T-1/89

A — Issues arising from the administrative procedure II- 878

1. The course of the administrative procedure II- 878

2. The applicants' main arguments II- 883

3. The nature of competition cases II- 884

4. The Commission's internal working procedures II- 886

(a) The internal organization of the Commission's work II- 886

(b) Internal working documents relating to the press conference II- 891

(c) Other questions concerning access to files and the presentation of evidence to the undertakings II- 892

6. Alteration of the legal assessment in the course of the procedure II- 900

7. The minutes of the hearing before the Commission II- 905

B — The reasons on which the decision is stated to be based II- 907

1. The reasoning requirement in general II- 907

2. The concept of agreement II- 922

3. The concept of concerted practice II- 923

(a) The problem defined II- 923

(b) The significance of the question in the present cases II- 924

(c) The parties' submissions and arguments II- 925

I I - 870

(i) Do 'concerted practices' require conduct on the market? II- 939

(j) The structure of the two forms of infringement II- 944

4. May a doctrine of attempt be propounded in the context of Article 85? II- 945

5. Was the undertakings' conduct objectively inapt as a means? II- 946

6. In there one agreement and one concerted practice? II- 948

7. Collective responsibility under Article 85(1)? II- 950

4. Documentary evidence II- 955

5. The economic analyses II- 957

6. Target prices and volumes as the subject-matter of agreements or of concertation II- 957

F — Is the existence of a cartel proved ? II- 960

1. Introduction II- 960

2. The alleged floor-price agreement II- 960

(a) The price initiative from July to December 1979 II- 971

(b) January to May 1981 II- 975

(c) August to December 1981 II- 977

(d) The periods from June t o July 1982 and from September to November 1982 II- 979

(e) The end of the price cartel II- 980

II - 8 7 2

(c) Quota arrangements in 1983 II- 986

10. Account management and account leadership II- 987

11. Other ancillary measures II- 988

G — Limitation II- 988

II — The individual cases II- 990

A — Rhône-Poulenc (Case T-1/89) II- 990

II - 8 7 3

OPINION OF MR VESTERDORF — CASE T-l/89

H — Hüls (Case T-9/89) 11-1007

I — Hoechst (Case T-10/89) 11-1009

J — Shell (Case T-11/89) 11-1010

K — Solvay (Case T-12/89) 11-1012

C — Mitigating circumstances 11-1024

D — Reduction of the fines as a result of the annulment of certain parts of the

decision 11-1026

E — Must the Commission draw up a catalogue of fines? 11-1026

F — Extent or intensity of the individual undertaking's participation 11-1028

1. Extent as stated in the Commission's decision 11-1028

On a proposal by the First Chamber, the Court of First Instance, sitting in plenary session, decided on 16 November 1989 to In addition to a number of objections of designate an Advocate General in Joined a procedural nature concerning the Cases T - l / 8 9 to T-4/89 and T-6/89 to Commission's administrative handling of the T-15/89 (the polypropylene cases). I was cases, the actions brought raise a number of subsequently designated by the President of important questions on the interpretation of the Court of First Instance to perform that Article 85 of the EEC Treaty. These function. Examination of the case-files and questions are dealt with in detail in all the the impression given at the oral hearing pleadings and the way in which they are show that the cases fully satisfy the decided will be of considerable importance criteria — namely the legal difficulty and for the future application of Article 85. As the factual complexity of the case — for the Court will recall, at the hearing the designating an Advocate General now laid Commission even went so far as to express down in the Court of First Instance's own the view that Article 85 would have to be rules of procedure. amended if the Court did not accept the Commission's fundamental arguments concerning the interpretation and application of Article 85. One of the most important points in the case is the question The cases concern the Commission's of the interpretation of the term 'concerted decision of 23 April 1986 relating to practice' in Article 85, unless, of course, a proceeding under Article 85 of the when everything is considered there are EEC Treaty (IV/31.149 —Polypropylene) grounds for concluding that all of what the (Official Journal 1986 L 230, p. 1). In that Commission alleges constitutes 'agreements' decision heavy fines were imposed on fifteen within the meaning of Article 85. The undertakings in the chemical industry for question here is whether the Commission is having, over periods of varying lengths from correct in its view that a concerted practice mid-1977 until at least November 1983, within the meaning of Article 85 exists as participated in an agreement and concerted soon as the 'concertation' takes place or practice whereby they formed a price cartel whether there must also be a 'practice' and introduced quota arrangements and within the meaning contended for by the other measures supporting the price cartel. applicants, in the sense that there must be a In its decision the Commission further demonstrable attempt, by means of direct ordered the undertakings to bring the initiatives vis-à-vis the undertakings' infringements to an end. customers, to put into effect on the market what has been 'concerted'. Another major issue is the extent to which the much debated 'framework agreement' can Fourteen of the fifteen undertakings constitute a single agreement within the thereupon brought proceedings claiming, meaning of Article 85 if, on the one hand,

there is no evidence to suggest that the The structural problems affecting the measures which were subsequently taken market in polypropylene in the years 1977 to were on the whole based on an agreement 1983 on future cooperation between the applicants, while, on the other hand, it may be assumed that a significant number of measures were put into effect, each one of which can be said to be based on agreements or constitute a concerted practice, which together form a pattern and As is apparent from many observations which were systematized to a considerable made in the pleadings and at the hearing, as extent. A third major problem is the well as from the Commission's decision, the question of each individual applicant's invol- present cases are marked by the very severe vement. This question comprises two parts: structural problems which beset the polypro- on the one hand, there are the evidential pylene market from the mid-1970s to the problems and, on the other, there is the beginning of the 1980s. The problem was question of liability for cooperation or considerable overcapacity, which meant low participation, or, as it was put in the course profitability for producers and in many of the proceedings, the question of cases heavy losses in the production of poly- collective responsibility or of a collective propylene. As the Commission states in its infringement. decision (point 12), the very expensive production plant entailed such high fixed costs that reasonable profitability depended in large measure on obtaining a high level of plant utilization. Around 1977, after the expiry of a number of patents and in the light of very optimistic forecasts for growth in demand, seven new producers began to produce polypropylene in Western Europe causing production capacity to increase very significantly, but in the years which followed demand failed by far to match that increased capacity. In my view, it is not A number of the procedural objections recur necessary for the purposes of the Court's in most of the cases and the main problems decision to examine further the underlying set out above are, with few exceptions, reasons for the sudden overcapacity common to all the cases. The same is true of because, as will be seen later, I agree with the question of penalties. I have thus the Commission that the question whether, decided to structure my Opinion in this how far or to what extent State aid was way: I begin with a general section, in granted to some undertakings in the which I discuss the alleged procedural industry concerned must be immaterial. defects in the Commission's decision, the question of the interpretation and application of Article 85, and the general principles governing the question of proof of an infringement in cases of this type; in the second part, I examine each case indi- vidually with a view to establishing how the When there arises in a market-oriented evidence stands in relation to the individual economy a situation of overcapacity in a applicants; in the third part, I deal with the particular sector, capacity must be reduced question of penalties. in the long term, all other things being

equal. The Commission has indeed Those considerations prompt reflection on explained (in point 13 of the decision) that one of the fundamental problems of compe- in 1982 discussions were held on this tition law, namely the question of the extent matter, which led to a proposal to reduce to which, and within which limits, under- capacity. The Commission would not, takings which are normally in competition however, give its approval to a 'crisis cartel' with one another may lawfully cooperate in suggested by the undertakings if there were order to defend their common interests, to be 'unacceptable restrictions on compe- either in a systemized way through trade tition such as price or quota-fixing'. associations or similar organizations or in specific instances, when special problems

polypropylene market in 1977 should consider steps to avoid devastating price competition, which could jeopardize the In determining the possibilities open t o very heavy investments in plant they have undertakings for cooperation and ident- made, by reaching a mutual arrangement in ifying where the demarcation line between order to survive for the time being pending lawful discussions and unlawful agreements the advent of better times. In the present or practices lies there is thus a difficult cases, a certain reduction in production course to be charted between Scylla and capacity did take place, on a more or less Charybdis.

T h e particular to the direct and indirect effects undertaking's representative might have of the second big oil price rise in 1979 and attended the meeting in the belief that there the subsequent sharp rise in the price of the were no dubious subjects on the agenda, raw material, propylene, together with the and, as stated, undertakings must be general economic downturn which resulted allowed a certain freedom to discuss in reduced demand. 2 — SA Musique Diffusion Française and Others v Commission 1 — See Baden Fuller in European Law Review 1979, p. 439. [1983] ECR 1825, at 1930.

As is apparent from the decision, on 13 and As the Court of Justice held in the Ziichner 14 October 1983 Commission officials judgment, 3 the requirement of inde- carried out unannounced investigations pendence in Community competition law pursuant to Article 14(3) of Regulation N o 'strictly precludefs] any direct or indirect 17/62 4 at the premises of ten producers of contact between . . . traders, the object or polypropylene supplying the Community effect of which is to create conditions of market (Atochem, BASF AG, D S M N V , competition which do not correspond to the Hercules Chemical NV, Hoechst AG, Hüls normal conditions of the market in AG, ICI PLC, Montedipe,* Shell Inter- question, regard being had to the nature of national Chemicals Co. Ltd. and Solvay and the products or services offered, the size Cie). Fines were subsequently imposed on and number of the undertakings and the those undertakings, which have brought volume of the said market.' On the other actions against the Commission. In addition, hand, however, competition law does not, an investigation was carried out at the of course, preclude contacts per se between premises of BP Chemie in Paris. BP is, undertakings. however, not covered by the contested decision because the Commission did not consider that it had sufficient evidence against that undertaking (point 78, last sentence, of the decision). After the investi- I — General section gations, the Commission requested infor- mation from the abovementioned under- takings pursuant to Article 11 of Regulation

No 17/62; five other undertakings In June 1984, the Commission granted the (AMOCO, Chemie Linz AG, Petrokjemi applicants access to files. This was done in a AS, Petrofina SA and ANIC Spa) were also way which has given rise to some asked to provide information. Of those five controversy in the proceedings and with undertakings, three have brought actions which some of the applicants are not against the Commission; one undertaking, satisfied. SAGA Petrokjemi AS & Co., has paid the fine imposed; finally, there is the under- taking A M O C O , against which the Commission did not consider it had enough On 24 October 1984, a meeting took place evidence. preparatory to the oral hearing, which was to begin on 12 November 1984, between, on the one hand, the Commission official, Roland Monssard, whose task it was t o Commission officials subsequently carried conduct the hearing, and, on the other out investigations pursuant to Article 14(2) hand, the undertakings' legal advisers. It of Regulation No 17/62 at the premises of appears from a note produced by Shell that ANIC and the selling agents of Chemie on that occasion the official in question Linz in the United Kingdom and Germany. made two statements, one of which is relied N o investigations were carried out at the upon by some undertakings in support of premises of Rhône-Poulenc, which is never- their case, the other being relied upon by theless covered by the decision. Commission. First, he is said to have stated that a representative of each individual undertaking had to be present at the hearing (in other words, that the matter should not be left exclusively to outside Counsel) and On 30 April 1984, the Commission decided, that, in his view, it was 'safer' for the upon its own initiative, to open the company's representative to be a member of proceedings provided for in Article 3(1) of the 'commercial service'. The second Regulation No 17 and in May 1984 it sent statement concerned his own role. H e to the fifteen undertakings a written explained that he was only expressing a statement of objections pursuant to the personal view and that it was moreover 'not regulation. This covered inter alia all the very important'. He went on to explain that undertakings which have now brought there was some disagreement between the proceedings, apart from ANIC and Rhône- Commissioner responsible and himself about Poulenc. The statement of objections was his role in the conduct of competition cases, divided into a general part and a part or, in other words, that there was specifically directed to each individual disagreement over the interpretation of his undertaking. terms of reference. 5

As a result of arguments advanced by the opportunity to deal with the issues at a new undertakings in their replies to the oral hearing. In addition, the undertakings statement of objections, on 31 October 1984 objected to the condition that their the Commission sent to the legal advisers of commercial services should not have the the undertakings a bundle of documents. material disclosed to them. Secondly, the Among those documents were copies of undertakings claimed that after the first price instructions given by the undertakings round of the oral hearings there was an to their commercial services together with increasing and significant lack of clarity in summaries of the documents. The lawyers the legal view adopted by the Commission of a number of undertakings refused to and against which the undertakings had to accept the conditions upon which the docu- defend themselves. In the undertakings' mentation was made available and returned view, the origin of that uncertainty was the it before the oral hearing. In particular, the considerable lack of clarity in the statement lawyers were unhappy with the Com- of objections. Finally, they were of the mission's requirement that the documents opinion that the uncertainty was further were not to be shown to the commercial increased at the oral hearing. It was alleged services of the undertakings. that various Commission officials had attempted to clarify the statement of objections orally and that those explanations were difficult to understand and appeared inconsistent in themselves and with each T h e first session of the oral hearing took other. place from 12 to 20 November 1984. At that session, several undertakings refused to go into the material sent to them on 31 October 1984. They asserted that the Commission had altered its arguments and that at the very least they should have the opportunity to reply in writing; in addition, they claimed that they had not had On the first point, the undertakings claimed sufficient time to acquaint themselves with more specifically that from the text of the the documents concerned before the hearing statement of objections and the material began. sent to them later it was impossible to establish which part of the documentary evidence was relied on to support the Commission's various findings: thus, it was not possible to establish on the basis of all In a joint letter of 28 November 1984 from the material exactly what the Commission BASF, DSM, Hercules, Hoechst, ICI, alleged against each individual undertaking. Chemie Linz, Montedipe, Petrofina and As will be seen, that is a question which will Solvay (with which Hüls associated itself by recur later on in the case. a letter of 4 December 1984), the lawyers of those undertakings were highly critical on two points: first, they claimed that the material that had been sent to them on 31 October 1984 introduced new issues, both legal and evidential. The undertakings then argued that they should have sufficient time to analyse the material and submit written In addition, the undertakings raised the observations and then should be given the question of the meaning of the expression

With regard to the second point, the under- takings raised the question of the extent to which it is necessary for the Commission to state precisely in each case what it regards The Commission's view regarding the as an agreement within the meaning of relationship between an agreement and a Article 85 and what it regards as a concerted practice, as notified to the under- concerted practice. This question later takings in the letter of 29 March 1985, can developed into one of the main issues in the be summarized as follows: over a long case. Even by that stage the undertakings period the majority of polypropylene were putting forward the view, subsequently producers had agreed at regular and institu- to become their main argument, that the tionalized meetings to set target prices, concept of a concerted practice has an target volumes and target quotas and to objective element, a practice, whereas that is take various measures to give effect to those not the case where the concept of an plans. After the meetings the agreed plans agreement is concerned. were implemented by means of instructions given to the producers' commercial services. 6 — Judgment of 25 October 1983 in Case 107/82 AEG v Commiision [1983] ECR 3151. As detailed notes taken at the time of the

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OPINION OF MR VESTERDORF — CASE T-l/89

The cooperation may have the character of both oral hearing for those two undertakings and an agreement and a concerted practice, ICI took place at the second series of particularly when they are complex, meetings in July 1985. At this second round comprehensive and subject to continual of meetings, which took place from 8 to 11 alterations. Examples of these can be found July 1985 and on 25 July 1985, every under- in the Fedetab case, in which the Court saw taking took part except Shell, which as no reason to distinguish between the stated, had not taken part in the first round different forms of prohibited conduct.

precise form assumed by the prohibited minutes, including the undertakings' cooperation is thus only of subsidiary amendments and additions, was sent to importance; the producers participated in an them on 8 July 1986. unlawful cartel, the various elements of which can all be grouped together under the heading 'agreement' and the heading 'concerted practices' at the same time. Thus, As became apparent during the hearing even if it were to be assumed that the before the Court, the Advisory Committee producers' anti-competitive arrangements as dealt with the case without being in a whole should be regarded as a concerted possession of the final version of the practice rather than as an agreement which minutes, whereas when the Commission is possibly combined with a concerted dealt with the case it was in possession of practice, the prohibition laid down in Article the draft minutes as well as the under- 85 would be applicable not merely to their takings' replies and requests for uniform conduct on prices and sales but amendments. also, and all the more, to the preparation stage and in relation to the previous

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RHÔNE-POULENC v COMMISSION

conference it is stated inter alia that one of 2. 77>e applicants' main arguments Commissioner Sutherland's staff had said that the Commission was of the view that as a result of the cartel's activity the price of polypropylene had been artificially raised by between 15 and 3 0 % in the period between As the Court of Justice has had occasion to 1977 and 1982 and by 4 0 % in 1982. find in a series of cases, the principle of audi alteram partem is an absolutely fundamental principle in the administrative law of the Community, including its competition law. The undertaking concerned must thus be allowed access to the documents and other That course of the procedure has given rise evidence which the administration intends t o to a large number of objections of a put forward against the undertaking and procedural nature against the contested must be given an opportunity to comment decision. The most important of them will on both the material on which the decision be dealt with here, in the first part of my is based and the legal arguments on which Opinion, while the views put forward only the decision is founded. by individual undertakings will be dealt with in the second part in the sections concerning the individual undertakings.

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OPINION OF MR VESTERDORF — CASE T-l/89

(b) the Hearing Officer had his powers (c) the reasoning in the decision is not restricted in relation to the sufficiently individualized in relation Commission's general decision on to each individual undertaking. the Hearing Officer's terms of reference.

The first principal argument raises funda- mental issues concerning the Commission's activity in competition cases, which prompts — The undertakings have not been given me to embark first of all on a examination sufficient access to files. of the general nature of such cases.

T o some extent, two other matters occupy a — The undertakings have not had all the place apart, having been previously dealt relevant documents communicated to with under an Article 91 procedure before them. the Court of Justice. These are the question of access to files in relation to the Hearing Officer's report and secondly the documentary evidence which formed the basis for the press conference held in — The bodies empowered to take a connection with the publication of the decision did not have a full and proper decision. Moreover, many of the questions foundation for taking a decision. concerning procedural defects raised in the present cases have arisen previously in cases before the Court of Justice.

— The Commission altered its legal assessment of the case during the course 3. The nature of competition cases of the procedure.

judicial review of legality, and the substance addressed itself to a question which formed of the cases, which all broadly exhibit the an offshoot from one of the Pioneer cases. 9 characteristics of a criminal law case. In However, as the Court of Justice expressly many instances, the parties' submissions can emphasized in the said judgments, the only be understood with the help of the Commission is bound to observe the terminology and concepts used in criminal procedural safeguards provided for by law and procedure. Community law. It follows, on the one hand, that no institutional claims, that is t o say claims relating to the established system, can be advanced concerning the The Court of Justice has held that the Commission's handling of competition cases procedure for dealing with cases before the but that the Commission — and this is self- Commission is an administrative procedure. evident — must in any event respect not I would refer here to the judgment of 15 only the written rules but also the unwritten July 1970 in Case 45/69, Boehringer principles laid down in the case-law of the Mannheim v Commission [1970] ECR 153, Court of Justice. In the Pioneer cases, the at paragraph 23, where it was held that the Court of Justice considered Article 6(1) of procedure before the Commission the European Convention for the Protection concerning the application of Article 85 of of Human Rights in connection with an the EEC Treaty is an administrative allegation that the decision in those cases procedure, even where it can lead to the was unlawful because the Commission imposition of fines. This means, as far as the exercised the function of both judge and present case is concerned, that the prosecutor, whilst in the Fedetah cases it Commission's decision was not unlawful addressed the question in connection with notwithstanding the fact that the members alleged infringements of a number of of the Commission themselves did not take procedural rules. The arguments of the part in the hearings but left this task to undertakings were not accepted in any of officials pursuant to Article 9(1) of Regu- the cases. lation No 99/63.

the Protection of Human Rights. At all 4. The Commission's internal working events, within the framework formed by the procedures existing body of rules and the judgments handed down hitherto it must therefore be sought to ensure that legal protection within the Community meets the standard otherwise regarded as reasonable in Europe.

(a) The internal organization of the Commission's work

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cites a number of concrete examples from outstanding work. I therefore agree with the the procedure, which, in its view, demon- Commission that any errors made in dealing strate such a biased and unbalanced with the present complex of cases do not assessment of some of the facts that it warrant the conclusion that the internal would be warrantable to conclude that the organization of the Commission was working procedure in Directorate-General arranged in a way that it may be assumed IV was in itself capable of affecting the from the outset that it leads to mistakes of decisions to the applicants' detriment. the sort the applicant considers it has demonstrated.

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OPINION OF MR VESTERDORF — CASE T-l/89

(b) The Hearing Officer Article 6

In the early 1980s the Commission found it In performing the duties defined in Article 2 expedient that one person, enjoying relative above, the Hearing Officer may, if he independence in his official duties, should in deems it appropriate, refer his observations future take charge of oral hearings when direct to the Member of the Commission they took place pursuant to Article 9(1) of with special responsibility for competition, Regulation N o 99/63. The Commission at the time when the preliminary draft therefore created the post of Hearing decision is submitted to the latter for Officer with effect from 1 September 1982; reference to the Advisory Committee on Mr Roland Mussard was appointed to the Restrictive Practices and Dominant post and it was he who took charge of the Positions. hearings in the present cases. The creation of the post was announced in the Eleventh Report on Competition Policy. In the Thir- teenth Report on Competition Policy, the Commission published the Hearing Officer's Article 7 terms of reference, and it was over the interpretation of the Hearing Officer's powers under those terms of reference that there was allegedly a disagreement between the Hearing Officer and the Commissioner Where appropriate, the Member of the concerned, to which reference is made Commission with special responsibility for above in Section 1. competition may decide, at the Hearing Officer's request, to attach the Hearing Officer's final report to the draft decision submitted to the Commission, in order to ensure that when it reaches a decision on an The relevant provisions read as follows: individual case it is fully apprised of all relevant information.'

guards that the case-law of the C o u n of Restrictive Practices and Dominant Justice requires to be observed in adminis­ Positions. However, there is nothing in the trative procedures or that otherwise result present cases to indicate that the Hearing from the written legal code. Officer was prevented from submitting his observations to the Commissioner concerned before the case went to the Advisory Committee. Furthermore, with reference to Article 5, there is nothing t o indicate that the Hearing Officer was Once the Commission has chosen to adopt prevented from putting his views to the such rules, which are in the nature of legal Director-General. Finally, no duty can be safeguards, it can at any rate be argued that read into Article 7 of the terms of reference it is bound to observe those rules, even if it obliging the Commissioner concerned t o was under no legal obligation to adopt forward the view of the Hearing Officer t o them. T h a t must be particularly so where the Commission. Even though it is, of the rules are published for the benefit of course, unfortunate that the Hearing those concerned and it is expressly stated Officer and the Commissioner concerned that the purpose of the rules is to strengthen were not in full agreement on how far the the legal safeguards for undertakings caught rules went, there is, in my view, nothing in in the Commission's spotlight. As regards the present cases to substantiate the the case-law of the Court on the adminis­ contention that the Commission disregarded tration's duty to observe its own rules, I the provisions which it had itself adopted. would refer in particular to the judgment of 30 January 1974 in Case 148/73 Ĺouwage v Commission [1974] ECR 81, in which the Court stated (paragraph 12, at p. 89) that Consequently, the submissions made by a even if an internal service directive 'has not number of the applicants to the effect that the character of a rule of law which the the Commission improperly restricted the administration is always bound to observe, it Hearing Officer's powers must be rejected. nevertheless sets forth a code of conduct indicating the practice to be followed, from which the administration may not depart without giving the reasons which have led it to do so, since otherwise the principles of 5. Access to documents equality of treatment would be infringed.' In Case 81/72 Commission v Council [1973] ECR 575, the Court took the same view, in that case in relation to the Council acting in (a) The Hearing Officer's report its legislative capacity.

produce the report was a procedural defect. As the Commission has stated, it is not, In the proceedings under Article 91, I C I however, the Hearing Officer's report submitted that there was a substantial which is the subject of judicial review in the difference between the contested decision present cases. The contested decision does and certain statements concerning the case not fall to be reviewed in the light of the made by the Hearing Officer at the hearing. report. It is neither surprising nor unusual if, In response, the Commission contended that in a large administrative organization like there was nothing in the Hearing Officer's Directorate-General IV, there are differing terms of reference requiring his report to be views on such a large complex of cases as disclosed to the undertakings. The that under review now, both as far as the Commission takes the view that it is an facts are concerned and with regard to the internal document whose disclosure would legal issues, of which some are notoriously create difficulties for the Commission problematical. Once the internal debate in because a rule or practice of disclosure the Commission on how a case is to be would entail a risk that the Hearing Officer decided, including its collegiate process, is and the staff engaged on the case would over, the decision is adopted and it is the refrain from expressing themselves freely factual and legal basis of that decision during the administrative procedure. which is to be reviewed by the Court.

them. Consequently, in the Court's view, in national competition cases are in principle the report of the Hearing Officer did n o t entitled by law to access to files, an constitute a decisive factor which the Court exception is generally made for what are had to take into account in carrying out its called internal working documents such as judicial review. drafts, notes or reports. Such documents will typically express provisional views, including possibly earlier, subsequently abandoned, assessments of the case, whose disclosure to the party or parties involved is, in my view rightly, not considered necessary

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light on the question whether there had including ICI, had not therefore had any been any misuse of powers. As the Court of opportunity to comment; nor were those Justice stated, an examination of the factors apparent from the decision now Commission's internal working documents being contested. The Commission's response with a view to determining whether the is that good administration requires that its Commission's decision was influenced by officers should be free to set down their factors other than those indicated in the internal deliberations in writing without statement of the reasons on which the them falling automatically into the hands of decision was based would constitute an third parties. As I mentioned above, in exceptional measure of enquiry. It would connection with the production of the presuppose that the circumstances Hearing Officer's Report, the Court of surrounding the decision in question gave Justice in the said order found first of all rise to serious doubts as to the real reasons that access to the Commission's internal for the decision and, in particular, to working papers was an extraordinary suspicions that those reasons were measure of enquiry to be used only when extraneous to the objectives of Community there were serious doubts as to the real law. reasons for a decision. The Court went on to state that ICI's assertions, based upon statements in the press, to the effect that the decision was based on reasons other than those set out in the decision, were not borne out by the articles to which ICI referred. The Court stated further that press In the present case, there is no indication of statements and interviews with Commission any misuse of powers. The Commission was officials cannot be equated with the thus justified in refusing to disclose the Institution's position as set out in the report. The submissions made in this regard contested decision. The Court accordingly must therefore, in my opinion, be rejected. took the view that at that stage of the proceedings there were no solid reasons for it to consider that the decision was based on factors other than those set out in the grounds for the decision.

In my view, it is not surprising that the that Table 9 appended to the decision, applicants felt very unsure upon hearing which sets out information in the public figures of up to 4 0 % mentioned as the domain, does actually show rises of the effect of the alleged cartel when its effect is order mentioned. Against that background, not quantified in the decision. According to the fact that the Commission official in the legal viewpoint which I shall advocate question may have indicated that the said later in my Opinion, the effects of a cartel price rises reflected the effects of the cartel on the market are of significance only for is perhaps not totally incomprehensible. Nor the assessment of the fines. But even in that do I believe that the press cuttings put limited perspective, the undertakings' fear forward in evidence contain anything that the figures mentioned at the press relevant to the case either. That Members of conference concerning the effects of the the Commission may have had differing alleged cartel were used as a basis for the views on the fining policy to be followed assessment of the fines can be readily has as little significance for the outcome of understood. the case as any speculation about the results of the lobbying in which, according to the newspaper reports, the undertakings engaged.

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persons and undertakings liable to fines to follows that such documents may not be be given full opportunity to defend them- used as evidence in any subsequent legal selves. This means that those concerned proceedings. 17 should be apprised of all the relevant material.

In its Eleventh Report on Competition Policy, the Commission announced that it intended to give undertakings access to files in competition cases. It stated in particular In Community law, however, there is, as a (at p. 30) general rule, no unconditional access to files; see in particular the judgment of the Court of Justice in VBVB and VBBB v Commission.15

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T h e Commission is even considering going However, the Commission regards the beyond the requirements laid down by the documents listed below as confidential and Court and allowing, in principle, firms accordingly inaccessible to the undertaking involved in a procedure to have access to concerned : the file on the particular case. However, any such inspection is limited by the Commission's obligation to refrain from disclosing business secrets to other companies and the need to preserve the (i) documents or parts thereof containing confidential nature of the Commission's other undertakings' business secrets; internal or working documents.

(ii) internal Commission documents, such as notes, drafts or other working papers;

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which these new arrangements could not be may also include other proprietary taken into account; they will have to be documents belonging to an undertaking dealt with on a case-by-case basis. which it may not wish to be made accessible to third parties or to parties involved in the proceedings. In particular, confidential ..." (sensitive) information provided by third parties in the course of investigations should, in principle, not be made accessible In the Thirteenth Report, the Commission to parties involved in the proceedings. further explained how it intended to grant access to files. It stated inter alia (p. 63) as follows : In cases where proceedings are instituted against several competing firms the c Commission, for reasons of public interest, must ensure that the access to files does not lead to an exchange of commercially The Commission does not offer access to its sensitive information between the under- file before formal proceedings are started. takings which are the subject of the This means that undertakings do not have a proceedings. This rule applies even if the possibility of access until they have received undertakings agree to waive confidentiality a formal statement of objections from the for such information on a reciprocal basis. Commission. T o the statement of objections is annexed a list of the documents in the Commission's file, with an indication of the degree of access.

J Documents or information can be made accessible to parties to proceedings, either by access to the file or by the sending of In its Eighteenth Report on Competition copies, according to the circumstances. . . . " Policy (1988), the Commission described at page 58 the experience gained:

(i) documents which were not sent to the undertaking, but with which the under- However, considering that the applicants taking could acquaint itself when the are undertakings which can secure every applicants were given access to the conceivable form of expert assistance and Commission's records in June 1984; did in fact do so, it cannot be validly main- tained without further explanation on their part, that practical problems hindered them from using that opportunity to acquaint themselves with the material to which they (ii) the documents which were appended to were given access. the general statement of objections but which are not expressly or identifiably referred to in the objections; The applicants further argue, however, that the access to files which they were granted was not sufficient to permit the Commission (iii) documents which the Commission subsequently to use in evidence against them recognizes that it inadvertently omitted the documents to which they were given to send to the undertakings. access in order to acquaint themselves with them. In support of this contention, they refer to the case-law of the Court of Justice cited above, according to which documents which serve as the evidential basis for a There is also a fourth category, namely the decision are to be expressly mentioned in documents which, in the Commission's the statement of objections or, if need be, in view, do not 'concern' the particular supplementary statements addressed to the applicant and with regard to which the applicants. The Commission, on the other Commission in its defence expressly states hand, considers that documents to which that those documents, in so far as they are the applicants had access in order to not put forward in evidence against the acquaint themselves with them may be used applicant, as a document do not 'concern' it. against the undertakings.

of documents if those documents are in any matter is somewhat different. It is clear that event identified in such a way in the the undertakings obtained copies of them statement of objections that the under- and the statement of objections itself served takings have the opportunity to ask for as a warning that the Commission proposed copies. 18 On the other hand, there is to make use of them in any eventual nothing in the case-law to suggest that the decision. The applicants were thus able to Court of Justice would be disposed to alter comment on the probative value of those its view of the way in which an undertaking documents, which, according to the should be confronted with a document judgment of the Court of Justice in the before it can be used in evidence against it. AEG case, is the reason why the document In that regard, the AEG case is illustrative; should be 'mentioned' in the statement of the undertaking concerned had to be objections. That naturally presupposes that presumed to be acquainted with the from the statement of objections the documents found on its own premises. applicants were able to determine with reasonable certainty what the Commission was seeking to prove. As will be seen in the following section, my view is that in its statement of objections, taken together with In the present cases, the system introduced the letters of 29 March 1985, the by the Commission for giving access to files Commission made it so clear what it was was in place at least one year after it was seeking to prove that by that time the announced in a publication which must be applicants should have realized how they presumed to have come to the attention of should regard the individual documents and those concerned. On the other hand, those comment on them. I therefore take the view who had access to the case-files could that there are no grounds for excluding hardly be expected to realize that the those documents from the case. Commission would rely on the access it had granted to them as support for a contention that it should not be necessary to refer to a document, at any rate by sending it out.

not ostensibly identified in the decision, the question must, however, be examined in relation to the question how far they could 18 — See Schwarze, Europäisches Verwaltungsrecht II, p. 1294, be regarded as being of importance for the note 77, according to which undertakings in cartel cases are at all events entitled on request to production of a undertakings' defence (see below the copy of the relevant documents. comments concerning the fourth group of 19 — On this point, see the attitude taken by the Court of Justice in AEC v Commission, cited above at footnote 17. documents).

The Commission describes, for instance, the circumstances surrounding the lack of In the first place, problems arise with regard access to files as follows (BASF, defence, p. to proving the very existence of a cartel, 61, para. 3.2): including in particular an agreement or framework agreement. Under the sequence adopted by the Commission for leading its evidence, it first sought to demonstrate the existence of the cartel itself and then the 'Of the other ten documents which are individual applicants' participation. T h e mentioned on pp. 9-11 of the application, cartel is purported to be proved by the the applicant was not given access to nine, appendices to the general statement of because they were either of no importance objections, that is to say by the '101 pieces for the case against the applicant (they of documentary evidence', and the partici- concern only the undertakings specifically pation of individual undertakings by the mentioned in the individual documents), or annexes sent to each applicant. If, therefore, because they only contain corroboration of the Commission did not send all the the other documents of which the applicant annexes to all the undertakings, thus had cognizance (that is the case of the note, dividing the production of evidence into two mentioned in paragraph 29 of the decision, phases — according to the questionable of an internal meeting held at Shell on 5 logic that it is possible to prove separately July 1979) the existence of a cartel, which can hardly consist of anything else than the individual undertakings' participation — then this is the situation from which the Court must Besides showing that the Commission has begin to assess the evidence. It must be deprived itself of an opportunity of streng- examined whether the very existence of the thening other evidence which is perhaps not cartel can be considered proved on the basis that strong, that quotation shows that the of the '101 documents' without taking into Commission in fact believes that it is its task account the annexes sent only to the indi- in a combination of cases like this to decide vidual undertakings in conjunction with the which documents may be of interest for individual statements of objections. In the which undertakings for the purposes of their converse case, it could indeed be claimed defence. It is understandable that, in the that the documents were used against all the conduct of the procedure, the Commission applicants. perhaps focused sharply on the material

It is therefore plain that to exclude such documents from the proceedings would not be the appropriate step, the applicants' It is difficult to deduce from the case-law of declared objective being precisely to use the Court of Justice any clear indication of those documents if possible in order to its attitude to this question. There is a hint, prove that they did not take part in any however, in the AEG case (paragraph 24, particular economic relationship or [1983] ECR 3192), in which it is stated that relationships. 20 Furthermore, it would also AEG was justified in submitting the view be unreasonable to exclude on that ground that the Commission could not use a documents which might be suitable as document when part of it had not been evidence against other undertakings. communicated to the company and that 'it was not for the defendant to judge whether a document or a part thereof was or was not of use for the defence of the under- taking concerned'. The Court of Justice Incidentally, it ought to be mentioned that therefore held the document to be inad- the applicants must, of course, be entitled to missible in its entirety. It is thus established rely on documents which they did manage that it is not the Commission's task to assess what the undertaking can use for its 20 — On this point, see K. P. E. Lasok, The European Court of defence. At first sight those statements do Justice, Practice and Procedure, p. 260, footnote 4.

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to obtain, even if the Commission does not documents mentioned which were not put think that they concern the undertaking in forward in evidence might be capable of question (note, for example, Shell's use of affecting the overall assessment of the the Solvay document of 6 September 1977, evidence to such a degree as to lead to a of which Shell took a copy when given different result. access to the records (defence in the Shell case, p. 69)). T h e documents cannot in any way be regarded as 'procured unlawfully'.

At all events, however, it is necessary that the documents might have been of real and specific importance. In the present cases, T h e argument that the Commission altered none of the documents we have seen and its legal assessment of the case during the which were not communicated to all the procedure can be summarized as follows: undertakings, for example the Solvay according to the applicants, throughout the document just mentioned, were likely t o administrative procedure the Commission alter the picture in any important point. In indicated that there was a whole series of the light of the fairly clear and convincing infringements of Article 85(1), whereas only evidence before the Court concerning most in its decision did it describe the situation as of the Commission's objections, it seems t o a single agreement or, as it is called in point me, furthermore, improbable that the (few) 81(3) of the decision, a 'framework

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It also points out that, according to the case-law of the Court Thus, the applicants' view is that in the of Justice, it is not necessary for the decision a substantial shift in foundation statement of objections on the one hand and took place, since they now have to defend the decision on the other to be completely themselves against what is described as 'a identical. single continuing agreement within the meaning of Article 85(1)' and against 'an overall framework agreement which was manifested in a series of more detailed sub-agreements worked out from time to The applicants' more specific argument that time', which in Article 1 of the decision is the alleged alteration of the legal case expressed as 'participating.

A framework agreement throughout the statement of objections rests, at least in part, on different legal and 'agreements', 'concerted practices', factual premises than continuous conduct. Whereas evidence of a framework 'infringements', and so forth are mentioned agreement releases the Commission from in the plural. the need to produce irrefutable evidence of individual agreements or other anti- competitive arrangements, a continuing infringement in the legal sense is an ex post facto synthesis of individual actions into a In response to those arguments the

In the applicants' view, what they describe as the Commission's 21 — Judgment of 15 July 1970 in Case 41/69 ACF Chemiefarma v Commission [1970] E C R 661, paragraphs change of position suggests that as a result 91-93, p. 691 « seq.; and judgment of 29 October 1980 in Joined Cases 209 to 215 and 218/78 van Landewyck v of the undertakings' objections the Commission [1980] ECR 3125, paragraphs 67-74, p. 3244.

abandon such objections as have been ensemble d'accords e t / o u de pratiques shown to be unfounded or to supplement concertées', in the Italian version 'un and recast its arguments both in fact and in complesso di accordi e/o di pratiche law in support of the objections which it concordate' and in the Dutch version 'een maintains. As the Court of Justice has geheel van overeenkomsten en/of onderling stated, that possibility is not inconsistent afgestemde feitelijke gedragingen', the with Article 4 of Regulation N o 99/63. German version states, as I have mentioned, that it concerns 'eine Vielzahl von Verein- barungen und/oder aufeinander abge- stimmten Verhaltensweisen' (my emphasis). In this regard, the Commission points o u t While in its written observations the that it had already contended at various Commission did not expressly mention this, places in the statement of objections it maintained at the hearing, with specific forwarded to the applicants on 25 M a y reference to the word 'ensemble', that it had 1984 that there was continuing and institu- alleged from the outset that it was the tionalized cooperation (see points 128 and totality of agreements and so forth which

In the reasonably construe point 1 of the statement Commission's view, the clarification thus of objections as referring to a sum total or a given was sufficiently explicit to enable a complex of agreements in the sense proper defence to be prepared. In the contended by the Commission, it does not administrative procedure there was enough seem that this can be the case in German, opportunity for an extremely thorough for the word *Vielzahl' can mean only a discussion of the true nature of the cartel (large) number of agreements and so forth, and in its decision the Commission drew the and not the sum total of such agreements. conclusions from that debate, just as the The first step in the examination of this applicants have made the most of their argument must therefore consist in seeking opportunities to defend themselves. to establish how far the other parts of the statement of observations and the Commission's letter of 29 March 1985 gave the applicants such a good indication of It is hardly surprising that it is in fact three what the matter was about that the word of the German-language applicants w h o 'Vielzahl' can be ignored; that the have in particular put forward the argument applicants should thus have realized from examined here, for in the German version the other reasons and matters adduced that the first point of the general statement of it was not a 'Vielzahl' but 'a complex' that objections was formulated slightly was meant.

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From the extracts cited here, which are crucial, I am satisfied — with reservations in In the judgment of the Court of Justice in 22 — The German text refers to 'fortgesetzte Zusammenarbeit', ACF Chemiefarma y Commission,21 the dicta which can mean 'constant cooperation' but which naturally conveys the idea of 'fortgesetzte Handlung' in the criminal law sense. 23 — Cited above in footnote 21.

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From the 9 9 / 6 3 is observed if the decision does not von Landewyck judgment probably all that allege that the persons concerned have can be concluded is that the addition of one committed infringements other than those or more legal factors of the same character mentioned in the statement of objections as those on which the Commission has and only takes into consideration facts on based its decision constitutes the addition of which the persons concerned have had the one or more objections in the sense of opportunity of making known their views. Article 4, the question of the alteration of the legal case not being addressed.

In view of the fact that the applicants had already to a large extent given their views regarding all the conditions in connection with the notifi- cation, the fact that one of the conditions It would therefore seem necessary to was expressly mentioned in the first examine specifically whether it may be statement of objections and the fact that the considered that the applicants concerned in Commission had summarized in its decision fact understood the statement of objections the statements of the applicants regarding in a way consistent with the content of the the said condition, the submission was decision. In its reply to the statement of rejected in so far as that condition was objections, Hoechst states that the concerned because, as was stated inter alia, Commission alleges 'an agreement and/or the two notifications had to be read as a concerted practice' against the undertaking

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of that expression. No clear deductions can proposals submitted by the applicants for therefore be made from that examination of amendments of the minutes, constitutes a the undertakings' replies. major procedural irregularity. Similar criticisms are put forward as far as the Members of the Commission are concerned when they adopted the decision.

The replies to the statements of objections show, however, that apart from quite sporadic legal discussions which do not relate to the present question, the applicants The Commission has explained that the comment only on the facts held against applicants' comments on the draft minutes them by the Commission and their replies were not available when the Advisory show no indication at all of their being Committee delivered its opinion. However, aware of the direction which their the applicants' remarks were enclosed with subsequent defence would take. Thus, there the draft minutes when the case came before are no sufficient grounds for assuming that the Commission for a decision. For their the way in which the statement of part, the applicants do not dispute the objections was formulated led the under- Commission's explanation. takings, when replying thereto, down a legal path entirely divergent from the path later followed by the Commission in its decision.

The Commission does not expressly deny that there was a procedural defect, but, with Despite there being no perfect congruence reference in particular to the judgment of between the statement of objections and the the Court of Justice in Distillers Company v decision, I therefore take the view, even as Commission,25 submits that what happened far as the German-language versions are cannot be regarded as having affected the concerned, that Article 4 of Regulation N o contents of the decision. The Commission 99/63 was not disregarded; on the contrary, points out that there is no period prescribed the legal assessment of the case was for sending out the draft minutes, just as, in properly clarified in the light of the replies the Commission's view, there are no rules to the statement of objections. stipulating to whom the draft and the approved minutes should be sent.

In the present cases, I think that it may be assumed from what we know, firstly, that the Members of the Commission did have the necessary bases for their decision. As M r Advocate General Warner stated, 26 it must be inferred from the content in particular of the provisions of Article 10 of Regulation N o 17/62 and Article 9(4) of Regulation N o 99/63 that both the Advisory Committee and the Members of the Commission should have to hand a final Secondly, as far as the Advisory Committee and approved version of the minutes of the is concerned, the question to be examined hearing before the Commission when the with reference to the case-law of the Court Committee delivers its opinion or the of Justice is how far in each individual case Commissioners adopt the decision. discrepancies can be found that might be regarded as having been capable of giving the Committee's members a mistaken impression of the statements of the indi- vidual applicants. Many of the applicants have made this general assertion without That view seems to find support in the specifying where the discrepancies lay. In judgments of the Court of Justice in my opinion, that is not sufficient. The Buckler & Co. v Commission17 and ICI v applicant concerned must be required to Commission.28 state expressly the essential points on which the final minutes differ from the draft minutes. Without a more detailed expla- nation from the applicants of the points on which, in their view, the provisional minutes are actually misleading, it is not possible for It is true that the Court of Justice does not the Court to exercise its review function. In directly and explicitly address itself to the cases like this it cannot be the task of the problem but rejects the objections raised in Court to go through the provisional minutes the cases cited by pointing out that, on and then the final version page by page with essential points, there were between the a view to determining what discrepancies final approved minutes and the draft there are so as then to consider what the minutes no discrepancies which were so applicants might have had reason to be dissatisfied with. Since none of the 26 — Distillers v Commission, cited in footnote 25; see in applicants have made their objections more particular [1980] ECR 2294. precise, I consider it appropriate to dismiss 27 — Judgment in Case 44/69 [1970] ECR 733, at p. 753. these objections on the basis of the said 28 — Judgment of 14 July 1972 in Case 48/69 [1972] ECR 619, procedural grounds. paragraphs 27 to 32, at p. 651.

According to Article 190 of the Treaty, acts of the Commission are to state the reasons on which they are based. The purpose of the reasoning requirement is not only to Apart from that, it may be difficult to be enable addressees of acts to ascertain more specific about the requirements whether the decision is materially correct; it applicable in general to the content and must also serve as the basis for judicial scope of the statement of reasons. In a case review of the administration's decision. concerning another field of law, 3 3 namely Furthermore, the requirement that adminis- freedom of movement for workers, the trative decisions should be fully reasoned Court of Justice stated that where it is a may compel the administration to make question of securing the effective protection clear for its own sake the reasons on which of a fundamental right conferred by the a decision is based. 29 Treaty on Community workers, such persons must be able to assert that right under the best possible conditions and have the possibility of deciding, with full As regards the duty to state reasons, the knowledge of the relevant facts, whether Court of Justice has held generally that the there is any point in their applying to the duty is to be regarded as fulfilled if the courts. In my opinion, the requirements statement of reasons indicates clearly and relating to the statement of reasons in cases coherently the considerations of fact and of such as those now under examination, law on which the decision is based. 30 particularly in view of their vitally important According to the judgment just mentioned, nature, can hardly be less strict. this also applies in the case of a decision imposing fines. The scope of the duty to 31 — Judgment of 15 July 1960 in Joined Cases 36, 37, 38 and 40/59, Präsident Ruhrkohlen-Verkaufsgesellschaft GmbH state reasons depends largely on what has to and Others v High Authority of the ECSC [1960] ECR be explained and must be considered in the 423. 32 — Judgment of 1 July 1986 in Case 185/85 Union Sidé- rurgique du Nord et de l'Est de la France (Usinor) SA v 29 — Sec Schwane, p. 1349 and note 84. Commission [1986] ECR 2079, paragraph 20 at p. 2098. 30 — See the judgment in Chemiefarma cited in footnote 21 33 — Judgment of 15 October 1987 in Case 222/86, UNECTEF [(1970] ECR 6*1, parigraphs 76 and 77, at p. 689). v Heylens, [1987] ECR 4112.

2. The Commission's duty to comment in the T h a t fact also has a secondary effect as decision on the evidence and arguments regards the statement of reasons. Whatever adduced before the decision is adopted the difficulties which will always be involved in giving expression to a finding when it is based on an overall assessment of an enormous volume of evidence, this must be done in the statement of reasons. This is a This question has been raised in a number consequence of the rules applicable and the of earlier cases. Briefly, applicants have Commission must adhere to them. taken the view, as they do in the present cases, that the Commission has neglected its duty to give adequate reasons for its decision if it does not address in the decision all, or at least the main, arguments and evidence which the undertakings have In the area concerned here there is a adduced during the administrative particular danger of the argument shifting, procedure. This view is asserted under so that it is attempted to some extent to various headings and in various contexts but bring questions which should normally be the substance is the same. regarded as questions of substantive law within the ambit of the reasoning

34 — Sec U. Everling in Wirtschaft und Wettbewerb, 1989, p. 877. It requires two different questions to be 35 — See OJ 1989 C 215 of 21 Ausust 1989, p. 1, containing the Council Decision of 24 October 1988 establishing a Court addressed. First, there is the question as to of First Instance, as published in OJ L 319 of 25 November 1988 and amended by the corrigtndum what need not be included in the statement published in OJ L 241 of 17 August 1989. of reasons under the law applicable. Then, it

must be determined which positive contained answers to some of the applicant's requirements may possibly be imposed in answers but did not constitute a detailed this regard on the statement of reasons in refutation of them. However, the statement order for it to satisfy the general of reasons contained a self-sustained requirements laid down in the case-law of argument setting out in general terms why the Court of Justice. the Commission arrived at a specific view. The Court of Justice accordingly held that the Commission could not be required t o comment on all the issues of fact and law raised by every individual undertaking. In the Consten and Grundig case, 3 6 the Court of Justice stated very generally that in non-judicial proceedings of that kind (consisting of a competition case before the Commission) the administration was not required to give reasons for its rejection In the case of GVL v Commission™ it is of the parties' submissions. In ACF stated (in paragraph 12, at p. 500) that in its Chemiefarma,07 the Court amplified that decision the Commission is not obliged t o statement, stating in effect (in paragraph 76 discuss all the observations put forward by et seq., [1970] ECR at p. 689) that in order the undertakings in their reply to the to fulfil its duty under Article 190 to state statement of objections if the reasons stated reasons the Commission was not required to in the decision are of themselves such as discuss all the points of fact and of law dealt to justify the conclusions at which the with by the parties in the course of the Commission arrived in the course of the administrative procedure. The Court went administrative procedure. on to hold that the statement of reasons was to be considered sufficient if it indicated clearly and coherently the considerations of fact and of law on which the Commission had acted so as to acquaint both the addressee of the decision and the Court From the case-law of the Court of Justice it with the Commission's reasoning. Finally, can be concluded first of all that it is the the Court held that the Commission had not Commission which has the absolute power disregarded essential procedural require- to determine the matters to be discussed in ments by omitting factors which it rightly the case.

defined. Nor is the Commission bound to 36 — judgment of 13 July 1966 in joined Cases 56 and 58/64 discuss arguments which may indeed be Etablissements Consten S.¿ r.l. and Grundig-Ver- kau/s-GmbH v Commiiiion [1966] ECR 299. The same relevant but may give a self-sustained approach was taken later, see for instance the judgment of account explaining why it arrived at a 21 February in Case 6/72 Continental Can [1973] ECR 215 (at paragraph 6, p. 240) and VBVB and VBBB cited above in footnote 16. 39 — Judgment of 2 March 1983 in Case 7/82 Gesellschaft zur 37 — See footnote 21.

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Even if under the in relation to each other. This might be law applicable the Commission could be necessary in order to show that all relevant required to refute the undertakings' material has been included and that what arguments, in my opinion, this was done the parties have adduced cannot lead to any quite adequately. Point (c) contains a other conclusion. Thus, in my opinion, discussion of Professor Albach's study of there would be a defect in the statement of the German market. Apart from the fact

In submitting specific administrative act the solution of a these arguments the applicants seem almost theoretical legal problem. It must be to be saying that the Commission should sufficient for the Commission to adopt a yield to unprovable facts and should position towards the case as it stands and to otherwise follow the undertakings' views. It give reasons of fact and of law for that is possible that the Commission's views on this matter are not entirely unshakeable but 40 — Judgment of 21 February 1984 in Case 86/82 Hasstlblad (GB) Limited v Commission [1984] ECR 883 (at p. 915, the fact that the Commission did not allow right-hand column). itself to be convinced does not constitute a

It is contended that the decision is framed in The case-law thus indicates, rightly in my such a way that it was impossible for each view, that each individual addressee must individual applicant to ascertain what was simply be able to obtain a 'clear picture' of alleged against it. In particular, Rhône- the complaints which concern it. However Poulenc maintains that it has been (I almost said 'of course'), the case-law 'victimized' on account of the way in which gives no indication of the degree of the decision is framed because that under- precision required of the decision in order taking, which left the market in 1980, was for a 'clear picture' to be obtained from it. unable, so it claims, to ascertain on what the Commission based its decision as far as it was concerned. Rhône-Poulenc therefore considers that it is being held responsible for something which others did later. In my view, the procedural aspect of this issue can be regarded as forming part of the question In the present cases, the Commission gives, as to how far the requirement to state in Chapter A of the decision, a detailed reasons may be regarded as having been account of the market circumstances that it fulfilled in relation to each applicant. considers material. That section does not give rise to any problems. In Chapter C, the Commission describes in points 15 to 68 the documentary evidence in its possession; In the Suiker Unie judgment, 4 1 the Court of first, the nature of that evidence (point 15) Justice stated that there was no reason at all and then, with great meticulousness in my why the Commission should not make a view, the original floor-price agreement, the single decision covering several regular meetings, the purpose of the infringements, even if some of the under- meetings, the target-price system, price takings to which it was addressed were initiatives and their implementation, indi- unconnected with some of those vidual price initiatives, the alleged quota infringements, provided that the decision arrangements and the special position of the permitted each addressee to obtain a clear four major producers. In Chapter F, all the picture of the complaints made against it. undertakings are specifically named and the involvement of each one is discussed. Points 41 — Judgment of 16 December 1975 in Joined Cases 40/73 et al. Coöperatieve Vereniging Suiker Unie UA and Others v Commmion [1975] ECR 1663 (paragraph 111, at p. 1921). 42 — See footnote 7 (paragraph 32, p. 3236).

That view is based upon an interpretation of Article 85 which the applicants put forward as the correct one, namely that it is necessary to be able to prove actual conduct So we have first of all a clear temporal on the market in order for the ingredients delimitation from a general point of view. of a concerted practice to be present. T h e Commission has also addressed itself in Consequently, their view is that the nature each case to the most important factors of the proof for the two different types of which can give rise to liability and has given infringement is different and that the matter a detailed description of what it considers to to be proved is therefore different. If that is be the deed committed as well as a the case, the Commission must, in the description of the intensity with which, in its applicants' view, be obliged to explain view, each individual undertaking precisely what it regards as an agreement participated. In the light of the foregoing I and what it considers to be a concerted do not consider that the applicants are practice. Where the Commission has not correct in their argument concerning the done so, there is, in the applicants' view, statement of reasons in the decision. such a blurring of the picture that their ability to conduct an effective defence is reduced.

4. The interpretation of Article 85 as a formal problem

T h e applicants do not, however, dispute that the Commission was entitled to draw up its decision in the way in which it did if T h e final matter which may be addressed in its view that concerted practices are not the course of this general examination of necessarily and by definition required to

In points 97 to 100 of the decision the As will be seen, the reply to that question Commission then describes in detail the therefore depends on the interpretation of structural changes that took place with the term 'concerted practice' in Article 85(1) regard to Saga Petrokjemi. It appears, inter and, in my view, the statement of reasons, alia, that prior to 1982 Saga Petroleum held which in itself explains the Commission's 56% and then 100% of the shares in Saga point of view remarkably well (see, in Petrokjemi but that the Commission saw n o particular, point 87(3) and (4) of the grounds for considering that the two under- decision), therefore satisfies the takings were the same undertaking for the requirements of Article 190 of the Treaty. If purpose of liability to fines and thus for the Commission's legal view is not upheld, imputing infringements committed by Saga the statement of reasons will as a result also Petrokjemi to Saga Petroleum. In 1983, be defective, but this would then be of no Saga Petroleum was sold to Statoil and on 1 particular interest. January 1984 Saga Petrokjemi ceased to exist as a separate legal entity when, as it is stated, it was 'absorbed into Statoil', that is C — The concept of an 'undertaking' as 'per- to say, it merged with Statoil. It is further stated that the undertaking now forms 'a petrator of an act' separate profit centre in the Statoil organ- ization'. It is then stated that Statoil now operates in its own name the thermoplastics In points 96 to 102 of the decision the business formerly represented by Saga Commission sets out its reasoning on the Petrokjemi, whose marketing subsidiaries in question of the significance to be attached Denmark and the United Kingdom are now to a series of reorganizations within the styled as subsidiaries of Statoil but perform European petrochemical industry for the exactly 'the same function as before in purpose of imputing responsibility for the relation to the sale and marketing of ther- infringements covered by the decision. The moplastics'. considerations it sets forth concern inter alia ANIC, Rhône-Poulenc and SAGA Petrokjemi.

that undertaking had continued in existence separately identifiable in economic terms in its original form. In the Commission's and therefore responsibility for infringement view, the key question is whether 'following of the law was not extinguished upon the the merger and despite the changes in merger. Responsibility for the infringement structure and legal form, the undertaking accordingly rests with the undertaking which committed the infringement is still in which took over the undertaking which existence or whether it has been liquidated', committed the infringement. a question which falls to be determined exclusively by reference to the rules of Community law.

their polypropylene business to other producers (see the first paragraph of point 101 of the decision). T h e Commission takes the view that, although it was subsumed into a larger group of undertakings, the undertaking which committed the infringement, Saga Petrokjemi, 'continued in existence'. Rhône-Poulenc has not objected to being According to the Commission, the deter- held responsible for any infringements mining factor is whether there is an committed in the period before that under- economic and functional continuity between taking sold its polypropylene business. the original undertaking and its successor, ANIC, however, has submitted that the even if the successor did not continue the Commission was wrong to impose a fine on unlawful activities. With regard to func- it for acts committed before the transfer to tional and economic continuity, the Montepolimeri of ANIC's polypropylene Commission refers to the fact that the business. ANIC considers that this successor, Statoil, had not dissolved the constituted unequal treatment to the business of Saga Petrokjemi or liquidated its detriment of ANIC in relation to the Scan- assets but, on the contrary, had continued dinavian undertakings and, moreover, in the economic activities and retained Saga relation to the Commission's previous Petrokjemi's operating plant and marketing practice, according to which liability to fines

plastics operations. The Commission infringements committed by SIR prior to accordingly concludes that the undertaking ANIC's takeover of SIR's polypropylene which committed the infringement remained business.

According to what the Commission told the Court, it seems clear, however, that it took It can therefore be concluded that the the view that if legal action was to be taken Commission did not intend to make any against anyone on account of SIR's liability to a fine 'follow' the transfer of infringements, it was not to be against SIR's polypropylene business to ANIC. ANIC because of that company's takeover ANIC, however, remains of the opinion that of SIR's polypropylene business, but rather the Commission fixed its fine without taking against the remaining part of SIR. The fact proper account of SIR's market share in the that the Commission, apparently on grounds relevant period. A N I C also considers that of expediency, chose not to try to hold the the Commission wrongly omitted to attach liquidated undertaking liable cannot, I evidential value in ANIC's favour to the fact believe, be turned to account in asserting that ANIC and SIR are mentioned together that the Commission was inconsistent in its in a number of pieces of documentary attitude towards the different situations, evidence, because, it is said, the joint desig- even if the failure to bring legal proceedings nation SIR/ANIC can equally well mean was due to a misjudgment of the prospects that the infringement was wholly or partly of imputing liability. The Commission's committed by SIR and not by ANIC. The attitude to the imputation of liability is thus Commission contests both of ANIC's points. reasonably clear within the framework of The question is one of evidence and will be the present case and manifests itself in the dealt with below in the section concerning ANIC-Montepolimeri relationship, in which ANIC. the problem raised is real.

Consequently, the issue to be addressed is (see, on this point, the second paragraph of how to treat liability incurred but not yet point 101 of the decision), which in itself penalized at the time of a transfer or other can give rise to problems. change in ownership of the entity with regard to which an infringement is committed. In other words, it is a matter of determining what is to happen to the under- taking qua 'perpetrator' following restruc- turing involving a change of ownership. From the point of view of the transferor, the crucial point is, of course, whether it is possible to transfer an undertaking with As regards the imputation of liability, ANIC contingent liability under the competition has further stated that in assessing ANIC's rules, and, from the transferee's point of situation the Commission used a definition view, whether a transferee which has not of the concept of 'undertaking' different acted unlawfully itself should have to face from that used with regard to the the imposition of a fine arising from an Norwegian undertakings. In the 'Norwegian

The distinction on infringements to an end, the imposition of which the Commission relies, namely the fines under Article 15 of Regulation N o transferor's continued existence after the 17/62 always requires intentional or transfer, has, according to ANIC, absurd negligent conduct (see Article 15(2)). and arbitrary consequences, since it allows the transferor's liability to depend solely on whether he is running another commercial undertaking and how that is organized. ANIC maintains that the fact that the Commission's view is internally inconsistent becomes apparent when a comparison is made between ANIC's situation and the relationship in the peroxygen case between PCUK and Atochem, to which the Commission refers in point 101 of the

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As an undertaking that upon the transfer of its polypropylene ANIC has a single object which was not business a true transfer of undertaking took altered by the transfer of the polypropylene place, with all its tangible and non-tangible business and therefore ANIC must be assets including plant and polypropylene regarded as having continued to exist as an know-how being transferred to Monte- undertaking. polimeri. The polypropylene business constituted an economic entity in itself within ANIC and that economic entity was

In parent company/subsidiary relationships an under- taking can, in the connection relevant here, be the parent company, the subsidiary company or the economic entity made up of On this point, the Commission has referred the parent and subsidiary company together. to the fact that there is no discrepancy This form of problem has come to the fore between its treatment of the Norwegian many times in the case-law of the Court of undertakings and ANIC. While the Justice and is examined thoroughly in Norwegian undertaking continued to exist academic legal writing. 44 The same question as part of Statoil with essentially unaltered in the case of transfers has led to only a few economic and functional characteristics, decisions.

a specific economic activity. The views of 1988, IV/31.865, PVC, and IV/31.866, LdPE). competitors and customers can help to 44 — See most recently, Rutsch, Strafrechtlicher Durchgriff hei verbundenen Unternehmen?, Cologne 1987, and Lipowsky, identify the undertaking. ANIC thus Die Zurechnung von Wetthewerbiventößen, Munien 1987. remained ANIC in the eyes of its customers 45 — Cited above, in footnote 41.

1971. It disputed that it could be held conduct to the new legal person, provided responsible for infringements committed that the latter was 'responsible for the same before that date. The specific situation was economic entity'. this: in 1966 four cooperatives had formed a coordinating body on a provisional basis with the cooperatives themselves as members, but in 1970 a cooperative society was formed in which members of the original four cooperatives were direct participants. T h e coordinating body, which had participated in the infringements, was

cooperatives. O n this point, the Court stated decisive, but on the contrary a balancing of (in paragraphs 84 to 88, [1975] ECR 1926) the evidence which the Court of Justice in that, as Suiker Unie had assumed all the the sugar cases had laid down as necessary rights and liabilities of the four cooperatives for a finding of a common course of of the old association, it had to be treated as conduct, namely (a) that Suiker Unie had assumed all the rights and liabilities of the the economic successor both of the old cooperatives, (b) that it was not denied that association and of its members, which had the same undertakings were involved; and intended to confer that role on Suiker Unie. (c) that it was not even claimed that Suiker The Court went on to point out that it was Ünie's conduct on the market differed from not denied that the name 'Suiker Unie' still that of the former association.

Unie. In his Opinion, Mr Advocate General connection, both economic and legal, Mayras examined the issue very thoroughly between the two companies was such as 'to (pp. 2078-2079). H e stated inter alia that, allow their acts to be treated as continuous' under the competition rules, fines are so as to justify imputing the infringements complained of to Rheinzink. The Court of imposed on undertakings in their capacity as Justice held (paragraph 9, at p. 1699) that economic entities and it is the economic all things considered Rheinzink GmbH had facts which must be made to prevail. H e taken over the former company and had went on to allude to the risk of circum- vention and considered that the Commission was entitled to impute the prior course of 46 — Judgment of 28 March 1984 in Joined Cases 29 and 30/83 Compagnie Royale Asturienne des Mines S.A_ and Rhetnzmk GmbH v Commission [1984] ECR 1679.

continued its economic activities, stating that it had held that, since PCUK had that a change in the legal form and name of ceased to exist as a separate legal entity, an undertaking did not free the new under- Atochem, having taken over its peroxide taking from liability for the anti-competitive business and adopted its economic behaviour of its predecessor when, from an objectives, had to be the addressee of any economic point of view, the two were decision. That PCUK subsequently went identical. into liquidation is quite correct and is supported in addition by the information given in the PVC decision (point 49), but it is not apparent from the peroxygen decision. In particular, it is not apparent With regard to the Commission's practice, it that the Commission may have attached might be appropriate first to examine in weight to the question of how far there more detail the peroxygen decision to which existed a remaining part of the undertaking. the Commission refers in the final Rather, from the wording it seems that the paragraph of point 101 of the polypropylene Commission attached weight to the takeover decision, and which is also discussed in of assets and economic objectives, that is to these proceedings. In the peroxygen say the peroxygen interests, without the decision (Official Journal 1985 L 35, p. 1, question of the transferor undertaking's in the fourth paragraph of point 49) it is continued existence being of importance. stated : That the Commission had probably earlier taken the view ascribed to it by ANIC, namely that liability follows production and earnings, seems also to follow from the PVC decision (point 44), from which it appears inter alia that Norsk Hydro, which 'At all relevant times, the other French had acquired the PVC business from an supplier besides L'Air Liquide was PCUK, undertaking that continued to exist, should, part of the Pechiney-Ugine-Kuhlmann according to the Commission's original conglomerate. In 1983 the French chemical view, have been liable for earlier industry was reorganized and the peroxygen infringements, but that the Commission business of PCUK was transferred to now, that is to say in the PVC decision, Atochem, part of the Elf-Aquitaine group. recognized that the transferor should have The Commission considered that as the been held liable. present owner of the business entity which was involved in the infringements, and having taken over the assets and adopted the economic objectives of PCUK in this sector, Atochem must be the addressee of any decision and responsible for the payment of any fines imposed in respect of the infringements committed by PCUK.' In the PVC and LdPE decisions the Commission stated generally on the question (second paragraph et seq. of point 42):

It is thus irrelevant that an undertaking may have sold its PVC business to another: the As is clear from the case-law of the Court purchaser does not thereby become liable of Justice cited above and also to that extent for the participation of the seller in the from the Commission's practice, it must be cartel. If the undertaking which committed specifically determined in every case what the infringement continues in existence it has become of the 'undertaking' at fault. In remains responsible in spite of the transfer. the polypropylene decision and its written pleadings in the ANIC case, the Commission gives an excellent account of the factors to be taken into consideration. In the section of the decision concerning On the other hand, where the infringing Saga Petrokjemi, the Commission also undertaking itself is absorbed by another explains in an exemplary way why Statoil producer, its responsibility may follow it should, in its view, bear responsibility. and attach to the new or merged entity.'

The view that one might have suspected the ANIC has not in particular explained Commission of entertaining, namely that whether the management bodies and/or any remaining part of the undertaking may groups of persons responsible for the poly- be held liable to a fine in any event, is thus propylene business left ANIC and moved to probably simply incorrect, even though it Montepolimeri. may usually reflect the true position. On the other hand, it may be appropriate to emphasize that general considerations concerning the conditions and function of liability to a fine may require weighty reasons for holding, in the absence of In view of the case-law of the Court of special grounds, that liability can be Justice cited above and the considerations I incurred through the acquisition of a have set forth concerning the conditions and production entity with regard to which an the function of liability to a fine, the fact infringement of the law has been committed that ANIC itself transferred all tangible and by the transferor. Indeed, the Commission non-tangible rights, including production seems to be aware of this. Without its being plant and know-how, to Montepolimeri is necessary to come to a conclusion on the not, in my opinion, sufficient for ANIC to decision as far as the Norwegian under- cease to bear liability when it must be takings are concerned, the question whether assumed that in its present form and with its the management bodies and/or the group of present management and executives ANIC persons behind the infringements were also essentially continues to exist, only without transferred will be an important factor for its polypropylene production. the imputation of liability.

agreements or decisions prohibited pursuant with relative precision. An agreement to Article 85(1) are to be automatically void. covered by Article 85 can, of course, have been concluded in such a way that it would be legally binding on the parties but for the fact that it is invalid under Article 85(2). However, it is clear from the case-law of In the cases now before the Court, the the Court of Justice that an agreement interpretation of Article 85 has given rise to within the meaning of Article 85 may also argument on the interpretation of the consist of a 'gentlemen's agreement', 47 the concept of 'concerted practice' and on the binding and rule-making character of which question of the extent to which a plurality is not due to legal factors but to social of acts or, in some circumstances, omissions, psychological factors. An agreement may which are partly quite heterogeneous in consist of a continuous contractual character can properly be regarded as a relationship 48 and it can probably also be single agreement or as a concerted practice tacit so that it need not be set down in within the meaning of Article 85(1). writing.

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Article 85(1) has rightly been described as problems arising in the complex of cases an 'abstraktes Gefährdungsdelikt'. 50 now before the Court.

An agreement within the meaning of Article 85 ('agreements . . . which have as As is apparent from the proceedings in these their . . . effect.. . ') may, however, also cases, there are considerable difficulties in display the characteristics of pure 'result' arriving at anything like a clear definition of offences; in such cases, it is unnecessary to the conceptual content of, on the one hand, prove an anti-competitive object." On the the offence consisting of a concerted other hand, it is clear that a particular set of practice having an unlawful object, and, on facts may at one and the same time contain the other hand, a concerted practice having the constituent elements of both types of an unlawful effect. offence.

Much of the debate in academic circles and In the present cases, it is not, however, the in the present cases has left the impression concept of 'agreement' which causes diffi- that many commentators have in fact culties in the realm of interpretation. reached the conclusion that the concerted Rather, as mentioned above, it is the practice/object combination may if anything concept of 'concerted practice' which raises be described as a conceptual anomaly, considerable problems of interpretation. which has virtually led to the explaining away of this type of offence. It must also be recognized that a type of offence which appears to combine elements of both a 3. The concept of concerted practice 'conduct' offence (object) and a 'result' offence (practice which is concerted) may be a difficult concept to handle.

which might rightly be described as a even if after the concertation no actual concerted practice had an appreciable effect conduct, causally related to it, on the part on the market or at least that there is of the undertakings which took part in the evidence proving the initiation of parallel concertation can be proved. measures. It is also possible, however, that the Court might come to the conclusion that it is not possible to establish, with the required degree of certainty, either perceptible effects on the market or at least conduct which can be traced back to concertation of some sort. The pleadings submitted by the parties in the present cases may also give rise to considerations as to whether an attempt falls within the ambit of Article 85; in other words, whether under Article 85 'concerted practices . . . which have as their object. . . ' constitute an offence in themselves and not only attempts to commit the offence of It would then be a matter of interest unto adopting concerted practices having an itself to know how to judge the situation unlawful effect. when one knows that collusion has taken place but cannot establish exactly what happened thereafter.

(b) The significance of the question in the present cases

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But the Commission did not do this, so the In its letter of 29 March 1985, the question is what happens if the Court does Commission set out at length its views on not agree with the Commission on this the relationship between agreements and point. Is the Court itself to undertake the concerted practices within the framework of classification or is the decision to be Article 85(1). In the decision, those views annulled? In view of the existing case-law of are developed, as mentioned above in this the Court of Justice, in which the Court of Opinion in section I, A. 1. In points 86 to Justice has carried out its own fairly 88 of the decision, the Commission explains, thorough assessment of the cases, the possi- with reference to the dicta of the Court in bility of the Court carrying out an inde- the ICI and Suiker Unie judgments, why it pendent examination of its own can hardly considers that it is necessary not to draw a

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T h e Commission then describes the various 52 — See footnote 41. degrees of cooperation. First, agreements 53 — See footnote 3.

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When, for their part, the applicants contend In their submissions both sides examine that a concerted practice must have mani- closely the case-law of the Court of Justice fested itself on the market, this indicates to but arrive at completely different results. It the Commission that they are confusing the will therefore be useful first to look at the question of the proof of the existence of a background to the provision and at what concerted practice with the concerted can be deduced from the Court's case-law practice itself. which, as already stated, is sparse. The Opinions of the Advocates General in those cases also contain observations to which the parties have referred and which will be examined in more detail. Finally, academic literature is of some assistance in the task of interpretation. In my view, there is little indication that in general the applicants are confusing the concepts or have otherwise misunderstood the problem. They simply disagree with the Commission's point of view.

a constituent element of 'conspiracy', just as component of 'conspiracy', which concerns n o acts other than the conspiracy need be conduct on the market. committed. 55

As Joliét has remarked, 5 6 the concept of 'concerted action' was of significance for The interpretation of the Treaties on the the determination of the legal meaning of basis of the travaux préparatoires is a conscious parallelism of action, when there notoriously difficult area in Community was no direct evidence of 'conspiracy'. T h e law, one reason for this being that a large concept has thus been important in cases number of the preparatory documents have where the problem has been examined from not been published. In the area of compe- the market aspect and where on the basis of tition law, the difficulties are illustrated, for an assessment of the market compared with example, by Ellis's 57 examination of the other evidence it was necessary to determine known, more or less official, preparatory whether the alleged practice could be documents relating to Article 85. It is presumed to have been 'concerted probably also indicative that the applicants unlawfully'. nave not pointed to any specific, written elements in the genesis of Article 85 in support of their view.

Direct evidence of 'conspiracy' is, however, as stated, sufficient to constitute an infringement of the Sherman Act.

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hand, historical considerations do not the evidence of an agreement will often be support the Commission's view either. impossible to adduce unless the concept of agreement is to be emptied of all meaning. 5 9

(e) The dicta of the Court of Justice concerning the concept of 'concerted practice' In paragraphs 64 and 65 of the judgment the Court stated:

The Court's first judgments on this subject were delivered in 1972. 58 They were later to become the subject of a wide, and in part 'Article 85 draws a distinction between the critical, debate, which will be discussed concept of "concerted practices" and that of below under (g). "agreements between undertakings" or of "decisions by associations of undertakings"; the object is to bring within the prohibition of that article a form of coordination between undertakings which, without In those cases the facts differed significantly having reached the stage where an from the cases now under review. It was agreement properly so-called has been price increases implemented on the market concluded, knowingly substitutes practical which in themselves made the Commission cooperation between them for the risks of suspect coordination of a practice which competition. had unquestionably been implemented on the market. The dispute was about the extent to which the uniformity of the price rises could be explained by the oligopolistic structure of the market and the judgment refers (in paragraph 96) to only one meeting By its very nature, then, a concerted at which the undertakings could have had practice does not have all the elements of a the opportunity to arrange the concertation contract but may inter alia arise out of which is the central issue in the present coordination which becomes apparent from cases. the behaviour of the participants.'

It should also be mentioned that in para- before it, in which the question was graphs 118 and 119 of the judgment the precisely whether particular conduct on the Court stated: market found to be de facto uniform was due to collusion and there is nothing else in the judgment to indicate that in setting forth those grounds the Court also had in view situations such as that existing in the poly- 'Although every producer is free to change propylene cases, the judgment can hardly be his prices, taking into account in so doing relied upon in support of either the the present or foreseeable conduct of his applicants' view or the Commission's view competitors, nevertheless it is contrary to in the present cases. the rules on competition contained in the Treaty for a producer to cooperate with his competitors, in any way whatsoever, in order to determine a coordinated course of action relating to a price increase and to ensure its success by prior elimination of all The Court's judgment in the Sugar cases 60 uncertainty as to each other's conduct comes perhaps somewhat closer to the view regarding the essential elements of that now put forward by the Commission. It was action, such as the amount, subject-matter, stated in paragraphs 172 to 176 [(1975] date and place of the increases. ECR 1942):

In these circumstances and taking into account the nature of the market in the 'SU and CSM submit that since the concept products in question, the conduct of the of "concerted practices" presupposes a plan applicant, in conjunction with other under- and the aim of removing in advance any takings against which proceedings have been doubt as to the future conduct of compe- taken, was designed to replace the risks of titors, the reciprocal knowledge which the competition and the hazards of competitors' parties concerned could have of the parallel spontaneous reactions by cooperation or complementary nature of their respective constituting a concerted practice prohibited decisions cannot in itself be sufficient to by Article 85(1) of the Treaty.' establish a concerted practice; otherwise every attempt by an undertaking to react as intelligently as possible to the acts of its competitors would be an offence.

common market including the choice of the In the Ziichner case 6I a German court had persons and undertakings to which he asked the Court of Justice whether in makes offers or sells. transfers of capital and other payments between banks within the common market the debiting of a general service charge at a rate of 0 . 1 5 % of the sum transferred was a concerted practice. Although it is correct to say that this requirement of independence does not deprive economic operators of the right to adapt themselves intelligently to the existing and anticipated conduct of their competi- In its judgment the Court first summarized tors, it does however strictly preclude any its dicta in the ICI and Sugar cases, stating direct or indirect contact between such in paragraphs 12 to 14: operators, the object or effect whereof is either to influence the conduct on the market of an actual or potential competitor or to disclose to such a competitor the course of conduct which they themselves have decided to adopt or contemplate 'As the Court has stated, in particular in its adopting on the market. judgment of 14 July 1972 (Case 48/69 ICIv Commission [1972] ECR 619), a concerted practice within the meaning of Article 85(1) of the Treaty is a form of coordination between undertakings which, without having reached the stage where an The documents quoted show that the agreement properly so called has been applicants contacted each other and that concluded, knowingly substitutes practical they in fact pursued the aim of removing in cooperation between them for the risks of advance any uncertainty as to the future competition. conduct of their competitors.

Although it is correct to say that this 'Parallel conduct in the debiting of a requirement of independence does not uniform bank charge on transfers by banks deprive traders of the right to adapt them- from one Member State to another of sums selves intelligently to the existing or from their customers' funds amounts to a anticipated conduct of their competitors, it concerted practice prohibited by Article does however strictly preclude any direct or 85(1) of the Treaty if it is established by the indirect contact between such traders, the national court that such parallel conduct object or effect of which is to create exhibits the features of coordination and conditions of competition which do not cooperation characteristic of such a practice correspond to the normal conditions of the and if that practice is capable of signifi- market in question, regard being had to the cantly affecting conditions of competition in nature of the products or services offered, the market for the services connected with the size and number of the undertakings such transfers.' and the volume of the said market.'

Later on in the judgment the Court discussed coordination. In paragraph 21 it stated :

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tation alone or whether subsequent de facto concerned and the existence of a link and causally related conduct on the part of between such conduct and a prearranged the undertakings involved is required. plan.'"

In the Dyestuffs cases, 65 M r Advocate General Mayras essentially endorsed the (f) Observations of the Court's Advocates view expressed by Mr Advocate General General on the question Gand in the Chemiefarma case. However, on one point he goes further than M r Advocate General Gand. First, he refused to accept that as a legal category concerted practices were simply a particular variant of the concept of agreement; he maintained that the distinction in the Treaty should be In the Chemiefarma case, 62 Mr Advocate given an independent meaning and that General Gand took the same view as that concerted practices should be regarded as a maintained by the applicants in the present separate category in order to avoid circum- cases. In examining how far a 'gentlemen's vention of the provision by undertakings' agreement' was to be regarded as an not leaving any written trace of their agreement or a concerted practice within agreements. That view was followed by the the meaning of Article 85(1), he stated as Court, as I mentioned. M r Advocate follows : 6 3 General Mayras went on to state (at p. 671, right-hand column):

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case-law, an agreement, provided that its practice which has not had any material existence is established and that it has as its effect on the competitive situation, despite object an adverse effect on competition the intention of the participants and because within the common market, is prohibited of circumstances beyond their control, to under Article 85 without its being necessary escape the application of Article 85.1 should to consider the real effect of the said be tempted to say that in such a case merely agreement on competition. Thus it seems to to attempt or to initiate execution would be me that one cannot dissociate the idea of a enough to justify the application of Article concerted practice from the real effect that 85(1).' it has on the competitive situation within the common market.'

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a "coordination which becomes apparent elaboration, it is stated that the circum- from the behaviour of the participants". It is stances in question must be proved to have quite beyond dispute that the directives on had the effect of restricting competition. distribution were not only worked out in However, the problem arising in the present common but that they were and are cases is not discussed, this being applied . . . '. unnecessary in the circumstances of that case.

(g) Academic writing The most recent observations on the matter come from Mr Advocate General Van Gerven in the Sandoz case 68 (Opinion, p. 2, see footnote 7), in which, without further In this section, which is not intended to be exhaustive, reference is made to a number 67 — Sec footnote 7, [1983] ECR 1825, at p. 1929. 68 — Judgment of II January 1990 in Case C-277/87, published of writers whose observations on the matter in summary form in [1990] ECR 1-45. highlight the nature of the problem.

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Goldman71 states in his commentary on the Dyestuffi case when discussing the definition of concerted practices that the concept can J. A. Van Damme70 endorses Joliet's view, be understood either as an exchange of emphasizing that a concerted practice can declarations of intent which the participants be disassociated from the actual effects o n did not however intend to be legally binding market conditions. H e bases his argument (or as obligations from which they can on the fact that Article 85(1) also covers unilaterally discharge themselves) or as an concerted practices having the distortion of arrangement under which concerted partici­ competition as their object. It is, however, pation follows upon exchanges of infor­ interesting to note that Van Damme appears mation and mutual consultations between to make a distinction only between, on t h e undertakings but is ultimately freely decided one hand, cases in which only concertation upon by each individual undertaking. itself is proved and, on the other hand, cases Goldman goes on to state that not only may in which concertation which has affected gentlemen's agreements and agreements market conditions is proved. The last which can be terminated unilaterally be category mentioned by Van Damme is included in the concept of concerted really collusion having as its effect and n o t practices, it is also possible for practices only as its object the impairment of compe­ decided upon individually, but following tition. H e does not therefore distinguish an exchanges of information and consultation, intermediate category of concertation which to be regarded as 'concerted'. It thus has such an object and is followed by appears from Goldman's description of the concept of concerted practice that he would 69 — See footnote 56. 70 — La Politique de la Concurrence dans la CEĶ ]977, a publi­ 71 — Droit Européen dei Affaires, Themis, Droit 1990, p. 278, cation of l'Institut Universitaire International, Presses Universitaires de France. Luxembourg, Editions UGA. 72 — Journal du Droit International, 1973, p. 925 (p. 938).

consider the constituent elements of a not succeeded in bringing about the concerted practice having the impairment of intended effects. H e r description seems competition as its object to be present when rather to imply that in her interpretation she (i) collusion is proved, for example in the ignores the category of concertation having form of consultations and exchanges of an anti-competitive object because she information, and (ii) action is subsequently considers the concertation must manifest taken, even if that subsequent action is itself in an alteration in the actual freely decided upon by each of the partici- competitive situation, in other words that

According to Colmant, that is the case where the effects of the undertakings' conduct are insufficient to damage compe- tition but are sufficiently clear for it to be concluded that there must have been an intention to enter into anti-competitive activity. Colmant maintains that the Piriou7i (op. cit. p. 53), in her commentary existence of a concerted practice pre- on the Dyestuffs judgments, takes the view supposes a combination of two factors : first, that the Court of Justice attached decisive concertation, the subjective factor; secondly, weight to the effect which the concertation certain de facto conduct, the objective has on competition. From this she concludes factor; between those two factors there must that concertation must in practice result in be a link. the elimination of the risks of competition. She is thus dubious about Mr Advocate General Mayras's suggestion that the potential effect of a concerted practice, that is to say an attempt per se to mount a concerted practice, could be caught by Van Gerven7s stresses the importance of

actual competitive situation. Piriou thus against cartels operates as soon as coordi- appears to overlook the intermediate nation of the participating undertakings' category in which steps have been taken to implement the concertation but they have 74 — Revue du Marché Commun, 1973, p. 17. 75 — Kartelrecht, 1986. 76 — Handbuch des Europäischen Rechts, Article 85, Nos 17 and 73 — Cahiers de Droit Européen, 1973, p. 50. 18, p. 106 «seq.

Bellamy and Child78 also consider that contact between undertakings, often As will be seen from this brief examination consisting of meetings, discussions, of some of the academic literature dating exchanges of information or 'soundings from 1973 to this day, there is considerable out', when their object is to influence disagreement about the interpretation of the market behaviour, falls within the concept concept of 'concerted practice'. Some of concerted practices. writers regard the concept as meaning that concertation itself is sufficient, thus over- looking the word 'practice', or consider concertation to be a practice in itself. Other academic writers, particularly the most recent, insist that there must be both concertation and a practice, described by Kovar 79 interprets the Dyestuffi judgments some as subjective and objective elements as laying down a definition with two respectively. It appears clear, however, that components: one, objective, the parallel it is the concertation which is universally conduct, the other, subjective, its intentional regarded as the crucial element. All the character. commentators are unanimous that a practice on the market which cannot be traced back to any concertation is manifestly outside the scope of Article 85.

Druesne 80 considers that a concerted practice comprises two aspects: the conduct itself and the intention to act together. According to Druesne, the mere exchange of information can, however, constitute a However, it also appears from an exam- concerted practice, inasmuch as the under- ination of the academic literature that those takings, by making their intentions known commentators who say that there should also be a practice seem to suppose in some 77 — Kommentar zum EWG-Vertrag, Anicie 85, N o 28, p. 10. way that evidence must be adduced of an 78 — Common Market Law of Competition, Third Edition 1987, effect on the market and not solely of para. 2-040, p. 60. 79 — Clunet, 1977, p. 219. 80 — Droit Matériel et Politique de la Communauté Européenne, 81 — Das Wettbewerbsrecht der Europäischen Wirtschafts- 1986, p. 163. gemeinschaft, Article 85, No 23, p. 799.

As I shall endeavour to demonstrate below, the problem can, I believe, be reduced to (h) The starting point for interpretation one question: when is an infringement of the law committed? As will be seen, all this boils down to, in my view, is that the point in the course of events at which one can speak of a completed infringement called a concerted practice having an unlawful object If one considers the actual wording of is later than the corresponding point for Article 85, a concerted practice within the agreements having an unlawful object. meaning of that provision comprises a priori exactly the same elements as an agreement, namely there is a prohibition of concerted practices which have as their object the prevention, restriction or distortion of competition and an equivalent prohibition against concerted practices which have such (i) Do 'concerted practices' require conduct an effect. A literal and grammatical interpre- on the market? tation thus clearly leads to the conclusion that a separate category may be identified comprising concerted practices having an (unlawful) object.

assumed to exist immediately upon, and by into existence without something that can virtue of, the exchange of information of best be described as an agreement and we competitive significance or if concertation is suppose that A is to do a, B is to do b, C is ensured in any other way. to do c and so on, it is, however, quite obvious that such a concertation may be extraordinarily difficult to prove unless it has also been possible to obtain other, fairly direct, evidence of what has taken place. Nevertheless, there is clearly a concerted practice which simply does not manifest itself in the form of uniform parallel action. If we look at the available case-law as cited above in section (e), it will be seen that the cases have been considered from the perspective of the market. Hitherto the task has been to decide whether, on the basis of an observation of de facto conduct on the market and on the basis of the often slender documentary evidence available, it was possible to consider it established that the reason for the observed conduct on the market was collusion between the under- If one is confronted with a market which is takings in question. It is also clear that when behaving in a conspicuous way, displaying the market behaves in a way which is hard other indications or unlawful concertation, to explain, when one or more meetings take the relevant factors must, of course, be place between undertakings normally in concordant. If the market inexplicably competition, when more or less similar shows an actual price which is the 'right' telexes are sent out with, for example, price market price plus 15%, then, as far as the instructions and so on, these happenings will evidential situation is concerned, it does not typically be strong indications that help to have a telex which states the 'right' everything is not as it should be, even if price minus 15% or, for that matter, the there is no conclusive direct evidence. 'right' price plus 150%. It must be possible to prove a connection upon the evidence; it must be possible to infer safely from the behaviour of the market, on the basis of evidence pointing in the same direction, that there was concertation and what form it took. W h e n one considers a situation from the perspective of the market, it is evident that it will normally be conspicuously uniform behaviour on the market which will arouse the Commission's suspicions. However, a concerted practice can quite conceivably consist in a mutual understanding between the participating undertakings that A will d o X (for example, charge a particular price) while B, C, D and E will do Y (for example, But how does the situation appear from the charge a particular price less 5 pence). In other side? H o w does the matter stand if that case, too, there is a concerted practice. one is aware of 'concertation' but the other If, for the sake of the argument, we ignore factors are somewhat less clear? Is it the fact that it is scarcely conceivable for sufficient, as the Commission believes, that such a sophisticated arrangement to come there is proof of concertation, that is to say,

In my opinion, it can therefore be main- tained that in principle concertation will automatically trigger subsequent action o n We have to ask ourselves, however, what is the market which will be determined by the it that happens when undertakings have concertation, whether the undertakings d o entered into concertation? Why is the one thing or another with regard to their concertation something so crucial that, in market policy, that is to say regardless the view of the Court of Justice, it follows whether they subsequently behave in a more from Article 85 that 'any direct or indirect or less uniform way on the market. contact between such operators, the object Something of this sort will, in my view, also or effect whereof i s . . . to influence the occur if concertation in the form of conduct on the market of an actual or exchanges of information of competitive potential competitor' is categorically significance, for example about actual o r prohibited, as it stated in the more recent anticipated prices, takes place without any Sugar and Ziichner cases cited above? In my further coordination between the under- view, the reason is that such undertakings takings, that is to say merely on the under- will then necessarily, and normally standing between the undertakings that all unavoidably, act on the market in the light are presumed to react rationally in relation of the knowledge and on the basis of the to their own and the other participants' discussions which have taken place in situation. Thus, in such a case, the under- connection with the concertation. They will takings are in a position to assess the market have received information about the way in situation with considerably more certainty and to act accordingly. The exchange of 83 — See Hans-Dieter Lübben: Das Verbot, abgestimmten information will, all else being equal, entail Verbaltem im deutschen und europäischen Kartellrecht, p.at all events a considerable risk that market 90 and note 51.

conditions will not be the same as they an unlawful object covered by Article 85. would otherwise have been. It is obvious When undertakings act with greater that in such a case it will not normally be knowledge and more or less justified expec- possible to prove any concrete, specific tations about other undertakings than they causal link between the acts (practice) and should have had and normally would have, the concenation (the exchange of infor- there is always a clear risk that competition mation for an unlawful purpose). will be less intense than it otherwise would have been. Such a danger is distinctly present where market conditions are such that wholly free competition would lead to drastic falls in prices. If, as stated above in According to Article 85(1), all concerted point 2, agreements having an object which practices are prohibited. That part of the is unlawful under Article 85 have the provision is thus in the nature of a character of an abstraktes befährdungsdelikt. 'catch-all' provision, 84 which in its broad I find it difficult to see what is to prevent terms is intended to cover all forms of the infringement called a concerted practice competitive cooperation between under- having an unlawful object, which is takings other than just those belonging to completely parallel in that regard, from the concept of agreements. The passage being interpreted in a more or less from the judgment of the Court of Justice comparable way. The infringements have referred to above in section (e) in which it is exactly the same character. In the case of a stated concerted practice, there must and will be, in addition to the concertation, de facto conduct subsequent to and connected with the concertation. Nothing like that is required in the case of agreements. However, in both cases the essential thing 'a form of coordination between under- about the infringement is that traders in takings which, without having reached the those cases no longer determine indepen- stage where an agreement properly so-called dently the policies they will pursue and has been concluded, knowingly substitutes there thus arises a very considerable risk practical cooperation between them for the that conditions of competition not corre- risks of competition' sponding to the normal conditions on the relevant market will be created.

the market for unconnected, extraneous prove individual, causally-related acts. As reasons such as the destruction of its far as the undertakings are concerned, it production plant, Article 85 cannot apply. It follows from my argument that there is in would, however, apply if there was evidence fact incumbent on the undertakings a of an agreement having an unlawful object. certain burden of proof or at least a very Secondly, the view contended for here broad obligation to provide information if it means that it remains at least theoretically is to be accepted that the knowledge possible to prove that the practice being obtained from the concertation was not pursued is not concerted in the sense that in used in the determination of the under- some circumstances a party will be able to taking's policy. It is also worth pointing out show that it has cast off the ties or bonds in this regard that the applicants admitted ensuing from the concertation and closed its during the hearing before the Court that the mind to the knowledge gained from it. This information obtained in the meetings was might be conceivable where, for example, an useful. undertaking is taken over and the new management seeks to clean up the business or is simply unaware of the collusion which had taken place.

M y interpretation of the concept is in fact consistent with the opinion of a considerable number of academic commen- tators and in particular with the ordinary and natural meaning of the words used in the provision. It is to be observed in this regard that there is no question of an extensive interpretation of the provision, which, because of its quasi-penal nature, would be difficult to reconcile with It is evident that, as far as the practical generally accepted legal safeguards, as the consequences are concerned, there will not Court of Justice also indicated in its normally be any great differences between judgment in the Parke Davis case. 85 Finally, the Commission's view and the concept of it is to be observed that the interpretation concerted practice for which I am advocated here ensures that the effet utile of contending.

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(j) The structure of the two forms of perhaps rather as a matter of counter- infringement evidence, in relation to the existence of the agreements themselves. One of the applicants' arguments is that what may look like an agreement is not an agreement if it has not had the desired effects. Moreover, evidence regarding the existence of the agreements is also adduced on another In their written submissions the applicants basis, or at any rate it is sought to challenge contend that the Commission should have verbally the Commission's allegation that distinguished between an 'agreement' and a the agreements existed. 'concerted practice' because these forms of infringement are different in character and in particular because the matter to be proved is different.

As far as agreements are concerned, the dispute about proof mainly concerns two matters: on the one hand, whether agreements (having as their object etc.) were Consequently, even though I cannot share entered into and, on the other, whether they the Commission's view of the concept of produced effects, as the Commission concerted practice, I do agree that the two maintains. The existence of effects is in itself concepts, interpreted in the way I consider a matter to be proved, first for the purposes correct, have such a parallel structure that of establishing the extent to which Article the making of a distinction is unnecessary, 85 has been infringed because the at any rate in this particular instance. agreement had those effects and, secondly Consequently, when I later examine the and in the alternative, possibly for the evidence in the case I shall not always purposes of demonstrating that the matter is expressly indicate whether each specific of lesser gravity since the cartel had no, or aspect of the undertakings' conduct can be little, anti-competitive effect in practice. categorized as an agreement within the However, the question of effects is also meaning of Article 85(1) or is more in the important as a matter of evidence, or nature of a concerted practice.

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If the Court accepts this view, I see little If we consider the agreement/object profit in seeking to determine whether an offence, it seems clear to me from the attempt is punishable under Article 85. wording of Article 85 that this concept was Given the way in which the Commission's not intended to cover the situation where decision is drafted, it would, however, the Commission manages to break into the appear to be necessary to examine whether undertakings' negotiations before an it can be said that an attempt is punishable, agreement is concluded. The same applies, particularly where concerted practices are according to the wording of Article 85, to a concerned. concerted practice. Furthermore, elementary considerations relating to legal safeguards would militate against any attempt to introduce, without any express legal basis, a concept of attempt into the ambit of Article Article 85 comprises, on the one hand, an 85, which would in reality widen the ambit offence pertaining to abstraktes befährdungs- delikt, namely an agreement having an 86 — [1972] ECRaip. 687.

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5. Was the undertakings' conduct objectively inapt as a means f Thus, it is maintained (by ICI) that it is clear from the very wording of the provision that it is the object, objectively assessed, of the agreement or the concerted practice which must be considered in judging the case, and not the subjective intentions of the During the hearing Professor Albach participants in the meetings. The applicant concluded one of his addresses to the Court argues that the object of the arrangements by venturing his personal view that all the must be assessed in the light of the actual initiatives attempted by the undertakings economic context in which they are made, had to be regarded as having no more than and refers to the judgments of the Court of a placebo effect on nervous business Justice in Société Technique Minière*7 and managers. H e explained amongst other Volk.*" According to the applicant, those things that a price agreement can be an judgments show that, whether it is the effective strategy in an oligopoly when sale object or the effect which is being prices do not cover overheads. But, he examined, the evaluation of an arrangement continued, theory and experience show that cannot be divorced from its actual effects implementation is difficult on a market o n upon competition. Thus, in its view, in which there are seventeen producers and order to establish that the object of the practically impossible in a period of considerable overcapacity. He then 87 — Judgment of 30 June 1966 in Case 56/65 Société Technique described his analyses, which led him t o Minière w Maschinenbau Ulm GmbH [1966] ECR 235. conclude that the so-called 'target' prices 88 — Judgment of 2 July 1969 ¡n Case 5/69 fram Võik v S.p.r.L EtsJ.Vervaecke [1969] ECR 295.

According to the applicant's line of argument, the conduct displayed cannot therefore create liability when it is estab- lished, or so it contends, that it was not possible for it to affect the market, The present cases do not concern minor regardless of what was done. If the conduct undertakings with modest market shares could not, as matters stood, produce any where the risk of there being an actual effect, it could not have the object of effect on the market is slight. On the restricting competition within the meaning contrary, the largest petrochemical enter- of Article 85 either. prises in Europe, which together account for almost the entire market, are involved. The circumstances of the Volk case were thus quite different from those in the present cases and that judgment therefore has no value as a precedent for determining If, for the sake of argument, we assume that this point. the market was not in fact affected, it remains to consider how an indisputable intention to infringe the rules of compe- tition is to be judged.

It is also hard to see any connection between the applicants' situation and the It is difficult to find in the judgments cited judgment in Société Technique Minière. T h e or in any other judgments of the Court of Court of Justice stated that the object of the Justice any support for the view maintained agreement had to be considered, taking into by the applicant. account the economic context in which it

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was to be applied and that the effects on corroborate such an assertion in any competition had to result from all or some substantial way either, nor has there been of the clauses of the agreement itself. Société produced any evidence which, without Technique Minière also concerned an having been produced for the occasion, is of exclusive dealing agreement. general assistance in resolving the question.

It is difficult to see how the classification per se can have such crucial importance in the In my view, it would at least have to be context of these cases. I therefore consider possible to demonstrate that amongst it a matter of no decisive importance academic writers on economic matters there whether what happened is eventually to be was a consensus of opinion that the market designated a continuous infringement or could never be affected by the means which whether it is more accurate to describe it as parties seek to bring to bear. Nothing of the an agreement and a concerted practice. kind has been proved in this case. The most that can be inferred from Professor Albach's oral testimony is that, given the market conditions, the participating parties were If one considers the original, ordinary scarcely able to exert any appreciable meaning of the word 'agreement', it would influence on the market. The other certainly be straining this meaning to use it documentary evidence produced does not to describe a series of meetings and so forth

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RHÔNE-POULENC v COMMISSION

If, therefore, from the point of view of a The applicants contend, however, that the continuous infringement one can identify a term 'framework agreement' is an artificial gap from the middle of 1978 until autumn concept meant to cover up holes in the 1979, this must be equally true of any Commission's case. I do not believe that framework agreement, which thus no longer that is so. It must, however, be consists of one agreement but of two acknowledged that when the existence of agreements, with all the problems of limi- 'an agreement' has been inferred from only tation which this may entail. a large volume of evidential material, one must be particularly careful not to deduce from that concept something which was not there before.

In my view, therefore, the applicants' line of argument on this point cannot in itself lead to the annulment of the decision, but it remains to be verified whether the As the case has been presented by some of Commission has been able to prove its alle- the undertakings, there may be reason to gations and has not been induced by its own emphasize that one can regard 'framework description of all the events which took agreement' as a collective concept, which place into deducing facts for which there is the Commission also appears to do, otherwise no evidence.

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In its defence in the BASF case, for example, the Commission has this to say on the matter:

As is clear from my observations in the previous section, there is, in my view, no justification for arguing that the existence of a prior basic agreement on practically all 'It must be added that infringements of aspects of what is later supposed to have Article 85(1) of the EEC Treaty belong to taken place may be presumed. At the those infringements which can only be hearing, this was indeed acknowledged by committed by several parties acting in the Commission, which claimed that in the concert. Consequently, the involvement of decision it asserted nothing of the kind. each of the parties in the infringement Therefore, for that reason alone, it is not committed by the other participants in the possible to hold each individual applicant cartel must necessarily be imputed to it as its responsible for all the acts done by all the own conduct since the infringement resides parties participating in the cartel, even if it is precisely in that joint action. This does not proved that they took part over a certain exclude the various parties from joining the period. cartel at different times . . . '.

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RHÖNE-POULENC v COMMISSION

When, however, the Commission states in the second paragraph of point 83 that each participant must bear responsibility not only If one considers how the alleged cartel for its own involvement but also for the probably worked in practice, it is plain to execution of the agreement in its entirety, see that it can be extraordinarily difficult to this suggests responsibility going beyond the determine in detail the degree of involve- activities in which the undertaking itself ment of each party. W h o had the idea of participated and it is here that the problem taking this or that initiative? W h o sought to lies. It must, however, be added that in the persuade those others who were perhaps less same point in the decision the Commission enthusiastic? Who came to the meetings best explains that each participant's responsibility prepared? And so on. It is self-evident that arising from its involvement in the cartel where there are no admissions on the part relates only to the period in which that of the participating undertakings, it is often participant was in the cartel. not possible to unravel all those threads in an administrative procedure in which most of the evidence is based on written documents. Of course, in cases of this nature there are also limits on how far it is It is of course correct that, as the necessary to go into the finest detail. For Commission states in its defence in BASF technical reasons of a legal nature, it may case, the infringement of Article 85 is a therefore be justifiable to make do, if collective infringement in the sense that two necessary, with a slightly broader

Ltøon a reasonable and limited application of that argument, there is no justification for claiming that some are to bear collective liability; on the contrary, it is only that the legal system resists the overstretching of its It is perhaps these problems relating to requirements to include the provision of a proof which show through the not very detailed account and detailed evidence on felicitous first sentence of the second points on which this will rarely be possible paragraph of point 83 of the decision. and where the presumed perpetrators are themselves responsible for getting into such a situation, so that some relaxation of the requirements of proof must be regarded as unobjectionable. Otherwise, in many cases the Commission would in all likelihood have to abandon prosecution from the outset in If, like myself, one regards the Com- cases where there is unquestionably an mission's statements as merely reflecting unlawful cartel but where it is not possible those aspects, there is nothing to reproach to adduce detailed proof of each party's the Commission for. involvement in the cartel's activities. Such a result would in practice rob Article 85 of much of its effectiveness.

undertakings concerned have otherwise course, for the Court of First Instance and infringed Article 85, provided that it is the Court of Justice, and not for the proved that the undertaking or undertakings Commission, to provide the definitive inter- in question participated in other aspects of pretation of the decision. As expressed in its the infringements. defence in the Hercules case, the Commission's view comes perilously close to making mere contact with law-breakers or belonging to a group having an unlawful object liable to a fine and, as explained earlier, this has no basis in Article 85. If Upon a reading of the Commission's there were to be a need for such a rule, it decision, in particular point 78 and points would be for the legislature to introduce it. 107 to 109, there is no obvious indication that the Commission did in fact impute to certain undertakings responsibility for what others had done. However, this question must be specifically examined in relation to each undertaking, which will be done at a E — General remarks on the assessment of the later stage in my Opinion when the evidence and on the categories of evidence and evidence concerning each undertaking is the evidence itself examined.

2. Unfettered evaluation of the evidence A very important factor in the present cases is the overall view of the evidence. It is clear that even where it is possible to give a reasonable alternative explanation of a specific document, which may be isolated from a number of documents, the expla- It is important first to point out that the nation in question might not withstand activity of the Court of Justice and thus also closer examination in the context of an that of the Court of First Instance is overall evaluation of a whole body of governed by the principle of the unfettered evidence. It must accordingly be permissible evaluation of evidence, unconstrained by the to apply, as the Commission does, various rules laid down in the national legal conclusions drawn from periods where the systems. Apan from the exceptions laid evidence is fairly solid to other periods down in the Communities' own legal order, where the gap between the various pieces of it is only the reliability of the evidence evidence is perhaps larger. After all, there before the Court which is decisive when it needs to be a particularly good explanation comes to its evaluation. 89 In the present to convince a court of law that in a cases, only the evidence which cannot be particular phase of a series of meetings used by the Commission against the under- things occurred which were completely takings because it was not communicated to different from what had transpired at earlier them during the administrative procedure is or subsequent meetings when the meetings to be treated as an exception to that were attended by the same people, took principle, as I have explained above. place under similar external conditions and indisputably had the same primary purpose, namely to discuss the problems within the industrial sector concerned.

The Commission has relied on that fact in support of its view that if those persons were not heard there is less reason to give credence to the various explanations which 4. Documentary evidence some applicants — with, moreover, outstanding forensic skill — have advanced in order to prove that the documents produced in evidence do not demonstrate Most of the applicants have contested the what they appear to indicate at first sight. I reliability of the records of the meetings and consider that the Commission is right to take that view. It is remarkable that it the notes upon which the Commission has should have been necessary to put forward founded its decision. alternative hypotheses as to the true context of the case when persons connected with the undertakings, and in whose employment a large number of them presumably still are, The most important body of the could explain what all the documents really Commission's evidence is in fact the written meant. accounts, including the notes, found on ICI's premises. The Commission claims (point 70, fifth paragraph, of the decision) that the records of the meetings give an exact, trustworthy and consistent account of what took place at the meetings. The Commission further emphasizes that for N o decisive weight should, of course, be their part the applicants have not put attached to the fact that certain explanations forward evidence which might cast doubt on have not been provided, but, in my view, the reliability of the documents on which the point made by the Commission is at any the Commission relies (point 70, first rate an evidential factor which is at odds paragraph, of the decision). with the applicants' attempt to weaken the Commission's case.

Quite generally, it is not at all improbable for the representatives of undertakings to It is further claimed that even when the meet in order to enter into agreements or to notes recorded faithfully what was said, concert their practices in the way alleged by they are far from being reliable as a record the Commission. As we know, the of the defacto situation in the industry or of Commission has successfully argued before the intentions of the individual producers. the Court that this is what occurred in many In this connection, I refer to the quite cases. frequent remarks about the lack of trust between the parties and the fact that the undertakings' subsequent conduct demon- strates a lack of will to keep to the agreements, which, according to the notes, were entered into at the meetings. The documents in the present cases originate from employees who have to provide their colleagues and superiors with an account of what took place at meetings which they attended. If we exclude the Hercules case, there is no indication that For its part, the Commission refers in those persons did not fulfil their duties quite particular to the fact that the documents loyally and to the best of their abilities. were drawn up directly after the relevant Under the general rules of evidence, the fact events and that the person or persons who that the documents were drawn up took the notes had no reason at all not to immediately after the meetings and clearly give a correct account, just as the contents without any thought for the fact that they of the documents, according to the might fall into the hands of third parties Commission, do not bear any trace of exag- must be regarded as having great signif- geration. As mentioned above, the icance. An overall evaluation of the contents Commission claims that none of the under- of the reports of the meetings shows, in my takings asked for the persons involved to be view, that they were drawn up with care by heard pursuant to Article 3(3) of Regulation persons who were fully acquainted with the N o 99/63. matters they were describing, setting out in concise, measured and matter-of-fact language what the person or persons who drafted the reports understood from the meetings. They are clear and logical and do not bear any impression that the persons in In assessing the evidential value of a question may have seriously misunderstood reporting document regard should be had or misinterpreted what took place. It must first and foremost to the credibility of the also, of course, be regarded as improbable account it contains. Regard should be had that large industrial undertakings would

send their employees to meetings which the assessment and adjudication. Thus, when undertakings certainly considered important Professor Albach makes his observations if those employees were not capable of about what target prices might be in an reporting what happened at the meetings in economic context, it must be emphasized a sensible and reliable way. that his views are not, and cannot form, a legal assessment. Even if it were to be found that there were no significant effects on the market, that does not prove that no agreement was reached or that no exchange As far as the ICI case is concerned, it is of information took place with a view to maintained, as mentioned above, that the regulating prices. It is for the Court to notes of meetings were very often consider what is prohibited under Article supplemented by analyses and additions for 85(1) and the evidence for the commitment the author's own use. That is not of prohibited acts, and not for economic immediately apparent from the notes and theorists. despite the Commission's request to this effect ICI has not specified what the supplementary material and analyses were. Furthermore, and this must be repeated, ICI has not requested that the person or persons in question should be heard in order to On the basis of an overall assessment of the substantiate its claims. evidence, the Court must therefore consider whether what took place constitutes prohibited conduct, even if the expression 'target prices' from the point of view of economic experts might conceivably mean something other than unanimity on the In view of the foregoing, I consider that prices which all should strive to obtain. It is there need be no hesitation in assuming that the content of the documentary evidence the notes are a reliable source for under- which must show whether the persons standing what took place at the meetings attending the meetings had the intention of and given their ordinary natural meaning influencing prices or whether they simply they thus provide a basis for surmising the wished to tell each other what they thought significance of the matters discussed. were reasonable prices on the basis of market evaluation and it is the Court which must determine were necessary whether it is unlawful for parties to inform one another over a very long period of time about what 5. The economic analyses they think the market can bear.

The next link in the chain of argument of most of the applicants is the attempt to In my view, too, there is no other way to show that they had not come to any interpret the notes of the meetings. agreement or at any rate did not regard themselves as bound by any agreement, which is purportedly proved by the very fact that the prices they were together striving to achieve were not obtained.

However, it is perhaps the very term 'target prices' which lies at the root of much of the confusion characterizing the proceedings in these cases. For, as the Commission says, The applicants have thus in fact set them- the term 'target prices', as used in the notes selves the very difficult task of conjuring of the meetings and so on, must precisely be away the very certain and well-documented understood as reflecting agreements to the content of the negotiations and the effect that the undertakings should as far as impression of them created by the notes of possible attain a certain price level. As the meetings. In my view, they have not proved to be the case, and as the succeeded in that task and I think that there Commission is also aware, it was often need be no hesitation in assuming that difficult, and, according to the applicants, target prices and so forth were agreed to, impossible, for them to attain the prices t o probably in the form of a 'gentlemen's which they aspired. Indeed, the applicants agreement', as alleged by the Commission

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and to the extent that is otherwise borne out determining the parties' reciprocal legal and by the documentary evidence. moral obligations, is, according to the case-law of the Court of Justice, not decisive.

Some would perhaps argue that an agreement solely designed to strive to obtain a specific price as far as the market will bear The conclusion to be drawn from the above is not per se a manifestation of anti- must be that even a type of agreement competitive conduct. which, according to its substance, takes account of actual market conditions, as it undoubtedly must, is covered by Article 85(1). From the evidential point of view, it can, moreover, be concluded that any non-application or incomplete application in Yet, to judge by the notes, that is not what practice of the prices striven after is not was intended. On the contrary, the purpose suitable counter-evidence in the face of was to obtain a higher price than the agreements of that type. participants reckoned on or could have obtained. The intention was clearly to attempt to push the price level upwards. The 'object' within the meaning of Article 85(1) emerges quite clearly. Many of the applicants do not in fact dispute the factual circumstances, but only their legal consequences. Thus, ICI, for example, states that the targets discussed at the producers' meetings were consensus In view of the foregoing, it cannot matter, recommendations to which the producers in my opinion, that the very term 'target aspired with different degrees of prices' is so conveniently vague that in the enthusiasm. mutual relationships between the parties participating in the cartel it would be difficult to determine when a participant had ignored such an agreement. The fact that the agreements were akin to 'gentlemen's agreements' because of their In my view, that explanation lies square rather uncertain and vague substance and with a description of an agreement or thus could not have served as a basis for concertation prohibited under Article 85,

Generally, it is not possible to establish which undertakings snowed a greater or lesser degree of solidarity, even if some individual undertakings were in the spotlight According to the information available, at more than others; moreover, they need not the end of 1977 a series of meetings began, always have been the same. It is possible attended by a number of polypropylene that one or two undertakings demonstrably producers who supplied the European had more inclination to 'cheat' than the market. The meetings continued to take others, but the picture is far from clear and place until the end of September 1983. They the fact that the undertaking or under- were held with increasing frequency, ^'ius, takings in question possibly looked after the applicants do not seriously dispute that their own interests at the others' expense in 1978 six meetings appear to have been cannot, in my opinion, be taken as an indi- held, in 1979 an unknown number, but cation that they did not take part. probably fewer, in 1980 it would seem that there were six meetings, in 1981 ten meetings, in 1982 twenty-three meetings and in 1983, until the end of September 1983, fifteen meetings. According to the Commission, the basic aim of the meetings Exactly the same considerations apply as regards volume targets and quotas. 91 — See section A, 5 c.

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We know therefore that the Marketing Director of Hercules received information from an unknown source to the effect that The Commission's basic evidence as far as an agreement had been reached between the the floor-price agreement is concerned is a 'Big Four' the substance of which is outlined note supposedly made some time during the in the telephone notes — although not as first half of 1977 — possibly in June — by coherently as the Commission's decision the Marketing Director of Hercules. The gives the impression. notes concerned were made by the Marketing Director in the course of a telephone conversation with an unidentified person. In the document, which is rather fragmentary — as notes of telephone conversations often are — and which is not immediately comprehensible in all its details, it is first reported that the major producers have made an agreement. Besides that It thus appears that there existed what the statement are the names of the undertakings Commission later calls a 'core agreement' Monte, Hoechst, Shell and ICI. Next is (see the letter of 29 March 1985, p. 3) written, in telegraphic form, 'System floor between the four major producers and that prices — Floor prices from July 1 — defi- Hercules had knowledge of it. W e learn nitely August 1 when present contracts nothing further from that document and in expire — Floor prices for 4 month period particular we learn nothing about other only'. Then follows a remark about an alter- producers. It is, however, not unreasonable native, which possibly refers to something to infer from the wording of the document then existing. In between those notes there that an agreement was entered into between are some remarks about importers which do the four major producers in particular and not appear to belong in any context of not between other undertakings. Indeed, which we otherwise have knowledge. that possible interpretation is put forward by Thereafter there is a sentence which the Commission both in its letter of 29 probably means that a meeting is to be held March 1985 and later as an alternative.

'In the market situation described above, six or seven producers, including . . . (Monte), were in contact with each other, in all prob- ability by telephone, with a view to ICI also broadly admits the factual circum- examining what arrangements might stances. It thus does not deny that the possibly be considered in order to alleviate producers were in telephone contact in the the very serious difficulties they were facing crisis year of 1977 and that the discussions at that time might have been about the collapse of Western European prices. It admits that it is also possible that some producers may have suggested the desirability of a minimum price level in order to halt the slide in prices. In the course of those contacts, Monte ICI then refers to the abovementioned note, states further, the prices which would have which it does not, however, find cogent enabled those difficulties to be alleviated because the price in fact fell to D M 1.0/kg. were indicated.

On this point, the Commission contends On this point, the Commission states that that in the first place there was no reason the note appears credible per se and that for the undertakings to calculate between both ICI and Shell have admitted that there themselves a price which would have was telephone contact between the

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European Chemical News under the sufficient profit to producers and that prices headline 'Montedison PP price rise backed should continue to be increased. by European producers'.

4. The meetings between the producers

3. The continuation of the floor-price agreement

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as the period from the end of 1977 or the be careful not to attach too much weight to beginning of 1978 and thereafter is what is not contained in a document. concerned, decisive weight is attached to the fact that meetings took place at which it is not disputed that the producers discussed the problems faced by the sector.

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by knowingly cooperating with the Big Four course, is that the whole thing was stage- on the implementation of that agreement. managed for the benefit of the under- takings' customers and the public.

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form of 'price-leadership' 92 put into effect there is no evidential basis for holding by the Big Four acting together. If the that the others did likewise. position were otherwise, it would mean that there would be a prohibition against under- takings' reacting intelligently to the existing market, which cannot be the intention of the competition rules (see the judgment of 6. Assessment of the situation in 1978 the Court of Justice in the ICI case, paragraph 118).

As far as 1977 is concerned, it should accordingly be held that the Big Four — Monte, ICI, Hoechst and Shell — More direct evidence, such as to that participated in a floor-price agreement available for later periods, is missing for as the Commission alleges, whereas 1978 and the sole price initiative that the Commission considers it has found is the 92 — See the US case Hunt v Mobil Oil Corp. (Supreme Court, 1977) 465 F. Supp. 195, 231, according to which it is not 'second part' of the floor-price agreement sufficient in order for unlawful conduct to be regarded as proven for an undertaking to have been present at the of 1977. It is, of course, suspicious if place where the unlawful act was committed and possibly competing undertakings hold more or less even to have had knowledge of others' unlawful conduct. regular meetings to discuss the market, 93 — Note in this regard that Van Damme distances himself on this point from Joliet's criticism of the ICI judgment: La market demand, the balance of supply and Politique de la Concurrence dans la CEĶ p. 150. demand and the price level for individual

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In my view, the course of events of which we are aware, does not leave much doubt that discussions were held in 1978 which had some sort of unlawful object and later led to something unlawful taking place, but in the final analysis there must be evidence T o summarize, I therefore conclude that the that the discussions led to concrete results in Commission has not adduced any evidence

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of agreements or concerted practices 'Quote 1980' and 'Proposal I' and 'Proposal contravening Article 85(1) as far as any of II' and 'Proposal III', probably originates, the undertakings are concerned, at least as according to ICI on whose premises the regards a significant part of 1978. table was found, from one of the German or Austrian producers. In the latter table are calculated, according to ICI, first the producers' actual sales to West Europe in the years 1976 to 1979. Again according to ICI, the column ' + % gg 1979' contains a I shall return to this matter latter, but as far calculation of the individual undertakings' as the four major producers are concerned, figures for 1979 with the addition of either the liability to a fine for matters which the 5 or 10%. The column 'Quote 1980' is the Commission has, in my view, demonstrated author's suggestion for 'target volumes' for with regard to 1977 and the beginning of 1980. The columns 'Proposal I, II, III' were 1978 must be regarded as time-barred. intended to be filled in by ICI's represen- tative. The column 'Proposal III' contains the final target quotas suggested as the 'quota' for the year 1980.

In the first table (annex 55 to the general part of the statement of objections), which is headed 'Producers' sales to West Europe (Turkey not included)' are set out, in the three first columns, the producers' sales in As far as production volumes are concerned, the years 1976 to 1978. These are the it is first stated in the note of the meeting of figures for all the applicants in the present 26 September 1979 that it was accepted that cases as well as for the other West a fixed quota system was important and European producers. In a fourth column then follows the statement: 'go for 80% there are the figures for the year 1979 with scheme as per recent Zurich note'. With the additional word 'actual'. In the fifth regard to this latter cryptic remark, ICI column there are corresponding figures explains (Article 11, response, p. 23): At a under the heading 'revised target 1979'. T h e meeting in Zurich the producers who were next table (annex 56), which is divided up represented took total industry sales made into a main column under the heading in West Europe during the first eight 'Sales' and columns headed ' + % gg. 1979', months of 1979 and averaged these in order

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to arrive at a monthly rate. It was doubting that there was a price initiative in considered that monthly demand in the last the last half of 1979. Any quota three months of that year would be at no arrangement alleged to have been more than 80% of the average monthly introduced by the beginning of 1979 is, demand in the first eight months of the year however, in my view not sufficiently well and accordingly at the meeting it was documented. It may be assumed that there suggested that producers should limit their was some sort of arrangement in the final volume ambitions to take into account this months of 1979 but — according to the fact. evidence to hand — not the quota agreement alleged by the Commission.

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October nor in November and that the plan operating companies in Europe would be n o w is 2.05 on 1 December. Finally, as far aiming to secure Montedison's target D M as prices are concerned, it states '1 Nov. 2.05/kg. Shell reckoned that its polypro- 1.90 or 1.95 — yet to be decided — but pylene prices would rise towards the end of decision will be swift', whatever that might August or early September. mean in the context.

In a letter dated 29 August 1979 As to the Commission's further evidence, it ATO-Chimie notified its prices applicable must first be observed that the documents from 1 September 1979 for consignments of originating from Shell mentioned in the 20 t as FF 4.70 for 'fibre', FF 4.70 for second paragraph of point 29 and the first 'moulage homopolymère', FF 5.00 for paragraph of point 31 of the decision must 'moulage copolymère' and FF 4.90 for 'film not be taken into consideration since they homopolymère'. The prices for other grades were not sent to all the undertakings in the are also on the list. Further surcharges for course of the administrative procedure (see various grades and for quantities of less above, p. 11-897 ff.) than 20 t are given.

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containing price instructions it was also for September are given: 'raffia 2.05; ho stated that the price rises were necessary moulding 2.05; co moulding 2.20; ho cast even though the price rise announced at the film; 2.10', the last figure being crossed out end of May 1979 'has not in any case fully by hand and amended to '2.05 DM/kg'. In penetrated'. In the letters to the offices in notes to the list of prices it was mentioned other countries the prices for 'Raffia' and that premiums and discounts remained as 'Spritzguß' are given as BFR 33/kg, FF they were and that D M 1.90 was to be paid 4.70/kg, LIT 920/kg and 500 or UKL for 'oriented film', which was to become 510/t. D M 2.05 from 1 September.

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In a telex of 20 June 1979 Chemie Linz 'Floor PPF 500 informed its sales organization in Germany H P M 510' that on 19 June a decision had finally been taken to raise the price to D M 1.90 for raffia. It then pointed out that its compe- titors were trying to obtain a price increase for 1 July 1979, which would be reflected in information given to their local organiz- ations. In addition it was mentioned that it Finally, a cutting from European Chemical was appreciated that a necessarily reduced News dated 6 August 1979 and put forward flexibility in prices on the part of compe- in evidence by Atochem should be titors would mean more contact from mentioned. Beneath the heading 'ICI joins consumers. It finally explained that it would latest P P initiative', it is reported that ICI, be necessary and practicable to aim at a following the previous week's pricing further price increase of 15/pf. for 1 initiative by Montedison, had announced its September. ' D M 2.05' is added in brackets intention to lift polypropylene prices on the and 'Raffia' is inserted by hand. European market by 5 to 10% from 1 September. Homopolymer would thus rise to UKL 500 per tonne, compared to the 1 June level of UKL 480 per tonne.

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take effect from 27 August. Hoechst, BASF The internal Solvay document mentioned in and Chemie Linz had, however, shortly point 32 of the decision and the information before that public announcement, given contained therein cannot be taken into notice of exactly the same price rise to take consideration since it was neither sent to the effect at more or less the same time. Shell undertakings in the course of the adminis- and ICI sent out their announcements on 30 trative procedure nor otherwise adduced in July and it is of course conceivable that, as evidence. Shell states, those undertakings acted on the basis of a price announcement which Monte might have sent out a few days before the publication in European Chemical News. In any case, those undertakings certainly reacted extremely rapidly. Given the fact In the decision the Commission stated that a that (a) it is documented that meetings were price initiative was mounted at the end of held, (b) it is clear that at least three under- 1980 to set a target price of DM 1.50/kg. takings, for reasons difficult to explain, The only basis for that allegation is a arrived at exactly the same view as Monte number of price instructions from various with regard to the price level to be applied undertakings, the aim of which was to push from a particular date, and (c) it appears prices up to the level that the producers from the said note of the meeting that an were reported by European Chemical News effort was to be made to attain precisely of 10 November 1980 as believing could be that price level before 26 September, I attained before the year end. consider that there need be no hesitation in assuming that the level and timing of the price rise must have been the object of an agreement or concertation.

minimum prices applicable from 5 January It is stated in that letter inter alia that there 1981 as UKL 320 per tonne for raffia, were sure to be individual cases where UKL 380 per tonne for 'homo- temporary solutions would have to be polymer— moulding' and UKL 430 per found. tonne for 'copolymer — general purpose'. In the letter it was stated that Shell was reported to have written to its customers to announce a price rise of UKL 30 per tonne as from 1 January 1981. In addition, instructions were given concerning the On 9 December 1980 Monte informed its procedure to be followed in cases where it Italian sales offices that from 31 December might be necessary to arrive at a 1980 the price would be LIT 720, 750 and compromise in relation to target prices. In 870. It was stated that a watch would be telex notifications, the dates of which are kept on how the situation developed so as illegible, to ICI in France and Italy the to ensure the best possible result with regard prices stated as 'desired minimum prices to the price/volume relationship. from the beginning of next year' are 3.50, 4.10, 4.00 and 4.30 for January and 4.00, 4.40, 4.30 and 4.60 (FF) for February and 720, 760, 750 and 850 for January and 830, 860, 850 and 950 (LIT) for February.

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merely followed. The somewhat vague and Therefore, in view of the above, I see no anonymous statements in European reason for doubting the essence of the Chemical News thus plainly cannot explain Commission's findings of fact as far as the why the price level of so many undertakings content of points 32 and 33 of the decision was set as uniformly as it was. Furthermore, are concerned. the uniformity of the price announcements is particularly striking.

(c) August to December 1981 The report concludes that 'it was agreed' that the D M 1.75 target should remain and that DM 2.00 should be introduced 'without exception' from 1 March, as mentioned in point 33 of the decision. The detailed examination set forth above of the documentary evidence concerning the first price initiatives has shown that essen- tially the Commission's assessment of the evidence had a firm foundation. It is thus The price instructions issued and referred to mainly the leaving out of account of in the last paragraph of point 33 of the documents which — as explained in more decision essentially correspond to that plan, detail in Section A, 5 (c) above — cannot be except for ATO's instructions which are used on procedural grounds that alters the slightly at variance. picture slightly.

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In the second paragraph of point 35 of the September 1981 for the months of decision, the Commission states that there September and October. On 28 August was an original plan to go for a price of Shell issued a notice of prices to apply from D M 2.30/kg in September 1981 and that 1 September and 1 October. In that letter, that plan was probably revised at the the alleged intended price increase meeting on 28 July. As will have become mentioned in the first paragraph of point 36 clear from the foregoing, the sole ground of the decision is simply referred to as 'nov. for supposing that there was an original, 2.5 D M / k g ' . concerted plan consists of the ICI and Shell letters dated 17 and 19 June 1981 respectively and we have no information as to whether meetings were held in the period before 28 July, apart from the meeting on 15 June. On 23 December 1981 ICI issued a notice of prices to apply from January 1982. On 5 November 1981 Shell issued a notice of target prices for November and December. On 27 November prices were issued for What we know therefore is that after the January 1982. meeting on 15 June ICI and Shell both had plans to attain a price level of D M 2.30 by 1 September. The first more solid evidence which emerges is, however, the holding of the meeting of 28 July 1981 together with the note from Hercules of 29 July Examination of those price instructions concerning the 'official prices' for August shows that the Commission is justified in and September. describing them as nearly identical. Bearing in mind that it is known that meetings were held shortly before most of the price instructions were issued and also that there are otherwise well-documented price For those reasons I am not satisfied that initiatives, I have no hesitation in assuming there is sufficient evidence of an 'original that a similar initiative took place with plan' as mentioned at the beginning of the regard to September and probably for the second paragraph of point 35 of the rest of 1981. decision.

(e) The end of the price cartel was held. The Commission, however, takes the view that the undertakings continued to concert their practices even after 29 September 1983 on the basis of the previous agreements. The last price initiative mentioned in the decision is stated therein to have begun in July 1983. With regard to the period leading up to the last meeting, held on 29 September 1983 (possibly 30 September), The question whether the cartel had any before the Commission's investigations took effect even after the Commission's investi- place, the content of the decision does not gation does not appear to be particularly call for comment. As with the period from important in this case since it is strictly a June 1982 to November 1982, the evidence question of whether the cartel might have is so massive that there is no reason to go produced effects for a further few months. into it in detail in this Opinion. I should If this further period is compared with the point out that two documents originating duration of the cartel, it must be obvious from Shell and mentioned in point 49 of the that the question how far agreements decision cannot be relied on as evidence for entered into before 13 and 14 October 1983 the existence of the cartel. The documents were followed for any time after those dates concerned are a document called 'PP W . is not of great significance for the determi- Europe-Pricing' and an internal report nation of the amount of the fines. dated 14 June 1983. According to the Commission, all the applicants had the opportunity to acquaint themselves with these documents when they were given access to the files. However, as stated earlier, this is not sufficient in my opinion. The applicants' view of the legal situation as regards the last period of the cartel is however, incorrect. The unlawful activity cannot be regarded as having ceased when the Commission intervened and thereby possibly put an end to the organized The fact that those two documents cannot meeting activity. It is the effects of the cartel be used does not, however, weaken the which are decisive. Commission's conclusion.

concerned with the economic effects of 9. The quota arrangements agreements or of any comparable form of concerted practice or coordination rather than with their legal form'. Similarly, in the EMI judgment 95 (at paragraphs 30 to 32, p. 848), it is said that agreements are also covered by Article 85 if they continue to As is clear from my remarks in section F, 7, produce their effects after they have above, concerning the situation in 1979, I formally ceased to be in force. The situation do not think that there is a sufficient basis in the two cases cited was somewhat for concluding that there was a quota different from that in the present cases. arrangement for all of 1979. The first quota They concerned proper agreements which arrangement to be dealt with in this section were formally terminated and not will therefore be the alleged quota arrangements made within the framework arrangement for 1980. of a cartel in which the agreements, by their the very nature, are characterized by the fact that the parties to the agreement knew perfectly well that their purpose was unlawful. As the Commission mentions under heading VII of the decision and as is shown by the documentary evidence, the undertakings operated with 'volume targets', 'target volumes', 'quotas' and 'aspirations'. These terms raise exactly the same difficulties of interpretation as the term 'target prices'. As mentioned above in section E, 6, it must, however, be assumed that agreements or concertation fall within the prohibition in The same principle must, however, apply. If, Article 85(1) even if their substance essen- therefore, it can be established that a similar tially takes account of actual market pattern was followed in the period after the conditions. The same holds true for target meetings ceased to take place, the obvious quotas. assumption is that the agreements or concertation previously entered into were being put into effect in the period after the Commission's investigation. As I see it, there is not much doubt that the price instructions for the period in question, that is to say (a) The arrangement for 1980 October and November 1983, show that agreements or concertation must have existed. I therefore agree with the Commission that the cartel cannot be regarded as having terminated until a few months after the last meeting. This conclusion applies even though the In the note of the 26 September meeting, it document referred to in the third paragraph is stated, as discussed earlier, that a fixed of point 51, which was found on ATO's quota system is 'essential'. That demon- premises, cannot be used against the under- strates that at that time the problem was takings since it was not sent to all of them. being addressed and, as mentioned above in section F, 7, there are certain indications that a form of quota arrangement was in 95 — Judgment of 25 June 1976 in Case 51/75 EMI Records Limitedv CBS United Kingdom Limited [1976] ECR 811. existence at the end of 1979.

At the other end of the time-scale covered been the virtual 'withdrawal from Dundee' by the alleged quota arrangement we find as a result of trying to lead prices up early the note of the experts' meeting held in in the year. January 1981. In this note provisional sales figures for December 1980 are set out and sales figures in the fourth quarter of 1980 are compared with those for the corre- sponding period in 1979. It can be seen that sales figures for each month of the fourth quarter of 1980 exceeded those for the corresponding months in 1979 and that total sales in 1980 were only 3 % lower than From the year 1980 there is a table (annex those in 1979. Sales figures for each indi- 60 to the general statement of objections) to vidual undertaking are then set out in a which reference is made in the first and column. Alongside there is a second column second paragraphs of point 55. On the in which is given the target figure for each typed table headed 'Polypropylene — Sales undertaking, based, as stated in the note of Target 1980 (kilotonnes)' the date of 28 the meeting, on a '1.21 million tonne market (but possibly 26) February 1980 is written in in Western Europe in 1980'. In a comment by hand. In the table there are four columns on the figures it is said that of the four headed '1980 Target (Based on 1979; major producers only ICI was off target. Petrofina Adjust.)'; 'Opening suggestions'; D S M , it continues, disputed any under- 'Proposed adjustments' and 'Agreed targets'. taking to cut back from its original target; In the latter column are given the figures for the Amoco figures were largely guesswork each undertaking, which added together and the Hercules figure did not seem to fit produce 'max 1390' (kilotonnes). At the in with views about its level of activity in root of the document is typed '1 390 kt 1980. It is explained that figures were not would represent + 12.1% on 1979'. Beside forthcoming from Solvay and BP but adding the figures for Saga, Tagsa/Paular, BASF the rest together would suggest a combined and Petrofina there is an asterisk referring total of 90 kilotonnes versus a target of 71 to a note in the document that they are 'to kilotonnes. be rechecked'. Against Petrofina, in the column 'Proposed adjustments' is written 'max. 20', which reappears in the column 'Agreed targets'. That tallies with the fact that, according to the information available to us, Petrofina did not enter the market until 1980.

brackets which, compared with the figures striking it is that from three different in that document's 'Proposal II' column, sources, namely ATO, ICI and an correspond to the first-mentioned unidentified German undertaking, there are document's 'Agreed targets' column, as far detailed schemes specifying quotas in the as the undertakings for which 'adjustments' form of an 'opening suggestion', a revised were proposed are concerned. In the suggestion and a final or agreed proposal, 'Proposal III' column in annex 56 figures which correspond to each other down to are given which correspond essentially to almost the smallest detail. the 'Agreed targets' in the first-mentioned document which, when totalled, amount to 1 378 kilotonnes. There are discrepancies as regards Petrofina (15 instead of 20), BASF (60 instead of 64) and Saga (35 instead of 38), that is to say 12 kilotonnes in total, which relate to three of the four under­ When the notes of the meetings of 26 and takings which, according to annex 60, were 27 September 1979 and January 1981 are to be ťechecked. also taken into account, confirming that discussions took place in the latter half of 1979 and corroborating the contents of the tables, I see no reason to doubt that the course of events recounted in point 55 of the decision as far as 1980 is concerned must be regarded as an essentially accurate The figures found in annex 60 in the and well-founded account. I find especially column 'Agreed targets' recur in annex 57, a revealing the comment in the note of the document originating from ICI, dated 8 meeting of January 1981 to the effect that October 1980, in which a comparison is DSM disputed any undertaking to cut back made between 1980 quotas and the various from its original target. D S M is quoted as undertakings' theoretical capacity. They are having sold 46.1 kilotonnes, which should again found in annex 58 in the column be compared with the fact that in the 'Sales 1980, Aspirations'. In that document, document of 28 February 1980 that under­ which originates from ICI and is dated 9 taking is mentioned as having a quota of 45 October 1980, actual sales for the individual kilotonnes. undertakings are also given, together totalling 1 170 kilotonnes. Finally, in annex 59, which also originates from ICI, there are columns showing 'targets' for 1980, totalling 1 382 kilotonnes, compared with 'actual'sales listed in two columns, one typewritten in round figures and one hand­ written with exact figures, totalling 1 207.9 (b) T h e period 1981-82 kilotonnes. Those figures correspond, with minor discrepancies, to the figures mentioned in the note of the meeting of January 1981.

From the note mentioned in the decision (annex 64) of a meeting on 27 May between Shell and ICI it is clear that no quota From an undated internal note found on agreement had been entered into at that ICI's premises (mentioned in the third time. From the note of the meeting dated 17 paragraph of point 56 of the decision) June 1981 also referred to it appears that no (annex 63) it appears that at a meeting quota arrangement had been established at various alternatives had been discussed as that point either. regards quota arrangements. It is not clear whether this was an internal ICI meeting or a meeting between producers. According to the note, ICI's attitude was that volume should be limited to the level that the market was expected to reach, namely 1.35 In a table found on ICI's premises, but million tonnes. It is then stated that apparently originating from Monte (annex

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1982 If the first months of the year are left out of account, it appears fairly clear from the documentary evidence that the producers could not agree on a quota scheme. T o support the Commission's assumption that there must have been a stopgap measure of such a nature as to be covered by Article The Commission believes that the under- 85(1) there is, however, only the statement takings similarly required each other to limit that 'people' used 1980 quotas. The fact that sales for 1982 without otherwise managing at some point which might have been at the to reach a consensus on a quota scheme. end of 1981 or the beginning of 1982 a Annexes 69 to 71 of the general part of the

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Point 59 of the decision contains an account (c) Quota arrangements in 1983 of ICI's initiative upon the taking over by the undertaking of the chairmanship of the 'group'. As regards quota arrangements, it is clear that ICI wished to have, and considered essential, an effectively func- For the first two quarters of 1983 the tioning quota system which was to take Commission considers it has established that effect from the beginning of 1983. there was a consensus between the Meanwhile, it was emphasized (from the producers on a quota system. note of the meeting of August 1982 it appears that it was ICI which emphasized this to the others) that the undertakings had to endeavour to limit their sales to the market share which they had had in the first It is indeed clear from the documents put months of the year and (also according to forward in evidence that upon taking over

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the chairmanship of the 'group' in the provides a basis for concluding that a middle of 1982 ICI attached great weight to consensus was reached for the first quarter. the introduction of a quota arrangement. The evidence shows, moreover, that ICI's managers made great efforts to set up such an arrangement.

Thus, in my view, there are no sufficient grounds for assuming that there was an agreement on a quota arrangement for any part of 1983.

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discussions of each individual customer's the undertakings agreed to divert their situation. supplies to deep sea markets in order to create a shortage in Western Europe conducive to a price increase. In the light of the evidence available I find it doubtful that the undertakings did anything other than inform each other of their sales to deep sea markets, called 'rest of the world' in the In my view, on the basis of that evidence documentary evidence. It is quite normal for there cannot be any reasonable doubt that undertakings to attempt to dispose of the Commission is right in believing that surplus production in markets other than one or more management systems were used the nearest. However, very firm evidence is in order to try to halt or neutralize required before it can be found that the customer tourism. It is not hard to imagine undertakings clearly intended to create a that a system such as that described shortage on the West European market. In collapsed after a time. It is certainly no easy my view, there is no such evidence to hand matter to make such a system work in a and the proper course for the Court is to market with 20 sellers and a very large ignore the Commission's allegation that number of purchasers. The notes of there was an agreement to divert supplies meetings in 1983 show, however, that it did from Western Europe. function for some months.

G — Limitation 11. Other ancillary measures

continuing or repeated infringements, time The Commission regards what happened begins to run on the day on which the quite simply as a constant or continuous infringement ceases. infringement and in the decision also alleges that there is such an interrelationship between the floor-price agreement of 1977 and what subsequently took place that the infringement which began in 1977 can be regarded as having ended only some time after the Commission's investigations at the According to the first sentence of Article undertakings' premises on 13 and 14 2(1), the limitation period is interrupted by October 1983. any action taken by the Commission, or by any Member State, acting at the request of the Commission, for the purpose of the investigation or proceedings in respect of an infringement. The limitation period is inter- rupted with effect from the date on which The applicants maintain their view that the the action is notified to at least one under- arrangements which may have existed in taking which has participated in the 1977 were essentially different and infringement. completely separate from what later took place.

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can establish with sufficient certainty, cases where the incriminating evidence is namely the price initiative in the latter half clear and unambiguous. I would recall that of 1979. Of course, the beginning of the in Section I, F. 5 above I have expressed my series of meetings which formed the views on the question of the participation of framework for the later infringements bears the smaller undertakings in the floor-price some temporal connection with the agreement as from 1977, and so in principle floor-price agreement, but no concrete I shall not comment on that aspect in this unlawful results of the series of meetings section. prior to 1979 have been demonstrated.

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The Commission for its part first refers to its main premiss that the matters discussed at the meetings of which no reports are available must have been the same as those discussed at the meetings of whose subject- With regard to documentary evidence matter we do have knowledge. The concerning the period when Rhône-Poulenc Commission thus bases its view precisely on was present on the market, the applicant the retroactive presumption which is chal-

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OPINION OF MR VESTERDORF — CASE T-l/89

In so far as Rhône-Poulenc is concerned, the only evidence of its involvement in the cartel, apart from the references in the quota tables, is its participation in the As far as its attendance is concerned, meetings. As I stated in the introduction to according to ICI's information, Rhône- my Opinion and as is accepted in American

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The Commission points out that having taken part in secret meetings at which target prices were agreed Rhône-Poulenc cannot escape responsibility for involvement in the One argument connected to a certain extent with the matter of evidence is Rhône- 97 Sec footnote 92; see also the Opinion of Advocate Poulenc's assertion that the Commission General Sir Gordon Slynn in SA Musique Difįuuon Française v Commission (cited in footnote 2). disregarded the principle of equal treatment

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in so far as it treated Rhône-Poulenc as a meetings and on that basis it did not believe participant in the cartel while not pros- that the cases against BP and A M O C O ecuting BP and A M O C O even though, in would stand up. Such an assessment of the Rhône-Poulenc's view, the Commission had evidence must clearly lie within the better evidence against those two under- Commission's margin of discretion even if takings than against Rhône-Poulenc. others might consider that the cases could have stood up. Moreover, in my opinion, the Commission's assessment appears reasonable. On those grounds I therefore consider that Rhône-Poulenc's submission in this respect must be rejected.

T h e Commission states that the decisive factor in its assessment of the evidence was that the involvement of those two under- takings in the meetings of the cartel could Finally, Rhône-Poulenc has claimed that the not be proved and that the Commission statement of reasons for the decision is therefore decided, despite holding certain inadequate in its regard in so far as the suspicions, to refrain from taking further Commission took no account of the fact action against those two undertakings. that the cartel developed in the course of the period during which it existed and thus wrongfully called Rhône-Poulenc to account for actions undertaken only after it had withdrawn from the market.

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against an undertaking. In so far as more the meeting which, according to the second regular participation cannot be established, paragraph of point 58 of the decision, was other solid evidence is necessary in order to held on 10 March 1982. There are no find that the undertaking took part in the documents in the case to refute that denial. cartel. With Petrofina as with Rhône- Poulenc the question of participation in meetings gives rise to certain problems.

In its answer to a similar question from the Court, the Commission stated that the indi- cation in the third paragraph of point 33 of the decision that Petrofina took part in In its pleadings, Petrofina acknowledged those meetings is based on an error. that it took part in meetings from May 1982 Regarding the possibility of Petrofina's and until the end of the series of meetings in participation during this period, the September 1983. With regard to the period Commission further states in the eighth from March to May 1982 there remains paragraph of point 78 of the decision that it some uncertainty as to what actually is is not certain whether before March 1982 Petrofina's position. In its reply of 12 Petrofina was separately represented at the January 1984 to the Commission's request meetings. for information, Petrofina states that its employees took part in meetings 'from March 1982'. In an annex to its reply, Petrofina then lists the meetings between May 1982 and September 1983 in which it took part, beginning with the meeting on 18 In view of the fact that the Commission May 1982, and also states which employees does not directly seek to claim that represented Petrofina there. On that basis it Petrofina was represented at the meetings in might be assumed that Petrofina took part January 1981 or at the other meetings up in meetings from March 1982 but was not until March 1982 and that Petrofina's in a position to specify w h o took part in statements are best construed as a denial, them. On the other hand, Petrofina the Court should, in my opinion, proceed expressly denies that it was represented at on the basis that Petrofina employees did

As regards the meetings in the period from March to May 1982 I consider that, in the light of what Petrofina itself acknowledged in its answer to the Statement of Objections, it may be held that Petrofina did take part in the meetings from March 1982 (except for the meeting on 10 March 1982). However, there is not sufficiently complete information to show whether Montefina may have been independently represented at the meetings and in that way or in other ways may have incurred the responsibility of the parent companies. Nor is there any However, the Commission believes that information as to whether Montefina may Petrofina was also involved in the various have directly represented the parent cartel arrangements in the period from the companies, notwithstanding the fact, as beginning of 1980 until March 1982 and the mentioned above, that Petrofina's first eighth paragraph of point 78 of decision answer should have prompted the implies that Petrofina may have been indi- Commission to ask again. In those circum- rectly represented at the meetings through stances, the Commission's alternative point its collaboration with Montedipe concerning of view may be disregarded altogether. A the plant at Feluy. third possibility was raised by the Court at the hearing in the form of a question to the Commission, which was asked whether it considered that Montedipe had also repre- sented Petrofina through its collaboration in Montefina. The Court did not really obtain an answer to that question. T h e Commission's basis for regarding Petrofina as having taken part in the cartel or as sharing responsibility for what happened in the period from 1980 until March 1982 stems from two quite different points of view. As is apparent from the third paragraph of point 102 of the decision, the Commission claims principally that Petrofina took part in the cartel in its own It must therefore be concluded that there right from 1980. In the alternative, however, remains considerable uncertainty as to it considers that Petrofina must share how — if at all — Petrofina was represented responsibility for Montefina's participation at the meetings, or what connection in the cartel up to March 1982. Petrofina otherwise had with the meetings.

The other evidence on which the Only two written price instructions are Commission founds its assumption that available from Petrofina, which explains Petrofina was involved in the cartel as from that price instructions were given orally to 1980 is summarized in the Commission's its salesmen. answer to the Court's written question number 33. The Commission there states that it is principally relying on Annex 60 to the general Statement of Objections, which refers inter alia to '1980 Targets (Based on 1979 + Petrofina Adjust.)'. That shows, according to the Commission, that Petrofina took part as from 1980 and that it must The fact that price instructions were not therefore also have taken part in the price given in writing, however, does not by any initiatives taken after the beginning of 1980. means signify that instructions were not The Commission also bases its view on the given. Details about the content of oral fact that during the period under price instructions simply form no part of the consideration Petrofina was allocated its evidence in the case. They may have own separate quotas, which were thus not accorded exactly with the written included in Montedipe's quotas. instructions sent out by the other under- takings and they may have been quite different. Given the means of obtaining information at the disposal of the Commission under the relevant provisions, it hardly has much chance of procuring solid information about the oral instructions. But Petrofina for its part has done nothing to substantiate its assertion that it acted Since, as described above, Petrofina's in- completely independently of any agreements volvement in meetings remains altogether or concertation entered into by the other unclear, the evidence relied on by the undertakings. The fact that an undertaking, Commission is, in my view, so sparse that I as Petrofina maintains, sold at prices below believe that the Court should conclude that the target prices does not, as pointed out Petrofina cannot be held to have taken part above, serve as evidence to refute the in the cartel before March 1982. Since assertion of its participation in an agreement Petrofina collaborated with Montedipe in or concerted practice. That would require the period up to that date, it is indeed not the undertaking to come forward with inconceivable that Petrofina was implicated information which showed that it had not in one way or another, but there is not the even tried to use an agreed or concerted slightest evidence to prove it. target price as its own target or otherwise allowed its conduct on the market to be influenced by the agreements or the concer- tation.

In the present case there are, as pointed out prices is quite common, but it certainly does above, two price instructions. The first is not mean that that was not the price aimed dated 11 March 1982, that is to say the day at. after a meeting in which, as I have said, Petrofina must be presumed not to have taken part. Petrofina considers that it was legitimately entitled to expect that the Commission would not use the document against it since that document was neither included amongst the documents that were The second written price instruction was sent together with the Commission's letter given on 20 July 1983. It specifies that with of 29 March 1985 nor mentioned in the immediate effect prices are to be charged decision or the annexes thereto. I would which seem to correspond to what was simply observe in this respect that the annex agreed at a meeting on 1 June 1983.

1982. If an undertaking has generally been June 1983 in which Petrofina took part. involved in meetings, the fact that, perhaps for fortuitous practical reasons, it was absent from one single meeting is not, as the Commission points out in point 83 of the decision, decisive. It was in the interests of all parties to ensure that the absentee was informed of what had happened at the O n the basis of the information available, it meeting. Whether a document which must be assumed that Petrofina's written concerns a circumstance not expressly price instruction was sent for the reason mentioned in the decision should be used at given by that undertaking.

It is tiations. That goods are not sold at list therefore scarcely possible to attach any significance to the document at all.

But even if it is not possible to lay too much only from March 1982 until it came to an weight on the written price instructions end around November 1983. themselves, I consider that Petrofina's participation is beyond doubt in the light of the other evidence. Petrofina is one of the undertakings which explain their presence at the meetings by saying that they were C — Atochem (Case T-3/89) obliged to take part so as to gain the necessary information in order, as new undertakings, to cope with the competition. Quite apart from the fact that the question of liability for merely passively receiving information might arise in such a situation, According to Article 1 of the decision, the explanation given is quite simply not Atochem took part in the cartel at least plausible. It is so improbable that a from 1978 and until it came to an end. That completely passive role should have left no part of the decision fits awkwardly with the trace whatsoever in the written evidence reasons given by the Commission in the that the explanation can be rejected. second paragraph of point 105 of the decision where Atochem is treated in the same way as ANIC, BASF, DSM and Hüls. T o that extent, the reasoning is defective. But since, upon my assessment of the evidence, the cartel's infringement of Article 85(1) cannot be regarded as proven in Adopting the metaphor used in the respect of the period before Autumn 1979, discussion at the hearing about various that defect is of no significance. undertakings' claims to have had a purely passive role, I must say that it is just not likely that a group of business managers from various EEC countries should repeatedly sit around a table and simply listen, like a bevy of birdwatchers, for Atochem acknowledges that it took part in a sounds which do not come. certain number of meetings with other poly- propylene producers between 1978 and 1983 but it denies having taken part in any infringement of Article 85(1). Atochem claims that as a newcomer on the market it needed to gather any information what- The evidence also rules out such an soever, including information given at assumption in Petrofina's case. The meetings of producers, without committing documents contain details regarding itself to any agreement at all regarding Petrofina's participation in the adoption of either prices or quantities. Atochem is price initiatives, volume targets and account mentioned by ICI as a regular participant management. throughout the whole period.

In its response to the Commission's request for information, BASF states that its employees took part sporadically in O n this point I consider that the meetings during the period before 1 January Commission's views must be upheld. In the 1980. With regard to the period after that case of the price initiatives adopted in 1979 date, BASF mentions four meetings in 1980 and thereafter, there was no possibility, as in which it took part and a large number of in 1977, for a small group of producers meetings in and after June 1982. In its independently to adopt decisions which application BASF describes its participation were followed by the others after reading before June 1982 as occasional. about them in the trade press. On the contrary, it is clear from the evidence that the situation was such that at the meetings decisions were taken or understandings secured regarding target prices which were then communicated to the public inter alia through the trade press. I do not think one should attach too much weight to BASF's description in the pleadings of its participation in meetings before June 1982. Moreover, the applicant's participation in the cartel from Autumn 1979 is demonstrated in other ways, in particular by the price instructions which the Commission used to prove the In view of the foregoing, I consider that cooperation which followed the agreements there is sufficient evidence to support the entered into or concertation of practice that conclusion that Atochem took part in the took place at the meetings. Thirdly, the cartel from Autumn 1979 until the cartel applicant is mentioned by ICI as a came to an end in Autumn 1983. participant in the meetings without any limi-

tation in time. The least which may be E _ ANIC (Enichem) (Case T-6/89) concluded is that participation in the meetings was sufficient to have given BASF the opportunity to keep abreast with what was happening at the meetings and to adapt its conduct accordingly. ANIC has acknowledged that it took part in the producers' meetings at least from Autumn 1979. On the other hand, it is still not altogether certain when ANIC's partici- pation in the meetings came to an end. In its answer to the Commission's request for information, ANIC writes that it began to take part in the producers' meetings at a With regard to volume targets, it is clear time which was most probably not long from the tables produced that BASF took after the start of the series of meetings. The part on the same footing as the others. first paragraph of point 19 of the decision BASF's denial of having taken part in any states that ANIC did not take part in the account management system does not meetings after about the middle or end of appear tenable. In addition, it would appear 1982 when ANIC's interests in the polypro- that it was Mr Arenz of BASF who was the pylene sector were taken over by first to draw attention to the risk involved if Montedipe. However, the Commission all the undertakings charged exactly the considers that ANIC's participation in the same price at the same time when cartel lasted until the end of 1982 or the approached by a customer. According to the beginning of 1983 (see Article 1 of the report on the meeting held in September decision). 1982 at which that point was made, it was agreed that undertakings other than the individual customer's principal supplier would offer to sell at a price which was a few pfennigs higher than the price agreed at that time, which was D M 2.00. The reports ANIC states in its reply to the Commission's on the subsequent meetings show that BASF request for information that the last time it took part in the same way as the other took part in a meeting was in October 1982 undertakings in the attempts to limit the in Zurich. ANIC later stated that that infor- consequences of customers' shopping mation was erroneous and that it probably around to find where they could obtain the stopped taking part in meetings at the most advantageous prices. beginning of 1982.

As the Commission acknowledged at the With regard to the quota arrangements for hearing, there is hardly any evidence in the the period during which ANIC did take case that A N I C took part in meetings after part, the evidence is the same as against the the middle of 1982 and in any event the other undertakings. The account comment in the report of the meeting held management systems were introduced only in May 1982 to the effect that ANIC was after the time at which ANIC's participation no longer taking part does not seem to be must be taken to have come to an end. contradicted by other evidence. It is possible that ANIC may have given information to be used in attempts to bring about a quota agreement for 1983, but in my opinion there is not sufficient evidence in the material F — Hercules (Case T-7/89) available to assume that ANIC took part in the activities of the cartel after the middle of 1982. Accordingly, it should be assumed that ANIC took p a n from Autumn 1979 until the middle of 1982 and not, as found Hercules has specifically raised the question by the Commission, until the end of 1982 or of the extent to which an undertaking may the beginning of 1983. be liable for a fine in a case where an employee may have acted on his own initiative and contrary to his superiors' instructions.

The first question which arises is, of course: power to commit Hercules, and in What was he doing at the meetings at all? particular that he did not have authority The explanation given by Hercules for his over production and thus could not participation is that its management did not undertake to adopt agreements on quotas. It make it sufficiently clear to him that the is stated that he was subordinate, on the one applicant did not wish to take part in the hand, to a sales director and, on the other, arrangements of which it became acquainted to the undertaking's managing director, to during the first phase, namely in 1977. It is whom the sales director reported. The suggested that Mr Bastiaens, like a moth, Commission, for its part, lays great weight fluttered around the flame until he was on the fact that Mr Bastiaens had the title engulfed by it and began to take part in the of 'Marketing Manager'. The applicant meetings. According to Hercules, he was stresses that Mr Bastiaens repeatedly responsible for predicting price movements indicated that his participation was 'unof- in the market and preparing price guidance ficial' and it states that he probably did not for the affiliated sales companies and his so much give information as gather it. The ability to perform his job would of course Commission, on the other hand, points out be enhanced if he knew the other under- in particular that Mr Bastiaens was takings' intentions. Hercules acknowledges apparently very active and had good ideas that it may accordingly be found that its and that in any event he was present. senior management did not exert sufficient vigilance as regards what was occurring but it believes that a lack of vigilance cannot be equated with a knowing participation on the undertaking's part.

that M r Bastiaens's superior in some cases Where an employee is vested with powers did know what was happening at the by virtue of his position, it is clear that the meetings and the note dated 29 July 1981 limits on those powers must be determined a does not in any event give the impression priori on the basis of objective factors. that either Mr Bastiaens or his superiors Normally, an undertaking cannot incur were unaware of the general issue. On the liability for acts which third parties can see contrary, there appears to be a considerable are clearly outside an employee's powers. degree of understanding. Finally, it has been The legal position appears to be somewhat explained that M r Bastiaens occupied a post different, however, if an employee acts on the third rung from the top in a large within the general powers inherent in his undertaking. position but contrary to his orders or at the fringes of the powers inherent in his position.

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not enough for the applicant to maintain Commission, for no reason, failed to take now, after the event, that Mr Bastiaens did account of the applicant's low level of not have a decisive influence on production participation both in evaluating its blame- and so forth if in point of fact it has allowed worthiness and fixing the fine. a senior employee who was known to have substantial influence on price policy to have such a free hand that he was able to take part. I therefore consider that this argument must be dismissed.

Hercules acknowledges that it took part in meetings from May 1979 but contends that its participation until May 1982 was sporadic and after that date certainly not regular. After August 1983 no representative In so far as concerns reports of meetings of Hercules took part in the meetings or and similar evidence, there is the report for had contact with its competitors. The a meeting held on 10 March 1982 which is applicant points out in particular that ICI, in referred to in point 15(b) of the decision its response to the Commission's request for (Annex 23 to the general part of the information, states that Hercules's partici- Statement of Objections) and also a report pation at the meetings was not regular and on a meeting held on 13 May 1982. Written that at the meetings Hercules did not give price instructions exist for the period from information regarding its own figures. March 1982. For the period before March Hercules further points out that Monte, in 1982 there is the abovementioned note its answer to the Commission, stated that stating that the official prices were given on the major European producers generally two tablets. There is also a copy of a survey took part in the meetings, apart from of price developments allegedly used by M r A M O C O , Shell, BP and Hercules, although Bastiaens as a basis for a talk to the Monte was not ruling out altogether the applicant's salesmen. It stated inter alia that possibility that Hercules attended some a general resolute attitude had brought meetings. Hercules considers that the prices up to D M 2.05, the closest they had

yet come to published target prices. Finally, which the Commission relies consists of it should be pointed out that the note second or third-hand hearsay about circum- concerning the original 1977 floor-price stances which Hercules was prevented from agreement stemmed from Hercules. examining more closely, in particular because of lack of knowledge about the origin of the documents. As stated above in Section I, E, 2, however, it is the overall assessment of the evidential weight of a document which must be decisive and the bulk of the documents relied on by the It is clear from the foregoing that Hercules Commission constitutes, by any reasonable must have taken part in the cartel at least yardstick, very strong evidence. It is, from March 1982. I would not attach moreover, difficult to see what may have decisive importance to the fact that, prevented Hercules from seeking to according to the information available, Mr ascertain who was the originator of which Bastiaens did not himself come forward documents to the extent that the originator with figures concerning his employer. The is known, for example by approaching the part he played in meetings and discussions Commission. and the fact that Hercules did send out price instructions which corresponded to what had been agreed leave no reasonable doubt that the other undertakings could count on the applicant's price policy G — DSM (Case T-8/89) following theirs, which must be sufficient to find that Article 85(1) has been infringed. T h e evidence regarding the period between Autumn 1979 and March 1982 is somewhat weaker. But it is established that Hercules DSM acknowledges that it took part on a acknowledged that it took part in a not fairly regular basis in the meetings of the inconsiderable number of meetings in that cartel from 1 January 1981. As regards the period and the other evidence shows that period prior to that, it denies taking part in Hercules in any event was extremely well the meetings on a regular basis or in any informed of what was happening in the structured form. cartel. I am therefore compelled to take the view that there are the requisite grounds for concluding that Hercules's participation extended from Autumn 1979 until the cartel came to an end in 1983. It should be noted The Commission, on the other hand, which that Hercules's participation in the 1980 in Article 1 of the decision held that D S M quota arrangements, whose existence must had taken part from some time between be held to be proven, is no less well 1977 and 1979, contends that, according to documented than that of the other under- the available volume target schemes for takings. 1979 and 1980, DSM must at least have taken part from 1979.

With regard to price initiatives, Hüls has largely based its case on the contention that D S M further refers to the maxim in dubio, there was not or could not have been any pro reo and claims that the Commission may agreement or concerted practice falling not demand that the undertakings should under Article 85(1). The first part of its produce a convincing alternative expla- argument relates to the question of interpret- nation for what the Commission regards as ation at the heart of the present cases, incriminating evidence. I find it hard to see namely the interpretation of the concepts of how such general considerations cast any agreement and concerted practice with new light on the questions of proof arising regard to what occurred in these cases. T h e in this case. The practical reality is that second part of its argument rests on there must be proof of an infringement and considerations over the question whether its that whoever is to judge the evidence must conduct had any effect on the market and be satisfied, upon an overall assessment of the conclusions which some purport to draw the weight of the evidence, that the case therefrom. Hüls stresses in particular made out by the Commission is sound. As Professor Albach's view that actual price will have become apparent, I consider that changes are difficult to reconcile with any

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There remains the question of the In the light of the foregoing, Hüls may be applicant's participation in meetings and considered to have essentially acknowledged what is otherwise disclosed by the that it took part from the beginning of 1981 documentary evidence about the role played and that its earlier participation is denied. by Hüls in the case. In this connection Hüls On the other hand, there is information states first that, according to the annex provided by ICI, whose reliability has, submitted by the Commission, Hüls took moreover, largely been supported by the part in meetings on one occasion in 1981 other applicants' varying degrees of and more frequently as from 1982. It did acceptance, and the fact that there is no not take pan in local meetings concerning other information, as was the case for territories within the EEC. Hüls also did not Petrofina, giving any other indication that take part in a meeting held in the United Hüls took part from a somewhat later date Kingdom on 18 October 1982. than Autumn 1979, the time which must be assumed to have been the real beginning of the cartel.

In its answer to the Commission's Statement of Objections, Hüls does not seek to deny that it took part in the plenary meeting in January 1981, nor is the possibility ruled out Moreover, the written price instructions that its employees took part in a few other point unequivocally to Hüls having taken meetings in 1981. In any event, it says, it part on the same footing as the other must be assumed that Hüls took part at the smaller producers and Hüls is mentioned in earliest in meetings as from January 1981 exactly the same way as the others.

As will have become apparent from my general observations, any difference Hoechst does not deny that it took part in between target prices and the sales prices the meetings that were held but points out actually obtained do not, in my view, signify that those meetings were not particularly that the undertaking did not take part in the frequent in the period before 1981. implementation of the common plans. It is almost inevitable that undertakings which are also in competition with one another will to a significant extent seek to promote their own interests at the expense of others where there is an attempt at collusion but it Hoechst's defence is essentially that sales would hardly have been possible to maintain were not transacted at the agreed target over a long period of time an attitude of prices and that its turnover did not match continuing disloyalty to the others, as Hüls the agreed quotas either. In its pleadings claims to have done, without this showing Hoechst also points to the weaknesses up in the documentation available. The which are actually to be seen in the strongest indication of this happening is that Commission's evidence. Finally, Hoechst some of the notes on meetings suggest that points out that it was most unlikely that the some of the smaller producers (not Hüls information exchanged at the meetings incidentally) were ambitious and that some could dispel the uncertainty regarding the were 'hooligans'. In the absence of concrete future conduct of the other undertakings on indications to the contrary, it must be justi- the market and thus eliminate competition. fiable to describe Hüls's explanation as The questions thus raised have all been dealt implausible. The documents in the case with in the general part of my Opinion. show that Hüls also took part in the quota arrangements and account leadership system.

in the core agreement alleged by the J — Shell (Case T-11/89) Commission. According to ICI's reply to the Commission's request for information, there existed, as mentioned in the first paragraph of point 68 of the decision, a special 'understanding' between the four biggest It is plain that Shell's role in the activities of producers that if prices were to be increased the cartel is the least well documented since those four undertakings would have to take it did not take part in the 'bosses' meetings' the lead even at the expense of their own and 'experts' meetings' of the other under- sales. A Shell note (Annex 94 to the general takings. Statement of Objections) records that price initiatives taken by the big producers (Hoechst, M-P, ICI, Shell) had hardly any effect. At the end of 1982 the Big Four began to hold separate meetings. According to Table 5 annexed to the decision, all those However, as mentioned in the preceding undertakings took part in a total of seven section, Shell did take part in meetings meetings of that kind between 13 October between the four biggest producers and also 1982 and 22 August 1983. Hoechst denies in a series of so-called local meetings. It is that it took p a n in the meeting on 13 known that the meetings between the four October 1982 at Heathrow and indeed ICI biggest producers, which are described in has not clarified whether Hoechst took part. the second paragraph of point 68 of the It is further apparent from the second decision as 'pre-meetings' and which were paragraph of point 67 of the decision that held in advance of the so-called 'bosses' Hoechst also did not take part in a meeting meetings', took place on the day before the with the other big producers on 17 June bosses' meetings for, as ICI says, practical 1981 at which the various possibilities were reasons, because the participants' hier- discussed. archical level was the same as in the bosses' meetings.

As far as Shell's participation in the original That body of evidence as a whole floor-price initiative is concerned, my constitutes, in my view, an adequate basis assessment of this question is apparent from for finding that Shell took part both in the the relevant observations set out in the cartel itself and in the separate group general part of my Opinion — see Section I, constituted by the four big producers as F,5. alleged by the Commission. The fact that Shell did not physically attend the plenary meetings, either at the expert or 'boss' level, was not, in my view, decisive to the extent that it is documented, as in this case, that Shell supplied to and received from the meetings the relevant information and appears to have acted according to the As far as the period between Autumn 1979 outcome of the meetings. and the end of 1982 is concerned, we know that Shell has acknowledged that it often received information from ICI concerning target prices and so forth. We also know from various meeting reports that there was significant communication in the opposite direction, with information reaching the participants in the plenary meetings Finally, I would point out that I attach n o regarding Shell's position on various particular weight to Shell's objections matters. It is evident from the reports on concerning the Shell group's structure or meetings on 27 May 1981, 17 June 1981 internal organization which is relatively and 9 and 10 September 1982 that there decentralized — see the first and second were frequent contacts between ICI and paragraphs of point 102 of the decision. T h e Shell. The meeting on 1 July 1981, also main thrust of Shell's argument here is that attended by Montepolimeri, referred to in the undertaking to which the decision was the second paragraph of point 67 of the addressed, namely Shell International decision, should also be mentioned. Chemical Company, had no form of authority to issue instructions to the companies which sold polypropylene and that Shell International Chemical Company, which is described by Shell as a mere service company, had to obtain approval from the national Shell undertakings in order to conclude any agreement whatsoever. From Shell International Chemical However, according to the relevant docu- Company and Shell in the United Kingdom mentation, it is established that it was Shell there exist 'price recommendations' and International Chemical Company which price instructions respectively which follow took part in the pre-meetings and coor- up on the agreements that were concluded dinated the notification of prices. There can or concertation that took place at the therefore hardly be any doubt that it was plenary meetings. There is further sufficient that company which stood at the centre of evidence for assuming that Shell took part events as far as Shell was concerned and in the quota arrangements for 1980. Finally, Shell's arguments based on its internal according to the evidence, the national Shell structure are therefore, in my view, best organizations took part to a certain extent regarded as an attempt to use that structure as coordinators in the account leadership to evade liability to a fine, which is of systems. course unacceptable.

In Solvay's reply to the Commission's request for information, Solvay acknowledges its participation in the meetings of producers from the beginning of 1978, which corresponds to the infor- On reading the meeting reports one gains mation given by ICI. Solvay thus took part the distinct impression that there was a in the cartel during the period in respect of climate of constructive mutual mistrust which there is proof of an infringement of between the persons attending the meetings Article 85(1), that is to say from Autumn but also that they worked seriously on the 1979 until the end of 1983. I would problems confronting them. I do not especially point out here that participation consider it possible to derive from Solvay's in the original floor-price agreement cannot duplicity theory anything that might be of be considered proved, in particular because vital importance in determining whether the note of 6 September 1977, which is there was an infringement of Article 85(1). referred to in the fifth paragraph of point 16 of the decision and was the subject of much discussion in the course of this case, was not even properly communicated to Solvay in the manner laid down by the Court of Justice. The same applies to the argument that the interests of the participants were so diverse and mutually incompatible that this fact Solvay is one of those undertakings which alone precluded the conclusion of any describes its own role as completely passive. agreements or the mounting of any concer- T h a t argument is refuted by the meeting tation. This line of argument in fact turns reports to hand and the factual circum- largely on the participants' motives: while stances on which the Commission bases its the undertakings well established on the assessment are in actual fact hardly chal- market in 1977 had to try to hold on to lenged. Solvay states in its application that it their market shares and still try to obtain took part in the meetings only with the higher prices, the interest of the new object of gathering technical and producers lay in winning a share of the commercial information that could be used market, if necessary by undercutting the to overcome the handicap stemming from existing undertakings. the fact that Solvay was a newcomer to the market. But it further states that 'the applicant otherwise does not seek to deny that that exchange of information, to the applicant's knowledge, could have been capable of limiting the effects of the crisis As is evident from the proceedings, that which had arisen because of the excessive argument is factually incorrect. There are production capacity on the market'. Solvay many references in the documentary further points out that Solvay itself and evidence to the fact that other parties, that many of the other undertakings acted is to say in particular the big producers, are duplicitously. It is thus pointed out that at restricting their sales and voluntarily giving the oral hearing before the Commission up market shares. As a theoretical argument,

The position as regards evidence is most straightforward in the case of the applicants right at the centre of events, ICI and It is obvious that if one assumes that the Montedipe. These cases in fact largely cartel had no effect whatsoever on compe- concern arguments going to the question of tition, it must at the same time be concluded the limits of lawful conduct, and not so that it did not affect trade between Member much to an assessment of the evidence States either. However, it is equally clear against these two undertakings, which that agreements and concerted practices of without exaggeration can be described as the kind used by the cartel as a means to try rather overwhelming. Both undertakings to obtain higher prices may affect trade acknowledge the factual circumstances between Member States, which is indeed the constituting in the Commission's view the criterion laid down by Article 85(1) and the offence covered by Article 85(1) and both established case-law of the Court of Justice. seek by various means to demonstrate that O n e or more undertakings might, for the conduct displayed was lawful. example, have been induced to withdraw

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In the present case, however, the situation was the reverse. Both the established under- I think that the remainder of Montedipe's takings and the newcomers were seeking to argument, which is not considered keep prices artificially high and in any event elsewhere, can be summarized in a few there can hardly be any question of unfair words: Montedipe believes that consider-

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The Commission for its part points out that Chemie Linz must have taken part in the quota arrangement for of 1979 and that, according to ICI's information, Chemie Linz regularly took part in the meetings, without any limit in time. Montedipe's leading role is less well documented than that of ICI. On the other hand, it is not disputed that Montedipe acted as chairman of the group until the middle of 1982 and there is no reason to In my view, an examination of the meeting believe that chairmanship of the group reports and notes produced as evidence in entailed less important tasks before it was this case, together with ICI's account of the assumed by ICI. participation of Chemie Linz in the cartel,

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A — The Commission's fining policy

Pursuant to Article 15 of Regulation N o 17/62 the Commission can impose fines on It is not directly stated in the decision, but undertakings for intentional or negligent the magnitude of the fines in comparison infringements of the competition rules. The with fines previously imposed and the fines can constitute up to 10% of each general part of the Commission's defence undertaking's turnover in the preceding suggests that even though there may not business year. Under Article 15 regard must have been any real increase in the general be had both to the gravity and to the level, the Commission has in any event duration of the infringement. imposed fines which reflect an upward tendency. It may therefore be appropriate t o examine the attitude of the judicial auth- orities towards the Commission's fining policy as such. In the cases before the Court fines were imposed which at first sight seem very high 99 — Common Market Law of Competition, see footnote 78.

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In its judgment in the Pioneer case 101 the Court of Justice approved the new, more severe attitude on the part of the Commission. The Court of Justice held inter alia (at pages 1905 et seq.): In that report the Commission stated that after about 20 years' experience of enforcing the competition rules, during which time it had imposed relatively light fines, it had found that fines of that size were not proving adequate to deter companies from continuing to commit even quite clear-cut infringements. T h e 'The Commission's power to impose fines Commission went on to state that in a on undertakings which, intentionally or decision taken at the end of 1979 it h a d negligently, commit an infringement of the indicated that it intended to reinforce the provisions of Articles 85(1) or 86 of the deterrent effect of fines by raising the Treaty is one of the means conferred on the general level thereof in cases of serious Commission in order to enable it to carry infringements, that is to say in particular out the task of supervision conferred on it those for which fines had been imposed in by Community law. That task certainly the past and had been confirmed in includes the duty to investigate and punish judgments of the Court of Justice, such as individual infringements, but it also encom- export bans, market partitioning and hori- passes the duty to pursue a general policy zontal and vertical price fixing, in the realm designed to apply, in competition matters, of restrictive agreements, and in the sphere the principles laid down by the Treaty and of abuses of dominant positions, refusals to to guide the conduct of undertakings in the supply, price discrimination, exclusive o r light of those principles.

It was [therefore] open to the Commission to have regard to the fact that practices of It follows, in my view, that in normal this nature, although they were established circumstances the Community judicial auth- as being unlawful at the outset of orities should not pursue their own penalties Community competition policy, are still policy but — within the limits of Regulation relatively frequent on account of the profit N o 17/62 — leave it to the Commission to that certain of the undertakings concerned set the general level of fines. In that respect are able to derive from them and, conse- I am thus of the same view as Mr Advocate quently, it was open to the Commission to General Warner, who stated in the BMW consider that it was appropriate to raise the case 102 that the Court's unlimited review level of fines so as to reinforce their jurisdiction under Article 17 of Regulation deterrent effect. N o 17/62 (see Article 172 of the Treaty) does not mean that the Court should in every case substitute its own assessment of what constitutes an appropriate fine for the The fact that the Commission, in the past, Commission's. imposed fines of a certain level for certain types of infringement does not mean that it is estopped from raising that level within the limits indicated in Regulation N o 17 if that In my view, there is only reason to intervene is necessary to ensure the implementation of where the Commission, without giving Community competition policy. On the reasons, departs from a relatively well- contrary, the proper application of the established level of fines in a single case and Community competition rules requires that thus acts contrary to the principle of equal the Commission may at any time adjust the treatment. However, in my view there are level of fines to the needs of that policy. no grounds for concluding that the Commission has done so in the cases now before this Court, as the applicants submit. ...' In the parallel decisions in the PVC and LdPE cases 103 the fines also appear high,

Under Article 15(2) of Regulation N o 17/62, the basic criteria for determining the amount of fines are — in addition to the limits on the amount — the gravity and the duration of the infringement. Since there is thus no basis for the conclusion that in the polypropylene decision the Commission departed from the general level of fines which it has applied since the Pioneer judgment, this Court should take as its point of departure the In its decision the Commission states first level of fine which the Commission has (point 107, second paragraph) that the applied in the cases now before it. infringement was deliberate. In the light of the evidence I think there can be no doubt that the Commission is correct to state that the undertakings were fully aware of both the unlawful nature of their conduct and the serious penalties of which they ran the risk. These are undoubtedly, therefore, deliberate infringements, which must in every case be dealt with much more severely than Even if it is not decisive, I consider this negligent infringements. I05 point particularly valid inasmuch as the polypropylene cartel continued to exist notwithstanding the publication of the Pioneer decision on 5 March 1980, when the applicants were put on notice that it could become very expensive for them to infringe With regard to the latter criterion to be the competition rules. applied under Article 15(2), the Commission states that the infringement was of relatively 104— Commission decision of 19 December 1990 in Cases long duration. IV/33.133-A: Soda-ash — Solvay, ICI; IV/33.133-B: Soda-ash — Solvay, CFK; IV/33.133-C: Soda- ash—Solvay; and IV/33.133-D: Soda-ash —ICI (OJ 105— See for example, Mr Advocate General Warner in the 1991 L 152 pp. 1, 16, 21 and 40). BMUncase, cited in footnote 102, at page 2493.

Since the general level of fines applied by the Commission must, as set out above, be No further justification is required for the taken as a basis, there must be a certain conclusion drawn by the Commission (point reduction in the fines as a result of the fact 107, fourth paragraph, of its decision) that that the duration of the infringements this was a particularly serious infringement. cannot be held to have been as long as the The applicants had the very clear intention Commission maintains. The reduction of seeking to achieve a price level above that should not, however, be proportional to the of the market, and in any event with regard length of the period which is to be left out to the period after the middle of 1982 it is of consideration, since the organization of difficult to take seriously the applicants' the cartel became increasingly 'professional' strongly expressed protests of reasonable in the period after Autumn 1979, whereas and worthy motives for the infringement. previously, in the Commission's view, it Regardless of whether or not the assessment took less serious forms and was assessed of those attending meetings that the market accordingly in the decision. I think a was more or less in balance at that time was reduction in the fines of about 10 to 15% in fact correct, the comment reported in a would be appropriate in this respect. meeting note referred to in point 37, third paragraph, of the decision, to the effect that it was the participants and not the market that should determine the price level even if supply and demand were in balance, shows in any event that the purpose cannot have been to protect production capacity which might in the long term be viable under In connection with the discussions regarding normal conditions of competition against a the duration of the cartel a number of the crisis. The purpose was quite simply to applicants argued that its duration should be obtain a higher payment for goods than determined solely on the basis of the periods could have been obtained without infringing in respect of which the Commission in its Article 85(1). As the Commission points out,

It is not simply the actual harmful effects but largely the potential harmful effects which must be emphasized. If we were to suppose that Article 85 created simply a 'result' offence with an attached provision In my view, the gravity of the infringement on attempts, the assessment of the gravity of cannot be directly assessed on the sole basis an attempt would presumably not differ of the extent of its actual and detected drastically from the assessment of the harmful effects. First of all, part of the defi­ completed offence, where the attempt nition of the offence laid down in Article 85 demonstrated a fixed intent to take every takes no account of the effects at all. conceivable step to realize the unlawful Agreements or concerted practices whose purpose. I therefore agree with the purpose is to interfere with competition can Commission that the gravity of the constitute just as serious infringements as infringement must largely be determined on the infringements regarded as equivalent to the basis of the evidence presented to us them whose effect is to restrict competition concerning the cartel's intention to try to in an unlawful manner. Where it must be influence the market. concluded that conduct did not have the object of interfering with competition but had that effect, the unlawful effect must at least constitute negligence on the part of the offender before a fine can be imposed. Cases in which there is only the infringement consisting of an 'agreement or concerted practice having as its effect. . . ' involve only the lowest grades of intention, With regard to the cartel's intention to seek since more serious intention — having the to undertake joint action, I do not think the object — constitutes a part of the actual case can give rise to much doubt. The fact description of the offence in the other part that in practice it was often impossible to of the definition of the offence contained in carry through the planned price initiatives Article 85(1). makes no difference in that regard. In the period with which we are concerned the 106— See the judgment of 10 December 1985 in Joined Cases cartel in no way appeared dilettantish or 240-242, 261, 262, 268 and 269/82 Stichting Siįarettenin- unstructured. On the contrary, its organ­ äuitriev Commission [19851 ECR 3831, at paragraph 82, p. 3881. ization appears to have been entirely

professional, which in my view must be whereas as a matter of principle the causal given considerable weight in the assessment relationship could very well have been the of the gravity of the infringement. I reverse, as submitted by the undertakings. therefore think that all the submissions chal- But even if the latter hypothesis is true, the lenging the Commission's assessment of the fact that the prices actually achieved were gravity of the infringement must be rejected. lower than the agreed prices led to the adoption of new, adjusted target prices which the parties were to seek to achieve. From the documentary evidence in the form of meeting reports it is unmistakably clear what was meant by agreed or coordinated target prices. These, as the name itself indicates, expressed a price level that was t o However, the Commission based its be sought to be achieved on the market, and decision on the fact that the cartel had a were invariably higher prices than those certain effect. Consequently, the calculation which had been previously achieved. In the of the fines must undoubtedly be changed if course of these proceedings we were shown the Commission was not correct in its studies prepared by Professor Albach which assumption. As the Commission has for part of the market in question sought t o described its assessment of the cartel's simulate the prices which might be assumed effects in points 72 to 74 of its decision, the to have prevailed in the absence of actual influence on prices can even in its agreements or concerted practices. The view have been relatively restricted. The results of those studies were, as I have central issue, says the Commission, is that already mentioned, that the market would the agreed or coordinated prices served as to all intents and purposes have behaved in the basis for the negotiation of prices with the same manner without any agreements o r customers. I think that is right, and the concerted practices, and that the agreements or concerted action thus clearly assessments of the participants in the had a certain influence on price formation. meetings themselves of the results of their We have had the impression in this case that many endeavours were incorrect. prices for individual consignments of goods were to a large extent set on an individual basis and it was certainly an advantage for the firms' sales forces to have a defined common price to guide them. Quite aside from the methodological problems associated with such price simu- lations, and as the Commission pointed out at the hearing, Professor Albach expressly acknowledged, however, as the Court will recall, that the market may very well have been influenced to a certain extent. There is some doubt, on the other hand, about the extent to which the unlawful conduct in fact influenced prices. It is possible that the Commission went In the light of those factors I do not think somewhat too far in seeing a direct causal that there is any basis for reducing the fines relationship between the target prices which on considerations relating to the cartel's were fixed (points 90 and 91 of the actual effects, even though the decision) and the actual prices, in the sense Commission's view of the causal that the former influenced the latter, relationship may have been expressed a little

It is possible that there may in any event — the lack of any real measures of have been good intentions in seeking to constraint in respect of individual maintain production capacity, jobs and so producers. on for a certain period until demand increased in a sector which undoubtedly had a future. But in the system established by

107— Judgment of 8 November 1983 in Joined Cases 96-102, I do not think that enumeration of miti- 104, 105, 108 and 110/82 IAZ International Belgium v Commission (ANSEAU-NAVEWA) [1983] ECR 3369 at gating circumstances can be criticized. paragraph 55, p. 3417.

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Finally, it is possible that State aid has I have already given my view of the effects distorted competitive relationships on the of the cartel in relation to the gravity of the polypropylene market to some extent. As infringement. Finally, I agree with the the Commission correctly pointed out, Commission that even higher fines would however, Article 85(1) is applicable in any have been called for if the cartel had in event. It is striking, moreover, that virtually addition taken steps to impose actual all the undertakings in the relevant sector measures of constraint on undertakings were implicated in the infringements, both which did not comply with the agreements those that received State support and those and such like which had been entered into. that did not. We are thus not dealing with a cartel established by a number of under- takings with the purpose of defending them- selves against unreasonable competition from State-supported undertakings. The applicants' submissions on this point must therefore be rejected.

In conclusion, my view is that the fines are not out of proportion, seen in relation to the very serious infringement in question, and that proper account was taken of the In the last paragraph of point 109 of the mitigating circumstances which can and decision the Commission states that a few of should reasonably be taken into account.

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D — Reduction of the fines as a result of the E — Must the Commission draw up a annulment of certain parts of the decision catalogue of fines f

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relative weight to be given to different was no individual statement of the reasons factors only some of which are entirely for the fine imposed on each undertaking. quantifiable. The decision must to a large In my view, the Commission provided the extent remain a matter of discretion. reasoning which in the nature of the case it Indeed, later on, in its answer to the written was possible to give. Where it is not possible questions put by the Court and at the to quantify all the factors entering into the hearing, the Commission denied that in calculation of fines, it is difficult to see what assessing the fines it should have carried out further elements could be added to those precise calculations on the basis of the mentioned by the Commission. quantifiable factors.

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guilty of a clear error of assessment. T h a t because they had been committed more than might for example be thought to be the case 15 years previously, and because the general where it appeared that the Commission had level of fines had increased significantly in taken incorrect turnover or sales figures as a the meantime. There is no reason to reject basis for its assessment. that explanation; nor, in my view, can the fact that the fines were not increased in that respect be held to constitute a disregard of a principle of equal treatment or any other principle.

I I - 1028

RHÖNE-POULENC v COMMISSION

It is not apparent from the case why Shell reasonable suggestion that the meetings did not take part in the regular plenary should be discontinued because supply and meetings. I agree with the Commission, demand were in balance. That could be seen however, that the fact that it did not take as reflecting a somewhat lesser degree of part in meetings with all the producers commitment, were it not for the fact that cannot in itself be regarded as a mitigating Solvay continued to participate in the group circumstance. Shell's participation must after that time. therefore be assessed on the same footing as that of the other undertakings in so far as there is an evidentiary basis for its in- volvement. That is described in more detail above in point II J. Some of the minor producers were described by the others on several occasions as disruptive and aggressive. In this context, that can be taken to mean that they displayed somewhat less commitment than the others. It is, however, to be noted that in any event they sought to further their interests within the framework of the cartel. As described above in point II F, the role of The fact that some producers managed to Hercules seems to have been surrounded by win themselves a not insignificant market a degree of ambiguity. I agree with the share during the period of the cartel's Commission, however, that the fact that existence can therefore be taken not as Hercules did not provide the other under- meaning that their commitment was less takings with information on its own sales than that of the others but rather that they figures cannot be regarded as a mitigating were adept at using the cartel for their own circumstance, since in other respects that purposes, that is to say to achieve a better undertaking participated in the cartel and market position in a 'well ordered manner'. benefited or sought to benefit from it.

Among the four large producers it is apparent from the decision that the The minor producers can again be divided Commission imposed larger fines on into the producers that took part in the Montedipe and ICI because of the leading cartel for the whole period of its existence role that each of those undertakings played and those that joined or left the cartel in the for a certain period, and that ICI's fine, as course of that period. has been explained, was reduced because of the extent to which it cooperated in the investigation. The fines on both under- takings appear to have been assessed more or less uniformly in relation to their turnover in the polypropylene sector. It should be observed that the Commission did With regard to the first group, the level of not take into account the objections to the fines seems again to be fairly constant in effect that only the undertakings' external relation to their sales in the Community, sales of polypropylene should be considered. which a priori it should do, moreover, T h e Commission seems instead to have where no distinction was made according to relied on turnover figures corresponding to the intensity or extent of their participation what the undertakings themselves mutually and, as it appears, no decisive weight was regarded as their market share. In my view, placed on their total turnover. As a that is a good criterion for calculating fines. percentage of sales the fines were generally Leaving aside the fact that the undertakings somewhat lower than in respect of the large total turnover was not discussed in the case, producers. With regard to BASF, the parties there is little to indicate that the disagree as to how far the sales figures for Commission laid any particular weight on the production from Rheinische that in calculating the fines, which is hardly Olefinwerke GmbH, a 50/50 joint venture surprising since in any event these are very between BASF and Shell, should be large undertakings whose strength on the included in the basis for calculation of the market and whose ability to pay a fine of fine. BASF asserts that it acted only as sales the magnitude in issue is beyond doubt. agent for the part of the production attrib- There thus seems to be a good balance utable to Shell. The question is entirely between the fines of E C U 11 and 10 million unresolved and should have been inves- imposed respectively on Montedipe and ICI. tigated more closely by the Commission at T h e same is true of the fines of E C U an early stage in the procedure. The result, I 9 000 000 imposed on Shell and Hoechst, think, must be that be that greater weight which were clearly considered to have should be placed on BASF's own figures formed part of the nucleus of the group and an appropriate reduction made in the

Somewhat lower fines were imposed on the last group of undertakings, that is to say ANIC, Petrofina and Rhône-Poulenc, as is stated in the decision. Leaving aside the fact that the fine must be further reduced in Subject to what must follow from the respect of Petrofina as a result of the foregoing, it is therefore my view that the shorter period for which its participation Commission is not guilty of any error of can in my view be considered to be proved, assessment. here too there seems to be a good balance both between the fines imposed on these undertakings and in relation to the fines imposed on the others. The fine imposed on Rhône-Poulenc should be reduced on the basis, first, of the fact that the period in relation to which there is evidence proving its participation is significantly shorter than On that basis I therefore propose that the the Commission assumed, and, secondly, of fines should be fixed as follows: the fact that the period which must thus be disregarded was characterized by the fact that the cartel was in an introductory phase. Rhône-Poulenc's fine must therefore be reduced by a total of 40%. Petrofina's participation was of significantly shorter duration than is asserted by the ANIC SpA ECU 525 000 Commission, and part of the period which Atochem SA ECU 1 400 000 should not be taken into account was after BASF AG ECU 1 750 000 the cartel had taken on its definitive form. DSM N V ECU 2 200 000 On that basis I propose that Petrofina's fine Hercules Chemicals NV ECU 2 200 000 should be reduced by half. A particular Hoechst AG ECU 7 200 000 problem is raised by the question to what Hüls AG ECU 2 200 000 extent the Commission included SIR's ICI PLC ECU 8 000 000 turnover in calculating the fine for ANIC. Chemische Werke According to what we have been told, the Linz AG ECU 800 000 basis of calculation was the turnover figures Montedipe SpA ECU 8 800 000 (equals market share) for 1982. There is no Petrofina SpA ECU 300 000 doubt, however, that the market share held Rhône-Poulenc SA ECU 300 000 by SIR in 1982 before it produced — for a Shell International short period — for ANIC's account was Chemical Co. Ltd ECU 7 200 000 very small. Even if there are no grounds for Solvay & Cie ECU 2 000 000

the applicants Hoechst, Shell, ICI and Montedipe took part in the said agreement or concerted practices from about mid-1978 until Autumn 1979;

ANIC SpA took part in the said agreement or concerted practices after the middle of 1982;

Petrofina SA took part in the said agreement or concerted practices before March 1982;

Hercules Chemicals N V gave detailed information on its deliveries;

the producers diverted deliveries to overseas markets in order to create a shortage in Western Europe;

the applicants shared the market by allocating to each producer a 'quota' for the two first quarters of 1983; and

3. For the rest, the applications are dismissed.

4. Costs

With regard to the costs of the case, it should be observed that in most of the cases the Commission's arguments have been upheld to a large extent. However, its decision has been subject to justified criticism and must be annulled on certain points. It was therefore not unreasonable to bring the cases, and I think it would therefore be right to apply the provisions of Article 69(3) of the Rules of Procedure of the Court of Justice (see Article 87(3) of the Rules of Procedure of the Court of First Instance) and order the parties to bear their own costs. That should apply to Cases T - l / 8 9 , T-3/89, T-4/89 and T-6/89 to T-15/89. With regard to Case T-2/89, Petrofina, in view of the outcomeII-1033 of the case the Commission should in addition to its own costs pay half of the applicant's costs.