Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords

1 . COMPETITION - DOMINANT POSITION - MARKET IN QUESTION - MARKET FOR SPARE PARTS - DEFINITION

( EEC TREATY , ART . 86 )

2 . COMPETITION - DOMINANT POSITION - CONCEPT

( EEC TREATY , ART . 86 )

3 . COMPETITION - AGREEMENTS AND DOMINANT POSITION - EFFECTS ON TRADE BETWEEN MEMBER STATES - CONDITION FOR THE APPLICATION OF COMMUNITY RULES

( EEC TREATY , ARTS . 85 AND 86 )

4 . COMPETITION - DOMINANT POSITION - ABUSE - EFFECTS ON TRADE BETWEEN MEMBER STATES - CONDITION - ACTUAL OR POTENTIAL EXISTENCE OF NORMAL PATTERN OF TRADE BETWEEN THE MEMBER STATES

( EEC TREATY , ART . 86 )

Summary

1 . TO DETERMINE WHETHER AN UNDERTAKING OCCUPIES A DOMINANT POSITION IT IS NECESSARY FIRST TO DETERMINE THE RELEVANT MARKET . AS REGARDS THE SUPPLY OF SPARE PARTS IT IS NECESSARY TO ASCERTAIN , TO THAT END , WHETHER SUCH SUPPLY CONSTITUTES A SPECIFIC MARKET OR WHETHER IT FORMS PART OF A WIDER MARKET . TO ANSWER THAT QUESTION IT IS NECESSARY TO DETERMINE THE CATEGORY OF CLIENTS WHO REQUIRE SUCH PARTS .

2 . THE MANUFACTURER OF A PRODUCT OCCUPIES A DOMINANT POSITION WHEN IT IS IN A POSITION WHICH ENABLES IT TO DETERMINE ITS CONDUCT WITHOUT TAKING ACCOUNT OF COMPETING SOURCES OF SUPPLY .

3 . THE INTERPRETATION AND APPLICATION OF THE CONDITION RELATING TO EFFECTS ON TRADE BETWEEN MEMBER STATES CONTAINED IN ARTICLES 85 AND 86 OF THE TREATY MUST BE BASED ON THE PURPOSE OF THAT CONDITION WHICH IS TO DEFINE , IN THE CONTEXT OF THE LAW GOVERNING COMPETITION , THE BOUNDARY BETWEEN THE AREAS RESPECTIVELY COVERED BY COMMUNITY LAW AND THE LAW OF THE MEMBER STATES . THUS COMMUNITY LAW COVERS ANY AGREEMENT OR ANY PRACTICE WHICH IS CAPABLE OF CONSTITUTING A THREAT TO FREEDOM OF TRADE BETWEEN MEMBER STATES IN A MANNER WHICH MIGHT HARM THE ATTAINMENT OF THE OBJECTIVES OF A SINGLE MARKET BETWEEN THE MEMBER STATES , IN PARTICULAR BY PARTITIONING THE NATIONAL MARKETS OR BY AFFECTING THE STRUCTURE OF COMPETITION WITHIN THE COMMON MARKET . ON THE OTHER HAND CONDUCT THE EFFECTS OF WHICH ARE CONFINED TO THE TERRITORY OF A SINGLE MEMBER STATE IS GOVERNED BY THE NATIONAL LEGAL ORDER .

4 . IF THE RESTRICTIVE SALES POLICY OF A PRODUCER PREVENTS A POTENTIAL CLIENT , ESTABLISHED IN THE SAME MEMBER STATE , FROM SATISFYING ITS SPARE PARTS REQUIREMENTS THROUGH NORMAL COMMERCIAL CHANNELS , THAT IS TO SAY ON THE NATIONAL MARKET , AND IT IS THUS INDUCED TO ATTEMPT TO OBTAIN THE PRODUCT IN QUESTION IN THE OTHER MEMBER STATES , THOSE ATTEMPTS CANNOT BE REGARDED AS AN INDICATION OF THE EXISTENCE , WHETHER ACTUAL OR POTENTIAL , OF A NORMAL PATTERN OF TRADE BETWEEN THE MEMBER STATES IN THE PRODUCT . IN THOSE CIRCUMSTANCES THE PRODUCER ' S CONDUCT IS NOT CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES WITHIN THE MEANING OF ARTICLE 86 OF THE TREATY .

Parties

IN CASE 22/78

1 . HUGIN KASSAREGISTER AB , STOCKHOLM ,

2 . HUGIN CASH REGISTERS LTD , LONDON ,

REPRESENTED BY WALTER VAN GERVEN AND ( FOR THE WRITTEN PROCEDURE ) JEAN-FRANCOIS BELLIS , OF THE BRUSSELS BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF MESSRS ELVINGER AND HOSS , 84 GRAND-RUE ,

APPLICANTS ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY ITS LEGAL ADVISER , JOHN TEMPLE LANG , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER , MARIO CERVINO , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

Subject of the case

APPLICATION FOR THE ANNULMENT OF COMMISSION DECISION NO 78/68/EEC OF 8 DECEMBER 1977 RELATING TO A PROCEEDING UNDER ARTICLE 86 OF THE EEC TREATY ( IV/29.132 HUGIN/LIPTONS ) ( OFFICIAL JOURNAL , L 22 OF 27 JANUARY 1978 , P . 23 ),

Grounds

1BY AN APPLICATION LODGED ON 24 FEBRUARY 1978 THE SWEDISH COMPANY HUGIN KASSAREGISTER AB AND ITS BRITISH SUBSIDIARY HUGIN CASH REGISTERS LTD ., HEREINAFTER REFERRED TO JOINTLY AS ' ' HUGIN ' ' , SEEK PRIMARILY , THE ANNULMENT OF THE COMMISSION DECISION OF 8 DECEMBER 1977 RELATING TO A PROCEEDING UNDER ARTICLE 86 OF THE EEC TREATY ( OFFICIAL JOURNAL , L 22 OF 27 JANUARY 1978 , PP . 23 TO 35 ). IN THE ALTERNATIVE THEY SEEK THE CANCELLATION OR REDUCTION OF THE FINE IMPOSED ON THE TWO COMPANIES JOINTLY BY THAT DECISION .

2ARTICLE 1 OF THAT DECISION STATES THAT HUGIN HAS INFRINGED ARTICLE 86 BY REFUSING TO SUPPLY SPARE PARTS FOR HUGIN CASH REGISTERS TO LIPTONS CASH REGISTERS AND BUSINESS EQUIPMENT LTD , WHICH HAS ITS REGISTERED OFFICE IN LONDON , AS FROM 1 JANUARY 1973 . IT FURTHER STATES THAT HUGIN KASSAREGISTER AB HAS ALSO INFRINGED ARTICLE 86 BY PROHIBITING ITS SUBSIDIARIES AND DISTRIBUTORS WITHIN THE COMMON MARKET FROM SELLING SUCH SPARE PARTS OUTSIDE ITS DISTRIBUTION NETWORK . IN THE GROUNDS FOR ITS DECISION THE COMMISSION STATES THAT HUGIN OCCUPIES A DOMINANT POSITION WITHIN THE MEANING OF ARTICLE 86 , THAT IT HAS ABUSED THAT POSITION AND THAT TRADE BETWEEN THE MEMBER STATES MAY BE AFFECTED THEREBY .

HUGIN ' S POSITION ON THE MARKET

3AS REGARDS THE QUESTION WHETHER HUGIN OCCUPIES A DOMINANT POSITION ON THE MARKET THE COMMISSION TAKES THE VIEW THAT THE FACTS OF THE CASE HAVE SHOWN THAT WHILE HUGIN HAS ONLY A RELATIVELY SMALL SHARE OF THE CASH REGISTER MARKET - WHICH IS VERY COMPETITIVE - IT HAS A MONOPOLY IN SPARE PARTS FOR MACHINES MADE BY IT AND THAT CONSEQUENTLY IT OCCUPIES A DOMINANT POSITION FOR THE MAINTENANCE AND REPAIR OF HUGIN CASH REGISTERS IN RELATION TO INDEPENDENT COMPANIES WHICH NEED A SUPPLY OF HUGIN SPARE PARTS . AS REGARDS THE RECONDITIONING OF USED MACHINES AND THE RENTING OUT OF SUCH MACHINES THE COMMISSION ALSO TAKES THE VIEW THAT HUGIN OCCUPIES A DOMINANT POSITION AS REGARDS CASH REGISTERS OF ITS OWN MANUFACTURE , SINCE UNDERTAKINGS ENGAGED IN SUCH ACTIVITIES DEPEND ON SUPPLIES OF HUGIN SPARE PARTS .

4HUGIN CONTESTS THE VALIDITY OF THE COMMISSION ' S FINDINGS ON THESE VARIOUS POINTS . IN ITS PRINCIPAL ARGUMENT IT STATES THAT THE SUPPLY OF SPARE PARTS AND OF MAINTENANCE SERVICES IS CERTAINLY NOT A SEPARATE MARKET BUT IS AN ESSENTIAL PARAMETER OF COMPETITION IN THE MARKET FOR CASH REGISTERS AS A WHOLE . IT STATES THAT ON THAT MARKET AFTER-SALES SERVICE AND THE QUALITY OF REPAIR AND MAINTENANCE SERVICES , INCLUDING THE SUPPLY OF SPARE PARTS , CONSTITUTE SUCH A SIGNIFICANT COMPETITIVE FACTOR THAT HUGIN RUNS THOSE SERVICES AT A LOSS .

5TO RESOLVE THE DISPUTE IT IS NECESSARY , FIRST , TO DETERMINE THE RELEVANT MARKET . IN THIS RESPECT ACCOUNT MUST BE TAKEN OF THE FACT THAT THE CONDUCT ALLEGED AGAINST HUGIN CONSISTS IN THE REFUSAL TO SUPPLY SPARE PARTS TO LIPTONS AND , GENERALLY , TO ANY INDEPENDENT UNDERTAKING OUTSIDE ITS DISTRIBUTION NETWORK . THE QUESTION IS , THEREFORE , WHETHER THE SUPPLY OF SPARE PARTS CONSTITUTES A SPECIFIC MARKET OR WHETHER IT FORMS PART OF A WIDER MARKET . TO ANSWER THAT QUESTION IT IS NECESSARY TO DETERMINE THE CATEGORY OF CLIENTS WHO REQUIRE SUCH PARTS .

6IN THIS RESPECT IT IS ESTABLISHED , ON THE ONE HAND , THAT CASH REGISTERS ARE OF SUCH A TECHNICAL NATURE THAT THE USER CANNOT FIT THE SPARE PARTS INTO THE MACHINE BUT REQUIRES THE SERVICES OF A SPECIALIZED TECHNICIAN AND , ON THE OTHER , THAT THE VALUE OF THE SPARE PARTS IS OF LITTLE SIGNIFICANCE IN RELATION TO THE COST OF MAINTENANCE AND REPAIRS . THAT BEING THE CASE , USERS OF CASH REGISTERS DO NOT OPERATE ON THE MARKET AS PURCHASERS OF SPARE PARTS , HOWEVER THEY HAVE THEIR MACHINES MAINTAINED AND REPAIRED . WHETHER THEY AVAIL THEMSELVES OF HUGIN ' S AFTER-SALES SERVICE OR WHETHER THEY RELY ON INDEPENDENT UNDERTAKINGS ENGAGED IN MAINTENANCE AND REPAIR WORK , THEIR SPARE PART REQUIREMENTS ARE NOT MANIFESTED DIRECTLY AND INDEPENDENTLY ON THE MARKET . WHILE THERE CERTAINLY EXISTS AMONGST USERS A MARKET FOR MAINTENANCE AND REPAIRS WHICH IS DISTINCT FROM THE MARKET IN NEW CASH REGISTERS , IT IS ESSENTIALLY A MARKET FOR THE PROVISION OF SERVICES AND NOT FOR THE SALE OF A PRODUCT SUCH AS SPARE PARTS , THE REFUSAL TO SUPPLY WHICH FORMS THE SUBJECT-MATTER OF THE COMMISSION ' S