C-8/95

NEW HOLLAND FORD v COMMISSION

OPINION OF ADVOCATE GENERAL RUIZ-JARABO COLOMER delivered on 16 September 1997 *

1. This case comes before the Court by way 3. To be used on the public highway in the of appeal by New Holland Ford Limited United Kingdom in accordance with national (hereinafter 'New Holland') against the law, every vehicle must be registered with judgment of the Court of First Instance the Department of Transport. The responsi­ (hereinafter 'the CFI' )of 27 October 1994 1 bility for such registration falls to the Local (hereinafter 'the contested judgment'). That Vehicle Licensing Offices (hereinafter judgment dismissed the application for 'LVLOs'), of which there are about 60. The annulment brought by New Holland and registration of vehicles is governed by proce­ Fiatagri Limited against Decision dural guidelines issued by the Ministry, 92/157/EEC 2 (hereinafter 'the contested decision') in which the Commission found entitled 'Procedure for the first licensing and that the UK Tractor Registration Exchange registration of motor vehicles'. According to infringed Article 85(1) of the EEC Treaty, those guidelines, a special form — form V55 because it gave rise to an exchange of infor­ — must be used for the application to regis­ mation which enabled each tractor manufac­ ter a vehicle. turer to learn about the sales of its various competitors and imports and sales by deal­ ers. In this appeal, New Holland acts for itself and for Fiatagri since the latter trans­ ferred its business to New Holland on 1 January 1987 and was then wound up.

agreement for the dissemination of infor­ Processing of the data contained on form mation, called the 'UK Tractor Registration V55 was entrusted to the data-processing Data System' (hereinafter 'the Data System'). company Systematics International Group of Companies Limited (hereinafter 'SIL'), to which the United Kingdom Ministry of Transport passed the information obtained when agricultural tractors were registered. SIL invoiced the cost of its services to each of the members of the agreement, under individual contracts concluded between SIL and those members. 5. In principle, any manufacturer or importer of agricultural tractors in the United Kingdom could join the Exchange and the Data System. The number of partici­ pants in the agreement varied while the investigation was being carried out, as a result of restructuring in the industry. At the date of notification of the Exchange, eight 7. The content of the Exchange was deter­ manufacturers, including New Holland and mined by the data included on form V55 and Fiatagri, were parties to the agreement. the use of those data under the information Those eight manufacturers were the leading agreement. New Holland and the Commis­ economic agents in the industry, since, sion had differing views in that regard, which according to the Commission, they held are reflected in paragraphs 8 to 16 of the 87% to 88% of the agricultural tractor mar­ contested judgment. ket in the United Kingdom, the remainder being shared by several small manufacturers.

— model, serial and chassis numbers, date of registration; it is apparent from the meet­ ing 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 9. In the Commission's opinion, there are the system which is the subject-matter of two main versions of the form: first, forms the first notification that information is V55/1 to V55/4, which are 'pre-completed' no longer disseminated to the members by manufacturers and sole importers and of the agreement, it having been agreed used by dealers to register vehicles delivered since 1 September 1988 that SIL is no to them, and, secondly, form V55/5, which is longer to send the vehicle registration designed for parallel imports. form to the members of the agreement. According to the applicants, the manu­ facturers need that information to con­ duct their recall campaigns and to check the validity of warranty claims submitted to them; the applicants state that that is the reason why that information, whose transmission to the members is also pro­ In paragraphs 11 to 16 of the contested judg­ vided for by the Data System, was sent to ment the CFI summarized the parties' posi­ the members until September 1988;

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— original and selling dealer (code number, 12. The parties agree that the information name, address and postcode): according sent to the members of the agreement by SIL to the applicants, that information is not can be placed into three categories, but they recorded by SIL; define those three categories differently.

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geographical breakdown corresponding ber, in particular the imports and exports to the sales territories of that member's of dealers in their respective territories. It distribution network, to specific analyses is therefore possible to identify imports requested by a given member, and also to and exports between the various dealer registration figures for tractors sold by it. 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, 14. According to the Commission, the three both inside and outside the United King­ categories of information are as follows: dom, by identifying the sales destination in that way. At the meeting with the par­ ties 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 — aggregate industry information: overall that, contrary to the statements made in industry sales, with or without a break­ the Decision, the information exchange down by horsepower or by drive-line; system did not enable the various manu­ that information is provided for time facturers to compare the sales of dealers periods broken down by year, quarter, in a given distribution network. month or week;

given dealer (dealer-import). It does not 10. On 11 November 1988, the Commission therefore relate to exports to other Member issued a Statement of Objections to the States or imports from such States. AEA, to each of the eight members of the Exchange and to SIL. On 24 November 1988 the members of the Exchange decided to sus­ pend it. During a hearing before the Com­ mission, 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. On 12 March 1990 five members of the agreement — including New Holland — notified to the Commission 16. According to the Commission, until 1988 a new agreement for the dissemination of SIL provided members of the agreement information, the Data System, and under­ with copies of form V55/5, which is used by- took not to implement the new system independent importers. Since 1988 it pro­ before receiving the Commission's response vides members only with the information to their notification. taken from that form, which is now destroyed after abstraction of data by SIL. The Commission contends that those regis­ tration documents permitted parallel imports to be identified, mainly through the serial number of the vehicle. With regard to the latter information, the Commission explained at the meeting with the parties on 7 December 1993 that in its opinion it was 11. In Decision 92/157, the Commission: necessary to distinguish between forms V55/1, 3 and 4, on the one hand, and formV55/5 on the other. Forms V55/1, 3 and 4 are pre-completed by the manufac­ turer, so that the information relating to the serial number appears on the form which accompanies each vehicle, and there is there­ — held that the agreement on the exchange fore a perfect check of the destination of of information on registrations of agri­ those tractors by the manufacturers. On the cultural tractors infringed Article 85(1) of other hand, with regard to form V55/5, SIL the Treaty 'in so far as it gives rise to an sent the form to the members until Septem­ exchange of information identifying sales ber 1988 and thus made it possible for them of individual competitors, as well as to trace the origin of a given vehicle. During information on dealer sales and imports that same meeting, the Commission never­ of own products' (Article 1); theless accepted that after 1 September 1988 the system did not enable the manufacturers to monitor parallel imports. At that meeting the applicants stated that, even before 1 Sep­ tember 1988, it was not possible for them to monitor parallel imports because the chassis — rejected the application for exemption number of the vehicle did not appear sys­ under Article 85(3) of the Treaty (Article tematically on formV55/5.' 2);

II — The admissibility of the appeal

— misapplication of Article 85(3). 13. New Holland claims that the Court should set aside the CFI judgment on the following grounds:

14. Before analysing each of those grounds, (a) Grounds relating to procedural errors: I consider it appropriate to give an overview of the criteria laid down by the Court of Jus­ tice for the admissibility of appeals against CFI judgments.

— breach of the obligation to state adequately the reasons on which the 3 — Joined Cases 56/64 and 58/64 Consten md Grandie v Corn- contested judgment is based; minion [196G] ECR 299.

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Secondly, the Court of Justice has held that an appeal may be based only on grounds 16. In my opinion, in competition cases aris­ relating to the infringement of rules of law, ing from Commission decisions it is advis­ able, as suggested by Advocate General

4 — Sec, inter alia, the orders of 26 April 1993 in Case C-244/92 P Kupka-Floridi v ECS [1993] ECR 1-2041, of 26 September 5 — Case C-53/92 P Hilti v Commission [1994] ECR 1-667, para­ 1994 in Case 26/94 P X v Commission [1994] ECR 1-4379, of graph 42, Joined Cases C-241/91 P and C-242/91 P RTE and 17 October 1995 in Case C-62/94 P Turner v Commission ITP v Commission [1995] ECR 1-743, paragraph 67, and the [1995] ECR 1-3177 and the judgment of 24 October 1996 m order of 17 September 1996 in Case C-19/95 P San Marco v Case C-73/95 P Viho v Commission [1996] ECR 1-5457, Commission [1996] ECR 1-4435, paragraphs 39 and 40. paragraphs 25 and 26.

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NEW HOLLAND FORD v COMMISSION

However, I wish to draw attention to the fact that the attitude of the appellant, which 17. In this case, the Commission, in its re-interprets the facts established by the CFI response, contests the admissibility of the in the contested judgment and expressly bases its grounds of appeal on that re-interpretation, is not in harmony with the 6 — Opinion of Advocate General Jacobs in Hilti v Commission, criteria laid down by the Court of Justice to cited above, paragraphs 8 to 12 and 46 to 49. ensure that appeals are properly conducted.

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III — The grounds of appeal arguments raised by the parties at the hear­ ing, in particular the analysis made by Pro­ fessor Albach of the structure of the relevant market, the complexity of agricultural trac­ tors as a product, the evolution of the under­ takings' market shares and the effect of the A. Breach of the obligation to state information exchange agreement on price adequately the reasons on which the con- levels. tested judgment is based

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21. Insufficiency of reasoning is an admis­ B. Breach of the obligation to address the sible ground of appeal. However, in this case material factual errors in the contested I consider that New Holland does not decision and their impact on the legality of clearly identify the legal deficiencies in the the decision reasoning of the contested judgment. The arguments which New Holland raises in this ground of appeal under the heading of insuf­ ficient reasoning of the contested judgment do not meet the conditions laid down by the case-law of the Court of Justice regarding the admissibility of appeals.

23. I therefore propose that the Court of Justice treat this ground of appeal as inad­ missible. 8 — Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I-1981, paragraph 49.

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factual findings of the CFI is apparent from — the specificity of the Data System was the documents submitted to it. overlooked;

— 'full' transparency regarding prices; destruction of 'hidden competition'.

25. New Holland then gives a number of examples of manifest errors or inaccuracies in the contested decision which the CFI did not analyse or from which it failed to draw the proper consequences in the contested judgment, despite the evidence produced by 26. As New Holland points out, the the applicants. Those errors are as follows: decision in Commission v Brazzelli Lualdi and Others, recently confirmed in the order 9 in San Marco v Commission, allows the Court of Justice to examine in an appeal the facts established by the CFI where the sub­ stantive inaccuracy of the factual findings of the CFI is apparent from the documents — tractors should be regarded as a differen­ submitted to it. In its response the Commis­ tiated product; sion asserts that the judgment in RTE and 10 ITP v Commission does not refer to the matter of substantive inaccuracy and there­ fore implies that Commission v Brazzelli Lualdi and Others has been overruled on that point. I do not share the Commission's — the features of the information exchange view on that point and the order in San agreement prior to the notification are Marco v Commission confirms that the case- irrelevant; law of the Court of Justice has not changed in that respect.

29. According to that case-law, the present ground of appeal is inadmissible since New Holland merely questions the appraisal and evaluation of the evidence carried out by the CFI and raises before the Court of Justice In fact, in this ground of appeal the appellant the same arguments as those rejected by the merely questions the appraisal and evalua­ CFI in the contested judgment. In any event, tion made by the CFI, in paragraphs 58 to 78 I consider that the CFI sufficiently justified, of the contested judgment, of the evidence in paragraphs 58 to 78 of the contested judg­ put before it regarding certain matters of fact ment, its appraisal of the evidence, with the in the contested decision. New Holland result that the Court of Justice is in a pos­ expresses its disagreement with the probative ition to undertake the review required under value attributed by the CFI to the various Community case-law. The CFI cannot be items of evidence but docs not indicate any required to indicate in detail the importance substantive inaccuracy in the findings of the which it attaches to each item of evidence or CFI appearing in the documents before the to explain all the reasons which prompt it to Court. accord greater probative value to some items of evidence than to others.

28. According to the case-law of the Court of Justice, it is for the CFI alone to assess the value which should be attached to the items of evidence produced to it and in an appeal the Court of Justice has no jurisdiction to 30. This ground of appeal should therefore decide as to the facts or the evidence admit­ be dismissed. ted by the CFI to support them provided that the evidence was duly obtained and the rules and general principles of law relating to 11 — Commission v Brazzelli Lualdi and Others, cited above, the burden of proof were observed together paragraph 66, and the order in San Marco v Commission, cited above, paragraph 40.

34. In my view, New Holland's argument to 32. As far as the relevant market is con­ that effect must be rejected. The CFI cerned, the appellant claims that the CFI adequately applied, in paragraph 51 of the breached its obligation to apply correctly the contested judgment, the criterion of substi­ legal principle established in United Brands v tutability established by the Court of Justice Commission, according to which reference in order to determine the relevant product must be made in its examination to the fea­ tures of the product in question and to a clearly defined geographical area in which it 12 — Case 27/76 United Brands v Commission [1978] ECR 207, is marketed and where the conditions of paragraph 11.

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market. The members of the information graphical extent of the relevant market. 4 As

35. As regards the finding concerning the geographical market, New Holland is of the opinion that the CFI erred in paragraph 56 of the judgment in considering that the United Kingdom, rather than the Common Market as a whole, is the relevant market. According to the criterion established in 37. As regards the description of the struc­ United Brands, the relevant geographical ture of the relevant market, New Holland market should have been the entire territory argues that the contested judgment and the of the Community because the Community contested decision mis-characterize it in vari­ market in agricultural tractors displays ous fundamental respects. Thus, the CFI homogeneous conditions of competition. considered that the market share of the four large manufacturers has remained stable and that there has been no significant penetration by competitors, that there were strong barri­ ers to entry to the market deriving from the high costs needed in order to set up a distri­ bution system, the existence of brand loyalty and the information exchange agreement, and that the selling prices of agricultural 36. That argument must be rejected. To my tractors in the United Kingdom were lower mind the CFI correctly applied the United than in other Member States. According to Brands judgment and the case-law of the Court of Justice in determining the geo­

14 — See A. Frignani and M . Waelbroeck, Disciplina della Con¬ correnza nella CE, UTET, Turin, 1996, p. 243 et seq. 15 — Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 13 — See, inter alia. Case 322/81 Michelin v Commission [1983] 113/73 and 114/73 Suiker Unie and Others v Commission ECR 3461, paragraph 37, and Casc C-333/94 P Tetra Pak v [1975] ECR 1663, Michelin v Commission, cited above, and Commission [1996] ECR I-5951, paragraph 13. Case C-62/86 AKZO v Commission [1991] ECR I-3359.

38. New Holland's argument is inadmissible in an appeal because it questions the assess­ ment and the probative value accorded by According to New Holland, the case-law of 16 the CFI to the evidence produced to it. New the Court of Justice allows account to be Holland has not alleged that evidence was taken of the potential effects of an agreement distorted or that the substantive inaccuracy only in order to determine whether it affects of the CFI's findings is apparent from the trade between Member States, but not to documents before the Court. Since, in the show that it has a restrictive effect on com­ contested judgment, the CFI obtained evi­ petition. Therefore, the CFI should have dence in the proper manner and observed the required the contested decision to have con­ rules and general principles regarding the tained an analysis of the actual effects on burden of proof and the assessment of evi­ competition of the information exchange dence, the Court of Justice has no jurisdic­ agreement. In the alternative, New Holland tion in an appeal to examine the evidence argues that it is necessary to demonstrate the actual effects on competition at least in the which the CFI accepted in order to establish case of agreements which have actually been the facts. applied. The information exchange agree­ ment was applied for 13 years until it was suspended on 24 November 1988 and the Commission should have examined its actual effects on competition in the United King­ dom market in agricultural tractors and the 2. The anti-competitive effects of the infor­ evolution of that market from the time of mation exchange agreement suspension of the application of the agree­ ment to the date of adoption of the contested decision.

41. For an agreement to be contrary of Article 85(1) it must have 'the object or effect of preventing, restricting or distorting competition in the common market'. In addition to restriction of competition, an According to the case-law of the Court of effect on intra-Community trade is a further Justice, 17 it is necessary first to check necessary requirement for there to be an whether the object of the agreement in itself infringement of Article 85(1). Those two constitutes a restriction of competition. If it requirements are closely linked with each does, the condition laid down by the provi­ other in the case-law of the Court of Jus­ 22 sion is fulfilled and it is unnecessary to tice, which refers without distinction to examine its effects. Only if it is concluded the relevance of the potential effects of agree­ that the object of the agreement does not ments on competition or on intra- involve a restriction of competition is it Community trade. However, it certainly appropriate to analyse its effects to see cannot be asserted, as New Holland sug­ whether it gives rise to such a restriction. 8 1 gests, that Community case-law takes into account the potential effects of agreements on intra-Community trade and that, on the contrary, it requires proof of actual effects on competition.

The effects of an agreement must be assessed in relation to the competition which would Determination of the effects of an agreement prevail in the relevant market if that agree­ on competition constitutes a complex econ­ ment had not existed. Accordingly, the omic appraisal and the Court of Justice has Court of Justice considers that the Commis­ held that, although it should undertake a sion's examination of agreements 'must be comprehensive review of whether the condi­ based on an assessment of the agreements as tions for the application of Article 85(1) are a whole', which means that both the actual fulfilled, its review of complex economic effects and the potential effects of those appraisals by the Commission is necessarily

limited to verifying whether the relevant judgment, the judicial review provided for rules on procedure and on the statement of by the case-law of the Court of Justice. reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of 23 appraisal or a misuse of powers. I do not consider that the CFI should have required the Commission to carry out an analysis of the actual effects of the agreement on competition in the United Kingdom agri­ cultural tractor market, in which it would have indicated the prices and market shares of each trader that would have prevailed if there had been no information exchange 42. In the present case, the information agreement. Proof of the anti-competitive exchange agreement did not have an anti­ effects of that agreement would have been a competitive object and, therefore, it was nec­ requirement that the Commission would 24 essary to consider its effects on competition have found difficult to fulfil, and which in the United Kingdom agricultural tractor would be unnecessary since the characteris­ market. In the contested judgment, the CFI tics of the relevant market and the object of considers that the Commission sufficiently the information exchange agreement were demonstrated, in the contested decision, the sufficient to show that it was capable of restrictive effects of the information restricting competition. exchange agreement.

43. For all those reasons, I consider that this part of the ground of appeal cannot be upheld.

the Commission has expressed its views on a 46. Apart from the fact that New Holland 'pure' information system, not linked with does not precisely identify the issue of law any anti-competitive agreement, which only which it raises in this part of the present disseminates information on past sales and ground of appeal, I consider that those argu­ does not relate to a basic product. Paragraph ments were put forward in the same terms 91 of the contested judgment recognizes that before the CFI, which rejected them in para­ the contested decision 'is the first in which graph 35 of the contested judgment. More­ the Commission prohibited an information over, when the appellant does introduce a exchange agreement which does not directly new argument, it does so in reliance on a concern prices, but which does not underpin definition of the characteristics of the rel­ any other anti-competitive arrangement evant market which differs from that estab­ either', but the CFI considered, in paragraph lished in the contested judgment. For all 35 of the contested judgment, that the con­ those reasons, I consider that this part of the tested decision 'simply applies principles laid ground of appeal is inadmissible. down in the Commission's previous deci­ sions to a particular market, namely that for agricultural tractors in the United Kingdom'. According to New Holland, that second view expressed by the CFI, contradicting the first, prompted it to consider that the con­ tested decision complied with the obligation of a higher standard of reasoning which 47. In view of the foregoing considerations, applies to Commission decisions that break I am of the opinion that this ground of new ground, in accordance with the Papiers appeal is partially inadmissible and that the 25 admissible parts should be dismissed. Peints judgment.

from the agreement itself. According to issues raised, New Holland objects to the New Holland the CFI should not have con­ solution adopted by the CFI in paragraph 99 sidered the contested decision valid because of the contested judgment regarding the application of Article 85(3) to the infor­ the Commission did not specify those parts mation exchange agreement. The CFI con­ of the information exchange agreement firmed the contested decision, considering which the undertakings should have that the restrictions of competition resulting removed in order to make it compatible with from that agreement were not needed in Article 85(1). order to attain the objectives set by the undertakings participating in it. The Com­ mission properly explained, in the view of the CFI, how the manufacturers of agricul­ tural tractors in the United Kingdom could achieve their objectives by using an infor­ 49. This ground of appeal cannot be upheld. mation system with lesser anti-competitive In my opinion, the CFI correctly applied effects or having recourse to other mecha­ Consten and Grundig in paragraphs 36 to 38 nisms such as the identification of market of the contested judgment since it took data by each undertaking. account of the parties' submissions in that regard and took the view, correctly, that the content of the contested decision made it clear that the Commission considered the information exchange agreement in its entirety to be incompatible with Article 85(1). It was not possible to distinguish within that agreement certain parts that New Holland considers that reasoning of the should be eliminated with a view to render­ CFI to be incorrect and that as a result the ing it legal because it operated as a structured CFI incorrectly applied Article 85(3). First, whole. Indeed, the appellant does not make it reiterates that the timescale provided for m any submission in this ground of appeal con­ the information exchange agreement was cerning identification of parts of the agree­ necessary for the manufacturers to learn in ment which might be severable from it. due time of fluctuations in demand in order to match their supply to customer demand. Secondly, the appellant states that the infor­ mation exchange agreement allows all manu­ facturers, both large and small, to obtain the same information because it is managed by E. Misapplication of Article 85(3) of the EC an independent data-processing company. If Treaty there were no agreement large manufacturers would be better placed than small ones to learn about the market.

In view of the foregoing considerations , I suggest that the Court of Justice:

(1) declare the appeal partially inadmissible;

(2) dismiss the admissible grounds of appeal;

(3) order the appellant to pay the costs.

27 — Sec Case C-360/92 P Publishers Association v Commission [1995] LCR I-23, paragraphs 24 to 29.

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