C-151/83

JUDGMENT OF 11. 10. 1984 — CASE 151/83

divide the quotas within the group cerning them is affected by such a in a manner which is most conducive decision. to the efficient management of production. Moreover, by thus selecting, as the entity to which the 3. In so far as the Commission applied quota system is to be applied pursuant Article 2 (4) correctly when it fixed a to Decision No 1696/82, a group of total quota for a group of under- concentrated undertakings of the kind takings, it was necessarily entitled to referred to in Article 66 of the ECSC take account of the results of the Treaty, the Commission has in no group as a whole in deciding whether way undermined the validity of the to refuse or to grant the quota definition of an undertaking con- adjustments applied for under Article tained in Article 80 of the ECSC 14 of the aforesaid decision. In taking Treaty, as clarified in particular by that approach, the Commission's sole the case-law of the Court, since aim was to accord identical treatment neither the distinct legal personality of to groups of integrated undertakings the undertakings forming part of the in comparison with single under- group nor their individual right to takings possessing several production institute proceedings in matters con- establishments.

In Case 1 5 1 / 8 3

SOCIÉTÉ ACIÉRIES ET LAMINOIRS DE PARIS ( A L P A ) , represented by Lise F u n c k - Brentano, of t h e Paris Bar, with an address for service in L u x e m b o u r g at t h e C h a m b e r s of Marlyse N e u e n - K a u f f m a n , 21 R u e Philippe-II, applicant, v

gives the following

JUDGMENT

Facts and Issues

I — Facts and written p r o c e d u r e requested the Commission to treat Alpa as a distinct production centre in the Usinor group.

By registered letter of 26 May 1983 requiring acknowledgement of receipt, In that letter, Mr Davignon reminds the Société Aciéries et Laminoirs de Paris Alpa that Article 2 (4) of Decision No (Alpa), hereinafter referred to as "Alpa", 1696/82 of 30 June 1982 provides that: applied to the Commission for the "For the purposes of this decision, any adjustments provided for by Article 14 of group of concentrated undertakings Decision No 1696/82/ECSC of 30 June within the meaning of Article 66 of the 1982 (Official Journal, L 191, p. 1) for Treaty shall be regarded as a single the second quarter of 1983. undertaking even if such undertakings are located in different Member States." Moreover, Decision No 24/54 of the High Authority of the ECSC of 6 May By registered letter of 22 June 1983 1954 (Official Journal, English Special requiring acknowledgement of receipt, Edition 1952-1958, p. 16) defines what is the Commission replied to Alpa's letter to be regarded as control of an under- and referred to an earlier letter of taking for the purposes of Article 66 (1) 5 April 1983 signed by Mr Davignon, a of the ECSC Treaty. In his letter, Mr Member of the Commission, which had Davignon points out that Usinor holds been written in reply to an application 100% of Alpa's share capital, with the for quota adjustments dated 23 February result that Alpa is in fact integrated 1983. Alpa claims that it never received within Usinor which is the sole recipient the Commission's original letter. of the quotas allocated pursuant to Articles 5 and 9 (2) of Decision No 1696/82. There is no legal provision which permits Alpa to be treated as a In his letter of 5 April 1983, Mr distinct undertaking for the purposes Davignon acknowledges receipt of Alpa's of Article 58 of the ECSC Treaty. letter of 23 February 1983 in which Alpa

Alpa brought an action against that letter As far as Mr Davignon's reply is by application lodged at the Court concerned, his letter is not in the form of Registry on 25 July 1983. The written a decision but is a personal letter from procedure followed the normal course. him to the Chairman and General Upon hearing the report of the Judge- Manager of Alpa. The letter is more Rapporteur and the views of the in the nature of an "explanatory Advocate General, the Court decided to memorandum" (and therefore merely assign the case to the First Chamber confirms the position). It explains the without any preparatory inquiry. general provisions in force and refers to an individual decision which has already been adopted in relation to another undertaking and which has had legal II — C o n c l u s i o n s of t h e p a r t i e s effect (and which moreover was the subject-matter of an action brought by the undertaking to which it was The applicant claims that the Court addressed, Usinor, in Case 103/83). The should declare the individual decision Commission refers to the Court's notified to it on 22 June 1983 to be void. judgments of 10 December 1957 in Joined Cases 1 and 14/57 Société des The Commission contends that the Usines à Tubes de la Sarre [1957 and Court should: 1958] ECR 105 at p. 114 and of 5 December 1963 in Joined Cases 53 and Dismiss as inadmissible the application 54/63 Lemmerz-Werke [1963] ECR 239 for a declaration that the letter of 22 at p. 248. June 1983 is void; The Commission's conclusion in no way In the alternative, dismiss the application diminishes, in its view, the legal as unfounded; protection accorded to undertakings by the ECSC Treaty and in particular by Order the applicant to pay the costs. Article 33 thereof, against an individual decision notifying the quotas allocated for the quarter in question. III — Submissions and argu- m e n t s of t h e p a r t i e s The Commission considers the ap- plication to be inadmissible inasmuch as it is based on the alleged illegality of Admissibility Articles 2 (4) and, possibly, of the third indent of Article 14 of the general The Commission considers that the Decision No 1696/82, as amended. The application is inadmissible in its entirety. Commission takes the view that the letter Mr Faure's letter of 22 June 1983 is not of 22 June is not concerned with the a decision. In its letter of 26 May 1983 application of either Article 2 (4) or the

third indent of Article 14. The inap- The applicant also considers that the plicability of the third indent of Article Commission's letter constitutes a de- 14 flows directly from Decision No cision. It refers to the judgment of the 1696/82, whilst Article 2 (4) has already Court of 22 June 1983 in Case 317/82 been the subject-matter of the individual Boëlv Commission [1983] ECR 2041, in decision of 27 April 1983 which was which the Boel undertaking requested contested in Case 103/83. In that regard, the Commission to apply Article 14.

alone. Since Alpa is the real addressee of those decisions it is justified in taking the view that they are of individual concern to it in its capacity as a legal person. By analogy with the provisions of the second paragraph of Article 173 of the The Commission considers that it is EEC Treaty, the Commission's decisions unnecessary in these proceedings to relating to products in Category V are decide whether the individual decision of addressed to another legal person but are 27 April 1983 allocating quotas to of direct and individual concern to Alpa. Usinor is addressed to the applicant since Moreover, those provisions are merely the applicant has not brought an action a more precise re-statement of the against it. The Commission emphasizes provisions of the second paragraph of that the applicant's request must not be Article 33 of the ECSC Treaty. regarded as a request to apply Article 14 but as a request to disregard the

The applicant's letter and the reply from Mr Faure, a Commission official, fall outside the field of application es- The Commission refused to consider tablished by the general decision. The granting the adjustment applied for by Commission was under no obligation to the applicant on the ground that Alpa take à decision and did not therefore do was integrated within the Usinor group so. If every individual wishing to for the purposes of Article 58 of the challenge a general decision were able to ECSC Treaty. bring an action against it, after receiving a reply from an officer of the Commission, Article 33, which provides that a general decision may be contested The Commission referred to Article 2 (4) only in the event of a misuse of powers, of Decision No 1696/82 which provides would be rendered entirely nugatory. as follows: "For the purposes of this decision, any group of concentrated undertakings within the meaning of Article 66 of the Treaty shall be regarded In its letter of 22 June 1983, the as a single undertaking even if such Commission did not adopt a measure undertakings are located in different nor did it apply any provision of the Member States". The Commission, also general decision adversely affecting the referred to Decision No 24/54 of the applicant. The letter merely sets forth an High Authority of the ECSC of 6 May opinion' expressed" by" à"rT "officer" of "the 1954 which defines the concept of Commission which is confined to a "control" of an undertaking pursuant to description of the factual position. Article 66 of the Treaty.

2. It is based on the third indent of The definition given by the Commission Article 14 of Decision No 1696/82 leads to discrimination against under- which rules out in general terms any takings which have endeavoured to possibility of adjustment for under- implement a restructuring plan. That is takings whose production exceeds a true in the case of the applicant, the orly certain volume but does not define undertaking forming part of the Usinor the concept of undertaking in relation group which manufactures concrete to that possibility. reinforcing bars, after concentration of production of such bars in the applicant's factory. Alpa is a small modern under- taking located in the Paris region and The applicant takes the view that the advantageously situated for obtaining Commission, by borrowing the defi- supplies of scrap and for selling concrete nitions which are used in the Treaty reinforcing bars in the region. and the secondary legislation only in connection with agreements, decisions, concerted practices and concentrations, and applying them to the quota system, The definition in question also discrimi- is guilty of a misuse of powers. nates without any objective reason against integrated undertakings of the kind referred to in Article 66 in favour The applicant points to various of independent undertakings. The provisions of the ECSC Treaty, general applicant is an undertaking legally decisions of the Commission and distinct from Usinor. It cannot manu- judgments of the Court, which indicate facture any other product and cannot in its view that the criterion adopted is therefore benefit from transfers of that of the legal unit rather that the production from one factory in the economic unit. Thus the penalties which group to another. It is geographically may be imposed on undertakings in isolated in the Paris region. Its default are imposed on the undertaking employees cannot therefore be trans- itself and not on the owner thereof. In ferred to other factories in the group. the case of the scrap equalization Accordingly, it is confronted with social, scheme, the Court approved the legal financial and accounting problems rather than the economic criterion by identical to those of undertakings not identifying the concept of undertaking, integrated in a group. within the meaning of the Treaty, with the concept of a legal or natural person, on the ground that the Treaty availed itself essentially of that concept for the purpose of designating those on whom The allocation of insufficient quotas rights are conferred and duties are means that the applicant is unable to imposed under Community law. satisfy all its customers, who are geogra- phically concentrated within the Paris region. Its position on the French market has continued to deteriorate whilst the The concept of concentrated under- position of independent undertakings, in takings, which the Commission has particular those from Italy, has steadily borrowed from Article 66 of the Treaty, impoved. is unlawful since it is used outside the field of application prescribed by the Treaty. It is also inappropriate since it is contrary to the objectives pursued by the The quotas allocated by the Commission Treaty and by the quota system. no longer permit the minimum prof-

If production quotas were allocated to every individual undertaking, the rights The Commission does not deny that Alpa of an undertaking which has acquired is a concentrated undertaking within the control over a concentration of under- Usinor group for the purposes of Article takings would be called in question and 66 of the Treaty. It acknowledges that the principle embodied in Article 66 of Alpa is an undertaking within the the ECSC Treaty to the effect that meaning of Article 80 of the Treaty. concentrations of undertakings are lawful would be contravened. A production quota fixed for a group of undertakings as a whole renders the The question is whether Article 2 (4) of system more flexible. Production over Regulation No 1696/82 which provides the reference period is calculated as a that "for the purposes of this decision, whole for the undertakings forming part any group of concentrated undertakings of the group. The group may, however, . . . shall be regarded as a single under- if it wishes, divide between the various taking . . ." is unlawful. undertakings the production quotas fixed. A group thus enjoys a substantial advantage over a single undertaking which merely has the option of adjusting The Commission recalls that the Treaty or increasing, by exchange or by confers on the Commission a wide purchase, the quotas allocated to it. margin of discretion with regard to the Decision No 1696/82 therefore takes adjustment of the system of production account of the fundamental objective quotas. The Commission is required to which the creation of a concentration of exercise objectively and without discrimi- undertakings is intended to achieve, nation the power conferred upon it by namely the rationalization of operations Article 58 of the ECSC Treaty. For the as a result of specialization within the proper application of the quota system, group. the criterion according to which the quota system also applies to a group of concentrated undertakings of the kind referred to in Article 66 of the ECSC Treaty is objective and appropriate. A group of concentrated undertakings is no different from an undertaking which constitutes a single legal person but possesses several production estab- The characteristic feature of a con- lishments. The system adopted by the centration of undertakings is that one public authorities must take account or more undertakings are controlled of genuine economic structures and by another undertaking. The existence operations. The purpose of the quota of control implies the possibility of system is to determine the structure and

the volume of production in the future, form of organization takes no account of by reference to the structure and the reality, is arbitrary and discriminates volume of production recorded in the against a single undertaking possessing past. For a group of concentrated under- several production units. takings of the kind referred to in Article 66 of the ECSC Treaty, production recorded over the reference period is the result of decisions adopted in connection with the unity of the consortium and in the light of the interests thereof. The Commission considers it impossible to take the view that the manner in which Alpa is managed is uninfluenced by the fact that it forms part of the Usinor group. Alpa's contention to the The Commission points out that if Alpa's effect that it cannot benefit from reasoning were taken to its logical transfers of production from one factory conclusion and Article 2 (4) were to another is contradicted by the repealed, and if the other provisions of statement on page 11 of the application the decisions in question were to remain to the effect that transfers of production unchanged, the applicant's quotas might to the applicant from other factories of be much smaller (approximately 5 5 % of the Usinor group have already taken existing quotas) in the.light of its contri- place. bution to the best months of production which are used as a basis for the calcu- lation of the reference production. Even if the applicant satisfied the requirements for an increase under the third indent of Even if Article 14 were applicable, the Article 14, the increase would have been Commission doubts whether Alpa would small, since such adjustments have never be able to plead exceptional difficulties. exceeded the equivalent of a 5 % The quotas allocated to Usinor in the decrease in the abatement rate in second quarter of 1983 enabled Alpa to question. use its production capacity to a considerable extent (65.8%) and in its judgment of 11 May 1983 in Case 244/81 Klöckner v Commission [1983] ECR 1451, the Court held in paragraph The Commission denies the applicant's 27 of its decision that Article 58 in no contention that it has discriminated way places the Commission under a duty between integrated undertakings and to guarantee to any given undertaking independent undertakings. A group of such minimum production as that under- concentrated undertakings is no different taking regards as appropriate in ac- from a single undertaking possessing cordance with its own criteria of prof- several production establishments. In itability. Finally, the Commission denies both cases, the nature and the volume of the applicant's contention to the effect production are the result of a concerted that the Commission has been guilty of a and therefore uniform industrial and misuse of powers. To prove a misuse of commercial policy. Both types of organi- powers the applicant must demonstrate zation must be accorded equal treatment that the decision in fact pursues an at law since they both are in the same objective other than that for the purposes position as regards the effects of the of which the High Authority is entitled quota system on the planning of to act (judgment of the Court of 12. 6. production. To select as a criterion the 1958 in Case 15/57 Compagnie des Hauts

Fourneaux de Chasse v High Authority Alpa is completely independent in [1957 and 1958] ECR 211). relation to the parent company. The quota system must be adapted to the actual state of the market, in terms of objective economic information relating to the market and to each undertaking. The Commission must provide for the In its reply, the applicant emphasizes that adjustment of an establishment's re- it is the effect of Article 2 (4) in ferences where it operates under conjunction with the third indent of economic conditions similar to those of Article 14 which gives rise to the discrimi- an independent undertaking. nation of which it complains. Moreover, such discrimination may be eliminated in two ways, either by recognizing the applicant's status as an independent The applicant also points out that it has undertaking to which individual quotas derived no benefit from the fact that a are allocated, or by not ruling out a quota was allocated to Usinor. Quotas priori any right of adjustment in the case were allocated to the Usinor group in of an undertaking which produces respect of products in Category V on the concrete reinforcing bars and is in- basis of the group's past references. The tegrated in a group, where that under- applicant refers to certain figures to taking was the only one within that demonstrate that the calculation of the group to produce concrete reinforcing reference production takes account of bars and satisfied all the other periods in which the volume of requirements laid down in the third production of the other centres engaged indent of Article 14. in the manufacture of concrete reinforcing bars declined and ultimately compelled them to shut down com- pletely. The restructuring operation carried out by the group severely penalized the applicant since its volume The information supplied by the of production was reduced by a factor of Commission, to the effect that a group 2V2 and it was therefore unable to of undertakings enjoys greater flexibility provide for depreciation of the rationali- as regards the division amongst the zation and modernization costs which undertakings forming part of the group it incurred in accordance with the of the quotas allocated to it, may be objectives of the Treaty and of the correct in certain cases but is incorrect in restructuring programme. others. The undifferentiated application to dissimilar situations of a single exclusively legal criterion, stems from an all-embracing, technocratic vision of the system. The Commission is reversing the In the applicant's view the effect of the order of the obligations incumbent upon system established by the Commission is it as regards the organization of the that two undertakings operating under quota system. Its first duty is to restore a similar conditions are differently treated. proper balance to the market and its The grant of adjustments to small-sized second duty is to ensure compliance with independent undertakings and the refusal the quotas, but the Commission's to extend that possibility to integrated intervention seems to be dictated first undertakings, which are operated under and foremost by the requirements of the same conditions as an independent control, which is not an end in itself. undertaking, inevitably leads to struc-

According to the case-law of the Court, the Commission must apply Article 58 of The Commission consciously decided the ECSC Treaty impartially in relation that the sacrifices resulting from the to competition and must not accord pref- reduction of aggregate production were erential treatment to certain under- to be borne by certain undertakings and takings as against others whose position not by others, for no objective reason on the market is similar to theirs. other than the size of the former. Modernization and restructuring mea- sures should confer an advantage on the undertakings which have adopted them and should not penalize them. Rules derogating from the general system of The applicant emphasizes that an ad- quotas must be formulated by reference justment of the share of the quota to the general objectives of the Treaty. possessed by certain undertakings leads to a correlative reduction of the share of others. That deflection of production is clearly apparent from a table annexed to the reply, from the market forecasts published and from the division of the quotas allocated. Following the ad- The Court of Justice has upheld the justments effected by the Commission, validity of the system of calculating the share of the aggregate quota quotas on the basis of the reference allocated to Usinor for the first quarter production, since it took the view that of 1983 was reduced from 2.47% of the the system did not affect the structure of provisional quota to 2.33% of the the market. In the Court's view: "That definitive quota. Usinor's share of the criterion . . . enables total production to aggregate quota for products in be reduced without altering the positions Category V has steadily declined in each of the undertakings on the market as quarter as a result of the allocation between each other" (judgments of 3. 3. of additional quotas to unintegrated 1982 in Case 14/81 Alpha Steel [1982] competing undertakings, as is clear from ECR 749 and of 16. 2. 1982 in Joined the table set out in Annex V. It fell from Cases 39, 43, 85 and 88/81 Halyvourgiki 2.88% in the fourth quarter of 1981 to [1982] ECR 593). 2.33% in the first quarter of 1983.

If the definitive aggregate quota had legal form in which the undertaking in been equitably divided amongst the question is constituted. If Alpa were a undertakings producing concrete rein- separate undertaking, whilst forming part forcing bars and operating under the of a group, it would be allocated same conditions, the applicant would separate quotas and adjustments. If an have been granted an adjustment in entity similar to Alpa were merely a order to bring the reduction of its separate factory, forming part of a single volume of production as regards Cate- legal entity, it would not be allocated gory V products closer to the total separate quotas. average reduction for all ECSC under-

therein. That contradiction emerges once As regards the applicant's objection that again in the applicant's reply in which its reference production is calculated in a the applicant states that either Alpa must manner which is disadvantageous to the be recognized as an undertaking for the Usinor group, the Commission points purposes of the system — in breach of out that the rules for the calculation of Article 2 (4) — to enable it to take quotas were introduced essentially by the advantage of the third indent of Article first general decision, No 2794/80/ 14, or that the production limit of ECSC. The application in this case is not 700 000 provided for by Article 14 must concerned with the quota system be repealed in order to enable the Usinor established by that regulation and if the group to benefit therefrom. Those two applicant had any objections to that arguments, which are contradictory, system, Alpa, or rather Usinor, could must in the Commission's view be simply have brought an action against it. regarded as alternatives to each other It was not in Usinor's interests to do so since they are mutually incompatible. before since the group had taken full advantage of the flexibility provided by Moreover, the Commission denies that it the systems concerned. applied an exclusively legal criterion when it adopted Article 2 (4). It However, the Commission also points contends that it is Usinor which favours out that the purpose of the quota system the adoption by the Commission of an is not to enable the undertakings exclusively "legal" rule involving the concerned to use their plant and allocation of individual quotas to each equipment profitably. In that regard, the undertaking within the meaning of Commission refers to the judgment of Article 80 of the ECSC Treaty. It follows the Court of 11 May 1983 in Case from that argument that the allocation of 244/81 Klockner, and in particular to quotas and any adjustments thereto paragraph 27 of the decision (cited would depend purely and simply on the above).

The Comnmission also contends that the The Commission also points out that the third indent of Article 14 of Decision differences between the forward pro- No 1696/82 is lawful. grammes and the definitive programmes published by it stem from the adjustments of the reference production First, the Commission analyses market referred to in Articles 5 and 9 (2) or in trends the effect of which was to place at Article 15 of Decision No 1696/82 and a disadvantage undertakings known as not from the adjustments of quotas single-product undertakings manufac- granted pursuant to the third indent of turing concrete reinforcing bars from Article 14. Adjustments in the latter case scrap by converting it directly into liquid accounted for a mere 40 691 tonnes out steel in electric furnaces. That process is of a total of 1710 000 tonnes. The unsuitable for manufacturing all other Commission also questions the relevance iron and steel products. of the applicant's remarks concerning the adjustments granted in respect of The Commission maintains that the previous quarters and the nationality of reduced abatement rates, applied to small the undertakings which benefited from and medium-sized-single product under- such adjustments. In any event, the takings by Decision No 533/82 were undertakings benefiting from adjust- non-discriminatory and proportionate to ments granted pursuant to the third the objective of giving all undertakings a indent of Article 14 in the second quarter chance of survival. Unequal treatment of 1983 are situated in four of the ten does not constitute discrimination since Member States, including France. the situations involved are not com- parable, from the point of view of the size of the undertaking, the structure of Finally, the Commission observes that production and the effects of the system the Usinor group obtained quota of production quotas. adjustments under Article 14 of Decision No 2794/80 which led to an increase in its references for Category V under the As regards the objection that the system established by Decision No adjustments granted to competing under- 1696/82 and that Usinor's capacity takings altered certain market structures, utilization rate is 65.8%, whilst the it is probable that the structure of the average for its competitors is 42.5%. market in concrete reinforcing bars Accordingly, the applicant cannot rely would have changed far more markedly on the existence of exceptional in the absence of a quota system than difficulties resulting from the quota has been the case as a result of that system. system. If the market had been completely free, the share of the market possessed by independent producers with electric steel mills would have increased IV — O r a l p r o c e d u r e at an even faster rate in view of their lower costs. At the sitting on 23 February 1984 oral The Commission also refers to figures argument was presented by L. Funck- relating to the production of concrete Brentano, for Alpa, and by F. Benyon, reinforcing bars between 1980 and 1982 for the Commission of the European which show that Italian production Communities. declined more sharply than both average production in the Community and The Advocate General delivered his Usinor's own production. opinion at the sitting on 5 April 1984.

4 In these proceedings the applicant seeks a declaration that the above- mentioned Commission decision, which was notified to it on 22 June 1983, is void.

s According to the applicant, the Commission incorrectly applied Article 2 (4) of Decision N o 1696/82 of 30 June 1982 which provides that "for the purposes of this decision, any group of concentrated undertakings within the meaning of Article 66 of the Treaty shall be regarded as a single undertaking ...''

ALPA v COMMISSION

6 The applicant is a wholly-owned subsidiary of Usinor, although it has legal personality under French law. It is the only undertaking in the Usinor group to manufacture products in Category V (concrete reinforcing bars).

7 The applicant claims that the Commission should, when considering applications for the adjustment of quotas under Article 14 of Decision N o 1696/82, take account of the individual position of each undertaking forming part of the group and not of the whole group of concentrated undertakings, as referred to in Article 66 of the ECSC Treaty.

A d m i s s i b i l i t y of t h e a p p l i c a t i o n .

Substance

n The applicant contends that the contested decision must be declared void in so far as it is based on two unlawful provisions, namely Article 2 (4) of Decision N o 1696/82 which wrongly permits a subsidiary to be assimilated to the.group of which it forms part, and Article 14 of the same decision which, by providing in the case of concentrated undertakings for the possibility of quota adjustments only for the group itself, discriminates between undertakings forming part of such a group and independent under- takings.

i2 The applicant therefore calls in question in the first place the legality of Article 2 (4) of Decision N o 1696/82 on the ground that the Commission is not authorized to take as a basis in connection with situations other than those listed in Article 66 of the ECSC Treaty the definition of a group of undertakings which is used in the Treaty in relation to the rules on mergers and concentrations, or consequently to disregard the definition of an under- taking contained in Article 80 of the ECSC Treaty. The applicant recalls that the concept of an undertaking within the meaning of the Treaty coincides with the concept of a natural or legal person (judgment of the Court of 22. 3. 1961 in Joined Cases 42 and 49/59 SNUPATv High Authority [1961] ECR 53).

1 3 That submission must be rejected. The Commission by deciding for practical reasons to allocate the quotas to the undertaking which directs the production operations in the group, has not exceeded the discretionary power conferred upon it by Article 58 of the ECSC Treaty since a method of that kind also enables the undertaking to subdivide the quotas within the group in a manner which is most conducive to the efficient management of production. Moreover, by thus selecting, as the entity to which the quota system is to be applied pursuant to Decision N o 1696/82, a group of concentrated undertakings of the kind referred to in Article 66 of the ECSC Treaty, the Commission has in no way undermined the validity of the definition of an undertaking contained in Article 80 of the ECSC Treaty, as clarified in particular by the case-law of the Court, since neither the distinct

iz Furthermore, the Commission is entitled in connection with the examination in individual cases of the need for adjustment of the reference production or the reference quantities of each undertaking pursuant to Article 14 of Decision No 1696/82, to draw a distinction between undertakings according to their size, by fixing a production limit for the purpose of defining under- takings which may benefit from the scheme in question. Small and medium- sized undertakings which manufacture exclusively products in Categories IV, V and VI may experience more serious difficulties in their efforts to survive

JUDGMENT OF 11. 10. 1984 — CASE 151/83

in the present economic situation than undertakings which are able by manu- facturing other products, to offset the difficulties encountered in relation to products in Category V.

Costs

is Under Article 69 (2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the applicant has been unsuccessful in its submissions, it must be ordered to pay the costs.

On those grounds,

For the Registrar

D. Louterman G. Bosco Administrator President of the First Chamber