C-167/85

Mr President, on the ground that the letters of 22 March Members of the Court, and 24 April 1985 are not in the nature of an express decision refusing to apply the procedure under Article 15B but merely The Associazione industrie siderurgiche indicate the nature of the measures already italiane ('Assider') and the Government of adopted and state that the investigation will the Italian Republic have instituted be pursued with a view to taking any further proceedings against the Commission for action which may be necessary. failure to act. They seek a declaration that the Commission's implied decisions refusing their formal requests of 18 February and 2 However, the question whether or not an April 1985 are void, and the application in express decision was adopted within the toto of the measures provided for in Article two-month period prescribed by the third 15B of Commission Decision No paragraph of Article 35 of the ECSC Treaty 234/84/ECSC of 31 January 1984 on the must be considered by the Court of its own extension of the system of monitoring and motion.2 Hence it is also necessary to production quotas for certain products of determine whether or not the letter of 2 undertakings in the steel industry. ' May 1985 sent to the Italian Government by way of reply to the latter's formal request of 2 April 1985 is in the nature of an express In the alternative, Assider seeks the decision. If it is, it means that the annulment of the express decision of refusal Commission broke its silence and only an which may be contained in the action for annulment under Article 33 Commission's letter of 22 March 1985 sent would be open to the applicants. to the Italian Minister for Industry, which was transmitted to Assider on 24 April 1985. In the circumstances, the letter of 24 April 1985 (to which the letter of 22 March 1985 was annexed) and the letter of 2 May 1985 The relevant legislation and details of the cannot be regarded as having broken the facts, submissions and arguments of the Commission's silence. parties are set out in the Report for the Hearing. I will therefore refer to them only where strictly necessary. Before considering It follows from the case-law of the Court the substance of the case, I wish to that there is no express decision, even an comment briefly on the admissibility of the adverse one, capable of interrupting a two applications. failure to act where the institution merely informed the person concerned that the questions raised by the latter were being A — Admissibility studied3 and that it had begun the necessary 2 — See lhe judgment of 17 July 1959 in Case 42/58 Société dei The Commission raises an objection of «dm fins de l'Eu (SAFE) v High Authority [1959] ECR 183 at p. 191. inadmissibility to Assider's alternative claim 3 — Judgment of 17 July 1959 in Case 42/58 Soditi del ticien firn de VElt (SAFE)v High Authority [1959] ECR 183 at p. 191; see also the judgment of 22 March 1961 in Joined * Translated Irom lhe rrench. Cases 42 and 49/59 Snupal v High Authority [1961] ECR 1 — OJ 1984, L 29, p. 1. 53 at p. 73.

In its letter of 2 May 1985 the Commission The Commission, however, rejects any explains that 'all the action [taken so far] is strictly literal interpretation of the consistent with the undertakings given by provisions in question and regards them as the Commission to the Court of Justice' in having only a subsidiary character. In its Case 45/84 R 6 and it suggests the estab- view, it is entitled to apply the measures lishment of an appropriate procedure for the provided for in those provisions only with reciprocal transmission of information to the· greatest care and under very strict enable it to study in depth the data conditions, that is to say only after first available. establishing that the imbalance in traditional deliveries is attributable to the pursuit by undertakings of practices that are contrary to Community law and that the penalties imposed as the result of any infringements The letters of 24 April and 2 May 1985 are concerning prices, quotas, competition and not therefore in the nature of express State aids have proved ineffectual. Any decisions refusing to adopt the measures interpretation leading to the virtually required. Assider's alternative claim for the automatic application of the measures annulment of the decision which may be provided for in Article 15B as soon as a contained in the letter of 24 April 1985 is serious disturbance in trade between therefore inadmissible as it is devoid of Member States is established would be purpose. incompatible with the ECSC Treaty itself. It follows, according to the Commission, that 4 — Judgment of 22 March 1961 in Joined Cases 42 and 49/59 there was (and still is) no failure to act on Snupatv High Authority [1961] ECR 53 at p. 74. its part, because, in view of the circum- 5 — Judgment of 6 April 1982 in Joined Cases 21 to 26/61 Meroni v High Authority [1962] ECR 73 at p. 76. stances of the case, it was not required and 6 — See the Order of 28 March 1984 in Case 45/84 R was not even entitled to adopt the measures European Independent Steelwork Association v Commission [1984] ECR 1759. sought by the applicants.

Since the interpretation of any legal provision depends inter aita on the purpose it pursues, I wish to begin by considering In point 4 (Steel policy — Short-term the aim of Article 15B, particularly since the measures), paragraph 4 (checks on cross- parties to the proceedings attach so much border movements of steel products in the importance to this question. Community) of the minutes of that meeting, the Council 'confirms that the restructuring of the steel sector rests on a principle of

the manifest crisis in the steel industry. the traditional flows of trade is in line with Hence it forms part of the system of moni- this principle, and without this there would toring and production quotas that was be the possibility of a diversion of trade by extended by that decision and, in addition, some undertakings at the expense of others'. of the other measures adopted in connection with the steel crisis and the restructuring of the Community's iron and steel industry. Those views were restated in the ninth The link between all those measures is self- recital in the preamble to Decision No

the production quota system'. 1983 fixing minimum pnces for certain steel products (Ol 1983, L 373, p. 1): 'such a measure, is an integral part of the other crisis measures taken by the Commission, in particular with regard to quantities. It should therefore be temporary.' 8 — See, for instance, the Court's judgment of 15 October 1985 in Joined Cases 211 and 212/83 and 77 and 78/84 Kmpp

OPINION OF MR MISCHO —JOINED CASES 167 A N D 212/85

different undertakings, which constitutes the period of widespread crisis, might ultimately basis of any anti-crisis policy. 9 The second prove fatal to the iron and steel industry as paragraph of the ninth recital in the a whole. Hence I do not consider that the preamble to Decision N o 234/84/ECSC application of paragraph 4 must necessarily expressly states that the aim of Article 15B depend on a prior finding of unlawful is to 'ensure that this principle is complied conduct on the part of the undertaking to with'. which such a request is made.

T o that end, Article 15B makes two specific On the other hand, the quota reduction means of action available to the provided for in paragraph 5 clearly Commission: constitutes a penalty, the imposition of which depends largely on the Commission's discretion. Its application presupposes, like first, the Commission may formally request any other penalty, the existence of an the undertakings in question to give a infringement. In my view, such an commitment that, during the following infringement cannot consist simply in a quarter, they will themselves correa the sharp increase in traditional deliveries. For imbalance in their traditional deliveries such an increase to be penalized, it must be (paragraph 4); attributable to, and a consequence of, unlawful conduct.

ASSIDER A N D ITALY v COMMISSION

Finally, there is no need to emphasize the In its judgments of 11 May 1983 in the links between those different principles, Klöckner-Werke cases, 12 the Court expressly and more particularly between freedom 'acknowledged that the Commission was of movement and competition which has entitled, in laying down the system of not been distorted by illegal practices concerning prices, or by agreements, 12 — Case 244/81 [1983] ECR 1451, paragraph 37 of the decision; Joined Cases 311/81 and 30/82 [1983] ECR 13 — Joined Cases 211 and 212/83 and 77 and 78/84 Knipp 1549, paragraph 36 of the decision; and Case 136/82 Stahl AC and Thysun Stahl AG v Commuúon [1985] ECR [1983] ECR 1599, paragraph 36 of the decision. 3409.

OPINION OF MR MISCHO —JOINED CASES 167 AND 212/85

That strikes me as being equally be inclined either to take national applicable to the objectives of Articles 2 and compensatory measures, which would lead 4, in relation to which the Court also to the disintegration of the common market, acknowledged that it is not certain whether or to request the implementation of the they can be simultaneously pursued in their 16 safeguard clause contained in Article 37 of entirety and in all circumstances, the ECSC Treaty, with unforeseeable results particularly if it is borne in mind that the which could cause much more harm to the principles embodied in Article 4 may, albeit common market than the limited measures 'as provided in this 17 Treat/, be subject to provided for in Article 15B' {Independent certain limitations. Steelworks Association v Commission [1984] ECR 1759 at p. 1762).

Treaty requires it at the same time to ensure the maintenance and observance of normal In that regard, I would recall that, in its competitive conditions (third indent of judgment of 21 June 1958,14 the Court Article 5)'. acknowledged that 'in practice it will always be necessary to reconcile to a certain degree the various objectives of Article 3 since it is clearly impossible to attain them all fully Accordingly, the measure provided for in and simultaneously as those objectives Article 15B (5) was considered, in the constitute general principles which must be absence of voluntary restraint by the under- observed and harmonized as far as possible'. takings concerned, as the means most suited From that, the Court inferred, in its to re-establishing traditional patterns of judgment of 18 March 1980,15 that 'if the need for a compromise between the various 16 — See the Court's judgment of 16 February 1982 in Case objectives [of Article 3] is imperative in a 276/80 Padana v Commission [1982] ECR 517, paragraph

graphs 53 to 55 of the decision. Treaty.

Since that is the aim of Article 15B, the question is whether, in this case, the The figures annexed to the Italian Minister conditions for the application of that for Industry's letter of 11 March 1985 provision were satisfied and whether the confirm quite clearly that those changes Commission was therefore wrong to refrain were 'substantial' also having regard to the from adopting the measures prescribed by criteria used by the Commission in its calcu- that provision. lations, which were explained by the latter in its replies to questions from the Court. According to those criteria, the conditions 2. Whether the conditions for the application for initiating the procedure provided for in of the measures provided for in Article Article 15B are satisfied where a Member 15B (4) were satisfied in this case State's share of another Member State's market in a given category of products varies by more than 1%. Italy made successive complaints on 5 June, 5 August and 30 November 1984 and on 25 February 1985 relating to the different quarters of 1984. A complaint relating to Hence the Commission actually started to the whole of 1984 was repeated on 11 implement the system established by Article March 1985. 15B even before the applicants submitted their formal requests to it.

These applications are concerned only with 1984, the year to which the formal requests made by the applicants related, even Thus, first of all, in October 1984 it though, according to the Italian Govern- arranged bilateral consultations between the ment, the disturbances continued in the first Member States concerned for the purpose two quarters of 1985. of comparing statistical data from both sides and obtaining details and figures for each 19 — Written Question No 813/84, OJ C 71 of 18.3.1985, p. 5. undertaking so as to enable it to determine

Finally, the Commission investigated prices However, the fact remains that, in at the undertakings concerned by deliveries examining whether such a complaint is to Italy of the same semi-finished products justified, the Commission must take account and, in the spring of 1985, it initiated not only of the statistical data transmitted in against some 15 undertakings the procedure support of the complaint but also of 'all the provided for in Article 36 of the ECSC circumstances pertaining to the case in Treaty, as a result of which in the autumn question' (paragraph 3). of 1985 the penalties laid down for infringing Article 60 of the ECSC Treaty were imposed on six of them. The fines Accordingly, recognition that the figures on were paid in December 1985. which a complaint is based are correct does not necessarily entail recognition that the complaint is justified within the meaning of With regard to the products in category lb, Article 15B. the Commission claims that it is still waiting for a reply to its requests for additional information in order to enable it to In its assessment the Commission may take determine in each case the origin of goods into account other factors which may be and, first and foremost, in order to carry such as to modify the significance of the out the necessary checks on the prices figures and to defer or even render charged by the undertakings concerned. I unnecessary or inappropriate the adoption would point out, however, that those of the measures provided for in paragraphs requests were made on 2 and 8 May 1985. 4 and 5 of Article 15B.

Those factors may be of different kinds. In measures resulting from such a decision, or this case, in its letters of 21 December 1984 to its express rejection. In the latter case, and 20 March 1985 the Commission asked the complainant and all those affected by a the Italian Government to let it have its decision rejecting its complaint would be observations in cases where it had been afforded sufficient legal protection in an established that Italy had substantially action for annulment under Article 33 of the exceeded its traditional deliveries to the ECSC Treaty. other Member States. It was probably on the basis of those figures and those obser- vations that the Commission took the view, In the circumstances, even though it is true in its letter of 22 March 1985, that 'for all that in its letters of 21 December 1984, 20 categories taken together (excluding that of and 22 March 1985 and 2 May 1985 the semi-finished products for small welded Commission always stated its views on the tubes) the excess deliveries sometimes cancel figures alone without ever expressly recog- each other out and correspond to normal nizing that Italy's complaints were justified, market fluctuations'. the fact remains that at no time in the proceedings before the Court did it challenge the applicants' contentions to the effect that it had acknowledged those The investigations carried out may also complaints to be justified. relate to the causes which gave rise to the variations established and may lead to the finding of infringements in other areas, such as pricing, as was the case here. In my view, it is indisputable that, once the Commission established not only that deliveries had been altered to a significant extent but also that this was the result of Therefore the Commission undoubtedly infringements of the rules on prices, it enjoys a wide discretion in investigating the should necessarily have recognized that the complaints submitted to it in order to complaints were justified. It can even be ascertain whether they are justified. argued that, in making those findings, the Commission recognized at least by impli- cation that those complaints were justified. Accordingly, it might be tempting to argue that in the present circumstances the Commission, which is still investigating It also seems possible to infer such implied Italy's complaints so as to determine recognition from the fact that in October whether they are justified, has not yet 1984 the Commission arranged consul- decided, even by implication, not to apply tations with the Member States concerned. the measures provided for in paragraphs 4 Article 15B (4) provides that the and 5 of Article 15B, and consequently that Commission 'shall consult the Member it is not failing to act. States concerned if it considers that the complaint is justified'.

Admittedly, in this instance the examination There is therefore not the slightest doubt need not be conducted as rapidly as when that the Commission was under an obli- Article 37 of the ECSC Treaty is applied. gation to take such action. In the first place, the use of the word 'shall' normally expresses an obligation. Secondly, the For example, when on 24 June 1968 the binding nature of paragraph 4 is borne out French Republic made a request to the by a comparison with paragraph 5 which Commission pursuant to that provision, that goes on to provide that 'if an undertaking Member State was authorized to adopt does not give such a commitment, or if measures for curtailing deliveries of iron the commitment is not honoured, the and steel products originating in other Commission may reduce the part of the Community countries and bound for France undertaking's quota which may be delivered by a decision adopted only 12 days later.20 in the common market for the following quarter by a quantity not exceeding that which caused the imbalance in traditional On 8 February 1974 the United Kingdom deliveries.' Finally, the aim of Article 15B, made a request to the Commission, as described above, required the whereupon the latter authorized that Commission to take action. Member State as from 18 February 1974 to restrict its exports of ECSC products.21 A further request made on 18 June 1974 was acceded to on 25 June 1974.22 Thè action provided for in paragraph 4 should have been taken even before the Commission had definitively established the Is there any urgency in this case? existence of any infringements since, as I stated earlier, the measure provided for in paragraph 4 is not in the nature · of a Article 15B (2) provides that a complaint by penalty. In any event, a significant alteration a Member State must be submitted not later in traditional deliveries in a market charac- than eight weeks following the end of the terized by the existence of production and quarter in which the traditional deliveries delivery quotas very often constitutes were altered to a significant extent. evidence of such infringements and must in any event be urgently and swiftly inves- According to Article 15B (4), the request tigated. However, it was unnecessary to addressed to the undertakings in question await the result of those investigations. 20 — Commission Decision No 915/68/ECSC of 6 July 1968 on the application to the French Republic of Article 37 of the Treaty establishing the European Coal and Steel A fortiori, before taking action under Community (JO 1968, L 159, p. 6). paragraph 4, the Commission was under no 21 — Commission Decision No 74/134/ECSC of 18 February 1974 on the application to the United Kingdom of Great obligation to await the outcome of the Britain and Northern Ireland of Article 37 of the Treaty establishing the European Coal and Steel Community (OJ 'classic' penalties which it was entitled to 1974, L 74, p. 20). impose in appropriate circumstances. In that 22 — Commission Decision of 25 June 1974 amending regard, moreover, a further argument, based Commission Decision N o 74/134/ECSC of 18 February 1974 on the application to the United Kingdom of Article on the wording and context of Article 15B, 37 of the ECSC Treaty (OJ L 189 of 12.7.1974, p. 25).

Accordingly, the existence of excess It is clear from the wording of paragraph 5 deliveries in the first quarter of 1984 should that the Commission may adopt the have led the Commission to request the measures provided for therein only if an undertakings in question to give a undertaking does not commit itself to commitment in writing that they would voluntary restraint or does not honour its correct the imbalance in their traditional commitment. The application of paragraph deliveries as from the third quarter of the 4 is therefore one of the conditions for the same year. application of paragraph 5. We have seen that it was not in fact applied in this instance. It is therefore impossible to accept the At the hearing, however, the Commission Commission's argument to the effect that, stated that it had considered it pointless to before requesting the undertakings in request the undertakings in question to give question to give a commitment in writing a commitment in writing to 'correct' their pursuant to paragraph 4, it must first impose exports to Italy since it had been informed the 'classic' penalties in respect of the that those undertakings were not prepared irregularities established (for instance, a fine to give one. for non-observance of minimum prices) and await the effects of those penalties. If the Court were to consider that (contrary to my view) in those circumstances the Commission was not obliged formally to That argument is incompatible with the rule request such a commitment, or that the that an imbalance must be corrected 'during informal response of the undertakings the following quarter'. concerned was tantamount to 'not giving such a commitment', the question arises whether the Commission was guilty of a The Commission has therefore failed to misuse of powers in not reducing the quotas fulfil an obligation imposed upon it by of the undertakings in question pursuant to Article 15B (4). By failing to comply with Article 15B (5). that obligation, it has infringed a rule of law reding to the application of the ECSC Assider and the Italian Government take the Treaty. I therefore suggest that the Court view that merely to impose penalties, in this declare, on the basis of the first paragraph case, in respect of the prices charged of Article 35 of the ECSC Treaty, that the amounts to failure to recognize the purpose Commission has failed to act. of Article 15B.

Secondly, there is no doubt that the T h e Court has consistently held that 'a Commission refused of its own volition to decision may amount to a misuse of powers exercise the powers conferred upon it under only if it appears, on the basis of objective, Article 15B by ascribing to them a purpose relevant and consistent facts, to have been which, according to the applicants, differs taken for purposes other than those from their true purpose. stated'. 2 3 The mere fact that the Commission, or another Community institution, exercises its powers for a purpose other than that for which they were I would point out that in its judgment of 29 conferred upon it constitutes a misuse of November 1956, 26 the Court stated that powers. The same 'holds true if the 'even if the defendant has committed certain institution refuses to exercise those powers in errors in selecting the basis for its calcu- disregard of the aim for which it has them. lations, . . . it is not to be held that its errors constitute ipso facto proof of misuse of powers unless it has also been established objectively that the High Authority pursued in this case, through a serious lack of care T o purport to draw a distinction, as thè or attention amounting to a disregard for Commission does, between an infringement the lawful aim, purposes other than those of the law consisting in the unintentional application of a rule of law that differs from 24 — On this point see the Opinion of Mr Advocate General that which the legislature intended and a Lagrange in Case 3/54 Atsider v High Authority [1954-56] ECR 72 at p. 85. misuse of,powers, which arises only where a 25 — On this point see the Opinion of Mr Advocate General Lagrange in Case 8/55 Fédération charbonnière de Belgique 23 — See, for instance, the judgment of 21 June 1984 in Case v High Authority [1954-56] ECR 260 at p. 272. 69/83 Lux v Court of Auditori [1984] ECR 2447, 26 — Fédération charbonière de Belgique v High Authority paragraph 30 of the decision. [1954-56] ECR 292 at p. 303.

Unless it was absolutely certain of being What is the position in this case? able swiftly to achieve the aim of Article 15B by means of 'classic' penalties, the Article 15B had been adopted at the height Commission should, at any rate in parallel of the crisis in the steel industry (see the with the imposition of those penalties, have third recital in the preamble to Decision No reduced the delivery quotas as provided for 3746/86/ECSC 2 8 repealing that article). in paragraph 5.

Its purpose, in accordance with the concern In view of the urgent need to bring to an expressed by the Council, was to ensure that end the adverse consequences for the Italian 'the restructuring of the steel industry undertakings of the unlawful conduct in is carried out within a competitive question, the imposition of two separate context compatible with the solidarity penalties was quite legitimate. imposed by the production quota system'.

27 — On this point sec the judgment of 11 February 1955 in Case 3/54 [1954-56] ECR 63 and the judgment of 16 July Admittedly, a reduction in the quotas that in Case 8/55 [1954-56] ECR 245. might be delivered in the common market 28 — Commission Decision No 3746/86/ECSC of 5 December 1986 amending Decision No 3485/85/ECSC on the would not have ensured that the under- extension of the system of monitoring and production takings at fault would actually reduce their quotas for certain products of undertakings in the steel industry (OJ 1986, L 348, p. I). exports to Italy. This shows, by the way,

OPINION OF MR MISCHO — JOINED CASES 167 AND 212/85