C-2/01

Proceedings before the Court of First Instance and the contested judgment I-31

Proceedings before the Court of Justice I-37

II — Legal analysis I-37

Preliminary remarks I-37

The grounds of appeal relating to the findings of fact I-38

(i) Failure to take full account of the facts concerning Bayer's alleged monitoring of the final destination of the goods supplied I-39

1 — Original language: Italian.

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BAI AND COMMISSION v BAYER

(ii) The requirement for the manufacturer to require a particular form of conduct on the part of distributors or to seek to obtain their compliance with its policy designed to prevent parallel imports before an agreement on an export ban can be regarded as having been made I-56 (iii) The burden of proof I-58 (iv) The lack of correspondence between the stated intention and the actual intention of the wholesalers I-60 (v) The argument that the measures adopted by Bayer were only apparently unilateral I-61 Concluding considerations I-62 III — Costs I-62 IV — Conclusion I-63

1. These cases concern an appeal brought I — Facts and procedure by the Bundesverband der Arzneimittel- Importeure e.V. ('BAI') and by the Com- mission against the judgment of 26 October 2000 of the Court of First Instance in Case T-41/96 Bayer v Commission ('the con- tested judgment') 2 annulling Commission Background to the dispute Decision 96/478/EC of 10 January 1996 'relating to a proceeding under Article 85 of the EC T r e a t y ' ('the c o n t e s t e d decision'). 3 2. The contested judgment sets out the background to the dispute as follows:

' 1 . The applicant, Bayer AG (hereinafter "Bayer" or "the Bayer Group"), is the parent company of one of the main Euro- pean chemical and pharmaceutical groups and has a presence through its national subsidiaries in all the Member States of the Community. For many years, it has manu- 2 — [2000] ECR II-3383. factured and marketed under the trade 3 — OJ 1996 1. 201, p. 1. name "Adalat" or "Ädalate" a range of

4 — According to that well-known provision, '[t]he following 4. Faced with that situation, the Bayer shall he prohibited as incompatible with the common market: all agreements between undertakings, decisions by Group changed its delivery policy, and associations of undertakings and concerted practices which began to cease fulfilling all of the increas- may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion ingly large orders placed by wholesalers in of competition within the common market...'.

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4. In the grounds of the decision, the 7. With regard to the latter, the Commis- Commission sought to show in particular: sion stated in particular that the evidence in (i) that Bayer France and Bayer Spain had its possession 'show|ed[ that supply of the made an agreement with the wholesalers quantities allowed by Bayer France and providing for an export ban (recitals 156 to Bayer Spain [was] subject to compliance 188); (ii) that the object and effects of that with an export ban. Bayer France and agreement were restrictive of competition Bayer Spain [made] the extent of the (recitals 189 to 197); and (iii) that it had an reduction in the amounts they supplied] appreciable effect on trade between dependent on the wholesalers' conduct in Member States (recital 198). response to the export ban. If the whole-

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salers infringe [d] the export ban, this — 'Bayer Spain and Bayer France imposed entail [ed] a further automatic reduction in a ban applicable systematically and the supplies they receive[d]'. 5Following an consistently to all sales transactions analysis of the relevant documents, the between them and their respective Commission therefore concluded that 'the wholesalers where the two companies conduct of Bayer France and Bayer Spain knew that the wholesalers were expor- showfed] that the two companies ha[d] ting'; 8 subjected their wholesalers to a permanent threat of reducing the quantities supplied, a threat which was repeatedly carried out if they did not comply with the export ban'. 6

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wholesalers even began to comply with the 11. On 1 August 1996, BAI (a German national "quotas" imposed by their sup- association of importers of medicinal prod- plier, negotiating as far as they could to ucts) applied for leave to intervene in increase them to the maximum, thus bow- support of the form of order sought by ing to the strict application of and com- the Commission. On 26 August 1996, the pliance with the figures regarded by Bayer European Federation of Pharmaceutical France and Bayer Spain as normal for the Industries' Associations (a European indus- supplying of the domestic market'. 11 try federation representing the interests of According to the Commission, '[t]his atti- 16 national pharmaceutical industry associ- tude demonstrates that the wholesalers ations, 'the EFPIA') applied for leave to were aware of the real motives of Bayer intervene in support of the form of order France and Bayer Spain and of the tactics sought by Bayer. By orders of 8 November deployed by the two companies to thwart 1996, the President of the Fifth Chamber parallel exports: they adapted to the system (Extended Composition) of the Court of established by their supplier so as to First Instance granted both bodies leave to comply with its requirements. This behav- intervene. iour thus demonstrates their compliance with the export ban which was incorpor- ated into the continuous commercial relations between Bayer France and Bayer Spain and their wholesalers'. 12 12. By judgment of 26 October 2000, the Court of First Instance upheld Bayer's first plea in law concerning the applicability of Article 85(1) to the case and annulled the contested decision on the basis that, in its view, 'the Commission incorrectly assessed the facts of the case and made an error in the legal assessment of those facts by holding it to be established that there was a common intention between Bayer and the wholesalers referred to in the Decision, Proceedings before the Court of First which justified the conclusion that there Instance and the contested judgment was an agreement within the meaning of Article 85(1) of the Treaty, designed to prevent or limit exports of Adalat from France and Spain to the United King- dom'. 13

Article 85(1) of the Treaty. It noted, in edge [d] having introduced a unilateral particular, that 'where a decision on the policy designed to reduce parallel imports' part of a manufacturer constitutes unilat- but 'denie[d] having planned and imposed eral conduct of the undertaking, that an export ban. In that regard, it denie[d] decision escapes the prohibition in ever having had discussions with the Article 85(1) of the Treaty', 14 since the wholesalers, let alone making an agreement concept of an agreement as contemplated with them, in order to prevent them from in that provision 'centres around the exist- exporting or to limit them in the export of ence of a concurrence of wills between at the quantities delivered. Moreover, it least two parties, the form in which it is state [d] that the wholesalers did not adhere manifested being unimportant so long as it in any way to its unilateral policy and had constitutes the faithful expression of the no wish to do so'. 17 Given those denials by parties' intention'. 15 In order to apply the the applicant, the Court of First Instance provision in question, therefore, 'a distinc- decided that 'in order to determine whether tion should be drawn between cases in the Commission ha[d] established to the which an undertaking has adopted a genu- requisite legal standard the existence of a inely unilateral measure, and thus without concurrence of wills between the parties the express or implied participation of concerning the limitation of parallel another undertaking, and those in which exports, it [was] necessary to consider the unilateral character of the measure is whether, as the applicant maintain[ed], merely apparent. Whilst the former do not the Commission [had] wrongly assessed fall within Article 85(1) of the Treaty, the the respective intentions of Bayer and the latter must be regarded as revealing an wholesalers'. 18 agreement between undertakings and may therefore fall within the scope of that article. That is the case, in particular, with practices and measures in restraint of competition which, though apparently adopted unilaterally by the manufacturer in the context of its contractual relations 15. Regarding first the 'alleged intention of with its dealers, nevertheless receive at least the applicant to impose an export ban', the the tacit acquiescence of those dealers'. 16 Court of First Instance concluded, after a thorough examination of the documents referred to in the decision, 'that the Com- mission ha[d] not proved to the requisite legal standard either that Bayer France and Bayer Spain [had] imposed an export ban on their respective wholesalers, or that Bayer [had] established a systematic moni- toring of the actual final destination of the 14. Having said that, the Court of First packets of Adalat supplied after the adop- Instance, turning to consider the applica- tion of its new supply policy, or that the bility of Article 85(1) to the case in hand, applicant [had] applied a policy of threats then observed that the 'applicant acknowl- and sanctions against exporting whole- salers, or that it [had] made supplies of

21 — Paragraph 120. 19 — Paragraphs 109 and 110. 22 — Paragraph 121. 20 — Paragraph 119. 23 — Paragraph 122.

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18. The Court of First Instance next 'deter- 153 For the same reasons, the Commis- mined whether, having regard to the actual sion cannot claim that the reduction conduct of the wholesalers following the in orders could be understood by adoption by the applicant of its new policy Bayer only as a sign that the whole- of restricting supplies, the Commission salers had accepted its requirements, could legitimately conclude that they or maintain that it is because they acquiesced in that policy'. 24 After review- satisfied Bayer's requirements that ing the documents referred to in the they had to procure extra quantities decision, the Court of First Instance held: destined for export from wholesalers who were not "suspect" in Bayer's eyes and whose higher orders were therefore fulfilled without difficulty.

'151 Examination of the attitude and actual conduct of the wholesalers shows that the Commission has no foundation for claiming that they aligned themselves on the applicant's policy designed to reduce parallel imports.

157 The Commission was therefore wrong in holding that the actual conduct of the wholesalers consti- tutes sufficient proof in law of their 155 In the absence of evidence of any acquiescence in the applicant's pol- requirement on the part of the appli- icy designed to prevent parallel cant as to the conduct of the whole- imports.' salers concerning exports of the packets of Adalat supplied, the fact that they adopted measures to obtain extra quantities can be construed only as a negation of their alleged acquiescence. For the same reasons, the Court must also reject the Com- 19. In response to the Commission's argu- mission's argument that, in the cir- ments based on Community case-law cumstances of the case, it is normal (paragraphs 160 to 170), the Court of First that certain wholesalers should have Instance then analysed the cases cited by tried to obtain extra supplies by the defendant institution to show that the circuitous means since they had to latter could not 'effectively rely on the undertake to Bayer not to export and case-law precedents referred to in order to thus to order reduced quantities, not call into question the analysis, which ha[d] capable of being exported. led the Court to conclude that in this case acquiescence of the wholesalers in Bayer's new policy ha[d] not been established and that the Commission ha[d] therefore failed to prove the existence of an agreement'. 25

156 Nor, finally, has the Commission proved that the wholesalers wished 20. Finally, the Court of First Instance to pursue Bayer's objectives or rejected the proposition on which the wished to make Bayer believe that Commission's reasoning was predicated, they did. On the contrary, the docu- ments examined above demonstrate that the wholesalers adopted a line of 25 — Paragraph 159.

namely that 'the mere finding of fact that 22. The Court of First Instance further the wholesalers did not interrupt their observed, in relation to the Commission's commercial relations with Bayer after the proposition, that the aim of Article 85(1) 'is latter established its new policy designed to not to eliminate obstacles to intra-Commu- restrain exports [was] a sufficient ground nity trade altogether; it is more limited, for it to hold that the existence of an since only obstacles to competition set up agreement between undertakings within the as a result of a concurrence of wills meaning of Article 85(1) of the Treaty between at least two parties are prohibited [was] established'. 26 by that provision'. 28 On that basis, the Court of First Instance therefore concluded that 'provided he does so without abusing a dominant position, and there is no con- currence of wills between him and his wholesalers, a manufacturer may adopt the supply policy which he considers necessary, even if, by the very nature of its aim, for example, to hinder parallel imports, the implementation of that policy may entail restrictions on competition and affect trade between Member States'. 29 21. In that regard, the Court of First Instance observed in particular that the 'proof of an agreement between undertak- ings within the meaning of Article 85(1) of the Treaty must be founded upon the direct or indirect finding of the existence of the subjective element that characterises the very concept of an agreement, that is to say a concurrence of wills between economic operators on the implementation of a policy, the pursuit of an objective, or the adoption of a given line of conduct on the market, irrespective of the manner in which the parties' intention to behave on the market in accordance with the terms of that agreement is expressed'. In its view, the Commission had misapplied 'concept of the 23. In the light of all of the above con- concurrence of wills' in holding that 'the siderations, the Court of First Instance continuation of commercial relations with annulled the decision without considering the manufacturer when it adopts a new Bayer's alternative pleas in law, which were policy, which it implements unilaterally, based on: erroneous application of amounts to acquiescence by the wholesalers Article 85(1) of the Treaty, the legitimacy in that policy, although their de facto of the conduct complained of under conduct is clearly contrary to that pol- Article 47 of the Act of Accession of Spain icy'. 27 to the European Communities, and mis-

24. By applications lodged on 5 January II — Legal analysis 2001, BAI (Case C-2/01 P) and the Com- mission (Case C-3/01 P) requested the Court of Justice to quash the judgment of the Court of First Instance and to dismiss directly the action brought at first instance or, in the alternative, refer the case back to the Court of First Instance. By order of the Preliminary remarks President of the Court of 28 March 2001, the two cases were joined for the purposes of the written and oral procedure and the judgment. 27. In support of its challenge, BAI raises three grounds of appeal. These are: failure to take full account of the facts on which the decision was based; infringement of the 25. By applications lodged on 9 April and burden of proof rules; and an error of law 23 April 2001 the European Association of as to the legal criteria for determining European Pharmaceutical Companies (a whether there is an agreement within the European association which represents the meaning of Article 85( 1 ) of the Treaty. interests of Pharmaceutical Companies; hereinafter 'EAEPC') and the Kingdom of Sweden 31applied for leave to intervene in support of the forms of order sought by the appellants. Leave to intervene was granted by the President of the Court by orders of 28. The Commission, for its part, first 25 June 2001 (Kingdom of Sweden) and makes a general criticism of the restrictive 26 September 2001 (EAEPC). approach followed by the Court of First Instance in the contested judgment, claim- ing it would have grave consequences for 30 — Council Regulation No 1 7 of6 February 1962, First Regulation implementing Articles 85 and 56 of the Treaty its efforts to prevent restraints on compe- (OJ, English Special Edition 1 9 5 9 - 1 9 6 2 . p. 87). tition arising from the compartmentali- 31 — To he precise. EAEPC sought leave to intervene in support of the forms ot order sought by BAI and the Commssion, sation of national markets. It then goes on while the kingdom ot Sweden sought leave to intervene only m support ot the forms of order sought by the to raise five grounds of appeal, which Commission. essentially concern the unduly restrictive

31. The admissibility of these grounds of appeal is, however, disputed by Bayer and EFPIA, who maintain that it is not open to the appellants to challenge before the Court 29. In the interests of proper structure and of Justice findings of fact made at first clarity of exposition, I believe it appropri- instance by the Court of First Instance. ate to consider first the arguments concern- ing the findings of fact by the Court of First Instance, so that the issues of law can be dealt with after any doubts about the relevant questions of fact have been resolved. 32. It should be observed first and foremost that, under Article 225 EC and Article 51 of the Statute of the Court, an appeal lies from a decision of the Court of First Instance 'on points of law only'. From this it follows, according to settled case-law, that the Court of First Instance 'has exclus- ive jurisdiction, first, to establish the facts except where the substantive inaccuracy of The grounds of appeal relating to the its findings is apparent from the documents findings of fact submitted to it and, second, to assess those facts. When the Court of First Instance has established or assessed the facts, the Court of Justice has jurisdiction under Article 168a of the Treaty [now Article 225 EC] to review the legal char- acterisation of those facts by the Court of 30. Both BAI and the Commission contest First Instance and the legal conclusions it the findings of fact made in the contested has drawn from them... The Court of judgment, alleging respectively: (i) a failure Justice thus has no jurisdiction to establish to take full account of the facts concerning the facts or, in principle, to examine the Bayer's alleged monitoring of the final evidence which the Court of First Instance destination of the goods supplied; and (ii) accepted in support of those facts. Provided distortion of the clear sense of the evidence that the evidence has been properly or failure to take account of the evidence in obtained and the general principles of law regard to the wholesalers' intention to give and the rules of procedure in relation to the Bayer the impression that they were hence- burden of proof and the taking of evidence

34. By its first ground of appeal, BAI contests the finding by the Court of First Instance that the Commission failed to prove 'that Bayer [had] established a sys- tematic monitoring of the actual final 36. The objection of inadmissibility destination of the packets of Adalat sup- appears to me well founded. In reality, BAI is not contending that the documents in the case-file submitted to the Court of 32 — Case C-7/95 P John Deere [1998] ECR I-3111, paragraphs 21 and 22. To the saint- effect see, among many others, the judgments in Case C-53/92 P Hilti v Commission [1994] ECR I-667, paragraphs 42 and 43, and Case C-8/95 P New 33 — Paragraph 109. Holland Ford v Commission [1998] ECR I-3475, para- 34 — BAI refers here to the documents referred to by the graph 26. Commission in recitals 140 and 180 of the decision.

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therefore that the appellant is challenging a finding of fact made by the Court of First 38. Referring to the wholesalers' strategy Instance (which clearly took into consider- of 'spreading orders intended for export ation the content of the documents referred among the various agencies', 37 the Com- to), 35 I conclude that this ground of appeal mission observes: first, that the Court of must be declared inadmissible. First Instance failed to consider the fact that, following the refusal by Bayer France to fulfil orders expressly intended for export, the local agencies were asked to act discreetly; 38 secondly, that that Court failed to consider that spreading the orders among the local agencies could have had no other purpose than to deceive Bayer regard- ing the intention to export. With regard to

so. The only illustration they provide is that of the reaction of an undertaking in trying to continue its export activities as far as possible. There is no direct mention or evidence of 37. By its third ground of appeal, the an intention to support Bayer's policy of preventing exports, of which the wholesaler was perfectly aware, as Commission claims that the Court of First is indicated in recital 94 of the Decision' (emphasis added). In its reply, the Commission refers instead to paragraph Instance fundamentally misconstrued or 156 of the judgment, where the Court of First Instance concludes that 'the Commission [has not} proved that the failed to take into account particular pieces wholesalers wished to pursue Bayer's objectives or wished

order: As soon as the order is received, please forward to Boulogne. 35 — See in particular paragraphs 103 and 104 of the contested Thank you for your cooperation and your discretion' judgment. (emphasis added).

Faced with these statements, 1 pointed out that 40. For my part, I agree with Bayer and HUFASA needed substantial quantities of Adalat V EFPIA that the Court of First Instance did because... not fail to consider the documents cited by ... it was better not to submit figures that would not be accepted as possible for Hufasa and which the Commission, which are in fact clearly revealed our interest in exporting significant amounts. That is why I took the view that it was more referred to in those passages of the judg- important to obtain a quantity of ADALAT for ment that are concerned with determining export with very plausible figures rather than to maintain a very high level of orders which would not 'whether, having regard to the actual con- be supplied. Tile important thing was actual receipts rather than the order. That is no doubt why... orders duct of the wholesalers following the less than forecast' (emphasis added by the Commis- adoption by the applicant of its new policy sion). of restricting supplies, the Commission (ii) Secondly, the Commission refers to a letter written by could legitimately conclude that they a Spanish wholesaler, quoted in recital 129 of the decision, noting in particular the following passage: 'I acquiesced in that policy'. 42 give you my word that I am doing my utmost to obtain supplies greater than our requirements' (em- phasis added by the Commission). 40 — The Commission is here referring to a letter written by a 41 — Haver and EFPIA specifically mention paragraphs 125, Spanish wholesaler, quoted in recital 129 of the decision, noting in particular the following passage: '... if we want a 128, 131 and from 143 to 152. product that sells well on our market, wc could order it 42 — Paragraph 124. The documents relied on by the Commis- along with the usual orders, but if it is tare, we will not he sion are specifically adverted to in paragraphs 126, 129, able to hide it' (emphasis added by the Commission). 130, 144, 146 to 1.50.

44. Furthermore, this ground of appeal should also be held inadmissible in part, if, in addition to alleging that the docu- ments in question were fundamentally 42. On the contrary, the Court of First misconstrued, it were also meant to contest Instance expressly acknowledged that the the view taken by the Court of First purchasing strategies used by a number of Instance of their probative value, thus large wholesalers were intended 'to circum- calling into question the findings of fact vent Bayer's policy of restricting made in the contested judgment. In other supplies'. 43 In that regard, it notes in words, this ground of appeal should be held inadmissible in part if, by raising it, the Commission were also contesting the find- 43 — Paragraph 126 of the judgment. To the same effect, see ing by the Court of First Instance that the paragraph 135 of the judgment, where it is stated that some wholesalers had 'a strategy for circumventing Bayer's documents in question were not capable of policy', and paragraph 156, where it is noted that the documents examined by the Court of First Instance 'demonstrate[d] that the wholesalers adopted a line of conduct designed to circumvent Bayer's new policy of restricting supplies to the level of traditional orders'. 44 — Paragraph 154 of the judgment.

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proving that the wholesalers had acquies- 47. More specifically, what has to be ced (or wished to give the impression of determined is whether an 'agreement' com- having acquiesced) in an alleged export ban prising an export ban can be regarded as imposed by Bayer, by agreeing to order having been entered into if: only the quantities strictly necessary to cover domestic requirements.

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(c) following the introduction of the sales pharmaceutical sector) are already copying quota system described above, the the sales quota system put in place by Bayer wholesalers, although aware of its in order to be able to compartmentalise purpose, continue to order supplies national markets with impunity. from the manufacturer concerned, negotiating with it from time to time the quantities of product to be acquired;

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BAI AND COMMISSION v BAYER

(i) The Sandoz judgment tomers of the line of conduct adopted by Sandoz PF towards them'. 52 On that basis, the Court therefore held that the 'Commis- sion was justified in considering that the set 50. BAI and the Commission, supported by of continuous commercial relations, of EAEPC on this point, argue first of all that which the "export prohibited" clause the interpretation of Article 85(1) adopted formed an integral part, established by the Court of First Instance is in conflict between Sandoz PF and its customers, was with the Sandoz judgment, which held, governed by a pre-established general they maintain, that an 'agreement' within agreement applicable to the innumerable the meaning of that provision arises by individual orders for Sandoz products'. 53 virtue of the mere fact that an export ban is imposed by a manufacturer in the course of continuous commercial relations with wholesalers, regardless of the actual con- duct of the wholesalers and even in the absence of monitoring and sanctions on the part of the manufacturer.

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Court of Justice in Sandoz, because the it. On the facts of the present case, how- facts of the two cases are quite different, ever, neither of the two principal features there having been, in Sandoz, a written of Sandoz is to be found; there is no formal agreement on an export ban. clause prohibiting export and no conduct of non-contention or acquiescence, either in form or in reality'.

54. However, on the question of the dif- ferences between Sandoz and the present case, Bayer and EFPIA also cite the views 55. For my part, I share the view that the expressed by the Court of First Instance in different attitudes taken by the Court of paragraph 163 of the contested judgment, Justice in Sandoz and by the Court of First which reads: Instance in the contested judgment are justified by the different factual circum- stances, albeit not exactly for the reasons suggested by Bayer and EFPIA.

57. Where a material difference between 59. There is thus a clear difference between the Sandoz case and this one does exist, in the two cases, consisting principally in the my opinion, is in the fact that by inserting fact that whereas Sandoz sought the coop- the words 'export prohibited' in its eration of the wholesalers with a view to invoices, Sandoz expressed its own inten- eliminating or reducing parallel imports tion regarding the conduct the wholesalers (evidently because their cooperation was should adopt in relation to the final desti- essential for the attainment of that objec- nation of the products supplied. In other tive), Bayer did not seek or require any terms, with those words Sandoz clearly conduct on the part of its wholesalers in requested (or required) the wholesalers to regard to the final destination of the refrain from exporting the products sup- products supplied, but devised a strategy plied and hence, by that conduct, to that enabled it autonomously to achieve the cooperate with it in attaining its aim of result of eliminating or reducing parallel eliminating or reducing parallel imports. imports, without the collaboration of the wholesalers being needed.

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anything of them. In any event, doing so — AEG, in which they claim that the would lead to the absurd result that such an Court deemed tantamount to an agree- agreement could be formed even by the ment a practice adopted by a manu- tacit acceptance of an offer that was never facturer who 'with a view to maintain- (even implicitly) made! ing a high level of prices or to exclud- ing certain modern channels of dis- t r i b u t i o n , refuses to a p p r o v e distributors who satisfy the qualitative criteria of the system'; 56

62. In the light of the foregoing consider- ations, I therefore take the view that the interpretation given by the Court of First Instance to Article 85(1) of the Treaty is — Ford, in which they claim that the not in conflict with that adopted by the Court deemed tantamount to an agree- Court in Sandoz. ment the decision of a car manufac- turer not to supply right-hand drive vehicles to German dealers in order to prevent them exporting to the UK market;

were agreements within the meaning of to comply with national regulations requi- Article 85( 1 ) by virtue of the mere fact that ring them to hold adequate supplies of the measures taken by the manufacturers medicines in stock at all times. formed part 'of the contractual relations between the undertaking and resellers' 58or 'formed part of a set of continuous business relations governed by a general agreement drawn up in advance', 59without attaching any significance, for that purpose, to the actual conduct of the resellers and to whether or not systems of monitoring and sanctions were adopted by the manufac- turers. 66. Bayer and EFPIA counter that the precedents relied upon by the appellants are not in point since they concern meas- ures adopted by manufacturers in the context of selective distribution systems. Whereas in those cases the relationship between manufacturers and wholesalers were governed by selective distribution agreements, into which the ostensibly uni- lateral measures adopted by the manufac- turers became integrated, in this case there was no distribution agreement between Bayer and the wholesalers, whose relation- ship was embodied solely in the sales contracts entered into for the quantities of 65. In the light of those authorities, the product ordered from time to time. Bayer Court of First Instance should therefore and FFPIA also observe that the legal have recognised that in the instant case an requirements to which the wholesalers are agreement had been made within the subject bear no relation to a selective meaning of Article 85(1), it having been distribution agreement between manufac- established that Bayer's policy designed to turer and wholesalers. prevent or restrict parallel imports formed part of its continuous commercial relations with the wholesalers. Moreover, the appel- lants submit, the close ties between Bayer and its wholesalers could be treated as equivalent to those found in a selective distribution system, since: for one thing, the company could use only wholesalers who had met the legal requirements relating to the sale of medicines; for another, the wholesalers had to buy from Bayer in order 67. I too take the view that the AEG, Ford and Bayerische Motorenwerke judgments 58 — AFG, paragraph 3 8 , and Ford, paragraph 2 1 . do not support the appellants' case since, it 59 — Bayerische Motorenwerke, paragraph 16. seems to me, those authorities have a quite

68. It is not my view that the Court 69. That point is brought out particularly decided, in those judgments, that the meas- clearly in AEG and Ford, where the issue ures adopted by the manufacturers in was precisely whether the Commission themselves constituted agreements, within could use the manufacturer's conduct in the meaning of Article 85(1), solely because operating a selective distribution agreement they formed part of continuous commercial as the basis for declaring such an agreement relations with the resellers. In reality, the in 'the way.

recognised in the case-law of the Court that there are on the contrary they were in fact covered legitimate requirements, such as the maintenance of a specialist trade capable of providing specific services as by those agreements, of which they effec- regards high-quality and high-technology products, which tively came to form an integral part. In may justify a reduction of price competition in favour of competition relating to factors other than price. Systems of other words, the Court's analysis was not selective distribution, in so far as they aim at the attain- ment of a legitimate goal capable of improving compe- directed at establishing whether the adop- tition in relation to factors other than price, therefore tion of the measures in question was constitute an element of competition which is in conform- ity with Article 85(1). The limitations inherent in a equivalent to the making of agreements selective distribution system are however acceptable only on condition that their aim is in fact an improvement in within the meaning of Article 85(1), but competition in the sense above mentioned.

practice. Given that, according to settled nature relating to the technical qualifications of the reseller and his staff and the suitability of his trading premises and case-law, the restraints on competition that such conditions are laid down uniformly for all inherent in selective distribution systems potential resellers and are not applied in a discriminatory fashion. It follows that the operation of a selective may be justified only under certain con- distribution system based on criteria other than those mentioned above constitutes an infringement of ditions, what had to be decided in those Article 85(1). The position is the same where a system cases was whether the agreements in which is in principle in conformity with Community law is applied in practice in a manner incompatible therewith relation to those systems, as operated by (paragraphs 33 to 36).

70. It was with reference to that issue, 71. In AEG, the Court pointed out that 'in therefore, that the Court held, in AEG and the case of the admission of a distributor, Ford, that the manufacturer's conduct or approval [was] based on the acceptance, decision did not 'constitute, on the part of tacit or express, by the contracting parties the undertaking, unilateral conduct' or 'a of the policy pursued by AEG which require[d] inter alia the exclusion from the network of all distributors who [were] 61—AEG concerned an action challenging a Commission qualified for admission but [were] not decision which stated that 'AEG... infringed Article 85(1) prepared to adhere to that policy'. The of the EEC Treaty by the way in which it ha[d] applied its selective distribution agreement'; this was based on a Court held that 'the view must therefore be finding that A ' EG had improperly applied its selective taken that even refusals of approval [were] distribution system by discriminating against certain dis- tributors and by influencing directly or indirectly dealers'acts performed in the context of the con- resale prices... with a view to excluding in principle certain forms of distribution and maintaining prices at a given tractual relations with authorised distribu- level' (paragraph 5 of the judgment, emphasis added). Ford tors inasmuch as their purpose [was] to concerned a challenge to a decision by which the Commission had, first, stated that 'Ford AG's main dealer guarantee observance of the agreements in agreement restrict[ed] competition and affect[ed] trade between Member States in the sense of Article 85( 1) of the restraint of competition which form[ed] the Treaty' and, secondly, refused 'to grant an exemption basis of contracts between manufacturers pursuant to Article 85(3) for that agreement as applied by Ford AG since 1 May 1982, the date on which ford AG's and approved distributors'. 64 circular of 27 April 1982 came into force' — Ford AG notified the German ford dealers by a circular dated 27 April 1982 that with effect from 1 May it would no longer accept their orders for right-hand-drivecars (para- graph 10 of the judgment, emphasis added). 63 — Paragraph 38 of AEG and paragraph 21 of ford. 62 — Paragraph 12. 64 — Paragraphs 38 and 39.

72. Likewise, the Court observed in Ford reasoning followed, it seems to me that the 'that agreements which constitute [d] a same logic underlies that judgment, where selective distribution system and which, as the Court had to decide 'whether in [that] case, [sought] to maintain a Article 85(1) of the EEC Treaty must be specialised trade capable of providing spe- interpreted as meaning that it prohibits a cific services for high-technology products motor vehicle manufacturer which sells its [were] normally concluded in order to vehicles through a selective distribution govern the distribution of those products system from agreeing with its authorised for a certain number of years. Because dealers that they are not to supply vehicles technological developments [were] not to independent leasing companies where, always foreseeable over such a period of without granting an option to purchase, time, those agreements necessarily ha[d] to those companies make them available to leave certain matters to be decided later by lessees residing or having their seat outside the manufacturer.... [It] is precisely such the contract territory of the authorised later decisions that were provided for in dealer in question, or from calling on such Schedule 1 to Ford AG's main dealer dealers to act in such a way'. 67 agreement as far as the models to be delivered under the terms of that agreement [were] concerned'. As in AEG, the Court therefore noted that 'admission to the Ford AG dealer network implie[d] acceptance by the contracting parties of the policy pur- sued by Ford with regard to the models to be delivered to the German market'. 65 On that basis, it therefore concluded that 'the Commission was entitled, during its exam- ination of the main dealer agreement with a view to the possibility of granting an exemption in respect of it under Article 85(3) of the Treaty, to take account 74. In order to decide that question, the of the discontinuance of deliveries of right- Court referred to the Ford judgment and hand-drive cars by Ford AG to its German noted that 'the call to refrain from sup- dealers'. 66 plying independent leasing companies con- tained in the circular of 12 February 1988 was made in the context of the contractual relations between BMW and its dealers' and that 'the circular expressly refer[red] to the dealership agreement on numerous occasions'. 68 It may therefore be taken that in Bayerische Motorenwerke, too, the Court considered that the adoption of the measure in question was provided for 73. Although the Court's analysis in Baye- under the selective distribution agreement rische Motorenwerke does not bring out as and that, accordingly, as in the AEG and clearly the terms of the issue and the Ford cases, the measure adopted by the car

manufacturer should be taken into account such as this (where the manufacturer and for the purposes of assessing the compati- wholesalers have not entered into any bility of that agreement, as operated in distribution agreement) to argue that the practice, with the rules on competition. It is existence of an agreement within the in that sense, I believe, that one should meaning of Article 85(1) can be shown therefore read the statement by the Court simply by establishing that the measures to the effect that the call by the car adopted by the manufacturer to prevent or manufacturer must 'be regarded as an restrict parallel imports are part of its agreement within the meaning of continuous commercial relations with its Article 85( 1 ) of the Treaty'. 69 wholesalers. In the absence of a distribution agreement to which the measures adopted by the manufacturer may be ascribed, an agreement with regard to such measures can therefore be regarded as having been made only if the parties can be shown to 75. Contrary to the appellants' contention, have had a common purpose (however therefore, the cases considered above are expressed). not authority for the proposition that an agreement within the meaning of Article 85(1) must be regarded as having been made by virtue of the mere fact that a manufacturer adopts measures imposing sales quotas in the context of continuous 77. I do not believe, furthermore, that a commercial relations with its distributors. different conclusion can be reached by As we have seen, in those cases the issue taking into consideration the requirements was not whether agreements within the imposed on the wholesalers under the meaning of Article 85(1) had been made (it national rules governing the distribution was common ground that the contracts of medicinal products, which — according governing the selective distribution systems to BAI and the Commission — effectively constituted agreements within the meaning make Bayer's relations with its wholesalers of that provision), but only whether the equivalent to those obtaining under a measures adopted by the manufacturers selective distribution system. It seems clear were in some way covered by the selective to me that for the purposes of finding an distribution agreements and were therefore agreement within the meaning of to be taken into consideration for the Article 85(1), the statutory obligations purposes of assessing the compatibility of imposed on wholesalers are quite incapable those agreements with the rules on compe- of making up for the absence of a dis- tition. tribution agreement to which the measures adopted by the manufacturer could be ascribed.

81. In particular, the Commission com- plains that the Court of First Instance held Individual examination of the various that an agreement on an export ban exists grounds of appeal relating to questions of only if a system of ex post monitoring of law the actual final destination of the products supplied has been set up and punitive sanctions are applied to ensure that prod- ucts are not exported. In the Commission's 79. Following that general discussion of the view, such an agreement exists also where previous judgments of the Court relied the manufacturer limits supplies prospec- upon by the appellants, I can now turn to tively if evidence of exporting activity is deal briefly with the various grounds of found, thus penalising possible exports ex appeal raised by them, referring back as far ante. With such a system, it was not as possible to the preceding discussion. necessary to prohibit exports directly, since an export ban was imposed indirectly at the time of ordering. The Commission further submits that by adopting an excessively restrictive interpretation of Article 85(1), the Court of First Instance departed from the Sandoz judgment, in which an agree- ment on an export ban was found to exist even in the absence of monitoring and (i) The requirement for a system of moni- sanctions by the manufacturer. toring and sanctions before an agreement on an export ban can be regarded as having been made

80. By the Commission's first ground of appeal and subparagraph (i) of the first 82. Similar arguments are put forward by part, of BAI's third ground of appeal, the BAI, which makes the point that, while it is appellants, supported on this point by the true that a system of monitoring and Kingdom of Sweden, claim that the Court sanctions can constitute evidence of the of First Instance adopted an excessively existence of an agreement on an export restrictive interpretation of Article 85(1) of ban, it is not the case, conversely, that the the Treaty by wrongly holding that the absence of such a system automatically existence of a system of monitoring and rules out the existence of an agreement. In sanctions constituted a necessary condition support of this statement, BAI relies in I-54

85. That point made, I must concur with Bayer and EFPIA that the Court of First Instance did not by any means state that an 83. Bayer and EFPIA, for their part, first agreement on an export ban can arise only submit that by this ground of appeal the if a system of monitoring and sanctions has appellants are effectively seeking to chal- been put in place by the manufacturer. It lenge the findings of fact made by the Court was the Commission itself that contended of First Instance. However, their main that in this case the imposition of an export objection to this ground is that it is based ban 'may be deduced from the following on a misreading of the judgment, given that additional factors: (a) a system for detect- the Court of First Instance did not by any ing exporting wholesalers, and (b) success- means state that a system of monitoring ive reductions in the amounts supplied by and sanctions is an essential prerequisite for Bayer France and Bayer Spain where a finding of an agreement on an export wholesalers export all or some of the ban. products'. 71 In relation to that point, all the Court of First Instance did, therefore, was to assess the cogency of the Commis- sion's assertions, examining in particular whether, as set out in the contested decision, '[t]he evidence in the Commis- sion's possession show[ed] that supply of the quantities allowed by Bayer France and Bayer Spain [was] subject to compliance with an export ban' 72 and whether 'the conduct of Bayer France and Bayer Spain 84. For my part, let me say straight away show[ed] that the two companies ha[d] that this ground of appeal if it is not to be subjected their wholesalers to a permanent held inadmissible, cannot purport to chal- threat of reducing the quantities supplied, a lenge the finding of fact by the Court of threat which was repeatedly carried out if First Instance 'that the Commission ha[d] they did not comply with the export not proved to the requisite legal standard... ban'. 73 Contrary, therefore, to what the that Bayer established a systematic moni- appellants maintain, in conducting its toring of the actual final destination of the packets of Adalat supplied after the adop- tion of its new supply policy, or that the 70 — Paragraph 109 of the contested judgment; emphasis added. applicant applied a policy of threats and 71 — Recital 156 of the contested decision. sanctions against exporting wholesalers, or 72 — Paragraph 163. that it made supplies of this product con- 73 — Paragraph 170.

87. By the Commission's second ground of 90. Bayer and EFPIA, for their part, submit appeal and subparagraph (ii) of the first first that the ground of appeal is inadmiss- part of BAI's third ground of appeal, the ible, since, they claim, it purports to appellants claim that the Court of First challenge findings of fact made by the Instance adopted an excessively restrictive Court of First Instance in the contested interpretation of Article 85(1) of the Treaty judgment. In any event, they argue that the by wrongly holding that an agreement on ground of appeal should be dismissed an export ban can be regarded as having because the Court of First Instance did been made only if the manufacturer not state, as a general proposition, that an requires a particular form of conduct on agreement on an export ban can be held to the part of wholesalers or seeks to obtain exist only if the manufacturer requires a their compliance with its policy designed to particular form of conduct on the part of prevent parallel imports. wholesalers or seeks to obtain their com-

I-56

BAI AND COMMISSION v BAYER

pliance with its policy designed to prevent that maintained, in the contested decision, parallel imports. Bayer and EFPIA submit that Bayer France and Bayer Spain had that the present case differs from Sandoz, imposed an 'export ban' on the whole- AEG and Ford, and consequently they deny salers, in other words that they had that the Court of First Instance departed required them not to export the Adalat from the precedent established by the Court packets supplied to them. The Court of of Justice in those cases. First Instance therefore did no more than review the validity of the Commission's assertions.

92. That point made, I must, so far as concerns the substance of the argument, concur with Bayer and EFPIA that the Court of First Instance did not by any means hold that an agreement on an export ban can be regarded as having been made 94. As I stated above in relation to the only if the manufacturer requires a par- Sandoz judgment (paragraphs 55 to 62), I ticular form of conduct on the part of believe that an offer or a requirement by wholesalers or seeks to obtain their com- the manufacturer — however expressed, pliance with its policy designed to prevent even implicitly — is always necessary in parallel imports. It was the Commission order for an agreement to be regarded as having been made by way of tacit accept- ance on the part of the wholesalers. Given 74 — Paragraph 120 of the contested judgment; emphasis added. In the following paragraph 121, the Court of First Instance therefore that the Commission has sought added that the Commission had 'not even claimed that to show the existence of the agreement Bayer sought to get the wholesalers to change their way of formulating orders'. complained of by relying on the whole-

I-57

OPINION OF MR TIZZANO — JOINED CASES C-2/01 P AND C-3/01 P

salers' 'implicit acquiescence in the export Court of Justice in Attic, 76 which held that ban' imposed by Bayer, 75 I take the view if the Commission adduces prima facie that the Court of First Instance was right to evidence of an agreement the onus then inquire into whether Bayer sought anything lies on the undertaking concerned to prove in return from its wholesalers. the absence of common intentions.

76 — Case C-49/92 P Commission v Anic [1999] ECR I-4125, 75 — Recital 176 of the contested decision. paragraph 96.

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BAI AND COMMISSION v BAYER

of Justice had decided was that once it had 102. However, I believe this ground of been shown that an agreement within the appeal to be unfounded on the merits, in meaning of Article 85(1) had been made in that the Court of First Instance correctly the course of a meeting of competing applied the principle according to which undertakings, an undertaking that was '[w]here there is a dispute as to the exist- present at the meeting can assert that it ence of an infringement of the competition did not intend to participate in the oper- rules, it is incumbent on the Commission to ation of the agreement only if it can prove prove the infringements which it has found it. and to adduce evidence capable of demon- strating to the requisite legal standard the existence of circumstances constituting an infringement'. 77 I do not think that the Court of Justice overturned that fundamen- tal principle in Anic, by requiring the Commission only to adduce prima facie evidence of an agreement.

100. I take the view that this ground of appeal is admissible but unfounded.

104. In the light of the foregoing consider- 106. According to Bayer and EFPIA, this ations, I therefore take the view that this ground of appeal also is inadmissible ground of appeal must be held unfounded. inasmuch as it effectively calls into question the finding by the Court of First Instance that the distributors, by their conduct in relation to placing of orders and by their efforts to obtain greater quantities of product, did not give their express or implied consent to an export ban. 81 As to the merits, Bayer adds that only if an 'explicit statement of intention' had been made would the 'stated intention' count and any 'mental reservation' not be taken (iv) The lack of correspondence between into consideration. If instead, as here, it the stated intention and the actual intention was a case of 'implicit statements of of the wholesalers intention', then only the 'actual intention' as manifested by the conduct of the party concerned, should be taken into account. EFPIA, for its part, merely asserts that Sandoz and Atochem are not in point because they concern circumstances differ- ent from those here. 105. By its fourth ground of appeal, the Commission, supported by EAEPC, sub- mits that the Court of First Instance erred in law by having regard not to the stated intention of the wholesalers (to order for domestic market requirements only) but to their actual intention (to order for export purposes as well). Here the Commission relies on Sandoz and Atochem, 79 arguing that in those cases the Community judica- ture did not attach any importance to the actual intention of the undertakings or to any 'mental reservations' they may have had, on the basis that it is only the stated intention of the undertakings concerned that counts for the purposes of the exist- ence of an agreement within the meaning of 107. I would state, first, this ground of Article 85(1). In support of that argument, appeal is not inadmissible, since seeking to EAEPC also cites the Courage 80 judgment challenge not the findings of fact made by as authority for the proposition that an the Court of First Instance but rather the agreement within the meaning of legal significance that that Court attached Article 85(1) exists even if one of the to the wholesalers' actual intention in the parties is forced into it against its will. presence of a contrary stated intention.

108. However, the ground of appeal continued to order from Bayer, acquiring appears to me to be unfounded inasmuch volumes of Adalat deemed by Bayer to be as it is predicated on the false assumption in line with their domestic requirements, that in this case there was a 'stated could certainly be taken into consideration intention' on the part of the wholesalers in order to show a 'tacit acceptance', within to enter into the agreement complained of the meaning of the Sandoz judgment, of the (regarding Bayer's alleged export ban), as export ban allegedly imposed by Bayer. opposed to a contrary 'actual intention' or, But, as we have seen above (paragraphs 55 in other words, a 'mental reservation'. This to 62), that would presuppose that Bayer assumption seems to me to be contradicted had actually requested or required (even by the finding of fact made by the Court of implicitly) the wholesalers to order for First Instance (which is not open to chal- domestic requirements only or not to lenge here), according to which the docu- export, which, according to the findings ments cited in the contested decision did of fact made by the Court of First Instance, not show that the wholesalers had has not been proved. expressed to Bayer an intention to confine themselves in future to ordering only such volumes of Adalat as were strictly necess- ary to cover domestic requirements, thereby binding themselves to observance of Bayer's alleged export ban. 111. Since therefore, according to the find- ings of fact set out in the contested judg- ment, there was in this case no 'stated intention' on the part of the wholesalers in relation to the agreement complained of, I 109. In other words, the Court of First take the view that the Court of First Instance found that it was not proven in Instance cannot be criticised for failing to this case that the wholesalers had in any take account of it. It follows that this way 'stated' to Bayer that they would order ground of appeal should, in my opinion, be for their domestic markets only or that they held unfounded. would not export the products supplied so as to bring their future conduct into line with an export ban allegedly imposed by Bayer. According to the finding of fact made by the Court of First Instance, there was therefore no 'stated intention' on the part of the wholesalers in relation to the agreement complained of. (v) The argument that the measures adopted by Bayer were only apparently unilateral

116. In accordance with Article 69(2) and (4) of the Rules of Procedure, and in view of the conclusions I have reached in favour 114. Since by those grounds the appellants of a dismissal of the appeals, I am of the are in effect arguing that the Court of First opinion that BAI and the Commission Instance in various ways departed from the should be ordered to pay the costs, includ- precedents established by the Court of ing those incurred by EFPIA. However, the Justice in Sandoz, AEG, Ford, and Baye- Kingdom of Sweden and EAEPC should rische Motorenwerke, they must in my bear their own costs. I-62

BAI AND COMMISSION v BAYER

IV — Conclusion

In the light of the foregoing considerations, I propose that the Court should:

— dismiss the appeals;

— order BAI and the Commission to bear the costs;