C-228/82

JUDGMENT OF 28. 2. 1984 — JOINED CASES 228 AND 229/82

In Joined Cases 228 and 229/82,

FORD OF EUROPE INCORPORATED, of Wilmington (County of Newcastle), Delaware (USA), and FORD-WERKE AKTIENGESELLSCHAFT, of Cologne (Federal Republic of Germany),

represented by J. Lever Q C and C. Vajda, both of Gray's Inn, instructed by P. G . H . Collins, solicitor, and by P. Sambuc of Messrs. Boden, Oppenhoff & Schneider, Rechtsanwälte, Cologne with an address for service in Luxem- bourg at the Chambers of J.-C. Wolter, 2 Rue Goethe, applicants, supported by JAMES A. LAIDLAW (HOLDINGS) LIMITED, of Edinburgh (Scotland), represented by P. L. O. Leaver, barrister-at-law, and Messrs. Durrant Piesse, solicitors, of London, and STORMONT LIMITED, of Kent (England), represented by P. L. O. Leaver, barrister-at-law, and Messrs. Travers Smith, Braithwaite & Co., solicitors, of London,

both having an address for service in Luxembourg at the Chambers of E. Arendt, 34 Β Rue Philippe-Il, interveners, ν

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, John Temple Lang, with an address for service in Luxembourg at the office of O. Montalto, a member of the Commission's Legal Department, Jean Monnet Building, Kirchberg, defendant,

gives the following

JUDGMENT

INDEX

Facts and issues

I — Facts and procedure 113 2

A — The Ford Group and its members 1132 B — The manufacture and marketing of Ford vehicles in Europe 1133 C— The roles of the applicants in the Ford Group 1133 D —The institution of proceedings 1134 E— The contested decision 1135 F— The procedure before the Court 1136

Facts and Issues

The facts of the case, the course of Republic of Germany. It is a subsidiary the procedure and the conclusions, sub- of Ford Motor Company. missions and arguments of the parties may be summarized as follows : 2. Other subsidiaries of Ford Motor Company are Ford-Werke Aktiengesell- schaft (hereinafter referred to as "Ford AG"), the applicant in Case 229/82, I — Facts and p r o c e d u r e which is a company incorporated under German law. Ford Motor Company A — The Ford Group and its members Limited (hereinafter referred to as "Ford Britain") and Henry Ford and Son 1. Ford of Europe Incorporated (here- Limited (hereinafter referred to as "Ford inafter referred to as "Ford of Europe"), Ireland"). the applicant in Case 228/82, is a corpo- ration incorporated in the United States 3. In the present cases the European of America and has offices in the United subsidiaries of Ford Motor Company are Kingdom, Belgium and the Federal referred to as "the Ford Group".

FORD ν COMMISSION

4. The Ford Group manufactures and 2. On the other hand, Ford AG manu- supplies motor cars and other vehicles. It factures Ford vehicles and is also is accepted that neither the Ford Group responsible for the sale of the vehicles in nor any of its members occupies a the market consisting of the Federal dominant position with regard to the sale Republic of Germany. of cars in the common market.

1. Ford of Europe coordinates the 2.2.2. In order to meet special orders allocation of economic activity, such as which, according to the applicants, do the manufacture and sale of vehicles, not form part of the sales programme, among the companies of the Ford Ford AG has established two systems for Group. special orders:

JUDGMENT OF 28. 2. 1984 — JOINED CASES 228 AND 229/82

(a) The "Special Vehicle Ordering" Vertrag", to the Commission. It was system is intended to enable dis- notified with a view to obtaining tributors and other customers to negative clearance in accordance with order vehicles with special speci- Article 2 of that regulation or, in the fications. For example, Ford AG has alternative, an exemption under Article supplied, for use by the German 85 (3) of the EEC Treaty. Notwith- police forces, fleets of vehicles standing the contacts established between incorporating police specifications Ford AG and the Commission since that which are not found in any other time, the Commission had still not part of its manufacturing pro- adopted a formal decision regarding that gramme. agreement by May 1982.

FORD ν COMMISSION

4. After hearing the parties on 23 July 2. In its statement of the reasons on 1982 and after informing the Advisory- which it based its decision the Com­ Committee on Restrictive Practices and mission stated inter alia: Monopolies, the Commission adopted Decision IV/30.696 headed "Distri­ "The facts bution system of Ford Werke AG — Interim measure (Official Journal 1982 L 256, p. 20), which is the subject of the present proceedings. 1. On the basis of a Main Dealer Agreement . . . notified to the Commission on 14 May 1976, [Ford E — The contested decision AG] operates a distribution system

JUDGMENT OF 28. 2. 1984 — JOINED CASES 228 AND 229/82

1. By applications lodged at the Court 21. On 12 May 1982 the Bureau Registry on 3 September 1982, the Européen des Unions de Consom- applicants, Ford of Europe and Ford mateurs (BEUC) made an appli- AG, brought two actions both seeking

FORD ν COMMISSION

JUDGMENT OF 28. 2. 1984 — JOINED CASES 228 AND 229/82

2. The Commission contends that the and the method by which the sales Court should: programme is promoted, that is to say the distribution system.

FORD ν COMMISSION

1.2.2. Such continued sales of right- grammes, guarantees and the like, which hand drive cars by Ford AG to its from time to time may apply in the German dealers were also creating an relationship between manufacturers and incentive to those dealers to divert their dealers. The "Visit Europe Plan" was energies from their primary function of just as much part of the distribution marketing Ford cars on the German system as the dealer agreement. market, where Ford's market share had Moreover, the circular itself showed that declined substantially. the applicants, too, regarded their action as affecting the other parties to the agreement and as representing a change in their practice with regard to such 1.2.3. In the circumstances the ap­ parties. plicants conclude that it was necessary and proper to decide, in April 1982, that Ford AG should discontinue the supply of right-hand drive cars in the Federal 2.2.1. Finally, the Commission empha­ Republic of Germany. sizes that the applicants do not deny that the purpose of the refusal to supply right-hand drive cars was to prevent parallel imports of such cars, bought at 2.1.1. The Commission emphasizes that German prices, which were on average Ford AG's dealer agreement with its 20% lower than the British prices, into German distributors did not distinguish the United Kingdom. The objective was between right-hand drive and left-hand anti-competitive and contrary to the drive motor vehicles or between German basic principles of Community law. and British specifications.

car buyers in "right-hand drive" individual concern to it. It emphasizes countries from suffering substantial that the decision to discontinue the sale losses as a result of having to pay of right-hand drive cars in the Federal unnecessarily high prices for their new Republic of Germany was taken by the cars. applicants in conjunction with Ford Britain in April 1982 and that the parti­ cipation of Ford of Europe in that decision represented an essential part of its responsibility for the coordination of the allocation of economic functions of members of the Ford Group. Further­ A — The admissibility of the action in more, there is no dispute (and it would Case 228/82 appear that the Commission is not disputing the question either) that the decision taken by it in August 1982 is of direct and individual concern to the Ford Group. For that reason the only question is whether Ford of Europe is competent 1. The Commission questions the to represent the Ford Group in the admissibility of Ford of Europe's appli­ present proceedings. In fact the cation. It maintains that the contested Commission does not dispute that Ford decision is addressed to a company other of Europe is the authorized represen­ than the applicant and that that company tative of the group. does not claim to have suffered any losses itself (as distinct from Ford Britain and Ford AG) as a direct result of the application of the decision. In the circumstances it does not appear to the In those circumstances and taking Commission that the decision is of account of the difficulty the decision "direct and individual concern", within would cause Ford of Europe in coordi­ the meaning of Article 173 of the Treaty, nating economic functions within the to Ford of Europe even if Ford of Ford Group, it would not be correct to Europe is the authorized representative dismiss its action. of the Ford Group. While it takes the view that Ford of Europe would presumably be entitled to intervene in the action brought by Ford AG, the Commission entertains reservations as to the consequences of a possible Β — The substance of the case acceptance by the Court that separate companies, forming part of the same group, could make separate applications or interventions when they could cer­ tainly say whatever they wished to say in The applicants emphasize that in practice a single application. Multiple applications the Commission is saying that it may add unnecessarily to the length and adopt an interim measure to prohibit an complexity of written arguments. They act or omission that is not in itself also increase legal fees. unlawful if there is a distinct likelihood that such . an act or omission would render a notified agreement ineligible for 2. Ford of Europe contends that the exemption. They rely essentially on three contested decision is of direct and submissions :

1.2. As to the eight important circum­ stances on the basis of which the (i) The applicants' arguments Commission claims to be entitled to refuse to grant an exemption, the applicants observe that many of them 1. The applicants submit that there is no were not mentioned in the statement of reasonably strong prima facie case for the objections or in the decision. The Commission to refuse to grant an applicants therefore had no opportunity exemption in respect of the dealer in the course of the administrative agreement notified by Ford AG. The procedure to put forward any argument question to be considered is whether the based upon the alleged circumstances. fact that certain vehicles are not supplied Consequently the Commission may not in the Federal Republic of Germany is a rely on them to support its decision. In

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1.2.1. Moreover, discontinuance of 3.1. The applicants maintain that the supplies of right-hand drive cars by Ford Treaty does not impose on manufac- AG in the Federal Republic of Germany turers (or on suppliers in general) any cannot be equated, as the Commission obligation to adopt positive measures to seeks to equate it, with an export ban: an enable distributors to compete but simply export ban relates to goods which have forbids them to impose restrictions on been placed on the market whereas a the competitive capacity of distributors. mere omission or refusal to supply is According to the applicants the purely unilateral and does not relate to Commission forces Ford AG, on the goods which have been placed on the contrary, to deliver products to German , market. The applicants add that a distributors almost wholly for the unilateral decision adopted by a supplier purpose of enabling them to take who is not in a dominant position to the advantage of short-term economic con- effect that it will supply to its distributors ditions and, in so doing, to undermine only certain of the products it manu- the profitability of Ford Britain, one of factures is not an agreement or Ford AG's most important customers, concerted practice which has as its object and of its distribution network. They are or effect the prevention, restriction or of the opinion that the Treaty does not distortion of competition within the impose on manufacturers such an meaning of Article 85 (1) of the Treaty. obligation to destroy themselves. The same can be said even if the decision in question was adopted following discussions between a given number of companies which, like the Ford Group, 3.2. The applicants submit that there is constitute a single undertaking for the no precedent in Community law, not purposes of Community competition law even the only regulation laying down since Article 85 does not apply to such a conditions for the exemption of á distri- situation. Moreover, Community law bution system under Article 85 (3) does not impose an obligation to supply (Regulation No 67/67 of the under that article. Commission of 22 March 1967 (Official Journal, English Special Edition 1967, p. 10)), to support the Commission's argument to the effect that the avail- 2. The applicants dispute the view of ability of all products in the range is a the Commission that it may adopt an precondition for the grant of exemption

(ii) The Commission's arguments (2) Right-hand drive cars are being produced in one State with a view to sale in another State where the prices are higher than in the first State; 1. The Commission disputes the applicants' proposition that a fact or circumstance may be taken into account (3) The undertaking has been selling by the Commission in the course of the right-hand drive cars at the lower procedure for exemption only if it was price in the lower-price State; caused by the dealer agreement or if it reduces the benefits or increases the harm resulting from the agreement. It (4) The cost of manufacturing left-hand considers that there is nothing in the drive cars is identical to that of Court's case-law to compel the Com­ manufacturing right-hand drive cars; mission to consider only the kind of facts defined by the applicants. Their argument would make it impossible for (5) The manufacture of left-hand drive the Commission to take account of other cars is technically very similar to the similar agreements made with the same manufacture of right-hand drive cars supplier. Furthermore, it would exclude and both can be manufactured easily consideration of any structural rigidity on the same production line. arising from the fact that a certain number of manufacturers have selective distribution networks for competing (6) The undertaking stopped selling products, which would be contrary to right-hand drive cars in the State what the Court has held. where the prices are lower solely

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2. The Commission maintains that there is no doubt that it could properly have adopted a decision under Article 15 (8) Most other car manufacturers have (6) of Regulation No 17 if the circular of restrictive distribution systems in April 1982 had contained an export ban. most Member States so that the But that circular went further, rendering structural rigidity of the whole car any application of Article 85 (3) of the market is considerable. Treaty to Ford AG's restrictive distri- bution system completely unjustified. If, as it appears to the Commission, Ford AG's distribution agreement is unlawful when combined with its refusal to supply right-hand drive cars in the Federal The Commission considers that all those Republic of Germany, the Commission's eight circumstances exist in this case. final decision would compel Ford AG either to resume supply of right-hand drive cars or to change its agreement in such a way that it no longer falls within Article 85 (1) of Treaty. In fact the Commission considers that the result 1.2.1. It adds that a refusal to supply, would have been practically the same if it or any other unilateral act preventing had adopted an interim decision under exports, may be taken into account in Article 15 (6) of Regulation No 17, deciding whether to grant an exemption, unless the undertaking chose to continue because it has the same economic effects and to risk having a fine imposed on it. as an export ban and partitions the An interim decision ordering Ford AG to market. The Commission points out that resume its previous practice does not it is irrelevant whether the refusal to interfere with its distribution system and supply is, of itself, lawful or unlawful. is therefore less onerous for Ford AG The decision not to supply certain goods than either of the aforementioned to dealers cannot be isolated from the decisions. According to the Commission circumtances in which it was adopted. if Ford AG seriously believes that it is When the Commission is called upon to more onerous to resume the practice decide whether an exemption should be which it had followed until April 1982, granted under Article 85 (3) of the it may alter or suspend the dealer Treaty, it must take into account the agreements it has made in the Federal actual facts and it is irrelevant in that Republic of Germany in such a way as to

make Article 85 (1) inapplicable to them. concerns the first decision involving the The Commission emphasizes that it adoption of interim measures adopted by chose to adopt a decision involving the Commission under the Treaty, but interim measures because it wished to that is the only sense in which the protect consumers' interests as much as decision in question is novel. The possible and because the most effective Commission maintains that there is a way of doing that was to adopt a large body of case-law in which the decision ordering Ford AG to resume Court has consistently prohibited supplies. measures of all kinds, whether public or private, which produce effects equivalent to export bans and quantitative restriction on imports. 3. The Commission states that it has in no way imposed on Ford AG any obligation to sell to its German dealers all the Ford vehicles manufactured by the 4. The Commission concludes that, if Ford Group, or even all the vehicles there is an agreement to which Articles manufactured by Ford AG. It has simply 85 (1) applies for other reasons, then a restored the status quo by requiring Ford refusal to supply is equivalent to any AG to supply right-hand drive versions other measure by which parallel imports of the vehicles which it was already are prevented and may be a sufficient supplying under the "Visit Europe Plan" reason to refuse to grant an exemption and to German dealers. under Article 85 (3) of the Treaty. It is in that sense that the refusal to supply, althought not by itself an infringement of Article 85 (1), has the same effect as an 3.1. The Commission maintains that export ban. Consequently, this case is the applicants are making an old- concerned exclusively with the ap­ fashioned plea for the right to divide the plication of Article 85 (3) and the common market for the purpose of Commission has a discretion in the obtaining territorial protection against its application of that provision. It is of the own products manufactured in the opinion that, in view of the circum­ Federal Republic of Germany for its stances of this case, it was therefore British factory whose production costs justified in refusing to grant the are much higher. They are asking for exemption in respect of the agreement in protection from competition by obliging question. buyers of cars in the United Kingdom to pay the high production costs applicable there instead of being allowed to buy the same vehicles more cheaply in the Federal Republic of Germany. No such Second submission argument can be accepted, in the view of the Commission, either under Article 85 or under Articles 30 to 37 of the Treaty. (i) The applicants' arguments

resumes the supply of right-hand drive Republic of Germany), Ford AG could vehicles in the Federal Republic of simply have ceased to give effect to or to Germany, the Commission is not entitled enforce or to seek to enforce the dealer to make an order, either on an interim agreement. Even if the Commission's or final basis, requiring Ford AG, which decision had subsequently been declared does not occupy a dominant position, to void by the Court, its existence would resume such supplies. Refusal to supply is have given Ford AG absolute protection not of itself an infringement of Article 85 against claims by its dealers for breach of (1) of the Treaty and the Commission contract by Ford AG if, in conformity may not require undertakings to act in a with the decision, it disregarded the specific manner when the omission to act obligations arising under the agreement in that manner does not constitute an by virtue of Article 85 (1) during the infringement of Article 85 or 86. In that period of validity of the decision, by respect the applicants recall that the choosing not to resume supplies of right- Commission has still not adopted a hand drive cars in the Federal Republic decision expressing its definitive opinion of Germany. of Ford AG's request for negative clearance or, in the alternative, an exemption in respect of its dealer agreement. Unless and until it is definitively established that Article 85 (1) applies to the agreement it is premature to discuss the prerequisites for the 2.2. Instead, according to the ap- application of Article 85 (3). plicants, the decision imposes on Ford AG a public-law duty to resume supplies of right-hand drive cars in the Federal Republic of Germany and Ford AG must either comply with that duty or, according to the Commission, divest itself of that duty by running the risk of 2. If the requisite conditions had been disregarding its civil-law duties under satisfied, which is, moreover, disputed by the dealer agreement which may sub- the applicants, the Commission could sequently be exempted retroactively have adopted an interim measure under Article 85 (3) and therefore be prohibiting the parties from using Ford declared valid retroactively. AG's dealer agreement unless Ford AG resumed supplies of right-hand drive cars in the Federal Republic of Germany. Such a measure would have had completely different effects from the interim measure which the Commission actually adopted in this case. 3. The applicants conclude that even if Ford AG's dealer agreement is not capable of being exempted (unless it resumes supplies of right-hand drive cars in the Federal Republic of Germany) the Commission cannot, by means of an interim measure adopted under Article 3 2.1. Thus, if the Commission had of Regulation N o 17, which only applies prohibited the use of Ford AG's dealer to infringements of Article 85 and 86 of agreement (unless it resumes supplies of the Treaty, order Ford AG to resume the right-hand drive cars in the Federal sale of right-hand drive cars in the State

2. The Commission takes the view that it could have adopted an interim measure prohibiting the parties from operating the dealer agreement unless Ford AG resumed supplies of right-hand drive 1. The Commission considers that it is cars. In fact, the decision adopted in entitled, if it is necessary to preserve the August 1982 was better than the status quo, to prohibit, in an interim hypothetical decision postulated above. decision, the objectionable features of an Thus the contested decision restored the agreement or a practice which is status quo instead of altering it and it did contrary to Article 85 (1). If that was not not affect the operation of the dealer the case, the power to adopt a decision agreement. Furthermore, it directly ordering interim measures would differ prevented the injury caused to buyers of little from the power already given by right-hand drive cars and to the Article 15 (6) of Regulation N o 17. The Community interest resulting from Ford Commission adds that it is able to do AG's refusal to supply. On the other more by ordering the adoption of interim hand the decision does not take away measures than it is empowered to do in from Ford AG the possibility of ceasing its final decision since the two types of to operate its dealer agreement. The decision are entirely different and have Commission adds that the type of different objectives. Thus, if the parties "hypothetical" interim measure which to an exclusive distribution agreement Ford concedes would have been per­ begin to interfere with parallel imports, missible, would have been more onerous the Commission may order them, by an than a decision adopted under Article 15 interim decision, to stop the interference. (6) of Regulation No 17 which would It follows that if a party to an exclusive have allowed Ford to continue to operate distribution agreement refuses to supply its agreement only at the risk of being a dealer because he is exporting or fined. importing in parallel, the Commission may order supplies to be resumed if such a measure is necessary to restore the status quo and to protect the dealer in question, even if the refusal to supply is not of itself an infringement of Article 85. The Commission states that the fact that it has not yet refused a negative 3. The Commission concludes that it clearance or an exemption in respect of was entitled to adopt the interim the agreement is of no importance: the measure even if Ford AG's refusal to adoption of a final decision is not a pre­ supply right-hand drive cars to German requisite for the adoption of a decision distributors was not of itself an ordering interim measures. In this case infringement of Article 85 of the Treaty.

Third submission 2.2.1. The applicants affirm Ford AG's right, as an undertaking which is not in a dominant position, to choose where to sell its products and to the need to (i) The applicants' arguments preserve the profitability of Ford AG's most important customer, namely Ford Britain, and its distribution network. 1. The applicants contend that the They believe that if they were obliged to Commission's decision raises novel and comply with the Commission's decision, complex problems for which there is no they and the Ford Group would suffer precedent in Community law and with irreparable damage. which it is not appropriate to deal by means of an interim decision. 2.3. With regard to the legitimate interests of the undertaking concerned it 2. They go on to allege that the is essential, on the other hand, that Commission has failed to satisfy the legal interim measures be taken only in cases conditions laid down by the Court in the proven to be urgent in order to avoid a order in the Camera Care case, cited situation likely to cause serious and irre- above, for the valid exercise of any parable damage to the parties seeking power it may have in the present case to their adoption or damage which is adopt an interim measure. In support of intolerable for the public interest. that assertion they submit the following arguments. 2.3.1. The applicants maintain that, until the Commission's response in the 2.1. The interim measures must be proceedings for the suspension of the indispensable in order to avoid the operation of its decision of 18 August exercise of the power to adopt a decision 1982, there was no suggestion that that given by Article 3 of Regulation No 17 decision had been adopted pursuant to a becoming ineffectual er even illusory. request made by the European Office of Consumer Unions or any other third party. The Commission is therefore now 2.1.1. A brief interruption in supplies of precluded from relying on the request right-hand drive cars by Ford AG would made by the European Office of not enable Ford AG to prevent the Consumer Unions. resumption of purchases and imports following a final Commission decision if such a decision were made and upheld. 2.3.2. In the second place the allegation now made by the Commission of serious and irreparable harm to third persons is, 2.1.2. Accordingly the interim measures in any event, based upon invalid ordered by the Commission in the reasoning; the absence of an opportunity present case are not indispensable. for British buyers to improve their position by buying right-hand drive Ford cars directly or indirectly from German 2.2. Furthermore, the Commission can- dealers or under the "Visit Europe Plan" not adopt interim measures without cannot be equated with damage suffered having regard to the legitimate interests by those buyers within the meaning of of the undertaking concerned by such the urgency requirement. Thus the measures. interim measure did not protect British

2.3.3. Finally the applicants submit that 2.5. Finally, when adopting interim the urgency requirement can be satisfied measures, the Commission must maintain in this case only if there is a situation the essential safeguards guaranteed to the which is intolerable for the public parties in particular by Regulation No 17 interest. The public interest which the and Article 19 thereof. rules on competition contained in the Treaty are intended to protect is in the maintenance of a system of competition 2.5.1. The applicants allege that the in the common market which is not Commission did not inform Ford AG distorted. The public interest is not either in the statement of objections or benefited in the long term by what are, during the hearing that it proposed to in effect, forced price reductions. rely on Article 3 of Regulation No 17. Consequently the applicants did not, at any point, address the Commission on its 2.4. The interim measures must, fur­ powers to apply that article in this case. thermore, be of a temporary and conser­ vatory nature and must be restricted to what is required in the given situation. 2.5.1.1. Thus the applicants conclude that the Commission failed to comply 2.4.1. The applicants maintain that the with the requirements of Regulation No Commission's decision requires Ford AG 99/63/EEC of the Commission of 25 to do that which it had never previously July 1963 on the hearings provided for in done: Article 19 (1) and (2) of Council Regu­ lation No 17 (Official Journal, English (a) To accept a legally binding con­ Special Edition 1963-1964, p. 47), in tractual obligation to make right- particular those laid do\vn in Articles 2 hand drive cars available to dealers; and 4 thereof, and that it failed to observe the principle of Community law that the parties must be given an oppor­ (b) T o accept orders for right-hand tunity to state their case. drive cars constructed to British speci­ fications which it had never pre­ viously sold to dealers; 2.5.2. They also refer to the failure to (c) To supply more right-hand drive cars consult the Advisory Committee in than it had ever done before (since accordance with Article 10 (3) and (5) of the decision set no limits to the Regulation No 17. number of cars which had to be supplied). 2.5.2.1. The aforementioned article requires the Commission to consult the 2.4.2. Furthermore, the small, albeit Advisory Committee before adopting any increasing, quantity of sales of right- decision following upon any proceedings hand drive cars by German dealers to brought for the purpose of establishing British customers before 1 May 1982 the existence, inter alia, of an in­ would become a flood, magnified fringement of Article 85. As the because of the provisional nature of the Commission did not declare, cither in measures ordered by the Commission. the statement of objections or during the

hearing, that it intended to rely on infringed the principle of Community Article 3 (1) of Regulation No 17, the law that a mandatory decision must be applicants had no alternative but to precise in its terms. assume that the Commission did not inform the Advisory Committee of that intention. Furthermore, even if the 4.1. They maintain that the decision Advisory Committee was given an oppor- gives them no indication as to: tunity to consider the new basis for the Commission's decision it could have been given the opportunity only at the (a) The types of cars which Ford AG is hearing and that was not a reasonable required to supply; opportunity as required by Article 10 of Regulation No 17. (b) The price at which and the terms on which Ford AG is required to supply 2.5.3. The applicants state that a those cars; number of Ford Britain's dealers applied by telex to be heard by the Commission in respect of the proceedings which had (c) The extent of its obligation to been initiated against Ford AG and that supply. the Commission does not deny that they had a sufficient interest to be heard. Nevertheless the Commission did not (ii) The Commission's arguments reply to those telex messages before adopting its decision and even assuming that it did take them into consideration, 1. The Commission states that to argue, it decided not to grant the dealers an as do the applicants, that no interim opportunity to state their case in writing. decision should be taken which is "novel" is to maintain that the Com- mission should adopt interim measures 2.5.3.1. The applicants therefore con- rarely, if ever. In the Commission's view clude that in adopting the decision the that is not what the law provides. Commission infringed Article 19 (2) of Regulation N o 17 and Article 5 of Regu- lation No 99/63, cited above. 2. The Commission contends that its decision of 18 August 1982 fulfils all the conditions required to give it the power 3. The applicants allege that the to order interim measures and laid down Commission stated in its statement by the Court in its order of 17 January following the Camera Care case that 1980 in the Camera Care case, cited there must be a strong prima facie case above. before interim measures can be adopted. As the decision nowhere expressly indi- cates that the Commission considered 2.1. It maintains that it is impossible to that question, the applicants conclude adopt a final decision within a short that this requirement has not been time. A final decision would be fulfilled in the present case. "ineffective" within the meaning of the Court's order in the Camera Care case if it came too late to prevent the damage 4. Finally, the applicants consider that which prompt measures would prevent the Commission has, in any event, or minimize.

2.3.2. According to the Commission, to 2.2. The Commission points out that be deprived of an opportunity to save the concept of "legitimate interests" does money when purchasing an article which not appear as a separate criterion in the it is necessary to buy is to suffer damage, Court's order in the Camera Care case. In the present case the British buyers of Ford vehicles did effectively suffer such damage, similar to the damage caused by 2.2.1. It admits that Ford has a an export ban or a restrictive agreement legitimate interest in its dealer system in not to sell at a favourable price. both the Federal Republic of Germany and the United Kingdom. Nevertheless that interest does not justify its 2.3.3. The Commission disagrees that prohibiting German dealers from ex­ the decision "forced" a reduction in porting. The Commission adds that the prices: it re-established intra-brand applicants have produced no evidence to competition and it freed it from a show that they run the risk of serious measure which stopped all parallel damage if German dealers make imports of right-hand drive cars and additional profit on additional sales to deprived all buyers in the Community of the United Kingdom. the opportunity of buying such cars at the lowest price at which they had pre­ viously been available. 2.3. The Commission considers that interim measures should be adopted in respect of Ford AG because the main­ 2.4. The Commission states that a tenance of German dealers as a channel decision involving interim measures is of supply of right-hand drive cars to the conservatory it if maintains the existing United Kingdom and the avoidance of position. the partitioning of the market, which was a situation which was intolerable in the public interest, were matters of urgency. 2.4.1. It maintains that the contested decision created a duty to treat right- hand drive cars and left-hand drive cars 2.3.1. It emphasizes the fact that the in the same way, as Ford AG had done European Office of Consumer Unions until May 1982. The decision did not requested the adoption of interim oblige Ford AG to accept a new con­ measures in its complaint made in respect tractual obligation to supply "all cars" to of, inter alia, Ford AG's refusal to its dealers; it obliged it to withdraw the supply. It was therefore entitled to order circular and thus to resume the supply of

2.5. As to the duty to observe essential procedural guarantees the Commission 2.5.3. The Commission denies that states as follows. Ford's dealers had a sufficient interest to entitle them to be heard during the procedure leading to an interim decision. 2.5.1. A procedure begun by the Furthermore, even if the dealers have the Commission with a view to the adoption right to present written submissions in of interim measures is necessarily part of the main procedure, they do not have a a main procedure. It was therefore right to insist on presenting their written correct for the Commission to say in the submissions during the procedure in- statement of objections that a procedure volving interim measures and thereby under Article 6 of Regulation No 17 has delay that procedure. The Commission been initiated; it clearly follows, furth- points out that they did nevertheless ermore, from the text of that statement make written submissions which it took and from the minutes of the hearing that into account; they did not simply ask to the Commission was planning to adopt a be heard. The Commission adds that the decision ordering interim measures. Such applicants do not rely on any particular a decision was clearly possible under argument of the dealers: the interests of

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FORD ν COMMISSION

The applicants stressed at the hearing inter alia that the Commission's interim decision was unconditional and involved an obligation for Ford which could not be contained in the Commission's final The Advocate General presented his decision. The Commission's power to opinion at the sitting on 15 December adopt interim measures could not be 1983.

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Decision

1 By applications lodged at the Court Registry on 3 September 1982, Ford of Europe Incorporated, of "Wilmington, Delaware (United States) and Ford- Werke Aktiengesellschaft, of Cologne, brought two actions under the second paragraph of Article 173 of the EEC Treaty for a declaration that Commission Decision N o 82/628 of 18 August 1982 relating to a proceeding under Article 85 of the EEC Treaty (IV/30.696 — Distribution system of Ford-Werke AG — Interim measure, Official Journal L 256, p. 20) is void.

2 By order of 17 November 1982 the Court ordered the cases to be joined, because of their close relationship, for the purposes of the written and the oral procedure and the judgment.

3 The applicants are subsidiaries of Ford Motor Company, a company incor- porated in the United States of America. Ford of Europe Incorporated (hereinafter referred to as "Ford of Europe") is a corporation incorporated in the United States of America and has offices in the United Kingdom, Belgium and the Federal Republic of Germany, while Ford-Werke Aktiengesellschaft (hereinafter referred to as "Ford AG") is a company incorporated under German law established in the Federal Republic of Germany and, in its capacity as a manufacturing company, in Belgium as well.

5 In order to implement its sales programme in the German market Ford AG established a selective distribution system based on a main dealer agreement ["Haupthändler-Vertrag"] binding it to its German distributors. That agreement was notified to the Commission on 14 May 1976 and Ford AG requested negative clearance for it under Article 2 of Regulation No 17 of the Council of 6 February 1962 (Official Journal, English Special Edition 1959-1962, p. 87) or, in the alternative, an exemption under Article 85 (3) of the Treaty. At the time of the facts relevant to this case the Commission had still not adopted a formal decision on that request but it is common ground between the parties that the agreement, which is based on quantitative as well as qualitative criteria, is similar to other dealer agreements in the motor car industiy in relation to which the Commission has granted or intends to grant an exemption under Article 85 (3).

6 Until 1 May 1982 a certain number of right-hand drive cars, some constructed to British specifications and the rest to German specifications, were supplied by Ford AG to its appointed German dealers and were sold in the Federal Republic of Germany. Since the spring of 1981 there had been a great increase in demand for right-hand drive cars in that market because prices were considerably lower than those on the British market, partly as the result of monetary fluctuations, and therefore a growing number of British customers were buying those vehicles from German dealers.

7 Because it was concerned about the effects of such sales on the position of Ford Britain and its distribution network Ford AG notified the German Ford dealers by a circular dated 27 April 1982 that with effect from 1 May it would no longer accept their orders for right-hand drive cars and that as from that date all such cars would have to be purchased either from a Ford dealer established in the United Kingdom or from a subsidiary of Ford Britain.

10 In the decision, which was adopted on the basis of Regulation No. 17, and in particular of Articles 3(1) and 6(1) thereof, the Commission indicates that it is probable that Ford's distribution system is incompatible with Article 85 (1) but that it is highly likely that the system as applied until 1 May 1982 could have been exempted under Article 85 (3). Had the - agreement been exempted, abuse of the exemption could .have been terminated by prohibiting retroactively specified acts by Ford AG under Article 8 (3) (d) of Regulation N o 17. Since the present circumstances are analogous to a situation to which Article 8 (3) (d) could be applied and since the conditions for the adoption of interim measures referred to by the Court in its order of 17 January 1980 (Case 792/79 R Camera Care Limited v Commission [1980] ECR 119) are satisfied, the Commission could order Ford AG to re-establish the distri- bution system as applied by it until 1 May 1982.

1 1 Following applications made to the Court by Ford of Europe and Ford AG the President of the Court, by order of 29 September 1982, suspended the operation of the Commission's decision in part.

FORD ν COMMISSION

Admissibility

12 The Commission questions the admissibility of Ford of Europe's application. It maintains that the contested decision is addressed to another company and that Ford of Europe does not claim that it, as distinct from Ford Britain and Ford AG, was going to suffer losses as a result of the application of the decision. In those circumstances the Commission takes the view that the decision is not of direct and individual concern to Ford of Europe.

15 The applicants admit that the purpose of the circular was to ensure that British customers would buy their Ford cars through Ford Britain's distri­ bution network and consequently to restrict competition in the common market with regard to the sale of Ford vehicles to persons residing in the United Kingdom. Nevertheless they contend that that measure is not, by itself, contrary to Article 85 or Article 86 of the Treaty and that it is not sufficiently closely related to the notified dealer agreement for it to affect the assessment of that agreement in the light of those provisions. In any case the Commission's powers do not extend to the adoption of an interim decision which relates specifically to the refusal to supply part of production to the appointed dealers. Furthermore the contested decision does not satisfy the requisite conditions, as set out by the Court in its order of 17 January 1980, for the adoption of interim measures. In that respect the applicants submit

JUDGMENT OF 28. 2. 1984 — JOINED CASES 228 AND 229/82

that the decision was not indispensable in order to guarantee the effectiveness of the final decision and that it went beyond the scope of a conservatory measure. Since the circular caused no serious and irreparable damage to consumers, there is, in addition, no urgency. Finally they contend that the Commission failed to observe a number of procedural guarantees. In particular it did not give to two British dealers, who are intervening parties in these cases, an opportunity to state their views in writing although they had requested to be heard and had a sufficient interest for the purposes of Article 19 (2) of Regulation No 17.

FORD ν COMMISSION

the Court in the aforementioned order and denies that it failed to have due regard for the essential rights guaranteed to the applicants and their dealers by the provisions of Community law.

17 With regard to the parties' arguments, as set out above, it is appropriate first to examine whether, in adopting the contested interim measure, the Commission kept within the limits of its powers as established by the provisions of Community law and by the interpretation placed on those provisions by the Court in its order of 17 January 1980.

18 In that order the Court did not examine in detail the form and nature of the interim measures which the Commission may adopt. As the order makes clear, the power to adopt such measures is based on Article 3 (1) of Regu­ lation N o 17, which the Commission also mentioned in the references in the preamble to the contested decision.

19 That provision states that "Where the Commission, upon application or upon its own initiative, finds that there is infringement of Article 85 or Article 86 of the Treaty, it may by decision require the undertakings . . . concerned to bring such infringement to an end." As the Court stated in the aforementioned order the protective measures which the Commission may adopt as interim measures are those which appear indispensable in order to prevent the exercise of the power to make decisions given by Article 3 from becoming ineffectual or even illusory because of the action of certain under­ takings. It follows that the interim measures must come within the framework of the final decision which may be adopted by virtue of Article 3.

23 It must be pointed out that although, by adopting the contested decision, the Commission exceeded the limits of its powers, it was nevertheless not deprived of all possibility of reacting, immediately and in such a way as to influence Ford AG's conduct, to the circular which that company sent to its dealers. In particular the Commission may, Under Article 15 (6) of Regu- lation N o 17, reserve the possibility of imposing a fine where an agreement which has been notified continues in operation if it informs the undertakings concerned that after preliminary examination it is of the opinion that the conditions for the application of Article 85 (1) of the Treaty are satisfied and that an application of Article 85 (3) is not justified.

24 The applicants' submission of lack of competence must therefore be upheld and the contested decision must be declared void without there being any need to rule on the other submissions put forward in the actions.

FORD ν COMMISSION

Costs

25 Article 69 (2) of the Rules of Procedure provides that the unsuccessful party shall be ordered to pay the costs. Since the Commission has failed in its submissions, it must be ordered to pay the costs, including the costs incurred in the proceedings relating to the application for the adoption of interim measures and the costs incurred by the intervening parties, James A. Laidlaw (Holdings) Limited and Stormont limited. The Bureau Européen des Unions de Consommateurs, which intervened in support of the conclusions of the Commission, must bear its own costs.

On those grounds,

Delivered in open court in Luxembourg on 28 February 1984.

P. Heim J. Mertens de Wilmars Registrar President