C-69/87

Società Laminazione a Freddo pA ('LAF') brings this action under Articles 33 (2) and 36 of the ECSC Treaty ('the Treaty') for the annulment of an unpublished The special situation of certain users who Commission Decision C(87) 51 def., of 9 concluded long-term contracts before the January 1987 (the 'contested decision') or introduction of minimum prices justifies the reduction of the fine of ECU 50 000 derogations if firm-price contracts or imposed by virtue of Article 64 of the contracts containing industrial cooperation Treaty. The contested decision finds that clauses are involved' (ninth and tenth LAF infringed Commission Decision recitals). 3715/83/ECSC of 23 December 1983 fixing minimum prices for certain steel products (Official Journal 1983, L 373, p. 1: the 'general decision'), a decision not itself chal- lenged by LAF. Article 1 of the decision therefore imposed minimum prices for, inter alia, '(f) cold- rolled sheet'. By Article 3, the minimum prices were 'compulsory' for deliveries within the common market from 1 January 1984. Paragraph (2) of that article provided as follows: The general decision was taken under Article 61 of the Treaty which empowers the Commission to 'fix minimum prices within the common market if it finds that a manifest crisis exists or is imminent and that such a decision is necessary to attain the 'As regards long-term contracts concluded objectives set out in Article 3' of the Treaty. between steel undertakings and users before The general decision recites that 'in view of 9 November 1983 in respect of deliveries to the scale of the difficulties facing the steel be effected after 30 June 1984, undertakings industry, the Commission has recognized may obtain a derogation from the minimum the existence of a manifest crisis' (second prices if contracts including industrial recital). The Commission made the cooperation clauses are involved or if the following particular observations: contracts fix the prices precisely. T o this

The gist of LAF's first head of claim is that the relevant sales were not subject to the The commercial background to the sales is minimum prices because they were not that in 1982, FIAT decided to abandon the 'comparable transactions' within the production of certain special steels hitherto meaning of Article 60 of the Treaty, carried out within the group. The paragraph 1 of which prohibits certain production facilities for such steels were pricing practices, in particular 'discrimi- transferred to newly formed companies, the natory practices involving, within the share capital of which was to be purchased common market, the application by a seller by companies within the Finsider group. of dissimilar conditions to comparable trans- actions'. This involves two propositions: that the transactions were 'non-comparable' and that such transactions are not subject to the minimum price system. The Commission argues principally that the notion of Cold-rolling facilities were transferred to comparable transactions has no place in a LAF. Nuova Italsider, a Finsider company, minimum price system imposed under acquired 50% of LAF's share capital on 1 Article 61 and only as a subsidiary reply October 1982 and the remaining 5 0 % in that, as stated in the contested decision, the December 1985. FIAT agreed to purchase, sales are in any case 'comparable trans- and Finsider to supply, 8 0 % of its actions'. I shall take the arguments in that requirements of such steels for a period of order. 10 years. This arrangement was recorded in an agreement of 21 July 1982 which was submitted to the Commission for approval which was granted by unpublished Decision C(82) 1302 def., of 22 September 1982.

'Transactions shall be considered comparable within the meaning of Article 60 (1) if: The general rule is that undertakings shall 'publish' their price-lists (Article 1), which means that they shall maintain lists which must be available on request to anyone interested and which have been addressed to (a) they are concluded with purchasers : the Commission at least two days before the prices are applied (Article 4). However, Article 5 provides that 'differentials applied to individual consumer groups' need not be made public but nevertheless must be who compete with another, or 'notified' to the Commission. Paragraph (3) of that article requires the notification to specify the consumer groups in question. who use the same or similar goods, or

It is understood, as the Commission states who carry out similar functions in distri- in the rejoinder, that such differentials may bution;

OPINION OF SIR GORDON SLYNN — CASE 69/87

(b) they involve the same or similar The first is Article 2, the relevant parts of products; which read as follows (with my emphasis):

(c) in addition, their other relevant ' 1 . The minimum prices . . . shall be net of commercial features do not essentially all rebates with the exception of rebates to differ.' dealers which are published in the price- lists . . .

The Court specified in Case 29/67 (De 3. Discounts and rebates, of whatever kind, Wendel v Commission [1968] ECR 263), at published in the price-lists and conditions of p. 276 that 'Article 60 (1) applies to trans- sale or notified to the Commission, may not actions which, although as compared with be increased. normal transactions they have exceptional characteristics and for this reason obtain the benefit of special conditions of sale, never- theless remain comparable one with another'. In other words, differentials may 4. Undertakings whose published price-lists be applied as between categories of trans- and notified conditions give rise to prices action (or 'consumer groups') but not within lower than the minimum prices shall publish them. or notify new conditions to bring them into line with this decision within 15 days of its entry into force.'

provision for the whole range of such trans- impose a single minimum price for different actions. The Commission's argument, which kinds of sales. Non-comparable transactions I accept, is that Article 3 (2) clearly shows represent an insignificant proportion of sales that only two very specific categories of on the steel market as a whole. The exceptional transaction could be exempted Commission countered correctly that the from the blanket application of minimum ultra vires argument is inadmissible since it prices. Whether the LAF/FIAT sales would is raised for the first time in the reply, but have qualified for such exemption, which that, far from representing an insignificant the Commission doubts, is not a relevant share of the market, sales to the car sector issue since no application for exemption was account for about 2 5 % of cold-rolled made. products in the Community and FIAT takes 80% of its needs from LAF. Such proportions cannot be called insignificant and must be covered by the general decision. More important is a point not taken by the Commission: the general decision does not seek to impose one price Thirdly, support for the view that the for all transactions. It imposes minimum minimum prices were to be regarded as prices below which undertakings may not absolute floor prices, subject only to Article sell their products, but it does not prevent 3 (2), is gained from Article 6 which them from charging higher prices, subject provided that alignment on offers from third always to compliance with Article 60. countries, where permissible, must not result in prices below the minimum.

In general, LAF contends that the trans- actions between LAF and FIAT arose out of a complex of arrangements made between the parties to the agreement of 1982 (to which it should be noted LAF was not a According to LAF, these factors make the party): they are not simply sales and contracts wholly non-comparable with purchases in the ordinary course of trade. ordinary contracts for the supply of steel products for the car industry, even those concluded for a medium term. Since its incorporation in 1982, 6 5 % of LAF's production has been sold to FIAT. Indeed, LAF asserts that it was controlled by FIAT until December 1985; the significance of this is that, according to the applicant, the Commission's practice has always been to consider that intra-group sales must be In four particular respects, according to regarded as non-comparable. The Com- LAF, the supply contracts are quite atypical mission correctly observes that a 5 0 % in the steel sector and particularly in the holding cannot confer control. LAF retorts motor-car sector. First, the duration of 10 that it is sufficiently high to establish mutual years is wholly out of line with the norm of interest and therefore to make sales six months or a year. Second, the price is non-comparable. fixed by reference to the average price charged by German and French steel makers to domestic car makers; if the parties are unable to agree on that price, the dispute is to be settled by final arbitration, a very rare provision in such agreements. Third, provision is made for exchange of commercial, research and technical infor- mation and LAF is required to comply with very specific requirements as to service, LAF further asserts that the Commission has standards and innovation; failure to comply accepted that the relevant sales must be gives FIAT the right to refuse deliveries. characterized as non-comparable. Before LAF guarantees that the goods will be of taking the contested decision, the comparable quality with those of French Commission, as it is obliged to do by Article

LAF states that it attaches great importance to the non-comparable status it claims for its sales to FIAT. However, not only does that issue not fall for decision in these proceedings, on the view I have taken, but also it is impossible to come to a conclusion on the issue. The Court has no information on LAF's other sales and their features of However, whilst it is true that no fine was similarity or contrast with the FIAT sales. imposed for any breach of Decision No The Commission did not pursue its alle- 30/53, the contested decision itself explicitly gation that LAF had breached Decision N o states that the agreements are comparable 30/53 by departing from its published terms with many others in the car sector. The and conditions in FIAT's case, an allegation Commission argues that all three conditions which necessarily implies a charge of set out in Article 3 (1) of Decision No discriminatory pricing in comparable trans- 30/53 are satisfied: (a) because FIAT is in actions. competition with other car producers buying similar steel products, (b) because, by the very terms of the contract, LAF's supplies to FIAT must match up in quality with those of its equivalents in France and Germany and (c) for the following reasons: although the duration of the contract is long, the price has to be fixed every six months which is the norm, the price calculation clause is sufficiently precise to make recourse to arbi- The Court has in effect only two items of tration highly unlikely, thus depriving that information. The first is that LAF sold abnormal feature of the contract of practical below minimum prices, which has no significance, and finally, whilst 8 0 % of bearing on the comparability of those sales FIAT's requirements is a high proportion, with its other sales. The second is that 6 5 % French, German and British car makers also of LAF's output is sold to FIAT. It seems to obtain their requirements in comparable me hardly open to an undertaking to claim proportions from steel producers located in that such a high proportion of its business their respective countries. should be regarded as sufficiently excep-

It is not, however, necessary for the Court to come to a view as to the comparable nature of FIAT's sales in order to reject LAF's first, and main, head of claim.

However, LAF asked the Court to order the Its second head of claim is that Commission to produce the data at its non-comparable transactions, not being disposal concerning other supply agreements subject to the minimum price system, do not in the motor-car sector and the 16 other have to be notified under Article 3 (2) of individual Commission decisions imposing the general decision. This argument seems fines identical with that imposed on LAF on

LAF v COMMISSION

producers of steel products for that sector. other sales and a fortiori because the notion Such information would, in my view, be of comparable transactions is foreign to irrelevant for determining whether LAF's minimum price rules imposed under Article sales to FIAT were comparable with its 61.

For the reasons given, I think LAF's application fails. The contested decision should stand and there are no grounds for reducing the fine it imposed. I would order that LAF pay the Commission's costs.