61969J0044

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1 . POWER TO TAKE ACTION WITH REGARD TO FINES - TIME-LIMITS - MUST BE FIXED IN ADVANCE - POWERS OF THE COMMUNITY LEGISLATURE

2 . POLICY OF THE EEC - RULES ON COMPETITION - CARTELS - PROCEDURE BEFORE THE COMMISSION - RIGHTS OF DEFENCE - OBLIGATIONS OF THE COMMISSION - NOTICE OF COMPLAINTS - NOTIFICATION OF DOCUMENTS - BUSINESS SECRETS

( REGULATION NO 99/63 OF THE COMMISSION, ARTICLES 2 AND 4; REGULATION NO 17, ARTICLE 20 )

3 . POLICY OF THE EEC - RULES ON COMPETITION - CARTELS - GENTLEMEN' S AGREEMENT - AGREEMENT CLASSIFIED AS PROHIBITED - CRITERIA

( EEC TREATY, ARTICLE 85 )

4 . POLICY OF THE EEC - RULES ON COMPETITION - CARTELS - FINES - NATURE - OBJECT

( REGULATION NO 17, ARTICLE 15 ( 2 ))

5 . POLICY OF THE EEC - RULES ON COMPETITION - CARTELS - FINES - FIXING OF FINES - GRAVITY OF THE INFRINGEMENT - CRITERIA

( REGULATION NO 17, ARTICLE 15 ( 2 ))

6 . POLICY OF THE EEC - RULES ON COMPETITION - CARTELS - FINES - FIXING OF FINES - EFFECT OF NATIONAL REVENUE LAWS - NO REQUIREMENT TO TAKE SUCH LAWS INTO ACCOUNT

( REGULATION NO 17, ARTICLE 15 )

1 . IN ORDER TO ENSURE LEGAL CERTAINTY ANY LIMITATION PERIODS MUST BE FIXED IN ADVANCE; THE COMMUNITY LEGISLATURE ALONE IS COMPETENT TO FIX THEIR DURATION AND THE DETAILED RULES FOR THEIR APPLICATION .

2 . RESPECT FOR THE RIGHTS OF THE DEFENCE REQUIRES THAT IN ITS NOTICE OF COMPLAINTS THE COMMISSION SHALL SET FORTH CLEARLY ALBEIT SUCCINCTLY THE ESSENTIAL FACTS ON WHICH IT RELIES AND THAT IN THE COURSE OF THE ADMINISTRATIVE PROCEDURE IT SHALL SUPPLY THE OTHER DETAILS WHICH MAY BE NECESSARY FOR THE DEFENCE OF THE PERSONS CONCERNED .

THE RIGHTS OF THE DEFENCE LAID DOWN BY ARTICLE 4 OF REGULATION NO 99 ARE RESPECTED IF THE DECISION DOES NOT ALLEGE THAT THE PERSONS CONCERNED HAVE COMMITTED INFRINGEMENTS OTHER THAN THOSE REFERRED TO IN THE NOTICE OF COMPLAINTS AND ONLY TAKES INTO CONSIDERATION FACTS ON WHICH THE PERSONS CONCERNED HAVE HAD THE OPPORTUNITY OF MAKING KNOWN THEIR VIEWS ORALLY OR IN WRITING .

IF THE DOUBT ARISES AS TO WHETHER COMMUNICATING DOCUMENTS NECESSARY FOR THE DEFENCE OF A PARTY MIGHT BE INCOMPATIBLE WITH THE REQUIREMENT TO PROTECT THE BUSINESS SECRETS OF OTHER UNDERTAKINGS THE COMMISSION MAY NOT REFUSE SUCH COMMUNICATION WITHOUT FIRST CONSULTING THE LATTER .

3 . A GENTLEMEN' S AGREEMENT CONSTITUTES A MEASURE WHICH MAY FALL UNDER THE PROHIBITION CONTAINED IN ARTICLE 85 ( 1 ) IF IT CONTAINS CLAUSES RESTRICTING COMPETITION IN THE COMMON MARKET WITHIN THE MEANING OF THAT ARTICLE AND ITS CLAUSES AMOUNT TO A FAITHFUL EXPRESSION OF THE JOINT INTENTION OF THE PARTIES .

4 . THE PENALTIES PROVIDED FOR IN ARTICLE 15 OF REGULATION NO 17 ARE NOT IN THE NATURE OF PERIODIC PENALTY PAYMENTS . THEIR OBJECT IS TO SUPPRESS ILLEGAL ACTIVITY AND TO PREVENT ITS RECURRENCE SO THAT THEIR APPLICATION IS NOT RESTRICTED TO CURRENT INFRINGEMENTS ALONE . THE COMMISSION' S POWER TO IMPOSE PENALTIES IS IN NO WAY AFFECTED BY THE FACT THAT THE CONDUCT CONSTITUTING THE INFRINGEMENT AND ITS EFFECT HAVE CEASED .

5 . FOR THE PURPOSE OF FIXING THE AMOUNT OF THE FINE, THE GRAVITY OF THE INFRINGEMENT IS TO BE APPRAISED BY TAKING INTO ACCOUNT IN PARTICULAR THE NATURE OF THE RESTRICTIONS ON COMPETITION, THE NUMBER AND SIZE OF THE UNDERTAKINGS CONCERNED, THE RESPECTIVE PROPORTIONS OF THE MARKET CONTROLLED BY THEM WITHIN THE COMMUNITY AND THE SITUATION OF THE MARKET WHEN THE INFRINGEMENT WAS COMMITTED .

6 . IN FIXING THE FINES PROVIDED FOR UNDER ARTICLE 15 OF REGULATION NO 17, THE COMMISSION IS NOT REQUIRED TO TAKE INTO ACCOUNT THE DIFFERENCES EXISTING BETWEEN THE NATIONAL REVENUE LAWS .

IN CASE 44/69

BUCHLER AND COMPANY, A LIMITED PARTNERSHIP HAVING ITS REGISTERED PLACE OF BUSINESS AT 294 FRANKFURTER STRASSE, BRUNSWICK, REPRESENTED BY MR GLEISS, MR LUTZ, MR HOOTZ, MR HIRSCH, MR KLEINMANN, MR HELM AND MR KEMMLER, ADVOCATES OF THE LANDGERICHT STUTTGART, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF G . REUTER, ADVOCATE, 1 AVENUE DE L' ARSENAL, APPLICANT,

V

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER E . ZIMMERMANN, ACTING AS AGENT, ASSISTED BY G . VAN HECKE, ADVOCATE OF THE BELGIAN COUR DE CASSATION, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ITS LEGAL ADVISER, E . REUTER, 4 BOULEVARD ROYAL,

APPLICATION FOR THE ANNULMENT OR AMENDMENT OF THE DECISION OF THE COMMISSION OF 16 JULY, PUBLISHED IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES L 192 OF 5 AUGUST 1969, P . 5 ET SEQ ., AND RELATING TO PROCEEDINGS UNDER ARTICLE 85 OF THE EEC TREATY,

1 IN 1958 THE APPLICANT CONCLUDED AN AGREEMENT WITH NV NEDERLANDSE COMBINATIE VOOR CHEMISCHE INDUSTRIE, AMSTERDAM, ( HEREINAFTER REFERRED TO AS " NEDCHEM " ) TOGETHER WITH FIVE OTHER NETHERLANDS UNDERTAKINGS WHICH WERE SUBSEQUENTLY REPRESENTED BY IT, AND WITH C . F . BOEHRINGER AND SOEHNE, MANNHEIM, AND VEREINIGTE CHININEFABRIKEN ZIMMER AND COMPANY, GMBH, MANNHEIM ( HEREINAFTER TOGETHER REFERRED TO AS " BOEHRINGER " ), WHEREBY THOSE UNDERTAKINGS RETAINED THEIR RESPECTIVE DOMESTIC MARKETS AND PROVIDED FOR THE FIXING OF PRICES AND QUOTAS FOR THE EXPORT OF QUININE AND QUINIDINE TO OTHER COUNTRIES . THE APPLICANT WITHDREW FROM THIS AGREEMENT ON 28 FEBRUARY 1959 . IN JULY 1959 FOLLOWING THE INTERVENTION OF THE BUNDESKARTELLAMT TO WHICH THE AGREEMENT HAD BEEN NOTIFIED, BOEHRINGER AND NEDCHEM AMENDED THAT AGREEMENT IN SUCH A WAY AS TO EXCLUDE FROM IT DELIVERIES TO THE MEMBER STATE OF THE EEC .

2 IN 1960 A NEW CARTEL WAS ESTABLISHED BETWEEN BUCHLER AND THE TWO ABOVEMENTIONED UNDERTAKINGS AND SHORTLY AFTERWARDS IT WAS EXTENDED TO CERTAIN FRENCH AND BRITISH UNDERTAKINGS . THIS CARTEL WAS BASED IN THE FIRST PLACE ON AN AGREEMENT RELATING TO TRADE WITH THIRD COUNTRIES ( HEREINAFTER REFERRED TO AS THE " EXPORT AGREEMENT " ) AND PROVIDING INTER ALIA FOR THE FIXING BY AGREEMENT OF PRICES AND REBATES RELATING TO EXPORTS OF QUININE AND QUINIDINE AND THE ALLOCATION OF EXPORT QUOTAS SUPPORTED BY A SYSTEM OF COMPENSATION DEPENDING ON WHETHER THE EXPORT QUOTAS WERE EXCEEDED OR NOT FULFILLED . FURTHERMORE, A GENTLEMEN' S AGREEMENT BETWEEN THE SAME PARTIES EXTENDED THE ABOVEMENTIONED PROVISIONS TO ALL SALES WITHIN THE COMMON MARKET . THIS AGREEMENT ALSO ESTABLISHED THE PRINCIPLE OF THE PROTECTION OF DOMESTIC MARKETS IN FAVOUR OF EACH OF THE PRODUCERS AND BOUND THE FRENCH MEMBERS OF THE CARTEL TO REFRAIN FROM MANUFACTURING SYNTHETIC QUINIDINE .

3 SINCE THE COMMISSION CONSIDERED THAT THE RESTRICTIONS ON COMPETITION THEREIN PROVIDED FOR WERE CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES, IT IMPOSED ON THE APPLICANT A FINE OF 65 000 UNITS OF ACCOUNT BY A DECISION OF 16 JULY 1969 ( OJ L 192, PP . 5 ET SEQ .).

4 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 25 SEPTEMBER 1969 THE BUCHLER UNDERTAKING INITIATED PROCEEDINGS AGAINST THIS DECISION .

A - THE SUBMISSION RELATING TO THE LIMITATION PERIOD

5 THE APPLICANT COMPLAINS THAT THE COMMISSION DID NOT TAKE INTO ACCOUNT THE FACT THAT PROCEEDINGS IN RESPECT OF THE ALLEGED INFRINGEMENT ARE BARRED HAVING REGARD TO THE PERIOD WHICH ELAPSED BETWEEN THE DATE OF THE ACTS AND THE INITIATION OF THE ADMINISTRATIVE PROCEDURE BY THE COMMISSION .

6 THE PROVISIONS GOVERNING THE COMMISSION' S POWER TO IMPOSE FINES FOR INFRINGEMENT OF THE RULES ON COMPETITION DO NOT LAY DOWN ANY PERIOD OF LIMITATION . IN ORDER TO FULFIL THEIR FUNCTION OF ENSURING LEGAL CERTAINTY LIMITATION PERIODS MUST BE FIXED IN ADVANCE . THE FIXING OF THEIR DURATION AND THE DETAILED RULES FOR THEIR APPLICATION COME WITHIN THE POWERS OF THE COMMUNITY LEGISLATURE .

7 CONSEQUENTLY THE SUBMISSION IS UNFOUNDED .

B - SUBMISSIONS RELATING TO PROCEDURE AND FORM

I - SUBMISSIONS RELATING TO THE NOTICE OF COMPLAINTS

8 THE APPLICANT CLAIMS THAT IN THE NOTICE OF COMPLAINTS COMMUNICATED TO IT ON 30 MAY 1968 THE COMMISSION FAILED TO SPECIFY THE NATURE, SCOPE, CONTENT AND RESULTS OF CERTAIN INVESTIGATIONS ON WHICH THE DECISION AT ISSUE WAS BASED . THIS OMISSION IS SAID TO HAVE ADVERSELY AFFECTED THE APPLICANT' S RIGHTS OF DEFENCE .

9 ARTICLE 19 ( 1 ) OF REGULATION NO 17/62 OBLIGES THE COMMISSION, BEFORE TAKING A DECISION IN CONNEXION WITH FINES, TO GIVE THE PERSONS CONCERNED THE OPPORTUNITY OF PUTTING FORWARD THEIR POINT OF VIEW WITH REGARD TO THE COMPLAINTS MADE AGAINST THEM . ARTICLE 4 OF REGULATION NO 99/63 PROVIDES THAT THE COMMISSION SHALL IN ITS DECISIONS DEAL ONLY WITH THOSE OBJECTIONS RAISED AGAINST UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS IN RESPECT OF WHICH THEY HAVE BEEN AFFORDED THE OPPORTUNITY OF MAKING KNOWN THEIR VIEWS . THE NOTICE OF COMPLAINTS FULFILS THIS REQUIREMENT SINCE IT SETS FORTH CLEARLY, ALBEIT SUCCINCTLY, THE ESSENTIAL FACTS ON WHICH THE COMMISSION RELIES . THE REQUIREMENT IMPOSED ON THE COMMISSION BY ARTICLE 19 IS MET WHEN IN THE COURSE OF THE ADMINISTRATIVE PROCEDURE IT SUPPLIES THE DETAILS NECESSARY TO THE DEFENCE .

10 IN THE PRESENT CASE THE COMMISSION HAS CLEARLY SET OUT THE ESSENTIAL FACTORS ON WHICH IT BASED THE COMPLAINTS LISTED, REFERRING EXPRESSLY TO STATEMENTS CONTAINED IN THE MINUTES OF CERTAIN MEETINGS OF THE UNDERTAKINGS CONCERNED AND TO CORRESPONDENCE RELATING TO THE PROTECTION OF DOMESTIC MARKETS WHICH WAS EXCHANGED BETWEEN THOSE UNDERTAKINGS IN OCTOBER AND NOVEMBER 1963 . FURTHERMORE, MAINTAINING ON THE BASIS OF ITS INVESTIGATIONS THAT THE UNDERTAKINGS CONCERNED HAD CONTINUED TO EXCHANGE INFORMATION ON THEIR SALES WITH A VIEW TO POSSIBLE QUANTITATIVE COMPENSATION AND THAT UP TO THE END OF 1964 THEY HAD MAINTAINED A POLICY OF UNIFORM PRICES, THE COMMISSION THEREBY DEDUCED THAT AFTER 1962 THEY HAD CONTINUED TO APPLY THE GENTLEMEN' S AGREEMENT ON PRODUCTION AND SALE IN THE COMMON MARKET .

11 CONSEQUENTLY THE OBJECTIONS RAISED WITH REGARD TO THE NOTICE OF COMPLAINTS ARE UNFOUNDED .

II - THE OBJECTION RELATING TO CONSULTATION OF THE ADMINISTRATIVE FILE

12 THE APPLICANT MAINTAINS THAT THE COMMISSION INFRINGED THE RIGHTS OF THE DEFENCE BY REFUSING IN THE COURSE OF THE ADMINISTRATIVE PROCEDURE TO ALLOW IT TO CONSULT ESSENTIAL DOCUMENTS ON WHICH THE CONTESTED DECISION WAS BASED . THE DEFENDANT REPLIES THAT IT HAD ENABLED THE APPLICANT TO CONSULT THE DOCUMENTS WHICH WERE OF IMPORTANCE FOR THE APPRAISAL OF THE COMPLAINTS .

13 THE NOTICE OF COMPLAINTS ALLEGES THAT THE APPLICANT TOGETHER WITH OTHER PRODUCERS OF QUININE HAD UNTIL 1966 ADOPTED A POLICY OF COMMON PRICES, PARTICULARLY WITH REGARD TO SALES IN ITALY, BELGIUM AND LUXEMBOURG . ACCORDING TO THIS STATEMENT THIS CONCERTED CONDUCT IS CLEAR IN PARTICULAR FROM THE UNIFORMITY OF PRICES MAINTAINED BY THE UNDERTAKINGS FOR THEIR SALES IN THE SAID COUNTRIES . IN SUPPORT OF THIS STATEMENT THE NOTICE OF COMPLAINTS ( LAST SUBPARAGRAPH OF PARAGRAPH 11 ) REFERS TO THE OUTCOME OF INVESTIGATIONS CARRIED OUT BY THE COMMISSION' S STAFF IN THOSE COUNTRIES . IN THE COURSE OF THE ADMINISTRATIVE PROCEDURE THE APPLICANT REQUESTED THE COMMISSION TO ACQUAINT IT WITH THE RESULTS OF THE SAID INVESTIGATIONS . THE COMMISSION REJECTED THIS REQUEST ON THE GROUND THAT IT MUST PROTECT THE BUSINESS SECRETS OF THE OTHER UNDERTAKINGS .

14 NEVERTHELESS THE COMMISSION ITSELF ALLEGED THAT THOSE UNDERTAKINGS REGULARLY EXCHANGED INFORMATION ON THE AMOUNTS SOLD IN THE STATES IN QUESTION . FURTHERMORE IN CASE OF DOUBT THE COMMISSION COULD HAVE REQUESTED THE OPINION OF THE OTHER UNDERTAKINGS CONCERNED WITH REGARD TO THE APPLICANT' S REQUEST FOR THE COMMUNICATION OF THE DOCUMENTS RELATING TO THEM . IT DOES NOT APPEAR THAT THE COMMISSION CONSULTED THE SAID UNDERTAKINGS IN THIS WAY .

15 NEVERTHELESS, THROUGHOUT THE ADMINISTRATIVE PROCEDURE THE APPLICANT DID NOT DISPUTE THAT IT HAD CARRIED OUT A CONCERTED POLICY WITH REGARD TO PRICES UNTIL THE END OF OCTOBER 1964 . CONSEQUENTLY THE FAILURE TO COMMUNICATE THE DOCUMENTS DOES NOT APPEAR CAPABLE OF AFFECTING THE APPLICANT' S OPPORTUNITIES OF DEFENCE IN RESPECT OF THE ABOVEMENTIONED COMPLAINT WITHIN THE FRAMEWORK OF THE ADMINISTRATIVE PROCEDURE, EXCEPT FOR THE PERIOD FROM NOVEMBER 1964 TO JANUARY 1965 . CONSEQUENTLY THIS MATTER MUST BE CONSIDERED IN CONJUNCTION WITH THE SUBSTANCE OF THE CASE .

III - COMPLAINTS RELATING TO THE DRAWING UP OF THE MINUTES OF THE HEARING

16 THE APPLICANT MAINTAINS THAT BOTH THE ADVISORY COMMITTEE ON RESTRICTIVE PRACTICES AND MONOPOLIES AND THE COMMISSION ACTED ON THE BASIS OF A PRELIMINARY VERSION OF THE MINUTES OF THE HEARING, WHICH DID NOT TAKE INTO ACCOUNT THE AMENDMENTS WHICH IT HAD SUGGESTED . SUCH ACTION IS INCOMPATIBLE WITH THE PRINCIPLES OF THE RULE OF LAW GOVERNING THE GUARANTEE OF THE FUNDAMENTAL RIGHTS OF AN UNDERTAKING THREATENED WITH SANCTIONS .

17 THE PRELIMINARY NATURE OF THE MINUTES OF THE HEARING SUBMITTED TO THESE TWO BODIES COULD ONLY AMOUNT TO A DEFECT IN THE ADMINISTRATIVE PROCEDURE CAPABLE OF VITIATING THE DECISION WHICH RESULTS THEREFROM ON THE GROUNDS OF ILLEGALITY IF THE DOCUMENT IN QUESTION WAS DRAWN UP IN SUCH A WAY AS TO BE MISLEADING IN A MATERIAL RESPECT . A CONSIDERATION OF THE AMENDMENTS TO THE DRAFT MINUTES SUGGESTED BY THE APPLICANT SHOWS THAT THE ALTERATIONS REQUESTED DID NOT CONCERN ESSENTIAL FACTORS, WITH THE RESULT THAT THE FINAL TEXT OF THE MINUTES CONTAINING ALL THE APPLICANT' S SUGGESTED AMENDMENTS DIFFERS IN NO MATERIAL RESPECT FROM THE DRAFT SUBMITTED TO THE MEMBERS OF THE COMMISSION . THUS, THIS DRAFT WAS NOT CAPABLE OF CHANGING THE STATEMENTS OF THE UNDERTAKINGS CONCERNED, WITH THE RESULT THAT IT WAS ABLE TO PROVIDE THE ADVISORY COMMITTEE AND THE COMMISSION WITH COMPLETE INFORMATION ON THE ESSENTIAL CONTENT OF THE STATEMENTS MADE AT THE HEARING .

18 THIS COMPLAINT IS THEREFORE UNFOUNDED .

IV - THE COMPLAINT THAT THE MEMBERS OF THE COMMISSION DID NOT TAKE SUFFICIENT PART IN THE ADMINISTRATIVE PROCEDURE

19 THE APPLICANT MAINTAINS THAT THE PRELIMINARY INQUIRY IS VITIATED BY ILLEGALITY ON THE GROUND THAT THE MEMBERS OF THE COMMISSION WHO WERE TO DECIDE ON THE FINE HAD NOT BEEN PRESENT AT ITS HEARING .

20 AS THE PURPOSE OF THE PROCEDURE BEFORE THE COMMISSION IS TO APPLY ARTICLE 85 OF THE TREATY, EVEN WHERE IT MAY LEAD TO THE IMPOSITION OF FINES, IT IS AN ADMINISTRATIVE PROCEDURE . WITHIN THE CONTEXT OF SUCH A PROCEDURE THERE IS NOTHING TO PREVENT THE MEMBERS OF THE COMMISSION WHO ARE RESPONSIBLE FOR TAKING A DECISION IMPOSING FINES FROM BEING INFORMED OF THE OUTCOME OF THE HEARING BY SUCH PERSONS AS THE COMMISSION HAS APPOINTED TO CONDUCT IT, IN ACCORDANCE WITH ARTICLE 9 ( 1 ) OF REGULATION NO 99/63 . THUS, THE FACT THAT THE APPLICANT WAS NOT HEARD PERSONALLY BY THE MEMBERS OF THE COMMISSION AT ITS HEARING CANNOT AMOUNT TO A DEFECT IN THE CONTESTED DECISION .

21 THE APPLICANT MAINTAINS IN ADDITION THAT THE ADMINISTRATIVE PROCEDURE IS VITIATED BY THE FACT THAT THE FILE OF THE CASE WAS NOT SENT IN ITS ENTIRETY TO EACH MEMBER OF THE COMMISSION .

22 HOWEVER, THE MEMBERS OF THE COMMISSION RECEIVED COMPLETE AND DETAILED INFORMATION REGARDING THE ESSENTIAL POINTS OF THE CASE AND HAD ACCESS TO THE ENTIRE FILE .

23 THEREFORE, THE APPLICANT' S COMPLAINT IS UNFOUNDED .

C - SUBSTANCE

I - THE STATUS AND DURATION OF THE GENTLEMEN' S AGREEMENT

24 THE APPLICANT COMPLAINS THAT THE COMMISSION CONSIDERED THAT THE EXPORT AGREEMENT RELATING TO TRADE WITH THIRD COUNTRIES AND THE GENTLEMEN' S AGREEMENT GOVERNING THE CONDUCT OF ITS MEMBERS IN THE COMMON MARKET CONSTITUTED AN INDIVISIBLE ENTITY AS FAR AS ARTICLE 85 WAS CONCERNED . THE APPLICANT STATES THAT THE GENTLEMEN' S AGREEMENT, UNLIKE THE EXPORT AGREEMENT, DID NOT CONSTITUTE AN AGREEMENT WITHIN THE MEANING OF ARTICLE 85 ( 1 ) AND IN ANY EVENT IT DEFINITIVELY CEASED TO EXIST FROM THE END OF OCTOBER 1962 . THE CONDUCT OF THE PARTIES TO THE EXPORT AGREEMENT DOES NOT IN THE APPLICANT' S VIEW INDICATE THAT THEY CONTINUED THE RESTRICTIONS ON COMPETITION WHICH WERE ORIGINALLY PROVIDED FOR IN THE GENTLEMEN' S AGREEMENT . THE OPPOSITE CONCLUSIONS REACHED BY THE CONTESTED DECISION ARE THEREFORE ALLEGED TO BE VITIATED BECAUSE THEY ARE BASED ON INCORRECT FINDINGS .

25 THE GENTLEMEN' S AGREEMENT, WHICH THE APPLICANT ADMITS EXISTED UNTIL THE END OF OCTOBER 1962, HAD AS ITS OBJECT THE RESTRICTION OF COMPETITION WITHIN THE COMMON MARKET . THE PARTIES TO THE EXPORT AGREEMENT MUTUALLY DECLARED THEMSELVES WILLING TO ABIDE BY THE GENTLEMEN' S AGREEMENT AND CONCEDE THAT THEY DID SO UNTIL THE END OF OCTOBER 1962 . THIS DOCUMENT THUS AMOUNTED TO THE FAITHFUL EXPRESSION OF THE JOINT INTENTION OF THE PARTIES TO THE AGREEMENT WITH REGARD TO THEIR CONDUCT IN THE COMMON MARKET . FURTHERMORE IT CONTAINED A PROVISION TO THE EFFECT THAT INFRINGEMENT OF THE GENTLEMEN' S AGREEMENT WOULD IPSO FACTO CONSTITUTE AN INFRINGEMENT OF THE EXPORT AGREEMENT . IN THOSE CIRCUMSTANCES ACCOUNT MUST BE TAKEN OF THIS CONNEXION IN ASSESSING THE EFFECTS OF THE GENTLEMEN' S AGREEMENT WITH REGARD TO THE CATEGORIES OF ACTS PROHIBITED BY ARTICLE 85 ( 1 ).

26 THE DEFENDANT BASES ITS VIEW THAT THE GENTLEMEN' S AGREEMENT WAS CONTINUED UNTIL FEBRUARY 1965 ON DOCUMENTS AND DECLARATIONS EMANATING FROM THE PARTIES TO THE AGREEMENT THE TENOR OF WHICH IS INDISTINCT AND INDEED CONTRADICTORY SO THAT IT IS IMPOSSIBLE TO CONCLUDE WHETHER THOSE UNDERTAKINGS INTENDED TO TERMINATE THE GENTLEMEN' S AGREEMENT AT THEIR MEETING ON 29 OCTOBER 1962 . THE CONDUCT OF THE UNDERTAKINGS IN THE COMMON MARKET AFTER 29 OCTOBER 1962 MUST THEREFORE BE CONSIDERED IN RELATION TO THE FOLLOWING FOUR POINTS : SHARING OUT OF DOMESTIC MARKETS, FIXING OF COMMON PRICES, DETERMINATION OF SALES QUOTAS AND PROHIBITION AGAINST MANUFACTURING SYNTHETIC QUINIDINE .

II - PROTECTION OF THE PRODUCERS' DOMESTIC MARKETS

27 THE GENTLEMEN' S AGREEMENT GUARANTEED PROTECTION OF EACH DOMESTIC MARKET FOR THE PRODUCERS IN THE VARIOUS MEMBER STATES . AFTER OCTOBER 1962 WHEN SIGNIFICANT SUPPLIES WERE DELIVERED ON ONE OF THOSE MARKETS BY PRODUCERS WHO WERE NOT NATIONALS, AS FOR EXAMPLE IN THE CASE OF SALES OF QUININE AND QUINIDINE IN FRANCE, THERE WAS A SUBSTANTIAL ALIGNMENT OF PRICES CONFORMING TO FRENCH DOMESTIC PRICES WHICH WERE HIGHER THAN THE EXPORT PRICES TO THIRD COUNTRIES . IT DOES NOT APPEAR THAT THERE WERE ALTERATIONS IN THE INSIGNIFICANT VOLUME OF TRADE BETWEEN THE OTHER MEMBER STATES REFERRED TO BY THE CLAUSE RELATING TO DOMESTIC PROTECTION IN SPITE OF CONSIDERABLE DIFFERENCES IN THE PRICES PREVAILING IN EACH OF THOSE STATES . THE DIVERGENCES BETWEEN THE DOMESTIC LEGISLATION OF THOSE STATES CANNOT BY ITSELF EXPLAIN THOSE DIFFERENCES IN PRICE OR THE SUBSTANTIAL ABSENCE OF TRADE .

28 THE CORRESPONDENCE EXCHANGED IN OCTOBER AND NOVEMBER 1963 BETWEEN THE PARTIES TO THE EXPORT AGREEMENT WITH REGARD TO THE PROTECTION OF DOMESTIC MARKETS MERELY CONFIRMED THE INTENTION OF THOSE UNDERTAKINGS TO ALLOW THIS STATE OF AFFAIRS TO REMAIN UNCHANGED . THIS INTENTION WAS SUBSEQUENTLY CONFIRMED BY NEDCHEM DURING THE MEETING OF THE UNDERTAKINGS CONCERNED IN BRUSSELS ON 14 MARCH 1964 .

29 FROM THOSE CIRCUMSTANCES IT IS CLEAR THAT WITH REGARD TO THE RESTRICTION ON COMPETITION ARISING FROM THE PROTECTION OF THE PRODUCERS' DOMESTIC MARKETS THE PRODUCERS CONTINUED AFTER THE MEETING ON 29 OCTOBER 1962 TO ABIDE BY THE GENTLEMEN' S AGREEMENT OF 1960 AND CONFIRMED THEIR COMMON INTENTION TO DO SO .

30 THE SHARING OUT OF DOMESTIC MARKETS HAS AS ITS OBJECT THE RESTRICTION OF COMPETITION AND TRADE WITHIN THE COMMON MARKET . THE FACT THAT, IF THERE WERE A THREATENED SHORTAGE OF RAW MATERIALS, SUCH AN AGREEMENT MIGHT IN PRACTICE HAVE HAD LESS INFLUENCE ON COMPETITION AND ON INTERNATIONAL TRADE THAN IN A NORMAL PERIOD IN NO WAY ALTERS THE FACT THAT THE PARTIES NEVERTHELESS DID NOT TERMINATE THEIR ACTIVITIES . FURTHERMORE THE APPLICANT HAS FURNISHED NO CONCLUSIVE EVIDENCE CAPABLE OF PROVING THAT IT HAD CEASED TO ACT IN ACCORDANCE WITH THE AGREEMENT BEFORE THE DATE OF EXPIRY OF THE EXPORT AGREEMENT .

31 CONSEQUENTLY, THE SUBMISSIONS CONCERNING THE PART OF THE DECISION RELATING TO THE CONTINUATION OF THE AGREEMENT ON THE PROTECTION OF THE PRODUCERS' DOMESTIC MARKETS UNTIL THE BEGINNING OF FEBRUARY 1965 ARE UNFOUNDED .

III - THE JOINT FIXING OF SALES PRICES

32 WITH REGARD TO THE JOINT FIXING OF SALES PRICES FOR THE MARKETS WHICH WERE NOT SHARED OUT, THAT IS TO SAY, THE BELGO-LUXEMBOURG ECONOMIC UNION AND ITALY, THE GENTLEMEN' S AGREEMENT PROVIDED FOR THE APPLICATION TO SUCH SALES OF THE CURRENT PRICES FOR EXPORTS TO THIRD COUNTRIES FIXED BY MUTUAL AGREEMENT, IN ACCORDANCE WITH THE EXPORT AGREEMENT . THE JOINT FIXING OF SALES PRICES BY THE PRODUCERS OF VIRTUALLY ALL THE QUININE AND QUINIDINE DISTRIBUTED WITHIN THE COMMON MARKET IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES AND SERIOUSLY RESTRICTS COMPETITION WITHIN THE COMMON MARKET . IF, AS THE DEFENDANT MAINTAINS, THE PARTIES TO THE EXPORT AGREEMENT CONTINUED UNTIL FEBRUARY 1965 TO APPLY THEIR CURRENT EXPORT PRICES TO SUPPLIS TO THE ABOVEMENTIONED MEMBER STATES, IT WOULD FOLLOW THAT THEY CONTINUED TO ABIDE BY THAT PART OF THE GENTLEMEN' S AGREEMENT RELATING TO THE JOINT FIXING OF SALES PRICES .

33 WITH REGARD TO THE PERIOD FROM NOVEMBER 1962 TO APRIL 1964, THE FIGURES SUPPLIED BY THE DEFENDANT SHOW A SUBSTANTIAL AND CONSTANT IDENTITY BETWEEN THE CURRENT PRICES FIXED FOR EXPORT WITHIN THE FRAMEWORK OF THE AGREEMENT AND THE PRICES MAINTAINED BY THE UNDERTAKINGS CONCERNED, INCLUDING THE APPLICANT, FOR THEIR SALES IN UNPROTECTED DOMESTIC MARKETS IN THE COMMUNITY . WHERE SUCH PRICES DEVIATE FROM THE SCALE OF EXPORT PRICES THEY DO SO IN TERMS OF REBATES OR INCREASES CORRESPONDING GENERALLY TO THOSE AGREED ON UNDER THE GENTLEMEN' S AGREEMENT . THE APPLICANT HAS NEITHER SUPPLIED NOR OFFERED TO SUPPLY ANY EVIDENCE RELATING TO THE ABOVEMENTIONED PERIOD CAPABLE OF PROVING THAT THIS ARGUMENT OF THE COMMISSION IS UNFOUNDED, ALTHOUGH IT HAS DONE SO IN RESPECT OF A PART OF THE YEAR 1964 . MOREOVER THE INCREASE IN PRICES OF 15 PER CENT, WHICH WAS JOINTLY DECIDED UPON ON 12 MARCH 1964 UNDER THE EXPORT AGREEMENT WHICH LED NEDCHEM TO WITHDRAW ITS OPPOSITION, WAS UNIFORMLY APPLIED - ALTHOUGH THAT UNDERTAKING WOULD HAVE PREFERRED TO CONTINUE TO FIX LOWER PRICES - WITH REGARD TO SUPPLIES TO ITALY, BELGIUM AND LUXEMBOURG ALSO .

34 THESE CIRCUMSTANCES SHOW THAT WITH REGARD TO SALES PRICES THE PARTIES TO THE EXPORT AGREEMENT CONTINUED AFTER OCTOBER 1962 TO ACT IN THE COMMON MARKET AS IF THE GENTLEMEN' S AGREEMENT OF 1960 WERE STILL IN FORCE .

35 THE ACTION TAKEN BY THE PARTIES TO THE AGREEMENT WITH REGARD TO PRICES FROM MAY 1964 WAS ONLY DISCUSSED IN DEPTH AS A RESULT OF THE QUESTIONS PUT BY THE COURT TO THE DEFENDANT DURING THE ORAL PROCEDURE . IT IS CLEAR FROM THE ORAL PROCEDURE, TAKING INTO ACCOUNT THE INFORMATION SUPPLIED BY THE PARTIES, THAT DURING 1964 AND IN PARTICULAR FROM MAY ONWARDS, A PARTY TO THE AGREEMENT APPLIED PRICES WHICH IN AN INCREASING NUMBER OF CASES DEVIATED FROM THE CURRENT EXPORT PRICES, AND THAT THE DEFENDANT HAS BEEN UNABLE TO GIVE A CONVINCING EXPLANATION AS TO HOW THIS MIGHT BE RECONCILED WITH THE CONTINUATION IN FORCE OF THE AGREEMENT IN QUESTION . THE FAILURE TO COMMUNICATE TO THE UNDERTAKINGS CONCERNED THE RESULTS OF THE INVESTIGATIONS CARRIED OUT IN ITALY AND BELGIUM, WHICH EXCLUDED ANY POSSIBILITY OF CLARIFICATION AND DISCUSSION AT THE STAGE OF THE ADMINISTRATIVE PROCEDURE, MAY HAVE CONTRIBUTED TO LEAVING UNEXPLAINED FACTS WHICH OUGHT TO HAVE BEEN CLARIFIED .

36 IN THESE CIRCUMSTANCES PROOF HAS NOT BEEN SUFFICIENTLY ESTABLISHED IN LAW THAT THE APPLICANT BY MUTUAL AGREEMENT WITH THE OTHER PRODUCERS MAINTAINED UNIFORM PRICES FOR ITS SALES IN THE BELGO-LUXEMBOURG ECONOMIC UNION AND ITALY AFTER MAY 1964 . CONSEQUENTLY THE PERIOD FROM MAY 1964 TO FEBRUARY 1965 MUST BE OMITTED FROM THE INFRINGEMENT .

IV - THE SALES QUOTAS

37 WITH REGARD TO THE FIXING OF SALES QUOTAS FOR THE COMMON MARKET, WHICH WAS LINKED TO A SYSTEM OF COMPENSATION AND WHICH CONSTITUTED A SUPPLEMENTARY GUARANTEE OF THE SHARING OUT OF DOMESTIC MARKETS, THE APPLICANT MAINTAINS THAT THE NECESSARY CONDITION FOR THE FUNCTIONING OF SUCH A SYSTEM, NAMELY THE RECIPROCAL NOTIFICATION OF ALL SALES INCLUDING THOSE EFFECTED WITHIN THE COMMUNITY, WAS NO LONGER FULFILLED SUBSEQUENT TO OCTOBER 1962 .

38 IT IS NOT CLEAR THAT THE COMMUNICATIONS OF THE UNDERTAKINGS CONCERNED RELATING TO SALES, WHICH THE DEFENDANT HAS PRODUCED IN SUPPORT OF ITS OPPOSING STATEMENT, ALSO RELATE TO SUPPLIES WITHIN THE COMMON MARKET . ON THE CONTRARY, SUCH DOCUMENTS IN GENERAL REFER EXPRESSLY TO " EXPORT SALES ", AN EXPRESSION HABITUALLY EMPLOYED BY THE MEMBERS OF THE CARTEL TO INDICATE SALES TO THIRD COUNTRIES . FURTHERMORE, IT IS CLEAR FROM AN EXCHANGE OF LETTERS IN JANUARY 1964 BETWEEN TWO MEMBERS OF THE CARTEL THAT EVEN SUCH EXPORT SALES FIGURES WERE NO LONGER COMMUNICATED REGULARLY . THE DEFENDANT ITSELF ADMITS IN THE STATEMENT OF REASONS FOR THE CONTESTED DECISION THAT DURING 1963 AND 1964 THE COMPENSATION ARRANGEMENTS WHICH WERE INTENDED TO ENSURE THAT THE QUOTAS WERE OBSERVED WERE NOT APPLIED BECAUSE OF THE SCARCITY OF RAW MATERIALS AND BECAUSE OF THE INCREASE IN DEMAND, SO THAT THE MEMBERS OF THE CARTEL HAD NO FURTHER INTEREST IN EFFECTING COMPENSATORY DELIVERIES BETWEEN THEMSELVES .

39 AT THE HEARING THE DEFENDANT PRODUCED A TABLE OF THE AMOUNTS OF QUININE DISPOSED OF BY NEDCHEM, BOEHRINGER AND BUCHLER FROM 1962 TO 1964 WITH THE OBJECT OF PROVING THAT THOSE QUANTITIES, VIEWED AS A PERCENTAGE OF THE TOTAL OF THE QUOTAS, DID NOT DEVIATE PERCEPTIBLY FOR THAT PERIOD FROM THE QUOTA ASSIGNED TO EACH OF THE UNDERTAKINGS WITHIN THE FRAMEWORK OF THE AGREEMENT AND THUS THAT THE QUOTA ARRANGEMENT CONTINUED TO OPERATE AFTER 1962 .

40 NEVERTHELESS, THIS TABLE, WHICH MOREOVER DOES NOT INCLUDE SALES OF QUINIDINE, SHOWS THAT, EVEN TAKING AS A BASIS AN AVERAGE RECORDED OVER THE PREVIOUS TWO YEARS, THERE ARE CONSIDERABLE DEVIATIONS IN THE CASE OF EACH OF THE THREE UNDERTAKINGS IN RELATION TO ITS OWN QUOTA . FURTHERMORE, THE COMMISSION HAS SUPPLIED COMPREHENSIVE FIGURES COVERING ALL THE SALES OF QUININE BY THE UNDERTAKINGS CONCERNED AND IT IS THUS IMPOSSIBLE TO DISCERN FROM THEM THE COURSE OF CONDUCT OF THOSE UNDERTAKINGS IN THE COMMON MARKET . SINCE THERE IS INSUFFICIENT PROOF THAT THE SYSTEM OF QUOTAS FOR SALES WITHIN THE COMMON MARKET WAS CONTINUED AFTER OCTOBER 1962, IT MUST BE CONCLUDED THAT THE APPLICANT' S COMPLAINTS WITH REGARD TO THIS PART OF THE CONTESTED DECISION ARE WELL FOUNDED .

V - RESTRICTIONS ON THE MANUFACTURE OF SYNTHETIC QUINIDINE

41 THE GENTLEMEN' S AGREEMENT PROHIBITED THE GROUP OF FRENCH UNDERTAKINGS FROM MANUFACTURING SYNTHETIC QUINIDINE . OWING TO THE STRINGENCY OF THE RESTRICTIONS IMPOSED ON UNDERTAKINGS FROM ONE MEMBER STATE FOR THE BENEFIT OF UNDERTAKINGS IN OTHER MEMBER STATES AND TAKING INTO ACCOUNT THE IMPORTANCE OF SUCH UNDERTAKINGS ON THE MARKET IN QUESTION, THESE PROHIBITIONS CLEARLY HAVE AS THEIR OBJECT THE RESTRICTION OF COMPETITION WITHIN THE COMMON MARKET AND ARE CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES . THE FACT RELIED UPON THAT, WHEN THE GENTLEMEN' S AGREEMENT WAS CONCLUDED, THE FRENCH UNDERTAKINGS WERE NOT IN A POSITION TO MANUFACTURE SYNTHETIC QUINIDINE DOES NOT RENDER LAWFUL SUCH A RESTRICTION WHICH ENTIRELY PRECLUDED THEM FROM TAKING UP THIS ACTIVITY .

42 THAT THE FRENCH UNDERTAKINGS SHOULD ACCEDE TO THIS RESTRICTION OF THEIR FREEDOM IS EXPLICABLE IN TERMS OF THEIR INTEREST - OWING TO THE PARTICULARLY HIGH PRICES WHICH THEY MAINTAINED FOR THEIR PRODUCTS IN FRANCE - IN PRESERVING THE TERRITORIAL PROTECTION WHICH THEY ENJOYED ON THEIR DOMESTIC MARKET . TAKING INTO ACCOUNT THE CONNEXION THUS EXISTING BETWEEN THOSE TWO RESTRICTIONS ON COMPETITION, IT MAY REASONABLY BE CONCLUDED THAT THE PROHIBITION ON PRODUCTION LASTED AS LONG AS THE TERRITORIAL PROTECTION . ALTHOUGH IT IS TRUE THAT IN MARCH 1964 BOEHRINGER GRANTED A LICENCE TO MANUFACTURE QUINIDINE TO THE REMAINING BRITISH MEMBER OF THE CARTEL, ON WHOM THE GENTLEMEN' S AGREEMENT IMPOSED PROHIBITIONS SIMILAR TO THOSE IMPOSED ON THE FRENCH UNDERTAKINGS, THIS HAS NO EFFECT ON THE FINDING WHICH HAS ALREADY BEEN MADE WITH REGARD TO THE RELATIONSHIP BETWEEN THE FRENCH UNDERTAKINGS AND THE GERMAN AND NETHERLANDS MEMBERS OF THE CARTEL . ALTHOUGH IT IS POSSIBLE THAT, OWING TO THE SCARCITY OF RAW MATERIALS WHICH WAS ESTABLISHED BY THE CONTESTED DECISION ( NO 29, LAST PARAGRAPH ), IN ITS ULTIMATE PERIOD PROTECTION OF THE DOMESTIC MARKETS DID NOT HAVE IMPORTANT EFFECTS ON COMPETITION AND TRADE BETWEEN MEMBER STATES, THIS CARTEL NEVERTHELESS LASTED UNTIL FEBRUARY 1965 . IN THE ABSENCE OF ANY INDICATION TO THE CONTRARY AND HAVING REGARD TO THE ABOVEMENTIONED CONNEXIONS BETWEEN THE TWO ASPECTS OF THE CARTEL, IT MUST BE CONSIDERED THAT THE AGREEMENT RESTRICTING THE FRENCH UNDERTAKINGS' FREEDOM TO MANUFACTURE WAS OF THE SAME DURATION .

43 CONSEQUENTLY THE APPLICANT' S COMPLAINTS IN THIS RESPECT ARE UNFOUNDED .

VI - GENERAL APPRAISAL OF THE AGREEMENT WITHIN THE COMMON MARKET

44 IT IS CLEAR FROM THE FOREGOING THAT THE APPLICANT PARTICIPATED WITH OTHER PRODUCERS OF QUININE AND QUINIDINE IN AN AGREEMENT PROHIBITED BY ARTICLE 85 OF THE EEC TREATY . THIS AGREEMENT CONTINUED IN MOST OF ITS FORMS EVEN AFTER THE MEETING ON 29 OCTOBER 1962 . SERIOUS DOUBTS AS TO THE CONTINUATION OF THE AGREEMENT AFTER 1962 EXIST ONLY WITH REGARD TO THE APPLICATION OF SALES QUOTAS . NEVERTHELESS, THE FACT THAT THE UNDERTAKINGS DID NOT CONTINUE TO APPLY THE SYSTEM OF QUOTAS DOES NOT SEEM PERCEPTIBLY TO HAVE IMPROVED THE CONDITIONS OF COMPETITION, SINCE THEY CONTINUED JOINTLY TO FIX PRICES, TO APPLY UNIFORMLY TO THEIR DELIVERIES IN THE COMMON MARKET JOINT PRICE INCREASES ARRANGED IN MARCH AND OCTOBER 1964 AND DECIDED WITHIN THE FRAMEWORK OF THE EXPORT AGREEMENT AND FINALLY TO MAINTAIN PROTECTION OF THEIR RESPECTIVE DOMESTIC MARKETS AND THE PROHIBITION ON THE FRENCH UNDERTAKINGS' PRODUCTION OF SYNTHETIC QUINIDINE . HOWEVER, THE APPLICATION OF UNIFORM PRICES FOR DELIVERIES TO ITALY, BELGIUM AND LUXEMBOURG HAS ONLY BEEN PROVED TO EXIST UP TO APRIL 1964 .

43 FINALLY, EVEN IF IT MUST BE CONCEDED THAT THE EXPORT AGREEMENT COULD HAVE OPERATED INDEPENDENTLY OF THE AGREEMENT RELATING TO THE COMMON MARKET, IT MUST BE FOUND THAT IN FACT THE MEMBERS OF THE CARTEL ATTRIBUTED GREAT IMPORTANCE TO THE JOINT APPLICATION OF BOTH AGREEMENTS .

ALTHOUGH FROM OCTOBER 1963 THE EXPORT AGREEMENT WAS DECLARED TO BE " IN ABEYANCE " , IT IS CLEAR FROM THE DECLARATIONS MADE BY THE UNDERTAKINGS CONCERNED AT THEIR SUBSEQUENT MEETINGS TOGETHER WITH THEIR SUBSEQUENT CONDUCT AS A WHOLE THAT THEY CONTINUED TO HAVE AN INTEREST IN UPHOLDING THAT AGREEMENT, IN PARTICULAR WITH REGARD TO ITS POSSIBLE EMPLOYMENT WITHIN THE COMMON MARKET .

46 HOWEVER, WHILST ACKNOWLEDGING THAT THE AUTHORS OF THE TREATY DID NOT INCLUDE EITHER QUINQUINA BARK OR QUININE AMONG THE PRODUCTS TO WHICH THE SPECIAL RULES LAID DOWN IN AGRICULTURAL MATTERS APPLY, THE APPLICANT COMPLAINS THAT THE COMMISSION DID NOT TAKE INTO ACCOUNT THE DIFFICULTIES EXPERIENCED BY IT, IN PARTICULAR WITH REGARD TO THE SUPPLY OF RAW MATERIALS, AS A RESULT OF THE AGRICULTURAL NATURE OF THOSE PRODUCTS .

47 SUCH DIFFICULTIES CAN NEVER RESULT IN THE PROHIBITION IN ARTICLE 85 ( 1 ) BECOMING INAPPLICABLE, SAVE WHERE THE EXEMPTION PROCEDURE REFERRED TO IN ARTICLE 88 ( 3 ) APPLIES .

VII - COMPLAINTS RELATING TO THE FINE

48 THE APPLICANT COMPLAINS THAT THE COMMISSION IMPOSED ON IT A FINE FOR AN INFRINGEMENT WHICH HAD COME TO AN END . IT ALLEGES THAT THE COMMISSION MAY ONLY IMPOSE A FINE IF THE PARTY CONCERNED HAS PERSISTED IN ITS UNLAWFUL CONDUCT AFTER THE INFRINGEMENT HAS BEEN FORMALLY ESTABLISHED BY WAY OF A DECISION .

49 THE PENALTIES PROVIDED FOR IN ARTICLE 15 OF REGULATION NO 17 ARE NOT IN THE NATURE OF PERIODIC PENALTY PAYMENTS . THEIR OBJECT IS TO SUPPRESS ILLEGAL ACTIVITIES AND TO PREVENT ANY RECURRENCE . THIS OBJECT COULD NOT BE ADEQUATELY ATTAINED IF THE IMPOSITION OF A PENALTY WERE TO BE RESTRICTED TO CURRENT INFRINGEMENTS ALONE . THE COMMISSION' S POWER TO IMPOSE PENALTIES IS IN NO WAY AFFECTED BY THE FACT THAT THE CONDUCT CONSTITUTING THE INFRINGEMENT HAS CEASED AND THAT IT CAN NO LONGER HAVE DETRIMENTAL EFFECTS . FOR THE PURPOSE OF FIXING THE AMOUNT OF THE FINE THE GRAVITY OF THE INFRINGEMENT IS TO BE APPRAISED BY TAKING INTO ACCOUNT IN PARTICULAR THE NATURE OF THE RESTRICTIONS ON COMPETITION, THE NUMBER AND SIZE OF THE UNDERTAKINGS CONCERNED, THE RESPECTIVE PROPORTIONS OF THE MARKET CONTROLLED BY THEM WITHIN THE COMMUNITY AND THE SITUATION OF THE MARKET WHEN THE INFRINGEMENT WAS COMMITTED .

50 THE APPLICANT COMPLAINS THAT THE COMMISSION DID NOT TAKE INTO ACCOUNT THE ACTUAL ECONOMIC EFFECT OF THE FINE IMPOSED UPON IT IN RELATION TO THAT IMPOSED ON NEDCHEM, AS, CONTRARY TO THE PRACTICE FOLLOWED IN THE NETHERLANDS, THE FINES AND EXPENSES INCURRED IN THE DEFENCE OF AN OFFENDER IN GERMANY ARE NOT DEDUCTIBLE FROM THE AMOUNT UNDER THE NATIONAL REVENUE LAWS FROM THE AMOUNT ASSESSABLE TO TAX .

51 IN FIXING THE FINES PROVIDED FOR UNDER ARTICLE 15 OF REGULATION NO 17, THE COMMISSION IS NOT REQUIRED TO TAKE INTO ACCOUNT THE DIFFERENCES EXISTING BETWEEN THE NATIONAL REVENUE LAWS . THEREFORE, THIS COMPLAINT IS UNFOUNDED .

52 THE APPLICANT MAINTAINS THAT THE FINE OUGHT TO BE REDUCED IN RELATION TO THE SUM WHICH IT WILL BE REQUIRED TO PAY AS A RESULT OF PROCEEDINGS IN WHICH IT IS AT PRESENT INVOLVED ON THE BASIS OF THE SAME FACTS IN THE UNITED STATES OF AMERICA .

53 THOSE PROCEEDINGS CONCERN RESTRICTIONS ON COMPETITION WHICH HAVE TAKEN PLACE OUTSIDE THE COMMUNITY . THERE IS, THEREFORE, NO REASON TO TAKE THEM INTO ACCOUNT IN THESE PROCEEDINGS .

54 THE APPLICANT MAINTAINS THAT THE AMOUNT OF THE FINE IMPOSED UPON IT IS EXCESSIVE AS COMPARED TO THE FINE IMPOSED ON BOEHRINGER, TAKING INTO ACCOUNT THE RESPECTIVE SIZES OF THE TWO UNDERTAKINGS AND THE APPLICANT' S DEPENDENT POSITION AS REGARDS BOEHRINGER AND NEDCHEM .

55 THE CONTESTED DECISION IN THE SIXTH PARAGRAPH OF RECITAL NO 40, TOOK INTO ACCOUNT THE APPLICANT' S WEAKER POSITION AS REGARDS SUPPLIES OF RAW MATERIALS, AS COMPARED TO THE OTHER TWO UNDERTAKINGS . IN VIEW OF THE APPLICANT' S ACTUAL INFLUENCE WITHIN THE CARTEL THE FINE IMPOSED UPON IT IS PROPORTIONATELY LOWER THAN ITS QUOTA WHEN COMPARED WITH THE TOTAL FINES IMPOSED ON THE MEMBERS OF THE CARTEL .

56 THE FIRST INDENT OF THE SECOND PARAGRAPH OF RECITAL NO 5 OF THE CONTESTED DECISION APPEARS TO ACCEPT THAT, UNLIKE THE OTHER MEMBERS OF THE CARTEL, THE APPLICANT HAD NOT BASED ITS SALES POLICY ON THE PROTECTION OF THE DOMESTIC MARKETS, BUT THE COMMISSION DOES NOT SEEM TO HAVE TAKEN ACCOUNT OF THIS FACTOR IN FIXING THE AMOUNT OF THE FINE .

57 THE FINDINGS OF THE CONTESTED DECISION RELATING TO THE INFRINGEMENTS ALLEGED AGAINST THE APPLICANT ARE THUS WELL FOUNDED IN THEIR ESSENTIALS . EXCLUDING THE FIXING OF SALES QUOTAS FOR THE PERIOD FROM NOVEMBER 1962 TO FEBRUARY 1965 AND OF THE SALES PRICES FOR THE PERIOD FROM MAY 1964 TO FEBRUARY 1965 DID NOT APPRECIABLY DIMINISH THE GRAVITY OF THE RESTRICTIONS ON COMPETITION ARISING FROM THE AGREEMENT .

58 TAKING INTO ACCOUNT ALSO THE RESPECTIVE IMPORTANCE OF THE UNDERTAKINGS IN THE CARTEL, IT IS APPROPRIATE TO REDUCE THE FINE TO 55 000 UNITS OF ACCOUNT .

59 UNDER THE FIRST SUBPARAGRAPH OF ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE OF THE COURT OF JUSTICE, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS IF THEY HAVE BEEN ASKED FOR IN THE SUCCESSFUL PARTY' S PLEADING . SINCE THE APPLICANT HAS FAILED IN THE ESSENTIAL PART OF ITS CONCLUSIONS, IT MUST BE ORDERED TO PAY THE COSTS .

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION FOR ANNULMENT;

2 . ANNULS SO MUCH OF ARTICLE 1 OF THE DECISION OF THE COMMISSION OF THE EUROPEAN COMMUNITIES OF 16 JULY 1969 ( OJ L 192, P . 5 ET SEQ .) AS RECORDS THAT THE APPLICANT APPLIED THE CLAUSES OF THE GENTLEMEN' S AGREEMENT OF 9 APRIL 1960 ON THE SYSTEM OF QUOTAS AND COMPENSATION DURING THE PERIOD FROM NOVEMBER 1962 TO FEBRUARY 1965, AND THE FIXING OF PRICES AND REBATES FOR THE EXPORT OF QUININE AND QUINIDINE DURING THE PERIOD FROM MAY 1964 TO FEBRUARY 1965;

3 . REDUCES THE FINE IMPOSED ON THE APPLICANT BY THE ABOVEMENTIONED DECISION TO 55 000 UNITS OF ACCOUNT;

4 . ORDERS THE APPLICANT TO PAY THE COSTS OF THE PROCEEDINGS .