61975J0026

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COMPETITION - DOMINANT POSITION - CONCEPT - EXPLOITATION - ABUSE

( EEC TREATY, ARTICLE 86 )

WHEN COMBINED WITH THE FREEDOM OF THE MANUFACTURER OR ITS AUTHORIZED AGENT APPOINTED BY THE PUBLIC AUTHORITY TO FIX THE PRICE FOR ITS SERVICE, THE DELEGATION BY A MEMBER STATE TO SUCH PERSON IN THE FORM OF A LEGAL MONOPOLY OF THE DUTY GOVERNED BY PUBLIC LAW WHICH CONSISTS IN CARRYING OUT THE TECHNICAL INSPECTION OF VEHICLES BEFORE THEY ARE USED ON THE PUBLIC HIGHWAY, LEADS TO THE CREATION OF A DOMINANT POSITION .

THE ABUSE OF SUCH A POSITION MAY BE, INTER ALIA, IN THE IMPOSITION OF A PRICE WHICH IS EXCESSIVE IN RELATION TO THE ECONOMIC VALUE OF THE SERVICE PROVIDED, AND WHICH HAS THE EFFECT OF CURBING PARALLEL IMPORTS BY NEUTRALIZING THE POSSIBLY MORE FAVOURABLE PRICE LEVELS APPLYING IN OTHER SALES AREAS IN THE COMMUNITY OR BY LEADING TO UNFAIR TRADING IN THE SENSE OF ARTICLE 86 ( 2 ) ( A ).

IN CASE 26/75

GENERAL MOTORS CONTINENTAL NV, A LIMITED COMPANY INCORPORATED UNDER BELGIAN LAW WHOSE REGISTERED OFFICE IS AT ANTWERP, REPRESENTED BY MICHEL WAELBROECK, ADVOCATE AT THE COUR D'APPEL, BRUSSELS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBER OF ANDRE ELVINGER, 80 GRAND-RUE, APPLICANT,

V

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER, MICHEL VAN ACKERE, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF ITS LEGAL ADVISER, PIERRE LAMOUREUX, 4 BOULEVARD ROYAL, DEFENDANT,

APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE COMMISSION OF 19 DECEMBER 1974, RELATING TO A PROCEEDING UNDER ARTICLE 86 OF THE EEC TREATY ( IV/28.851-GENERAL MOTORS CONTINENTAL );

1 BY AN APPLICATION RECEIVED AT THE COURT REGISTRY ON 7 MARCH 1975 GENERAL MOTORS CONTINENTAL NV REQUESTED THE ANNULMENT OF THE DECISION OF 19 DECEMBER 1974 ( OJ 1975, L 29, P . 14 ), BY WHICH THE COMMISSION IMPOSED ON GMC A FINE OF 100 000 U.A ., THAT IS BF 5 000 000 ON THE GROUND THAT, BETWEEN 15 MARCH AND 31 JULY 1973, THE APPLICANT HAD INFRINGED ARTICLE 86 OF THE EEC TREATY BY CHARGING AN EXCESSIVE AMOUNT ON THE IMPORT OF FIVE MOTOR VEHICLES MANUFACTURED IN ANOTHER MEMBER STATE FOR THE INSPECTION FOR CONFORMITY WITH THE SPECIFICATIONS CONTAINED IN THE APPROVAL CERTIFICATE PRESCRIBED BY THE BELGIAN AUTHORITIES ( HEREINAFTER REFERRED TO AS THE 'APPROVAL PROCEDURE ') WHICH IT MUST CARRY OUT AS THE SOLE AUTHORIZED AGENT OF THE MANUFACTURER IN BELGIUM .

2 THE APPLICANT PUT FORWARD CERTAIN SUBMISSIONS AGAINST THIS DECISION WHICH CONCERN THE INFRINGEMENT OF THE RULES CONTAINED IN ARTICLE 86 OF AN ESSENTIAL PROCEDURAL REQUIREMENT AND OF ARTICLE 15 ( 2 ) AND ( 5 ) OF REGULATION NO 17 OF THE COUNCIL OF 6 FEBRUARY 1962 ( OJ 1962, P . 204 ).

3 IT IS FIRST NECESSARY TO CONSIDER THE SUBMISSIONS BASED ON ARTICLE 86, WHICH RAISE THE QUESTION WHETHER, THROUGH THE APPROVAL PROCEDURES, THE APPLICANT HOLDS A DOMINANT POSITION WITHIN THE MEANING OF ARTICLE 86 AND, IF SO, WHETHER ITS BEHAVIOUR CONSTITUTED AN ABUSE OF THIS POSITION .

THE DOMINANT POSITION

4 THE APPLICANT MAINTAINS, FIRST, THAT CONTRARY TO THE STATEMENT MADE IN THE DECISION IN QUESTION, THE ACTIVITY INVOLVED IN APPLICATIONS FOR VEHICLE APPROVAL AND THE ISSUE OF CERTIFICATES OF CONFORMITY COULD NOT CONSTITUTE A DOMINANT POSITION WITHIN THE MEANING OF ARTICLE 86 .

5 FAR FROM CONSTITUTING A MARKET IN ITSELF, THIS ACTIVITY IS MERELY ANCILLARY TO THE MARKET IN MOTOR CARS, THE OPEN AND HIGHLY COMPETITIVE NATURE OF WHICH IS UNDESIRABLE .

6 THEREFORE, THE PROVISIONS OF ARTICLE 86 COULD NOT BE APPLIED TO CHARGES THE IMPOSITION OF WHICH WAS PENALIZED BY THE DECISION OF THE COMMISSION, AS THE INCIDENCE OF SUCH CHARGES CAN ONLY BE ASSESSED IN RELATION TO THE MARKET IN MOTOR CARS AS A WHOLE, IN WHICH THE APPLICANT DOES NOT HOLD A DOMINANT POSITION .

7 THE APPROVAL PROCEDURE IN THE CONTEXT OF WHICH THE IMPOSITIONS IN QUESTION WERE MADE IS, BY NATURE, A DUTY GOVERNED BY PUBLIC LAW WHICH IS SO DELEGATED BY THE BELGIAN STATE THAT, FOR EACH MAKE OF MOTOR CAR THE PERFORMANCE OF THIS DUTY IS RESERVED EXCLUSIVELY TO THE MANUFACTURER OR ITS SOLE AUTHORIZED AGENT, APPOINTED BY THE PUBLIC AUTHORITY .

8 HOWEVER, ALTHOUGH IT ENTRUSTED THIS TASK OF INSPECTION TO PRIVATE UNDERTAKINGS THE STATE TOOK NO MEASURES TO FIX OR LIMIT THE CHARGE IMPOSED FOR THE SERVICE RENDERED .

9 THIS LEGAL MONOPOLY, COMBINED WITH THE FREEDOM OF THE MANUFACTURER OR SOLE AUTHORIZED AGENT TO FIX THE PRICE FOR ITS SERVICE, LEADS TO THE CREATION OF A DOMINANT POSITION WITHIN THE MEANING OF ARTICLE 86 AS, FOR ANY GIVEN MAKE, THE APPROVAL PROCEDURE CAN ONLY BE CARRIED OUT IN BELGIUM BY THE MANUFACTURER OR OFFICIALLY APPOINTED AUTHORIZED AGENT UNDER CONDITIONS FIXED UNILATERALLY BY THAT PARTY .

10 IT THUS EMERGES, THAT THE SUBMISSION WHICH THE APPLICANT BASES ON THE FACT THAT IT HELD NO DOMINANT POSITION MUST BE REJECTED .

THE ABUSE

11 IT IS POSSIBLE THAT THE HOLDER OF THE EXCLUSIVE POSITION REFERRED TO ABOVE MAY ABUSE THE MARKET BY FIXING A PRICE - FOR A SERVICE WHICH IT IS ALONE IN A POSITION TO PROVIDE - WHICH IS TO THE DETRIMENT OF ANY PERSON ACQUIRING A MOTOR VEHICLE IMPORTED FROM ANOTHER MEMBER STATE AND SUBJECT TO THE APPROVAL PROCEDURE .

12 SUCH AN ABUSE MIGHT LIE, INTER ALIA, IN THE IMPOSITION OF A PRICE WHICH IS EXCESSIVE IN RELATION TO THE ECONOMIC VALUE OF THE SERVICE PROVIDED, AND WHICH HAS THE EFFECT OF CURBING PARALLEL IMPORTS BY NEUTRALIZING THE POSSIBLY MORE FAVOURABLE LEVEL OF PRICES APPLYING IN OTHER SALES AREAS IN THE COMMUNITY, OR BY LEADING TO UNFAIR TRADE IN THE SENSE OF ARTICLE 86 ( 2 ) ( A ).

13 HOWEVER, THE APPLICANT MAINTAINS ON THIS POINT THAT CONDUCT COMPLAINED OF DID NOT CONSTITUTE AN 'ABUSE' WITHIN THE MEANING OF ARTICLE 86 .

14 IN ORDER TO DEMONSTRATE THIS POINT THE APPLICANT PUTS FORWARD A NUMBER OF ARGUMENTS BASED ON THE ACTUAL CIRCUMSTANCES IN WHICH THE CHARGE IN QUESTION WAS IMPOSED AND, SUBSEQUENTLY, LARGELY REFUNDED IN THE FIVE CASES REFERRED TO BY THE COMMISSION .

15 THE QUESTION WHETHER THE APPLICANT ABUSED ITS DOMINANT POSITION MUST BE CONSIDERED IN THE LIGHT OF ALL THE FACTORS WHICH GAVE RISE TO THE DECISION OF THE COMMISSION .

16 IT IS NOT DISPUTED THAT IN THE FIVE CASES TO WHICH THE COMMISSION REFERS, AND WHICH AROSE BETWEEN 15 MARCH AND 31 JULY 1973, THE APPLICANT IMPOSED A CHARGE WHICH WAS EXCESSIVE IN RELATION TO THE ECONOMIC VALUE OF THE SERVICE PROVIDED BY WAY OF THE APPROVAL PROCEDURE .

17 HOWEVER, THE APPLICANT MAINTAINS ON THIS POINT THAT THE INSPECTIONS WHICH IT CARRIED OUT DURING THIS PERIOD REPRESENTED AN UNUSUAL ACTIVITY ON ITS PART, IN THAT IT HAD ONLY BEEN MADE TO ASSUME RESPONSIBILITY FOR THEM AS FROM 15 MARCH 1973 WHEN THE STATE TESTING-STATIONS WERE DISCHARGED FROM UNDERTAKING THESE SAME INSPECTIONS .

18 AS THESE INSPECTIONS ONLY CONSTITUTED AN OCCASIONAL ACTIVITY ON THE PART OF THE APPLICANT AND ONE OF MINUTE IMPORTANCE IN RELATION TO THE INSPECTIONS WHICH IT NORMALLY CARRIES OUT ON THE VEHICLES WHICH IT PUTS DIRECTLY ON THE MARKET AND WHICH ARE, THEREFORE, MANUFACTURED IN ACCORDANCE WITH THE STANDARDS IMPOSED BY BELGIAN LEGISLATION, THE DEPARTMENTS RESPONSIBLE APPLIED THE CHARGE WHICH WAS UNTIL THEN NORMAL FOR THE INSPECTION OF THE VEHICLES WHICH IT IMPORTED .

19 THE APPLICANT AGAIN DRAWS ATTENTION TO THE FACT THAT FOLLOWING THE COMPLAINTS MADE BY THE PARTIES CONCERNED IT VERY QUICKLY REDUCED THE CHARGE FOR THE INSPECTION OF IMPORTED VEHICLES OF EUROPEAN MANUFACTURE TO A LEVEL WHICH WAS MORE IN LINE WITH THE REAL COST OF THE OPERATION AND REFUNDED THE EXCESS TO THE PARTIES CONCERNED, AND THAT THIS TOOK PLACE BEFORE THE COMMISSION BEGAN ITS INVESTIGATIONS .

20 THIS CONDUCT ON THE PART OF THE APPLICANT, THE TRUTH OF WHICH IS NOT CONTESTED BY THE COMMISSION, CANNOT BE REGARDED AS AN 'ABUSE' WITHIN THE MEANING OF ARTICLE 86 .

21 THE APPLICANT HAS GIVEN AN ADEQUATE EXPLANATION OF THE CIRCUMSTANCES IN WHICH, IN ORDER TO MEET A NEW RESPONSIBILITY TRANSFERRED FROM THE STATE TESTING-STATIONS TO THE MANUFACTURERS OR AUTHORIZED AGENTS OF THE DIFFERENT MAKES OF MOTOR CAR IN BELGIUM, IT APPLIED, FOR AN INITIAL PERIOD, TO EUROPEAN CARS A RATE WHICH WAS NORMALLY APPLIED TO VEHICLES IMPORTED FROM AMERICA .

22 THE ABSENCE OF ANY ABUSE IS ALSO SHOWN BY THE FACT THAT VERY SOON AFTERWARDS THE APPLICANT BROUGHT ITS RATES INTO LINE WITH THE REAL ECONOMIC COST OF THE OPERATION, THAT IT BORE THE CONSEQUENCES OF DOING SO BY REIMBURSING THOSE PERSONS WHO HAD MADE COMPLAINTS TO IT AND THAT IT DID SO BEFORE ANY INTERVENTION ON THE PART OF THE COMMISSION .

23 ALTHOUGH THE DECISION IN QUESTION MAY BE EXPLAINED BY THE COMMISSION'S WISH TO REACT ENERGETICALLY AGAINST ANY TENDENCY TO ABUSE WHAT IS CLEARLY A DOMINANT POSITION, ITS INTERVENTION WAS UNJUSTIFIED IN THE ACTUAL TEMPORAL AND FACTUAL CIRCUMSTANCES IN WHICH IT TOOK PLACE .

24 IN THESE CIRCUMSTANCES THE CONTESTED DECISION MUST BE ANNULLED BUT THE PARTIES MUST BEAR THEIR OWN COSTS .

25 UNDER ARTICLE 69 ( 3 ) OF THE RULES OF PROCEDURE, WHERE THE CIRCUMSTANCES ARE EXCEPTIONAL, THE COURT MAY ORDER THE PARTIES TO BEAR THEIR OWN COSTS IN WHOLE OR IN PART .

THE COURT

HEREBY :

1 . ANNULS THE DECISION OF THE COMMISSION OF 19 DECEMBER 1974 RELATING TO A PROCEEDING UNDER ARTICLE 86 OF THE EEC TREATY ( IV/28.851-GENERAL MOTORS CONTINENTAL );

2 . ORDERS EACH PARTY TO BEAR ITS OWN COSTS .