C-214/99

I — The legal and factual background 3 . Y ö t u u 1 i Ky i n f o r m e d N e s t e Markkinointi Oy, by a letter dated 23 June 1998, that it would end its purchases of 2. On 7 and 15 October 1986, Yötuuli Ky, fuel in accordance with the agreement with formerly M. Jukkola Ky, concluded with effect from 1 July 1998. 2Neste Markki- nointi Oy (hereinafter 'the claimant' or 'Neste') subsequently brought a claim * Original language: English. before the Tampereen Käräjäoikeus (Tam- 1 — See Commission Regulation (EEC) N o 1984/83 of 22 June pere District Court) against Yötuuli Ky and 1983 on the application of Article 85(3) of the Treaty to categories of exclusive purchasing agreements, OJ 1983 L. 173, p. 5. This regulation was adopted by the Commis- sion on the basis of tile authority granted bv the Council in Council Regulation 19/65/EEC of 2 March 1965 on the 2 — It would appear from the uncontradicted oral observations application of Article 85(3) of the Treaty to certain submitted by Neste that the original 1986 contract was categories of agreements and concerted practices, as renewed for a further period of five years on 7 October amended; OJ, English Special Edition, Series I (1965- 1996, but that the new contract was subject to termination 1966), p. 533. by either party on giving one year's notice.

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6. The Tampereen Käräjäoikeus (herein- after 'the national court'), in its order for reference of 1 June 1999, considers that the 'degree of tying-in caused by the network [of exclusive purchasing agreements in the 5. The claimant contested this defence. It Finnish service station market] is consider- submitted that an exclusive purchasing able'. However, it points out that the obligation should only be prohibited if it question whether access to the market is is clear, as a result of the overall effect of actually prevented is disputed between the the agreements in question, that national or parties. Referring to the Court's Brasserie foreign competitors cannot enter the.rele- de Haecht and Delimitis case-law, it notes vant market, and if the effect of those and that an exclusive purchasing agreement will other similar agreements on the partition- only infringe Article 81(1) EC if, having ing of the market is significant. While 573 regard to its economic and legal context, it of the total of 1 799 service stations hinders access to the market or renders it I-11124

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7. The national court considers that the 8. It has referred the following question to dispute before it requires it to decide the Court: whether 'the prohibition based on the overall effect of the network of agreements applies also to the agreement at issue'. This raises the issue whether the effects on competition of the agreements of a par- ticular supplier must be viewed globally or whether they may be viewed separately. In its view, the agreement at issue, viewed 'Is the prohibition referred to in Art- together with other agreements that are icle 85(1) of the EC Treaty applicable to terminable following on one year's notice an exclusive purchasing agreement con- period, would not appear to have signifi- cluded by a supplier of goods, which could cant effects on the partitioning of the be terminated by the retailer at any time on market. It regards the judgments of the one year's notice, if all the exclusive Court of First Instance in Langnese-lglo purchasing agreements concluded by that and Schöller, interpreting Delimitis, to be supplier have had a significant influence on insufficiently precise on the question whe- the partitioning of the market, either on ther an autonomous analysis of certain their own or together with the network of agreements is possible. 4In its view, agree- exclusive purchasing agreements concluded ments that are concluded for a duration of by all suppliers, but the agreements of several years restrict market access signific- similar duration to the exclusive purchasing agreement in question represent only a very small proportion of all the exclusive pur- 3 — See Case 23/67 Brasserie de Haecht v Wilkm [1967] chasing agreements of the same supplier, ECR 407 (hereinafter 'Brasserie de Haecht') and Case C-234/89 Delimitis [1991] ECR I-935. the majority of which are fixed-term agree- 4 — See Case T-7/93 Langnese-lglo v Commission [1995] ments which have been concluded for a ECR II-1533 and Case T-9/93 Schöller v Commission [1995] ECR II-1611. period of several years?'

I I — Observations invariably, for the purpose of applying Regulation No 1984/83, be equated with an indefinite duration. At the oral hearing, its agent stressed that national courts must 9. Written and oral observations have been be free to assess the real effects on com- submitted by Neste, the French Republic petition of contracts that contain tacit and the Commission. renewal clauses; such clauses, if the notice required is reasonable, may promote rather than restrict competition. To require in all cases a global approach to a supplier's network of contracts would restrict the autonomy of national courts and would 10. Neste pointed out in its oral observa- ignore the potentially pro-competitive tions that no question concerning the effects of tacitly renewable contracts where possible application of the block exemption the possibility of switching suppliers always arises in this case. It submits that competi- remains genuinely available. France con- tion in the market for the retail supply of tends that national courts should be en- petroleum fuels in Finland is limited to titled to take account of the diversity of inter-brand price competition. Relying potential situations. A tacitly renewable principally on Delimitis, it asserts that the contract concluded for a short period of agreements of the type in question have no, one or two years could facilitate a greater or at most only minimal, effects on com- turnover of suppliers than fixed-duration petition on that market. An unconditional contracts concluded for four or five years. right, on giving one year's notice, to However, where a contract falls to be terminate a contract is wholly reasonable regarded as having been concluded for an because it allows both the reseller and the indefinite duration, France submits that the supplier a reasonable period of time in mere fact that the category of contracts of which to prepare for a smooth change of which it forms part may represent only a supplier at the station. It permits the former small proportion of the exclusive purchas- real freedom to switch suppliers, while ing contracts operated by a particular providing the existing supplier with a supplier would not justify separate consid- chance to recoup its often considerable eration of the effects on competition of that investments at the station on behalf of the contract. reseller, or its costs in having provided the latter with equipment or low-cost loans.

not caught by Article 81(1) EC. In its view, the agreement at issue infringes Art- the decisive question is whether such con- icle 81(1) EC. Nevertheless, it also emerges tracts have the same effect on competition that the defendants have submitted that, if as the other contracts of the same supplier. that prohibition applies, the agreement In its view, segregating the contracts of a cannot benefit from the block exemption particular supplier would be arbitrary, for certain service station agreements pro- would run counter to the approach adopted v i d e d in T i t l e III of R e g u l a t i o n by the Court in Delimitis 5 and, in addition, No 1984/83, which was in force in June was expressly excluded by the Court of 1998 when the defendants gave notice of First Instance in Langnese-lglo 6 and termination of the agreement. 8 No ques- Schöller. 7While the national court alone tion has been referred regarding the applic- may assess the effects on the Finnish ability of the group exemption, as the market of the contracts at issue, the Com- national court appears to have assumed mission's agent contended at the hearing that it does not apply. However, the that tacitly renewable contracts were likely Commission and France have addressed to last longer and, thus, pose a greater written observations on the issue. Neste threat to competition than contracts con- does not consider it. cluded for fixed periods, since the prede- termined expiry date of the latter focuses the reseller's mind on the possibility of switching suppliers.

14. Article 10 of Regulation No 1984/83 provides an exemption from Article 81 EC for 'agreements to which only two under- takings are party and whereby one party, III — Analysis the reseller, agrees with the other, the supplier, in consideration for the according of special commercial or financial advant- ages, to purchase only from the sup- plier ... certain petroleum based motor-

vehicle fuels and other fuels specified in the 'indefinite duration' for the purpose of agreement for resale in a service station Regulation No 1984/83 10 and thus ex- designated in the agreement'. Art- cluded from the benefit of the block icle 12(1)(c) provides, however, that this exemption. 11 exemption shall not apply where 'the agreement is concluded for an indefinite duration or for a period of more than 10 years' (emphasis added).

16. The national court's question presup- poses that either the network of exclusive purchasing agreements entered into by Neste viewed on its own, or along with the parallel networks of similar agreements concluded by other petroleum-fuel sup- pliers in Finland, has significant market- foreclosing effects. The finding as to the existence of such effects has been made by 15. Although I was initially of the view the national court in the light of the Court's that, in order to provide the fullest and Brasserie de Haecht and Delimitis case- most useful answer possible to the national law. 12 It has not, however, yet made any court, it would be helpful to consider the definite finding about whether access is possible applicability of Regulation actually prevented or whether the contracts No 1984/83, I have been persuaded other- at issue make any significant contribution wise by Neste's unqualified submission at to the overall tying-in effects of Neste's the oral hearing to the effect that the block exemption is not at issue in this case. 9In 10 — As regards the new block exemption provided by Article 2 those circumstances, it would not be appro- of Regulation No 2790/1999, Article 5(a) provides that priate, in my view, for the Court, at least in '[A] non-compete obligation which is tacitly renewable beyond a period of five years is to be deemed to have been the absence of a question from the national concluded for an indefinite duration'. It thus falls outside the scope of the maximum period of five years allowed court, to consider whether a contract such under the new Regulation. as that at issue is to be regarded as being of 11 — The possibility that the agreement at issue might benefit from the application of the doctrine of provisional validity, confirmed recently by the Court in Case C-39/96 KVBBB v Free Record Shop [1997] ECR I-2303, on the basis that it was exempt from notification under both Article 4(2) of 9 — It informed the Court that following Finland's accession to Protocol 21 to the EEA Agreement and Article 4(2) of the European Union, it succeeded, in 1995, in renegotiating Regulation No 17 of the Council of 6 February 1962:

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network of agreements. It wishes, rather, tracts of this type is capable of restricting first to know whether it is permissible, the freedom of trade' (emphasis added). 15 when applying Article 81 EC, to consider separately some of a supplier's agreements. It will assist in answering this question if I recall the principal elements of the case- law.

15 — Ibid. 13 — [1967] ECU 407, p. 415. 16 — Case .56/65 S o c i é t é Technique Miniére v Masclimciibau 14 — Ibid. Ulm [1966] ECK 2.15.

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parallel re-exportation and importation'. 17 Such contracts entail for the supplier the The Court has thus stressed right from the advantage of guaranteed outlets, since, as a earliest days of Community competition result of his exclusive purchasing obligation law the importance of a dynamic and and the prohibition on competition, the contextual analysis. This approach was reseller concentrates his sales efforts on the categorically confirmed and developed by distribution of the contract goods. The it more recently in Delimitis, which con- supply agreements, moreover, lead to co- cerned the German beer market. operation with the reseller, allowing the supplier to plan his sales over the duration of the agreement and to organise product- ion and distribution effectively.

19. In Delimitis, the Court first provided a far from unfavourable overall assessment, so far as their object is concerned, of the Beer supply agreements also have advant- nature of exclusive purchasing agree- ages for the reseller, inasmuch as they ments: 18 enable him to gain access under favourable conditions and with the guarantee of sup- plies to the beer distribution market. The reseller's and supplier's shared interest in promoting sales of the contract goods likewise secures for the reseller the benefit of the supplier's assistance in guaranteeing product quality and customer service.

ments. Such agreements should not be 21. In Delimitis the Court was concerned viewed as falling within Article 81(1) EC with whether the existence of several unless, in the economic context in which exclusive purchasing agreements 'impedes they occur, they contain clauses whose access to the market'. 2 1To determine effects on competition are 'sufficiently whether access was impeded, it held that deleterious'. 19 it was first necessary to look at 'the extent of those agreements in their totality, com- prising all similar contracts tying a large number of points of sale ...'; i.e. at the cumulative effects on competition of the various parallel networks of agreements. However, even if the 'bundle of similar contracts' has 'a considerable effect on the opportunities for gaining market access', the market may not necessarily be fore- 20. Since an individual agreement such as a closed. 22 On the contrary, before this limb service station agreement between a sup- of the test may be deemed to be satisfied, plier of fuels and an operator of a local the 'opportunities for access' and the 'com- petrol station would be unlikely ever to petitive forces' operating on the market engender the restrictive effects necessary to must also be considered. 23 be considered as capable of falling within the scope of Article 81(1) EC, the Court has consistently followed the advice of Advocate General Roemer in Brasserie de Haecht and considered the effects of such agreements in their overall market con- text. 20 However, to determine whether national courts may segregate a particular supplier's network of the exclusive pur- chasing agreements for the purpose of determining whether, viewed separately, 22. It is only if an examination of those the effects of certain agreements on com- factors reveals that 'it is difficult to gain petition are so negligible as to render access to the relevant market' that the Article 81 EC inapplicable, it is necessary various individual agreements in question to examine carefully the dynamic contex- potentially restrict competition. 2 4How- tual approach formulated by the Court in ever, it is necessary to determine whether Delimitis, with regard to the effect of such the particular supplier's contracts contri- agreements. bute to an appreciable extent to 'the cumulative effect produced ... by the total- ity of the similar contracts found on the 19 — Société Technique Minière v Maschinenbau Ulm, loc. cit., market'. 2 5 This assessment requires that footnote 16 above. 20 — Referring to beer-supply agreements, he observed that they not only the market share held by that "... do not seem, when viewed i n isolation, to be prejudicial to the Common Market in any way', that 'this assessment is hardly altered if the entire distribution network of one brewery is examined as a whole, since where many such distribution networks exist ... it would be difficult for a 21 —Paragraph 19. single one of them to have an appreciable effect on trade 22 — Paragraph 20. between countries', but that such an effect could 'occur as 23 — See paragraphs 20 to 22. the result of the combined operation of all the internal beer distribution agreements in a Member State'; see [1967] 24 — Paragraph 24. ECR 407, at pp. 420 and 421 (emphasis in original). 25 — Paragraph 24.

(ii) Application in the present case

23. The national court has not yet decided 24. It must be recalled, however, that the whether access to the Finnish market for defendants have claimed before the the supply of petroleum fuels is impeded national court that the Finnish retail pet- for the purpose of the first limb of the roleum-fuels supply market is already satu- Delimitis test. Notwithstanding the very rated. The mere fact that some new com- strong market position enjoyed by Neste petitors have recently succeeded in gaining (577 service stations of a total of 1 799 on a foothold on that market, and that Neste's 31 December 1997), if new and equally market share has lately been slipping, does efficient competitors could still without not preclude a finding, which it is for the difficulty enter the market, or if existing national court alone to make by applying the Delimitis criteria, that access to the market 'is difficult'. To my mind, there 26 — Paragraph 26. must be more than a 'real possibility' of I-11132

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access, which must not, at least not exclus- were in existence on 1 July 1998 when the ively, be based on acquiring or taking over defendants allegedly breached their con- existing suppliers. 27 If the national court tract, were covered by the block exemption ultimately forms the view that competition contained in Article 10 of Regulation is not restricted by the various networks of No 1984/83. Consequently, the question exclusive purchasing agreements, then the arises whether it is permissible to view defence raised by the defendants to Neste's separately the effects on competition, on claim must fail, since the agreement at issue that date, of those 27 agreements, in so fai- could not, on its own, restrict competition as they were terminable on giving one for the purposes of Article 81(1) EC. year's notice.

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29 — Loc. cit., footnote 4 above. 33 — Paragraph 32. 30 — See Cases T-24/92 R and T-28/92 R Langnese-Iglo v Commission [1992] ECR II-1839. 34 — Commission Decision 93/405/EEC of 23 December 1992 relating to a proceeding pursuant to Article 85 of the EEC 31 — Commission Decision of 25 March 1992 relating to a Treaty against Schöller Lebensmittel G m b H & Co. KG proceeding under Article 85 of the EEC Treaty (IV/ (IV/31.533 and IV/34.072) and Commission Decision 34.072 — Mars/Langnese and Scholier — Interim Mea- 93/406/EEC of 23 December 1992 relating to a proceeding sures). This was an interim decision in which the pursuant to Article 85 of the EEC Treaty against Langnese- Commission had prohibited the applicants from enforcing Iglo G m b H (IV/34.072); OJ 1993 L 183, p. 1 and p . 19 their contractual rights under their exclusive purchasing respectively. agreements. 35 — Langnese-Iglo, paragraph 129, Schöller, paragraph 95, 32 — See paragraphs 30 and 31 of the Order. both cases cited in footnote 4 above.

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30. The clearest support for this view can be derived from Delimitis itself. By recog- nising that a clause allowing a tied publican to purchase beer from other Member States could affect the assessment under Art- icle 81(1) EC of an exclusive purchasing agreement, provided it genuinely permitted that publican to be supplied by other 29. The case-law therefore requires suppliers, the Court obviously accepted national courts to consider all the 'similar' that the effects on competition of every agreements operated by a particular sup- agreement entered into by a supplier were plier. Normally the various agreements not necessarily the same. It held that comprised in a network of exclusive pur- (emphasis added): 38 chasing agreements operated by a particu- lar supplier would be 'similar', if not almost identical. However, in my opinion, it does not follow that particular agree- ments containing specific clauses having clearly different economic effects should, for the purpose of applying the Delimitis test, necessarily be regarded as 'similar'. I 'If the interpretation of the wording of the agree with Neste that this view is not access clause or an examination of the i n c o n s i s t e n t with Langnese-lglo and specific effect of the contractual clauses as a whole in their economic and legal context shows that the limitation on the scope of 36 — Langnese-lglo, paragraph 206, Schöller, paragraph 160. The Commission pointed out in its written observations the prohibition on competition is merely that, in the Finnish version of the judgments, there is no hypothetical or without economic signifi- reference to 'of a supplier' hut merely to exclusive purchasing agreements whose contribution 'to a cumulative cance, the agreement in question must be effect is insignificant. However, in the authentic German version, the reference to supplier, '... die Alleinbezugsver- traege eines Lieferanten' (emphasis added), is included. 3 7 — Langnese-lglo, paragraph 207, Scholier, paragraph 161. 38 — Paragraphs 31 and 3 2 .

32. I do not accept the Commission's 31. Neste therefore correctly stresses the argument that subdividing a network of importance of 'duration' clauses in service exclusive purchasing agreements would station exclusive purchasing agreements. always be arbitrary. On the contrary, it Clauses governing the duration of agree- seems to me that the national court has ments comprised in a network of exclusive correctly analysed the distinction to be purchasing agreements are clearly material made, saying that 'it may be supposed in to their market effects and shorter periods principle that agreements of several years' are, by their nature, less restrictive. It is a duration restrict access to the market question of degree. In Delimitis, the Court significantly more than agreements which observed that the contribution of a bre- may end at any time with a short notice wery's individual contracts to market fore- period', and that '... it would not be closure depends on their duration: 'If the arbitrary to apply a prohibition based on duration is manifestly excessive in relation the overall effect of the network of agree- to the average duration of beer supply agreements generally entered into on the relevant market, the individual contract 39 — Paragraph 26.

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34. The mere fact that certain agreements may, because of their distinctiveness, occa- sionally merit separate assessment does not relieve the national court of its obligation to consider, by reference to their effects, 40 — See the Commission's new 'Guidelines on Verticil Restraints' (paragraph 151), which were issued in Decem- whether they are capable of restricting ber 1999 along with the adoption or the new block exemption regulation (Regulation No 2790/1999, loc. cit., competition and, thus, falling within the footnote 8 above) and which took effect on 1 June 2000. They have to date only been published on the Internet (see, scope of Article 81(1) EC. A relatively in tilis respect, littp://europa.eu.int/comm/dg04/antitrust/ short notice period in certain retail mar- legislation/verticalrestraints/guidelinesen.pdf). In para- graph 143 of the earlier draft version of the Guidelines, kets, like those for ice-cream and beer published along with the draft new block exemption regulation (see OJ 1999 C 270, p.12), it cited explicitly where there is far greater product differ- the example of 'petrol retailing'. entiation than in the retail petroleum-fuels 41 — The fact that Regulation No 2790/1999 specifically pro- supply market, could still contribute to a vides (Article 8) that the Commission may withdraw, by regulation, the benefit of the group exemption provided for in Article 2 of that Regulation, in the case of 'parallel networks of similar vertical restraints' which 'cover more than 5 0 % of a relevant market', does not support the 42 — Neste informed the Court at the hearing that the defend- Commission's opposition to the separate treatment in ants, along with the other 26 resellers, made a business certain circumstances of individual agreements, since the decision in 1995, when Neste wished to amend all of its power granted by Article 8 is, like the approach to agreements so as to bring them into conformity with Article 81(1) required by Delimitis, predicated on the Regulation N o 1984/83, to retain the agreements origin- similarity of the agreements at issue. ally concluded in 1986.

IV — Conclusion

36. Consequently, I would recommend that the Court answer the question referred by the Tampereen Käräjäoikeus as follows:

Article 85(1) of the EC Treaty (now Article 81(1) EC) does not apply to an exclusive purchasing agreement concluded by a particular supplier which,

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because it is terminable on giving a short period of notice, is economically distinguishable, as regards its effects on competition, from the majority of the other exclusive purchasing agreements of the same supplier, provided the agreement in question has insignificant effects on access to the market. This is so even if all the exclusive purchasing agreements concluded by that supplier, considered as a whole or together with the parallel networks of similar agreements concluded by the other suppliers active on the market, have a significant influence on foreclosure of the market.