T-185/96

under court administration, represented by Rémi Saint Pierre, court-appointed administrator,

Palma SA (CIA — Groupe Palma), a company incorporated under French law, established in Salon-de-Provence, France,

Christophe and Gérard Palma, residing in Salon-de-Provence,

in court-supervised liquidation, represented by Dominique Rafoni, administrator and liquidator,

* Language of the case: French.

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supported by

Groupe Volkswagen France SA, established in Villers-Cotterets (France), repre- sented by Joseph Vogel, of the Paris Bar, with an address for service in Luxem- bourg at the Chambers of Arendt and Medernach, 8-10 Rue Mathias Hardt,

intervener,

A P P L I C A T I O N for annulment of decisions to reject complaints alleging infringe- ments of Article 85(1) of the EC Treaty (Cases T-185/96, T-189/96 and T-190/96) and, secondly, for damages for loss allegedly suffered as a result of those decisions (Cases T-189/96 and T-190/96),

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JUDGMENT OF 21. 1. 1999 — JOINED CASES T-185/96, T-189/96 AND T-190/96

Background

1 The applicants are former dealers of VAG France, now Groupe Volkswagen France SA (hereinafter 'Volkswagen'), a subsidiary of the German car-maker, Volk- swagen, and sole importer into France of Volkswagen CVW') and Audi vehicles.

2 After termination of their dealerships by Volkswagen between 1986 and 1991, the applicants lodged with the Commission, under Article 3 of Regulation N o 17 of the Council of 6 February 1962: First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962 (I), p. 87), a number of com- plaints concerning refusals, based on Volkswagen's standard-form distribution agreement (hereinafter 'standard-form agreement'), to supply Audi and VW vehicles to them, after their rejection from the network.

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3 The complainants requested the Commission to find that the standard-form agree- ment was contrary to Article 85(1) of the E C Treaty and that Volkswagen was not entitled to refuse to sell to them, or to prohibit its approved distributors from sell- ing on to them, new Audi and VW vehicles and/or spare parts, on the sole ground that the complainants no longer formed part of its network.

8 Consequently, the Commission informed Volkswagen that it was preparing to find it in infringement of Article 85(1) of the Treaty, to require it to bring its infringe- ments to an end under pain of penalties and to impose on it a fine under Articles 15 and 16 of Regulation N o 17.

9 After receiving the observations of the interested parties, the Commission held a hearing on 8 November 1994 at which Volkswagen and the complainants were represented.

10 In the end, the Commission decided to take no further action on the complaints. By communications dated 24 June 1996, the institution made known its intention not to pursue its investigation and requested the complainants to let it have their observations.

1 1 The Commission took the view that the observations submitted by the complain- ants disclosed no matters or arguments capable of altering its new point of view. Therefore, by decisions of 23 September 1996 (hereinafter 'decisions to reject the complaints'), the Commission definitively dismissed the complaints.

12 In that connection, the Commission considered that, upon examination, some of the objections turned out to concern stipulations or contractual practices which did not constitute anti-competitive restrictions under Article 85(1) of the Treaty.

1 3 At the same time the Commission also rejected the other objections raised at the outset, citing the lack of sufficient Community interest in pursuing proceedings. The Commission observed that the gathering of evidence of possible past infringe- ments would have necessitated the employment of means disproportionate to its task and its staff, regard being had, inter alia, to the division of roles as between

16 O n hearing the Report of the Judge Rapporteur, the Court of First Instance (Third Chamber) decided to open the oral procedure without any preparatory inquiry. However, by letter of 1 July 1998, it requested the parties to reply to certain ques- tions in writing.

17 By order of 3 September 1998, the three cases were joined for the purposes of the oral procedure and the judgment.

18 The parties presented oral argument and gave replies to the Court's questions at the hearing on 13 October 1998.

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Forms of order sought by the parties

(ii) order the applicant to pay the costs.

21 The intervener submits that the Court should:

(i) dismiss the action as inadmissible;

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(ii) dismiss the action as unfounded;

(iv)order the Commission to pay the costs in the amount of FRF 100 000.

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JUDGMENT OF 21. 1. 1999 —JOINED CASES T-185/96, T-189/96 AND T-190/96

23 The Commission contends that the Court should:

(i) dismiss the claims for annulment as unfounded;

(ii) dismiss the second and third heads of claim as inadmissible;

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The claims for annulment (Cases T-185/96, T-189/96 and T-190/96)

Admissibility of the daims for annulment

25 It has been consistently held that an intervener is not entitled to raise an objection of inadmissibility which was not formulated, as in the present case, in the form of order sought by defendant (Case T-290/94 Kaysersberg v Commission [1997] E C R II -2137, paragraph 76).

26 The objection of inadmissibility raised by the intervener must therefore be rejected.

As to the first plea alleging infringement of Article 85 of the Treaty, inasmuch as the Commission wrongly analysed certain clauses in the standard-form agreement as being not restrictive of competition

29 The applicants essentially allege that, in analysing four stipulations in the standard- form agreement as being not restrictive of competition, the Commission, in its rejection decisions, disregarded the principle that category exemptions must be strictly interpreted, as stated in the second recital in the preamble to the old regu- lation and also failed to take account of the worsening of the economic dependence of distributors entailed by the clauses at issue, whereas the limitation of that dependence is an essential precondition of category exemption.

30 The Court observes that the old regulation does not lay down mandatory provi- sions directly affecting the validity of the clauses of a contract or obliging the par- ties to adapt their terms or likewise have the effect of rendering a contract void where all the conditions laid down in the old regulation are not satisfied (see Case 10/86 VAG France v Magne [1986] ECR 4071, paragraph 16, and Case C-230/96 Cabour [1998] E C R I-2055, paragraph 47).

31 In such a situation, the contract in question will be caught by the prohibition laid down in Article 85(1) only if its object or effect is perceptibly to restrict competi- tion within the common market and it is capable of affecting trade between Mem- ber States (see Cabour, cited above, paragraph 48).

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36 The applicants criticise the Commission for finally deciding that direct sales to cer- tain final consumers, reserved under the standard-form agreement to Volkswagen at prices lower than those allowed to its dealers, were not caught by Community

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competition rules, thereby disregarding the effect that those sales, by virtue of their volume and detailed arrangements, could have on the economic balance of the distributorships.

37 The Court finds that this complaint concerns not the actual lawfulness of the clause under examination but solely a possible upsetting of the economic balance of the distributorship agreement as the result of the unfair application, which has not been proven, of that provision by Volkswagen.

— Distributor's remuneration

41 The applicants maintain that the Commission was wrong to hold that the arrange- ments for the operation of the current account agreement had no anti-competitive effect, although under that agreement Volkswagen was able to limit the cash avail- able to the distributor and his freedom to put himself in funds, owing to the par- ticular rights which Volkswagen is alleged to have reserved to itself in delaying crediting to that account amounts due to the distributor.

42 The Court observes that the applicants' complaints do not concern the clause in issue itself but the manner in which it may have been misused, which does not emerge at all from the file.

43 It has not therefore been established that the Commission erred in law in conclud- ing that the provisions of the standard-form agreement examined above were not in themselves restrictive of competition within the meaning of Article 85(1) of the Treaty.

44 The first plea must therefore be dismissed as unfounded.

The second plea: infringement of Article 85 of the Treaty owing to the Commis- sion's refusal to find other clauses in the standard-form agreement to be anti- competitive

45 By their second plea the applicants allege essentially that the Commission was wrong in not holding eight other provisions of the standard-form agreement to be anti-competitive and in wrongly relying on a lack of sufficient Community interest in pursuing the investigation of the complaints. According to the applicants, the Commission cannot maintain that the gathering of evidence of infringements of

48 Moreover, where, as in the present case, the Commission does not have exclusive competence to find contractual clauses to be incompatible with Article 85(1) of the Treaty, national courts also having such competence, owing to the fact that that provision has direct effect, a complainant does not have the right to obtain from the Commission a decision under Article 189 of the E C Treaty regarding the exist- ence or otherwise of the infringements alleged (Case T-186/94 Guérin v Commis- sion [1995] E C R II-1753, paragraph 23).

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49 Although the Commission may, at the behest of private traders, initiate proceed- ings for finding infringements of Article 85 of the Treaty, the private interest of the complainants coincides correspondingly less with the Community interest in pur- suing the investigation of the alleged infringements where the Commission has already concluded that some of the original charges must be dismissed.

50 The Commission may be all the more justified in urging the complainants to seek redress in the national courts since it is for those courts to examine the actual con- ditions under which the standard-form agreement is to be performed by the parties (cf. the judgment in Case T-88/92 Leclerc v Commission [1996] E C R II-1961, para- graphs 122 and 123) and to assess, in the light of the applicable national law, the scope and consequences of any automatic nullity of certain contractual provisions under Article 85(2) of the Treaty, with particular regard to all the other matters covered by the agreement (Case 319/82 Société de Vente de Ciments et Bétons de l'Est v Kerpen & Kerpen [1983] ECR 4173, paragraphs 11 and 12, and Cabour, cited above, paragraph 51).

5 4 The applicants allege that the standard-form agreement contained provisions clearly intended to impede cross-border sales of contractual products between dis- tributors in the network. In particular, the distributor was under an obligation to make monthly purchases of contractual products, to take orders on forms pro- vided by Volkswagen and to forward to it a volume of orders enabling it to main- tain a minimum level of stocks. Moreover, the investigation established that there were no cross-border resales between network distributors and that there was evi- dence, such as warning circulars addressed to distributors by Volkswagen, of Volk- swagen's intention to block such transactions.

55 The Court considers, on the contrary, that the Commission was entitled to take the view that the actual wording of the provisions of the standard-form agreement, which prohibits distributors from reselling the contractual products only to dis- tributors outside the network, was not sufficient to support the applicants' allega- tions, and that the rules governing the distributors' obligation to purchase from Volkswagen did not in themselves necessarily exclude acquisitions of contractual products from other resellers in the network.

56 Nor, moreover, has it been demonstrated that the Commission was manifestly wrong to conclude that the evidence initially used against Volkswagen was in the end insufficiently precise or consistent in order to support a finding of an infringe- ment firm enough to withstand any possible review of legality.

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JUDGMENT OF 21. 1. 1999 — JOINED CASES T-185/96, T-189/96 AND T-190/96

61 Moreover, owing to the rate of resupply of Volkswagen spare parts under the auto- mated stock management system introduced by Volkswagen, a distributor belong- ing to this system had to order from Volkswagen a considerable percentage of parts, which were, however, available from third parties, and take on surplus stocks of components having a low turnover.

62 The Court observes that, as is clear from an examination of its terms, the standard- form agreement expressly allowed network distributors, except in the case of repairs under warranty and recalls of contractual products, to obtain from third parties of their choice supplies of parts of a quality equivalent to that of parts dis- tributed by Volkswagen.

63 It does not seem from the evidence in the case that the level of stock commitments was fixed otherwise than on the basis of estimated forecasts or that distributors were not free to choose between Volkswagen premium prices and the possibly lower prices charged by other suppliers, in a situation where the concentration of purchases with Volkswagen could be accounted for by the objective interest of the distributor (paragraph 58 above).

6 4 Moreover, the Court finds that it cannot regard as manifestly erroneous the Com- mission's reasoning that the uniformisation sought by Volkswagen of quality con- trol of parts of various origins obviously served the interest of the final consumer in obtaining the widest possible warranty, at least equivalent to that given by the manufacturer.

68 The Court observes that, as the Commission itself accepts, the case-file shows that one distributor was in fact dismissed from the network on the ground that he had agreed to distribute vehicles of other makes outside his sales territory. N o n e the less, it does not appear that dismissals on this ground occurred systematically.

69 Under those circumstances, the Commission was entitled to take the view that the national courts could effectively give a decision on the lawfulness of the contested provision under Article 85(1) of the Treaty in order to assess, under the national law applicable, the scope and consequences, particularly in the matter of compen- sation, of its possible nullity in respect of refusals to sell which might have been imposed on distributors outside the network under the standard-form agreement.

70 Thus, on this point there is no evidence that the Commission committed a mani- fest error which would entail annulment of the decisions rejecting the complaints.

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— Extension of the standard-form agreement to second-hand cars

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credit for contract products dependent on the volume of customer credit attracted by the distributor. The applicant claims that this is directly contrary to Article 85(1 )(c) of the Treaty and likely to restrict competition by independent credit companies and to harm the consumer.

75 The Court finds that no evidence has emerged to show that distributors were legally bound to sign the standard-term contracts in question. Moreover, even though Volkswagen admitted that it may in the past have linked the amount of investment premiums to a certain level of performance in terms of applications for finance by distributors who had signed those contracts, there is no evidence that this is still the case.

76 Under those circumstances, it has not been demonstrated that the Commission was manifestly wrong in concluding that the Community interest no longer dic- tated that the complaints on this point should be investigated.

— Access by Volkswagen to the distributor's files and computer management

— Unilateral termination and alteration of the sales territory granted

80 The applicants observe that no investigation was necessary for the Commission to assess the anti-competitive effect of the unilateral right for Volkswagen to alter the licensed territory and to terminate the agreement on exceptional grounds. The Commission, it is alleged, did not react to Volkswagen's assertion that no termina- tion on exceptional grounds had occurred for non-attainment of a minimum per- centage of the sales target, when that assertion has been refuted in one case at least, which does not exclude the possibility of other terminations.

81 It may be inferred from the framing of this plea that Volkswagen cannot be accused of systematically applying the contested provisions, which on their face are not restrictive of competition.

82 Thus, it does not appear that the Commission's decision not to conduct further additional investigations in order to determine the effect of the clause at issue was clearly unjustified.

83 It has not therefore been demonstrated that the Commission was guilty of a mani- fest error of assessment in deciding not to pursue the investigation of the objec- tions initially raised against the provisions examined above, particularly since at

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87 The third plea must therefore be rejected as unfounded.

88 It follows that the claims for annulment in Cases T-185/96, T-189/96 and T-190/96 must be rejected as unfounded.

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The claims for compensation (Cases T-189/96 and T-190/96)

89 In support of their claim for compensation, the applicants in Cases T-189/96 and T-190/96 essentially allege that in their case the Commission committed a serious fault arising from its factual and legal errors of assessment and the dismissal of their complaints.

RIVIERA AUTO SERVICE AND OTHERS v COMMISSION

94 It is clear from the history of the cases that the radical change in the Commission's view was likely to prompt the applicants to bring it before this Court to explain the reasons which led it to abandon its initial analysis of the provisions of the standard-form agreement.

95 In those circumstances, the only costs which should be borne by the applicants are those incurred by themselves.

O n those grounds,

T H E C O U R T O F FIRST I N S T A N C E (Third Chamber)

hereby:

Tiili Potocki Cooke

Delivered in open court in Luxembourg on 21 January 1999.

H. Jung V. Tiili

Registrar President

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