JUDGMENT OF 11. 6. 1968 — CASE 29/67 DE WENDEL v COMMISSION

In Case 29/67

THE COURT composed of: R. Lecourt, President, A. M. Donner and. W. Strauß, Presidents of Chamber, A. Trabucchi, R. Monaco, (Rapporteur), J. Mertens de Wilmars and P. Pescatore, Judges, Advocate-General: K. Roemer Registrar: A.Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure

Following a prices check carried out by the High Authority at the premises of the Société de Wendel from 26 September to 12 October 1966, it sent this company a letter dated 10 March 1967 alleging that it had not complied with the rules for publishing prices and price lists and had infringed the principle of non-discrimination (Article 60 of the Treaty and its implementing decisions').

The Société de Wendel submitted its observations in a letter of 11 April 1967. At a meeting arranged in Luxembourg by the High Authority on 25 May 1967 an exchange of views took place between the parties.

On 28 June 1967 the High Authority made a decision imposing a fine on the said company, in which it declared its views on the compatibility of transactions and deliveries already referred to in the letter of 10 March 1967 with the beforementioned rules, in particular:

a) Transactions entered into between the applicant and four German motorcar manufacturers (Volkswagen, Auto-Union, Daimler-Benz and Opel) for the delivery of their cold-rolled sheets;

b) Transactions entered into with twelve French consumers of thin sheets including three manufacturers of motor cars (Citroen, Simca and Chausson) and seven other customers in respect of different products;

c) Delivery of wire rod to the Bekaert wire-drawing plant.

With regard to the first category of transactions the decision acknowledges that the circumstances in which they took place justified the discounts which were allowed but complains that the applicant has failed to comply with the obligation to publish these discounts.

With regard to the second category of transactions it confirms that some of the differences (‘quantity’ and ‘loyalty’ rebates) are justified but render the company liable to a sanction for failure to make them public and that other differences (discounts allowing for ‘the current short-term economic situation’ and ‘market conditions’) are practices prohibited by Article 60 and its implementing provisions.

With regard to the third category of transactions the part of the decision dealing with them is not covered by these proceedings.

Because of the infringements found by the High Authority the decision imposes on the Société de Wendel a fine of FF 160000 under Article 64 of the Treaty.

This decision, which was notified to the said company on 3 July 1967, is the subject-matter of this application lodged at the Court Registry on 1 August 1967.

The procedure followed the normal course.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate-General the Court decided to open the oral procedure without prescribing any measures of inquiry.

The parties presented their oral observations at the hearing on 28 February 1968.

The Advocate-General delivered his opinion at the hearing on 26 March 1968.

II — Conclusions of the parties

The applicant claims that the Court should:

‘annul the decision of the High Authority of 28 June 1967 in so far as it imposes upon the applicant a fine of FF 160000 under Article 64 of the Treaty; annul the second and last sentence of Article 2(1) of Decision No 30/53, and order the Commission of the European Communities to pay the costs.’

The defendant contends that the Court should:

‘dismiss the applications as unfounded in every respect with all legal consequences, in particular with regard to costs.’

III — Submissions and arguments of the parties

Admissibility

The defendant raises no objection to the admissibility of the application.

The substance

The applicant puts forward in support of its conclusions the following submissions:

infringement of an essential procedural requirement.

infringement of the Treaty and the rules relating to its application.

I — Infringement of an essential procedural requirement

The submissions and arguments of the parties may be summarized as follows:

The applicant maintains that the statement of the reasons upon which the decision is based is wholly inadequate and does not comply with the criteria laid down in the case-law of the Court (Judgment in Case 1/63), because it does not give the reasons why the High Authority:

rejected the argument of the Société de Wendel that the transactions alleged to be illegal were ‘transactions having exceptional features’;

drew a distinction between, on the one hand, the benefits granted to the German motor vehicle manufacturers which were held to be justified and, on the other hand, the benefits granted to nineteen other customers which were held to be unjustified;

drew a distinction within this group of nineteen transactions between the price differences which were held to be justified and those which were held to be unjustified.

The applicant puts forward the following arguments in support of these complaints:

(a) The first complaint

The Société de Wendel in its letter of 11 April 1967 and during the meeting of 25 May 1967 attempted to justify its argument concerning the nature of the transactions alleged to be illegal by submitting that each of these transactions has many of the factors which render a transaction exceptional in nature (cf. later under the submission ‘infringement of the Treaty’).

However only the last of these four factors was examined in the contested decision. With regard to the others this decision merely gives simple statements without any explanation.

(b) The second complaint

The distinction drawn between the two groups of transactions in question is all the more difficult to understand because there are three French motor car manufacturers among the nineteen other customers. Yet the transactions entered into with the latter are similar to those concluded with the German manufacturers and the benefits granted are in the same order of magnitude.

Notwithstanding this fact the contested decision does not give any of the reasons which caused the High Authority to make such a distinction. The only reference in it to this question relates to the discounts which under the designation ‘rebates allowing for variations in current economic trends’ (hereinafter referred to as ‘conjunctural rebates’) or ‘rebates for market conditions’ were allowed to the three French motor car manufacturers and not to the German manufacturers. The question of the scope of these discounts will be examined in connection with the second submission that the Treaty has been infringed, but the above-mentioned reference cannot be accepted. As is shown by the two letters of confirmation, sent by the Société de Wendel respectively to Volkswagen on 15 June 1954 and to Opel on 22 June 1954 and notified to the High Authority, the discounts in question were allowed under the same conditions in the transactions entered into with German manufacturers.

(c) The third complaint

Similarly the distinction drawn, within the group of nineteen transactions between the justified and unjustified price differences is not accompanied by any explanation. On the one hand the only reference to this question in the contested measure relates to the application in these transactions of different categories of premiums. On the other hand the annex to this measure merely mentions the amount of the price differences or premiums which are justified and the price differences which are unjustified.

However, the importance of the distinction between these categories of premiums is entirely theoretical and represents no more than a purely formal matter of presentation. The only fact which matters is the actual final price.

The defendant replies that the statement of the reasons upon which the contested decision is based is adequate, as it contains all the essential factors which entered into the reasoning of the High Authority in connexion with the infringements of which it complained. It states that according to the case-law of the Court the High Authority did not have to refute each and every objection raised by the applicant (Judgment in Case 2/56) or to repeat in full a discussion of the arguments put forward by the applicant during the preparatory inquiries (Judgment in Case 27/64). Moreover it examined, in order to refute it, an essential point in the applicant's argument relating to the technical cooperation between the Société de Wendel and its customers (cf. page 3 of the contested decision).

In addition, the decision states clearly that the price differences corresponding to the quantity and loyalty rebates do not infringe the prohibition against discrimination if they are applied uniformly to all the customers concerned, which moreover is in conformity with the principle contained in Article 2(f) of Decision No 31/53. It also states that a distinction must be made between the discounts allowed having regard to the nature of the transactions in question (rebates for long-standing customers, loyalty, quantity premiums) and those allowed for other reasons, such as the market conditions or variations in short term economic trends and which should have been allowed uniformly to all the undertaking's customers. The fundamental reasoning on this point upon which the decision is based was moreover explained to the applicant at the meeting on 25 May 1967.

(a) The first complaint

As the contested decision is a decision imposing a pecuniary sanction, it did not have to discuss in its statement of reasons the argument that the transactions alleged to be illegal were special cases. To ensure that it was adequate the statement of reasons had simply to indicate what in the opinion of the High Authority the alleged infringement consisted of, which it did. If the applicant does not share the view taken by the High Authority of the nature of the transactions it may submit that there has been an infringement of the Treaty but it cannot argue on this ground that the statement of reasons is inadequate.

(b) The second complaint

The contested decision expressly states why it draws a distinction between transactions entered into with the four German motor car manufacturers and those entered into with the nineteen French consumers. Sanctions have been imposed in respect of the former for infringement of the obligation to make them public. Sanctions have been imposed in respect of the others partly for infringement of the principle of nondiscrimination and partly for infringement of the obligation to make them public. The decision also gives the reasons why these four agreements have not been held to be prohibited practices.

If the applicant takes the view that the High Authority has made an incorrect assessment of the facts that is a complaint relating to infringement of the Treaty and not to the inadequacy of the statement of reasons.

(c) The third complaint

The applicant fails to understand the significance of the figures set out in the annex to the contested decision. They are not intended to distinguish between price differences which can be justified because they are non-discriminatory and price differences regarded as discriminatory: their purpose is to determine the value of the ‘sales effected in disregard’ (of Chapter V of the Treaty or decisions taken thereunder) referred to in Article 64 of the Treaty, which is the basis upon which the amount of the fine is assessed. The applicant's argument to the effect that the distinction between ‘quantity’ or ‘loyalty’ rebates on the one hand and ‘conjunctural rebates’ allowed in respect of ‘market conditions’ on the other hand is theoretical and represents no more than a purely formal matter of presentation, is a matter relating to infringement of the Treaty and not to infringement of an essential procedural requirement.

II — Infringement of the Treaty and of the rules of law relating to its application

A — The nullity of the contested decision

The dispute centres on the following principal questions.

1. The nature of the contested transactions (infringement of the first sentence of the first paragraph of Article 2 of Decision No 30/53)

The applicant states that according to the first sentence of the first paragraph of Article 2 of Decision No 30/53 (as amended by Decision No 1/54) ‘for a seller to apply prices or conditions departing from those shown in his price list’ is not regarded as a prohibited practice, where the vendor can show ‘that the transaction is question does not fall within the categories of transactions covered by this price list’.

However the transactions alleged to be illegal belong to the category of special transactions under the beforementioned decision. The main characteristics to be noted in this respect are as follows:

loyalty based on the long-standing nature of the commercial relationship which has actually existed between the parties;

the size of the orders in question;

the special situation which arises when the buyer agrees to purchase from the producer a percentage — up to 80 % — of his requirements and where the producer guarantees at all times to meet this percentage;

far-reaching technical cooperation enabling the supplier to carry out large-scale improvements of his means of production or to develop new products which can extend the scope of his commercial activities.

The combination of several of these factors in one transaction is dufficient to make it an exceptional transaction which is not subject to the provisions of Article 60.

The defendant replies by pointing out that the applicant's argument fails to appreciate the scope of the principle of non-discrimination enshrined in Article 60(1) of the Treaty The prohibition provided by this Article — so far as comparable transactions are concerned — having regard to the first paragraph of Article 2 of Decision No 30/53 does not apply to transactions ‘having exceptional characteristics’.

But only those transactions whose characteristics cannot be repeated can be regarded as ‘exceptional’. As such transactions are not in fact by their very nature comparable to other transactions it follows by definition that they cannot be discriminatory.

However the transactions described by the applicant as ‘exceptional’ do not in fact differ very much from each other. Therefore the transactions concluded with the motor car manufacturers relating to large quantities of thin steel cannot be exceptional transactions since the seller has entered into similar transactions with a series of other motor car manufacturers. The transactions are in principle comparable if the seller delivers the same products (thin steel) in just as large quantities to other consumers.

If the applicant's argument were accepted, the scope of the principle of non-discrimination would be severely limited, having regard in particular to the volume of sales in 1965 of the Société de Wendel in its principal market (France) (52 % to 84.4 % according to the type of product).

Moreover the ‘exceptional’ nature of the disputed transactions cannot be inferred from the fact that each transaction had the characteristics which the applicant has mentioned.

With regard in particular to the example of technical cooperation an examination of the particulars supplied in this connexion shows that:

in the case of a whole series of customers the agreements concluded with them do not provide for any cooperation;

this cooperation did not in any of the cases go beyond what is normal in transactions of this size and for the products in question;

moreover a certain number of customers have similar relations with other producers in respect of the same products.

Finally, the mere fact that there was the same type of cooperation with a whole series of customers does not endow the transactions in question with exceptional characteristics.

The applicant, after stating that it never intended to challenge the principle of nondiscrimination and to criticize Article 60 of the Treaty, replies that the defendant's argument cannot be accepted, because according to the wording of the first sentence of Article 2 of Decision No 30/53 (as amended by Decision No 1/54) a transaction is exceptional when ‘it does not fall within the categories of transactions covered by this price list’. There is therefore no reason why there should not be a large number of transactions of the same kind as the one in question which also fall outside the categories of transactions covered by the price list. The fact that there is a large number of such transactions ceases to be exceptional.

The statement of defence — the applicant adds — tries to buttress its argument by comparing the quantities delivered under the disputed transactions with ‘total sales in 1965 by the applicant in its principal market (France)’. Apart from the fact that these figures (with the exception of those referring to reinforcing bars) do not correspond to those in the applicant's possession it must be made clear that, even if the problem is considered from the Commission's point of view and the exceptional transactions are considered according to their relative size, the only criterion to adopt is the number of customers or transactions and the quantities supplied under these transactions.

However if the number of these transactions is compared with the total number of French customers much lower percentages than those mentioned by the Commission (from 1.9 % to 6.4 % according to the type of product) are obtained.

Finally with regard to the arguments put forward by the defendant in connexion with technical cooperation the applicant makes the following observations:

as to the first argument: the expression ‘a whole series of customers’ only in fact refers to four of the twenty-two agreements in question and, further, only agreements providing for cooperation between producer and consumer throughout the entire term of the agreement are relevant:

as to the second agreement: the cooperation in question does not consist of the normal contacts which are established for technical purposes between producer and consumer with the object of being better able to adapt the quality of the product to the wishes of the customers and to the requirements of subsequent processing. It consists rather in the possibility of joint research by the supplier and the buyer, and often even by the latter's customers. Frequently this research culminates in manufacturing processes branching out in a new direction and the development of new modifications leading to an advantageous extension of the producer's markets. Such cooperation goes far beyond the field of normal technical cooperation described by the defendant;

as to the third argument: its meaning is hard to understand. If, in the cases mentioned, what is concerned is an ‘identical’ cooperation added to other unique features, the transactions in question would also be unique in character without thereby causing the agreements concluded by the applicant to lose their own character.

In its rejoinder the defendant explains that a transaction is only ‘exceptional’ if its special characteristics are incapable of being repeated in other transactions.

Therefore a large number of transactions which have exactly the same characteristics are not special but comparable.

In the present case the transactions alleged to be illegal have characteristics which are normal commercial practices, can be repeated in other transactions and are found in many of the transactions entered into by the applicant with different customers, since:

a) On the one hand, none of the four criteria which — taken alone or together — in the opinion of the applicant justify the classification of the contested transactions as ‘exceptional transactions’, can be applied. The first and third of these criteria (longstanding relations between the parties and an agreement between them for supplying a large percentage of the buyer's requirements) have the characteristics of loyalty discounts: the second criterion (size of the tonnages in question) refers to a feature which may justify quantity discounts. However the loyalty discount is a well-established current commercial practice which is compatible with the principle of non-discrimination. Similarly the quantity discount gives rise to a differentiation which is a common feature of commercial practice among producers. Even if the two criteria (loyalty and quantity) are applied together they no more succeed in making the transactions which they affect ‘exceptional’ than if each is applied separately: both discounts can be shown at the same time in the price lists. These transactions are therefore transactions having ‘special characteristics’: they are comparable to each other. That is why Article 2(f) of Decision No 31/53 (as amended by Decision No 2/54) provides for the publication of these discounts. Finally with regard to the fourth criterion an examination of the facts produced by way of proof in support of it by the applicant has not shown that the technical cooperation under the transactions in question in fact went beyond the normal contacts between producers and purchasers of special products.

b) On the other hand, a comparison with the agreements entered into by the applicant with the nineteen French customers discloses that the main purpose of each of them was substantially the same, as is shown in summary form by the above analysis. In addition to the variations relating to the special and specific aspects of each case, these agreements are identical so far as a number of important points are concerned, which also proves that the various transactions at issue are not exceptional transactions.

The defendant concludes its argument by pointing out that the contrary view put forward by the applicant is based on a misunderstanding. It is the applicant's view that the prohibition against discrimination laid down in Article 60 of the Treaty does not preclude the adaptation of its prices policy in each case in accordance with requirements of good commercial management, and in taking this view it overlooks the fact that this prohibition, as it must be understood in the context of this article, implies a strict obligation on the part of the undertaking to standardize its price system.

Such a prohibition, accompanied by the obligation to make prices public, in fact cuts down the opportunities of varying them. Undertakings can undoubtedly apply certain customary commercial criteria and allow discounts for quantity or loyalty or ordinary trade discounts but they cannot freely negotiate prices for each particular transaction or vary them.

2. The discriminatory nature of the price variations applied

The applicant maintains that even if certain transactions are not exceptional transactions they are nevertheless outside the scope of Article 60. According to the first sentence of the first paragraph Article 2 of Decision No 30/53 (as amended by Decision No 1/54) the application of prices different from those in the price list is not regarded as a prohibited practice if the seller can show ‘that the prices… have been departed from uniformly in all comparable transactions’.

It emerges from the documents sent to the High Authority that this uniformity and conformity had been observed in the transactions alleged to be illegal.

The fact that the agreements refer to price reductions and increases is not a matter to which any great weight need be attached, as this is merely a matter of presentation. The only reason why the transactions are not caught by Article 60 is to be found in the final price. Any attempt to establish the illegality of any transactions within the meaning of Article 60 on the basis of the words used to describe any particular premium would amount to a total failure to understand the real nature of the problem.

The defendant replies by calling attention to the fact that:

a) the Société de Wendel does not deny that it granted different price increases and reductions;

b) even if it is admitted that only the actual final price must be taken into consideration the applicant's argument is not valid, because the prices actually applied in this case, although brought closer to each other, are appreciably different for the French customers bound by contract;

c) finally, the applicant has not established that it allowed all its customers affected by the economic situation or the current economic state of the trade a discount connected with these factors. As the current economic state of the trade affects all customers in the same way the discount attributable to these factors should have been allowed to all customers.

The applicant submits the following observations on these three objections raised in the statement of defence.

a) the Société de Wendel did not infringe the principle of non-discrimination by agreeing different price increases and reductions, because the diversity of the discounts allowed is explained by the fact that the transactions were not comparable. Annual deliveries of 50000 metric tons of steel sheets to motor car manufacturers (Citroen, Simca) cannot be put on the same footing as annual deliveries of 5000 metric tons of commercial steel to wire-drawing firms and manufacturers of nuts and bolts (Giros, Hermant-Hicquet).

b) With regard to the discount mentioned in the annex to the contested decision under the columns headed ‘loyalty discounts’ and ‘conjunctural rebates’ their designation is simply a matter of presentation and is of minor importance. It is only the actual final price which is the decisive factor. Therefore in the case of Citroen and Simca the discounts allowed are made up in a different way but the final amount of the premium is the same. Of course the analysis of these discounts, which is necessary in order to check whether there has been any discrimination, muts be based on groups of comparable transactions and then checked against categories of consumers. Therefore an anlysis of the annex to the contested decision produces thefollowing total premiums: 14 % for deliveries of steel sheets to French motor car manufacturers; 10 % to 12 % for deliveries of steel sheets to nine other French customers; 8 % to 10 % for deliveries of wide strip to rolling mills for processing and 4 % to 5 % for deliveries of commercial steel to wire-drawing firms and manufacturers of nuts and bolts. Moreover in speaking of the differentiation of discounts mathematical strictness must be avoided in a system as complicated as the one in this case. It is all the more complicated because the distinguishing feature of the transactions in question is that many different criteria have to be applied. To consider fixing the amount of the total discounts at a figure equivalent to premiums allowed for each of the criteria which are supposed to be taken into account separately would amount to a misunderstanding of the realities of commercial life. The amount of this rebate and therefore the actual price will depend upon the relative importance which it is thought should be given to each of these criteria, so that it is in practice impossible to draw up in the form of a price list a table of rebates to be granted. What matters is that rebates of the same order of magnitude be granted in comparable circumstances.

c) Finally, with regard to the argument that the applicant sold ‘some of its products at the list price’ whereas it allowed ‘discounts for the economic situation’ on others, it is sufficient to call attention again to the fact that the expressions ‘conjunctural rebate’ and ‘rebate in respect of market conditions’ are of purely formal significance and that it is only the actual final price which is relevant. This price can be fixed in the case of transactions which are not current, provided of course that the principle of non-discrimination is observed in relation to comparable transactions (the first paragraph of Article 2 of Decision No 30/53).

The defendant retorts that in order to ensure that the benefits granted by way of loyalty and quantity discounts and conjunctural rebates are not discriminatory, they must be uniformly granted in all comparable transactions. In this case the High Authority found that the amount of the discounts was not in all cases in keeping with the obligations of the customers and emphasized that conjunctural discounts were not allowed to all customers affected by them. The arguments invoked by the applicant on this point are unfounded, since:

The example given in the applicant's reply showing that the discounts increase or decrease strictly in proportion to the value of the order — the differences in the price variations according to the applicant were only found in non-comparable transactions — is not convincing, because examples proving the contrary could also be given: 2 % for 3000 or 4000 metric tons and 3 % for 2000 metric tons (Moulinex, Labbe, Paris-Rhone) or for 8000, 8500, 9000 metric tons (Schmid-Soprem, Arthur Martin Behim).

The applicant 's argument that there is no distinction between loyalty and quantity discounts and conjunctural discounts is untenable in law and unfounded in fact. Each discount must in fact satisfy objective criteria, because otherwise the system of publishing prices, indicating specific increases and reductions (sizes, tolerances, quantity, loyalty) would have no purpose, reference to transactions which are comparable would no longer have any meaning and it would be impossible to prove under-quoting. The validity of the said distinction, moreover, is found in an analysis of the clauses providing for the bonuses in the agreements alleged to be unlawful. These clauses in fact show that conjunctural discounts are linked to an unstable factor (the trend of the market) whereas quantity and loyalty discounts are linked to a stable pre-established factor (the obligations of the customer), and that they are subject to periodic review and to price variations. It is for this reason that in this case we find that the conjunctural discounts allowed to individual customers have evolved along almost parallel lines, whereas contractual obligations of the customers vary from case to case. The assertion that the question whether there has been discrimination should be determined not by examining all comparable transactions at a specific point in time but by examining categories of consumers during the whole of the period under consideration has no legal foundation, as all the rules in force refer to ‘transactions’. Further the figures given on this point in the reply call for comment. First, the categories have been chosen arbitrarily and are not the same as those shown in the applicant's price list. Next, the figures do not distinguish between the types of discounts. Finally, they do not explain why greater benefits were granted to certain customers for several months (for example there were greater price variations between Moulinex and Paris-Rhone from May to September 1965). However the table produced shows, in spite of these corrections, price variations which are all the more significant because even a difference of 1 % to 2 % having regard to the amount and high prices of the deliveries represents a considerable sum. Finally the argument that is it necessary, when speaking of the differentiation of discounts, to avoid mathematical strictness is rebutted by the beforementioned considerations invoked in connexion with the argument that the possibility of fixing different prices and the prohibition against discrimination in Article 60 cannot be reconciled.

In addition the view cannot be accepted that it is impossible to work out at the same time the amounts of the discounts according to each of the criteria, even according to quantitative criteria, and to establish a system of discounts taking into account more than one factor. The first argument is a mere assertion which is contrary to the express provisions of the rules in force. With regard to the second argument, it is possible to attribute the correct importance to each factor once it is realized that the various criteria whose meaning has to be ascertained must correspond to objective, and not subjective factors.

3. The distinction between transactions entered into with German motor car manufacturers and the other transactions

The applicant complains that the contested decision regarded the transactions entered into with the German motor car manufacturers as justified and on the other hand qualified the nineteen other transactions with French consumers (including three motor car manufacturers) as prohibited practices within the meaning of Article 60.

That is a view which is manifestly contrary to the principle of non-discrimination, in particular so far as the transactions entered into with the three French motor car manufacturers are concerned. These transactions are in fact comparable to those entered into with the German manufacturers.

The defendant replies that the contested decision did not take exception to the discounts allowed to all the motor car manufacturers on the basis of the criteria of loyalty, regular orders and quantity. What the decision criticized as the additional benefits granted to the three French manufacturers under the transactions concluded with them with reference to factors — such as those beforementioned — which have no bearing on the transactions in question but which are based on the economic situation and current short-term economic trends.

As the situation and the current economic trends affected all customers, these additional benefits or price variations should have been allowed to all of them. Since this was not done the transactions in question are discriminatory.

The applicant replies that the benefits granted to the French customers were not higher but lower than those granted to the principal German customer. In 1965 the discounts, measured against the list prices, were 14 % and 16.2 % for Citroen and Volkswagen respectively. It appears therefore to be inexplicable that the discounts allowed the German manufacturers can be regarded as justified and the discounts allowed to French manufacturers regarded as unjustified.

With regard to the argument relating to the conjunctural rebates and rebates in respect of market conditions allowed to French customers it should be noted:

that these designations, as has already been explained, only have a formal significance, as it is only the actual final price which is relevant;

that in any event, so far as current economic trends and market conditions are concerned, the German and French manufacturers were treated on the same footing (as emerges from the two letters of confirmation already referred to).

The defendant stresses that the foundation of this complaint is the argument that the distinction between a conjunctural discount or a discount in respect of market conditions and a quantity or loyalty discount is purely formal.

However, the considerations which have just been mentioned, and which show that this distinction exists in fact and objectively, suffice to dispose of this complaint.

Moreover the figures put forward by the applicant in its reply in order to compare the benefits granted to the two motor car manufacturers, Volkswagen and Citroen are irrelevant. In the first case the deliveries amounted to 5000-7000 metric tons per month, whereas in the second case they amounted to 31000 metric tons per annum (that is to say, about 2500 metric tons per month) which makes the comparison valueless.

B — The illegality of the second sentence of the first paragraph of Article 2 of Decision No 30/53

The applicant submits that when the contested measure decided that the justified price differences should have been published it disregarded the first sentence of the first paragraph of Article 2 of Decision No 30/53 which permits the granting of discounts similar to those in this rasp

Moreover, it goes on to say that the complaint made against the Société Wendel on this point is based on a provision, the second sentence of the first paragraph of the said Article 2 which is null and void.

There is in fact a serious contradiction between this sentence and the first sentence of the same paragraph. The first sentence permits, in the two cases expressly mentioned, a seller to apply conditions or prices departing from those shown in his price list. The second sentence makes these exceptions and variations subject to the price publication rules. In so doing this sentence however contradicts the first, because imposing upon sellers the obligation to publish, or more precisely to show in their price lists the departures permitted by the first sentence, is in practice tantamount to eliminating the possibility of departing from the price lists.

The second sentence deprives the whole of the first paragraph of Article 2 (as amended) of its substance and must for this reason be annulled.

The defendant states first of all that, as it understands the position, the application raises on this point an objection of illegality with the object, in conformity with the case-law of the Court, not of having the said provision annulled, but of having it declared inapplicable.

It goes on to point out that there is no contradiction between the two sentences of the first paragraph of Article 2 of Decision No 30/53 (as amended by Decision No 1/54).

These provisions are based on the generally accepted view that the obligation not to discriminate and the obligation to publish prices are entirely separate; they have different objectives and impose different obligations. If it is true in fact that not every departure from the prices and conditions of sale shown in the price list is discriminatory (first sentence), this does not mean, on the other hand, that a departure which is not discriminatory is automatically exempted from all the rules relating to publicity (second sentence).

It was for this reason that the contested decision imposed a fine in respect of the departures which it held to be lawful but which had not been made public. The obligation which the applicant has disregarded in this connexion is found in Decision No 31/53 which expressly lays down that loyalty and quantity discounts must be made public.

The applicant endeavours to give a more detailed explanation of the contradiction which exists in its view between the two relevant sentences of the first paragraph of Article 2. It argues in particular that the ‘limits’ within the meaning of the second sentence to which the permitted exceptions and departures under the first sentence are subject are obviously ‘the same as those imposed upon discounts of every description shown in the price lists’. The following contradiction results precisely from this: ‘In certain transactions discounts can be allowed which depart from those shown in the price lists’ (first sentence), but ,‘at the same time these discounts cannot be less than those in the price lists’ (second sentence).

Having made this point the applicant states that it has never intended to challenge the distinction between discrimination and failure to publish. On the contrary, by arguing that the wording in the first sentence relating to the principle of non-discrimination cannot be affected by the rules relating to publicity, it has complied with the judgment in Case 1/54 concerning the absence of any connexion between the system of nondiscrimination and the obligation to publish.

The defendant retorts that the applicant cannot invoke the judgment of the Court in Case 1/54 to prove that the second sentence of the first paragraph of Article 2 of Decision No 30/53 contradicts the first sentence, since this judgment, which establishes the distinction between discrimination and the obligation to publish, refers expressly to the said decision.

In addition it points out that the applicant gives the word ‘limits’ in the second sentence of the first paragraph of Article 2 a meaning which corresponds neither to the letter nor to the spirit of this provision. According to its interpretation these ‘limits’ are in fact ‘those which define the amount of the discounts’.

However:

the first sentence of this paragraph does not speak of discounts but of ‘prices or conditions departing from those shown in his price list’;

neither the first nor the second sentence refers to the amount of the discounts but — independently of their amount — considers the price variations in the light of the rules relating to non-discrimination and publication;

the text in question states clearly that what is concerned is the ‘limits applicable under the price publication rules.’ However these rules, which for the purpose of this case are contained in Decision No 31/53, do not indicate what the amount of the discounts must be, but merely indicate which departures must be published by undertakings in their price lists.

It follows therefore that the ‘limits’ in question only refer to the ‘price publication rules’. Moreover the German text only confirms this interpretation.

The defendant therefore concludes mat there is no contradiction between the first and second sentences of the first paragraph of Article 2. Price advantages can in fact be non-discriminatory (first sentence) but can nevertheless be granted in violation'of the rules on publication (second sentence): this is simply a logical distinction between discrimination and infringement of the price publication rules. The second sentence is moreover a simple statement, as the obligation imposed upon undertakings to publish prices has already been defined by Decisions Nos 31/53 and 37/54 and noncompliance therewith can be punished with a fine under the provisions of Article 64, independently of the definition given to prohibited practices (Decision No 30/53).

Therefore if the second sentence whose meaning is challenged were thought to be inapplicable, the legal position would be the same. A breach of the duty could in fact be penalized under Article 64 even if there were no infringement of the prohibition against discrimination contained in Article 60(1).

Grounds of judgment

Admissibility

The application, according to its wording, on the one hard seeks the annulment of the decision of the High Authority to the extent to which it imposes upon the applicant a fine of FF 160000 under Article 64 of the ECSC Treaty and on the other hand the annulment of the last sentence of the first paragraph of Article 2 of Decision No 30/53 of 2 May 1953, as amended by Article 1 of Decision No 1/54 of 7 January 1954.

The application, in so far as it relates to the sanction imposed upon the applicant, constitutes an appeal in which the Court has unlimited jurisdiction under the second paragraph of Article 36 of the Treaty. In fact it challenges the imposition of the sanction on the applicant and disputes its validity on the ground that it is illegal.

This application is admissible.

The application, in so far as it asks for the annulment of the last sentence of the first paragraph of Article 2 (as amended) is out of time and is on this ground alone inadmissible. However, it appears from the context of the application that it in fact raises an objection of illegality within the meaning of the third paragraph of Article 36 of the Treaty. It is therefore necessary to consider this objection as a submission supporting the appeal in which the Court has unlimited jurisdiction.

The submission of infringement of the Treaty

A — The duty not to discriminate

The fine which is the subject-matter of the application is imposed first for discriminatory practices prohibited by Article 60(1) of the Treaty and by Article 2 (as amended) of Decision No 30/53.

The practices in respect of which a fine has been imposed consisted in the allowance of discounts inspired in particular by reasons concerning the short-term state of the market, in transactions entered into by the applicant with sixteen French consumers.

The applicant complains that by imposing a fine the contested decision infringed the beforementioned provisions as well as the principle of non-discrimination contained in Article 4(b) of the Treaty.

The transactions which the contested decision regarded as prohibited practices do not belong, according to the applicant, to the same category as those shown in its price list but should be regarded as transactions ‘having exceptional characteristics’, which, for this reason, do not come within the scope of the application of Article 60.

It is said that there are several factors in each of these transcriptions which distinguish them from those in the categories of transactions shown in the price list and which give them an ‘exceptional’ character These factors are in particular the longstanding relationships between the parties, the size of the deliveries in question, the meeting of a high percentage of the requirements and substantial technical cooperation.

Under the provisions of Article 60(1) of the Treaty discriminatory practices involving the application by a seller of dissimilar conditions to comparable transactions are prohibited. This prohibition is defined by Article 2 of Decision No 30/53 (as amended) under which departures from prices shown in the price list are only permitted if the transaction to which they are applied does not fall within the categories of transactions covered by the price list, or if, the the case of a number of transactions having special features in common, the prices have been departed from ‘uniformly’. Therefore a transaction which is not governed by the general criteria for fixing prices is not prohibited by Article 60(1) of the Treaty, as any danger of discrimination is avoided because by its very nature such a transaction is not comparable to any other. On the other hand Article 60(1) applies to transactions which, although as compared with normal transactions they have exceptional characteristics and for this reason obtain the benefit of special conditions of sale, nevertheless remain comparable one with another.

The factors relating to the loyalty of customers and to the quantities bought, which are relied on in this case, are not such as to make a transaction non-comparable.

Such factors are often a typical feature of the commercial relations between producers and the processing industry. In addition, with regard to technical cooperation, it appears from the facts put forward by the parties that comparable types of cooperation exist or are provided for in many transactions. With regard to the other transactions this cooperation is not special or exceptional, since its only purpose is to secure the delivery of products capable of meeting the needs of a specialized processing industry or to permit the buyer to carry out an effective check of the quality of the products with which he is supplied. It cannot be concluded after taking all these matters into consideration that the disputed transactions have any ‘exceptional characteristics’ which remove them from the categories shown in the price list within the meaning of Article 2 (as amended) of Decision No 30/53.

The first argument put forward by the applicant must therefore be rejected.

The applicant submits in the alternative that all the contested discounts are of the same order or magnitude as the price reductions granted to all the other customers; it therefore acted in conformity with Article 2 (as amended) of Decision No 30/53 which does not regard departures from the price list as a prohibited practice if the seller can show that they are applied uniformly in all comparable transactions. In support of this view it argues that in the complicated field of commercial transactions too much weight must not be attached to the various designations of premiums or rebates as their significance is purely formal; the only factor to consider in order to decide whether there have been any discriminatory practices is the final price which is in fact paid by all the buyers in a comparable situation.

The application of an identical or similar final price to several comparable transactions does not of itself remove the possibility of discrimination, for the harmonization of prices may be achieved by a combination of very different factors or of premiums granted in accordance with arbitrary criteria which vary from case to case. The principle of non-discrimination is only observed to the extent to which each of the factors which have contributed to the fixing of a final identical price has been established according to objective criteria applied uniformly to all comparable transactions. On the other hand the distinction between the different categories of premiums, far from being a purely formal matter, must satisfy objective criteria and requirements arising out of the nature of each premium. Loyalty or quantity rebates granted according to features peculiar to each transaction are connected with these features in such a way that they do not vary provided that the transactions are of the same kind.

On the other hand rebates allowing for variation in current economic trends (‘conjunctural’ rebates) are not connected with such features but are granted because of market conditions which affect or are capable of affecting a totality of traders so that they are intended to fluctuate in accordance with periodically recorded changes in the market conditions. Moreover, only an exact specification of the various factors which cause prices to vary to the advantage of certain transactions from those shown in the price list can prevent discrimination against other buyers, who, although they do not benefit from these advantages, may be in a comparable situation. In particular, conjunctural rebates are, for the reasons given above, an example of a discount which other consumers could justifiably claim. Therefore the applicant's argument that the price advantages granted to buyers in comparable situations should be considered ‘having regard to all discounts taken together’ does not satisfy the requirements of Article 60(1) of the Treaty.

In this case the reasons for the allowance of conjunctural discounts must be sought in the crisis which affected the common market in steel at that time. Having regard to the principle laid down in Article 60(1) of the Treaty the granting of conjunctural discounts in some only of the transactions referred to in the contested decision can only be permitted if it can be shown that these transactions were not all comparable so far as current economic trends were concerned. In conformity with Decision No 30/53 the onus is on the seller to show that transactions subject to prices or conditions of sale which are dissimilar or which are not shown in the price list are not comparable transactions. Such evidence has not been produced in this case.

Therefore the applicant's second argument must also be rejected.

B — The duty of publication

The fine imposed by the contested decision also penalizes breaches of the obligation to make public price lists and conditions of sale laid down in Article 60(2) of the Treaty and Article 2 of Decision No 31/53 as amended and supplemented by Decision Nos 32/53, 2/54, 32/56 and 20/63. The breaches in respect of which the fine was imposed relate to discounts which were not made public and were granted in transactions concluded in 1965 between the applicant and twenty-three consumers, nineteen French and four German.

The applicant submits that, since the first sentence of Article 2 (as amended) of Decision No 30/53 permits in certain circumstances exceptions to and departures from the price list, it is inconsistent to maintain that according to the following sentence these exceptions and departures are subject to the price publication rules, for it is impossible to regard as exceptions to or departures from the price fist price advantages which have to be shown in that price list. The applicant's conclusion is that the second sentence destroys the validity of the whole of the said Article 2 and must be annulled.

It follows from Article 60(2) of the Treaty that publication of prices is a method of achieving the objectives stated in the first paragraph. As this method prescribed by the Treaty is mandatory the obligation to publish price lists and conditions of sale must be regarded as a strict rule of law to which no exception is permitted. By virtue of this rule undertakings in the steel industry must publish all prices and conditions of sale in their price lists and any subsequent modifications. The second sentence of Article 2 (as amended) of Decision No 30/53, far from contradicting the previous sentence, conforms to this rule by providing that amendments of prices and conditions of sale incorporated in the price list shall be made public to the extent to which they apply to comparable transactions. Article 2(f) of Decision No 31/53, supplemented by Decision No 2/54, confirms this requirement by providing expressly that loyalty discounts allowed in such transactions shall be made public.

Therefore, as the contested premiums were regarded as lawful under the first sentence of Article 2 (as amended) of Decision No 30/53 and were applied to comparable transactions they should have been published in conformity with the beforementioned provisions and in accordance with Article 60(2) of the Treaty.

Therefore this submission must be rejected.

Moreover, as the amount of the disputed fine was calculated on the basis of the minimum volume of illegal sales recorded it does not appear to be unduly high.

Thus it is not necessary to decide this point.

The submission of infringement of an essential procedural requirement

In addition the applicant submits that the statement of the reasons upon which the contested decision is based is inadequate. In support of this submission it argues first that the decision did not give any reason for the distinction drawn between the price advantages granted to German car manufacturers, which were regarded as justified, and those granted to the nineteen other customers, which were considered to be partly unjustified, and, secondly that it has in addition not given any reason for the distinction between price variations held to be justified and those held to be unjustified within this group of nineteen transactions.

The fact that these two complaints have been raised together is sufficient to show that the allegation that the High Authority distinguished, and even discriminated, between German and French undertakings is without any foundation, since the decision not only regarded the price advantages granted to the German undertakings but also those allowed to some of the French undertakings as justified. On this point the High Authority only had to give reasons for the sanction which it imposed and did not have to give the reasons which had caused it to regard the applicant's conduct in certain cases in a more favourable light.

The statement of the reasons upon which the contested decision is based gives the grounds which compelled the High Authority to find that the applicant had infringed Article 60 of the Treaty and to impose upon it the disputed fine. For the reasons for a decision to be adequate, it must contain the factual and legal grounds upon which it is based and there is no need for it to deal with any objections which may possibly be raised against it.

This submission is therefore unfounded.

Costs

Under Article 69(2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. In this case the applicant has failed in all its submissions.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 2, 3, 4, 33, 36, 60 and 64 of the Treaty establishing the European Coal and Steel Community; Having regard to the Protocol on the Statute of the Court of Justice annexed to the Treaty establishing the European Coal and Steel Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69; THE COURT hereby:

1 Dismisses the application as inadmissible in so far as it seeks the annulment of the second sentence of Article 2 of Decision No 30/53, as amended by Article 1 of Decision No 1/54 and in all other respects as unfounded;

2 Orders the applicant to bear the costs.