T-34/92

FIATAGRI AND NEW HOLLAND FORD ν COMMISSION

J U D G M E N T O F T H E C O U R T O F FIRST INSTANCE (Second Chamber) 27 October 1994 *

Table of contents

The facts I-912

(a) The administrative procedure I-912

(b) The content of the agreement and its agreement and its legal context I-914

First part of the plea: the Commission's failure to take sufficient account of the appli­ cant's arguments I - 925

Second part of the plea: imprecision in the operative part of the Decision I-927

The plea that the Decision is based on a wrong definition of the relevant product and of the relevant market I-930

Arguments of the parties I-930

Findings of the Court I-933

— The product market I - 933

* Language of the case: English.

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JUDGMENT OF 27. 10. 1994 — CASE T-34/92

The plea of misapplication of Article 85(1) of the Treaty I - 944 Arguments of the parties I - 944 Findings of the Court I - 947 The plea that application of Article 85(3) of the Treaty was wrongly refused I-951 Arguments of the parties I-951 Findings of the Court I - 953 Costs I-954

In Case T-34/92,

Fiatagri UK Limited, a company governed by the laws of England and Wales, having its registered office in Basildon (United Kingdom), and

Commission of the European Communities, represented by Julian Currall, of its Legal Service, acting as Agent, and Stephen Kon, Solicitor, and Leonard Hawkes, Barrister, of the Bar of England and Wales, with an address for service in Luxem­ bourg at the office of Georgios Kremlis, of the Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for the annulment of Commission Decision 92/157/EEC of 17 February 1992 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.370 and 31.446 — UK Agricultural Tractor Registration Exchange, OJ 1992 L 68, p. 19),

T H E C O U R T O F FIRST INSTANCE O F T H E E U R O P E A N COMMUNITIES (Second Chamber),

composed of: J. L. Cruz Vilaça, President, C. P. Briët, D. P. M. Barrington, A. Sag- gio and J. Biancarelli, Judges,

Registrar: H. Jung,

1 The Agricultural Engineers Association Limited (hereinafter 'the AEA') is a trade association open to all manufacturers or importers of agricultural tractors operat- ing in the United Kingdom. At the material date, it had approximately 200 mem- bers including, in particular, Case Europe Limited, John Deere Limited, Fiatagri- UK Limited, Ford New Holland Limited, Massey-Ferguson (United Kingdom) Limited, Renault Agricultural Limited, Same-Lamborghini (UK) Limited, and Watveare Limited. The applicants are therefore both members of the AEA.

(a) The administrative procedure

2 On 4 January 1988 the AEA notified to the Commission, primarily with a view to obtaining negative clearance, or alternatively individual exemption, an agreement relating to an information exchange system based on data held by the United King- dom Department of Transport relating to registrations of agricultural tractors, called the 'UK Agricultural Tractor Registration Exchange' (hereinafter 'the first notification'). That information exchange agreement replaced a previous agreement dating back to 1975 which had not been notified to the Commission. That latter agreement had been brought to the attention of the Commission in 1984 during investigations carried out following a complaint made to it concerning obstacles to parallel imports.

3 Membership of the notified agreement is open to all manufacturers or importers of agricultural tractors in the United Kingdom, whether or not they are members of the AEA. The AEA provides the secretariat for the agreement. According to the

4 O n 11 November 1988 the Commission issued a statement of objections to the AEA, to each of the eight members concerned by the first notification, and to Sys- tematics International Group of Companies Limited (hereinafter 'SIL'), a data- processing company with responsibility for the processing and handling of the data contained in Form V55 (see paragraph 6, below). On 24 November 1988 the mem­ bers of the agreement decided to suspend it. According to the applicants, the agree­ ment was subsequently re-activated, but without dissemination of information enabling competitors' sales to be identified, whether individually or in aggregate. During a hearing before the Commission, they claimed, relying in particular on a study carried out by Professor Albach, a member of the Berlin Science Center, that the information distributed had a beneficial effect on competition. O n 12 March 1990 five members of the agreement, including the applicants, notified to the Com­ mission a new agreement (hereinafter 'the second notification') for dissemination of information, called the 'UK Tractor Registration Data System' (hereinafter 'the Data System') and undertook not to implement the new system before receiving the Commission's response to their notification. According to the applicants, the new agreement provides for a significant reduction in the amount and frequency of the information obtained under the agreement and also removes all the 'institu­ tional' elements to which the Commission had objected in its abovementioned statement of objections.

— required the AEA and the members of the agreement to put an end to the infringement, in so far as they had not already done so, and to refrain in future from entering into any agreement having an identical or similar object or effect (Article 3).

(b) The content of the agreement and its legal context

6 United Kingdom legislation provides that all vehicles must be registered with the Department of Transport if they are to be used on public roads in the United King- dom. The application for registration of a vehicle must be submitted on a special form, FormV55. Under an arrangement with the Department of Transport, that department sends to SIL some of the information which it receives upon registra- tion of vehicles. According to the applicants, that arrangement is identical to the one made with manufacturers and importers of other categories of vehicles.

7 The parties do not agree on a number of factual questions concerning the infor- mation appearing on that form and the use of that information. Those matters of disagreement can be summarized as follows.

8 The applicants stress the fact that, having regard to the administrative source of the information disseminated to the members of the agreement and also to the fact that

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1 1 According to the Commission, the form contains the following information, cer­ tain aspects of which are disputed by the applicants:

— make (manufacturer);

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JUDGMENT OF 27. 10. 1994 — CASE T-34/92

— model, serial and chassis numbers, date of registration; it is apparent from the meeting between the parties and the Judge-Rapporteur on 7 December 1993 that the information relating to serial (or chassis) numbers is recorded by SIL. However, in the system which is the subject-matter of the first notification that information is no longer disseminated to the members of the agreement, it having been agreed since 1 September 1988 that SIL is no longer to send the vehicle registration form to the members of the agreement. According to the applicants, the manufacturers need that information to conduct their recall cam- paigns and to check the validity of warranty claims submitted to them; the applicants state that that is the reason why that information, whose transmis- sion to the members is also provided for by the Data System, was sent to the members until September 1988;

— original and selling dealer (code number, name, address and postcode): accord- ing to the applicants, that information is not recorded by SIL;

— industry data: they concern aggregate figures on registrations of tractors sold by the whole industry, subdivided according to time periods, horsepower, drive-line and postcode area of the registered keeper of the vehicle;

— identifying data: they concern registrations of tractors sold by each member of the agreement, subdivided according to the date of sale, the tractor model and the postcode area of the registered keeper of the vehicle;

— own data, released only to the member of the agreement concerned: they relate to sales of registered tractors made by each of the dealers belonging to that member's distribution network, to data relating to the two previous categories, with a geographical breakdown corresponding to the sales territories of that member's distribution network, to specific analyses requested by a given mem­ ber, and also to registration figures for tractors sold by it.

14 According to the Commission, the three categories of information are as follows:

— aggregate industry information: overall industry sales, with or without a break­ down by horsepower or by drive-line; that information is provided for time periods broken down by year, quarter, month or week;

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— data concerning sales by dealers belonging to the dealer network of each mem- ber, in particular the imports and exports of dealers in their respective territo- ries. It is therefore possible to identify imports and exports between the various dealer territories and to compare those sales activities with the sales made by dealers in their own territories. As appears in particular from points 29, 30, 55 and 56 of the Decision, a manufacturer could, if he so wished, curtail the retail activity of dealers outside their allocated territories, both inside and outside the United Kingdom, by identifying the sales destination in that way. At the meet- ing with the parties on 7 December 1993 the applicants claimed that only a given manufacturer, but not any of its competitors, could compare the sales of its own dealers and that, contrary to the statements made in the Decision, the information exchange system did not enable the various manufacturers to com- pare the sales of dealers in a given distribution network.

15 The applicants stress the fact that that information on 'dealer-import' and 'dealer- export' does not form part of the agreement itself and is not communicated by SIL to members of the agreement except on the basis of individual arrangements con- cluded with SIL. That data, which is no longer available under the agreement which was the subject of the second notification, concerns sales made by a dealer outside his territory (dealer-export) and sales made by other United Kingdom dealers in the territory of a given dealer (dealer-import). It does not therefore relate to exports to other Member States or imports from such States.

17 It is in those circumstances that the applicants brought the present action by appli­ cation lodged at the Court Registry on 6 May 1992.

18 The applicants claim that the Court should:

(i) order production of the minutes of the meeting of the college of Commissioners at which Commission Decision C(92)271 of 17 February 1992 relating to

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JUDGMENT OF 27. 10. 1994 — CASE T-34/92

Case IV/B-2/31.370 and 31.446 (UK Agricultural Tractor Registration Exchange) was adopted, together with the text of the decision attached to those minutes; further, order production of the amendments made to those minutes by the Commission before they were sent to the Advisory Committee;

(iii) order the applicants to pay the costs of the proceedings.

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FIATAGRI AND NEW HOLLAND FORD ν COMMISSION

21 In its rejoinder the Commission informed the Court that it did not object to the present case being joined with the proceedings brought by John Deere Limited in Case T-35/92 for the purposes of the oral procedure, provided that the two cases were made the subject of separate judgments. At the close of the written procedure the President of the Second Chamber of the Court of First Instance, by order dated 28 October 1993, ordered that the present case be joined with Case T-35/92 John Deere Limited ν Commission for the purposes of the oral procedure, subject to certain parts of the application in Case T-35/92 and certain annexes thereto being confidential vis-à-vis the applicants in the present case.

22 Upon hearing the Report of the Judge-Rapporteur, the Court of First Instance (Second Chamber) decided to open the oral procedure without any preparatory inquiry. However, it requested the parties to reply to certain written questions and to produce certain documents. The applicants and the defendant replied to those questions on 2 December 1993. In addition, the parties and SIL were invited to take part in a meeting with the Judge-Rapporteur in accordance with Article 64 of the Rules of Procedure. That meeting took place on 7 December 1993. The parties pre- sented oral argument and gave their replies to the oral questions put by the Court at the public hearing on 16 March 1994. During the course of that hearing, Mr Hodges, representing SIL, was examined as a witness in accordance with Arti- cle 68 et seq. of the Rules of Procedure.

— is based on a wrong definition of the product and of the relevant market;

— contains errors of fact in its examination of the information notified;

— is based on an error of law concerning the interpretation of Article 85(1) of the Treaty;

— wrongly fails to apply Article 85(3) of the Treaty to the present case.

The plea that the Decision was adopted pursuant to an unlawful procedure

24 I n s u p p o r t of their claim that the Decision should be declared non-existent, the applicants submit, first, that it should b e ascertained w h e t h e r the C o m m i s s i o n ' s Rules of Procedure have been followed and, secondly, w h e t h e r the C o m m i s s i o n unilaterally made certain amendments to the minutes of the hearing.

27 The Court considers that in the absence of any evidence to call into question the validity of the Decision, the presumption of validity enjoyed by Community mea­ sures must apply to the Decision, as notified to the applicants. Since the applicants have failed to produce the slightest evidence which might rebut that presumption, it is not appropriate for the Court to order the measures of inquiry requested. As regards the propriety of the procedure for adopting the copy of the Decision and its notification, the Court also considers that, even if flaws affecting that copy or the propriety of its notification to the undertakings were proved to exist, those flaws would not in any event affect the legality or, a fortiori, the existence of the Decision and would only have a bearing on the date from which the period for bringing proceedings against it begins to run. Furthermore, as is apparent from the thrust of the action itself, the applicants were able to take full cognizance of the Decision and to assert their procedural rights to their full extent. In the present case, the applicants were sent a copy of the Decision certified as a true copy by the Secretary General of the Commission. In the absence of any solid evidence which would call into question its regularity, such a copy is authentic (judgment of the Court of Justice in Joined Cases 97 to 99/87 Dow Chemical Iberica and Others ν Commission [1989] ECR 3165, paragraph 59, and judgment of the Court of First Instance in Case T-43/92 Dunlop Slazenger ν Commission, not yet published in the ECR, paragraphs 24 and 25). Having regard to all those circumstances, the first part of the plea must therefore be dismissed.

30 The Court notes that, faced with the Commission's argument that the changes in question, made to the minutes of the hearing at which the Commission heard the applicants' case, were, contrary to their contention, made known to them by a let- ter from the Commission dated 14 October 1991, the applicants confine themselves to stating that that letter had been sent directly to the undertakings and not to their lawyers. That fact cannot call into question the validity of the information thereby brought to the attention of the undertakings. The Court also observes that the undertakings, duly informed in that way of the amendments made to the minutes, do not claim that those amendments changed the meaning of their statements or even that the amendments invalidate the opinion given by the Advisory Commit- tee on Restrictive Practices and Dominant Positions. Consequently, and in accor- dance with settled case-law, the second part of the plea must also be dismissed,

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FIATAGRI AND NEW HOLLAND FORD ν COMMISSION

without it being necessary to order measures of inquiry in this respect (judgments of the Court of Justice in Case 44/69 Buchler ν Commission [1970] ECR 733, para­ graph 17; Case 48/69 ICI ν Commission [1972] ECR 619, paragraph 31; Case 30/78 Distillers Company ν Commission [1980] ECR 2229; judgments of the Court of First Instance in Case T-2/89 Petrofina ν Commission [1991] ECR II-1087, para­ graph 45; Case T-4/89 BASF ν Commission [1991] ECR II-1523, paragraph 47; Case T-6/89 Enichem Anie ν Commission [1991] ECR II-1623, paragraph 47; Case T-9/89 Hüls ν Commission [1992] ECR II-499, paragraph 79; Case T-12/89 Solvay ν Commission [1992] ECR 11-907, paragraph 67; and Case T-15/89 Chemie Linz ν Commission [1992] ECR 11-1275, paragraph 76).

JUDGMENT OF 27. 10. 1994 — CASE T-34/92

made by a member of the agreement in the territory of a given dealer at ten units, below which aggregate data could not be disseminated. The applicants claim that that figure is too high and does not take account of the real state of the market, which is extremely atomized. Similarly, the choice of year for the reference period is not acceptable. In this connection, point 61 of the Decision is so confused that the members of the agreement have been unable to find a common interpretation of it. The undertakings state, secondly, that, with the exception of a footnote, the Decision does not deal with the Data System, which amounts to a lack of reason­ ing with respect to that system. Thirdly, the applicants consider that the Decision does not take account of the fact that the laws of most Member States permit the dissemination of registration data to manufacturers. Fourthly and finally, they claim that in the judgment in the Papiers Peints case the Court of Justice held that the Commission was under a duty to supply more detailed reasons when, as in the present case, its decision goes 'appreciably further than its earlier decisions' (judg­ ment of the Court of Justice in Case 73/74 Papiers Peints de Belgique ν Commis­ sion [1975] ECR 1491, paragraph 33). In the applicants' view, the Commission has clearly failed to fulfil that duty in this case.

35 The Court finds that the Commission, which at points 33 and 65 of the Decision found that the Data System was contrary to Article 85(1) of the Treaty on the ground that this information exchange system reproduced mutatis mutandis the previous system and that the information exchange did not fall within the scope of Article 85(3) of the Treaty because the restrictions of competition were not indis­ pensable, provided sufficient reasons for its decision on this point, regardless of any appraisal, at this stage of examination of the case, of the correctness of those rea­ sons. As regards the argument that the principles laid down by the Court of Justice in the Papiers Peints judgment have been disregarded, the Court observes that, according to that judgment, whilst the Commission may provide a summary state­ ment of reasons for a decision which is in line with settled case-law, its obligation to provide a statement of reasons is broader where the decision adopted goes 'appreciably further' than the case-law existing at the date of the decision (para­ graph 31 et seq.) In this case, the Court considers that, as the Commission correctly argues and as is explained below in the grounds of this judgment (see paragraph 90), the Decision simply applies principles laid down in the Commission's previ­ ous decisions to a particular market, namely that for agricultural tractors in the United Kingdom. Accordingly, and without its being necessary to examine the dif­ ferent legal systems of Member States, the applicants are not justified in claiming that the Commission has failed to observe the abovementioned principles laid down by the Court of Justice in its judgment in the Papiers Peints case.

37 The Commission considers that the reference to the judgment in the Consten and Grundig case, cited above, is not relevant. In the present case, it is the information exchange agreement which is in itself anti-competitive and not a particular provi­ sion of it. By setting out the conditions upon which it would not object to the agreement on the exchange of information, the Commission has complied with the requirements of the Consten and Grundig judgment, according to which the Com­ mission must, where it does not state in the operative part of its decision which parts of an agreement fall within Article 85(1), set out in the preamble to its deci­ sion the reasons for which it considers that parts of the agreement are not sever­ able from the whole agreement. Referring to the principle of interpretation of an operative part, as laid down by the Court of Justice in its judgment in Suiker Unie and Others ν Commission (Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73 and 114/73 [1975] ECR 1663) the Commission considers that the operative part of the Decision is clear, in particular with regard to point 61 thereof.

38 The Court observes that in the Consten and Grundig case the Court of Justice held, with regard to the interpretation of Article 85(2) of the Treaty, that the nullity for which that provision provides is to be restricted to the provisions of an agreement which are anti-competitive under Article 85(1) of the Treaty, wherever those pro­ visions are severable from the remainder of the agreement. According to the judg­ ment relied on, it is only where an agreement is a unity in itself, such that the anti­ competitive provisions cannot be severed from it, that the whole agreement must be declared contrary to Article 85(1) of the Treaty. O n that occasion the Court of Justice stated that, in the latter situation, the Commission should 'set out in the preamble to the decision the reasons why those parts did not appear to it to be

39 As regards the contention that it is difficult to interpret Article 3 of the Decision, according to which the undertakings are to refrain from entering into any infor­ mation exchange system having an object identical or similar to the agreement for which an exemption had been sought, the Court considers that that article is purely declaratory. Article 85(1) of the Treaty lays down a fundamental prohibition of agreements which are anti-competitive in character. That provision, adopted as a matter of public policy, is therefore binding on the applicant undertakings irrespec­ tive of any binding decision adopted by the Commission on this point, at least where, as it has done in this case, in points 16 and 61 of the Decision and in Article 1 of its operative part, cited above, it places the undertakings — which are entitled to enjoy legal certainty for transactions they enter into — in a position to ascertain the extent to which their information exchange system is lawful. It is clear in par­ ticular from point 50 of the Decision, which in no way contradicts its operative part, that knowledge of competitors' sales for 'historical' purposes is not unlawful. All in all, if the Commission wished to prohibit a different information exchange system involving the applicants, it could rely directly on Article 85(1) of the Treaty,

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regardless of Article 3 of the Decision. As the Commission maintains, the opera- tive part of the Decision, read in the light of the preceding grounds, in particular points 16 and 61, is therefore clear. The second part of the plea must therefore be dismissed.

FIATAGRI AND NEW HOLLAND FORD ν COMMISSION

lively competition. The market shares of the main suppliers have decreased dra­ matically, whilst those of the other competitors have increased. The identity of those firms has changed, so that the undertakings which are in the 'leading' posi­ tions are not the same as those which held those positions when the information exchange system was created. The Commission's assertion that there are high bar­ riers to entry into the market is incorrect. All in all, far from malung the market rigid, the agreement contributes to its transparency.

43 With regard to the analysis of the product, the applicants contest the statement made in the Decision that the different types of product are broadly substitutable. They state that the agreement did not classify tractors only by horsepower and drive-line, but also and more importantly, by model. The applicants consider that the Commission has prohibited the practice to which it objects without making any genuine analysis of the conditions in which the market operates, so that the Com­ mission has found a per se infringement, contrary to both the case-law of the Court of Justice and the Commission's previous decisions and policy, as set out in vari­ ous 'notices' and in its annual reports on competition policy.

46 The Commission also contends that, contrary to the applicants' claims, it did anal- yse the market, but the conclusions it drew from that analysis were different from those of the applicants. With regard to the analysis of the product, the Commis- sion rejects the criteria for differentiation proposed by the applicants. Nor does it accept the applicants' suggested analysis of the market as an open market. The mar- ket is essentially a replacement market characterized by imperfect competition, oli- gopolistic in nature and dominated by five undertakings, and on which brand loy- alty is strong. Supply concerns substitutable products. The Commission does not dispute that the tractor is a 'heterogeneous' product, but it differs from the appli- cants with respect to the extent of that heterogeneity. Although supply is relatively diversified, that diversification must be appraised in the light of the nature of demand. The fact that the respective market shares of each of the principal com- petitors have changed is not necessarily explained by the intensity of competition on the relevant market.

47 The applicants' argument that suppliers are increasing their investments in order to adapt to stagnant demand does not correspond to the reality of a market in which the concentration ratio is increasing. Similarly, the Commission does not accept the applicants' conclusion that it has wrongly described the relevant market as a closed market with high barriers to entry. According to the Commission, a market in

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50 The Court considers that in order to decide whether the Commission has taken account of the specific characteristics of the market in question in this case, it must first be assessed whether the definition of the product market is correct and, sec- ondly, whether the description of the characteristics of the market contained in the Decision is accurate.

51 As regards the definition of the product market, it is first necessary to assess the degree of substitutability of the product. The Court considers that the applicants' argument that the Decision fails to make any analysis of the product market must be rejected since it is sufficiently apparent from the Decision that it is based on the assumption that the relevant market is that for agricultural tractors in the United Kingdom. Furthermore, since participation in the information exchange system at issue is subject only to the participant being a manufacturer or importer of agri- cultural tractors in the United Kingdom, and not of a particular category of agri- cultural tractors, the applicants are not justified in arguing that the definition of the product market is wrong and that the different types of agricultural tractors are not largely substitutable. The Court concludes from that fact that the undertakings themselves define their competitive position, in the context of the agreement, by reference to the general concept of agricultural tractor, as adopted by the Commis- sion.

53 Those barriers are due in particular to the need for a new competitor to have a suf­ ficiently dense distribution network. Moreover, it is apparent from the investiga­ tion of this case that, as the Decision indicates, in particular in points 35, 38 and 51, imports into the United Kingdom of agricultural tractors with a horsepower above 30 hp are limited; that is also confirmed both by a report entitled 'European Community Farm Equipment Sector', submitted to the Court by the Commission in reply to a written question from the Court, and also the information submitted by the applicants themselves, which shows that the imports concern products which are largely not substitutable, since, according to customs statistics, of 3 862 new vehicles imported in 1991, 2 212 have a power rating of less than 25 kw. Finally, that analysis is not affected by examination of the structure of residual sup­ ply, the extremely atomized nature of which reinforces the positions held by the largest undertakings, contrary to what is claimed by the applicants.

54 All in all, the Court therefore considers that the Commission is correct in con­ tending that the relevant market displays the characteristics of a closed oligopoly.

55 It follows that the applicants have not produced any significant evidence to show a manifest error of appraisal in the Commission's definition and analysis of the functioning of the relevant market.

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— The geographic market

FIATAGRI AND NEW HOLLAND FORD ν COMMISSION

agreement as notified in 1988 has existed since 1975. The system notified differs from the previous system. The assertion in points 14 and 15 of the Decision that Form V55 contains the name of the registered keeper of the vehicle and that that information is passed on to the members of the agreement is incorrect. According to the applicants, the administrative authority only requests dealers to include the postcode of the place where the purchaser resides, but that information does not enable the manufacturer to contact the purchaser. The applicants claim that SIL did not in fact extract from Form V55 the whole postcode of the registered keeper of the vehicle in order to process and send it to members of the agreement, but merely noted the four or five digits from that postcode which enable the place of regis­ tration to be located within postcode areas, numbering approximately 8 250, in the United Kingdom.

59 However, contrary to the suggestions in points 6 and 49 of the Decision, that divi­ sion into territories is not improper. The dealer territories are determined indepen­ dently by each manufacturer and are known only to it and to SIL, to which they are communicated in order to draw up the statistics. The applicants query the term 'dealer territory on the basis of [a] five-digit postcode' which, in their opinion, wrongly suggests that the dealer territory coincides with the territories covered by one postcode. They also contest the contention in the Decision that the informa­ tion disseminated creates a fully transparent system, because, on a heterogeneous product market, where price competition is combined with non-price competition, information on past sales can create only very imperfect transparency.

61 Finally, with regard to the link which the Decision attempts to establish between the information exchange system and restrictions on parallel imports, the members of the AEA concerned have demonstrated that the information which they held regarding imports did not derive from the information exchange system at issue. The applicants consider that the Commission wrongly states that the changes resulting from the new notification are not significant, because the Commission failed to take into account the fact that, under the new system, the information on sales made by a manufacturer through its own dealers would relate only to sales made by a dealer in its own territory. They state that the list of modifications to the system made on the occasion of the second notification, as set out in the Com- mission's defence, omits to take account of the fact that the information on regis- tration data for individual members would not be disseminated on a monthly basis, but rather on a quarterly basis.

62 According t o the C o m m i s s i o n , the applicants contest the interpretation of the information notified as regards the duration of the agreement, the relevance of postcodes in the operation of the agreement and, finally, the scope of the second notification.

63 With regard, first, to the duration of the agreement, the applicants' argument that it has not existed since 1975 is new. Prior to the lodging of the application origi- nating the proceedings, the applicants had not made any distinction between the notified agreement and the information exchange system which existed previously.

65 Thirdly, with regard to the scope of the second notification, the Commission con­ siders that point 65 of the Decision explains the reasons why the Commission con­ sidered that the second notification did not contain any material difference in rela­ tion to the agreement. The Commission considers that the Data System, just as the system which was the subject of the first notification, enables competitors' sales to be identified and also sales made by a dealer outside his own territory. Although the Commission does not dispute that the second notification introduces certain positive changes in relation to the first notification, it was unable to grant an exemption under Article 85(3) of the Treaty for that second notification because the system notified continued to operate on the principle of a monthly exchange of information, including information broken down by model, enabling sales and the market share of each competitor to be identified on the basis of a geographical breakdown ranging from national or regional levels to dealer territory and post­ code area levels. Referring to the second paragraph of point 61 of the Decision, the Commission states that the applicants are fully aware that the Commission's view is that they may not exchange information at local area level and also that the exchange of information for large geographical areas can only be made annually and relate to the year preceding the year in which the information is disseminated. In reply to a written question from the Court, the Commission refers to para­ graphs Β and C of Annex 2 to the second notification for the information identi­ fying sales volumes and market shares of members and dealers for monthly periods.

67 More particularly, the statement contained in the last sentence of point 37 of the Decision, that '[t] his effect of neutralizing and thus stabilizing the market positions of the oligopolists is in this case likely to occur because there are no external com- petitive pressures on the members of the Exchange except parallel imports which are however also monitored as has been explained above', is not incorrect since, as stated above (in paragraph 52), it has been sufficiently demonstrated that the United Kingdom agricultural tractor market is in the nature of a closed oligopoly.

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68 Similarly, the last clause of the third indent of point 38 of the Decision, which states that 'this information is also available from customers who inform the dealers of competitors' prices in a given territory', merely describes a probable way in which the market functions in view of its characteristics, as analysed previously, but in no event establishes a link between that mode of functioning of the market and the information exchange system at issue.

69 As regards the first sentence of point 40 of the Decision, which states that '[ο] η the UK tractor market, therefore, the only difficult, but very important, market data to obtain is the exact volume of sales of each manufacturer/dealer so as to be able to notice instantly changes in sales volumes and market shares of each mem­ ber of the oligopoly and of each dealer at the level of dealer territories', the appli­ cants in no way demonstrate that, as they submitted at the hearing, that sentence is intended to refer to both dealers who are members of a distribution network and dealers of competitors' distribution networks.

73 It follows that, as is stated above (see paragraph 66), the applicants have not dem- onstrated, contrary to what they contend, that the factual errors which the Com- mission may have made in point 14 of the Decision are such as to affect its legality.

— The other alleged factual errors

74 With regard, first, to the processing by SIL of data concerning the postcode of the registered keeper of the vehicle, it is apparent from the very terms of point 14 of the Decision, which makes clear reference to a postcode to the fifth digit, that the applicants' contention that the Commission made a factual error in finding that SIL extracted from the V55 form the seven digits of the postcode of the registered keeper of the vehicle is unfounded in point of fact.

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75 Secondly, with regard to the organization of the dealer territories, the applicants have not demonstrated the existence of any factual errors in the Commission's assessment, which found that those territories are determined by reference to post­ code sectors, either individually or in groups.

77 Fourthly and lastly, as regards the argument that in its analysis of the Data System the Commission failed to take account of the fact that that system reports on a quarterly basis the sales made by the dealers of a given manufacturer in the dealer territory of each dealer, the Court finds, having regard to paragraphs Β and C of Annex 2 to the form notifying the Data System, that certain information relating to registrations of vehicles is sent to the members of the agreement on a monthly basis, whilst other information, in particular that concerning sales made by the respective dealers in their sales territory, is sent on a quarterly basis. Accordingly, the Commission's assessment set out in point 65 of the Decision, to the effect that the Data System 'continues ... to provide information identifying sales volumes and market shares of the members and dealers for monthly periods', is not marred by any error of fact.

78 It follows that the applicants' plea that the Commission's assessment is marred by certain errors of fact of such a kind as to affect the legality of the Decision must be dismissed.

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The plea of misapplication of Article 85(1) of the Treaty

Arguments of the parties

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82 With regard to the second point, the applicants, which rely in particular on experts' reports drawn up by Professor Albach, referred to in paragraph 4 above, claim that although the Commission contends that in an oligopolistic market an agreement such as the one in question necessarily stifles competition, the United Kingdom agricultural tractor market by no means displays such a characteristic. In any event, even if the oligopolistic nature of the market were admitted, the economic studies demonstrate the summary nature of the Commission's analysis. The applicants therefore consider that the Commission tends to give credit to the theory of a pei­ se infringement, but has not in fact established the existence of a sufficiently appre­ ciable impairment of competition resulting from the potential effects of the agree­ ment. To do that, the Commission ought to have assessed the agreement by refer­ ence to the competition which would occur in its absence. Instead, it merely finds Ά per se infringement. The application of a rule oí per se prohibition has no basis in case-law. The applicants claim that, far from being restricted, competition is sharp- ened by the information exchange in question. Since, as in this case, access to the information exchanged is open to any competitor, the information exchange sys- tem becomes a competitive tool.

83 The Decision receives no support from any precedent, either with respect to the method of analysis or the legal principles applied. It is rather the case that exami- nation of the precedents contradicts the Commission's analysis of the information exchange system in this case. The applicants refer, in that respect, to the Seventh Report on Competition Policy, published in 1978. The Commission has not observed in this case the rale which it laid down for itself.

Decision 87/69/EEC of 15 December 1986 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.458 — X/Open Group, OJ 1987 L 35, p. 36) in which it gave a wide definition of the potential effects on competition arising from the exchange of information, which went beyond that accepted by the Court of Jus- tice, and in which it granted an exemption for the information exchange. The Court of Justice has never been called on to consider a case which concerns exclusively exchanges of information. The Commission's statement that the question whether the relevant product is a homogeneous product or, on the contrary, a differentiated product is irrelevant, directly contradicts economic theory. It must therefore be concluded from that that the other aspects of that Decision are not relevant in this case. In summary, the applicants claim that not only is the Decision not supported by any precedent but also that the examination in their context of cases which have been the subject of a decision directly contradicts the approach adopted in the present case.

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clearance or an individual exemption, the Commission must also take into account the potential negative effects of the agreement on future competition. In the present case, in a market which was oligopolistic and therefore characterized by imperfect competition, the Commission had refused to approve restrictions on competition resulting from the information exchange system between the principal economic operators.

Findings of the Court

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JUDGMENT OF 27. 10. 1994 — CASE T-34/92

access to the market between its members, which have information enabling them to forecast the conduct of their competitors, and traders which are not members of the agreement, which not only are in a position of uncertainty as to the conduct of their competitors but will also have their conduct revealed immediately to their main competitors if, in order to overcome that handicap, they join the system.

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Decision does not in any event reveal any inconsistency with decisions previously adopted by the Commission. The Commission decisions referred to concern either information exchanges relating to information different from that at issue in this case or to markets whose characteristics and methods of operation are by their very nature different from those of the relevant market. Similarly, the applicants have not established that in the Decision the Commission disregarded certain of the princi­ ples which it had undertaken to observe, in particular in its Seventh Annual Report on Competition Policy. As already found (see paragraph 35 above), the Decision therefore contains, in relation to the decisions previously adopted by the Commis­ sion, a sufficient statement of reasons and the applicants cannot claim that it dis­ regarded the principles laid down by the Court of Justice in the Papiers Peints case, cited above.

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92 That assessment is not open to challenge on the ground that it is apparent from the pre-trial inquiry, and in particular from the explanations provided by SIL which have been accepted by the Commission, that since 1 September 1988 the members of the agreement no longer receive more than once a year an overall picture of the market broken down by make and by model, since the information disseminated to each member of the system between two annual series relates only to the posi- tion of a given manufacturer on the market as a whole. Provision of such infor- mation to all suppliers presupposes an agreement, or at any rate a tacit agreement, between the traders to define the boundaries of dealer sales territories by reference to the United Kingdom postcode system, as well as an institutional framework enabling information to be exchanged between traders through the trade associa- tion to which they belong, and, secondly, having regard to the frequency of such information and its systematic nature, it also enables a given trader to forecast more precisely the conduct of its competitors, so reducing or removing the degree of uncertainty about the operation of the market which would have existed in the absence of such an exchange of information. Furthermore, the Commission cor- rectly contends, at points 44 to 48 of the Decision, that whatever decision is adopted by a trader wishing to penetrate the United Kingdom agricultural tractor market, and whether or not it becomes a member of the agreement, that agreement is necessarily disadvantageous for it, regardless of whether, having regard to its modest cost and membership rules, the information exchange system is in principle open to all. Either the trader concerned does not become a member of the infor- mation exchange agreement and, unlike its competitors, then forgoes the informa- tion exchanged and the market knowledge; or it becomes a member of the agree- ment and its business strategy is then immediately revealed to all its competitors by means of the information which they receive.

52). That being so, there is no need for the Court to consider the question whether the Commission is correct in contending that at the hearing several undertakings suggested that the suspension of the agreement had materially affected their ability to forecast market developments. Furthermore, the Commission is correct in con­ tending in points 55 and 56 of the Decision that, at least until 1 September 1988, the date on which SIL ceased sending a copy of Form V55/5 to the undertakings, the information exchange system at issue enabled parallel imports of agricultural tractors into the United Kingdom to be monitored through identification of the vehicle chassis number, which was previously entered on the form by the manu­ facturer. Finally, the analysis of the anti-competitive effects of the agreement is not affected by the content of the second notification, made on 12 March 1990, since, as is argued in point 65 of the Decision and as follows furthermore from the infor­ mation set out in Annex 2 to the notification form, the new system 'continues ... to provide information identifying sales volumes and market shares of the members and dealers for monthly periods and to give details on the chassis number and date of registration of each tractor sold. This latter information, like the V55/5 forms, permits the identification of the origin and destination of all tractors'.

94 It follows that the plea of misapplication of Article 85(1) of the Treaty must be dis­ missed.

The plea that application of Article 85(3) of the Treaty was wrongly refused

97 The Commission contends that the applicants' arguments are based on a misinter- pretation of the Decision. It disputes that it has accepted that exchange of infor- mation has a positive influence on competition. Nothing leads to the conclusion that the assessment made by the Commission, which considered that one of the four conditions laid down in Article 85(3) was not satisfied, is manifestly wrong. Accordingly, its rejection of the application for exemption was correct. That assess- ment is not affected by the second notification, which only made minor amend- ments to the information exchange system, so that the assessment made following the first notification remains valid with regard to the evaluation of the second noti- fication.

98 According to the Commission, when the 'voluntary statistical section' of Form V55 is completed, it contains the name and address of the registered keeper.

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Under the Data System, SIL would extract from the V55 forms, and provide to the members of the agreement, detailed information regarding the chassis numbers and dates of registration of tractors sold. The Commission considers that such infor­ mation enables the members of the agreement to identify the origin and destina­ tion of each tractor sold. Moreover, contrary to the applicants' claims, that infor­ mation is not essential for checking warranty or bonus claims, as is apparent from points 59 to 65 of the Decision. Examination of bonus or warranty claims does not at all require that the manufacturers take part in an information exchange system with competitors, and each manufacturer could set up and operate an appropriate method of checking such claims on an individual basis.

observations set out with regard to the first notification are valid, mutatis mutan- dis, with regard to the second, since, as has been previously observed, the Data System 'continues to provide monthly data regarding the sales volume and market shares of members and dealers'. As emerged at the meeting with the parties on 7 December 1993, the Commission thus intended to argue that, in order to achieve the objectives contended for, it is not indispensable to have information available which identifies individual sales by competitors over short periods of time. The applicants, which merely state that the information gathered is necessary to ensure after-sales or warranty services, do not establish that the restrictions of competi- tion resulting from the information exchange system, as previously analysed (see paragraph 91, above), are indispensable, in particular in the light of the alleged objectives. It is clear that an after-sales or warranty service can be carried out per- fectly well without any information exchange system of the type in question. Con- sequently, the information exchange system, as set out in both the first notification and in the second notification dated 12 March 1990, does not satisfy the conditions laid down in Article 85(3) of the Treaty.

100 It follows that the plea that the Commission wrongly rejected the individual appli- cation for an exemption which was submitted to it must be dismissed and that this action must itself be dismissed.

Costs

101 Pursuant to Article 87(2) of the Rules of Procedure of the Court of First Instance, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicants have failed in their sub- missions, they must be ordered to pay the costs.

2. Orders the applicants jointly and severally to pay the costs.

Cruz Vilaça Briët Barrington

Saggio Biancarelli

Delivered in open court in Luxembourg on 27 October 1994.

Η. Jung J. L. Cruz Vilaça

Registrar President