JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber,
Extended Composition)
22 October 1997 (1)
(Competition Mobile cranes Article 6 of the European Convention on
Human Rights Acting within a reasonable time Certification system
Prohibition on hiring Recommended rates Internal rates Fines)
In Joined Cases T-213/95 and T-18/96,
Stichting Certificatie Kraanverhuurbedrijf (SCK), a foundation established under
Netherlands law, whose registered office is in Culemborg, Netherlands,
Federatie van Nederlandse Kraanverhuurbedrijven (FNK), an association
established under Netherlands law, whose registered office is in Culemborg,
Netherlands,
represented by Martijn van Empel, of the Amsterdam Bar, and Thomas Janssens,
of the Brussels Bar, with an address for service in Luxembourg at the Chambers
of Marc Loesch, 11 Rue Goethe,
v
Commission of the European Communities, represented by Wouter Wils, of its
Legal Service, acting as Agent, with an address for service in Luxembourg at the
office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,
supported in Case T-18/96 by
Van Marwijk Kraanverhuur BV, a company incorporated under Netherlands law,
whose registered office is in Zoetermeer, Netherlands,
Kraanbedrijf Nijdam BV, a company incorporated under Netherlands law, whose
registered office is in Groningen, Netherlands,
Kranen, Transport & Montage 's Gilde NV, a company incorporated under
Netherlands law, whose registered office is in Geldermalsen, Netherlands,
Wassink Transport Arnhem BV, a company incorporated under Netherlands law,
whose registered office is in Arnhem, Netherlands,
Koedam Kraanverhuur BV, a company incorporated under Netherlands law, whose
registered office is in Vianen, Netherlands,
Firma Huurdeman Kraanwagenverhuurbedrijf, a company incorporated under
Netherlands law, whose registered office is in Hoevelaken, Netherlands,
Datek NV, a company incorporated under Belgian law, whose registered office is
in Genk, Belgium,
Thom Hendrickx, resident in Turnhout, Belgium,
represented by August Braakman, of the Rotterdam Bar, and Willem Sluiter, of the
Hague Bar, with an address for service in Luxembourg at the Chambers of Michel
Molitor, 14A Rue des Bains,
APPLICATION, in Case T-213/95, for an order under Articles 178 and 215 of the
EC Treaty requiring the Commission to pay compensation for the harm caused to
the applicants by its unlawful conduct and, in Case T-18/96, for the annulment of
Commission Decision 95/551/EC of 29 November 1995 relating to a proceeding
pursuant to Article 85 of the EC Treaty (IV/34.179, 34.202, 216 Stichting
Certificatie Kraanverhuurbedrijf and the Federatie van Nederlandse
Kraanverhuurbedrijven) (OJ 1995 L 312, p. 79),
THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES (Fourth Chamber, Extended
Composition),
composed of: K. Lenaerts, President, P. Lindh, J. Azizi, J.D. Cooke and M. Jaeger,
Judges,
Registrar: J. Palacio González, Administrator,
having regard to the written procedure and further to the hearing on 4 June 1997,
gives the following
Judgment
Background and procedure
- 1.
- These cases are concerned with the mobile crane-hire sector in the Netherlands.
Mobile cranes are cranes which can be moved freely about a worksite. They can
thus be distinguished from tower cranes which are mounted on fixed rails and can
move forwards and backwards only. Mobile cranes are used mainly in construction,
in the petrochemical industry and in the transport sector.
- 2.
- For technical reasons, the area of operation of a mobile crane is confined to a
radius of 50 kilometres. A further feature of the mobile crane-hire sector is that
contracts are entered into very shortly before a job is carried out ('overnight
contracting). When a crane-hire firm is asked to do a job at very short notice, it
decides, in the light of the site's location and the availability of its own cranes,
either to use one of the latter or to hire a crane from another firm located near the
site.
- 3.
- The foundation Keuring Bouw Machines ('Keboma), which was set up in 1982 by
the Netherlands Ministry for Social Affairs, inspects cranes before they are brought
into service for the first time, to ensure that they comply with the legal safety
requirements set out in the Arbeidsomstandighedenwet (Law on Conditions at the
Workplace), in the Veiligheidsbesluit voor Fabrieken of Werkplaatsen (Decree on
Safety in Factories and at Worksites), in the Veiligheidsbesluit Restgroepen
(Decree on Safety at other types of Workplace) and in various ministerial
regulations and publications of the Labour Inspectorate. Keboma is the only
official body designated to inspect and test mobile cranes. Under Council Directive
89/392/EEC of 14 June 1989 on the approximation of the laws of the Member
States relating to machinery (OJ 1989 L 183, p. 9), the requirement that cranes be
inspected before they are first brought into service does not apply, from
1 January 1993, to cranes which bear an EC mark and are accompanied by an EC
declaration of conformity within the meaning of the directive. Cranes must be
inspected by Keboma three years after they are first brought into service and, after
that second check, every two years.
- 4.
- The Federatie van Nederlandse Kraanverhuurbedrijven ('FNK) is the sector-based organization, established on 13 March 1971, which brings together crane-hire
firms in the Netherlands. Under its statutes, its object is to defend the interests of
crane-hire firms, in particular of its members, and to encourage contacts and
cooperation in the broadest sense between members. FNK members account for
1 552 of the 3 000 or so cranes available for hire in the Netherlands. From
15 December 1979 to 28 April 1992 Article 3 of FNK's internal rules contained a
clause requiring its members to give priority to other members when hiring or
hiring out cranes ('the priority clause) and to charge 'reasonable rates. The
FNK set and published recommended rates and cost estimates for the hiring of
cranes by clients. In addition, internal rates applicable to hirings between FNK
members were set at regular meetings of crane-hire firms.
- 5.
- The Stichting Certificatie Kraanverhuurbedrijf ('SCK) is a foundation set up in
1985 by representatives of crane-hire firms and their clients. Under its statutes, its
object is to promote and maintain the quality standards of crane-hire firms. It
accordingly set up a certification system under which it issues certificates to firms
which meet a range of requirements relating to the management of a crane-hire
firm and to the use and maintenance of cranes. That certification system enables
clients to proceed on the basis that the firm concerned complies with the
requirements in question without having to check this themselves. The second
indent of Article 7 of SCK's rules on the certification of crane-hire firms prohibits
firms certified by it from hiring cranes from firms not certified by it ('the
prohibition on hiring). With effect from 20 January 1989, SCK was accredited by
the Raad voor de Certificatie (Certification Council), the Netherlands authority
responsible for accrediting certification bodies; it recorded that SCK fulfilled the
conditions established on the basis of the European standards EN 45 011 defining
the criteria which certification bodies must satisfy. Under Paragraph 2.5 of the
accreditation criteria of the Raad voor de Certificatie, the certificate-awarding body
is required to ensure that the certification conditions are also complied with if
subcontractors are used. It can meet that requirement either by checking
subcontractors itself (Paragraph 2.5.A1) or by monitoring the checks on
subcontractors carried out by the accredited firm (Paragraph 2.5.A2 and A3).
- 6.
- On 13 January 1992, M.W.C.M. Van Marwijk ('Van Marwijk) and ten other
undertakings submitted a complaint to the Commission together with an application
for interim measures. They considered that the applicants were infringing the
competition rules of the EC Treaty by excluding firms not certified by SCK from
hiring out mobile cranes and by imposing fixed prices for crane hire.
- 7.
- On 15 January 1992 SCK's statutes and its rules on the certification of crane-hire
firms were notified to the Commission. FNK's statutes and internal rules were
notified on 6 February 1992. In both cases, an application was made for negative
clearance or, in the alternative, exemption pursuant to Article 85(3) of the Treaty.
- 8.
- In an action brought by the complainants in the Netherlands courts, the President
of the Arrondissementsrechtbank (District Court), Utrecht, made an interim order
on 11 February 1992 requiring FNK to withdraw the priority clause and the system
of recommended rates (applicable to hirings with clients) and of internal rates
(applicable to hirings between crane-hire firms). He made an order restraining
SCK from applying the prohibition on hiring. By a further interim order, made on
9 July 1992, the Gerechtshof (Regional Court of Appeal), Amsterdam, set aside the
first order, holding that it was not obvious and beyond all doubt that there was no
prospect of the arrangements in question being exempted by the Commission. On
the same day, SCK reinstated the prohibition on hiring. FNK, on the other hand,
gave up future involvement in the formulation of recommended rates and internal
rates.
- 9.
- On 16 December 1992, the Commission issued a statement of objections addressed
to the applicants. In that document it informed them that it intended, pursuant to
Article 15(6) of Council Regulation No 17 of 6 February 1962, First Regulation
implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition
1959-62, p. 87; 'Regulation No 17), to lift the immunity from fines laid down in
Article 15(5).
- 10.
- On 3 February 1993 the applicants sent the Commission their reply to the
statement of objections. In that reply they asked in particular for a hearing to be
arranged.
- 11.
- By letter of 4 June 1993 the Commission informed them that the procedure under
Article 15(6) of Regulation No 17 could be terminated only if the prohibition on
hiring was withdrawn.
- 12.
- The complainants made a fresh application to the President of the
Arrondissementsrechtbank, Utrecht, who, by interim order of 6 July 1993, ruled
that the prohibition on hiring could no longer be applied since the Commission had
in the meantime made known its view on the arrangements at issue and there
appeared to be no prospect of its exempting that prohibition.
- 13.
- By letter dated 29 September 1993 the Commission informed the applicants that
it would hold the hearing requested by them before it adopted a final decision
under Article 85 of the Treaty, but that there was no requirement for such a
hearing to be held where a decision was based on Article 15(6) of Regulation
No 17.
- 14.
- The order of the Arrondissementsrechtbank, Utrecht, of 6 July 1993 was confirmed
by the Gerechtshof, Amsterdam, in a judgment delivered on 28 October 1993. The
judgment was based, in particular, on an undated letter which Mr Giuffrida, of the
Commission's Directorate-General for Competition (DG IV), had sent to the
complainants with a copy to the applicants' adviser. The applicants state that they
received the copy on 22 September 1993. The author of the letter expressed
himself as follows: 'I can confirm that a draft decision under Article 15(6) of
Regulation No 17 is to be submitted, as part of a written procedure, to the
Commission for adoption at the end of this week, once all the necessary language
versions are available. The approval of the departments concerned has already
been obtained ... My department envisages that it should be possible to notify [the
applicants] formally of the decision in the first half of October 1993.
- 15.
- On 4 November 1993 SCK issued a statement that the prohibition on hiring would
be suspended until the Commission had adopted a final decision.
- 16.
- On 13 April 1994 the Commission adopted a decision under Article 15(6) of
Regulation No 17.
- 17.
- By letter dated 3 June 1994 the applicants formally called on the Commission to
adopt its final decision no later than 3 August 1994.
- 18.
- By letter of 27 June 1994 Mr Ehlermann, who was then Director-General of
DG IV, informed the applicants that 'the date of 3 August 1994 specified for
adoption of the final decision was completely unrealistic, but that 'adoption of the
final decision was a priority.
- 19.
- By letter of 9 August 1994 the Commission, replying to a letter from the applicants
of 3 August 1994, informed them that the statement of objections of
December 1992 related solely to the initiation of a proceeding prior to adoption of
a decision under Article 15(6) of Regulation No 17. It stated that the final decision
would be preceded by the adoption of a fresh statement of objections, following
which the applicants would have the opportunity to be heard.
- 20.
- On 21 October 1994 a fresh statement of objections was issued to the applicants,
relating to a proceeding pursuant to Article 85 of the Treaty.
- 21.
- On 21 December 1994 the applicants sent the Commission their reply to the
statement of objections. In that reply they again formally called on the Commission
to act without delay and waived their right to a hearing.
- 22.
- On 27 November 1995 they brought an action for damages before the Court of
First Instance (Case T-213/95). They also applied, by separate document, for
interim measures (Case T-213/95 R). They subsequently discontinued that
application and, by order of 24 January 1996, the President removed Case
T-213/95 R from the register. Costs were reserved.
- 23.
- On 29 November 1995 the Commission adopted Decision 95/551/EC relating to a
proceeding pursuant to Article 85 of the EC Treaty (IV/34.179, 34.202, 216
Stichting Certificatie Kraanverhuurbedrijf and the Federatie van Nederlandse
Kraanverhuurbedrijven) (OJ 1995 L 312, p. 79; 'the contested decision). It found
that FNK had infringed Article 85(1) of the Treaty from 15 December 1979 to
28 April 1992 by applying a system of recommended and internal rates, which had
enabled its members to predict each other's pricing policy (Article 1). It also found
that SCK had infringed Article 85(1) of the Treaty from 1 January 1991 to
4 November 1993 (with the exception of the period between 17 February 1992 and
9 July 1992) by prohibiting its affiliated firms from hiring cranes from firms not
affiliated to SCK (Article 3). In addition, it ordered the applicants to terminate
those infringements forthwith (Articles 2 and 4) and imposed a fine of
ECU 11 500 000 on FNK and one of ECU 300 000 on SCK (Article 5).
- 24.
- By letter of 11 January 1996 the applicants requested access to the file for the
purpose of bringing an action against the contested decision. The Commission
refused that request by letter of 15 January 1996.
- 25.
- By application lodged at the Registry of the Court of First Instance on
6 February 1996, they brought an action for annulment of the contested decision
(Case T-18/96). They also applied, by separate document, for interim measures
(Case T-18/96 R).
- 26.
- On 25 March 1996 the applicants reached an agreement with the Commission
regarding amendment of the prohibition on hiring for the period up to delivery of
the Court's judgment in Case T-18/96. According to the amended version of the
second indent of Article 7 of the rules on the certification of crane-hire firms, the
firms certified by SCK may use only 'cranes bearing a valid certification plate, on
the basis of prior certification either by the foundation or by another certification
body in the Netherlands or abroad which is qualified to certify crane-hire firms
and which manifestly applies equivalent criteria, unless it can be established from
written documentation (including faxes) that when the client placed the order he
attached no importance to whether or not the (third-party) crane-hire firm whose
services he called upon in that instance was certified (letter from the Commission
to the applicants of 25 March 1996).
- 27.
- The President of the Court of First Instance dismissed the application for interim
measures in Case T-18/96 R by order of 4 June 1996 ([1996] ECR II-407). The
costs of the application for interim measures were reserved. An appeal against that
order was dismissed by order of the President of the Court of Justice of
14 October 1996 ([1996] ECR I-4971).
- 28.
- By letter of 9 July 1996 sent to the President of the Court of First Instance in
connection with Case T-18/96, the applicants applied to the Court for an order,
pursuant to Article 65(b) of the Rules of Procedure or, in the alternative, pursuant
to Article 64(3)(d) thereof, for the production of the Commission's file in the SCK
and FNK cases, numbered IV/34.179, 34.202 and 34.216, including the
Commission's internal documents relating to the exchanges of views which had
taken place between the Directorate-General for Industry (DG III) and DG IV on
those cases, together with any other files which formed the basis for the contested
decision.
- 29.
- By order of 4 October 1996 the President of the Fourth Chamber, Extended
Composition, granted Van Marwijk and seven other mobile crane-hire firms leave
to intervene in support of the form of order sought by the Commission in Case
T-18/96.
- 30.
- By order of 12 March 1997 he decided, pursuant to Article 50 of the Rules of
Procedure, to join the two cases for the purposes of the oral procedure.
- 31.
- Upon hearing the Report of the Judge-Rapporteur, the Court (Fourth Chamber,
Extended Composition) decided to open the oral procedure without any
preparatory inquiry. However, it requested the original parties to produce certain
documents before the hearing.
- 32.
- The parties presented oral argument and answered questions put to them by the
Court at the hearing on 4 June 1997.
- 33.
- After hearing the parties in this regard at the hearing, the Court (Fourth Chamber,
Extended Composition) considers that the two cases should also be joined for the
purposes of the judgment.
Forms of order sought
- 34.
- In Case T-213/95 the applicants claim that the Court should:
declare the Community liable for the damage which they are suffering and
will continue to suffer as a result of the Commission's unlawful conduct;
order the Community to pay compensation for that damage, to determine
the extent thereof in consultation with the applicants and, if an amicable
settlement is not reached in that regard, to determine the amount of the
damage itself, if need be after appointing an expert to quantify it precisely;
order the Commission to pay the costs.
- 35.
- The Commission contends that the Court should:
dismiss the action;
order the applicants jointly and severally to pay the costs, including the costs
of the application for interim measures.
- 36.
- In Case T-18/96 the applicants claim that the Court should:
declare that the contested decision is non-existent, since, in its operative
part, the Commission decides that Article 85(1) applies and fines the
applicants in that connection but does not rule on the applicants' request
for an exemption under Article 85(3) of the Treaty;
in the alternative, declare the contested decision to be unconditionally void;
in the further alternative, annul it because it infringes Article 85 of the
Treaty, Article 6 of the European Convention for the Protection of Human
Rights and Fundamental Freedoms of 4 November 1950 ('the European
Convention on Human Rights), general principles of law and the obligation
to give reasons (Article 190 of the Treaty);
in the further alternative, annul it in part so that no fine is imposed on the
applicants;
order the Commission to pay the costs;
order the interveners to pay the costs relating to the intervention.
- 37.
- The Commission contends that the Court should:
dismiss the action;
order the applicants to pay the costs.
- 38.
- The interveners contend that the Court should:
give judgment for the Commission in the terms sought by it;
order the applicants to pay the costs, including those of the interveners.
The action for damages (Case T-213/95)
- 39.
- It is settled case-law that the Community's liability under the second paragraph of
Article 215 of the EC Treaty is dependent on the concurrent presence of a number
of conditions as to the unlawfulness of the acts alleged against the Community
institution concerned, the fact of damage and the existence of a causal link between
the conduct of the institution and the damage complained of (see, for example,
Case C-146/91 KYDEP v Council and Commission [1994] ECR I-4199,
paragraph 19, and Joined Cases T-481/93 and T-484/93 Exporteurs in Levende
Varkens and Others v Commission [1995] ECR II-2941, paragraph 80).
1. The allegedly unlawful conduct of the Commission
- 40.
- The applicants put forward four pleas in law to establish the existence of unlawful
conduct on the part of the Commission in the proceeding which it initiated in
response to the complaint submitted on 13 January 1992 and the notifications given
by the applicants on 15 January and 6 February 1992. Those pleas allege
respectively infringement of Article 6 of the European Convention on Human
Rights, breach of the principle of legal certainty, breach of the principle of the
protection of legitimate expectations and breach of the audi alteram partem rule.
The first plea: infringement of Article 6 of the European Convention on Human Rights
Summary of the arguments of the parties
- 41.
- The applicants submit that the Commission is required to comply with the
European Convention on Human Rights. They refer, in that regard, to the case-law (Case 11/70 Internationale Handelsgesellschaft v Einfuhr- und Vorratsstelle
Getreide [1970] ECR 1125, Joined Cases 46/87 and 227/88 Hoechst v Commission
[1989] ECR 2859 and Case 374/87 Orkem v Commission [1989] ECR 3283), to
Article F(2) of the Treaty on European Union and to the Joint Declaration by the
European Parliament, the Council and the Commission of 5 April 1977 (OJ 1977
C 103, p. 1).
- 42.
- They submit that administrative procedures before the Commission for the
application of Article 85 of the Treaty are proceedings to which Article 6 of the
European Convention on Human Rights applies. Under the case-law of the
European Court and the European Commission of Human Rights, that provision
applies to contentious administrative proceedings (Stenuit v France [1992] 14
EHRR 509 and Niemitz v Germany [1993] 16 EHRR 97).
- 43.
- According to the applicants, the Commission failed to comply with the requirement
of a 'reasonable time laid down in Article 6(1) of the European Convention on
Human Rights. The European Court of Human Rights has held that a period of
17 months exceeds a reasonable time (judgment of 9 December 1994, Schouten and
Meldrum v Netherlands, Series A, No 304). The entire administrative procedure
before the Commission took more than 45 months. It is clear, therefore, that the
Commission's conduct infringed Article 6(1) of the Convention.
- 44.
- The Commission abused the procedure under Regulation No 17 by drawing up the
first statement of objections solely in order to adopt a decision based on
Article 15(6) of that regulation. Furthermore, it is impossible to understand why
the Commission needed 22 months from the adoption of the first statement of
objections to issue the second one, which contained precisely the same basic
arguments as the first. The drawing-up of the second statement of objections
served no purpose and was intended by the Commission to prolong the procedure.
- 45.
- The applicants point out that the judgment of the Gerechtshof, Amsterdam, of
28 October 1993 took the form of a temporary measure designed to have effect
until the Commission adopted its decision. Accordingly, the Commission should
have come to a final decision quickly. Furthermore, the spirit in which the
Commission conducted the procedure was imbued with the conviction that it was
sufficient for it to influence the national court and to adopt a decision under
Article 15(6) of Regulation No 17. The Commission never gave the case the
slightest priority.
- 46.
- The applicants did not in any way contribute to the Commission's delays. They
made constructive proposals in order that a decision might be reached quickly, but
the Commission rejected those proposals. They waived their right to a hearing
after receiving the second statement of objections, in order to expedite the
adoption of the final decision. The Commission cannot criticize them for pleading
their case before DG III, which has responsibility within the Commission for
certification policy. The intervention of DG III would have been necessary even
if the applicants had not sought it. Nor can they be criticized for the interventions
before the Commission by the Permanent Representation of the Netherlands to the
European Union and the Raad voor de Certificatie, which took place within a
period of no more than two weeks (from 13 to 27 October 1993).
- 47.
- The applicants add that the complexity of the case cannot in any event justify the
exceeding of a reasonable time (Schouten and Meldrum v Netherlands, cited above).
As regards the delays caused by the absence of the Finnish and Swedish
translations of the draft decision, they contend that organizational delay cannot be
relied on as a justification for the exceeding of a reasonable time (judgment of the
European Court of Human Rights of 6 May 1981, Buchholz, Series A, No 42).
- 48.
- In response to the applicants' submissions, the Commission states that account must
be taken of all the circumstances of the case when determining whether
proceedings are of unreasonable duration. Not only the Commission's conduct is
relevant, but also that of the applicants, as well as the complexity of the case and
all the other particular circumstances. The Commission admits that it did not
regard the case as a priority from January to July 1992, in view of the fact that it
was also pending before the Netherlands court and that the infringements had
ceased once the Arrondissementsrechtbank, Utrecht, had made its order of
11 February 1992 (see, in that regard, Case T-24/90 Automec v Commission [1992]
ECR II-2223, paragraphs 77 and 85). It expedited its consideration of the caseafter the Gerechtshof, Amsterdam, had delivered its judgment of 9 July 1992
allowing SCK to reinstate the prohibition on hiring (see paragraph 8 above).
- 49.
- It was apparent from the provisional examination of the case that the conditions
for application of Article 15(6) of Regulation No 17 were met. Five months after
the Gerechtshof, Amsterdam, had given its judgment, the applicants received from
the Commission a statement of objections with respect to the application of that
provision (statement of objections of 16 December 1992, see paragraph 9 above).
- 50.
- The Commission also points out that when the draft decision under Article 15(6)
was ready, DG III asked DG IV for a meeting on the draft decision before it was
presented to the college of Commissioners. The intervention by DG III in the
procedure, which was the principal cause of delay in dealing with the case in the
following months, was, however, the direct result of steps taken by the applicants.
The decision under Article 15(6) was finally adopted on 13 April 1994.
- 51.
- Subsequently, on 21 October 1994, the Commission notified the applicants of the
statement of objections with a view to the adoption of a final decision. That
decision, adopted on the basis of Articles 3 and 15(2) of Regulation No 17, had a
different purpose and different legal consequences from a decision adopted on the
basis of Article 15(6). One month after receiving the applicants' reply to the
second statement of objections, DG IV had already formulated a draft decision.
However, following the accession of Finland and Sweden to the European Union
on 1 January 1995, there were serious problems of delay with translations into
Finnish and Swedish. The Commission finally adopted the contested decision on
29 November 1995.
- 52.
- Therefore, the Commission argues, it cannot be accused in this case of having
offended against the principle requiring action to be taken within a reasonable time
in the course of the administrative procedure.
Findings of the Court
- 53.
- It is settled case-law that fundamental rights form an integral part of the general
principles of law whose observance the Community judicature ensures (see, in
particular, Opinion 2/94 [1996] ECR I-1759, paragraph 33, and Case C-299/95
Kremzow v Austria [1997] ECR I-2629, paragraph 14). For that purpose, the Court
of Justice and the Court of First Instance draw inspiration from the constitutional
traditions common to the Member States and from the guidelines supplied by
international treaties for the protection of human rights on which the Member
States have collaborated or of which they are signatories. The European
Convention on Human Rights has special significance in that respect (Case 222/84
Johnston v Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651,
paragraph 18, and Kremzow, cited above, paragraph 14). Furthermore, as provided
in Article F(2) of the Treaty on European Union, 'the Union shall respect
fundamental rights, as guaranteed by the [European Convention on Human Rights]
and as they result from the constitutional traditions common to the Member States,
as general principles of Community law.
- 54.
- The applicants claim that, following the complaint submitted by Van Marwijk and
others on 13 January 1992 and the notifications given by SCK on 15 January 1992
and FNK on 6 February 1992 (see paragraphs 6 and 7 above), the contested
decision, dated 29 November 1995, was not adopted within a 'reasonable time for
the purposes of Article 6(1) of the European Convention on Human Rights, under
which '... everyone is entitled to a fair and public hearing within a reasonable time
by an independent and impartial tribunal established by law ....
- 55.
- When a party applies to the Commission for negative clearance under Article 2 of
Regulation No 17 or gives it notification under Article 4(1) thereof for the purpose
of obtaining an exemption, the Commission may not defer defining its position
indefinitely. In the interests of legal certainty and of ensuring adequate judicial
protection, it is required to adopt a decision or, if such a letter has been requested,
to send a formal letter within a reasonable time. Similarly, when it receives an
application under Article 3(1) of Regulation No 17 alleging infringement of
Article 85 and/or Article 86 of the Treaty, it is required to adopt a definitive
position on the complaint within a reasonable time (Case C-282/95 P Guérin
Automobiles v Commission [1997] ECR I-1503, paragraph 38).
- 56.
- It is a general principle of Community law that the Commission must act within a
reasonable time in adopting decisions following administrative proceedings relating
to competition policy (see, with regard to the rejection of a complaint, Guérin
Automobiles, cited above, paragraph 38, and, with regard to State aids, Case 120/73
Lorenz v Germany [1973] ECR 1471, paragraph 4, and Case 223/85 RSV v
Commission [1987] ECR 4617, paragraphs 12 to 17). Accordingly, without there
being any need to rule on the question whether Article 6(1) of the European
Convention on Human Rights is, as such, applicable to administrative proceedings
before the Commission relating to competition policy, it is necessary to consider
whether, in this case, in the proceedings preceding the adoption of the contested
decision, the Commission offended against the general principle of Community law
requiring it to act within a reasonable time.
- 57.
- The administrative proceedings in this case lasted, in all, approximately 46 months.
However, as the Commission has rightly stated, 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 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 (see, by analogy, the judgments of the European Court of
Human Rights of 23 April 1987 in Erkner, Series A, No 117, p. 62, paragraph 66,
of 25 June 1987 in Milasi, Series A, No 119, p. 46, paragraph 15, and in Schouten
and Meldrum v Netherlands, cited above, p. 25, paragraph 63).
- 58.
- As regards, first, the context of the case, FNK's internal rules contained, as from
15 December 1979, a clause requiring its members to give priority to other
members in the hiring out of cranes and to charge reasonable rates (Article 3(a)
and (b) of the internal rules). The clause in SCK's rules on the certification of
firms to which the contested decision relates, namely the prohibition on hiring (the
second indent of Article 7 of the rules on certification), entered into force on 1
January 1991. The applicants apparently saw no need to seek the Commission's
opinion on their statutes and rules before Van Marwijk and ten other undertakings
submitted a complaint to the Commission on 13 January 1992. SCK's statutes and
its rules on the certification of crane-hire firms were not notified to the Commission
until 15 January 1992 and FNK's statutes and internal rules were not notified until
6 February 1992.
- 59.
- It should next be borne in mind that the period of 46 months from the lodging of
the complaint and the notifications to the adoption of the contested decision is
made up of various procedural stages. After the Commission had reviewed the
complaint and the notifications, it issued, on 16 December 1992, a statement of
objections with a view to the adoption of a decision under Article 15(6) of
Regulation No 17 and it actually adopted such a decision on 13 April 1994. It then
sent a new statement of objections on 21 October 1994 with a view to the adoption
of the contested decision, which took place on 29 November 1995.
- 60.
- Each procedural stage must be examined to see whether its duration was
reasonable.
- 61.
- The statement of objections of 16 December 1992 constitutes the first, provisional,
position adopted by the Commission on the notifications given by the applicants.
The duration of that first part of the procedure, approximately 11 months, was
reasonable and may even be regarded as relatively short in the light of all the
documents in the case. It should be noted that, during that period, the Commission
considered in parallel the notifications given by the applicants and the complaint
submitted by Van Marwijk and others objecting to the very practices notified by the
applicants. Moreover, it was reasonable for the Commission to take the view that
the case submitted by the applicants did not need to be given priority. The
applicants themselves did not make clear, in their notifications, the need for their
case to be dealt with urgently, even though paragraph 7.4 of the Annex to
Form A/B (annexed to Regulation No 27 of the Commission of 3 May 1962, First
Regulation implementing Council Regulation No 17 (OJ, English Special Edition
1959-62, p. 132), subsequently replaced by Commission Regulation (EC)
No 3385/94 of 21 December 1994 on the form, content and other details of
applications and notifications provided for in Council Regulation No 17 (OJ 1994
L 377, p. 28)) asks the notifying parties to specify the degree of urgency.
Furthermore, the practices notified, which the Commission considered could not
be exempted under Article 85(3) of the Treaty, had ceased for a period of about
five months, between 11 February 1992 and 9 July 1992 (see paragraph 8 above),
following an action brought by the complainants before the Netherlands courts.
- 62.
- The period of approximately 16 months between the statement of objections of
16 December 1992 and the adoption, on 13 April 1994, of the decision under
Article 15(6) of Regulation No 17 was also reasonable. Counsel for the applicants
conceded at the hearing before the Court that, in its letter to the Commission of
21 October 1993 (to Mr Dubois in DG IV), SCK made clear for the first time the
need for the case to be dealt with rapidly and as a matter of urgency. FNK did not
take such a step before the decision was adopted on 13 April 1994. The letter of
formal notice of 3 June 1994 from the applicants' adviser to the Commission is the
first indication given by FNK of its interest in having the case dealt with rapidly.
Furthermore, it is common ground that at the very time when SCK was first
making clear to DG IV the need for the procedure to progress rapidly, the
applicants requested DG III to intervene with DG IV with a view to obtaining a
successful outcome to their application for an exemption (see, in particular, the
letter of 5 October 1993 from the applicants' adviser to Mr McMillan, the Head of
Unit III.B.3). While such an approach is perfectly proper, the applicants should
have realized that the intervention requested from DG III was going to slow down
the procedure, in particular as DG III does not have to be consulted in a
proceeding for exemption under Article 85(3) of the Treaty or in a proceeding for
the finding of an infringement under Article 85(1).
- 63.
- The next stage in the procedure was the notification to the applicants of the
statement of objections for the adoption of the contested decision. Such
notification was given on 21 October 1994, six months after the decision under
Article 15(6) of Regulation No 17 had been adopted.
- 64.
- That period of six months is not unreasonable.
- 65.
- The applicants claim, however, that the sending of the second statement of
objections served no purpose and was intended by the Commission to prolong the
procedure. That argument must be rejected. On the one hand, the two statements
of objections had different purposes. The first related to withdrawal of immunity
from fines, as provided for in Article 15(5) of Regulation No 17, by the adoption
of a decision under Article 15(6), while the second was preparatory to a decision
establishing infringements and imposing fines under Articles 3(1) and 15(2) of
Regulation No 17. On the other hand, the second statement set out objections
regarding all the infringements found in the contested decision, that is to say the
prohibition on hiring and the recommended and internal rates, while the first was
confined to analysing the prohibition on hiring in the light of Article 85 of the
Treaty. Article 19(1) of Regulation No 17 and Articles 2 and 4 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 (Official Journal, English Special
Edition, 1963-1964, p. 47), which apply the audi alteram partem principle, require
that undertakings concerned by a proceeding for the establishment of infringements
are afforded the opportunity, in the course of the administrative procedure, of
effectively making known their views on all the objections dealt with in the decision
(Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 9,
Joined Cases T-10/92, T-11/92, T-12/92 and T-15/92 Cimenteries CBR and Others
v Commission [1992] ECR II-2667, paragraph 39, and Joined Cases T-39/92 and
T-40/92 CB and Europay v Commission [1994] ECR II-49, paragraph 47). The
Commission was thus required to send a second statement of objections to the
applicants not only because the two statements of objections had different purposes
but also because the contested decision deals with an objection not covered by the
first statement of objections. In other words, if the Commission had not sent the
second set of objections, the contested decision would have been adopted in
manifest disregard of the applicants' rights of defence.
- 66.
- Next, the Commission adopted its final decision on 29 November 1995,
approximately 11 months after it had received, on 21 December 1994, the
applicants' reply to the second statement of objections. Irrespective of the
translation problems debated by the parties in their pleadings, the fact that the
Commission needed 11 months from receipt of the reply to the statement of
objections in order to prepare a final decision in all the official Community
languages does not amount to a breach of the principle that action must be taken
within a reasonable time in an administrative procedure relating to competition
policy.
- 67.
- As regards the applicants' argument that the Commission never gave the case the
slightest priority and considered that it was sufficient for it to influence the nationalcourt and to adopt a decision under Article 15(6) of Regulation No 17, it should
be noted that the Commission is entitled to apply different degrees of priority to
the cases submitted to it (Automec v Commission, cited above, paragraph 77).
Furthermore, if it takes the view that the practices notified to it cannot be
exempted under Article 85(3), it may, when assessing the degree of priority to be
given to the notification, take into account the fact that a national court has already
caused the infringements in question to cease.
- 68.
- In addition, by way of reply to an argument developed by the applicants at the
hearing, as to the permanent adverse effects of a decision under Article 15(6) of
Regulation No 17, it should be pointed out that in Joined Cases 8/66, 9/66, 10/66
and 11/66 Cimenteries CBR and Others v Commission [1967] ECR 75, at pp. 92 and
93, the Court of Justice held that an action for annulment of such a decision was
admissible on the basis, inter alia, that 'if the preliminary measure were excluded
from all review by the Court ... [it] would ... have the effect of saving the
Commission from having to give a final decision thanks to the efficacy of a mere
threat of a fine. In this case, it is not open to the applicants, who failed to bring
an action for annulment of the decision of 13 April 1994 adopted under
Article 15(6) of Regulation No 17, to complain of any permanent adverse effects
of that decision.
- 69.
- In view of all of the above considerations, the Commission did act in accordance
with the principle requiring it to act within a reasonable time in the administrative
procedure preceding the adoption of the contested decision.
- 70.
- The first plea must therefore be rejected.
The second plea: breach of the principle of legal certainty
Summary of the arguments of the parties
- 71.
- The applicants state that for 45 months they were uncertain whether the exemption
applied for would be granted. They add that the principle of legal certainty must
be observed even more strictly in the case of rules liable to entail financial
consequences (Case 325/85 Ireland v Commission [1987] ECR 5041, paragraph 18).
A decision under Article 15(6) of Regulation No 17 cannot in any way provide the
same certainty as a final decision (judgment of the Court of Justice in Cimenteries
CBR and Others v Commission, cited above). It is, moreover, strange that the
Commission states that they could be reassured as to their position following the
decisions of the Netherlands courts, when those decisions were intended solely to
lay down interim arrangements pending the final decision by the Commission.
Besides, the judgment of the Gerechtshof, Amsterdam, of 28 October 1993 is based
in particular on the letter from Mr Giuffrida of September 1993 (see paragraph 14
above) which incorrectly stated that 'the approval of the departments concerned
[had] been obtained. DG III had not yet adopted a position on the case when
that statement was made.
- 72.
- The Commission denies that the applicants suffered from a lack of legal certainty
for 45 months. It refers to the order of the Arrondissementsrechtbank, Utrecht,
of 6 July 1993. In its rejoinder it adds that the statement of objections of
16 December 1992 and its letter of 4 June 1993 (see paragraphs 9 and 11 above)
gave the applicants a clear signal as to whether an exemption might be granted.
It also states that the term 'departments concerned in Mr Giuffrida's letter of
September 1993 encompassed solely the departments of DG IV and the
Commission's Legal Service. DG III was involved in the procedure only after it
had expressly made a request to that effect, following an approach by the
applicants. DG III's involvement in the procedure meant that the decision under
Article 15(6) of Regulation No 17 was adopted a few months later than Mr
Giuffrida could reasonably have anticipated on 22 September 1993.
Findings of the Court
- 73.
- The plea falls into two parts.
- 74.
- The first raises the question whether the Commission is required, in accordance
with the principle of legal certainty, to adopt a decision within a reasonable time
when agreements have been notified to it under Article 2 and/or Article 4(1) of
Regulation No 17. Formulated in this way, it merges with the first plea and must
be rejected for the same reasons.
- 75.
- In the second part of the plea, the applicants complain that Mr Giuffrida's letter
of September 1993 (see paragraph 14 above) incorrectly stated that 'the approval
of the departments concerned [had] been obtained. That complaint is also put
forward under the third plea, alleging breach of the principle of the protection of
legitimate expectations. It will be rejected for the reasons given in paragraph 82
below.
- 76.
- Accordingly, the plea that the principle of legal certainty was infringed cannot be
upheld.
The third plea: breach of the principle of the protection of legitimate expectations
Summary of the arguments of the parties
- 77.
- The applicants contend that the Commission made promises which proved to be
false. They refer, first, to the letter from Mr Giuffrida (see paragraph 14 above)
which informed them in September 1993 that a decision under Article 15(6) of
Regulation No 17 would be adopted shortly. They then refer to the letter from
Mr Ehlermann of 27 June 1994 (see paragraph 18 above) according to which
adoption of the final decision was a priority. Since the judgment of the
Gerechtshof, Amsterdam, of 28 October 1993 was based on the Commission's
promises to the effect that it was going to adopt its decision in the near future, the
applicants consider that they were justified in believing that the Commission would
keep its promises.
- 78.
- In their reply they also point out, in relation to the letter from Mr Giuffrida, that
DG III is responsible for certification policy and that, according to the Commission,
this case is the first time that Article 85 has been applied to a certification system.
Accordingly, when the letter was drafted, at least one 'department concerned,
namely DG III, had not given its approval. In view of the influence that the letter
in question had on the judgment of the Gerechtshof, it must be concluded that the
Commission, by its incorrect statements, offended against the principle of the
protection of legitimate expectations.
- 79.
- In response to those arguments, the Commission states that the letter of 22
September 1993 did not give a false idea of the situation at that time. It relies in
that regard on the line of argument set out in paragraph 72 above. It also
considers that its letter of 27 June 1994 does not contain any untrue statements.
Findings of the Court
- 80.
- The concept of legitimate expectations presupposes that the person concerned
entertains hopes based on specific assurances given to him by the Community
administration (judgment in Case T-465/93 Murgia Messapica v Commission [1994]
ECR II-361, paragraph 67, and order of 11 March 1996 in Case T-195/95 Guérin
Automobiles v Commission [1996] ECR II-171, paragraph 20).
- 81.
- In this case the applicants submit that two letters from the Commission contained
promises which proved to be false.
- 82.
- The letter from Mr Giuffrida was drafted on 21 or 22 September 1993. It is a reply
to a letter from the complainants of 21 September 1993 and the applicants state
that they received a copy of it on 22 September 1993. The letter indicated that a
draft decision under Article 15(6) of Regulation No 17 would be submitted to the
College of Commissioners in the course of the following week and that the
Commission envisaged that the applicants would be formally notified of the
decision in the first two weeks of October 1993. While that correspondence might
be considered to contain specific assurances regarding the impending adoption of
a decision by the Commission, the applicants do not deny that, as soon as they
became aware of it, they approached DG III for it to intervene with DG IV (see,
in particular, the letter of 5 October 1993 from the applicants' adviser to Mr
McMillan, the Head of Unit III.B.3, which refers to a discussion between him and
the adviser on 28 September 1993). In such circumstances, the applicants could not
expect the Commission to honour any assurances expressed in its letter received
by them on 22 September 1993.
- 83.
- The letter from Mr Ehlermann of 27 June 1994 confirmed that the adoption of a
final decision in this case was a priority for the staff of DG IV. Having regard to
the general nature of such a statement, there can be no question of specific
assurances having been given by the Commission which could have given rise to
reasonable expectations on the part of the applicants as to the date on which a
final decision in the matter would be adopted. In any event, the truth of Mr
Ehlermann's statement was in the event confirmed by the Commission, since it
issued on 21 October 1994 a statement of objections for the adoption of a final
decision.
- 84.
- It follows that the third plea must also be rejected.
The fourth plea: breach of the audi alteram partem rule
Summary of the arguments of the parties
- 85.
- The applicants point out that they requested a hearing on several occasions during
the procedure which led to adoption of the decision under Article 15(6) of
Regulation No 17. The fact that the Commission did not act on those requests
constitutes a contravention of the rights of the defence. They consider that, in
order for those rights to be protected, they had to have the opportunity to react,
in the course of oral proceedings, with all their procedural safeguards, first, to new
matters which may have emerged during the administrative procedure and,
secondly, to the Commission's rejection of any compromise. The interest which
they had in such a hearing would have justified any procedural delay, at least
during the period preceding the adoption of the decision under Article 15(6).
- 86.
- In response to this, the Commission states that it gave the applicants the
opportunity to make known their views on the objections which it had expressed.
There can therefore be no question of an infringement of the rights of the defence.
Since there is no legislation which requires the undertakings or associations
concerned to be heard orally before the Commission adopts a decision under
Article 15(6) of Regulation No 17 and since there is no specific circumstance in this
case to suggest that the rights of the defence could in fact be safeguarded only by
holding a hearing, the Commission, having consulted the applicants in writing, was
not in any way required to hear them orally.
Findings of the Court
- 87.
- According to the applicants, the damage suffered by them resulted from the fact
that, when they brought their action, the Commission still had not adopted a final
decision on their notifications and had thus allowed doubt to subsist for almost four
years as to whether the statutes and rules notified by them were lawful. The result
of the Commission's conduct was that the Raad voor de Certificatie was
threatening SCK with withdrawal of its accreditation, hirers of cranes were paying
less regard to FNK's general conditions and the applicants' good reputation was
being affected.
- 88.
- It must be held that the Commission's conduct complained of in this plea, namely
that it did not hold a hearing before it adopted a decision under Article 15(6) of
Regulation No 17, could not have caused or aggravated the damage as asserted in
the application.
- 89.
- This plea therefore does not disclose any link with that damage.
- 90.
- Moreover, it is concerned solely with the lawfulness of the decision of 13 April 1994
adopted under Article 15(6) of Regulation No 17. The purpose of the present
action is to obtain compensation for harm connected with a failure to adopt a final
decision within a reasonable time and not with unlawfulness of the decision of
13 April 1984 which, in any event, the applicants did not challenge within the time-limit laid down for that purpose.
- 91.
- The fourth plea must accordingly be rejected.
- 92.
- It follows therefore that an analysis of the various pleas has not revealed any
unlawful conduct on the part of the Commission sufficient for the Community to
incur liability.
- 93.
- The Court nevertheless considers that it should still examine the question whether
there is a causal link between the conduct claimed to be unlawful and the damage
alleged by the applicants.
2. Causal link
Summary of the arguments of the parties
- 94.
- The applicants submit that the Commission must be held responsible for the
damage suffered by them. They allege that SCK is threatened with loss of its
accreditation, because the Raad voor de Certificatie considers the prohibition on
hiring to be the only means of satisfying the accreditation criteria, while that very
prohibition was suspended pending the contested decision. As for FNK, its
reputation and its general conditions in particular have been affected by the
Commission's conduct. The applicants point out in their reply that the
Gerechtshof, Amsterdam, acting on the basis of an incorrect statement by the
Commission, delivered an interim judgment suspending the prohibition on hiring
until the Commission had adopted a final decision (see paragraph 14 above). TheCommission's inactivity over an unacceptably long period gave the judgment of the
Gerechtshof of 28 October 1993 a temporal effect far exceeding that intended by
that court.
- 95.
- In response to this, the Commission states that there is no direct and necessary
causal link between the steps taken by it and the continuing suspension of the
prohibition on hiring. It was not the Commission, but the Netherlands court, which,
as an interim measure, suspended the prohibition on hiring. If SCK considered
after a certain time that the interim measures were no longer justified because the
final decision by the Commission was taking longer than expected, it could have
applied to the national court to have the interim measures varied or set aside.
Findings of the Court
- 96.
- Article 85(1) of the Treaty produces direct effects in relations between individuals
and creates rights directly in respect of the individuals concerned which the national
courts must safeguard (see, for example, Case C-234/89 Delimitis v Henninger Bräu
[1991] ECR I-935, paragraph 45).
- 97.
- The Gerechtshof, Amsterdam, applied Article 85(1) of the Treaty in its judgment
of 28 October 1993 and prohibited SCK from applying the prohibition on hiring
(the second indent of Article 7 of SCK's rules on the certification of crane-hire
firms). While it is true that the Gerechtshof was influenced by the Commission's
position, that is to say by the letter of Mr Giuffrida of September 1993 (see
paragraph 14 above) announcing the adoption of a decision under Article 15(6) of
Regulation No 17, the fact remains that the position so taken did not bind the
national court. Mr Giuffrida's assessment of the prohibition was merely a factor
which the Gerechtshof could take into account in examining the question whether
that practice was in accordance with Article 85 of the Treaty (Joined Cases 253/78,
1/79, 2/79 and 3/79 Procureur de la République v Giry and Guerlain [1980] ECR
2327, paragraph 13, and Case T-575/93 Koelman v Commission [1996] ECR II-1,
paragraph 43). Besides, as will become apparent from the analysis of the action
for annulment brought against the contested decision, the view taken by the
Commission during the administrative procedure and set out in the contested
decision is based on a correct interpretation of Article 85(1) of the Treaty. Thus,
if SCK was threatened with withdrawal of its accreditation, that threat was due to
the fact that SCK had been required to put an end to an infringement of
Article 85(1). The Commission cannot be held responsible for such 'harm.
- 98.
- As regards FNK, the applicants fail to explain how its reputation and its general
conditions were affected by the Commission's conduct, even though, according to
settled case-law, the burden of proving a causal link between the fault committed
by the institution and the injury pleaded falls on the applicants (see, for example,
Joined Cases C-363/88 and C-364/88 Finsider and Others v Commission [1992] ECR
I-359, paragraph 25, and Case T-168/94 Blackspur and Others v Council and
Commission [1995] ECR II-2627, paragraph 40). The only practices of FNK called
into question during the administrative procedure were the system of recommended
and internal rates and the priority clause which required FNK's members to give
priority to other members when hiring or hiring out cranes (Article 3(a) and (b) of
FNK's internal rules). The applicants stated in the administrative procedure, in the
written procedure before the Court and at the hearing that FNK voluntarily
abandoned those practices after the Gerechtshof, Amsterdam, had set aside, on
9 July 1992, the order of the President of the Arrondissementsrechtbank, Utrecht,
that is to say at a time (July 1992) when the Commission had not yet adopted a
position, even provisionally, on FNK's notification or Van Marwijk's complaint.
The harm pleaded by FNK cannot therefore have been caused in any way by the
Commission's conduct during the administrative procedure.
- 99.
- Accordingly, the action for damages must be dismissed, without there being any
need to consider in addition whether the other condition for Community liability,
namely that damage has occurred, is satisfied.
The action for a declaration that the contested decision is non-existent or for its
annulment (Case T-18/96)
1. Claim for a declaration that the contested decision is non-existent
Summary of the arguments of the parties
- 100.
- The applicants put forward a single plea in support of their claim. They submit
that the contested decision is non-existent inasmuch as the Commission failed to
rule in its operative part on the application for an exemption made under
Article 85(3) of the Treaty. It was essential to rule on that application in the
operative part, since compliance with the Community rules on competition must be
ascertained in relation to Article 85 as a whole (Joined Cases T-528/93, T-542/93,
T-543/93 and T-546/93 Métropole Télévision and Others v Commission [1996] ECR
II-649) and only the operative part of an act is capable of producing legal effects
(Case T-138/89 NBV and NVB v Commission [1992] ECR II-2181, paragraph 31,
and Case T-50/92 Fiorani v Parliament [1993] ECR II-555, paragraph 39). The
Commission's decision of 13 April 1994, adopted on the basis of Article 15(6) of
Regulation No 17, has no relevance in that regard. Such decisions are adopted
after only preliminary scrutiny and are therefore not equivalent to final decisions.
Furthermore, even if they could be regarded as final decisions, the decision in this
case was concerned only with SCK's prohibition on hiring and did not contain a
ruling on the practices notified by FNK, so that there was still no decision on
whether Article 85(3) might apply to those practices.
- 101.
- The Commission states in response that paragraphs 32 to 39 of the contested
decision clearly show that it considered and rejected the applicants' arguments for
an exemption under Article 85(3) of the Treaty. There was no logical reason for
adding an article in the operative part expressly rejecting the application for an
exemption under Article 85(3), because the finding, in Articles 1 and 3, of the
infringements of Article 85(1) committed by SCK and FNK and the orders in
Articles 2 and 4 necessarily meant that the application for an exemption under
Article 85(1) was rejected.
Findings of the Court
- 102.
- In the operative part of the contested decision the Commission found that FNK's
system of recommended and internal rates (Article 1) and SCK's prohibition on
hiring (Article 3) infringed Article 85(1) of the Treaty and ordered FNK (Article 2)
and SCK (Article 4) to terminate those infringements forthwith. The contested
decision also imposed fines on the applicants (Article 5).
- 103.
- Although the operative part does not contain an express ruling on the applications
for exemption made by the applicants under Article 85(3) of the Treaty, the
Commission verified whether the practices referred to in Articles 1 and 3 of the
contested decision complied with the rules on competition in relation to Article 85
as a whole. It is apparent from the carefully formulated grounds for the contested
decision (paragraphs 32 to 39) that the Commission considered whether
Article 85(1) of the Treaty could be declared inapplicable to those practices,
pursuant to Article 85(3). At the end of its examination, it points out in
paragraph 35, in relation to the recommended and internal rates laid down by
FNK, that 'it is ... not possible ... to grant exemption under Article 85(3) of the
Treaty. Similarly, in paragraph 39 it expressly concludes that 'it is ... not possible
... to grant exemption under Article 85(3) of the Treaty as regards SCK's
prohibition on hiring.
- 104.
- The statement of the reasons for an act is indispensable for determining the exact
meaning of what is stated in the operative part (Joined Cases 97/86, 99/86, 193/86
and 215/86 Asteris and Others v Commission [1988] ECR 2181, paragraph 27, Case
C-355/95 P TWD v Commission [1997] ECR I-2549, paragraph 21, and Case
T-26/90 Finsider v Commission [1992] ECR II-1789, paragraph 53). Accordingly,
even though the operative part of the contested decision does not contain an
express ruling on the applications for exemption by SCK and FNK under
Article 85(3) of the Treaty, the findings of infringement and the orders to terminate
those infringements contained in the operative part necessarily mean, in the light
of the grounds for the decision (paragraphs 32 to 39), that the Commission rejected
the applications in question.
- 105.
- Finally, the applicants cannot use as an argument the judgments in NBV and NVB
v Commission and Fiorani v Parliament. In each of those cases, which were not
concerned at all with the question whether a decision of a Community institution
was non-existent, the operative part of the decision challenged did not adversely
affect the applicants. Only some of the grounds for the decisions in question were
considered to be unfavourable to the applicants. The actions for annulment
brought in those cases were held to be inadmissible because they in fact sought the
annulment only of the grounds for the decision. In the present case the operative
part of the contested decision adversely affects the applicants because it holds them
liable for infringements of Article 85(1) of the Treaty, orders them to terminate
those infringements, imposes fines on them and, implicitly but definitely, rejects
their applications for exemption.
- 106.
- It follows that the plea cannot be upheld.
- 107.
- As a result, the claim for a declaration that the contested decision is non-existent
must be rejected.
2. Claim for annulment of the contested decision
- 108.
- The applicants put forward five pleas for the annulment of the contested decision,
based on the infringement of, respectively, Articles 3, 4, 6 and 9 of Regulation
No 17, Article 85(1) of the Treaty, Article 85(3) of the Treaty, the rights of the
defence and Article 190 of the Treaty.
The first plea: infringement of Articles 3, 4, 6 and 9 of Regulation No 17
Summary of the arguments of the parties
- 109.
- The applicants, referring to their arguments on the non-existence of the decision,
put forward a submission, albeit somewhat laconic, to the effect that the
Commission's failure to rule on the applications for exemption under Article 85(3)
of the Treaty infringes Articles 3, 4, 6 and 9 of Regulation No 17 and that the
Commission also committed a serious procedural error, with the result that the
decision does not fulfil the requisite procedural conditions and must therefore be
annulled.
- 110.
- The Commission refers to the argument which it expounded in relation to the claim
for a declaration that the contested decision is non-existent.
Findings of the Court
- 111.
- This plea is based on the same arguments as those relied on in connection with the
plea put forward in support of the claim for a declaration that the contested
decision is non-existent.
- 112.
- In the contested decision the Commission ruled unequivocally on the applications
for exemption under Article 85(3) of the Treaty (see paragraphs 103 and 104
above).
- 113.
- The first plea must therefore be rejected.
The second plea: infringement of Article 85(1) of the Treaty
- 114.
- In the light of the Report for the Hearing and following the oral procedure, it is
appropriate to divide this plea into four parts.
- 115.
- The first part of the plea alleges that SCK was mistakenly classified as an
undertaking within the meaning of Article 85(1) of the Treaty. The second part is
itself subdivided into two sections. In the first section it is alleged that the
Commission erred in law with regard to the reference to the criteria of
transparency, openness, independence and acceptance of equivalent guarantees
offered by other systems in assessing whether a certification system is compatible
with Article 85(1) of the Treaty. In the second section the allegation is to the
effect that the Commission erred in its assessment when it found that the
prohibition on hiring had as its object or effect the restriction of competition within
the meaning of Article 85(1) of the Treaty. In the third part of the plea it is
alleged that the Commission committed an error of assessment in finding that the
system of recommended and internal rates had as its object or effect the restriction
of competition within the meaning of Article 85(1) of the Treaty. Finally, in the
fourth part of the plea it is alleged that it erred in its assessment of the effect on
trade between Member States.
The first part of the plea, to the effect that SCK was mistakenly classified as an
undertaking within the meaning of Article 85(1) of the Treaty
Summary of the arguments of the parties
- 116.
- The applicants submit that SCK is not an undertaking within the meaning of
Article 85(1) of the Treaty because a certification body which devotes itself solely
and exclusively to the neutral and objective supervision of undertakings in a
particular sector is not engaged in an economic activity (see the judgments in Case
C-41/90 Höfner and Elser v Macrotron [1991] ECR I-1979 and in Joined Cases
C-159/91 and C-160/91 Poucet and Pistre [1993] ECR I-637, and the Opinion of
Advocate General Slynn in Case 123/83 BNIC v Clair [1985] ECR 391. Nor is SCK
an association of undertakings within the meaning of the same provision.
- 117.
- In response to that submission the Commission states that, in order for a body to
be able to be regarded as an undertaking within the meaning of Article 85(1) of the
Treaty, it is sufficient that, whatever its legal status may be, it is engaged in an
activity of an economic nature which may in principle be engaged in by a private
undertaking and with a view to profit. In this case the issue of a certificate in
return for payment amounts to such an activity. SCK must therefore be regarded
as an undertaking within the meaning of Article 85(1).
Findings of the Court
- 118.
- In the contested decision the Commission classified SCK as an undertaking within
the meaning of Article 85(1) of the Treaty (second subparagraph of paragraph 17).
- 119.
- It is necessary to consider whether the Commission committed an error of
assessment or was wrong in law in so classifying SCK.
- 120.
- In the context of competition law 'the concept of an undertaking encompasses
every entity engaged in an economic activity, regardless of the legal status of the
entity and the way in which it is financed (Höfner and Elser, cited above,
paragraph 21).
- 121.
- SCK is a body governed by private law which set up a certification system for
crane-hire firms to which affiliation is optional. It establishes independently the
criteria which the certified firms must satisfy. It issues a certificate only on
payment of a subscription.
- 122.
- Those features demonstrate that SCK is engaged in an economic activity. It must
therefore be regarded as an undertaking within the meaning of Article 85(1) of the
Treaty.
- 123.
- Since the Commission correctly classified SCK as an undertaking, the applicants'
argument that SCK is not an association of undertakings has no relevance.
- 124.
- It follows from the above that the first part of the second plea must be rejected.
The second part of the plea, alleging that the Commission, first, erred in law with
regard to the reference to the criteria of transparency, openness, independence and
acceptance of equivalent guarantees offered by other systems in assessing whether
a certification system is compatible with Article 85(1) of the Treaty and, secondly,
erred in its assessment when it found that the prohibition on hiring had as its object
or effect the restriction of competition within the meaning of Article 85(1)
Summary of the arguments of the parties
- 125.
- The applicants point out that the Commission considered in the contested decision
that if a prohibition on hiring 'is associated with a certification system which is
completely open, independent and transparent and provides for the acceptance of
equivalent guarantees from other systems, it may be argued that it has no restrictive
effects on competition but is simply aimed at fully guaranteeing the quality of the
certified goods or services (first subparagraph of paragraph 23). The Commission
infringed Article 85(1) of the Treaty by establishing, on its own initiative, general
criteria for determining whether that provision applies to certification systems,
when those criteria are not set out therein.
- 126.
- Furthermore, the prohibition on hiring under SCK's certification system does not
have as its object or effect the restriction of competition. In order to determine
whether such clauses come within the prohibition laid down in Article 85(1), it is
necessary to examine what the state of competition would be if those clauses did
not exist (Case 42/84 Remia and Others v Commission [1985] ECR 2545,
paragraph 18). SCK's certification system intensifies competition. It contributes
to transparency of the market by enabling the quality and safety provided by the
various persons offering the product to be assessed on the basis of an objective and
impartial standard. The prohibition on hiring cranes from uncertified firms is
essential because such a prohibition is the only way of ensuring that each contract
placed with a certified firm is carried out by a firm which meets the same safety
and quality requirements. In that sense, the prohibition on hiring provides
protection identical to that offered by a trademark, which the Court of Justice has
held to be compatible with Community competition law (Case C-10/89 CNL-SUCAL v HAG GF [1990] ECR I-3711, paragraph 13). The prohibition on hiring
is also essential because it constitutes the only means of complying with the
requirement in Paragraph 2.5 of the accreditation criteria of the Raad voor de
Certificatie (see paragraph 5 above), under which the certificate-awarding body is
required to verify that, where a job is carried out by a subcontractor, the quality
requirements are met. As for the Commission's suggestion that certified firms
should be allowed to demonstrate, by pre-prepared lists, that uncertified firms upon
whose services they call nevertheless meet the requisite quality requirements, the
applicants consider that such an ad hoc system of checking would be the direct
opposite of a certification system based on systematic checking. Finally, the
prohibition on hiring must also be upheld where the client expressly authorizes
cranes to be hired from an uncertified firm. The credibility of the certification
system is founded on the fact that all the products and services offered by certified
firms fulfil the requisite conditions.
- 127.
- The applicants submit that the system at issue complies in any event with all the
criteria laid down by the Commission. First, it is completely open, accepting not
only FNK members but also any other firm which wishes to be admitted to it. SCK
has thus issued certificates to 12 firms which were not FNK members. The
conditions for obtaining a certificate are objective and non-discriminatory. In that
regard, the reduced subscriptions paid by FNK members until 1 January 1992 were
merely to compensate for secretarial services rendered by FNK to SCK. The
system was also open to firms from other Member States, as confirmed by a report
by the Raad voor de Certificatie of 11 January 1993 and a letter of 11 March 1994
from the Association of Belgian Crane-Hire Firms. SCK has always accepted that
registration abroad satisfies the condition requiring firms which wish to obtain a
certificate from SCK to be registered with the Chamber of Commerce.
Accordingly, difficulties encountered by foreign firms in entering the Netherlands
market are due solely to differences in the countries' legislation.
- 128.
- The applicants add that, even though no reference is made thereto in SCK's rules,
SCK recognizes other certification systems as equivalent, so long as they provide
for guarantees analogous to those of the system at issue. SCK's certification system
genuinely gives added value compared with the statutory scheme, both substantively
and in its operation. Substantively, it imposes requirements relating to both
technical matters and the management of the firm which go beyond the statutory
requirements. SCK pursues a much more active monitoring policy than Keboma.
That complementary function of a certification system is explained by a deliberate
policy in the Netherlands of entrusting to the businesses active in the sector the
monitoring of statutory requirements as much as possible. The added value of
SCK's certification system was acknowledged by DG III in a memorandum of
18 August 1994 to DG IV. Accordingly, SCK cannot permit the hiring of cranes
which meet only the statutory requirements without that affecting the coherence of
its certification system. The fact that there are as yet no other private bodies which
have set up a certification system comparable to SCK's in no way signifies that SCK
is unwilling to recognize a comparable system were it to exist. Besides, the
Commission's argument would make it impossible to set up a certification system
in a sector where none yet exists, because the first system established would not
have the possibility of recognizing other, comparable, systems.
- 129.
- In response to the applicants' arguments, the Commission states that, in
paragraphs 23 to 30 of the contested decision, it carried out a detailed analysis of
the prohibition on hiring in its legal and economic context, in order to determine
whether such a prohibition is compatible with Article 85(1) of the Treaty (see Case
56/65 Société Technique Minière v Maschinenbau Ulm [1966] ECR 235).
- 130.
- It maintains that the prohibition on hiring is not essential in order to maintain the
coherence of the certification system in question. To underline the
disproportionate nature of the prohibition, it points out that the prohibition
excludes the possibility of using cranes certified by other bodies and does not allow
the head contractor to demonstrate, even by a pre-prepared list, that his uncertified
subcontractor meets all of SCK's requirements. Furthermore, the prohibition
prevents the head contractor from using an uncertified subcontractor where the
client has expressly waived the quality guarantees associated with a certificate from
SCK and has authorized the use of uncertified cranes.
- 131.
- SCK's certification system does not comply with the criteria set out in the first
subparagraph of paragraph 23 of the contested decision. First, from the beginning
and, at any rate in part, until 21 October 1993, it had the features of a closed
system (paragraph 24 of the contested decision). Secondly, contrary to the
applicants' contention, it did not allow other guarantee systems to be recognized.
The amendment proposed by the applicants to the original version of the second
indent of Article 7 of the rules on certification, for the recognition of certification
by other bodies governed by private law (letter dated 12 July 1993 from the
applicants' adviser to the Commission, marked for the attention of Mr Dubois), has
no practical effect because, first, such bodies do not exist either in the Netherlands
or in the neighbouring countries and, secondly, guarantees other than private
certificates are not recognized. In particular, the Keboma mark and similar official
certificates from the Belgian or German authorities remain unrecognized.
Findings of the Court
- 132.
- Under the second indent of Article 7 of SCK's rules on the certification of crane-hire firms, firms certified by it are prohibited from hiring cranes from uncertified
firms.
- 133.
- As regards the first section of this part of the plea, namely that the Commission
erred in law with regard to the reference to the criteria of transparency, openness,
independence and acceptance of equivalent guarantees offered by other systems in
assessing whether a certification system is compatible with Article 85(1) of the
Treaty, it should be noted that, in the contested decision (paragraph 23), the
Commission took the view that the anti-competitive nature of the prohibition on
hiring could be assessed only by reference to the nature of the certification system
with which that prohibition was associated. For that purpose, it laid down four
criteria namely openness, independence, transparency and acceptance of
equivalent guarantees offered by other systems which the certification system had
to comply with in order for it to be possible for the prohibition on hiring to fall
outside Article 85(1).
- 134.
- It is settled case-law that the assessment as to whether conduct is in accordance
with Article 85(1) of the Treaty is to be carried out in the legal and economic
context of the case (see, for example, Société Technique Minière v Maschinenbau
Ulm, cited above, and Case T-77/94 Vereniging van Groothandelaren in
Bloemkwekerijprodukten and Others v Commission [1997] ECR II-0000,
paragraph 140). Since the Commission was thus entitled to establish criteria giving
effect to the requirements of Article 85(1) in a specific legal and economic context,
it is necessary to examine whether the criteria to which it refers in the first
subparagraph of paragraph 23 of the contested decision are pertinent.
- 135.
- However, in view of the fact that the Commission relies solely on the lack of
openness in SCK's certification system and on the failure to accept equivalent
guarantees offered by other systems in finding that, in this case, the prohibition on
hiring distorts competition (second subparagraph of paragraph 23 of the contested
decision and Article 3 of the operative part), it is sufficient to determine whether
those two criteria are pertinent.
- 136.
- There is no doubt that the criterion of openness of the certification system is
pertinent to the assessment of the prohibition on hiring from the point of view of
Article 85(1) of the Treaty. The prohibition on hiring cranes from uncertified firms
affects significantly the competitive opportunities of those firms if it is difficult to
gain access to the certification system.
- 137.
- The second criterion, relating to the acceptance of equivalent guarantees offered
by other systems, is also pertinent. The prohibition on hiring preventing certified
firms from calling on the services of uncertified firms even if they provide
guarantees equivalent to those of the certification system cannot be objectively
justified by an interest in maintaining the quality of the products and services
ensured by the certification system. On the contrary, the failure to accept
equivalent guarantees offered by other systems protects certified firms from
competition from uncertified firms.
- 138.
- The first section of the second part of the plea, alleging that the Commission erred
in law, must therefore be rejected.
- 139.
- As regards the second section of that part of the plea, in which the applicants
contend that the Commission committed an error of assessment in holding that
SCK's prohibition on hiring restricts competition for the purposes of Article 85(1)
of the Treaty, it should be noted that when the setting up of SCK was discussed at
a meeting of the Noord Holland Region of FNK on 27 September 1983, those
taking part did not have in mind at all an intensification in competition betweenthem but rather an increase in market prices. The minutes of that meeting
(produced by the applicants by letter of 10 April 1997) thus recorded one of the
participants as saying: 'Such a [certification] institute is a very healthy thing. It
should have an effect on prices if the proposal is implemented well. Another
participant at the same meeting considered that the certification proposal was a
'good idea. He added that 'in a business, the turnover achieved is more
important than the rate of use of the machines. A crane-hire firm which does not
increase the rate of use of its machines will achieve an increase in turnover only by
increasing its charges.
- 140.
- Furthermore, the second section of the second part of the plea operates on a
different plane from that on which the Commission assessed the prohibition on
hiring in the contested decision. The Commission based its finding that competition
was restricted on the fact that that prohibition applied within a certification system
which was not completely open and did not accept equivalent guarantees offered
by other systems (second subparagraph of paragraph 23 of the contested decision).
- 141.
- The prohibition on hiring laid down by the second indent of Article 7 of SCK's
rules on the certification of crane-hire firms not only restricts the freedom of action
of certified firms but also, and above all, affects the competitive opportunities of
uncertified firms. Having regard to the economic power of SCK, which itself states
that it accounts for approximately 37% of the Netherlands mobile crane-hire
market, there can be no doubt that competition is restricted appreciably for the
purposes of Article 85(1) of the Treaty if, as the Commission states, the prohibition
on hiring operates within a certification system which is not completely open and
does not accept equivalent guarantees offered by other systems (see paragraphs 143
to 151 below). In such a case, the prohibition on hiring in fact reinforces the closed
nature of the certification system (first subparagraph of paragraph 26 of the
contested decision) and considerably impedes access by third parties to the
Netherlands market (second subparagraph of paragraph 26).
- 142.
- At this stage, it is necessary to consider whether the factual premisses namely the
lack of complete openness in SCK's certification system and the failure to accept
equivalent guarantees offered by other systems upon which the Commission
based its assessment are correct.
- 143.
- The Commission's finding that SCK's certification system was not open during the
period at issue (from 1 January 1991, when the prohibition on hiring was
introduced, until 4 November 1993, when the decision was made to suspend it, with
the exception of the period from 17 February to 19 July 1992) is based on the
following factors: it was more difficult for firms not affiliated to FNK than for firms
affiliated to it to be admitted to the certification system because the costs of
participation were higher for the former than for the latter; the requirements
imposed by the certification system were drawn up on the basis of the position in
the Netherlands, thereby hindering access by foreign firms. Thus, until 1 May 1993,
it was necessary under SCK's certification system to register with the Chamber of
Commerce and, until 21 October 1993, FNK's general conditions had to be applied
(paragraph 24 of the contested decision).
- 144.
- The factors put forward by the applicants to demonstrate that SCK's certification
system was open do not constitute persuasive proof.
- 145.
- First, the Commission stated in the contested decision that from 'September 1987
to 1 January 1992 participation in the SCK certification arrangements was roughly
three times cheaper for FNK members than for non-members (paragraph 9). The
fact that FNK members enjoyed a substantial reduction (of approximately 66%) in
their subscriptions to SCK until 1 January 1992 has not been disputed by the
applicants either during the administrative procedure or in the proceedings before
the Court. Even if, as they claim, that reduction was to compensate for secretarial
services rendered by FNK to SCK, the effect of such a practice was none the less
to make it more difficult for foreign firms than for Netherlands firms to be
admitted to SCK's certification system, since almost all (more than 90%) of the
firms certified by SCK were FNK members and only crane-hire firms established
in the Netherlands could be admitted as FNK members (Article 4(a) of FNK's
statutes). That 'barring effect was also reinforced by the fact that if firms
established in other Member States had nevertheless decided in favour of
certification by SCK, they would, until 21 October 1993, have had to apply the
general conditions of a body barred to them, namely FNK, and in the drafting of
which they had been unable to participate. The closed or, at least, not entirely
open nature of SCK's certification system as regards firms from other countries also
follows from the undisputed fact that its requirements were established on the basis
of the position in the Netherlands and, in particular, of Netherlands law.
- 146.
- As to the applicants' contention that it was still possible for a firm registered
abroad to obtain a certificate from SCK, it is stated in the report of the Raad voor
de Certificatie of 11 January 1993 (p. 5) that there is no barrier preventing foreign
firms from being party to SCK's certification system. In order to reach that
conclusion, reference is made in the report to an amendment of SCK's statutes
which came into force on 1 January 1992 and reformulated the object of the
foundation to the effect that it promoted and maintained the quality of crane-hire
firms generally and no longer just in the Netherlands. However, although SCK's
statutes no longer exclude the possibility that firms not established in the
Netherlands might obtain certification from SCK, it does not automatically follow
that its certification system is a completely open system for firms established in
another Member State. In this case, the fact that the certification system is not
completely open can be attributed to other factors, identified in paragraph 145
above.
- 147.
- The letter of 11 March 1994 from the President of the Association of Belgian
Crane-Hire Firms states that the most significant obstacle to inter-State trade in the
mobile crane-hire sector results from differences in the legislative provisions of the
various Member States and that Belgian firms therefore do not feel, in relation to
the carrying out of works within the Community, that they are obstructed by SCK's
action. In that regard, SCK itself stated in its notification that the requirements
imposed by the certification system correspond roughly to the obligations on crane-hire firms imposed by Netherlands law, so that certification constitutes a better
safeguard that those legal requirements are actually complied with (paragraphs 26,
27 and 28 of SCK's notification). By reproducing a number of requirements of
Netherlands law in its certification system, SCK has thus consolidated and
reinforced the barriers to intra-Community trade resulting from any differences
between national laws. When, pursuant to a Community directive, mutual
recognition of the various national systems is achieved in a sector, the effect of a
private certification body's requirement of compliance with Netherlands law in the
same sector is to preserve or re-establish the barriers to intra-Community trade
which the Community legislature intended to abolish. It is common ground that
SCK carries out certain checks which Keboma performed previously but gave up
after Directive 89/392 had been implemented (see paragraph 3 above). The
applicants in fact acknowledged in paragraph 114 of their reply that: 'The
introduction of the EC mark for hoisting cranes further reduced Keboma's statutory
function. Hoisting cranes with an EC mark and a declaration of conformity are
moreover not subject to inspection by Keboma before they are brought into service
for the first time. That means that SCK's functions have grown. Under SCK's
certification scheme, new hoisting cranes are well and truly checked to ensure that
they comply with the applicable legislative provisions. They cannot, therefore,
claim that any obstacle which foreign crane-hire firms may encounter in entering
the Netherlands market arises exclusively from differences in legislative provisions
as between the various Member States and not from SCK's certification system.
- 148.
- As to the question whether SCK's certification system allowed equivalent
guarantees offered by other systems to be accepted, it should be noted that SCK
proposed, in a letter of 12 July 1993 to Mr Dubois of DG IV, an amendment to
that system under which it would recognize other certification systems fulfilling the
conditions established on the basis of the European standards EN 45 011 and
offering guarantees equivalent to those under its own system. It is thus clear from
that proposed amendment that, in its original version, SCK's certification system
did not provide for the recognition of such equivalent systems. Furthermore, even
if, as the applicants allege, the amendment was merely a clarification of the original
version of the second indent of Article 7 of the rules on certification, SCK's system
makes no provision at all for the recognition of rules of public authorities which
provide guarantees equivalent to those offered by SCK.
- 149.
- It follows from the foregoing considerations that the Commission did not commit
an error of appraisal in finding, in paragraph 23 of the contested decision, that
SCK's certification system was not completely open (or at the very least that it was
not until 21 October 1993) and did not allow equivalent guarantees offered by
other systems to be accepted. Accordingly, the prohibition on hiring which
reinforced the non-open nature of the certification system and had the effect of
raising a substantial obstacle to access by third parties to the Netherlands market,
and in particular firms established in another Member State (see paragraphs 145
to 148 above), in fact constitutes a restriction of competition within the meaning
of Article 85(1) of the Treaty. That conclusion would be no different if the
applicants could show that the clause is necessary in order to preserve the
coherence of SCK's certification system. The fact that the system is not open and
equivalent guarantees offered by other systems are not accepted means that the
system itself is incompatible with Article 85(1) even if it were proved, as the
applicants claim, that it gave added value compared with the Netherlands
legislation. A specific clause in such a system, such as the clause prohibiting hirings
from uncertified firms, does not become compatible with Article 85(1) because it
is needed to preserve the coherence of that system, since the latter is by definition
incompatible with Article 85(1).
- 150.
- It follows that the second part of this plea must be rejected.
- 151.
- At the hearing the interveners urged the Court to rule in addition on the lawfulness
of the amendment to the second indent of Article 7 of the rules on certification
agreed upon by the principal parties for the period until delivery of this judgment
(see paragraph 26 above). However, in the context of an action for annulment
under Article 173 of the Treaty, the Community judicature confines itself to
reviewing the legality of the contested act. In this case, the contested decision
necessarily contains no appraisal of the new version of the clause containing the
prohibition on hiring, since the rules on certification were amended after the date
of the decision. The request made by the interveners at the hearing thus exceeds
the jurisdiction conferred by the Treaty on the Court in actions for annulment and
must accordingly be rejected as inadmissible.
The third part of the plea, alleging that the Commission committed an error of
assessment in finding that the system of recommended and internal rates had as its
object or effect the restriction of competition within the meaning of Article 85(1)
of the Treaty
Summary of the arguments of the parties
- 152.
- The applicants contend that the publication of recommended rates and the
formulation of internal rates do not amount, either, to restrictions of competition
within the meaning of Article 85(1) of the Treaty, because those rates were
intended to serve only as an aid to specific negotiations and had no binding force
at all. The position on the market would therefore have been identical if the
recommended rates and the cost estimates had not been published. Every business
active on the market was and would have remained free to determine its
commercial policy independently (Case 172/80 Züchner v Bayerische Vereinsbank
[1981] ECR 2021, paragraph 13). The applicants state that the market rates were
substantially lower than the recommended rates published by FNK and differed
depending on the firm, the client and the order.
- 153.
- Article 3(b) of FNK's internal rules, which imposes the obligation to charge
reasonable rates at the risk of having membership withdrawn on the basis of
Article 10 of the statutes, does not in any way imply that FNK's members were
required to charge the recommended rates. Besides, no individual check has been
carried out during all the years of FNK's existence to establish whether reasonable
rates were being applied and membership has never been revoked for such a
reason. The two judgments cited by the Commission in paragraph 20 of the
contested decision are not relevant. The judgment in Case 8/72 Vereniging van
Cementhandelaren v Commission [1972] ECR 977 was concerned with the
application of 'recommended rates under a mandatory system, non-existent in this
case, which imposed stringent sanctions in the event of non-compliance and thus
enabled all the participants to predict with a reasonable degree of certainty what
the pricing policy pursued by their competitors would be. The judgment in
Case 45/85 Verband der Sachversicherer v Commission [1987] ECR 405 related to
a situation where the agreement at issue had the object of influencing competition,
whereas in this case the publication of recommended rates and cost estimates had
a completely different object.
- 154.
- As regards the internal rates, the applicants do not deny that FNK performed
incidental secretarial functions in connection with consultation on those prices.
They consider, however, that FNK's involvement in the formulation of the internal
rates was so marginal that it cannot assume responsibility for this. In so far as the
formulation of the internal rates may be attributed to it, FNK did not in any eventhave any influence on the conditions of competition in the market. The market,
characterized by the phenomenon of overnight contracting, in fact evolved without
any prompting towards a situation in which parties who have regular commercial
dealings entailing the provision of identical and reciprocal services establish prices
in advance, to which they refer whenever they provide a service. The Commission
also failed to show that the internal rates were binding.
- 155.
- The Commission states in response that it is apparent from the relevant provisions
of FNK's internal rules and statutes that the recommended and internal rates are
binding as a result of the obligation on FNK members to charge reasonable rates,
breach of which may be punished by loss of membership (Article 10(1)(d) of the
statutes). Also, the phenomenon of overnight contracting makes it probable that
those recommended rates served in fact as reference prices.
Findings of the Court
- 156.
- It is necessary to determine first whether the Commission committed an error of
assessment in finding that the system of recommended and internal rates restricts
competition for the purposes of Article 85(1) of the Treaty ((a) below). It will then
be necessary to determine whether FNK can be held responsible for the
infringement alleged ((b) below).
(a) The system of recommended and internal rates
- 157.
- In the contested decision (paragraphs 20 and 21), the Commission effectively takes
the view that the firms affiliated to FNK were required to adhere to the rates
proposed by it. It considers that even if those rates were target prices, they still
restricted competition because they made it possible to predict with a reasonable
degree of certainty what the pricing policy of competitors would be.
- 158.
- Article 85(1)(a) of the Treaty expressly states that agreements, decisions and
concerted practices which 'directly or indirectly fix purchase or selling prices or any
other trading conditions are incompatible with the common market.
- 159.
- During the period at issue, FNK's members were required, under Article 3(b) of
its internal rules, to charge 'reasonable prices and Article 10(1)(d) of the statutes
provides that members may be expelled if they infringe the internal rules. FNK has
confirmed that the published recommended rates (applicable to dealings with
clients) gave substance to the concept of reasonable rates in Article 3(b) of its
internal rules (paragraph 17 of FNK's notification). It must be accepted that the
same applies to the internal rates (applicable to hirings between FNK members)
determined within FNK, normally on a regional basis (see paragraph 167 below).
It is difficult to imagine that FNK would have agreed to cooperate in the fixing of
internal rates which were not reasonable rates within the meaning of Article 3(b)
of the internal rules. Having regard to the fact that the recommended and internal
rates give substance to the concept of reasonable rates which FNK members are
required to charge under Article 3(b) of FNK's internal rules, the system of
recommended and internal prices therefore was in fact a pricing system binding its
members.
- 160.
- That finding is also borne out by the fact that, as the applicants themselves
concede, FNK's system of rates was set up to remedy instability in the market
which had resulted in a large number of insolvencies. In addition, various sets of
minutes of meetings held by FNK's regions, submitted to the Court in response to
the measure of organization of procedure ordered by it (see paragraph 31 above),
stress the binding nature of FNK's recommended and internal rates. Thus, one of
the participants at the meeting of the Noord Holland Region of 17 February 1981
stated 'that FNK membership has the disadvantage that you are obliged to charge
an agreed rate (point 4 of the minutes). It is likewise apparent from the minutes
of the meeting of the Noord Holland Region of 22 February 1982 (point 6) that
failure to adhere to the recommended rates would be treated as a breach of FNK's
internal rules. One of the participants at that meeting added that 'provision should
be made for penalizing such breaches of the rules by the imposition of a fine (see,
to the same effect, the minutes of the meeting of the Oost Nederland Region of
16 April 1986, point 3).
- 161.
- Although there is no actual known case of a penalty having been imposed on a
member for failure to comply with the understanding on prices, adherence to the
rates was nevertheless monitored. It is clear from the minutes of meetings of
FNK's regions that FNK members were brought into line. For example, the
minutes of the meeting of the West Brabant/Zeeland Region of 8 December 1980
(point 6) report the following exchange after Mr Van Haarlem had failed to adhere
to the agreed rates: 'The region disapproves of Mr Van Haarlem's action and Mr
Van Haarlem acknowledges that it would have been preferable if it had not
occurred (see also the minutes of the meeting of the West Brabant/Zeeland
Region of 21 February 1980, point 7).
- 162.
- Moreover, the very reason for which FNK gave its support to the formulation of
internal rates (see paragraphs 165 to 170 below) was to ensure that its members
adhered to its recommended rates. A crane-hire firm which reduces prices
significantly will attract strong demand from clients and will be obliged to hire extra
cranes from its competitors. The interest in setting internal rates thus followed
from the fact that a crane-hire firm will necessarily take those rates into account
when it sets its price with a client, in order to avoid any loss on extra cranes which
it may hire (see, for example, the minutes of the meeting of the Noord Holland
Region of 22 February 1982, point 6: 'It is good to have mutually agreed internal
rates, because those rates will all the same have some effect on the rates charged
to clients. If you in fact know that a crane can be hired from a fellow crane-hire
firm only at a specified rate, you are doubly careful in offering clients prices
substantially lower than those internal rates (see, to the same effect, the minutes
of the meeting of the West Brabant/Zeeland Region of 5 October 1987, point 4;
the minutes of the meeting of the Oost Nederland Region of 10 October 1989,
point 6; the minutes of the meeting of the Midden Nederland Region of 21
February 1990, point 4; the minutes of the meeting of FNK members using tracked
cranes, of 24 August 1989, point 2). Thus, to repeat the words used by Mr De
Blank, FNK's director, the internal rates had an 'educational function (minutes
of the meeting of the West Brabant/Zeeland Region of 30 May 1988, point 3).
- 163.
- Furthermore, according to the documents in the case, FNK's system of rates had
the object of increasing market rates. FNK itself stated in its notification that its
recommended rates were higher than the market price (paragraph 18 of the
notification). The setting of internal rates on the basis of the recommended prices
had an effect in itself, namely an increase in the prices charged in dealings with
clients (minutes of the meeting of the Zuid-Holland Region of 9 October 1990,
point 7: the internal rates have an 'upward force in relation to market prices;
minutes of the meeting of the Noord Holland Region of 11 February 1987, point 5:
'Mr De Blank observes that the Noord Region has seen intense cooperation on
rates. Initially in groups and then jointly with the three province-regions. That has
certainly borne fruit; minutes of the meeting of the Midden Nederland Region of
28 February 1991, point 4; minutes of the meeting of FNK members using tracked
cranes, of 12 November 1991, point 3: 'There is the impression that the market
rates also are increasing because of the agreements on internal rates.
- 164.
- It follows from the above that the system of recommended and internal rates was
a system of imposed prices which enabled FNK's members, even if some of them
did not always adhere to the prices set, to predict with a reasonable degree of
certainty the pricing policy pursued by the other members of the association. In
addition, it has been established that it had the object of increasing market prices.
The Commission was therefore right in finding that that system restricted
competition for the purposes of Article 85(1) of the Treaty (Vereniging van
Cementhandelaren v Commission, paragraphs 19 and 21, and Verband der
Sachversicherer v Commission, paragraph 41).
(b) FNK's responsibility in the setting of internal rates
- 165.
- The applicants take the view that FNK cannot be held responsible for the
formulation of the internal rates. Its role in setting them never went beyond
ancillary secretarial duties. They were formulated at a local or regional level.
- 166.
- In that regard, it should be noted that, for certain categories of cranes, namely
cranes of more than 150 tonnes and tracked cranes, internal rates were set at
national level. It is clear from the minutes submitted to the Court that the internal
rates were set in meetings at which all the FNK members which used such cranes
were represented (see the minutes of the meeting of firms using tracked cranes, of
15 February 1979, point 4). The meetings were generally held at FNK's
headquarters, in the presence of its director Mr De Blank, and the minutes were
drafted on FNK headed paper.
- 167.
- The setting of internal rates at national level was the exception rather than the
rule. However, FNK's management clearly would have wished internal rates for
other cranes to be set at national level as well (see the minutes of the meeting of
the Noord Holland Region of 4 September 1989, point 5: 'What the management
would like best is for a single internal rate for the whole country to be achieved).
For practical reasons, however, national internal rates could be laid down only for
cranes of more than 150 tonnes and for tracked cranes. FNK's management thus
considered: '... the number of firms which use cranes of between 100 and
150 tonnes is too large for agreements to be reached at national level. The
management thus decided that it was also necessary to draw up agreements for
those cranes within the regions ... (minutes of the meeting of the West
Brabant/Zeeland Region of 15 October 1990, point 7; see also the minutes of the
meetings of firms using hydraulic cranes of more than 150 tonnes, of
25 September 1990, point 6, and of 26 November 1991, point 6).
- 168.
- It follows that FNK itself decided whether an internal rate was to be set at national
or at regional level.
- 169.
- As regards, next, FNK's involvement in the formulation of regional internal rates,
it should be noted that, under the very terms of FNK's statutes, the regions are
divisions of FNK (Article 16 of the statutes), that the minutes of the regions'
meetings were drafted on FNK headed paper and that Mr De Blank, the director
of FNK, took part in all the meetings of the regions for which the Court has
received the minutes and at which internal rates were discussed. Furthermore, on
a number of occasions during regional meetings, Mr De Blank informed the
members of the region concerned of the internal rates laid down in other regions
(see, for example, the minutes of meeting of the West Brabant/Zeeland Region of
4 March 1991, point 5; the minutes of the meeting of the Midden Nederland
Region of 28 February 1991, point 4; the minutes of the meeting of the Noord
Holland Region of 24 September 1990, point 7; the minutes of the meeting of the
Noord Nederland Region of 26 September 1988, point 5). It thus played an active
role in the setting of internal rates in certain regions. In addition, it is clear from
the minutes of the meeting of the Midden Nederland Region of 28 February 1991
(point 4) that a circular from FNK relating to internal rates led in some cases to
an increase in prices.
- 170.
- It follows from the above findings that FNK was actively involved in the
formulation of internal rates, irrespective of whether they were set for the whole
country or for one region or certain regions. Even though FNK as an association
did not set the rates unilaterally but recorded the internal rates agreed between the
crane-hire firms at their meetings (minutes of the meeting of the management of
FNK of 4 April 1990, point 8), the laying down of internal rates within a region or
at a national level none the less corresponded to FNK's resolve to coordinate the
conduct of its members on the market (Verband der Sachversicherer v Commission,
paragraph 32).
- 171.
- Accordingly, the Commission did not commit an error of assessment in finding in
Article 1 of the contested decision that FNK was responsible for the system of
internal rates.
- 172.
- It follows from all the foregoing considerations that the third part of the second
plea must also be rejected.
The fourth part of the plea, alleging that the Commission erred in its assessment
of the effect on trade between Member States
Summary of the arguments of the parties
- 173.
- The applicants submit that the practices complained of in Articles 1 and 3 of the
contested decision are not capable of affecting trade between Member States
(Case 22/79 Greenwich Film Production v SACEM [1979] ECR 3275, paragraph 11,
and Case T-2/89 Petrofina v Commission [1991] ECR II-1087, paragraph 222).
According to them, the mobile crane-hire market is confined to the Netherlands
because of limited market mobility and the phenomenon of overnight contracting,
so that inter-State trade cannot be appreciably affected (Case 22/78 Hugin v
Commission [1979] ECR 1869). The fact that the complainants include two
undertakings established in another Member State is not sufficient proof that inter-State trade may be affected by the practices at issue. As regards SCK in particular,
its certification system is open to firms from other Member States on a non-discriminatory basis, provided that they satisfy the system's requirements. The
system, through its openness, thus encourages foreign firms to enter the
Netherlands market. As regards FNK, it was involved only indirectly with the
drawing up of internal rates, which applied solely at a local or regional level.
Moreover, those rates were of interest only to the firms which had formulatedthem. They therefore had no effect on inter-State trade in the mobile crane sector.
- 174.
- The Commission states in response that, even if mobile cranes can be moved only
within a radius of 50 kilometres, it was entirely possible for trade between Member
States to be affected in the Belgian and German frontier regions. The fact that the
complainants include two Belgian undertakings shows that the market in question
is not confined to the Netherlands.
Findings of the Court
- 175.
- According to settled case-law, in order that an agreement, decision or concerted
practice may affect trade between Member States it must be possible to foresee
with a sufficient degree of probability on the basis of a set of factors of law or fact
that it may have an influence, direct or indirect, actual or potential, on the pattern
of trade between Member States such as to give rise to the fear that the
achievement of a single market between Member States might be impeded (see
Joined Cases 209/78 to 215/78 and 218/78 Van Landewyck and Others v Commission
[1980] ECR 3125, paragraph 170, and Case C-219/95 P Ferriere Nord v Commission
[1997] ECR I-0000, paragraph 20).
- 176.
- The applicants are wrong in contending that inter-State trade cannot be affected
by the practices which are the subject of the contested decision simply because, in
the mobile crane-hire sector, any trade between Member States is precluded.
- 177.
- It is common ground that mobile cranes have an operating radius of roughly 50
kilometres. Inter-State trade can therefore develop in the frontier regions of the
Netherlands. That conclusion is borne out by the fact that two Belgian businesses
located near the Netherlands border are among the undertakings which submitted
a complaint to the Commission against SCK and FNK. It would be surprising if
they took such a step if they had no possibility of entering the Netherlands market.
- 178.
- The other matters relied on by the applicants do not call into question the
possibility of inter-State trade, but are intended to prove that the prohibition on
hiring and the system of recommended and internal rates cannot have an
appreciable effect on such trade.
- 179.
- In that regard, it should be borne in mind that practices restricting competition
which extend over the whole territory of a Member State have, by their very
nature, the effect of reinforcing compartmentalization of national markets, thereby
holding up the economic interpenetration which the Treaty is intended to bring
about (Vereniging van Cementhandelaren v Commission, cited above, paragraph 29,
Remia and Others v Commission, cited above, paragraph 22, and Case T-29/92 SPO
and Others v Commission [1995] ECR II-289, paragraph 229).
- 180.
- In this case, it is not disputed that SCK's prohibition on hiring and FNK's
recommended rates apply to the whole of the Netherlands. The same is true of
certain internal rates (see paragraph 166 above). Those practices, which restrict
competition (see paragraphs 141 to 150 and 157 to 164 above), thus affect inter-State trade by their very nature. Furthermore, SCK itself acknowledged in its
notification for the purpose of obtaining negative clearance or an exemption
pursuant to Article 85(3) of the Treaty (see paragraph 7 above) that the rules on
the certification of crane-hire firms could have a negative effect on trade between
Member States (paragraph 4.3 of the notification).
- 181.
- As to the question whether the practices referred to in Articles 1 and 3 of the
contested decision are capable of having an appreciable effect on inter-State trade,
although the parties do not agree on the exact market share held by FNK's
members and the firms certified by SCK, the applicants themselves have
acknowledged that in 1991 the firms certified by SCK accounted for 37%, and
FNK's members for roughly 40%, of the Netherlands mobile crane-hire market.
Even if the market share of the firms certified by SCK and of FNK's members was
'only 37% or 40% of the Netherlands market, the applicants were large enough
and had sufficient economic power for their practices, to which the contested
decision relates (including the prohibition on hiring and the recommended rates
which applied to the whole of the Netherlands), to be capable of having an
appreciable effect on trade between Member States (Case 19/77 Miller v
Commission [1978] ECR 131, paragraph 10).
- 182.
- It follows from the above that the fourth part of the second plea must be rejected.
- 183.
- It follows from all of the above that the plea relating to infringement of
Article 85(1) of the Treaty must be rejected in its entirety.
The third plea: infringement of Article 85(3) of the Treaty
Summary of the arguments of the parties
- 184.
- The applicants argue in the alternative that, by not declaring Article 85(1) of the
Treaty inapplicable in this case, the Commission infringed Article 85(3), because
SCK's certification system, the publication of recommended rates and of cost
estimates, and the setting of internal rates satisfied all the requirements of
Article 85(3).
Refusal by the Commission to exempt SCK's prohibition on hiring
- 185.
- The applicants submit that the certification system improves the position of mobile
crane-hire firms in that it helps to create a transparent market in which firms
comply with quality requirements exceeding the statutory requirements. That
added value of the certification system (see paragraph 128 above), backed up by
a much more active monitoring policy than the statutory monitoring, ultimately
benefits clients. Since clients are represented within SCK, it is also clear that
consumers are allowed a fair share of the resulting benefit. For the reasons already
given (see paragraph 126 above), the prohibition on hiring is the only means of
safeguarding the operation of the certification system in the particular
circumstances of the market at issue, so that any restriction of competition is
necessary in order to achieve the objective of implementing a certification system.
The certification system does not eliminate competition but strengthens it, in that
it permits keen competition between certified firms on price and other conditions,
ensuring a high level of quality in a transparent market and, at the same time, not
affecting the opportunity for competition between certified and uncertified firms.
- 186.
- The Commission states in response that paragraph 37 of the contested decision
shows that two of the four conditions laid down in Article 85(3) of the Treaty were
not met. As regards the condition requiring a contribution to the improvement of
production or distribution, it has not been established that the certification system
has an added value. In any event, the restrictions imposed on affiliated firms and
the resulting disadvantages for non-affiliated firms clearly outweighed any
advantages. The Commission considers in fact that most of the conditions for
certification of a crane-hire firm are statutory requirements monitored by several
bodies. It also denies that, operationally, SCK adopts a more active monitoring
policy than that pursued by Keboma. As regards the condition requiring that the
restrictions imposed in order to attain the objectives of SCK's certification system
be indispensable, the Commission relies on the arguments set out in paragraph 130
above to show that a prohibition on hiring was not indispensable.
Refusal by the Commission to exempt the system of recommended and internal
rates
- 187.
- The applicants take the view that the publication of recommended rates and cost
estimates also complies with the conditions in Article 85(3) of the Treaty. It has
thus been recognized in the Commission's decision-making practice (see
Commission Decision 93/174/EEC of 24 February 1993 relating to a proceeding
under Article 85 of the EEC Treaty (IV/34.494 Tariff structures in the combined
transport of goods) (OJ 1993 L 73, p. 38) and Commission Regulation (EEC)
No 3932/92 of 21 December 1992 on the application of Article 85(3) of the Treaty
to certain categories of agreements, decisions and concerted practices in the
insurance sector (OJ 1992 L 398, p. 7)) that the existence of a tariff structure
contributes to transparency of the market and economic progress in the sector
concerned inasmuch as consumers can make a better comparison of the
undertakings operating in it. Consumers therefore obtain a fair share of that
benefit. Such transparency of the market can be achieved only by the publication
of those rates, so that any resulting restriction of competition is indispensable.
Finally, publication does not lead to the elimination of a substantial part of
competition, because the published rates are not mandatory, allowing the operators
in the market to depart from them and, therefore, to compete with one another.
- 188.
- The internal rates must also be exempted under Article 85(3) of the Treaty. The
situation of firms hiring out mobile cranes is comparable to that of banks inasmuch
as they regularly enter into bilateral relations with each other by such hiring. Since
the Commission has declared Article 85(1) of the Treaty inapplicable to a tariff
agreement entered into by banks in relation to services which they provide on a
reciprocal basis (Commission Decision 87/103/EEC of 12 December 1986 relating
to a proceeding under Article 85 of the EEC Treaty (IV/31.356 ABI) (OJ 1987
L 43, p. 51)), equal treatment must be accorded to the applicants as regards the
setting of internal rates. Those rates improve production and increase efficiency
because they avoid price negotiations each time that crane-hire firms hire a crane
from another certified firm. That gain in efficiency also benefits clients, so that a
fair share of the benefit reverts to consumers. In so far as those rates create
restrictions of competition, the restrictions are indispensable in order to attain that
gain in efficiency. Finally, competition is not eliminated to a substantial extent
because, on any specific transaction, any party who was involved in the formulation
of the internal rates may always charge a different price or not enter into the
transaction.
- 189.
- The Commission refers to paragraph 34 of the contested decision. It adds that
FNK cannot rely on Decision 93/174 because the particular features of that case
are lacking in this case. The recommended rates concern the total price and not
one or other element of it and the need for transparency in the mobile crane-hire
market is not as great as in the market at issue in that decision. Nor, finally, can
FNK rely on the decision regarding inter-bank charges to prove that the internal
rates are indispensable. The situation of the mobile crane-hire firms differs from
that of the banks in a number of respects: banks are required to work in
partnership because they have to cooperate with the bank chosen by their client to
carry out a transfer, while mobile crane-hire firms themselves choose their sub-contractors; banks are confronted with a number of much more significant
transactions; finally, the internal rates are coupled with recommended rates
applicable to clients, while the Commission, in Decision 87/103, did not authorize
concerted action by banks on the rates charged to their customers.
Findings of the Court
- 190.
- It is settled case-law that the review undertaken by the Court of the complex
economic appraisals made by the Commission when it exercises the discretion
conferred on it by Article 85(3) of the Treaty, with regard to each of the four
conditions laid down in that provision, is necessarily limited to verifying whether the
rules on procedure and on the giving of reasons have been complied with, whether
the facts have been accurately stated and whether there has been any manifest
error of assessment or a misuse of powers (Joined Cases 142/84 and 156/84 BAT
and Reynolds v Commission [1987] ECR 4487, paragraph 62, CB and Europay v
Commission, cited above, paragraph 109, Case T-17/93 Matra Hachette v
Commission [1994] ECR II-595, paragraph 104, and SPO and Others v Commission,
cited above, paragraph 288).
- 191.
- In this case the Commission's refusal to exempt the rules and statutes of FNK and
SCK respectively is based on the finding that two of the four conditions laid down
in Article 85(3) of the Treaty are not satisfied. Since the four conditions for
obtaining an exemption under Article 85(3) are cumulative (Joined Cases 43/82 and
63/82 VBVB and VBBB v Commission [1984] ECR 19, paragraph 61, and SPO and
Others v Commission, cited above, paragraph 267), the Commission was not in fact
required to consider each of them.
Refusal by the Commission to exempt SCK's prohibition on hiring
- 192.
- It is clear from paragraph 37 of the contested decision that the Commission
rejected the application for exemption of SCK's certification system, and in
particular of the prohibition on hiring, after finding that the first and the third
conditions of Article 85(3) of the Treaty were not satisfied. It considered that
SCK's certification system did not provide real added value, either substantively or
in its operation, compared with the statutory requirements. The system accordingly
did not contribute to improving production or promoting technical or economic
progress (the first condition in Article 85(3)). Moreover, even if the certification
system yielded advantages which outweighed the resulting disadvantages for
uncertified firms, the prohibition on hiring was not indispensable for the operation
of that system (the third condition in Article 85(3)).
- 193.
- The applicants consider that the Commission infringed Article 85(3). In their view,
SCK's certification system has sufficient added value to justify the restriction on
competition alleged to result from the prohibition on hiring. First, SCK pursues a
more active monitoring policy in relation to the statutory requirements than
Keboma, the public body responsible for the inspection of cranes in the
Netherlands and, secondly, SCK's certification system imposes requirements,relating both to technical matters and to the management of the firm, which go
beyond the statutory requirements.
- 194.
- As regards, first, the allegedly more effective monitoring of the statutory
requirements carried out by SCK (the alleged operational added value), it must be
borne in mind that it is in principle the task of public authorities and not of private
bodies to ensure that statutory requirements are complied with (Case T-30/89 Hilti
v Commission [1991] ECR II-1439, paragraph 118). An exception to that rule may
be allowed where the public authorities have, of their own will, decided to entrust
the monitoring of compliance with statutory requirements to a private body. In this
case, however, SCK set up a monitoring system parallel to the monitoring carried
out by the public authorities without there being any transfer to SCK of the
monitoring powers exercised by the public authorities. Furthermore, the statement
in the second subparagraph of paragraph 37 of the contested decision that 'firms
which do not participate in the SCK certification system can likewise demonstrate
that they meet the statutory requirements is not seriously disputed by the
applicants. Thus, it has not shown that there were gaps in the monitoring of the
statutory requirements carried out by the public authorities which could have made
it necessary to set up a private monitoring system. Even if it were shown that the
monitoring of the statutory requirements carried out by SCK is more effective than
that of the Netherlands public authorities, the applicants still have not in any way
proved that the statutory monitoring system was insufficient. It should be noted
that SCK, which was set up in 1985, did not insert the clause providing for the
prohibition on hiring into its rules on certification until 1 January 1991. In reply
to a question put by the Court at the hearing, counsel for the applicants conceded
that, before the introduction of the prohibition on hiring, not a single complaint
had been made to SCK by clients regarding the use, by a certified firm, of cranes
which would necessarily have been inspected by the public authorities only hired
from uncertified firms. That being so, the Commission was entitled to take the
view that 'the restrictions imposed on affiliated firms and the disadvantages which
result for non-affiliated firms clearly outweigh any advantages claimed by SCK
(second subparagraph of paragraph 37 of the contested decision). Accordingly, the
Commission's assessment to the effect that the added value claimed for the
operation of the certification system did not satisfy the first condition in
Article 85(3) of the Treaty was in any event not vitiated by a manifest error.
- 195.
- As regards, next, the substantive added value claimed for SCK's certification system
and said to result from the imposition by the system in question of conditions,
relating both to technical matters and to the management of the firm, going beyond
the statutory requirements, the Commission found in the contested decision: 'It has
not been established that the SCK certification system does provide real added
value over and above the statutory rules applicable. The requirements imposed on
the affiliated firms are virtually identical to the statutory ones ... (first
subparagraph of paragraph 37). The Commission thus stated that the majority of
the safety requirements imposed by SCK were already imposed by Netherlands law.
The same applied to 'most of the non-safety-related requirements which SCK
imposes, such as those relating to the payment of tax and social security
contributions, registration with the Chamber of Commerce, third-party insurance,
creditworthiness and application of the collective labour agreements (third
subparagraph of paragraph 37). The Commission added that 'SCK goes beyond
statute law by imposing requirements regarding the manner of conducting business,
but that alone is insufficient to justify the restrictions of competition imposed (end
of the third subparagraph of paragraph 37).
- 196.
- The lawfulness of a decision refusing an exemption must be assessed in the light
of the matters relied upon by the parties in the notification, as clarified in the
course of the administrative procedure (see, for example, Case C-360/92 P
Publishers Association v Commission [1995] ECR I-23, paragraphs 39, 40 and 41).
- 197.
- In its notification SCK explained that the certification system imposed three kinds
of obligation on firms: first, requirements relating to mobile cranes, secondly,
general requirements relating to the firm and, thirdly, requirements relating to the
firm's staff.
- 198.
- As for the first group of requirements, which correspond to the 'safety
requirements mentioned in the contested decision, SCK expressly states in its
notification that those obligations 'also apply by virtue of national law
(paragraph 26 of the notification). It adds that the same applies to the
requirements relating to the firm's staff. It explains: '... in issue are ...
requirements which are already imposed by law. SCK seeks merely to ensure that
certified firms can demonstrate that they satisfy those statutory obligations
(paragraph 28 of the notification).
- 199.
- As to the general obligations relating to the firm, SCK explains in its notification:
'[they] relate to fiscal requirements, insurance requirements and solvency. Here
also, the requirements are already largely imposed on the firms by national
legislation, certification providing a further safeguard that those statutory
requirements are actually complied with. That applies in particular to the
requirements relating to the payment of tax and to registration with the Chamber
of Commerce and to the obligation to be insured (paragraph 27 of the
notification). In its notification SCK mentions only three non-statutory
requirements for certified firms: a solvency and minimum liquidity requirement, an
obligation (since withdrawn) to apply FNK's general conditions and an obligation
to take out third-party insurance.
- 200.
- As regards the added value claimed for the certification system in question, SCK
concentrated in its notification on the need for increased monitoring of the existing
statutory requirements (operational added value) rather than on substantive added
value. With regard to substantive added value, the Commission faithfully took up
in the contested decision (see paragraph 195 above) the argument which SCK had
put forward in its notification (see paragraphs 198 and 199 above), namely that the
requirements imposed by its certification system roughly corresponded to the
statutory requirements in force. In principle, such a finding should be sufficient to
reject the claim that the Commission committed a manifest error of assessment in
finding that SCK's certification system did not provide real substantive added value
compared with the statutory requirements.
- 201.
- In the course of the administrative procedure, however, the applicants gave greater
weight to the substantive added value claimed for the system. Thus, in their reply
to the statement of objections of 16 December 1992, they contended, by reference
to a table forming Annex 3 to that reply, that the certification system imposed a
number of safety and performance requirements not laid down by Netherlands law
(paragraph 9 of the reply). In their reply to the statement of objections of 21
October 1994, they referred to the same table in order to demonstrate that there
was substantive added value (paragraph 32 of the reply; Annex 19 to the
application). That table lists the conditions imposed by the certification system and
indicates whether each is statutory or non-statutory. A similar explanation was set
out in paragraphs 101 to 118 of the application to the Court.
- 202.
- In truth, it is difficult to reconcile the argument put forward by the applicants in
their replies to the statements of objections and in their application to the Court
with the description of the requirements of the certification system given by SCK
in its notification (paragraphs 26, 27 and 28 of the notification; see paragraphs 198
and 199 above). The added value of a certification system does not derive merely
from the fact that it imposes obligations not laid down by law. SCK's certification
system could have real added value only if the conditions imposed by it were
appropriate for the purpose of attaining the objective pursued, which is to
guarantee clients increased safety (see, in that regard, paragraphs 80 to 87 of the
application). The applicants have failed to explain why and to what extent the non-statutory conditions were appropriate for attaining the objective pursued.
Therefore, by concentrating, during the administrative procedure and in their reply,
solely on proving that a number of requirements of the certification system were
non-statutory, on the assumption that the system provides substantive added value
in that way, they have not succeeded in proving that the Commission committed a
manifest error of assessment in finding, first, that 'it has not been established that
the SCK certification system does provide real added value over and above the
statutory rules applicable (first subparagraph of paragraph 37 of the contested
decision) and, secondly, that the few non-statutory conditions imposed are not
sufficient 'to justify the restrictions of competition imposed (end of the third
subparagraph of paragraph 37).
- 203.
- It follows that the applicants have not proved that the Commission's assessment to
the effect that SCK's certification system and the prohibition on hiring associated
with it do not satisfy the first of the four conditions set out in Article 85(3) of the
Treaty is vitiated by a manifest error (see, for example, Van Landewyck and Others
v Commission, cited above, paragraph 185). Since the four conditions for granting
an exemption under Article 85(3) are cumulative, there is no need to consider
whether the Commission manifestly erred in its assessment of the question whether
or not the prohibition on hiring was indispensable under SCK's certification system
(see, for example, the order of 25 March 1996 in Case C-137/95 P SPO and Others
v Commission [1996] ECR I-1611, paragraph 48, and the judgment in CB and
Europay v Commission, cited above, paragraphs 110 and 115).
- 204.
- The plea alleging infringement of Article 85(3) of the Treaty must accordingly be
rejected in so far as it concerns the prohibition on hiring.
Refusal by the Commission to exempt the system of recommended and internal
rates
- 205.
- The Commission based its refusal to exempt FNK's system of recommended and
internal rates on the finding that the first two conditions in Article 85(3) of the
Treaty were not satisfied. It thus found in paragraph 34 of the contested decision:
'It has not been established that the obligation to apply reasonable rates,
irrespective of the alleged aim of increasing transparency on the market,
contributes to improving the crane-hire business and that consumers, in this case
the firms which hire cranes, enjoy a fair share of the resulting benefit. On the
contrary, according to [an] independent sectoral survey ..., the recommended and
internal rates applied, which were fixed by FNK in order to spell out what is meant
by reasonable rates, were generally above the market rates. The authors of the
survey saw part of the explanation in the fact that on the market one has to deal
with competition.
- 206.
- It is settled case-law that, where an exemption is sought under Article 85(3) of the
Treaty, it is incumbent upon the notifying undertakings to provide the Commission
with evidence that the four conditions laid down in that provision are met (VBVB
and VBBB v Commission, cited above, paragraph 52, and Matra Hachette v
Commission, cited above, paragraph 104).
- 207.
- As regards, first, the internal rates, in the section of its notification relating to
Article 85 of the Treaty FNK claimed solely that those rates did not eliminate
competition (paragraph 25 of the notification). Likewise, in their replies to the
statements of objections of 16 December 1992 and 21 October 1994, the applicants
did not adduce any new evidence enabling the internal rates to be assessed with
regard to Article 85(3). While the applicants adopted an approach during the
administrative procedure which was perfectly in harmony with their analysis to the
effect that FNK had nothing to do with the setting of the internal rates
(paragraph 19 of FNK's notification), they did not submit to the Commission any
evidence to prove that, as regards the system of internal rates, the first three
conditions in Article 85(3) were satisfied. They cannot therefore claim that the
Commission committed a manifest error of assessment in finding that 'it [had] not
been established (paragraph 34 of the contested decision) that the system of
internal rates satisfied the first two conditions in Article 85(3).
- 208.
- As for FNK's recommended rates, the applicants have claimed in the procedure
before the Court that such a system increases market transparency. Users, that is
to say their members' clients, benefit from that transparency, which simplifies the
comparisons which they may make between competing offers. The applicants
consider that the two other conditions in Article 85(3) are also satisfied, since the
restrictions of competition are indispensable to the attainment of those objectives
and a substantial part of competition is not eliminated.
- 209.
- Although FNK did not seek in its notification to justify the grant of an exemption
by claiming that the transparency of the market was improved, the applicants
nevertheless used that argument in the administrative procedure, and particularly
in their reply to the statement of objections of 21 October 1994 (paragraph 28 of
that reply).
- 210.
- An increase in market transparency is in fact inherent in any system of
recommended rates set and published by an association which represents a
significant proportion of undertakings operating in a given market. Accordingly,
demonstrating an increase in market transparency linked to a system of
recommended rates is not sufficient proof that the first condition in Article 85(3)
is satisfied. Besides, the applicants' line of argument and the Commission's
assessment of the recommended rates in paragraph 34 of the contested decision
operate on different planes. The Commission never contended that the system of
recommended rates did not increase the transparency of the market. It merelyconsidered that 'irrespective of the alleged aim of increasing transparency on the
market, the first two conditions in Article 85(3) were not satisfied. In the
contested decision, it rightly considered that FNK's members were obliged to
adhere to the recommended rates (see paragraphs 159 to 164 above) because those
rates gave substance to the concept of the reasonable rate which FNK's members
were required to charge under Article 3(b) of its internal rules (paragraph 20 of the
contested decision). In addition, it is not disputed that those rates were indeed
higher than the market rates (paragraph 34 of the contested decision and
paragraph 18 of FNK's notification).
- 211.
- The Commission, therefore, after finding that FNK's rates were mandatory and,
moreover, higher than market prices, held in paragraph 34 of the contested
decision that even if the system increased transparency a point on which it did
not have to rule the possible advantages of the system, namely the increased
transparency of the market, could not outweigh the harm to competition associated
with mandatory prices and, in particular, the unquestionable disadvantage resulting
from the system's object of increasing prices in relation to market prices.
Accordingly, the applicants, who in their application stated merely that the
advantage of the system of recommended rates was that it increased the
transparency of the market, have not demonstrated that the Commission committed
a manifest error of assessment in finding that, 'irrespective of the alleged aim of
increasing transparency (paragraph 34 of the contested decision), the first two
conditions in Article 85 of the Treaty were not satisfied.
- 212.
- It follows from the above that the third plea, that Article 85(3) of the Treaty was
infringed, must be rejected in its entirety.
The fourth plea: infringement of the rights of the defence
Summary of the arguments of the parties
- 213.
- There are three parts to this plea.
- 214.
- In the first part, the applicants submit that the Commission failed to comply with
the requirement imposed by Article 6 of the European Convention on Human
Rights to come to a decision within a reasonable time. They submit that the
Commission deliberately caused the administrative procedure to last a long time,
since it has acknowledged that it did not regard the case as a priority because it
was also pending before the Netherlands court and because the infringements had
ceased once the Arrondissementsrechtbank, Utrecht, made its order of
11 February 1992. That state of affairs changed only after delivery by the
Gerechtshof, Amsterdam, of the judgment of 9 July 1992 which allowed SCK to
reintroduce the prohibition on hiring. The applicants also point out that, in the
course of the administrative procedure, the Commission sent them two statements
of objections. The second statement, served 22 months after the first, did not
contain any change in the Commission's assessment of the facts and the application
of the law to those facts. Such slowness in the decision-making process, when the
applicants had emphasized the urgency of the matter in October 1994 by waiving
their right to a hearing, constitutes a serious abuse of procedure.
- 215.
- In the second part of the plea the applicants submit that the Commission infringed
the same article of the European Convention on Human Rights by adopting a
decision under Article 15(6) of Regulation No 17 without an oral hearing.
- 216.
- Finally, in the third part of the plea, they submit that the Commission infringed
their rights of defence by refusing to let them examine the file (see paragraph 24
above). The Commission cannot claim that they waived their right of access to the
file because they failed to invoke it before replying to the statement of objections
(see the 12th Report on Competition Policy). Furthermore, the position taken by
the Commission is unreasonable, because it deprives the party concerned of the
opportunity to prepare his defence to best advantage when the Commission's
decision is reviewed by the Court, without it being clear what interest of the
Commission is served by this. Finally, the applicants do not seek access only to the
'file but also to the internal memoranda exchanged in this case by DG III and
DG IV from 18 November 1993 to 27 September 1994 (see paragraph 28 above).
Although, in principle, such memoranda are not open to inspection, the applicants
claim that an exception is justified, because those memoranda could help to
establish whether there has been a misuse of powers in this case (Opinion of Judge
Vesterdorf acting as Advocate General in Case T-1/89 Rhône-Poulenc v
Commission [1991] ECR II-867, at p. II-891).
- 217.
- In responding to the first part of the plea, the Commission refers to its defence in
Case T-213/95. As regards the second part of the plea, its response is that, since
there is no legislation requiring the undertakings or associations concerned to be
given an oral hearing and there were no specific circumstances which meant that
in this case the rights of the defence could in fact be safeguarded only by a hearing,
it was not in any way required to seek the applicants' views at a hearing, having
previously sought them in writing. As for the third part of the plea, it points out
that, according to the case-law, the purpose of providing access to the file in
competition cases is to enable the addressees of statements of objections to
examine evidence in the Commission's file so that they are in a position effectively
to express their views on the conclusions reached by the Commission in its
statement of objections on the basis of that evidence (see Case T-30/91 Solvay v
Commission [1995] ECR II-1775, paragraph 59). Since the applicants did not take
advantage of the opportunity to examine the Commission's file after service of the
statement of objections, there is no longer any reason to let them see the file at a
subsequent stage in the procedure, and certainly not after the adoption of the
contested decision.
Findings of the Court
- 218.
- The applicants have already put forward, in Case T-213/95, the first part of this
plea, alleging a failure to comply with the requirement imposed by Article 6 of the
European Convention on Human Rights to come to a decision within a reasonable
time. That part of the plea must be rejected for the reasons set out in
paragraphs 53 to 70 above.
- 219.
- As for the second part, to the effect that the applicants should have been given a
hearing before the Commission adopted its decision of 13 April 1994 under
Article 15(6) of Regulation No 17, it should be noted that even if Community law
had required the Commission to give the parties concerned an oral hearing before
the adoption of such a decision, the failure to comply with that obligation would
have affected the legality of the Commission's decision of 13 April 1994 only, and
not that of the contested decision, that being the only measure whose legality is
under review in this case. It is not disputed that, in their reply to the statement of
objections of 21 October 1994, the applicants waived their right to a hearing before
the adoption of the contested decision. The second part of the plea must also
therefore be rejected.
- 220.
- As regards the final part of the plea, to the effect that the Commission refused the
applicants access to the file, it will be observed that they did not request access
until after the contested decision had been adopted. Consequently, the legality of
the contested decision cannot in any circumstances be affected by the Commission's
refusal to grant the requested access (see Case T-145/89 Baustahlgewebe v
Commission [1995] ECR II-987, paragraph 30). Moreover, the applicants have not
adduced any evidence to show that the file might contain information exonerating
them. Nor have they contended that they have not had access to all the
documentary evidence against them. They likewise do not claim, with regard to the
exchange of views between DG III and DG IV, that those internal memoranda,
which in principle are not available to third parties (Case T-7/89 Hercules
Chemicals v Commission [1991] ECR II-1711, paragraph 54, and Case C-310/93 P
BPB Industries and British Gypsum v Commission [1995] ECR I-865, paragraph 25),
could exonerate them. They contend that those memoranda could help to establish
whether there was a misuse of powers in this case. In their application, they did
not even think it necessary to set out a plea based on misuse of powers in order
to prove that the contested decision was unlawful.
- 221.
- Accordingly, the third part of the plea must also be rejected.
- 222.
- For the same reasons, the applicants' request of 9 July 1996 for measures of inquiry
or measures of organization of procedure to be adopted (see paragraph 28 above)
cannot be granted.
- 223.
- It follows that the fourth plea, that the rights of the defence were infringed, must
be rejected in its entirety.
The fifth plea: infringement of Article 190 of the Treaty
Summary of the arguments of the parties
- 224.
- The applicants contend that the Commission infringed Article 190 of the Treaty.
In this case, it was under a duty to give a fuller statement of reasons because it was
faced for the first time with the question whether a certification system complied
with the Community rules on competition. It also failed to take account of the
comments made by the applicants in the course of the administrative procedure.
The applicants consider in particular that the Commission's reasoning was
inadequate on the following points: the classification of SCK as an undertaking
within the meaning of Article 85(1) of the Treaty and the finding that the practices
of SCK and FNK which were under investigation restricted competition and
affected trade between Member States.
- 225.
- The Commission has not responded specifically to this plea.
Findings of the Court
- 226.
- According to settled case-law, the purpose of the statement of the reasons on which
an individual decision is based is to give the person concerned sufficient
information to enable it to ascertain whether the decision is well founded or
whether it is vitiated by a defect which may permit its legality to be contested, and
to enable the Community judicature to carry out its review of the legality of the
decision. The extent of that obligation depends on the nature of the measure in
question and on the context in which it was adopted (see, in particular, Case
C-350/88 Delacre and Others v Commission [1990] ECR I-395, paragraph 15, and
Case T-504/93 Tiercé Ladbroke v Commission [1997] ECR II-923, paragraph 149).
Accordingly, the Commission must explain its reasoning when it adopts a decision
which goes appreciably further than its previous decisions (Case 73/74 Papier Peints
v Commission [1975] ECR 1491, paragraph 31).
- 227.
- As regards, first, the alleged need for a fuller statement of reasons in this case, it
must be stated that although the Commission ruled, in the operative part of the
contested decision, only on the prohibition on hiring and the system of
recommended and internal rates, it nevertheless set out the criteria to be met by
a certification system openness, independence, transparency and acceptance of
equivalent guarantees offered by other systems in order for it to be regarded as
compatible with Article 85(1) of the Treaty (paragraph 23 of the contested
decision). The applicants cannot claim in relation to the infringements referred to
in the operative part of the contested decision (the prohibition on hiring and the
system of recommended and internal rates) that the decision goes appreciably
further than the Commission's previous decisions. In any event, the Commission
explained in detail in the contested decision why the system of recommended and
internal rates and the prohibition on hiring constituted infringements of
Article 85(1) of the Treaty (paragraphs 20 to 31 of the contested decision) and why
those practices could not be exempted under Article 85(3) (paragraphs 32 to 39).
It also gave sufficient explanation of the reasons for which it considered SCK to be
an undertaking within the meaning of Article 85(1) (paragraph 17).
- 228.
- As to the argument that the Commission should have taken account of the
comments made by the applicants in the course of the administrative procedure,
it should be pointed out that, although the Commission is required under
Article 190 of the Treaty to set out the circumstances justifying the adoption of a
decision and the legal considerations which led it to adopt that decision, that
provision does not require it to discuss all the matters of fact and of law which
were raised during the administrative procedure (BAT and Reynolds v Commission,
cited above, paragraph 72, and Tiercé Ladbroke v Commission, cited above,
paragraph 150). In addition, it is not apparent from any document in the case that
the Commission failed to take account of a fundamental matter which had been
raised during the administrative procedure (see Publishers Association v
Commission, cited above, paragraphs 41 and 42).
- 229.
- Accordingly, the plea that Article 190 of the Treaty was infringed is unfounded.
- 230.
- It follows from all of the above that the claim for annulment of the contested
decision must be rejected.
3. Subsidiary claims for annulment or reduction of the fines
- 231.
- The applicants put forward three pleas in support of their subsidiary claims for
annulment or reduction of the fines. The first alleges infringement of Article 15(2)
of Regulation No 17, the second breach of the principle of proportionality and the
third infringement of Article 190 of the Treaty.
The first plea: infringement of Article 15(2) of Regulation No 17
Summary of the arguments of the parties
- 232.
- The applicants submit that the imposition of fines was not justified. In their view
the finding in paragraph 44 of the contested decision that 'FNK and SCK cannot
have been unaware of the fact that the offending behaviour served to restrict
competition, or at any rate has that effect is incorrect.
- 233.
- SCK cannot be deemed to be aware of the object or, at any rate, the
anticompetitive effect of the prohibition on hiring because, first, the Raad voor de
Certificatie recognized that that prohibition constituted the only means of
preserving the coherence of the certification system and, secondly, the Commission
itself recognized, in its defence in Case T-213/95, the complexity of that case, both
conceptually and in terms of competition policy. In any event, the Commission has
accepted previously that the fact that it has never before ruled on a particular type
of infringement is a sufficient reason for not imposing fines (Decision 88/501/EEC
of 26 July 1988 relating to a proceeding under Articles 85 and 86 of the EEC
Treaty (IV/31.043 Tetra Pak I (BTG licence)) (OJ 1988 L 272, p. 27)).
- 234.
- As regards FNK's recommended rates, the applicants refer to Article 5 of
Commission Regulation (EEC) No 4087/88 of 30 November 1988 on the
application of Article 85(3) of the Treaty to categories of franchise agreements (OJ
1988 L 359, p. 46), to Article 1(1) of Council Regulation (EEC) No 1534/91 of
31 May 1991 on the application of Article 85(3) of the Treaty to certain categories
of agreements, decisions and concerted practices in the insurance sector (OJ 1991
L 143, p. 1) and to the judgment of the Court of Justice in Case 161/84 Pronuptia
[1986] ECR 353, according to which merely applying recommended rates, which are
not mandatory in nature, was not to be regarded as contrary to Community law.
In so far as FNK may be held responsible for the formulation of the internal rates,
it could reasonably have been unaware that that practice constituted an
infringement of Article 85(1) of the Treaty, since the Commission had already
approved, on two occasions, identical internal rates arrangements in the banking
sector (Decision 87/103 and Commission Decision 89/512/EEC of 19 July 1989
relating to a proceeding under Article 85 of the EEC Treaty (IV/31.499 Dutch
banks) (OJ 1989 L 253, p. 1)).
- 235.
- The Commission points out that, according to settled case-law, it is not necessary
for an undertaking to have been aware that it was infringing Article 85 for an
infringement to be regarded as having been committed intentionally. It is sufficient
that it could not have been unaware that the contested conduct had as its object
the restriction of competition (Case 246/86 Belasco and Others v Commission [1989]
ECR 2117, paragraph 41). Such a situation arose in the applicants' case. FNK
cannot rely on the judgment in Pronuptia, on Regulations No 4087/88 or
No 1534/91 or on the previous decisions of the Commission in the banking sector,
because they concerned optional charging arrangements whereas, in this case, the
recommended and internal rates were mandatory and applied to clients.
Findings of the Court
- 236.
- According to settled case-law, the infringements of competition law which are liable
to be sanctioned are those which are committed deliberately or negligently and it
is sufficient for this that the party committing the act in question must have known
that its conduct would result in a restriction of competition (see Case T-43/92
Dunlop Slazenger v Commission [1994] ECR II-441, paragraph 142, and the case-law cited).
- 237.
- SCK's arguments to the effect that it was unaware that the prohibition on hiring
constituted a restriction of competition cannot be accepted. First, there is no
document on the file in which the Raad voor de Certificatie stated that the
prohibition on hiring constituted the only means of complying with the condition
as to the coherence of the certification system in Paragraph 2.5 of its accreditation
criteria. Its final report of 22 April 1992, to which the applicants refer, merely
states that SCK no longer complies with that paragraph, having withdrawn the
prohibition on hiring following the interim order by the national court without
providing for an alternative solution ('SCK, acting on the court's decision, revoked
the provision in question (prohibition on hiring), but does not yet have another
provision to meet the underlying objective, namely that when use is made of other
firms' cranes, there is no doubt that those cranes will also meet the conditions.
SCK is thus in breach of the condition set out in Paragraph 2.5 of the accreditation
criteria).
- 238.
- Nor, secondly, does the Commission's recognition of the complexity of the case
constitute a justification for SCK's 'unawareness. It is in fact inconceivable that
SCK could have considered that the prohibition on hiring, which limits the
contractual freedom of certified firms and affects the position of uncertified firms,
was not liable to result in a restriction of competition in the market and to pose
problems with regard to Community competition law.
- 239.
- Thirdly, the decision by the Commission not to impose a fine in Decision 88/501
because of the relatively novel nature of the infringements found does not grant
'immunity to undertakings committing infringements which have not previously
been penalized by the Commission. The Commission exercises its discretion in the
specific context of each case when deciding whether it is appropriate to impose a
fine in order to sanction the infringement found and to protect the effectiveness of
competition law. In that regard, the applicants must have been aware of the
anticompetitive effects of a prohibition on hiring within a certification system which
was not open and made no provision for the acceptance of equivalent guarantees
offered by other systems.
- 240.
- As regards FNK, the system of recommended and internal rates was mandatory in
nature (see paragraphs 159 to 164 above) and was concerned not only with
relations between FNK members (internal rates) but also with relations between
them and clients (recommended rates). Those features make this case
fundamentally different from the situations analysed in Pronuptia, in Regulation
No 4087/88, in Regulation No 1534/91 as applied by Regulation No 3932/92 and
in the Commission's previous decisions in the banking sector, to which the
applicants refer (see paragraph 234 above). Furthermore, the system of
recommended and internal rates was intended to increase market prices (see
paragraphs 163 and 164 above). FNK must, therefore, have been aware that its
system of recommended and internal rates was going to result in a restriction of
competition.
- 241.
- It follows that the first plea must be rejected.
The second plea: breach of the principle of proportionality
Summary of the arguments of the parties
- 242.
- The applicants submit that the factors specified by the Commission in paragraph 45
of the contested decision for the purpose of determining the amount of the fines
are inappropriate. First, the amount of the fine is not proportionate to the alleged
disturbance of the common crane-hire market. Next, the Commission incorrectly
assumes that there are close links between SCK and FNK, which, taken together,
account for only 40% of the firms operating in the market and therefore do not
occupy an important part of the crane-hire market. Finally, FNK voluntarily
maintained the status quo which had resulted from compliance with the order of
11 February 1992, despite its being set aside on appeal on 9 July 1992. Such an
attitude, which would have provided grounds for not imposing any fine
(Commission Decision 79/934/EEC of 5 September 1979 relating to a proceeding
under Article 85 of the EEC Treaty (IV/29.021 BP Kemi DSDF) (OJ 1979 L
286, p. 32)), is in any event sufficient reason for the fine to be substantially
reduced.
- 243.
- Furthermore, the fines are excessive, because FNK and SCK do not possess the
financial means to pay them. In the case of SCK, the short duration of the
infringement (Commission Decision 75/75/EEC of 19 December 1974 relating to
a proceeding under Article 86 of the EEC Treaty (IV/28.851 General Motors
Continental) (OJ 1975 L 29, p. 14)) and the fact that the Commission had never
precisely determined the application of the competition rules to certification
systems (Case C-62/86 AKZO v Commission [1991] ECR I-3359, paragraph 163) are
mitigating circumstances justifying a reduction in the fine imposed. In the case of
FNK, the Commission was not entitled to take account of the turnover of its
members when setting the fine, because the contested decision was addressed to
the association and not to its individual members. Finally, the fact that, in the
administrative procedure, the Commission took more than a reasonable time to
adopt a decision, contrary to Article 6 of the European Convention on Human
Rights, should result in a reduction in the fines imposed.
- 244.
- In their observations on the statement in intervention, the applicants also refer to
Commission Decision 96/438/EC of 5 June 1996 relating to a proceeding pursuant
to Article 85 of the EC Treaty (IV/34.983 Fenex) (OJ 1996 L 181, p. 28) in which
the Commission imposed a fine of only ECU 1 000 for an infringement with
features comparable to those of the infringement allegedly committed by FNK.
- 245.
- The Commission responds by stating that the applicants cannot claim that a
disturbance of the Community market did not take place. The two applicants,
taken together, occupy an important part of the Netherlands market. Next, the
system of recommended and internal rates had existed for more than ten years
when FNK ended it following the interim order of the President of the
Arrondissementsrechtbank, Utrecht, of 11 February 1992. The fines are not
excessive because the turnover of the applicants' respective members amounts to
more than ECU 200 million. Account is taken of the relatively short duration of
the infringement in the case of SCK. Finally, no infringement of Article 6 of the
European Convention of Human Rights was committed.
Findings of the Court
- 246.
- According to settled case-law, the amount of a fine must be fixed at a level which
takes account of the circumstances and the gravity of the infringement and, in order
to fix its amount, the gravity of the infringement is to be appraised by taking into
account in particular the nature of the restrictions on competition (Case T-77/92
Parker Pen v Commission [1994] ECR II-549, paragraph 92).
- 247.
- In paragraph 45 of the contested decision, the Commission assessed the gravity of
the infringements for the purpose of fixing the amount of the fines to be imposed
on the applicants. It noted first that FNK's system of rates and SCK's prohibition
on hiring 'artificially control or restrict the Netherlands crane-hire market and thus
distort the Community market in crane hire. It then took account of the fact that
the applicants, 'which are linked closely to each other, comprise a great many
undertakings which occupy together an important part of the crane-hire market
and that 'the restrictions were dropped only after a court order to that effect.
- 248.
- Since there can be no doubt as to the appropriateness of those criteria for assessing
the gravity of the infringements, it is necessary to consider whether the
corresponding findings are substantively correct.
- 249.
- As already stated, SCK's prohibition on hiring and FNK's system of recommended
and internal rates infringed Article 85(1) of the Treaty. The prohibition on hiring,
which was associated with a certification system that was not completely open and
did not provide for the acceptance of equivalent guarantees offered by other
systems, restricted the competitive opportunities of uncertified firms, in particular
firms from outside the Netherlands. In addition, FNK's system of rates
substantially restricted competition between its members. The practices of FNK
and SCK at issue thus considerably disturbed the common market in crane-hire.
As regards the links between FNK and SCK, they themselves state in their
application 'that FNK has roughly the same number of members as SCK and that
they are largely the same firms. The Commission did not err either by finding
that FNK's members and the firms certified by SCK constituted an important part
of the mobile crane-hire market. It considered that FNK and SCK accounted for
78% or 51% of the Netherlands crane-hire market (paragraph 6 of the contested
decision). The figure of 51% had, moreover, been put forward by the applicants
themselves during the administrative procedure. In paragraph 26 of their reply to
the statement of objections of 21 October 1994, the applicants, disputing the figure
of 75% put forward by the Commission, stated that FNK's members together held,
on 31 December 1993, 1 544 mobile cranes out of a total of approximately 3 000
in the hire sector, that is to say a market share of 51%. The applicants' argument
that FNK and SCK, which group together essentially the same firms, hold 'only
40% of the Netherlands crane-hire market must therefore be rejected. In any
event a market share of 40% constitutes an important part of the Netherlands
crane-hire market. Next, FNK cannot secure the annulment of the fine or a
reduction in its amount by claiming that it maintained the situation resulting from
compliance with the order of 11 February 1992, even though that order was set
aside on appeal on 9 July 1992. Since the fine covered the period up to
6 February 1992 only (paragraph 46 of the contested decision), the fact that FNK
did not apply its system of recommended and internal rates after 11 February 1992
is in fact irrelevant when assessing the gravity of an infringement in the period prior
to 6 February 1992.
- 250.
- It will be recalled that the plea regarding infringement of Article 6(1) of the
European Convention of Human Rights is not well founded (see paragraphs 53 to
70 above). Accordingly, the argument that the fines should be reduced on the basis
of the alleged breach of the principle that action must be taken within a reasonable
time cannot itself be accepted.
- 251.
- Nor can the applicants use Decision 96/348 as an argument. It is clear from that
decision that the rates proposed by Fenex were no more than guidelines. What
was concerned was not, therefore, a system of rates which, such as the one in point
in this case, was binding on members of the association by virtue of an obligation
to adhere to reasonable rates (see paragraphs 159 to 164 above). Furthermore, it
is not disputed that, unlike FNK (interim order of 11 February 1992 made by the
President of the Arrondissementsrechtbank, Utrecht; see paragraph 8 above),
Fenex was not required by a national court or other public authority to end its
practice of circulating rates. Moreover, Fenex had already voluntarily stopped
circulating recommended rates before the Commission decided, on its own initiative
and not following a complaint, to initiate a proceeding against it.
- 252.
- As for the argument that the amount of the fines offends against the principle of
proportionality in the light of the applicants' financial means, the use of the general
term 'infringement in Article 15(2) of Regulation No 17, inasmuch as it covers
without distinction agreements, concerted practices and decisions of associations of
undertakings, indicates that the upper limits for fines laid down in that provision
apply in the same way to agreements and concerted practices as to decisions of
associations of undertakings. It follows that the upper limit of 10% of turnover
must be calculated by reference to the turnover of each of the undertakings which
are parties to those agreements and concerted practices or of the undertakings, as
a whole, which were members of the said associations of undertakings, at least
where, by virtue of its internal rules, the association is able to bind its members.
The correctness of this view is borne out by the fact that the influence which an
association of undertakings has been able to exert on the market does not depend
on its own 'turnover, which discloses neither its size nor its economic power, but
rather on the turnover of its members, which constitutes an indication of its size
and economic power (judgments in CB and Europay v Commission, cited above,
paragraphs 136 and 137, and in SPO and Others v Commission, cited above,
paragraph 385).
- 253.
- In this case, it is not disputed that FNK is an association of undertakings
(paragraph 8 of FNK's notification). Moreover, under Article 6 of its statutes it
can bind its members. The applicants therefore cannot claim that the Commission
was not entitled to take account of the turnover of FNK's members when it fixed
the amount of the fine to be imposed on that association.
- 254.
- As for the fine imposed on SCK, however, the Commission correctly characterized
SCK as an undertaking in the contested decision (paragraph 17) and not as an
association of undertakings. It was accordingly not entitled to take account of the
turnover of the certified firms to justify the amount of the fine. SCK's annual
accounts for 1994 show a turnover of HFL 608 231, which is the equivalent of
approximately ECU 288 750. Although the Commission complied with the upper
limit in Article 15(2)(a) of Regulation No 17, it is apparent that the fine of
ECU 300 000 imposed on SCK, which exceeds its total turnover in the year
preceding the adoption of the contested decision, is disproportionate.
- 255.
- The Court, in the exercise of its unlimited jurisdiction, accordingly considers that
it is appropriate to reduce the amount of that fine to ECU 100 000.
The third plea: infringement of Article 190 of the Treaty
Summary of the arguments of the parties
- 256.
- The applicants submit that the Commission's reasoning in support of the amount
of the fines is incomplete (Case 45/69 Boehringer Mannheim v Commission [1970]
ECR 769, point 53, Joined Cases 40/73 to 48/73, 50/73, 54/73, 55/73, 56/73, 111/73,
113/73 and 114/73 Suiker Unie and Others v Commission [1975] ECR 1663,
paragraph 612, and Joined Cases 100/80, 101/80, 102/80 and 103/80 Musique
Diffusion Française and Others v Commission [1983] ECR 1825, paragraph 120).
- 257.
- The Commission relies on paragraphs 45 and 46 of the contested decision.
Findings of the Court
- 258.
- The purpose of the obligation to state the reasons on which a decision adversely
affecting a person is based is to provide him with the necessary information so that
he may establish whether it is well founded and to enable the Community
judicature to carry out its review of the legality of the decision (see the case-law
cited at paragraph 226 above and Case T-150/89 Martinelli v Commission [1995]
ECR II-1165, paragraph 65).
- 259.
- In paragraph 44 of the contested decision the Commission found that the
applicants could not have been unaware of the fact that the offending behaviour
had served to restrict competition, or at any rate had that effect. In paragraphs 45
and 46 respectively, it appraised the gravity and the duration of the infringements
for the purpose of fixing the amount of the fines to be imposed on the applicants.
The latter two paragraphs provided the applicants with the information which they
needed in order to establish whether or not the fines imposed on them were well
founded and enabled the Court to carry out its review as to legality.
- 260.
- The third plea therefore cannot be upheld.
- 261.
- It follows from all the foregoing considerations that the claims for annulment of the
fines must be rejected and that the fine imposed on SCK must be reduced.
Costs
- 262.
- Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be
ordered to pay the costs if they have been applied for in the successful party's
pleadings. However, Article 87(3) provides that the Court may order that costs be
shared or that the parties bear their own costs if each party succeeds on some and
fails on other heads. In this case, the applicants have been unsuccessful on all their
heads of claim in Case T-213/95 and on their main heads of claim and on the
essential aspects of their subsidiary heads of claim in Case T-18/96. It is
accordingly not appropriate to apply Article 87(3) of the Rules of Procedure. The
applicants must therefore be ordered to pay the defendant's costs, including those
relating to the proceedings for interim measures. They must also be ordered to pay
the interveners' costs.
On those grounds,
THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended
Composition)
hereby:
1. Joins Cases T-213/95 and T-18/96 for the purposes of the judgment;
2. Reduces to ECU 100 000 the fine imposed on the Stichting Certificatie
Kraanverhuurbedrijf by Article 5(2) of Commission Decision 95/551/EC of
29 November 1995 relating to a proceeding pursuant to Article 85 of the EC
Treaty (IV/34.179, 34.202, 216 Stichting Certificatie Kraanverhuurbedrijf
and the Federatie van Nederlandse Kraanverhuurbedrijven);
3. For the rest, dismisses the applications;
4. Orders the applicants to bear their own costs and to pay the costs incurred
by the Commission, including those relating to the proceedings for interim
measures, and the interveners' costs.
Lenaerts Lindh
Azizi
Cooke Jaeger
|
Delivered in open court in Luxembourg on 22 October 1997.
H. Jung
P. Lindh
Registrar
President
Table of Contents
Background and procedure
II - 3
Forms of order sought
II - 8
The action for damages (Case T-213/95)
II - 9
1. The allegedly unlawful conduct of the Commission
II - 10
The first plea: infringement of Article 6 of the European Convention on Human
Rights
II - 10
Summary of the arguments of the parties
II - 10
Findings of the Court
II - 12
The second plea: breach of the principle of legal certainty
II - 17
Summary of the arguments of the parties
II - 17
Findings of the Court
II - 17
The third plea: breach of the principle of the protection of legitimate
expectations
II - 18
Summary of the arguments of the parties
II - 18
Findings of the Court
II - 18
The fourth plea: breach of the audi alteram partem rule
II - 19
Summary of the arguments of the parties
II - 19
Findings of the Court
II - 20
2. Causal link
II - 21
Summary of the arguments of the parties
II - 21
Findings of the Court
II - 21
The action for a declaration that the contested decision is non-existent or for its annulment
(Case T-18/96)
II - 22
1. Claim for a declaration that the contested decision is non-existent
II - 22
Summary of the arguments of the parties
II - 22
Findings of the Court
II - 23
2. Claim for annulment of the contested decision
II - 24
The first plea: infringement of Articles 3, 4, 6 and 9 of Regulation No 17
II - 24
Summary of the arguments of the parties
II - 25
Findings of the Court
II - 25
The second plea: infringement of Article 85(1) of the Treaty
II - 25
The first part of the plea, to the effect that SCK was mistakenly classified as
an undertaking within the meaning of Article 85(1) of the Treaty
II - 26
Summary of the arguments of the parties
II - 26
Findings of the Court
II - 26
The second part of the plea, alleging that the Commission, first, erred in law
with regard to the reference to the criteria of transparency, openness,
independence and acceptance of equivalent guarantees offered by other
systems in assessing whether a certification system is compatible with
Article 85(1) of the Treaty and, secondly, erred in its assessment when
it found that the prohibition on hiring had as its object or effect therestriction of competition within the meaning of Article 85(1)
II - 27
Summary of the arguments of the parties
II - 27
Findings of the Court
II - 29
The third part of the plea, alleging that the Commission committed an error
of assessment in finding that the system of recommended and internal
rates had as its object or effect the restriction of competition within the
meaning of Article 85(1) of the Treaty
II - 34
Summary of the arguments of the parties
II - 34
Findings of the Court
II - 35
(a) The system of recommended and internal rates
II - 36
(b) FNK's responsibility in the setting of internal rates
II - 38
The fourth part of the plea, alleging that the Commission erred in its
assessment of the effect on trade between Member States
II - 39
Summary of the arguments of the parties
II - 40
Findings of the Court
II - 40
The third plea: infringement of Article 85(3) of the Treaty
II - 42
Summary of the arguments of the parties
II - 42
Refusal by the Commission to exempt SCK's prohibition on hiring
II - 42
Refusal by the Commission to exempt the system of recommended and
internal rates
II - 43
Findings of the Court
II - 44
Refusal by the Commission to exempt SCK's prohibition on hiring
II - 44
Refusal by the Commission to exempt the system of recommended and
internal rates
II - 48
The fourth plea: infringement of the rights of the defence
II - 50
Summary of the arguments of the parties
II - 50
Findings of the Court
II - 51
The fifth plea: infringement of Article 190 of the Treaty
II - 52
Summary of the arguments of the parties
II - 52
Findings of the Court
II - 53
3. Subsidiary claims for annulment or reduction of the fines
II - 54
The first plea: infringement of Article 15(2) of Regulation No 17
II - 54
Summary of the arguments of the parties
II - 54
Findings of the Court
II - 55
The second plea: breach of the principle of proportionality
II - 56
Summary of the arguments of the parties
II - 56
Findings of the Court
II - 57
The third plea: infringement of Article 190 of the Treaty
II - 60
Summary of the arguments of the parties
II - 60
Findings of the Court
II - 60