Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
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1 . COMPETITION - AGREEMENTS - AGRICULTURAL PRODUCTS - COMMUNITY RULES - EXCEPTIONS - NON-APPLICATION BY THE COMMISSION - CONSULTATION WITH THE MEMBER STATES WITHIN THE MEANING OF ARTICLE 2 OF REGULATION NO 26 OF THE COUNCIL - NOT AN OBLIGATION
2 . COMPETITION - AGREEMENTS - PROHIBITION - ASSOCIATIONS OF INTERESTED UNDERTAKINGS - CONDITIONS
( EEC TREATY, ARTICLE 85 ( 1 ))
3 . COMPETITION - AGREEMENTS - ADVERSE EFFECT ON TRADE BETWEEN MEMBER STATES - RESTRICTIVE CLAUSE CONCERNING DIRECT IMPORTATION INTO A MEMBER STATE - PROHIBITION
( EEC TREATY, ARTICLE 85 ( 1 ))
Summary
1 . TO REQUIRE THE COMMISSION TO CONSULT THE MEMBER STATES, EVEN IN CASES WHERE IT IS IN NO DOUBT THAT THE EXCEPTIONS PROVIDED FOR UNDER REGULATION NO 26 ON THE SUBJECT OF AGREEMENTS AFFECTING TRADE IN AGRICULTURAL PRODUCTS CANNOT APPLY, WOULD BE TO OBLIGE THE COMMISSION TO FULFIL UNNECESSARY FORMALITIES AND NEEDLESSLY DELAY ENQUIRIES .
2 . ARTICLE 85 ( 1 ) APPLIES TO ASSOCIATIONS IN SO FAR AS THEIR OWN ACTIVITIES OR THOSE OF THE UNDERTAKINGS BELONGING TO THEM ARE CALCULATED TO PRODUCE THE RESULTS TO WHICH IT REFERS .
3 . A CLAUSE IN AN AGREEMENT RESTRICTING THE FREEDOM OF THE UNDERTAKINGS WHO ARE PARTY TO IT TO IMPORT DIRECT INTO A MEMBER STATE IS LIABLE TO INTERFERE WITH THE NATURAL MOVEMENT OF TRADE AND THUS TO AFFECT TRADE BETWEEN MEMBER COUNTRIES .
Parties
IN CASE 71/74
NEDERLANDSE VERENIGING VOOR FRUIT EN GROENTENIMPORTHANDEL, NEDERLANDSE BOND VAN GROSSIERS IN ZUIDVRUCHTEN EN ANDER GEIMPORTEERD FRUIT 'FRUBO', REPRESENTED BY J . J . A . ELLIS AND B . H . TER KUILE, BOTH OF THE BAR OF THE HAGUE, WITH ADDRESS FOR SERVICE IN LUXEMBOURG IN THE CHAMBERS OF J . LOESCH, 2 RUE GOETHE, APPLICANTS,
V
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER, B . VAN DER ESCH, WITH ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER, P . LAMOUREUX, 4 BOULEVARD ROYAL, DEFENDANT,
AND
VERENIGING DE FRUITUNIE, REPRESENTED BY R . A . DE JONGE, OF THE UTRECHT BAR, WITH ADDRESS FOR SERVICE AT THE CHAMBERS OF E . ARENDT, 34 B IV, RUE PHILIPPE-II, INTERVENER,
Subject of the case
APPLICATION FOR ANNULMENT OF THE DECISION OF THE COMMISSION OF 25 JULY 1974 CONCERNING A PROCEDURE UNDER ARTICLE 85 OF THE EEC TREATY ( IV/26.602-FRUBO ),
Grounds
1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 23 SEPTEMBER 1974 THE NEDERLANDSE VERENIGING VOOR FRUIT EN GROENTENIMPORTHANDEL AND THE NEDERLANDSE BOND VAN GROSSIERS IN ZUIDVRUCHTEN EN ANDER GEIMPORTEERD FRUIT 'FRUBO' ASKED THE COURT TO ANNUL THE DECISION OF THE COMMISSION OF 25 JULY 1975 FINDING THAT THEY HAD INFRINGED ARTICLE 85 ( 1 ) OF THE EEC TREATY;
2 IN 1952, THE APPLICANTS CONCLUDED AN AGREEMENT FOR THE ESTABLISHMENT OF A SYSTEM OF SALES BY AUCTION FOR CITRUS FRUIT PRODUCED OUTSIDE THE COMMUNITY AND FOR APPLES AND PEARS OF NON-EUROPEAN ORIGIN IMPORTED INTO THE NETHERLANDS; SINCE THEN THE AGREEMENT HAS BEEN THE SUBJECT OF SEVERAL MINOR AMENDMENTS AND, ON 8 FEBRUARY 1968, OF OBJECTIONS FROM A DUTCH WHOLESALER, SUBMITTED PURSUANT TO ARTICLE 3 ( 2 ) ( B ) OF REGULATION NO 17 IMPLEMENTING ARTICLES 85 AND 86 OF THE TREATY .
3 ARTICLE 9 OF THE SAID AGREEMENT, WHICH IS THE SOLE SUBJECT OF DISPUTE IN THIS CASE, OBLIGES WHOLESALERS TO DEAL IN THE PRODUCTS IN DISPUTE THROUGH THE MEDIUM OF AN IMPORT AUCTION UNLESS THEY WERE BOUGHT FROM AN IMPORTER-WHOLESALER ESTABLISHED IN ANOTHER MEMBER STATE OF THE EEC WHERE THEY HAVE ACTUALLY BEEN BROUGHT IN, UNLOADED AND CLEARED THROUGH CUSTOMS ( THE OBLIGATION CONCERNING UNLOADING HAVING BEEN REMOVED IN THE APPLICANT'S LAST DRAFT AMENDMENT ADDRESSED TO THE COMMISSION ON 24 JUNE 1974 ).
4 DESPITE THE EXCEPTION PROVIDED FOR AND THE PROPOSED AMENDMENT, THE DECISION UNDER CHALLENGE TREATS THE CLAUSE IN DISPUTE AS CONSTITUTING AN INFRINGEMENT OF ARTICLE 85 .
FIRST SUBMISSION AS TO FORM
5 THE APPLICANTS CONTEND THAT THE DEFENDANT HAS NOT, PURSUANT TO THE PROCEDURE PROVIDED FOR UNDER THE REGULATION, RULED ON THE APPLICABILITY OR OTHERWISE OF REGULATION NO 26 OF THE COUNCIL OF 4 APRIL 1962 APPLYING CERTAIN RULES OF COMPETITION TO PRODUCTION OF AND TRADE IN AGRICULTURAL PRODUCTS .
6 THE DEFENDANT MAINTAINS THAT IF, WHEN A DECISION IS TAKEN APPLYING ARTICLE 85 TO AGRICULTURAL PRODUCTS, IT FOLLOWS THE PROCEDURE OF REGULATION NO 17 AND DECIDES THAT AN AGREEMENT WHOSE EXEMPTION HAS BEEN APPLIED FOR DOES NOT COME UNDER REGULATION NO 26, THIS DOES NOT AFFECT THE RIGHTS OF THE APPLICANTS .
7 ARTICLE 1 OF REGULATION NO 26, IMPLEMENTING ARTICLE 42 OF THE EEC TREATY, PROVIDES THAT THE PRODUCTION OF OR TRADE IN AGRICULTURAL PRODUCTS ARE SUBJECT TO THE REQUIREMENTS OF ARTICLE 85 .
8 NEVERTHELESS, ARTICLE 2 ( 1 ) OF REGULATION NO 26 PROVIDES AS FOLLOWS : 'ARTICLE 85 ( 1 ) OF THE TREATY SHALL NOT APPLY TO SUCH OF THE AGREEMENTS, DECISIONS AND PRACTICES REFERRED TO IN THE PRECEDING ARTICLE AS FORM AN INTEGRAL PART OF A NATIONAL MARKET ORGANIZATION OR ARE NECESSARY FOR ATTAINMENT OF THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY '.
9 ARTICLE 2 ( 2 ) READS : 'AFTER CONSULTING THE MEMBER STATES AND HEARING THE UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS CONCERNED AND ANY OTHER NATURAL OR LEGAL PERSON THAT IT CONSIDERS APPROPRIATE, THE COMMISSION SHALL HAVE SOLE POWER, SUBJECT TO REVIEW BY THE COURT OF JUSTICE, TO DETERMINE, BY DECISION WHICH SHALL BE PUBLISHED, WHICH AGREEMENTS, DECISIONS AND PRACTICES FULFIL THE CONDITIONS SPECIFIED IN PARAGRAPH 1 '.
10 ARTICLE 2 ( 3 ) READS : 'THE COMMISSION SHALL UNDERTAKE SUCH DETERMINATION EITHER ON ITS OWN INITIATIVE OR AT THE REQUEST OF A COMPETENT AUTHORITY OF MEMBER STATE OR OF AN INTERESTED UNDERTAKING OR ASSOCIATION OF UNDERTAKINGS '.
11 TO REQUIRE THE COMMISSION TO CONSULT THE MEMBER STATES EVEN IN CASES WHERE IT IS IN NO DOUBT THAT THE EXCEPTIONS PROVIDED FOR UNDER REGULATION NO 26 CANNOT APPLY WOULD OBLIGE THE COMMISSION TO FULFIL UNNECESSARY FORMALITIES AND NEEDLESSLY DELAY ENQUIRIES INTO THE MATTERS CONCERNED .
SECOND SUBMISSION AS TO FORM
12 THE APPLICANTS CRITICIZE THE COMMISSION FIRST FOR HAVING ADDRESSED ITS FIRST STATEMENT OF OBJECTIONS OF 12 NOVEMBER 1969 ONLY TO THEIR MEMBERS AND NOT TO THE APPLICANTS THEMSELVES AND, SECONDLY, FOR HAVING, AFTER THE SECOND STATEMENT OF OBJECTIONS OF 19 NOVEMBER 1973, CONTINUED THE PROCEDURE ON THE BASIS OF THE NEW TEXT OF ARTICLE 9 OF THE AGREEMENT AS IT APPEARED AFTER THE AMENDMENT OF 21 FEBRUARY 1974 .
13 THE APPLICANTS CANNOT CLAIM THAT THEY WERE NOT INFORMED BY THE UNDERTAKINGS WHICH THEY ORGANIZE, BECAUSE THE SUBJECT OF THE STATEMENT OF OBJECTIONS WAS, OF COURSE, THE AGREEMENT CONCLUDED BETWEEN THE TWO ASSOCIATIONS .
14 MOREOVER, THE NATURE OF THE AMENDMENT OF 21 FEBRUARY 1974 DID NOT REQUIRE A FRESH STATEMENT OF OBJECTIONS .
THIRD SUBMISSION AS TO FORM
15 THE APPLICANTS CONTEND THAT THE COMMISSION HAS, SINCE 1961, USED THE NETHERLANDS AUCTIONS AS A SOURCE OF INFORMATION FOR THE PURPOSE OF FIXING THE REFERENCE PRICES FOR FRUIT AND VEGETABLES .
16 IT CLAIMS THAT THE COMMISSION CANNOT, CONSEQUENTLY, RAISE OBJECTIONS TO THE AGREEMENT WITHOUT DEPARTING FROM THE PRINCIPLES OF GOOD ADMINISTRATION AND MISUSING ITS POWERS .
17 THE COMMISSION COULD MAKE USE OF THE DETAILS OF PRICES SUPPLIED BY THE ROTTERDAM AUCTIONS AS STATISTICAL INFORMATION ENABLING IT TO DIRECT THE COMMON AGRICULTURAL POLICY WITHOUT THEREBY LEGITIMIZING THE CONDITIONS IMPOSED IN THE AGREEMENT ON THE OPERATIONS OF WHOLESALERS WHO TAKE PART IN THE SALES BY AUCTION .
FOURTH SUBMISSION AS TO FORM
18 THE APPLICANTS CRITICIZE THE DEFENDANT FOR NOT HAVING TAKEN ACCOUNT OF ASSURANCES GIVEN BY THE DIRECTOR OF THE 'RESTRICTIVE PRACTICES AND DOMINANT POSITIONS' DIRECTORATE IN HIS LETTER OF 21 DECEMBER 1971 REGARDING THE COMPATIBILITY OF AN AMENDED VERSION OF THE AGREEMENT WITH THE REQUIREMENTS OF ARTICLE 85 ( 3 ).
19 IN THE LETTER, THE DIRECTOR-GENERAL OF COMPETITION ( SIC ), TAKING NOTE OF A SPECIFIC AMENDMENT TO THE AGREEMENT WHICH THE APPLICANTS WERE PREPARED TO ACCEPT, STATES THAT, IN HIS VIEW, THE AGREEMENT AS THUS AMENDED, CAN, NOTWITHSTANDING THE REMAINING RESTRICTION ON COMPETITION, QUALIFY FOR EXEMPTION UNDER ARTICLE 85 ( 3 ).
20 EXPRESSED IN THESE TERMS, THE OPINION GIVEN COULD NOT CONVEY ANY IMPRESSION THAT IT COMMITTED THE COMMISSION; NOR, MOREOVER, IS THE SIGNATORY AUTHORIZED TO ENTER INTO SUCH A COMMITMENT .
21 THE SUBMISSIONS AS TO FORM MUST, ACCORDINGLY, BE DISMISSED .
FIRST SUBMISSION AS TO SUBSTANCE
22 THE APPLICANTS CONTEND THAT, BECAUSE THE DISPUTED DECISION WITHHELD APPLICATION OF ARTICLE 2 OF REGULATION NO 26 TO THE DISPUTED AGREEMENT ON THE GROUND THAT THE AGREEMENT WAS NOT ESSENTIAL FOR THE ATTAINMENT OF THE OBJECTIVES LAID DOWN UNDER ARTICLE 39, THE DECISION INFRINGED NOT ONLY ARTICLE 2 BUT ALSO ARTICLES 39, 40 AND 85 OF THE TREATY .
23 THE STABILIZATION OF MARKETS REFERRED TO IN ARTICLE 39 COVERS NOT ONLY ADJUSTMENT OF SUPPLY TO DEMAND IN ORDER TO DEVELOP COMMUNITY PRODUCTION BUT ALSO THE COMPATIBILITY OF TRADE IN PRODUCTS IMPORTED FROM THIRD COUNTRIES WITH PARAGRAPHS ( C ), ( D ) AND ( E ) OF THE SAID ARTICLE .
24 THE AGREEMENT DID, IN FACT, HAVE THE BENEFICIAL EFFECT OF CONCENTRATING THE SUPPLY OF AND DEMAND FOR FRUIT IMPORTED FROM THIRD COUNTRIES IN THE ROTTERDAM IMPORT AUCTIONS AND THUS OF ENSURING THE STABILITY OF THE MARKET, THE AVAILABILITY OF SUPPLIES AND THEIR REACHING CONSUMERS AT REASONABLE PRICES .
25 THE EXCEPTION PROVIDED FOR UNDER ARTICLE 2 ( 1 ) OF REGULATION NO 26, HOWEVER, APPLIES ONLY TO AGREEMENTS 'NECESSARY FOR ATTAINMENT OF THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY '.
26 THE APPLICANTS HAVE NOT SHOWN IN WHAT RESPECT THEIR AGREEMENT, WHICH IS CONCERNED WITH PRODUCTS COMING FROM THIRD COUNTRIES, CAN BE NECESSARY TO 'INCREASE AGRICULTURAL PRODUCTIVITY' OR TO 'ENSURE A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY', AS THE FIRST TWO OBJECTIVES OF THE COMMON AGRICULTURAL POLICY ARE EXPRESSED .
27 IN CONSEQUENCE, THE COMMISSION COULD REASONABLY REGARD ARTICLE 2 OF REGULATION NO 26 AS INAPPLICABLE .
SECOND SUBMISSION AS TO SUBSTANCE
28 THE APPLICANTS DENY THAT THE AGREEMENT MADE BETWEEN THEM IS, AS IT HAS BEEN DESCRIBED IN THE DISPUTED DECISION, AN AGREEMENT BETWEEN UNDERTAKINGS WITHIN THE MEANING OF ARTICLE 85 ( 1 ).
29 IN THEIR VIEW, AN AGREEMENT BETWEEN ASSOCIATIONS IS CAUGHT BY THIS PROVISION ONLY IF IT HAS ACTUALLY CREATED OBLIGATIONS WHICH ARE DIRECTLY ENFORCEABLE AS BETWEEN THE AFFILIATED UNDERTAKINGS, WHICH IS NOT THE POSITION IN THE PRESENT CASE SINCE ONLY THE ASSOCIATIONS THEMSELVES CAN COMPEL THEIR AFFILIATES TO DISCHARGE THE OBLIGATIONS IMPOSED UPON THEM BY THE AGREEMENT .
30 ARTICLE 85 ( 1 ) APPLIES TO ASSOCIATIONS IN SO FAR AS THEIR OWN ACTIVITIES OF THOSE OF THE UNDERTAKINGS BELONGING TO THEM ARE CALCULATED TO PRODUCE THE RESULTS TO WHICH IT REFERS .
31 TO PLACE ANY OTHER INTERPRETATION ON ARTICLE 85 ( 1 ) WOULD BE TO REMOVE ITS SUBSTANCE .
32 AS AN ASSOCIATION OF UNDERTAKINGS, THE APPLICANTS ARE THEREFORE SUBJECT TO THE PROVISIONS OF ARTICLE 85 .
THIRD AND FOURTH SUBMISSIONS AS TO SUBSTANCE
33 THE APPLICANTS CRITICIZE THE DISPUTED DECISION FOR HAVING STATED THAT THE OBJECT AND EFFECT OF ARTICLE 9 OF THE AGREEMENT IS TO RESTRICT COMPETITION WITHIN THE COMMON MARKET AND TO AFFECT TRADE BETWEEN MEMBER STATES .
34 THEY CONTEND THAT WHOLESALERS WHO ARE MEMBERS OF THE ASSOCIATION CAN, OUTSIDE THE AUCTIONS, THEMSELVES IMPORT INTO THE NETHERLANDS CITRUS FRUIT PLACED ON THE MARKET BY THIRD PARTIES IN OTHER MEMBER STATES WHICH, IF IT COMES FROM THIRD COUNTRIES, HAS BEEN CLEARED THROUGH CUSTOMS IN THOSE STATES .
35 IMPORTERS ESTABLISHED IN OTHER MEMBER STATES HAVE ACCESS TO THE ROTTERDAM AUCTIONS .
36 BOTH THE DEFENDANT AND THE INTERVENER, THE 'FRUITUNIE' ASSOCIATION WHICH ORGANIZES WHOLESALERS WHO LODGED AN OBJECTION PURSUANT TO ARTICLE 3, PARAGRAPH 2 ( B ) OF REGULATION NO 17, HAVE PROVIDED NUMEROUS EXAMPLES TO PROVE THAT DUTCH WHOLESALERS ARE PREVENTED FROM THEMSELVES ACTING AS IMPORTERS AND THAT IMPORTERS ESTABLISHED IN THE OTHER COUNTRIES OF THE COMMUNITY CANNOT, WITHOUT GOING THROUGH THE AUCTIONS, DELIVER FRUIT OR VEGETABLES TO A DUTCH WHOLESALER SUBJECT TO THE PROVISIONS OF THE AGREEMENT, WHICH INFLICTS SPECIAL HARDSHIP ON THOSE BASED NEAR THE FRONTIERS OF THE NETHERLANDS .
37 THE AGREEMENT PROHIBITS ANY DUTCH WHOLESALER WHO TAKES PART IN THE IMPORT AUCTIONS FROM BUYING CITRUS FRUIT UNLESS IT HAS BEEN ALREADY IMPORTED BY THIRD PARTIES IN ANOTHER MEMBER COUNTRY OF THE COMMUNITY WHERE IT HAS BEEN CLEARED THROUGH CUSTOMS .
38 BECAUSE IT RESTRICTS THE FREEDOM OF MEMBERS TO IMPORT DIRECT INTO THE NETHERLANDS, THIS CLAUSE IS LIABLE TO INTERFERE WITH THE NATURAL MOVEMENT OF TRADE AND THUS TO AFFECT TRADE BETWEEN MEMBER COUNTRIES .
39 ALL THE SUBMISSIONS AS TO SUBSTANCE MUST THEREFORE BE DISMISSED .
FIRST ALTERNATIVE SUBMISSION AS TO SUBSTANCE
40 ACCORDING TO THE APPLICANTS, THE DECISION INFRINGED ARTICLE 85 ( 3 ) WHEN IT DECLARED THAT THE OBLIGATION TO SELL AT THE AUCTIONS WAS NOT INDISPENSABLE TO THE ATTAINMENT OF THE ADVANTAGES FLOWING FROM THE AGREEMENT, NAMELY REDUCED TRANSPORT AND MARKETING COSTS, AND MORE FAVOURABLE IMPORT PRICES .
41 THEY CONTEND THAT THESE ADVANTAGES ARE IN FACT OBTAINABLE ONLY BY MEANS OF THE DISPUTED OBLIGATION .
42 THOUGH THE APPLICANTS HAVE SUBMITTED ARGUMENTS CAPABL OF DEMONSTRATING THAT THE ADVANTAGES IN QUESTION ARE UNDERWRITTEN BY THE OBLIGATION IN ARTICLE 9 OF THE AGREEMENT, THEY HAVE NOT DEMONSTRATED THAT IT IS AN INDISPENSABLE CONDITION FOR THE PROPER WORKING OF THE SYSTEM ESTABLISHED BY THE AGREEMENT AND, CONSEQUENTLY, FOR THE ADVANTAGES ACCRUING THEREFROM .
43 CONSEQUENTLY, AND IN VIEW OF THE MEASURE OF DISCRETION AVAILABLE TO THE COMMISSION ON THIS SUBJECT, THE INACCURACY OF THE REASONS GIVEN FOR THE DISPUTED DECISION HAS NOT BEEN ESTABLISHED .
SECOND ALTERNATIVE SUBMISSION AS TO SUBSTANCE
44 THE APPLICANTS CONTEND THAT THE DECISION INFRINGED ARTICLE 85 ( 3 ) IN THAT IT WRONGLY DECIDED THAT THE DISPUTED AGREEMENT WAS CAPABLE OF ELIMINATING COMPETITION IN RESPECT OF A SUBSTANTIAL PROPORTION OF THE PRODUCTS INVOLVED .
45 IN THEIR VIEW, AS THE PUBLIC SALE OBLIGATION INCLUDED IN THE AGREEMENT DOES NOT IMPEDE DIRECT COMPETITION ON THE DUTCH MARKET, THERE IS NO OBSTACLE WHICH MIGHT AFFECT A SUBSTANTIAL PROPORTION OF THE SUPPLY OF THE PRODUCTS INVOLVED .
46 AS THE SUBSTANCE OF THIS OBJECTION IS THE SAME AS THAT OF THE THIRD AND FOURTH OBJECTIONS AS TO SUBSTANCE, WHICH HAVE BEEN DISMISSED, IT IS NOT NECESSARY TO GIVE IT SEPARATE CONSIDERATION .
Decision on costs
47 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
48 AS THE APPLICANTS HAVE FAILED IN ALL THEIR PLEAS THEY SHOULD, THEREFORE, BE ORDERED TO PAY THE COSTS .
Operative part
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION;
2 . ORDERS THE APPLICANTS TO PAY THE COSTS .
Full & Egal Universal Law Academy