Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
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1 . COMPETITION - ADMINISTRATIVE PROCEDURE - HEARINGS - RIGHT OF THIRD PARTIES TO BE HEARD - CONDITIONS
( REGULATION NO 17 OF THE COUNCIL, ART . 19 ( 1 ) AND ( 2 ); REGULATION NO 99/63 OF THE COMMISSION, ARTS 1, 5 AND 7 )
2 . COMPETITION - AGREEMENTS - PROHIBITION - EXEMPTION - RENEWAL - FACTORS TO BE TAKEN INTO ACCOUNT - INCREASE IN THE DEGREE OF CONCENTRATION AFFECTING THE COMPETITIVE STRUCTURE OF THE MARKET IN QUESTION
( EEC TREATY, ART . 85 ( 3 )*)
Summary
1 . ARTICLE 19 ( 1 ) OF REGULATION NO 17 AND ARTICLE 1 OF REGULATION NO 99/63 REQUIRE THE COMMISSION TO HEAR UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS WHOSE AGREEMENTS OR CONDUCT ARE THE SUBJECT OF AN INQUIRY BUT NOT TO HEAR THIRD PARTIES . THE HEARING OF THIRD PARTIES IS PROVIDED FOR IN ARTICLE 19 ( 2 ) OF REGULATION NO 17 AND ARTICLES 5 AND 7 OF REGULATION NO 99/63, BUT IS REQUIRED ONLY IN SO FAR AS THE THIRD PARTY SHOWS THAT IT HAS A SUFFICIENT LEGAL INTEREST AND ACTUALLY APPLIES TO BE HEARD .
2 . THE INCREASING DEGREE OF CONCENTRATION ON THE MARKET IS A FACTOR TO BE TAKEN INTO ACCOUNT WHEN CONSIDERING AN APPLICATION FOR THE RENEWAL OF AN EXEMPTION UNDER ARTICLE 85 ( 3 ) OF THE TREATY IF THAT INCREASING CONCENTRATION AFFECTS THE COMPETITIVE STRUCTURE OF THE MARKET IN QUESTION .
Parties
IN CASE 43/85
ASSOCIAZIONE NAZIONALE COMMERCIANTI INTERNAZIONALI DENTALI E SANITARI ( ANCIDES ), WHOSE HEADQUARTERS IS AT 2 VIA TRINCEA DELLE FRASCHE, MILAN, REPRESENTED BY GIOVANNI BATTISTINI AND MARCO JANNI, OF THE MILAN BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ERNEST ARENDT, 34 RUE PHILIPPE II,
APPLICANT,
V
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ANTHONY MCCLELLAN, LEGAL ADVISER, ACTING AS AGENT, ASSISTED BY SILVIO PIERI, AN ITALIAN CIVIL SERVANT SERVING WITH THE COMMISSION UNDER AN EXCHANGE ARRANGEMENT WITH THE NATIONAL CIVIL SERVICES, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF G . KREMLIS, A MEMBER OF THE COMMISSION' S LEGAL DEPARTMENT, JEAN MONNET BUILDING, KIRCHBERG,
DEFENDANT,
APPLICATION FOR A DECLARATION THAT COMMISSION DECISION 84/588/EEC OF 23 NOVEMBER 1984 RELATING TO A PROCEEDING UNDER ARTICLE 85 OF THE EEC TREATY ( OFFICIAL JOURNAL 1984, L 322, P . 10 ) IS VOID,
THE COURT ( SECOND CHAMBER )
COMPOSED OF : T.*F . O' HIGGINS, PRESIDENT OF CHAMBER, O . DUE AND K . BAHLMANN, JUDGES,
ADVOCATE GENERAL : SIR GORDON SLYNN
REGISTRAR : D . LOUTERMAN, ADMINISTRATOR
HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 8 OCTOBER 1986,
AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 27 NOVEMBER 1986,
GIVES THE FOLLOWING
JUDGMENT
Grounds
1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 14 FEBRUARY 1985, THE ASSOCIAZIONE NAZIONALE COMMERCIANTI INTERNAZIONALI DENTALI E SANITARI ( HEREINAFTER REFERRED TO AS "ANCIDES ") BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY FOR A DECLARATION THAT COMMISSION DECISION 84/588 OF 23 NOVEMBER 1984 RELATING TO A PROCEEDING UNDER ARTICLE 85 OF THE EEC TREATY ( IV/28.775 - UNIDI ) ( OFFICIAL JOURNAL 1984, L 322, P.*10 ) IS VOID .
2 IN DECISION 84/588, THE COMMISSION RENEWED DECISION 75/498 OF 17 JULY 1975 ( OFFICIAL JOURNAL 1975, L 228, P . 17 ) IN WHICH IT GRANTED AN EXEMPTION UNDER ARTICLE 85 ( 3 ) OF THE EEC TREATY, VALID UNTIL 31 DECEMBER 1983, FOR THE DECISION OF THE UNIONE NAZIONALE INDUSTRIE DENTARIE ITALIANE ( HEREINAFTER REFERRED TO AS "UNIDI ") SETTING OUT THE RULES GOVERNING THE "EXPO DENTAL" EXHIBITIONS OF DENTAL MATERIALS .
3 THE EXPO DENTAL RULES WHICH WERE THE SUBJECT OF DECISION 75/498 DIFFER IN TWO IMPORTANT RESPECTS FROM THE RULES WITH WHICH DECISION 84/588 IS CONCERNED . FIRST, UNDER THE MORE RECENT RULES, EXPO DENTAL EXHIBITIONS ARE TO BE HELD EVERY YEAR INSTEAD OF EVERY 18 MONTHS AND THE PERIOD PRIOR TO EXPO DENTAL EXHIBITIONS DURING WHICH EXHIBITORS ARE BANNED FROM PARTICIPATING IN OTHER EXHIBITIONS HAS BEEN REDUCED ACCORDINGLY FROM 9 TO 6 MONTHS . SECONDLY, EXHIBITORS REFUSED ADMISSION TO OR EXPELLED FROM AN EXPO DENTAL EXHIBITION NOW HAVE A RIGHT OF APPEAL WITHIN EIGHT DAYS TO AN ARBITRATION PANEL .
4 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR THE FACTS OF THE CASE AND THE ARGUMENTS OF THE PARTIES WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .
5 WITH REGARD TO THE PROCEDURE, ANCIDES CLAIMS THAT WHEN THE COMMISSION ADOPTED THE CONTESTED DECISION IT DEPRIVED ANCIDES OF ITS RIGHT TO A FAIR HEARING . THE COMMISSION FAILED TO COMPLY WITH ARTICLE 19 OF REGULATION NO 17/62 OF THE COUNCIL OF 6 FEBRUARY 1962, THE FIRST REGULATION IMPLEMENTING ARTICLES 85 AND 86 OF THE TREATY ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1959-62, P.*87 ), AND ARTICLES 1, 5, 7, 8 AND 9 OF REGULATION NO 99/63 OF THE COMMISSION OF 25 JULY 1963 ON THE HEARINGS PROVIDED FOR IN ARTICLE 19 ( 1 ) AND ( 2 ) OF COUNCIL REGULATION NO 17/62 ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1963-64, P . 47 ) SINCE IT DID NOT CARRY OUT A SUFFICIENTLY DETAILED EXAMINATION OF THE NEW CIRCUMSTANCES TO WHICH ITS ATTENTION SHOULD HAVE BEEN DRAWN BY ANCIDES' S LETTER OF 7 JUNE 1984 IN REPLY TO THE NOTICE PROVIDED FOR IN ARTICLE 19 ( 3 ) OF REGULATION NO 17/62 . IN PARTICULAR, THE COMMISSION DID NOT HEAR THE VIEWS OF EITHER ANCIDES OR ITS MEMBERS .
6 THE FOLLOWING OBSERVATIONS MUST BE MADE CONCERNING THOSE ARGUMENTS .
7 IN THE FIRST PLACE, IT SHOULD BE NOTED THAT BOTH ARTICLE 19 ( 1 ) OF REGULATION NO 17/62 AND ARTICLE 1 OF REGULATION NO 99/63, WHICH REFERS TO THE FORMER PROVISION, CLEARLY ENVISAGE THE HEARING OF UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS WHOSE AGREEMENTS OR CONDUCT ARE THE SUBJECT OF AN INQUIRY, AND NOT THE HEARING OF THIRD PARTIES .
8 IN THE SECOND PLACE, AS THE COMMISSION RIGHTLY POINTS OUT, ACCORDING TO ARTICLE 19 ( 2 ) OF REGULATION NO 17/62 AND ARTICLES 5 AND 7 OF REGULATION NO 99/63, THE COMMISSION IS REQUIRED TO HEAR NATURAL OR LEGAL PERSONS WHO HAVE A SUFFICIENT LEGAL INTEREST ONLY IN SO FAR AS SUCH PERSONS ACTUALLY APPLY TO BE HEARD . SINCE ANCIDES DID NOT REQUEST A HEARING, THE COMMISSION CANNOT BE CRITICIZED FOR INFRINGING THOSE PROVISIONS .
9 IN THE THIRD PLACE, ANCIDES' ARGUMENTS FOUNDED ON ARTICLES 8 AND 9 OF REGULATION NO 99/63 ARE NOT RELEVANT BECAUSE THOSE ARTICLES DEAL ONLY WITH THE PROCEDURAL RULES APPLICABLE IN CASES IN WHICH THE COMMISSION CHOOSES OR IS REQUIRED TO CONDUCT AN ORAL HEARING . IN THIS CASE, AN ORAL HEARING WAS NOT REQUIRED AND DID NOT TAKE PLACE .
10 IT SHOULD BE ADDED THAT ANCIDES HAD IN ANY EVENT AN OPPORTUNITY TO MAKE ITS POSITION KNOWN WHEN IT REPLIED IN ITS LETTER OF 7 JUNE 1984 TO THE NOTICE REQUIRED UNDER ARTICLE 19 ( 3 ) OF REGULATION NO 17/62 . ANCIDES' ARGUMENT ALLEGING AN INFRINGEMENT OF ITS RIGHT TO A FAIR HEARING CANNOT THEREFORE BE ACCEPTED .
11 WITH REGARD TO THE SUBSTANCE OF THE CASE, ANCIDES CLAIMS THAT THE COMMISSION DID NOT CORRECTLY APPLY ARTICLES 85 AND 86 OF THE EEC TREATY WHEN ADOPTING THE CONTESTED DECISION .
12 IN THE FIRST PLACE, ANCIDES CLAIMS ESSENTIALLY THAT THE CONSEQUENCE OF THE COMMISSION' S DECISION IS THAT UNIDI HAS AN ADVANTAGE WHICH IS EQUIVALENT TO A DOMINANT POSITION . THUS, ALL TRADERS IN THE DENTAL EQUIPMENT SECTOR ARE OBLIGED TO TAKE PART IN EXPO DENTAL . THERE IS NO LONGER ANY SCOPE FOR OTHER ASSOCIATIONS OF UNDERTAKINGS PURSUING PROMOTIONAL AIMS AND ENGAGING IN PROMOTIONAL ACTIVITIES, NOR FOR INDIVIDUAL UNDERTAKINGS WISHING TO ORGANIZE THEIR OWN EXHIBITIONS .
13 IN REGARD TO THAT POINT, IT SHOULD BE NOTED FIRST OF ALL THAT THE INCREASING DEGREE OF CONCENTRATION ON THE MARKET IS A FACTOR TO BE TAKEN INTO ACCOUNT WHEN CONSIDERING AN APPLICATION FOR THE RENEWAL OF AN EXEMPTION UNDER ARTICLE 85 ( 3 ) OF THE TREATY IF THAT INCREASING CONCENTRATION AFFECTS THE COMPETITIVE STRUCTURE OF THE MARKET AT ISSUE .
14 IN THIS CASE, IT IS FOR ANCIDES TO PRODUCE EVIDENCE OF THE FACTS TO BEAR OUT THE EXISTENCE OF SUCH A SITUATION . IT MUST HOWEVER BE OBSERVED THAT ANCIDES HAS NOT PRODUCED ANY EVIDENCE WHICH WOULD PERMIT THE COURT TO CONCLUDE THAT UNIDI IN FACT ENJOYS A DOMINANT POSITION OR THAT IT HAS ABUSED SUCH A POSITION .
15 FURTHERMORE, THE POSSIBILITY OF THE ABUSE OF A DOMINANT POSITION BY UNIDI IS REDUCED BY THE FACT THAT ANCIDES NOW ORGANIZES ITS OWN COMPETING COMMERCIAL EXHIBITION AND THAT PROMOTIONAL TECHNIQUES DISTINCT FROM MAJOR COMMERCIAL EXHIBITIONS SUCH AS SO-CALLED "OPEN HOUSES", ORGANIZED BY MANUFACTURERS, AND EXHIBITIONS AT SPECIALIST CONGRESSES ARE ASSUMING INCREASING IMPORTANCE . IN THAT REGARD, IT MUST BE ADDED THAT IT IS CLEAR FROM THE PAPERS IN THE CASE THAT ALL THE MANUFACTURERS CONCERNED AND THEIR COMMERCIAL ASSOCIATES REMAIN FREE TO TAKE PART IN SUCH "OPEN HOUSES" AND EXHIBITIONS AT SPECIALIST CONGRESSES .
16 IT FOLLOWS THAT ANCIDES HAS NOT SUCCEEDED IN SHOWING THAT THE IMPORTANCE OF EXPO DENTAL HAS GIVEN RISE TO SUCH A DEGREE OF CONCENTRATION ON THE MARKET THAT THE CONDITIONS FOR THE GRANT OF AN EXEMPTION UNDER ARTICLE 85 ( 3 ) ARE NOT FULFILLED .
17 ANCIDES ALSO CLAIMS THAT THE COMMISSION INCORRECTLY ASSESSED THE SIGNIFICANCE OF THE AMENDMENTS INTRODUCED IN THE NEW EXPO DENTAL RULES COMPARED WITH THE RULES WHICH WERE THE SUBJECT OF THE COMMISSION' S 1975 DECISION .
18 IT SHOULD FIRST BE BORNE IN MIND THAT THE EXPO DENTAL RULES FROM WHICH THIS ACTION STEMS ARE ESSENTIALLY THE SAME AS THOSE WHICH WERE THE SUBJECT OF THE 1975 DECISION, EXCEPT AS REGARDS THE AMENDMENTS MENTIONED ABOVE, WHICH APPARENTLY MADE THE SYSTEM LESS RESTRICTIVE THAN BEFORE . THE COMMISSION WAS THEREFORE JUSTIFIED IN PROCEEDING ON THE BASIS THAT, AT FIRST SIGHT, THE AMENDED EXPO DENTAL RULES WERE JUST AS ELIGIBLE FOR EXEMPTION AS THE EARLIER ONES .
19 WITH REGARD TO THE SAID AMENDMENTS, ANCIDES CLAIMS IN THE FIRST PLACE THAT SINCE UNIDI HAS DECIDED THAT EXPO DENTAL EXHIBITIONS ARE TO TAKE PLACE EVERY YEAR IN JUNE AND THE PROHIBITION ON EXHIBITORS TAKING PART IN OTHER ACTIVITIES HAS BEEN REDUCED TO THE SIX MONTHS PRECEDING EXPO DENTAL AND HAVING REGARD TO THE SUMMER HOLIDAY PERIOD IN ITALY, ANCIDES HAS ONLY AN UNFAIRLY SHORT PERIOD IN WHICH TO ORGANIZE ITS OWN EXHIBITIONS .
20 IT SHOULD BE NOTED THAT NOTHING IN THE EXPO DENTAL RULES CONSIDERED BY THE COMMISSION REQUIRES THAT THE EXHIBITION SHOULD ALWAYS BE HELD IN JUNE AND, FURTHERMORE, IT EMERGED AT THE HEARING THAT THE 1986 EXPO DENTAL EXHIBITION IN FACT TOOK PLACE IN SEPTEMBER . THAT ARGUMENT MUST THEREFORE BE REJECTED .
21 IN THE SECOND PLACE, ANCIDES CLAIMS THAT THE COMMISSION OVERESTIMATED THE IMPORTANCE OF THE OTHER AMENDMENT TO THE EXPO DENTAL RULES, NAMELY THE ESTABLISHMENT OF AN ARBITRATION PANEL TO WHICH EXHIBITORS EXCLUDED FROM EXPO DENTAL COULD APPEAL .
22 IT SHOULD BE NOTED THAT, AS THE COMMISSION EXPLAINED IN THE CONTESTED DECISION, IN THE PERIOD SINCE THE ADOPTION OF DECISION 75/498, A NUMBER OF EXHIBITORS HAVE BEEN BARRED FROM EXPO DENTAL EXHIBITIONS FOR FAILING TO COMPLY WITH THE RULES . TO ENSURE THAT THE RULES ARE APPLIED OBJECTIVELY IN SUCH CASES, THE COMMISSION ASKED UNIDI TO INTRODUCE A RIGHT OF APPEAL TO AN ARBITRATION PANEL .
23 ALTHOUGH ANCIDES HAS ARGUED THAT THERE ARE DEFECTS IN THE WAY IN WHICH THE SAID ARBITRATION PANEL OPERATES, IT HAS NOT SHOWN THAT THE COMMISSION' S FINDING TO THE EFFECT THAT THE ESTABLISHMENT OF THAT PANEL CONSTITUTES AN IMPROVEMENT IN THE EXPO DENTAL RULES RESTS ON A SUBSTANTIVELY INCORRECT FACTUAL BASIS AND IS VITIATED BY AN OBVIOUS ERROR OF ASSESSMENT . THAT ARGUMENT MUST THEREFORE BE REJECTED .
24 FINALLY, ANCIDES CLAIMS THAT THE COMMISSION DID NOT TAKE ACCOUNT OF THE NEW TRENDS ON THE DENTAL MATERIALS EXHIBITIONS MARKET, WHICH ARE SUCH THAT THE REASONING ADOPTED IN DECISION 75/498, INCORPORATED BY REFERENCE INTO THE CONTESTED DECISION, IS NO LONGER APPLICABLE .
25 IT SHOULD BE POINTED OUT THAT THE COMMISSION, WHEN CONSIDERING UNIDI' S APPLICATION FOR RENEWAL OF THE EXEMPTION GRANTED IN 1975, WAS REQUIRED TO VERIFY THAT THE COMPETITIVE POSITION ON THE MARKET HAD NOT CHANGED TO SUCH A DEGREE THAT THE CONDITIONS REQUIRED FOR THE GRANT OF AN EXEMPTION WERE NO LONGER FULFILLED .
26 IN THE CONTESTED DECISION, THE COMMISSION DID IN FACT EXPRESSLY NOTE THAT THE TRENDS IN REGARD IN PARTICULAR TO PROMOTIONAL ACTIVITIES FOR DENTAL EQUIPMENT IN ITALY, REFERRED TO IN DECISION 75/498, NAMELY TOWARDS "OPEN HOUSES", EXHIBITIONS HELD IN CONJUNCTION WITH SPECIALIST CONGRESSES AND SPECIALIZED EXHIBITIONS, HAVE CONTINUED IN THAT SECTOR . SINCE THOSE TRENDS ARE PRECISELY THOSE RELIED ON BY ANCIDES TO SHOW HOW THE MARKET HAS CHANGED, THE COMMISSION CANNOT BE CRITICIZED FOR FAILING TO TAKE ACCOUNT OF THE NEW TRENDS ON THE MARKET WHEN IT ADOPTED THE CONTESTED DECISION .
27 IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE APPLICATION MUST BE DISMISSED IN ITS ENTIRETY .
Decision on costs
COSTS
28 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE ANCIDES HAS FAILED IN ITS SUBMISSIONS, IT MUST BE ORDERED TO PAY THE COSTS .
Operative part
ON THOSE GROUNDS,
THE COURT ( SECOND CHAMBER )
HEREBY :
( 1 ) DISMISSES THE APPLICATION;
( 2 ) ORDERS ANCIDES TO PAY THE COSTS .
Full & Egal Universal Law Academy