C-89/85

2. The parties to the proceedings and the United Kingdom, which, by order of 9 4. In that respect, I differ with the United * Translated from the French. Kingdom, which has asked the Court to 1 — OJ L 85, 26. 3. 1985, p. 1. resolve this dispute by holding that this case 2 — Apart from the argument concerning the Free Trade involves the exercise of territorial juris- Agreement concluded with Finland, which is specific to Case 89/85, the applicants in that case, like most of the diction, which is accepted both by other applicants, challenge the Commission's jurisdiction to apply the Community rules of competition solely on the Community law and by international law. basis of the doctrine known as 'the location of the effects'. I would point out, however, that the applicant in Case 104/85 challenged the Commission's jurisdiction only at the hearing, and the applicant in Case 116/85 did not raise any objections to the Commission's jurisdiction, explaining in a letter of 29 October 1987 its initial inaction by 5. The opponents of the effects doctrine reference to the consideration that the Court would have to examine that issue of its own motion, although it concurred have sought to make out their case against it on that point with the arguments submitted by the other applicants. At the hearing it reaffirmed its position and on the basis of arguments derived from both deferred to the wisdom of the Court on that issue. The applicant in Case 117/85 did not raise the objection that Community law and international law. Thus the Court lacked jurisdiction and, at the hearing, endorsed the arguments of the other applicants. 3 — Paragraph 79 of the contested decision.

the objection to the Commission's decision 1. The wording of Article 85 is that neither Community law nor interna- tional law authorizes the application of the Community competition rules to under- 8. The wording of Article 85 of the Treaty takings established outside the Community offers general support for the proposition solely by reason of the effects produced that Community competition law is within the Community. applicable, by its very essence, whenever anti-competitive effects have been produced within the territory of the Community.

law. 4 I — The effects doctrine in the light of Community law 10. In fact, it is uncertain whether the 'effect' referred to in Article 85 of the Treaty constitutes, strictly speaking, a basis of jurisdiction. This concept, like that of 7. Whatever the specific features of each of 'object', 5 quite clearly makes it possible to the cases now before the Court, the etablish an infringement of the substantive challenge to the Community's jurisdiction to apply its competition rules to undertakings 4 — G. Bernini: 'Les règles de concurrence' in Trente ans de established outside the Community rests on droit communautaire, Office des publications officielles des Communautés européennes, 1982, p. 345, in particular p. two considerations. In the first place, it is 375. B. Goldman:

T. competitive effects produced within the Schapira, G. Le Tallec, J.-B. Biaise: Droit européen des affaires, PUF, Themis, 1984, p. 245. I. Mégret, J.-V. Louis, territory of the Community. Secondly, it is D. Vignes and M. Waelbroeck: Le droit de la Communauté suggested that the case-law of the Court can économique européenne, Vol. 4: 'Concurrence', éditions de l'université de Bruxelles, 1972, pp. 110 and 111. J. Soufflet: be construed as rejecting the effects La compétence extraterritoriale du droit de la concurrence de

OPINION OF MR DARMON — JOINED CASES 89, 104, 114, 116, 117 AND 125 TO 129/85

law. I shall return to this point in due agreement is situated in a third country does course. not prevent application of. . . [Article 85 of the Treaty] . . . since the agreement is operative on the territory of the common 2. Principles laid down by the Court in its market', 9 the fact must not be altogether case-law disregarded that that case concerned an agreement granting an exclusive concession and that one of the parties to it was estab- lished within the Community.

In territory, the Court preferred to base such that judgment, regarding the principle of jurisdiction on the unity of the undertaking. non-discrimination on grounds of nationality in connection with the Treaty But that certainly does not mean that the rules on freedom of movement for workers location of the effects would not constitute and the provision of services, the Court a sufficient basis for jurisdiction. 7 As stated that: Professor Goldman has pointed out, precisely in connection with that judgment, 'no inferences may be drawn from the silences of the Court'. 8 'by reason of the fact that it is imperative, the rule on non-discrimination applies in judging all legal relationships in so far as

Å H L S T R Ö M V C O M M I S S I O N

16. That case was concerned with a rule of The former confers jurisdiction on the State the Union cycliste internationale, whose seat in which the person or the goods in was in Geneva. In the proceedings before question are situated or the event in the Court, the Union cycliste internationale question took place. The latter confers juris- sought to rely on Geigy 11 and Continental diction over nationals of the State Can 12against the effects doctrine, on the concerned. ground that that criterion had not been adopted by the Court in those judgments. 20. Territoriality itself has given rise to two distinct principles of jurisdiction: 17. That argument reveals the full signif- icance of the Court's answer. Some writers have drawn the conclusion that the effects doctrine is a basis for asserting Community (i) subjective territoriality, which permits a jurisdiction which, although enunciated in State to deal with acts which originated another context, may be relied upon in the within its territory, even though they field of competition. 13 If the position were completed abroad, adopted by the Court in Walrave may be transposed to competition law, and I see no reason why it should not, it is legitimate to argue that, far from repudiating the effects (ii) objective territoriality, which, con- doctrine, the Court has no hesitation in versely, permits a State to deal with acts endorsing it. which originated abroad but which were completed, at least in part, within its own territory. 18. However, that finding alone does not suffice. In a matter of this kind, it is necessary to ascertain whether or not such a 21. The principle of objective territoriality criterion is in conformity with the has played a decisive role in the extension of requirements and the practice of interna- national jurisdiction in the field of compe- tional law. tition. From it is derived the effects doctrine, which, in order to deal with the effects in question, confers jurisdiction upon II — The effects doctrine in the light of a State even if the conduct which produced international law them did not take place within its territory.

'from exercising jurisdiction in its own 24. The position under international law in territory, in respect of any case which that regard was restated and refined by Sir relates to acts which have taken place Gerald Fitzmaurice in his Separate Opinion abroad, and in which it cannot rely on some in the judgment of the International Court permissive rule of international law. Such a of Justice of 5 February 1970 in Barcelona view would only be tenable if international Traction: law contained a general prohibition to States to extend the application of their laws and the jurisdiction of their courts to persons, property and acts outside their 'It is true that, under present conditions, territory, and if, as an exception to this international law does not impose hard and general prohibition, it allowed States to do fast rules on States delimiting spheres of so in certain specific cases. But this is national jurisdiction in such matters (and certainly not the case under international there are of course others — for instance in law as it stands at present. Far from laying the fields of shipping, "anti-trust" legis- down a general prohibition to the effect that lation, etc.), but leaves to States a wide States may not extend the application of discretion in the matter. It does however (a) their laws and the jurisdiction of their postulate the existence of limits — though in courts to persons, property and acts outside any given case it may be for the tribunal to their territory, it leaves them in this respect indicate what these are for the purposes of a wide measure of discretion which is only that case; and (b) involve for every State an limited in certain cases by prohibitive rules; obligation to exercise moderation and as regards other cases, every State remains restraint as to the extent of the jurisdiction free to adopt the principle which it regards assumed by its courts in cases having a as best and most suitable. This discretion foreign element, and to avoid undue left to States by international law explains encroachment on a jurisdiction more the great variety of rules which they have properly appertaining to, or more appro- been able to adopt without objections or priately exercisable by, another State'. 18 complaints on the part of other States . . . all that can be required of a State is that it 16 — Ibid., p. 19. 17 — Ibid, p. 18. 15 — Permanent Court of International Justice, Judgments, 18 — Internationa] Court of Justice: Reports of Judgments, Orders and Advisory Opinions, Series A-J 10. 'Advisory Opinions and Orders', 1970, p. 65, at p. 105.

28. The jurisdiction thus conferred is 26. However, on the assumption that the 'jurisdiction to prescribe', being the power Permanent Court wished, in so doing, to of the State to 'lay down general or indi­ circumscribe the jurisdiction of the State vidual rules through its legislative, executive based on objective territoriality to cases in or judicial bodies'. 25 It cannot be which the effect produced within its understood as constituting 'jurisdiction to territory was itself a constituent element of enforce', which is the 'power of a State to the offence, that would have no bearing on give effect to a general rule or an individual the application of the Community compe­ decision by means of substantive tition rules to undertakings established implementing measures which may include outside the Community. It should be even coercion by the authorities'. 26 That recalled that Article 85 of the Treaty opinion is widely shared by those academic prohibits any agreements, decisions and writers who accept that the effects doctrine concerted practices which have as their effect 'the prevention, restriction or 22 — Opinion of Mr Advocate General Mayras in Cases 48, 52 distortion of competition within the and 53/69, cited above, [1972] ECR 665, at p. 694. common market'. Is not such an effect 23 — P. Julliard: 'L'application extraterritoriale de la loi écon­ omique' in L'application extraterritoriale du droit écon­ necessarily a constituent element of the omique, Cahiers du Cedin, supra, p. 13, in particular p. 24. offence? 21 That was the view taken by Mr 24 — In that regard, P. Demaret writes: T h e Lotus judgment was given with the smallest possible majority. But the Advocate General Mayras when he stated dictum cited above corresponds to the true sute of interna­ tional affairs as it was in 1927 and undoubtedly still is today', in L'extraterritorialité des lois et les relations transat­ 19 — Ibid., p. 23. lantiques: une question de droit ou de diplomatie? CDE, 20 — Ibid., p. 30. 1985, p. 1, in particular p. 26. 21 — M. Akehurst: Juńtdiction in international law, BYIL, 25 — B. Stern: Quelques observations sur les relies internationales 1972-73, p. 145, in particular pp. 195 and 196; B. relatives à l'application extraterritoriale du droit, AFDI, Goldman : Les champs d'application territoriale des lois sur la 1986, p. 7, in particular p. 11. concurrence, RCADI, 1969 (III), p. 635, in particular p. 701. 26 — Ibid.

'The imposition of a pecuniary sanction, the purpose of which is to suppress conduct 29. Where an agreement, decision or interfering with competition, and also to concerted practice is declared unlawful and prevent its continuance or renewal, should a fine is imposed, that is generally agreed to be distinguished from the recovery of a fine constitute the exercise of prescriptive juris- imposed which can only be effected, should diction. The prohibition imposed by interna- the undertaking penalized refuse to pay, by tional law upon a State is, to adopt the means of a forcible execution'. 31 wording used in Lotus, that ' — failing the existence of a permissive rule to the contrary — it may not exercise its power in any form in the territory of another State'. 28 31. That having been said, it is undoubtedly in United States law that are to be found the most far-reaching deliberations and 30. Accordingly, it is specific measures of efforts to determine the circumstances enforcement and coercion that are excluded. permitting a State to exercise its prescriptive However, as others have written before, 'to jurisdiction in situations involving order is not to compel'. 29 And I, for my extraneous elements. That is not surprising. part, agree with the following analysis made The Sherman Act dates back to 1890. It has by Professor Goldman: given rise to a very considerable body of case-law and academic writing, evidencing the concern to reconcile legitimate national interests with the imperative requirements of 'An order to pay a fine, where it penalizes international law and international relations. events covered by the law of the forum in That is why I propose to refer to the most view of the effects which they produce noteworthy decisions of the United States within the territory of the forum . . . is indis- courts. solubly linked, like the fact giving rise to it or the finding of nullity, to the application of the law which is by definition the proper law, and to deny the court the power to III — The principles of United States law

33. It was necessary to wait until 1945 and the Alcoa judgment 3 3to see the effects doctrine laid down in its most absolute 34. Decisions of that kind are rare, no form. Until that judgment was given, under- doubt because the cases in which there is no takings established abroad were penalized in connecting factor other than the effect the United States only on account of their produced are themselves exceptional. conduct within United States territory and However, I would refer to the judgment in the principle of objective territoriality, Horlogerie Suisse. 35 Judge Cashin, relying known in other branches of the law, had expressly on the effects doctrine, upheld the not been relied upon in disputes concerning jurisdiction of the United States authorities competition. 34 The Alcoa case, which was over the defendant which was established decided by a specially constituted court, abroad, since the conduct of the latter had a gave Judge Learned Hand occasion to state substantial and direct effect in the United that, with regard to the interpretation of States. It is worth noting, at this juncture, national anti-trust legislation, it is appro- the court's concern to qualify the effects. priate to take into consideration the limi- tations customarily observed by States upon the exercise of their powers. He went on, using words which still have an impact in view of the extent to which they embody the effects doctrine in its extreme form:

the American Law Institute, and the (1) Does the alleged restraint of compe- Anti-trust guide for international operations, tition affect, or was it intended to which was issued in January 1977 on the affect, the foreign trade of the United initiative of the United States Department of States? Justice. The latter document refers to the concept of a substantial and foreseeable effect. The same concept of a substantial (2) Is it of such a type and magnitude as to effect appears in the Tentative draft of the be cognizable as a violation of the Restatement (revised) published in 1985 Sherman Act? which requires there to be, in addition, conduct abroad which has or is intended to have a substantial effect within United States territory. The existence of an intent (3) As a matter of international comity and is, according to some writers, equivalent to fairness, should the extraterritorial juris- the requirement of a foreseeable effect. 36 diction of the United States be asserted to cover it?

(iii) the relative significance of the effects in the United States as compared with the 37. Judge Choy came to the conclusion effects produced elsewhere; that, in certain circumstances, the interests of the United States were too weak and the incentive for restraint in order to preserve harmony in its international relations too (iv) the extent to which there is an explicit strong to justify an assertion of extraterri- purpose to harm or affect United States torial jurisdiction. In order to determine trade, and the foreseeability of such whether such jurisdiction must be exercised, effect. he laid down three cumulative criteria, the first two relating to legality, and the third relating to expediency, which he expressed 39. I would also cite the judgment in in the form of three questions: Mannington Mills,31 in which Judge Weis, referring to and interpreting Timberlane 36 — See A. D. Neale and M. L. Stephens, supra, p. 167. 37 — 549 F. 2d 597 (9 Cir. 1977). 38 — 595 F. 2d 1287 (3 Cir. 1979).

Å H L S T R Ö M V C O M M I S S I O N

40. In that regard, United States law, as it now stands, rests on two principles. The first is that the United States will assert jurisdiction where the effects on its trade are direct, substantial and foreseeable. According to the second, the courts should assess the 'balance of interests' in order to 43. Noting that the United States courts ensure that the exercise of such jurisdiction frequently refuse to adopt that approach is reasonable. 39 and that academic criticism thereof has intensified, Judge Wilkey also pointed out that there is no evidence that interest balancing constitutes a rule of international law. 43 International law does not preclude

44. Finally, I would point out that the 1985 application of the domestic law which Tentative draft of the Restatement lists eight allegedly threatens foreign interests. criteria for determining the circumstances in which the exercise of jurisdiction must be 39 — A. D. Neale and M. L. Stephens, supra, p. 177. 40 — 731 F. 2d 909 (DC. Cir. 1984); Judge Wilkey has also criticized the judicial balancing of interests in: 'American 41 — Ibid., p. 78. anti-trust: adjusting conflicts with other legal systems', 42 — Ibid., p. 80. published in Private investors abroad, New York, Matthew Bender, 1985, cited by A. D. Neale and M. L. Stephens, 43 — Ibid., p. 80. supra, p. 179, Note 14. 44 — Ibid., pp. 83 and 84.

45. In practice, therefore, it would not appear that the balancing of interests in IV — Suggested jurisdictional criteria accordance with the criteria formulated in Timberlane Lumber and Mannington Mills has made it possible to elicit a jurisdictional rule of reason. With one exception — a 47. The difficulties encountered in this area United States writer has pointed out — no illustrate clearly that territoriality, as a court has refused to exercise its jurisdiction connecting factor, does not make it possible as a result of the analysis put forward in to resolve all the problems connected with those judgments. 45 For his part, Professor the scale and nature of contemporary inter- Mann considers that the balancing of national trade. According to Professor interests is, in law, a 'bad and misleading Mann, an inflexible territoriality principle is guide'. 46 In his view, a court cannot have a no longer suited to the modern world. 48 discretion to decide whether it should The same view is taken by Professor exercise its jurisdiction. If, construed in the Prosper Weil in the following passage: light of international law, a statute applies, a court is not entitled to reject it. If the rules of international law preclude its application, a court has no discretionary power to apply it. Consequently, the distinction between the 'The picture before us is that of an interna- existence and the exercise of jurisdiction, on tional society made up of adjacent cells, separated by frontiers; the concept of the one hand, and, on the other, the recog- territory, which lies at the very heart of the nition of a discretion to refrain from exer- concept of territoriality, illustrates that cising existing jurisdiction constitute a division between separate entities by misleading approach which should not be physical and geographical boundaries. But it followed. 47 is clear. . . that frontiers are not only barriers but also crossing points and economic life makes light of such barriers.' 49 46. However subtle and fertile it may be, therefore, United States law, while casting some light on this problem, evidently does not provide jurisdictional criteria that are 48. This assessment has led different writers to devise different criteria for the extraterri- 45 — J. P. Griffin: 'Possible resolutions of international disputes over enforcement of US anti-trust laws', 18, Stanford torial application of laws. Sir Robert journal of international law. Issue 2, 1982, cited by A. D. Neale and M. L. Stephens, supra, p. 76, note 14. Jennings, for example, considers that under 46 — F.A. Mann: The doctrine of international jurisdiction revisited after twenty years, RCADI, 1984 (III), p. 12, in 48 — Supra, RCADI, 1964, p. 126. particular pp. 30 and 31. 49 — P. Weil: L'application extraterritoriale du droit économique, 47 — F. A. Mann, ibid., pp. 87 and 88. Cahiers de Cedin, Montchrestien, 1987, p. 11.

international law a State is entitled to 49. Other writers suggest that the juris- exercise extraterritorial jurisdiction where its diction of the State in which 'the primary legitimate interests are concerned but that it effect' of the act is felt should be may not abuse that right. There is abuse recognized. 55 In order to determine whether where the exercise of extraterritorial juris- the effect is primary or secondary, it is diction constitutes interference with the necessary to take a twofold factor into exercise of the local territorial jurisdiction. 50 consideration: is the effect produced within According to Professor Mann, the real the State concerned more direct and more problem is that of identifying what he calls substantial than the effect produced in other the 'legally relevant facts' 51 and the State States. It is suggested that that approach whose connection with those facts is of such permits jurisdiction to be exercised only by a kind as to render the assertion of juris- States having a legitimate interest therein. 56 diction fair and reasonable. 52 Advocating Finally, it is generally acknowledged that that jurisdiction should be based on international law does not preclude 'closeness of connection', Professor Mann concurrent jurisdiction.

various aspects (including the practice of 50. In my view, those various concerns are, States, the principles of non-interference for the most part, taken into account by the and reciprocity and the demands of inter- adoption of the criterion of qualified effect. dependence)'. 53 That criterion, which does not conflict with any prohibitive rule of international law, has gained wide acceptance in the practice of States. 59 Moreover, it is, on objective grounds, particularly appropriate in view of the specific nature of competition law, 60 as Professor Mann points out at the same time a law designed to regulate market that a mere political, economic, commercial conditions and safeguard 'ordre public' in or social interest does not constitute a close the economic context. 61 It is on the basis of

The doctrine of jurisdiction in international law, 60 — J. M. Bischoff and R. Kovar, supra, p. 700. RCADI, 1964, p. 7, in particular p. 45. 61 — P. Eeckman: L'application de l'article 85 du traité de Rome 52 — Ibid., p. 44. aux ententes étrangères à la CEĶ mais causant des restrictions 53 — Ibid., p. 49. à la concurrence à l'intérieur du marché commun, RCDIP, 54 — Ibid., p. 104. 1965, p. 499, in particular p. 519.

54. The qualified effects are generally 52. According to the substantive provisions adopted as the criterion conferring juris- of Community law, the restriction of diction. The Restatement refers to substantial competition must be 'perceptible' 63 or and foreseeable effect. At its 55th 'appreciable'. 6 4 The adverse affect on Conference in New York in August 1972, competition may be either direct or indirect the International Law Association adopted a and objectively or reasonably foreseeable. 65 resolution on the application of the prin- Those are the characteristics of the effect ciples of international law in the field of envisaged as a constituent element of inter- restrictive practices. 69 According to Article 5 ference with freedom of competition within of that resolution, a State has jurisdiction to the Community. prescribe rules of law governing conduct that takes place outside its territory and causes an effect within its territory provided 53. In my view, not all of those charac- that three conditions are satisfied: (a) the teristics have to be adopted if the effect is conduct and its effect are constituent taken as the criterion of extraterritorial elements of a restrictive practice, (b) the jurisdiction. The most important reservation effect within the territory is substantial, and in that regard concerns indirect effect. 66 I (c) it occurs as a direct and primarily intended result of the conduct outside the 62 — P. Demaret, supra, p. 33. territory. It is noteworthy that this 63 — J. Mégret, J.-V. Louis, D. Vignes and M. Waelbroeck: Le resolution was preferred to that submitted droit de ta Communauté économique européenne. Editions de l'université de Bruxelles, 1972, vol. 4, 'Concurrence', p. 20. 64 — Ibid., p. 21. 67 — (1972) ECR 665, al pp. 699 and 700. 65 — B. Goldman and A. Lyon-Caen : Droit commerciai européen, 68 — Ibid., p. 702. Dalloz, 4th edition, p. 551. 69 — The International Law Association: Report of the 55th 66 — J. M. Bischoff and R. Kovar, supra, in particular p. 706 et Conference held in New York, 21 August to 26 August ¡972, seq. p. 138.

55. Admittedly, in its observations, the United Kingdom, referring to the aide- 58. In the absence of any such prohibitive mémoire of 20 October 1969 which it rule and in the light of widespread State submitted to the Commission regarding the practice, I would therefore propose that in 'Dyestuffs' cases, has maintained that the view of its appropriateness to the field of territorial basis alone can justify the competition, it be adopted as a criterion for Community's assertion of jurisdiction in the jurisdiction of the Community. these cases. It therefore considers that the principle laid down in the 'Dyestuffs' cases must apply not only to subsidiaries but also to other intermediate establishments, 59. Two specific problems remain to be situated within the Community, whose considered, namely the position of the KEA conduct within the Community has had an and the significance as regards the Finnish anti-competitive effect there. In those applicants of the Free Trade Agreement circumstances, according to the United concluded between Finland and the Kingdom, it is merely the exercise of terri- Community. torial jurisdiction which is involved.

V — The position of KEA

terms, KEA is said to have constituted the because it has been made by a non-profit- framework for concertation between the making association.' 72 producers concerned. 63. Admittedly, in this case, KEA's statutes provide that its members are in principle free to depart from the recommended price. 61. If it is satisfied, the criterion which I However, the Commission contends that the suggest the Court should adopt is such as to existence of a procedure to be set in motion justify, in principle, the assertion of juris- within the association in cases where diction by the Community even though members do not charge the prices thus KEA does not have any branches, subsi- determined is difficult to reconcile with that diaries or agencies in the Community, that option. It maintains, moreover, that KEA's is to say it lacks the type of territorial recommendations were indeed complied connection which, according to the United with in 1975 and 1976. It must be pointed Kingdom, constitutes the sole basis for the out, at this juncture, that the Court accepts exercise of jurisdiction by the Community. the application of Article 85 to a recommen- dation which is made by an association of undertakings and is described as non-binding if it is clear from the facts of the case that 'regardless of what its precise

Sachvenicherer[1987] ECR 405, paragraph 32.

69. This is the first time to my knowledge that the argument concerning the primacy of the Agreement has been submitted to the 67. Moreover, even though Professor Court. In the two previous cases brought Turner states that a specific and formal against decisions penalizing them under authorization of an export cartel constitutes Community competition law by under- a decisive condition for the immunity of the takings from countries that had concluded cartel in the event of the exercise of foreign free trade agreements with the Community, anti-trust jurisdiction, I would emphasize the Community's jurisdiction went unchal- that in the final analysis he maintains that: lenged. 76 Moreover, the numerous instances in which the Commission has applied Articles 85 and 86 to such undertakings have not given rise to proceedings contesting the applicability of those provisions.

'It seems reasonable to conclude that mere permission or even specific authorization for 70. I would emphasize, in the first place, participation in an international cartel that Article 23 or the Agreement is aimed at should not suffice to immunize the cartel 75 — Agreement concluded on 5 October 1973 (OJ L 328, 28.11.1973, p. 17. 74 — 'Application of competition laws to foreign conduct: appropriate resolution of jurisdictional issues', conference 76 — Judgment of 13 February 1979 in Case 85/76 Hoffmann-La held at the Fordham Corporate Law Institute on 3 and 4 Roche [1979] ECR 461 ; judgment of 31 May 1979 in Case October 1985. 22/78 Hugin [1979] ECR 1869.

O P I N I O N O F MR D A R M O N — J O I N E D CASES 89, 104, 114, 116, 117 A N D 125 T O 129/85

market. Treaty, exactly the same role as the 71. Accordingly, if practices in restraint of inter-State clause in Article 85 in the case of competition infringe both the provisions of Community law and the law of the Member the Agreement and the actual rules of the States. In my view, that parallel is Contracting Parties, is that such as to disputable, inasmuch as it equates render the latter rules inapplicable and allow relationships arising under the EEC Treaty recourse solely to the procedure provided with those arising under the Agreement.

72. The applicants' argument would lead to closely as possible the conditions of a a very significant limitation of the rights and domestic market'. powers of the Contracting Parties, which would require a wholly unequivocal 74. The applicants' apparently logical provision or should, at the very least, be reasoning ignores that difference between capable of being deduced from the manifest the objectives pursued. The characteristics intention of the parties to the Agreement. of the relationship between the Treaty and The terms in which the Agreement is the national laws of the Member States couched do not provide any indication to cannot be transposed to the relationship that effect. Furthermore, such an interpre- between the provisions of the Free Trade tation would not be in keeping with the Agreement and those of the EEC Treaty.

' . . . Community and national law on cartels the Joint Committee' suggests that the consider cartels from different points of procedure should be regarded as optional. 81 view. Whereas Article 85 regards them in That wording may be compared with the the light of the obstacles which may result text of Article 27 (3) (b) : 'As regards Article for trade between Member States, each 24, the difficulties arising from the situation body of national legislation proceeds on the referred to in that article shall be referred basis of the considerations peculiar to it and for examination to the Joint Committee . . . " considers cartels only in that context and, in particular, with Article 27 (3) (c): 'As regards Article 25 [cases of dumping], consultation in the Joint Committee shall take place before the Contracting Party And the Court stated that although concerned takes the appropriate measures.' Those clear differences in terminology cannot be regarded as neutral.

'the distinction between Community and national aspects could not serve in all cases 76. But in any event are the applicants as the decisive criterion for the delimitation entitled to complain that the Commission of jurisdiction . . . it implies that one and the did not raise the matter with the Joint same agreement may, in principle, be the Committee in order to seek a negotiated object of two sets of parallel proceedings, solution on the ground that such an attitude one before the Community authorities is contrary to Articles 23 and 27 of the Free under Article 85 of the EEC Treaty, the Trade Agreement and the specific nature other before the national authorities under of relations between Finland and the national law'. Community, as emphasized in the declaration annexed to the Agreement?

was consulted pursuant to the OECD's of the prohibitions laid down by the EEC 1979 Recommendation concerning practices Treaty. For its part, the Commission in restraint of competition, although the maintains that its intention was to penalize applicants maintain that such consultation world-wide concertation affecting intra- related to the terms of the decision which Community trade, which the Finnish had already been adopted. Evidently, applicants engaged in not only amongst Finland did not see any need to request the themselves but also with other producers. convening of a meeting of the Joint Committee, as it would have been auth- orized to do under Article 31 (2) of the 80. Consideration of the existence and of Agreement. the gravity of the effect on intra- Community trade presupposes an analysis of the substance of the case, which the Court 79. Finally, the applicants allege that it is will carry out at a later stage. only the effects 'of the concertation of their prices with those of the other parties to the 81. In conclusion, therefore, I consider that proceedings' that are involved, that such the Commission, in the decision complained concertation 'could at most have affected of, was right to state that the Free Trade trade between the Community and Finland' Agreement does not contain any provision and that 'any indirect effects [of such preventing it from applying Article 85 (1) of concertation] on intra-Community trade' the Treaty forthwith, where trade between are not sufficient to justify the application Member States is affected.