The Gazette 1973

Community Competition Law Dr. Alfred Gleiss, of the firm of Messrs Gleiss, Lutz, Hootz, Hirsch & Partner, Stuttgart, Germany, delivered lectures on Community Competition Law and on Merger Control to members of the Society in the Bur- lington Hotel, Dublin, on Saturday, 27 January 1973. The following summary has been approved by Dr. Gleiss. (I) Survey on EEC Competition Law

March 1967, called in brief Regulation 67/67, is of great importance. According to it, agreements between manufacturer and dealer from different Member States are admissible, if they contain exclusive obligations to deliver and supply without any export prohibition. In several individual Decisions, the Commission per- mitted special distributorship systems, especially the "selective distributorship system" of the Swiss watch maker Omega. In this Decision, the Commission con- sidered it a violation of Article 85, if in the agreements between the manufacturer and the general agents the number of the local retailers is limited, but it granted an exemption under Article 85 para 3, especially, be- cause technically highly developed and relatively ex- pensive products were affected. (8) In the field of "horizontal" cartels, the Com- mission came—in spectacular proceedings—to several decisions, especially in the Quinine and the Dyestuff Judgment of 14 July 1972 the Court defined the mean- ing of the concerted practices with the formula of "conscious practical co-operation". The objective paral- lel behaviour of several enterprises is not per se a con- certed behaviour but an important indication. (9) At the end of last year, the Commission granted a group exemption agreement for specialization agree- ments in the field of Horizontal Cartels. Previously in several decisions, it had already exempted specialization agreements, even if concluded by large enterprises. One can conclude from this that the Commission is prepared to accept such agreements, if effective competition remains on the markets concerned. The Regulation on Group (or: Block) Exemptions is applicable only, if the products in none of the Member States exceed market shares of more than 10% and the total turnover of the participating enterprises does not exceed 150 million units of account. (10) It results from the Commission's fundamental Decision of 23 December 1971 in the Henkel /Colgate case that even merely factual restrictions of research can be restraint of trade. This applies to all fields, in which the competition is largely influenced by the re- sults of research. (11) In its "EEC Cooperation Publication" of 29 July 1968, the Commission has worked out rules for enterprise cooperations, which do not violate Article 85. (12) Article 86 prohibits the abuse of market domin- ance. In this connection there are three important decisions of the Commission. The GEMA-Decision of 2 June 1971, the Continental Can Decision of 9 Decem- ber 1971 and the Decision against Zoja of 20 December 1972. In the latter decision, the Commission has pro- hibited a monopolist from refusing to supply a buyer. I shall deal in a special lecture with the problem of application of Article 86 to enterprise cooperation (Continental Can). (II) Merger Control Under Article 86 (1) The EEC Treaty does not contain regulations which prohibit expressly the merger of enterprises. On the contrary, the Commission again and again has taken initiatives for creating larger units of enterprises, "enterprises of European dimension". In 1971, e.g., it published the draft of the statute of a European joint stock company, in order to make a special legal form available for mergers of enterprises from different 150

(1) There is no general competition law of the EEC. Articles 85 et seq. contain directly applicable cartel law. In the fields of unfair competition and patent law, trade mark law and the like, national law will continue to apply which will be increasingly influenced by Community Law. (2) Besides the Community Cartel Law contained in Articles 85 and 86, the national Cartel Laws remain in force. The relation between EEC Cartel Law and national Cartel Law shall be solved pursuant to Article 87 para 2 (e) by a Regulation or a Directive to be issued by the Council. This has not, however, been done yet. (3) The Court of the European Communities in the so-called "Preliminary Dyestuff decision" of 13 February 1969 has pronounced that the application of the EEC Cartel Law does not exclude in principle the applica- tion of national Cartel Law but that in any clash of rules Community Law would have precedence. A decision in a national proceeding must not be inconsis- tent with a decision of the Commission. If the national decision is passed after the Commission's decision the national authority must "take account" of that of the Commission. In the opposite case, the national authori- ties "must take appropriate measures"—a somewhat vague dictum. Thus, because of the same facts, the national authori- ties as well as the EEC Commission may conduct pro- ceedings and levy fines. (4) The Cartel Prohibition of Article 85 is applic- able to all enterprises active within the EEC, no matter where they are located. Article 85 is not applicable to enterprises of the Coal and Steel Industry; so far, the European Coal and Steel Community (ECSC) Treaty has precedence. It is applicable to agriculture with cer- tain limitations. (5) Restraint of trade is prohibited only, if it "per- ceptibly" affects trade between Member States r-.nd competition. As per the "Bagatelle Publication" of the Commission, this will not be the case, if the market shares do not exceed 5% and the total annual turn- over of the participating enterprises is not more than 15 million units of account (one unit is about 45p). (6) Article 85 does not distinguish between Horizon- tal Cartels, i.e. such which are concluded between enter- prises of the same economic level, and Vertical "Cartels", i.e. agreements between enterprises of diffe- rent economic levels (say manufacturer and dealer). (7) The law relating to the so-called sole distributor- ship agreements has undergone the greatest degree of development. In the judgment Grundig/Consten of 1966, the Court prohibited "absolute' 'territorial protec- tion, i.e. the guarantee given by the manufacturer, that a sole distributor will be the only one who may import goods into a specific territory and that third parties shall not sell into this territory. The group exemption of sole distributorship agree- ments granted by the Commission's Regulation of 22