C-265/97

OPINION OF MR SAGGIO — CASE C-265/97 P

O P I N I O N OF ADVOCATE GENERAL SAGGIO delivered o n 18 July 1999 *

I — Introduction Treaty (now, after amendment, Arti- cle 81(1) EC).

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treatment or processing of agricultural Aalsmeer, the VBA organises auction sales products, and under which there is no of floricultural products, in particular obligation to charge identical prices, unless fresh-cut flowers, indoor plants and garden the Commission finds that competition is plants. The VBA's premises are used pri- thereby excluded or that the objectives of marily for the actual auction sales, but an Article 39 of the Treaty are jeopardised' area is reserved for the renting-out of (Article 2(1)). processing rooms for the purposes of wholesale trade in floricultural products. The tenants of these rooms are mainly cut- flower wholesalers and, to a lesser extent, dealers in indoor plants.

II — Facts before the Court of First Instance

3. The facts of the present case are sum- marised in the Court of First Instance 5. Florimex is an undertaking engaged in judgment in paragraphs 1 to 51. I will the flower trade, established in Aalsmeer. It repeat below only those passages of the imports floricultural products from Mem- judgment which are relevant for the pur- ber States of the European Community and poses of examining this appeal. from non-member countries, mainly for resale to wholesalers established in the Netherlands.

The parties 4

7. Article 17 of the VBA's statutes requires its members to sell their products in auctions organised on the premises of the The Commission decision of 1988 6 cooperative. A fee or commission is invoiced to the members for the services provided by the VBA. In 1991 that fee amounted to 5.7% of the proceeds of sale. 8. In 1982 Florimex lodged a complaint under Article 3(1) of Regulation No 17 that the VBA had infringed Articles 85 and 86 of the EC Treaty (now Article 82 EC) due to its auction rules on direct supplies to dealers established on its pre- mises. With regard to direct supplies to dealers established on the VBA's premises, it is apparent from the Court's judgment that, until 1 May 1988, the VBA auction rules included provisions designed to prevent the use of its premises for supplies, purchases 9. On 5 November 1984 the VBA applied and sales of floricultural products not to the Commission for negative clearance passing through its own auctions. In prac- under Article 2 of Regulation No 17 or a tice, the VBA granted authorisation for favourable decision under Article 2 of Reg- commercial transactions involving these ulation No 26, or, failing this, an exemp- products but only under certain standard tion decision under Article 85(3) of the contracts known as 'handelsovereenkom- Treaty, regarding, in particular, its statutes, sten' (trade agreements) through which the its auction rules, its trade agreements, its VBA allowed certain dealers, under the general conditions for the rental of proces- conditions established by the VBA, to sell sing rooms and its scale of charges. or supply to purchasers approved by it certain floricultural products bought in other auctions in the Netherlands, or to sell cut flowers of foreign origin against payment of a levy of 5% of the sale price. In addition, the association authorised the purchase by a dealer established on its 10. On 26 July 1988 the Commission premises of products not purchased adopted Decision 88/491/EEC relating to

(b) to store temporarily on the VBA's premises floricultural products not bought through the VBA only against 11. As from 1 May 1988 the VBA formally payment of a fee determined by the removed the purchase obligations and VBA, restrictions on the free disposal of goods imposed by the auction rules and also the levies, but at the same time introduced a 'user fee' ('facilitaire heffing'). The rules on this, amended several times in line with the Commission's indications, apply to direct supplies to dealers established on the VBA's constitute infringements of Article 85(1) of premises and to commercial transactions the EEC Treaty. not carried out through the VBA.

7 — OJ 1988 L 262, p. 27. 8 — Paragraphs 19 to 23 of the judgment.

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The rules on this 'user fee' involve the price for the products is applied but following: this must comply with the auction rules on the sale of products; suppliers may pay a fee of 5% as an alternative to the system described above;

(a) the fee is payable by the supplier, that is to say the person by whom or the undertaking on whose instructions the products are brought on to the auction premises. Delivery is monitored at the entry to the premises. The supplier is required to indicate the name and (f) a tenant of a processing room who nature of the products concerned, but brings goods onto the VBA's premises is not their destination; exempt from the user fee if he has purchased the products in question at another flower auction in the Commu- nity or has imported them on his own behalf into the Netherlands, provided that he does not resell them to dealers (b) the fee is levied on the basis of the on the auction premises. number of stalks (cut flowers) or plants supplied;

17. By letters of 3 May 1989 Florimex and the VGB submitted their observations in response to the notice of 4 April 1989. On 7 February 1990 the VBA notified the 14. On 19 July 1988 the VBA notified the Commission of its additional rules con- Commission of the amendments to its rules cerning the 'detailed provisions governing adopted with effect from 1 May 1988, in the user fee', under which it would be particular the new user fee, but made no possible for a supplier to pay the user fee at mention of the new trade agreements. On a flat rate of 5% of the value of the 15 August 1988 additional amendments to products. On the same date, the VBA the VBA rules were notified to the Com- notified the new trade agreements to the mission. Commission.

15. By letters of 21 December 1988 the Commission informed Florimex and the VGB that it had initiated proceedings against the VBA and expressed the opinion 18. By letter of 24 October 1990 the Com- that the user fee was not discriminatory by mission informed the appellants of its comparison with the fees payable by mem- intention to adopt a decision favourable bers and other suppliers selling at VBA to the VBA. The appellants repeated their auctions. arguments in letters of 26 November and 17 December 1990 and at a meeting with Commission staff dealing with the matter 9 — Paragraphs 25 to 36 of the judgment. on 27 November 1990.

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The Commission decision contested before 20. As regards the application of the first the Court of First Instance 10 sentence of Article 2(1) of Regulation No 26 to supplies for auction sales, the Commission found in particular, in point 11.2(a) of the document annexed to the letter of 4 March 1991, that:

In the part of that document entitled 'legal assessment', the Commission found firstly The importance of groups of producers and that the provisions concerning supplies for associations thereof in the context of the auction sales and the rules on direct common agricultural policy is apparent supplies to dealers established on the VBA's from C o u n c i l R e g u l a t i o n (EEC) premises formed part of a body of decisions No 1360/78 of 19 June 1978. The objec- and agreements concerning the supply of tives set out in Article 39(1) cannot be floricultural products on the VBA's pre- attained unless the structural difficulties mises which were covered by Article 85(1) affecting the production of agricultural of the EC Treaty. Secondly, it found that products and particularly the first stage of those decisions and agreements were neces- distribution of those products are elimi- sary for attainment of the objectives set out nated. This situation can be remedied by in Article 39 of the EC Treaty, within the grouping independent farmers on a coop- meaning of the first sentence of Article 2(1) erative basis so that the economic process of Regulation No 26. can be influenced by common measures designed among other things to centralise supply (fifth and sixth recitals in the 10 — Paragraphs 37 to 47 of the judgment. p r e a m b l e t o R e g u l a t i o n (EEC) 11 — OJ, English Special Edition 1963-1964, p. 47. No 1360/78).

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This general principle must also apply sion considered, in point 11.2(b) of its specifically in this case. It is clear from an document, that: analysis of the composition of the VBA's membership that, although a small group by itself is relatively important in economic terms, the vast majority of VBA producers are nevertheless farmers who can partici- pate in the economic process on a wider- than-regional scale only through centralisa- 'The user fees constitute an essential feature tion of supply. of the VBA distribution system, without which its competitive capacity and there- fore its survival would be compromised. Consequently, they are also necessary for attainment of the objectives set out in Article 39.

12 — OJ 1978 L 166, p. 1. The geographical concentration of supply 13 — OJ, English Special Edition 1972 (II), p. 437. and demand on the VBA's premises consti-

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notice of the definitive rejection of their between outside suppliers and the holders complaints concerning the user fee. In that of trade agreements regarding the respec- letter (hereinafter 'the decision'), the Com- tive rates at which they were charged the mission stated that the reasons given in it user fee and the fee provided for in the supplemented and clarified those given in trade agreements. 14 its letter of 4 March 1991 under Article 6, to which it referred.

24. The Court found that the arguments invoked under the first two headings were unfounded. It accepted the actions under the third and fourth headings, consequently annulling the Commission decision of III — The contested judgment 2 July 1992.

23. On 21 September 1992 Florimex and the VGB brought two separate actions against the contested decision. By an order IV — Substance of 14 June 1993, the cases were joined.

26. In its first ground of appeal the VBA alleges infringement and incorrect applica- tion of Article 190 of the EC Treaty and the rules on the limits of the Court of First Instance's review of administrative acts. — The statement of reasons for the deci- According to the appellant, the Court sion rejecting a complaint concerning wrongly interpreted Article 190 of the EC infringement of the competition rules Treaty with regard to the requirement to state reasons for a decision rejecting the complaint of infringement of the competi- tion rules. In addition, in deciding whether the reasons stated were inadequate, the Court re-examined all the matters of fact and law in the administrative procedure. In doing so, first, the Court carried out a review which is not within its competence but which comes exclusively under the 27. The appellant maintains that, when competence of the administration and, applying the competition rules, in particu- secondly, it annulled the contested act for lar Article 85(1) of the EC Treaty, to acts breach of a procedural requirement, after on agricultural products, the Commission having accepted that the competition rules has wide discretion which reduces the had been incorrectly applied, and not for scope of the Court to review the substance inadequacy of the reasons given. of the act. The appellant observes that, if the administration were required to state reasons in more detail for every decision on the application of the competition rules, the Community court called to review the legality of such an act would be able to review the assessments which come under the exclusive competence of the adminis- This ground has three different parts. The tration. However, it adds that, in any event, first concerns the requirement for the the decision rejecting a complaint on com- administration to state reasons for a deci- petition is not subject to the same require- sion rejecting a complaint on competition. ments to state reasons as a decision on the The second concerns the legality of the substance of the complaint. The Commis- review by the Court, when an act is being sion is not therefore required to take into contested, of the matters of fact and law consideration all the arguments invoked by accepted by the Commission in the admin- the parties but is only required to indicate istrative procedure. Finally, the third con- the matters of fact and law which led it to cerns whether a court of law may assess the reach a particular conclusion.

The defendants observe in this respect that, contested act. According to the contested even accepting the appellant's above con- judgment, the complainants are not respon- tention, even taking account of the char- sible for proving that the act is unlawful, acteristics of the contested act, the opposite rather the Commission is responsible for conclusion to that drawn by the appellant proving that the reasons for this act are must be reached. They state that, when founded and that the act is therefore applying the competition rules to acts lawful. concerning agricultural products, the Com- mission does not have wide discretion and that the review by the Community judica- ture must not be merely 'marginal', that is concentrating on identifying only manifest errors. In support of this contention, the defendants observe that this case does not 28. Before assessing whether the arguments involve a decision granting an 'exemption' used to support this plea of illegality of the under Article 85(3) of the EC Treaty but a act are well founded, I will briefly recall the decision excluding the application to an passages of the statement of reasons in the agreement of the prohibition referred to in Court's judgment which apply in this Article 85(1). The Commission is therefore respect. required only to ascertain that the condi- tions excluding, in agricultural matters, the application of the competition rules have been met. However, the decision at issue is not a decision on agricultural policy, as the appellant appears to maintain, but con- cerns the non-application of the competi- In the action for annulment of the decision, tion rules to an agreement on the trade of the appellants maintained, inter alia, that agricultural products. adequate reasons were not given and that the facts were wrongly characterised. The Court ruled jointly on these pleas by carrying out an examination in particular of the statement that 'the first sentence of Article 2(1) of Regulation No 26 is inap- plicable and that adequate reasons were not given in that regard'. In this respect the Commission basically makes two observations. Firstly it claims that the truth is that the Court examined the infringement of Article 190 even though this was not invoked in a specific plea in law in the action which was limited With regard to the requirement to state to contesting the application to this case of reasons for a decision such as that at issue the first sentence of Article 2(1) of Regula- here, the Court observes, in paragraph 146 tion No 26. Secondly it claims that the et seq., that the Commission has never Court incorrectly interpreted the require- found, in acts concluding similar infringe- ment to state reasons for a decision reject- ment procedures adopted before the deci- ing a complaint and thus also 'reversed the sion at issue, 'that an agreement between burden of proof' of the legality of the the members of a cooperative which affects

free access by non-members to agricultural acknowledging that the user fee is neces- producers' channels of distribution is neces- sary in order to guarantee the survival of sary for attainment of the objectives set out the VBA, without examining the compat- in Article 39 of the Treaty.' As stated by the ibility, with the objectives of the common Commission itself, the 'Court maintains agricultural policy, of the effects of this fee that this type of agreement is for the most on non-members of the cooperative. part not included among 'the means indi- cated by the regulation providing for a common organisation in order to attain the objectives set out in Article 39' and cannot be included within the provisions of the regulation on the common organisation of the market. The regulation to be considered 29. As I have just observed, the VBA argues in this case, on the common organisation of that this reasoning is defective in that the the market in live plants and floricultural Court, in accepting that adequate reasons products, does not in fact 'provide for were not given, did not take account of the agricultural cooperatives to impose such a nature of the contested decision and speci- fee on third parties'. The Court therefore fically of the fact that this is a decision concludes in this respect that 'it was rejecting a complaint which, as such, does incumbent on the Commission to set out not deal with the substance of the conduct its reasoning in a particularly explicit complained of. manner, since the scope of its decision goes appreciably further than that of earlier decisions'. It adds that this conclusion is particularly true in a case such as this because, 'constituting as it does a deroga- tion from the general rule in Article 85(1) of the Treaty, Article 2 of Regulation 30. In my opinion, this complaint is No 26 must be interpreted strictly'. A unfounded. decision adopted under the first sentence of Article 2(1) must show how 'the agree- ment at issue satisfies each of the objectives of Article 39'. In the event of a conflict between those objectives, 'the Commis- sion's statement of reasons must, at the very least, show how it was able to It must be borne in mind that, when reconcile them so as to enable the first adopting a decision rejecting a complaint, sentence of Article 2(1) of Regulation although not being required to comment on No 26 to be applied'. The Court therefore all the facts which the persons concerned proceeded to examine certain passages of put forward in support of their application, the statement of reasons of the decision. In it is incumbent on the Commission, how- particular, according to the Court, the ever, to set out the facts and points of law decision rejecting the complaint at issue which play an essential role in the adoption does not fully set out the facts and points of of the act. Furthermore, according to the law which led the Commission to conclude case-law referred to by the parties, Arti- on the application of the derogation in cle 190 of the EC Treaty is to be interpreted Article 2. In the Court's opinion, the Com- as meaning that the statement of reasons mission essentially limited itself to 'must be appropriate to the act at issue and must disclose in a clear and unequivocal

It cannot therefore be accepted, as the appellant does, that in stating the reasons for a decision such as that in this case the I do not therefore share the appellant's administration is not obliged to comply opinion that in each case the requirement with the requirement to state reasons as to state reasons differs according to whe- defined in the case-law, in other words that ther the decision concludes the procedure it does not have to state the reasons clearly by taking a position on the substance of the and completely for a decision such as that infringements or orders the rejecting of the at issue where such a decision involves a complaint. I do not believe that in the rejection of the complaint and where, second case the statement of reasons can similarly, it does not rule on the substance ever be less complete than in the first case. of the alleged infringement of the competi- It is appropriate to note that Article 190 tion rules. On the contrary, I would state does not provide for a different require- that, according to settled case-law on the ment to state reasons for these two types of scope of the requirement to state reasons act. The situation in which the decision for decisions rejecting a complaint, 'when a rejecting a complaint occurs before a complaint has been submitted to it, the formal investigation does not exempt the Commission must, however, examine care- institution from the requirement to state fully the facts brought to its notice in order adequate reasons for the act with regard to to decide whether they disclose conduct the findings of fact. The truth is that it does liable to distort competition in the common not make much sense to maintain that the market and affect trade between Member statement of reasons should, for certain States and inform the complainant of the categories of acts, be clearer and more reasons for its decision to close the file', 16 complete than in others. The adequacy of the statement of reasons is actually mea- 16 — See Case C-59/96 P Koelman v Commission [1997] ECR sured essentially according to the specific I-4809, paragraph 42 in particular, which confirms the characteristics of each individual act which judgment in Case T-575/93 Koelman v Commission [1996] ECR II-1, paragraphs 39 to 40. See also in this respect Case allows the parties to defend themselves and T-7/92 Asia Motor France and Others v Commission [1993] ECR II-669, paragraph 30; Case T-387/94 Asia Motor France and Others v Commission [1996] ECR II-961, paragraph 46; Joined Cases T-133/95 and T-204/95 /ECC v Commission [1998] ECR II-3645,.paragraph 125 15 — See in particular Case C-367/95 P Commission v Sytraval et seq. and finally Case T-111/96 /TT Promedia v and Brink's france [1998] ECR I-1719, paragraph 63. Commission [1998] ECR II-2937, paragraph 79.

The Court's assessment of the inadequacy of the statement of reasons for the con- tested act is confirmed by the fact that the contested decision, although not occurring after the formal opening of the investiga- tion, is not limited to a rejection of the Given therefore that the Commission had complaint on the ground that the com- conducted an investigation and in view of plaints are manifestly unfounded but con- the content of the contested decision which siders the substance of the circumstances involves complex issues and the application and establishes that, even though the user of an exemption, I consider that the Court's fee produces restrictive effects on competi- assessment of the requirement on the tion in the Netherlands market for flor- Commission to state reasons for a decision icultural products, it is not, however, of this kind is not open to complaint. prohibited under Article 85(1) of the EC Treaty as the agreement at issue comes within the scope of Article 2 of Regulation No 26. The Commission therefore, as rightly observed by Florimex, rejected the complaint on the basis of an analysis which, by applying a specific exemption, It therefore follows that the first part of the considers an agreement to be lawful even if, first ground of appeal is unfounded. taken on its own, it is likely to produce restrictive effects on competition.

— The review of the legality of the act by It is therefore significant that, as is appar- the Court of First Instance ent from the Court's judgment, the com-

However, the defendant undertakings 32. In putting forward the second and third maintain that the VBA's complaints are parts of the first ground of appeal, the VBA based on an incorrect reading of the claims that, when reviewing the facts in the judgment. The Court did not actually annul light of the legal framework of Article 2 of the decision as vitiated by an incorrect Regulation No 26, the Court did not limit assessment of the facts but in so far as it itself to verifying whether there was a was vitiated by an inadequate statement of manifest error in the characterisation of reasons. In other words, the Court regarded these facts but conducted a complex and in- as inadequate the reasons given by the depth analysis of the facts at issue. Accord- administration to justify the characterisa- ing to the VBA, this is contrary to the case- tion of the user fee as a fee charged to non- law of the Court of Justice according to members of the cooperative which was which only manifest errors in the charac- 'necessary for attainment of the objectives terisation of the facts can justify annul- laid down in Article 39 of the Treaty'. ment. During the procedure before the Court of First Instance, the latter instead asked the Commission to prove its assess- ment of the facts to be well founded and, thus, the burden of proving the legality of the act fell on the Commission, thereby indicating that the burden of proving its objections on this point is not the respon- 33. The second part of the first plea which sibility of the appellant. The Court also concerns the extent of the review by the conducted a full and in-depth examination Court of the contested act is also unfoun- of the facts found in the acts and, by so ded. It is settled case-law that, 'although as doing, replaced the Commission in con- a general rule the Community judicature ducting an administrative review. Accord- undertakes a comprehensive review of the ing to the appellant, this was not compa- question whether or not the conditions for tible with the administrative nature of the the application of Article 85(1) are met, its acts and therefore compromised legal cer- review of complex economic appraisals tainty itself. The VBA finally observes that, made by the Commission is necessarily whereas Florimex cited in its appeal both limited to verifying whether the relevant the inadequacy of the statement of reasons rules on procedure and on the statement of and the error in the characterisation of the reasons have been complied with, whether facts, the Court in its judgment examined the facts have been accurately stated and the foundation of these two pleas only in whether there has been any manifest error

I would observe that, in this case, the examination carried out by the Court — so I consider that, by acting in that way, the far as relevant to the present procedure — Court remained within the limits of its concentrated on the facts provided by the competence. Contrary to the contention of Commission on five points which were: the the cooperative, the Court's examination alleged necessity of the user fee for the concerned the legal characterisation of the survival of the cooperative, the effects of findings of fact (as described above). This the user fee, access to the Netherlands examination did not review the appraisal of market for non-members of the VBA, the the facts (with particular regard to eco- allocation to the user fee of the same nomic considerations) but only the apprai- function as that of the 'minimum price' in sal of the adequacy of these facts, as stated the context of the common organisation of by the Commission, with regard to the legal the market and, finally, the absence of conclusions which, based on such apprai- unequal treatment between non -members. sal, that institution considered itself able to The Court found that the findings made by make. the Commission in the decision in relation to these five points were not corroborated by the facts to which the decision refers. With regard to those facts, the Court limited itself to examining the well-found- edness of their legal characterisation. The Court therefore took the view that they did not correspond in any of the aforemen- tioned aspects to the legal framework 34. In the third part of the first ground of appeal, the VBA claims that the Court committed an error of law in that it decided 18 — See Case C-7/95 P Deere v Commission [1998] ECR I-3111, paragraph 34. See also the Court of Justice that the reasons given were not adequate by judgments to which the above case refers, in particular taking into account, not the adequacy of Joined Cases 142/84 and 156/84 BAT and Reynolds v Commission [1987] ECR 4487. The judgments on deci- sions rejecting complaints on competition include the the facts on which the act was based, but aforementioned cases of T-24/90 Automec v Commission the substance of that act and in particular (paragraph 80) and T-387/94 Asia Motor trance and Others v Commission (paragraph 33). the allegedly incorrect application of the

competition rules to the agreement conclu- contested judgment. The Court actually ded between members of the VBA. annulled the decision because it considered that the Commission had not conducted a sufficiently in-depth examination of the case at issue before finding the VBA rules, and in particular the user fee, to be compatible with the objectives of the I would point out that, contrary to the common agricultural policy. It follows that Commission's conclusions, in the appeal the Court decided that the arguments brought before the Court, Florimex invoked in support of both pleas for invoked both the infringement of the com- annulment were founded and it therefore petition rules and the inadequacy of the annulled the decision because, on the basis statement of reasons and that the argu- of the results of the administrative investi- ments made in support of these pleas gation, the circumstances at issue could not essentially concerned the alleged incorrect be compared to the type of agreement characterisation of the information provi- provided for by this provision since it ded to the Commission by the interested excludes the application of the competition undertakings, particularly with regard to rules to agreements in the agricultural the effects produced by the agreement on sector. In other words, in this case, by the market. The Court took the two pleas carrying out a joint analysis of the argu- together and ruled jointly — in paragraph ments — based on the error of law and the 108 et seq. — on the 'pleas alleging that the inadequacy of the statement of reasons — first sentence of Article 2(1) of Regulation put forward in support of the two pleas No 26 is inapplicable and that adequate invoked in the application for annulment, reasons were not given in that regard'. the Court considered not only that the From the examination of the parties' argu- reasons stated for the act were inadequate ments the Court concluded that the Com- but also that an error of law had been made mission had not provided, in the decision, in the application of the competition rules. all the elements needed to include the case at issue within the scope of the derogation referred to in the first sentence of Arti- cle 2(1) of Regulation No 26. The Court confirmed in essence that, in view of the findings of facts by the Commission, it was not justified to find that the circumstances This part of the first plea for annulment at issue came under the agreements men- must therefore also be rejected. tioned in Article 2 and could therefore benefit from the derogation which this provision specifies.

Instance had committed an error of law by deal jointly with the two pleas, as is failing 'to draw the necessary distinction apparent from paragraph 153. In this between the requirement [for the adminis- way, it not only examined in detail whether tration] to state reasons and the substantive the plea alleging infringement of the com- legality of' the contested decision. The petition rules was well founded (although judgment of the Court of First Instance this examination was carried out together concerned the decision rejecting the com- with that on the parallel plea alleging plaint objecting to State aid granted by the infringement of the requirement to state

By proceeding in this way, the Court of First This analysis fits perfectly with the overall Instance had, 'on the basis of an alleged context of the dispute. A judgment which insufficiency of reasoning, . . . criticised the solely bases the nullity of the act on alleged Commission for a manifest error of assess- inadequate reasons reflects only partially ment attributable to the inadequacy of the the problem raised and does not respond investigation carried out by that institu- adequately to the complaints made by the

In Florimex, the Court of First 36. It follows that this part of the ground of Instance expressly affirmed its desire to appeal is also unfounded.

37. In its second ground of appeal, the appellant invokes the infringement and incorrect application of the second sentence As a matter of law, the appellant underlines of Article 2(1) of Regulation No 26 which that, according to the settled case-law of provides that Article 85(1) of the EC Treaty the Court of Justice, the cases appearing in does not apply to certain agreements of the second sentence of Article 2(1) are farmers 'unless the Commission finds that particularisations of the general rule competition is thereby excluded or that the expressed in the first part of paragraph 1. objectives of Article 39 of the Treaty are From this premiss, the appellant seems to jeopardised'. The appellant criticises the draw the inference that, although referring Court of First Instance for having wrongly expressly to the first part of this provision, considered, in paragraph 138 of the judg- the decision was in fact based on paragraph ment, that it was not required to adjudicate 1 as a whole. Moreover, the second part of on the application of the second sentence of this paragraph, which refers to farmers' Article 2(1), taking the view that the Com- associations, seems to include the activities mission decision was based solely on the of cooperatives and therefore seems to derogations mentioned in the first sentence apply in this case. The second part of of Article 2 and that therefore only the Article 2 allows the derogation to be general derogation indicated in this provi- applied in a simplified manner, that is by sion applied. simply ascertaining whether the agreement hinders the attainment of the objectives referred to in Article 39 of the EC Treaty. In recent judgments Oude Luttikhuis and Others 19and Dijkstra and Others, 20 the Court of Justice confirmed that Article 2 must be understood as containing three categories of derogation (the first applies to The VBA observes that, contrary to the agreements in the context of a national Court's conclusion, the Commission exam- market organisation, the second applies to ined the possibility of applying the second agreements necessary for attainment of the sentence of Article 2(1) because, in the objectives set out in Article 39 of the EC preliminary draft decision to which the Treaty and the third applies to the cases Court's judgment refers, in paragraph 41, referred to in the second sentence of the Commission accepted that the user fee Article 2(1)) and that therefore the agree- constituted an essential feature of the VBA distribution system and was therefore rele- vant for the purposes of applying the 19 — Case C-399/93 Oude Luttikhuis and Others v Verenigde derogation referred to in the second sen- Coöperatieve Melkindustrie Coberco [1995] ECR I-4515. tence of Article 2(1) of Regulation No 26. 20 — Joined Cases C-319/93, C-40/94 and C-224/94 Dijkstra v Friesland [1995] ECR I-4471.

ments referred to in the second sentence 38. This plea for annulment is also unfoun- have the same general scope as those ded. I would observe, firstly, that, in the referred to in the first sentence. On the letter sent to Florimex and the VGB under other hand, the VBA claims that this case- Article 6 of Regulation No 99/63, the law dates from after the contested decision Commission confirmed that, in accordance and that it cannot therefore be taken into with the first sentence of Article 2(1) of account for the purpose of assessing the Regulation No 26, Article 85(1) of the EC legality of this decision. Treaty was inapplicable to agreements concluded between the members of a cooperative because these agreements are instruments necessary for attainment of the objectives set out in Article 39 of the EC Treaty. The Commission reached this con- clusion by reviewing the legality of the agreement on the basis solely of the first sentence of Article 2(1), thus referring to the objectives of the agricultural policy in general and not to the possibility of the agreement at issue coming under one of the categories of agreements mentioned in the second sentence of paragraph 1. On the second ground of appeal, the defendants maintain that the Court of First Instance was not required to review the decision on the basis of a provision which the contested decision did not take into account. In any case, the defendants add that, had it conducted such an examina- tion, the Court of First Instance would have concluded that the conditions required for the application of the derogation referred to in the second sentence of Article 2(1) In respect of this complaint, the Court of were not met in this case, essentially for First Instance states that Florimex invoked, three reasons: (a) the members of the as the third ground of nullity, the infringe- cooperative are not established in a single ment of Article 2(1) only with regard to its Member State because this cooperative also first sentence. The VBA, intervening in the includes undertakings which are estab- procedure at first instance in support of the lished outside the Netherlands; (b) the defendant, invoked in its oral arguments agreement does not cover strictly national the application to this case of the second activities and, therefore, the organisation of sentence of Article 2(1) of Regulation the market in the Netherlands, but specifi- No 26. In ruling on this ground of nullity, cally covers products originating from the Court of First Instance set out — in other Member States and even from third paragraph 138 — the limits of the dispute countries, and (c) finally, the user fee does observing that, with regard to the content not cover relations between members of the of the contested decision, it was not 'called agricultural cooperative but only non- upon to adjudicate on the arguments put members and therefore this fee constitutes forward by the intervener at the hearing ... a sort of customs duty payable in order to but only on the legality of the conclusion access the Netherlands market. reached by the Commission in the con-

39. In its third ground of appeal, the VBA criticises the judgment of the Court of First Instance for not having considered, con- trary to settled case-law, 21 that the user fee constitutes a restriction on competition intended to ensure that 'the cooperative Given the wording of the decision and the functions properly and maintains its con- complaints put forward in the action for tractual power in relation to producers' and annulment by Florimex, it was completely that this therefore constitutes an infringe- justified for the Court of First Instance to ment of Article 85(1) of the EC Treaty. conduct its review of the legality of the decision by reference only to the first sentence of Article 2(1). If the assessment of the legality of the act had been con- ducted on the basis of a provision other than that invoked by the appellant and used According to the defendants, in making this by the Commission as the basis for its contention the VBA has incorrectly inter- decision, the Court of First Instance would preted the case-law of the Court of Justice have overstepped the limits of the dispute on the application of the competition rules which are apparent from the arguments to agreements establishing cooperatives. In invoked by the appellants who specifically their opinion, the Court of Justice's judg- based the alleged illegality of the act solely ment actually concerned only those provi- on the first sentence of Article 2(1). sions which, unlike those at issue, affect solely the subjective interests of non-mem- bers of the cooperative. They maintain, in any case, that in the contested decision the Commission considered the application of the prohibition referred to in Article 85 to have been established. Therefore this ground of appeal does not involve the review of the legality of the contested act either. In any event, even accepting (which I do not), as the appellant maintains, that the second part of Article 2(1) constitutes a particularisation of the first and is therefore devoid of any independent legal scope, it 40. I fully agree with the observations must, however, be accepted that, where the made by Florimex. In essence, the coopera- application to an agreement of the first part of Article 2 is excluded, the second part must therefore also be regarded as inap- 21 — See in particular Case C-250/92 Gøttrup-Klim and Others v Dansk Landbrugs Grovvareselskab [1994] ECR I-5641, plicable. paragraphs 34 and 35.

tive basis its arguments on the premiss that decision (in that it has not disputed that the Article 85(1) does not apply in the present agreement comes under the prohibition case because the agreement did not produce referred to in Article 85(1) of the EC restrictive effects on competition. However, Treaty) but claims on the contrary the this premiss is incorrect. Contrary to what non-application of the derogation, the the VBA maintains in its appeal, in its Court of First Instance did not commit an decision the Commission did not rule out error of law but merely noted the position the application to the VBA rules of Arti- (favourable to the appellants) adopted on cle 85(1) of the EC Treaty on the ground this point by the Commission. that the restrictions on competition con- tained in these rules were necessary to ensure the survival of the cooperative and that the cooperative form of the VBA did not actually have any effect on free compe- tition in the sector. On the contrary, the Commission took the view that, just as the 41. It follows that this ground of appeal 1988 decision had considered that the must also be rejected. 'buyers established on the VBA's premises constituted a large enough group to make the restrictions on competition agreed with them come under the prohibition on agree- ments referred to in Article 85(1) of the EC Treaty', the agreements referred to by the contested decision assumed, in the same way, the same economic importance and therefore came under the prohibition on agreements producing restrictive effects on The fourth, fifth, sixth, seventh and eighth competition (point 1 of the letter under grounds of appeal alleging infringement Article 6). The Commission then consid- and incorrect application of the first sen- ered whether the derogation referred to in tence of Article 2(1) of Regulation No 26 Article 2 applied in this case. The VBA's rules were assessed specifically with regard to the object of the activity of the under- takings involved in this cooperative and those rules were taken to involve an agreement producing anti-competitive 42. In the fourth to eighth grounds of effects (point 2 of the letter under Arti- appeal, the VBA pleads infringement and cle 6). incorrect application of the first sentence of Article 2(1) of Regulation No 26 — which specifies that Article 85(1) of the EC Treaty does not apply to agreements in agricul- tural matters 'as form an integral part of a national market organisation or are neces- sary for attainment of the objectives set out in Article 39 of the Treaty' — having Since the contested decision starts explicitly regard to the assessments made of the from the premiss that the agreement was various arguments alleging illegality of the contrary to the competition rules and as user fee set out in paragraphs 146 to 196 of Florimex has not disputed this aspect of the the judgment.

In that connection, the VBA questions the relevance, in the judgment on the applica- tion of Article 2, that neither the legislation on the common organisation of the market The Court of First Instance firstly observes in floricultural products nor the rules on that to date 'the Commission has never other common organisations of markets found that an agreement between the refer to contracts for the trade in these members of a cooperative which affects products, but concern only the quality of free access by non-members to agricultural

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OPINION OF MR SAGGIO — CASE C-265/97 P

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VBA V FLORIMEX AND OTHERS

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OPINION OF MR SAGGIO — CASE C-265/97 P

— The fifth, sixth, seventh and eighth significant impediment to the freedom of grounds of appeal other agricultural producers to sell through the distribution channels in question' and that 'that obstacle is particularly significant in this case because the wholesalers estab- lished on the VBA's premises include ... the largest Netherlands exporters, who occupy 48. In its last four grounds of appeal, the a leading position in Community trade in VBA disputes the legality of the findings floricultural products (points 131 and 132 and characterisation of the facts as con- of the 1988 decision)'. The Court of First tained in paragraphs 155 to 198 of the Instance draws the conclusion from this judgment in which the Court of First that 'even though the VBA's system meets Instance examines the main arguments certain of the objectives set out in Arti- which the Commission used to justify the cle 39 of the Treaty, the user fee is capable application of the first sentence of Arti- of operating ... in a manner inimical to cle 2(1) of Regulation No 26 to the user those objectives, in particular by preventing fee. Those grounds of appeal essentially producers who are not members of the concern 'the need to ensure the survival of VBA from increasing their individual earn- the VBA; the existence of a quid pro quo ings (Article 39(1 )(b)), by impeding the for the user fee, and the fact that the user availability of supplies from those other fee has an effect analogous to that of a producers (Article 39(1)(d)) and by pre- minimum auction sale price' (paragraph cluding price developments which are 154). These paragraphs also examine the favourable from the consumer's point of complaint made by Florimex in its appeal view (Article 39(1)(e))' (points 155 to before the Court of First Instance on the 169). unequal treatment between the various suppliers who have access to the VBA facilities.

lection of payments and recovery of debts' sion is that the user fee has an effect and that 'similarly, the actual use of the analogous to that produced by the imposi- VBA's facilities by third parties is limited to tion of a minimum price on agricultural the use of roadways on the premises to products. According to the Court, such make deliveries to the commercial premises reasoning presupposes 'that protection of of the wholesalers concerned'. In the the minimum prices of an agricultural Court's opinion, it therefore follows that cooperative organised on the basis of 'the concentration of supply and demand auction sales takes precedence over the on the VBA's premises [as is apparent from interest of other agricultural producers who the contested decision] is therefore the only are not members of the cooperative in [effective] advantage mentioned as a quid selling their products freely to independent pro quo for the user fee levied'. The Court dealers'. Given that in principle it is the also observes that this economic advantage provisions on the common organisations of 'is described in the contested decision only agricultural markets which determine the in very general terms, without specifying price of products, 'where, as here, the rules how the value of that advantage, and the on the common organisation contain no amount of the resultant user fee, can be specific provision, it must be presumed that calculated and expressed in actual figures, the price formation mechanism desired in taking into account, as appropriate, specific that area is that of free competition, with- financial data concerning for example the out such mechanism being affected by income, margins and costs of the VBA, the private agreements under which coopera- investments made by it and the value of any tive groups impose a fee on transactions economies of scale enjoyed as a result by between other agricultural producers and third parties, and of the extent to which the independent dealers'. It follows, according rent paid by the buyers established on the to the Court, that this aspect of the decision premises already reflects the economic is also insufficiently reasoned (points 184 advantage invoked'. It follows that 'the to 187). only justification put forward in the con- tested decision regarding the amount of the user fee relates to the fact that suppliers selling by auction and outside suppliers who do not use the auctions pay approxi- mately the same rate of fee' (points 170 to 183). As for the alleged unequal treatment between suppliers, the Court observes that the Commission considers that the differ- ence of rate between the fee of 3 % of the price of the products, charged to suppliers who conclude 'trade agreements', and that of the user fee, which is in general set higher, is justified and therefore lawful. On this point, the defendant maintains that 'dealers who have concluded trade agree- ments with the VBA also assume such supply obligations'. However, the Court Another line of reasoning deployed by the observes that 'the trade agreements of Commission to support the contested deci- which copies have been produced ... do

not provide for specific supply obligations. takings in the sector did not justify the user The various trade agreements grant dealers fee being regarded as sealing off the market the right to sell and deliver supplies on the in question and favouring the reinforce- VBA's premises, but do not impose specific ment of the position of these undertakings obligations in that regard. According to the in this market. explanations given by the intervener's representative at the hearing, the 'obliga- tion' consists in the fact that, if the holder of a trade agreement does not sell the contractual products to the VBA's satisfac- tion, the agreement, which is for a term of one year, is simply not renewed.' Under In the sixth ground of appeal, the VBA those circumstances, the Court considers disputes the Court's assessment that the that 'the existence of certain specific and user fee constitutes a quid pro quo which is precise obligations capable of justifying the not proportionate to the benefits and difference of rate between the 3% fee services offered by the VBA. In the VBA's which certain outside suppliers are allowed opinion, the user fee constitutes the quid to pay and the user fee paid by other pro quo for a large number of different outside suppliers has not been adequately services provided by the VBA which, con- established' (points 191 to 196). trary to what is claimed in the judgment, are not limited solely to use of the premises and roadways within the cooperative's premises. In addition, the amount of the user fee was fixed by the VBA in agreement with the Commission and following an investigation carried out by experts in the sector. The amount was calculated on the basis of general criteria rightly taking into account the difficulty of establishing the precise quid pro quo for all the services provided. 49. In its fifth ground of appeal the VBA maintains that the Court erred in consider- ing that the user fee constituted an obstacle to access to the Netherlands market in floricultural products. Instead, it maintains that this fee only affected a specific type of supply by undertakings established on the In its seventh ground of appeal, the appel- VBA's premises and specifically those ori- lant disputes, in essence, that the user fee ginating from outside suppliers delivering can be regarded as a minimum price their products directly to such undertak- analogous to that fixed for the common ings. Secondly, the VBA maintains that the organisation of the market. In this context, Court was mistaken in considering that the the VBA recalls that the user fee applies user fee influenced the level of prices of only to sales of products to dealers estab- products sold to the consumer as the deal- lished on the VBA's premises and that the ers/suppliers alone paid the fee. Thirdly, it price of the individual products is in claims that the fact that the VBA member- principle established totally freely during ship includes the largest Netherlands under- auctions organised by the cooperative itself.

Finally, in the last ground of appeal, the rightly considered that, in the absence of VBA maintains that the Court wrongly price fixing for agricultural products in the determined the existence of unequal treat- context of the common organisation of the ment between suppliers making direct sup- markets, it is not possible to describe as plies and those concluding 'trade agree- lawful agreements between undertakings ments' with the cooperative in that, con- on the prices of products. This is confirmed trary to what the Court maintains, the fees by the express exclusion of agreements are the quid pro quo for the various under the 'agricultural derogation' referred benefits and services. to in the second sentence of Article 2(1) of Regulation No 26. It follows that, in this respect, the complaint in question is unfounded. Otherwise, like the fifth, sixth and eighth grounds of appeal, this ground of appeal amounts to a dispute about the findings of the fact by the Court since, in 50. In my opinion, with the exception of essence, it involves the actual effect of the the seventh ground of appeal, but only with fee on the final price of the product. regard to the substantive issues which it raises, these grounds of appeal can be merged into one complaint based on an allegedly incorrect finding of facts by the Court regarding: (a) the effects of the user fee on the outside undertakings and on the price of products sold to the consumer (fifth ground of appeal); (b) the dispropor- tion between the services actually provided 52. It must be borne in mind that an appeal by the cooperative and the amount of the brought against a judgment of the Court of user fee incumbent on outside suppliers First Instance must be limited to grounds of (sixth ground of appeal) and (c) the differ- law and, according to the settled case-law ence in treatment between the various of the Court of Justice, it cannot involve the suppliers of the VBA (eighth ground of re-examination of the assessment of the appeal). facts made at first instance. The Court of First Instance has 'exclusive jurisdiction ... to establish the facts except where the substantive inaccuracy of its findings is apparent from the documents submitted to it'. This means that 'when the Court of First Instance has established or assessed 51. In its seventh ground of appeal, the the facts, the Court of Justice has jurisdic- appellant claims that the Court erred in tion under Article 168a of the [EC] Treaty having characterised the user fee as a [now, after amendment, Article 225 EC] to minimum market price. This complaint review the legal characterisation of those raises a point of law the substance of which facts by the Court of First Instance and the should be examined as it particularly legal conclusions it has drawn from concerns the Court's assessment of the them'. 24 It follows that the fifth, sixth illegality of a minimum price for agricul- tural products established on a contractual basis. I would merely point out, in this 24 — See in particular the case of Deere v Commission referred respect, that the Court of First Instance to in footnote 19 (paragraph 18 et seq.).

(2) order the appellant to pay the costs incurred by Florimex BV and Vereniging van Groothandelaren in Bleomkwekerijprodukten at this stage of the proceedings.

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