,

(a) its dealers, that cross-supplies to other dealers and exports to other Member States are not forbidden and must not be prevented or discouraged, whether by price maintenance or otherwise, and

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(b) the public, that it will grant after-sales service under the manufacturer's guarantee to all Hasselblad products without discrimination.

(3) The applicant never engaged in a concerted practice aimed at preventing, limiting or discouraging exports of Hasselblad equipment between the Member States of the Community.

(4) The sole distributorship agreement between Victor Hasselblad and the applicant does not constitute an infringement of Article 85 (1) of the Treaty.

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(5) The selective distribution system operated by the applicant does not constitute an infringement of Article 85 (1).

(6) In any event the Commission cannot impose a fine for conduct consistent with the selective distribution agreement notified to the Commission until exemption under Article 85 (3) of the Treaty has been expressly refused. Finally, the applicant claims that the amount of the fine is excessive.

1. T h e s t a t e m e n t of t h e r e a s o n s on w h i c h t h e d e c i s i o n is based

on the finding that the market sector in which Victor Hasselblad carries on business is that of medium format reflex cameras. That definition includes only certain medium format cameras and excludes all 35 mm cameras, however complex they might be. Some 35 mm cameras compete effectively with Hasselblad cameras. If the Commission had taken account of the cameras which compete effectively with Hasselblad cameras, it would have been compelled to conclude that the applicant's market share was so negligible that it could not affect trade between Member States and that, accordingly, Article 85 (1) was inapplicable.

20 That argument cannot be accepted. It is clear from the documents before the Court that in 1978 Victor Hasselblad itself stated that it was the world leader in the sector of medium format reflex cameras. In a letter to the Commission in December 1978 it estimated its share of that sector at between 20% and 2 5 % in the Federal Republic of Germany, 2 5 % in the United Kingdom, 2 5 % in Belgium, 30% in France, 50% in Italy, 50% in Denmark, 50% in the Netherlands and 50% in Ireland. It is true that it also stated that Hasselblad cameras were competing with certain 35 mm cameras which it named, but that factor is not such as to invalidate its own definition of its business sector, namely that of medium format reflex cameras.

23 Accordingly, the submission that the applicant's market share was so negligible that Article 85 (1) of the Treaty is inapplicable has not been established and must be rejected.

3. T h e c o n c e r t e d p r a c t i c e

24 In support of the finding that the applicant has engaged in a concerted practice contrary to Article 85 of the Treaty, the Commission states in its decision that between June and October 1978 an undertaking known as "The Amateur's N o o k " established in Northern Ireland took delivery of a consignment of Hasselblad cameras from Ilford, the authorized distributor for Ireland. Part of that consignment was re-sold to Camera Care. The applicant established, by means of test purchases, that the goods in question had originally been supplied to Ilford. Victor Hasselblad therefore complained to Ilford. Ilford agreed by letter of 21 November 1978 to cease exports and to turn away foreign customers who visited its premises. Ilford complied with the export ban between November 1978 and August 1980. In December 1978 the applicant demanded compensation from Ilford in respect of expenses incurred by it as a result of the test purchases from Camera Care. Since Ilford assured the applicant that it would do its utmost to prevent "grey" (that is to say, parallel) exports, the applicant waived its demand for reimbursement.

25 According to the decision the proprietor of Camera Care ordered a large consignment of Hasselblad cameras from Telos, the authorized distributor for France, in May 1978. The applicant established by means of test

4. T h e sole d i s t r i b u t o r s h i p agreement between Victor Has­ selblad and the applicant

30 The first distributorship agreement between Victor Hasselblad and the applicant was concluded in 1958. That agreement contained a clause prohibiting sales by the applicant outside the United Kingdom. In 1975 that agreement was replaced by a new sole distributorship agreement not containing any prohibition on exports. The terms of the agreement were thus

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such that it could qualify for block exemption under Regulation N o 67/67/EEC of the Commission. The Commission maintains in its decision, however, that the agreement does not qualify for such exemption on the ground that the contracting parties took steps to obstruct the provision of supplies of products referred to in the agreement to dealers elsewhere in the common market, which renders the exemption contained in Article 1 inap­ plicable by virtue of Article 3 of the same regulation.

31 In that connection the Commission relies, in particular, on the conduct of Victor Hasselblad and of the applicant, considered above, as regards furnishing Camera Care with supplies.

32 The Commission also contends that the applicant introduced a guarantee, known as the "Silver Service Guarantee", covering only Hasselblad cameras imported into the United Kingdom through the applicant. Every Hasselblad camera is guaranteed by the manufacturer for a period of one year. The sole distributor is under an obligation to carry out the necessary repairs. The Silver Service Guarantee extends the one-year period to 24 months for cameras imported through the applicant. The Commission claims that in its advertisements the applicant offered users covered by the Silver Service Guarantee a 24 hour repair service and that it accords priority to such repairs.

37 Accordingly, the application for a declaration that Article 2 of the decision is void in relation to the applicant must be rejected.

5. T h e d i s t r i b u t i o n s y s t e m a p p l i e d in t h e U n i t e d K i n g d o m

38 The Commission states in Article 3 of its decision that the selective distri- bution system applied by the applicant since 1974 infringes Article 85 (1) of the Treaty by clauses 6, 23 and 28 of the dealer agreement, the quantitative selection of dealers and the influence of that system on resale prices.

39 According to the decision, the applicant decided in 1974 to introduce a distribution system for Hasselblad products. Only retailers who signed the standard dealer agreement were recognized as authorized Hasselblad dealers and supplied by the sole distributor. With effect from 1 January 1979 the applicant amended the existing dealer agreement in certain respects. The amended dealer agreement was notified to the Commission on 25 January 1980.

40 It must be pointed o u t in t h a t regard t h a t clause 6, to which the Commission refers, was n o t included in the agreements concluded before 1 J a n u a r y 1979.

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42 In support of its objection the Commission contends that the restrictive effect on competition of provisions such as clause 6 of the agreement has been recognized in its own decisions and in the case-law of the Court. The prohibition on cross-supplies restricts competition because it seriously impedes the economic freedom of authorized dealers and makes them wholly dependent.

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43 The power conferred on the applicant by clause 23 of the dealer agreement to require a dealer to stop publishing announcements in the press, to cease other advertising activities and to refrain from repeating them is tantamount to a right of retroactive censorshop which enables the applicant to prohibit dealers who are particularly active in the field of competition and prices, and more particularly those who import otherwise than through Victor Hasselblad's sole distributors, from advertising their activities.

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47 As regards clause 23 of the agreement, the applicant claims that the Commission ignored the evidence resulting from the dealer agreement itself and from other Hasselblad publications as to the importance which the applicant attaches to a common advertising programme of a high standard. In that connection, clause 22 (b) of the agreement provides that "the dealer shall at all times actively promote the sale of Hasselblad products . . . and foster in every way the reputation and the goodwill of the manufacturer, the company and the dealer". The sole purpose of clause 23 is to ensure a high standard in advertisements of Hasselblad products.

48 In reply to that argument the Commission states that the applicant's expla­ nation is contrary to its conduct in practice. In a letter dated 25 January 1978 addressed to its solicitor (and submitted by the applicant itself to the Commission) the applicant stated that an advertisement by Camera Care was causing problems in view of the selling prices mentioned in it ("strictly on prices"). The advertisement in question contains the phrases "We will match any price", "Match any price" and "Unbeatable prices".

49 Although in the circumstances the applicant chose to terminate the agreement concluded with Camera Care, it is clear that it scrutinized the wording of advertisements as regards selling prices and that the contested clause was drafted in such a way as to permit the applicant to prohibit such advertisements. The Commission's decision was therefore well founded as fai­ as clause 23 is concerned.

52 The Commission was therefore right in finding that clauses 22 and 27 of the dealer agreement in force before 1 January 1979, clauses 6, 23 and 28 of the dealer agreement as amended on 1 January 1979 and the criteria for the selection of dealers constitute infringements of Article 85 (1) of the Treaty.

53 In so far as the decision states that clause 6 of the dealer agreement constitutes an infringement of Article 85 (1) of the Treaty in respect of the period between 1974 and 1 January 1979, it must be declared void.

T h e fine

54 The applicant maintains that even if it were established that it had engaged in the alleged concerted practice aimed at restricting trade between Member States, the Commission cannot impose a fine upon it on that account. The 1958 agreement between Victor Hasselblad and its other sole distributors in the other Member States was notified to the Commission in 1965 and Article 15 (5) of Regulation N o 17 prevents the Commission from imposing a fine for conduct which took place after that notification and prior to a decision by the Commission granting or refusing an exemption under Article 85 (3) of the Treaty, where such conduct remains within the limits of the activity described in the notification.

55 That argument cannot be accepted. At the time of the concerted practices at issue the applicant was no longer a party to the notified agreement but was bound by an agreement dating from 1975 which did not contain a clause restricting exports or imports. The applicant cannot therefore rely on the

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Costs

58 Article 69 (2) of the Rules of Procedure provides that the unsuccessful party is to be ordered to pay the costs. However, the first paragraph of Article 69 (3) provides that the Court may order the parties to bear their own costs in whole or in part where each party succeeds on some and fails on other heads.

59 As each party has failed on some heads, each party must be ordered to pay its own costs.

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On those grounds,

THE COURT

Pescatore O'Keeffe Bosco Everling

Delivered in open court in Luxembourg on 21 February 1984.

For the Registrar

H. A. Rühl J. Mertens de Wilmars Principal Administrator President