JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)
9 September 1999 (1)
(Competition Action for failure to act Commission's obligation to investigate
Reasonable period)
In Case T-127/98,
UPS Europe SA, a company incorporated under Belgian law, established in
Brussels, represented by Tom R. Ottervanger, of the Rotterdam Bar, and Dirk
Arts, of the Brussels Bar, with an address for service in Luxembourg at the
chambers of Loeff Claeys and Verbeke, 5 Rue Charles Martel,
v
Commission of the European Communities, represented by Barry Doherty and
Klaus Wiedner, of its Legal Service, acting as Agents, with an address for service
in Luxembourg at the office of Carlos Gómez de la Cruz, also of its Legal Service,
Wagner Centre, Kirchberg,
APPLICATION for a declaration under Article 175 of the EC Treaty (now Article
232 EC) that the Commission has failed to act by not having delivered a decision
on the applicant's complaint lodged under Article 3(2) of Regulation No 17 of the
Council of 6 February 1962 First Regulation implementing Articles 85 and 86 of
the Treaty (OJ, English Special Edition 1959-62, p. 87) objecting to certain anti-competitive practices on the part of Deutsche Post AG,
THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES (Fourth Chamber),
composed of: R.M. Moura Ramos, President, V. Tiili and P. Mengozzi, Judges,
Registrar: B. Pastor, Principal Administrator,
having regard to the written procedure and further to the hearing on 9 March 1999,
gives the following
Judgment
Facts
- 1.
- The applicant is one of the companies in the United Parcel Service group
(hereinafter 'UPS) which distributes parcels throughout the world. It has offices
in all the Member States of the European Community, including Germany.
- 2.
- By letter of 7 July 1994 the applicant sent a complaint to the Commission asking
it to initiate a procedure to establish inter alia that abusive conduct by the Deutsche
Bundespost, now Deutsche Post AG (hereinafter 'Deutsche Post), on the postal
service market and the cross-subsidisation of that postal service were contrary to
Article 86 of the EC Treaty (now Article 82 EC), Article 90 of the EC Treaty (now
Article 86 EC), Article 92 of the EC Treaty (now, after amendment, Article 87 EC)
and Article 93 of the EC Treaty (now Article 88 EC).
- 3.
- Following a meeting between the applicant and the Commission in August 1994 the
Commission, on 11 August 1994, forwarded the complaint and a first letter under
Article 11 of Regulation No 17 of the Council of 6 February 1962 First
Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special
Edition 1959-62, p. 87, hereinafter 'Regulation No 17) to Deutsche Post, which
replied on 24 November 1994. The non-confidential version of that reply was sent
to the applicant on 28 November 1994 by the Commission. It was also the subject
of discussions between the applicant and the Commission.
- 4.
- By letter of 21 March 1995 the Commission indicated to the applicant that the
complaint would be examined only in relation to Article 86 of the Treaty and that,
if it so wished, a separate complaint 'substantially reinforced by further evidence
could be lodged on the basis of Article 92 of the Treaty.
- 5.
- On 3 April 1995 the applicant submitted its comments on Deutsche Post's reply of
24 November 1994.
- 6.
- On 10 July 1995 the Commission sent a second letter under Article 11 of
Regulation No 17 to Deutsche Post. The latter replied by letter of 2 October 1995.
- 7.
- On 13 December 1995 the applicant sought information from the Commission as
to the progress being made regarding its complaint in so far as Article 86 of the
Treaty was concerned.
- 8.
- On 30 April 1996 the Commission sent a third letter under Article 11 of Regulation
No 17 to Deutsche Post. Deutsche Post replied by letters of 31 May, 27 June and
12 September 1996.
- 9.
- On 19 November 1996 counsel for the applicant sent a letter to the Commission
calling on it to act and expressly referring to Article 175 of the EC Treaty (now
Article 232 EC).
- 10.
- Following that letter, Mr Temple Lang, Director of the Commission Directorate-General for Competition (DG IV), sent to Deutsche Post on 24 January 1997 a
communication in which he stated:
'The Directorate-General for Competition hereby informs you that, drawing on the
data available, it intends to take a negative position with regard to the behaviour
against which UPS has complained and to make a Statement of Objections with a
view to proposing that the Commission consider adopting a negative decision. The
Commission's objections to the above behaviour will be submitted to you in a fully
developed statement of objections, according to the normal procedures.
He added:
'The provisional timetable for the further procedure in this case will be the
following, taking into consideration the Commission's current priorities and
workload:
statement of objections in April 1997;
parties' written observations in June 1997;
hearing in July 1997;
Advisory Committee in September 1997; and
final decision in the Fall of 1997.
- 11.
- On 28 February 1997 Deutsche Post replied to that letter.
- 12.
- On 3 July 1997 the Commission responded to a further request from the applicant
for information concerning progress with the case, stating that, following the
complaint lodged on 23 January 1997 by another competitor of Deutsche Post,
examination of the case would take longer.
- 13.
- On 3 July 1997 the Commission also instructed a firm of outside consultants to
draw up a report on the studies produced by Deutsche Post. It received the report
on 11 September 1997.
- 14.
- By letter of 25 August 1997 Mr Temple Lang indicated to the applicant that the
Commission was suspending its investigation as regards Article 86 of the Treaty and
was proceeding with it as regards Article 92 of the Treaty.
- 15.
- On 22 October 1997 the applicant, referring expressly to Article 175 of the Treaty,
made an official request to the Commission to take a position on its complaint
lodged on 7 July 1994 and to reconsider its position as expressed in its letter of 25
August 1997 regarding the procedure against Deutsche Post under Article 86 of the
Treaty.
- 16.
- On 19 December 1997 the Director General of DG IV sent the applicant a letter
referring to Article 6 of Regulation No 99/63/EEC of the Commission of 25 July
1963 on the hearings provided for in Article 19(1) and (2) of Council Regulation
No 17 (OJ, English Special Edition, 1963-64, p. 47, hereinafter 'Regulation No
99/63). In that letter he stated:
'As indicated above, the Commission is therefore of the opinion that for the time
being your complaint should only be examined in so far as it alleges infringements
of the State aid rules. The Commission will open the procedure provided for in
Article 93(2) of the EC Treaty at the beginning of next year ... In view of the
foregoing, the Commission's services have come to the conclusion that there are no
grounds for granting your application in so far as Article 86 of the EC Treaty is
concerned.
He also invited the applicant to submit its observations. He did not however
exclude the possibility of the investigation being reopened in relation to Article 86
of the Treaty.
- 17.
- In a letter of 2 February 1998 the applicant submitted its observations on the letter
of 19 December 1997. In its letter it objected to the Commission's intention not to
pursue the investigation in relation to Article 86 of the EC Treaty. It asked the
Commission to reject its complaint, if it still wished to do so, by formal decision
within a reasonable time.
- 18.
- On 2 June 1988 the applicant sent the Commission a formal letter of request
expressly referring to Article 175 of the EC Treaty and calling on it to take a
definitive decision in relation to the procedure against Deutsche Post under Article
86 of the EC Treaty.
Procedure and forms of order sought
- 19.
- By application lodged at the Registry of the Court of First Instance on 7 August
1998 the applicant initiated the present proceedings.
- 20.
- Upon hearing the report of the Judge-Rapporteur, the Court decided to open the
oral procedure without any preparatory inquiry. However, by way of a measure of
organisation of procedure as provided for in Article 64 of the Rules of Procedure,
the Court asked the applicant to reply in writing to a question put to it.
- 21.
- The parties presented oral argument and answered the questions put to them by
the Court at the hearing on 9 March 1999.
- 22.
- The applicant claims that the Court of First Instance should:
declare in accordance with Article 175 of the EC Treaty that the
Commission has failed to act by not having delivered a decision on the
applicant's complaint lodged with the Commission on 7 July 1994;
order the defendant to pay the costs;
take such further action as the Court might deem appropriate.
At the hearing the applicant also requested the Court to set a time-limit of one
month for the Commission to take the necessary measures following delivery of the
judgment in accordance with the first paragraph of Article 176 of the EC Treaty
(now Article 233 EC).
- 23.
- The Commission contends that the Court of First Instance should:
dismiss the application;
order the applicant to pay the costs.
The claim for a declaration of failure to act
Arguments of the parties
- 24.
- The applicant, referring to the judgment of the Court of Justice in Case C-282/95 P
Guérin Automobiles v Commission [1997] ECR I-1503, paragraph 36, submits that
it is settled case-law that the Commission is required either to initiate a procedure
against the person to whom the complaint relates or to take a definitive decision
rejecting the complaint where the complainant has submitted his observations on
the letter sent under Article 6 of Commission Regulation No 99/63.
- 25.
- It adds that, in accordance with the principles of good administration, the
Commission's decision must be adopted within a reasonable time after receipt of
the complainant's observations (Guérin Automobiles, cited above, paragraph 37).
When the present action was commenced, six months after the applicant had
submitted its observations, the Commission had still not given its decision.
- 26.
- The applicant points out moreover that the complaint was initially lodged in July
1994 and that the Commission has thus had more than four years to examine it.
- 27.
- At the hearing it also submitted that Articles 86 and 92 of the Treaty are not
mutually exclusive. Thus, the Commission is under an obligation to conduct the
investigation under those two provisions in the same way and at the same time.
- 28.
- The defendant contends that the complaint criticises in particular the use by
Deutsche Post of income from its monopoly in the letter market in order to cross-subsidise its parcel services. The complaint raises complex questions of economic
analysis, in particular the prices charged by Deutsche Post and the cost structure
of that undertaking. The complaint also requires the Commission to analyse the
scope of the public service obligations imposed on Deutsche Post. Furthermore,
it must also consider a parallel complaint against Deutsche Post.
- 29.
- The Commission adds that it reconsidered its position after receiving the applicant's
letter of 2 February 1998 and that it decided to reopen the investigation in relation
to Article 86 of the Treaty, whilst at the same time suspending its investigations
under Article 92 of the Treaty. However, that new approach required an in-depth
examination which could not be completed in a matter of weeks.
- 30.
- The Commission contends that in those circumstances it cannot reasonably be
expected to have terminated its analysis at this stage and for this reason is not
guilty of any failure to act.
- 31.
- At the hearing the Commission stated that it is probably guilty of a technical
infringement of Article 175 of the Treaty but that there was no other course it
could have taken in this case. It added that the applicant is entitled to a decision
as to the existence or otherwise of an infringement of Article 86 of the Treaty, but
in view of the circumstances it did not wish to reject the complaint, which might be
well founded.
- 32.
- The Commission also conceded that Articles 86 and 92 of the Treaty are not
mutually exclusive but it added that it would be wasteful of resources to investigate
infringement of those two articles simultaneously.
Findings of the Court
- 33.
- It is appropriate to clarify at the outset the purpose of the claim for a declaration
of failure to act. That claim seeks a declaration of failure on the part of the
Commission to act in relation to the complaint lodged by the applicant on 7 July
1994 on the ground that six months had elapsed since the applicant submitted, on
2 February 1998, its observations on the Commission's letter of 19 December 1997
under Article 6 of Regulation No 99/63. At the hearing, the defendant, conceding
that it was probably guilty of a technical infringement of Article 175 of the Treaty,
did not dispute the fact that the purpose of the claim was as described above.
Moreover, in response to a written question from the Court, the applicant
confirmed that its application is concerned solely with failure by the Commission
to act in relation to examination of its complaint from the point of view of Article
86 of the Treaty.
- 34.
- In order to adjudicate on the merits of the claim for a declaration of failure to act,
it is necessary to verify whether, when the Commission was served with a formal
request under Article 175 of the Treaty, it was under an obligation to act (Case
T-95/96 Gestevisión Telecinco v Commission [1998] ECR II-3407, paragraph 71).
- 35.
- According to case-law, a letter addressed to a complainant which is in conformity
with the requirements of Article 6 of Regulation No 99/63 constitutes a definition
of position within the meaning of the second paragraph of Article 175 of the Treaty
(Case 125/78 GEMA v Commission [1979] ECR 3173, paragraph 21). Such a
definition of position terminates the Commission's failure to act (Guérin
Automobiles v Commission, cited above, paragraphs 30 and 31).
- 36.
- It is also settled case-law that, when a complainant has submitted his observations
on the notification under Article 6 of Regulation No 99/63, the Commission is
required either to initiate a procedure against the person who is the subject of the
complaint or to adopt a definitive decision rejecting the complaint, which may be
the subject of an action for annulment before the Community judicature (Guérin
Automobiles v Commission, paragraph 36).
- 37.
- According to the same case-law, the Commission's definitive decision must, in
accordance with the principles of good administration, be adopted within a
reasonable time after receipt by the Commission of the complainant's observations
(Guérin Automobiles v Commission, paragraph 37).
- 38.
- The question whether the duration of an administrative proceeding is reasonable
must be determined in relation to the particular circumstances of each case and,
in particular, its context, the various procedural stages to be followed by the
Commission, the conduct of the parties in the course of the procedure, the
complexity of the case and its importance for the various parties involved (Case T-73/95 Oliveira v Commission [1997] ECR II-381, paragraph 45, and Joined Cases
T-213/95 and T-18/96 SCK and FNK v Commission [1997] ECR II-1739, paragraph
57).
- 39.
- In this case the applicant's complaint was lodged on 7 July 1994. The applicant
submitted on 2 February 1998 its observations on the notification of 19 December
1997 sent to it pursuant to Article 6 of Regulation No 99/63. The formal request
for the Commission to act was made on 2 June 1998 and the application was
lodged at the Court of First Instance on 7 August 1998. It follows that when the
Commission was requested to act under Article 175 of the Treaty and when the
application was lodged, periods of four and six months respectively had elapsed as
from receipt of the applicant's observations.
- 40.
- In order to decide whether those periods were sufficient, it is necessary to consider
what the Commission should have done during that time. As the Court of First
Instance observed in Case T-64/89 Automec v Commission [1990] ECR II-367,
paragraphs 45 to 47, the procedure for examining a complaint comprises three
successive stages. During the first stage, following the submission of the complaint,
the Commission collects the information which it needs to enable it to decide how
it will deal with the complaint. That stage may include an informal exchange of
views between the Commission and the complainant with a view to clarifying the
factual and legal issues with which the complaint is concerned and to allowing the
complainant an opportunity to expand on his allegations, as the case may be in the
light of any initial reaction from the Commission. In the second stage, in the
notification prescribed by Article 6 of Regulation No 99/63, the Commission
informs the complainant of the reasons for which it considers that there are
insufficient grounds for upholding the complaint and invites it to submit any
comments it may have within a time-limit which it fixes for that purpose. In the
third stage of the procedure, the Commission takes cognisance of the observations
submitted by the complainant. Although Article 6 of Regulation No 99/63 does not
expressly so provide, at the end of that stage the Commission is required either to
initiate a procedure against the subject of the complaint or to adopt a definitive
decision rejecting the complaint, against which proceedings for annulment may be
brought before the Community judicature (Guérin, cited above, paragraph 36).
- 41.
- In the present case, when on 2 June 1998 the applicant sent to the Commission a
formal request to act within the meaning of Article 175 of the Treaty, requesting
it to take a position on its complaint, the procedure for examination of the
complaint was in its third and final stage. The Commission had received the
complaint alleging infringement of Article 86 of the Treaty 47 months earlier and
had already undertaken an investigation of the case. Consequently, in considering
whether the period between the lodgment of the applicant's observations following
the notification under Article 6 of Regulation No 99/63 and the sending of the
formal request to the Commission is acceptable, it is appropriate to take account
of the years already spent on the investigation, the present state of the investigation
of the case and the attitudes of the parties considered as a whole.
- 42.
- It follows that, when served with the formal request, the Commission was required
either to initiate a procedure against the person who was the subject of the
complaint or to adopt a definitive decision rejecting the complaint. It should not
have resumed its examination of the complaint. Therefore, the Commission's
defence to the effect that reconsideration of the situation was embarked upon only
after it received the applicant's observations following the notification under Article
6 of Regulation No 99/63 and that it could not be reasonably expected to have
completed its analysis by that stage, shortly after having decided to focus on
infringement of Article 86 of the Treaty, cannot be accepted.
- 43.
- On the contrary, the Commission should, on a reasonable view, have been in a
position either to initiate a procedure against the person who was the subject of the
complaint or to adopt a definitive decision rejecting the complaint, unless there
were exceptional circumstances, demonstrated by it, justifying the lapse of the
periods of time mentioned above (Gestevisión Telecinco, cited above, paragraph 81).
- 44.
- However, none of the arguments put forward by the Commission can justify its
failure to take action within the periods concerned.
- 45.
- Moreover, the Commission does not deny its obligation to act. Similarly, in
response to a question put to it by the Court, the Commission confirmed that by
the time of the hearing no specific measure had been taken following the
applicant's observations on the letter of 19 December 1997 with respect to its
complaint in relation to Article 86 of the Treaty. Thus, it conceded that it has still
not initiated a procedure against the person who is the subject of the complaint or
adopted a definitive decision rejecting the complaint. At the hearing it even
admitted that it has not acted 'in an impressive manner in this case and that,
manifestly, there has been an infringement of Article 175 of the Treaty.
- 46.
- It follows from the foregoing considerations that on 2 August 1998, upon the expiry
of the period of two months following its receipt, on 2 June 1998, of the request
for it to act, the Commission was in a position of having failed to act as a result of
its failure to initiate a procedure against the person who was the subject of the
applicant's complaint, which was lodged on 7 July 1994, or to adopt a definitive
decision rejecting that complaint.
- 47.
- Consequently, the claim for a declaration of failure to act in relation to Article 86
of the Treaty must be held to be well founded.
The request that a time-limit of one month be imposed for the Commission to take
action under Article 176 of the Treaty
Arguments of the parties
- 48.
- At the hearing the applicant asked the Court to impose on the Commission a time-limit of one month to take the measures required following the judgment in
accordance with the first paragraph of Article 176 of the Treaty. Otherwise, the
applicant submits, a further action under Article 175 of the Treaty would be
necessary. The applicant submits that its request is admissible having regard to the
general nature of the third head of claim in its application.
- 49.
- The Commission contends that the Court of First Instance has no jurisdiction to
impose such an obligation.
Findings of the Court
- 50.
- This request must be rejected as inadmissible. The Court of First Instance has no
jurisdiction to issue directions to the Community institutions (order of the Court of
First Instance in Case T-47/96 SDDDA v Commission [1996] ECR II-1559,
paragraph 45). Consequently, pursuant to Article 175 of the Treaty, the Court may
only declare that there has been an unlawful failure to act. It is then incumbent
on the institution concerned to take the measures necessary to comply with the
judgment of the Court.
Costs
- 51.
- Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be
order to pay the costs if they have been applied for in the successful party's
pleadings.
- 52.
- Since the Commission has been unsuccessful, it must be ordered to pay the costs
incurred by the applicant, as applied for by the latter.
On those grounds,
THE COURT OF FIRST INSTANCE (Fourth Chamber)
hereby:
1. Declares that the Commission has failed to fulfil its obligations under the
EC Treaty by failing either to initiate a procedure against the person who
is the subject of the complaint lodged by the applicant on 7 July 1994 or
to adopt a definitive decision rejecting that complaint following the
observations of 2 February 1998 on the notification to the applicant under
Article 6 of Regulation No 99/63/EEC of the Commission of 25 July 1963
on the hearings provided for in Article 19(1) and (2) of Council Regulation
No 17;
2. For the rest, dismisses the application;
3. Orders the Commission to pay the costs.
Moura Ramos Tiili
Mengozzi
|
Delivered in open court in Luxembourg on 9 September 1999.
H. Jung
R.M. Moura Ramos
Registrar
President