Exclusive dealing, discrimination, and discounts under EC competition law

Antitrust Law Journal

Volumn 67, Issue 3, 2000, Pages 641-669

  Spinks, S O ^a  

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EID: 0347742753     PISSN: 00036056     EISSN: None     Source Type: Journal    
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References (94)

1. Treaty Establishing the European Community, Mar. 25, 1957, 298 U.N.T.S. 3, as most recently amended by the Treaty of Amsterdam, Oct. 2, 1997, 1997 O.J. (C 340) 145. The renumbering of the competition law provisions entered into effect on May 1, 1999.
2. In the parlance of EC competition law, an "undertaking" is any legal or natural person carrying on activities of an economic or commercial nature. A group of companies that is under the sole control of a particular company or individual is considered to constitute one single "undertaking" for purposes of EC competition law. As a consequence, Article 81 of the EC Treaty is not concerned with agreements or concerted practices between parent company and subsidiary if they form an economic unit within which the subsidiary has no real freedom to determine its course of action in the market ("single economic unit" principle). Viho Europe v. Commission, Case C-73/95P, 1996 E.C.R. I-5457, 5495-96, [1997] 4 C.M.L.R. 419; Ahmed Saeed v. Zentrale, Case 66/86, 1989 E.C.R. 803, 848, [1990] 4 C.M.L.R. 102, Common Mkt. Rep. [1989] 2 CEC 654; Bodson v. Pompes Funèbres, Case 30/87, 1988 E.C.R. 2479, 2513, [1989] 4 C.M.L.R. 984, Common Mkt. Rep. [1990] 1 CEC 3.
3. Article 3(g) of the EC Treaty, supra note 1.
4. Rules virtually identical to the EC competition rules now apply throughout the European Economic Area (EEA), which consists of the 15 EC member countries and 3 EFTA countries (Norway, Iceland, and Liechtenstein), pursuant to Part IV of the Agreement on the European Economic Area, May 2, 1992, 1991 BDIEL AD LEXIS 175.
5. The Council of Ministers (or simply the Council) is the Community institution charged with ensuring that the objectives of the EC Treaty are attained and coordinating the general economic policies of the Member States. It is the principal legislative organ of the Community and takes decisions, either unanimously or by a qualified majority. It consists of one delegate (at Ministerial level) from the government of each Member State. As regards EC competition policy, the Council is empowered by Art. 85 (formerly Art. 89) of the EC Treaty to adopt, by a qualified majority upon a proposal from the Commission, regulations and directives which give effect to the rules on competition set out in the Treaty.
6. Art. 85 (formerly Art. 89) of the EC Treaty, supra note 1.
7. Art. 15, para. 2, Council Regulation 17 of February 6, 1962, First Regulation implementing Articles 85 and 86 of the Treaty, 1962 O.J. (13) 204, [1962 O.J. Spec. Ed. 87] [hereinafter Regulation 17]. At present, formal notification of an agreement or concerted practice provides immunity from fines for violation of Article 81 in respect of the implementation of the agreement or practice in the period following the notification. Art. 15, para 5, Regulation 17, supra. However, Commission proposals in the May 1999 White Paper on the Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty, 1999 O.J. (C 132) 1 [hereinafter White Paper] would eliminate the notification procedure. The Commission recently clarified its fining policy in the Guidelines on the Method of Setting Fines Imposed Pursuant to Article 15(2) of Regulation No. 17, 1998 O.J. (C 9) 3, and the Notice on the Non-imposition or Reduction of Fines in Cartel Cases, 1996 O.J. (C 207) 4.
8. Art. 230(4) (formerly Art. 173) and 225(2) (formerly Art. 168a) of the EC Treaty, supra note 1; Art. 3(c) of the Council Decision 88/951/ECSC, EEC, Euratom.
9. Art. 225(1) (formerly Art. 168a(1)) of the EC Treaty, supra note 1.
10. Regulation 17, supra note 7, Art. 9, ¶ 3.
11. At present only eight member countries have empowered their national authorities to apply the EC competition rules: Belgium, France, Germany, Greece, Italy, The Netherlands, Portugal, and Spain.
12. Commission Notice on Co-operation Between National Authorities and the Commission, 1997 O.J. (C 313) 3.
13. Commission Notice on Co-operation Between National Courts and the Commission in Applying Articles 85 and 86 of the EEC Treaty, 1993 O.J. (C 39) 6.
14. Article 81(1) provides: The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
15. Consten & Grundig v. Commission, Cases 56 & 58/64, 1966 E.C.R. 299, 344, [1966] C.M.L.R. 418, Common Mkt. Rep. (CCH) ¶ 8046.
16. Article 81(2) provides: "Any agreements or decisions prohibited pursuant to this Article shall be automatically void."
17. Article 81(3) provides that: The provisions of paragraph 1 may, however, be declared inapplicable in the case of: - any agreement or category of agreements between undertakings; - any decision or category of decisions by associations of undertakings; - any concerted practice or category of concerted practices; which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
18. White Paper, supra note 7.
19. Id. at 21.
20. See, e.g., Gottrup-Klim v. Dansk Landbrugs Grovvarelskab, Case 250/92, 1994 E.C.R. I-5641, I-5686-90, [1996] 4 C.M.L.R. 191; Delimitis v. Henninger Bräu, Case C-234/89, 1991 E.C.R. 1-935, 983-87, [1992] 5 C.M.L.R. 210, Common Mkt. Rep. [1992] 2 CEC 530; Pronuptia de Paris v. Irmgard Schillgalis, Case 161/84, 1986 E.C.R. 353, 381-85, [1986] 1 C.M.L.R. 414; Coditel v. Ciné Vog Films, Case 262/81, 1982 E.C.R. 3381, 3402, [1983] 1 C.M.L.R. 49; Nungesser v. Commission, Case 258/78, 1982 E.C.R. 2015, 2065-71, [1983] 1 C.M.L.R. 278; Brasserie de Haecht v. Wilkin, Case 23/67, 1967 E.C.R. 407, 415, [1968] C.M.L.R. 26, Common Mkt. Rep. (CCH) ¶ 8053; Société Technique Minière v. Maschinenbau Ulm, Case 56/65, 1966 E.C.R. 235, 249-50, [1966] C.M.L.R. 357, Common Mkt. Rep. (CCH) ¶ 8047.
21. In Völk v. Vervaecke, Case 5/69, 1969 E.C.R. 295, 302, [1969] C.M.L.R. 273, Common Mkt. Rep. (CCH) ¶ 8074, the ECJ established that an agreement falls outside the prohibition of Article 81 (1) if it is shown to have a negligible effect on the market.
22. According to the Commission, the market share threshold for appreciable effects of horizontal agreements is 5%, of vertical agreements is 10% and of mixed horizontal/ vertical agreements is 5%. Notice on Agreements of Minor Importance, 1986 O.J. (C 231) 2, as amended, 1994 O.J. (C 386) 20 and 1997 O.J. (C 372) 13. Before the most recent amendment, the Notice stipulated both a market share test (maximum 5%) and a turnover test (maximum Euro 300 million), both of which had to be met for an agreement to fall outside the scope of Article 81(1) under the Notice.
23. Article 82 provides that: Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary conditions which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
24. United Brands v. Commission, Case 27/76, 1978 E.C.R. 207, 277, [1978] 1 C.M.L.R. 429, Common Mkt. Rep. (CCH) ¶ 8429.
25. The ECJ has held that Article 82 can also apply to a group of undertakings that collectively occupy a dominant position, provided the undertakings are linked in such a way that they adopt the same conduct on the market. Almelo v. Ysselmij, Case C-393/92, 1994 E.C.R. 1-1477, 1519-20.
26. Hoffmann-LaRoche v. Commission, Case 85/76, 1979 E.C.R. 461, 521, [1979] 3 C.M.L.R. 211, Common Mkt. Rep. (CCH) ¶ 8527; Hilti v. Commission, Case T-30/89, 1991 E.C.R. 11-1439, 1480-81, [1992] 4 C.M.L.R. 16, Common Mkt. Rep. [1992] 1 CEC 155.
27. While in theory the presumption of dominance may be rebuttable under these circumstances, in practice it may be virtually impossible to do so.
28. In Metro v. Commission, Case 26/76, 1977 E.C.R. 1875, 1902, [1978] 2 C.M.L.R. 1, Common Mkt. Rep. (CCH) ¶ 8435, a market share of 5% to 10% was held to rebut conclusively an allegation of the existence of a dominant position.
29. AKZO Chemie BV v. Commission, Case 62/86, 1991 E.C.R. I-3359, 3453, [1993] 5 C.M.L.R. 215, Common Mkt. Rep. [1993] 2 CEC 115.
30. London European/Sabena, Case No. IV/32.318 (Nov. 4, 1988), 1988 O.J. (L 317) 47, [1989] 4 C.M.L.R. 662, Common Mkt. Rep. (CCH) ¶ 11043 (dominant position with a market share of between 40% and 50%); Tetra Pak (II), Case No. IV/31.043 (July 24, 1991), 1992 O.J. (L 72) 1, [1992] 4 C.M.L.R. 551, Common Mkt. Rep. [1992) 1 CEC 2, 145 (dominant position with a market share of over 30% together with other facts).
31. Hoffmann-LaRoche v. Commission, Case 85/76, 1979 E.C.R. 461, 541, [1979] 3 C.M.L.R. 211, Common Mkt. Rep. (CCH) ¶ 8527.
32. Continental Can v. Commission, Case 6/72, 1973 E.C.R. 215, 246, [1973] C.M.L.R. 199, Common Mkt. Rep. (CCH) ¶ 8171; Hoffmann-LaRoche v. Commission, Case 85/76, 1979 E.C.R. 461, 552-53, [1979] 3 C.M.L.R. 211, Common Mkt. Rep. (CCH) ¶ 8527.
33. Tetra Pakv. Commission, Case T-83/91, 1994 E.C.R. 11-755, 813, Common Mkt. Rep. [1995] 1 CEC 34.
34. See Gottrup-Klim v. Dansk Landbrugs Grovvareselskab, Case 250/92, 1994 E.C.R. I-5641, I-5691 (grounds 49-52), [1996] 4 C.M.L.R. 191.
35. Irish Sugar v. Commission, Case T-228/97, Oct. 7, 1999, not yet reported, at ground 112 (citing United Brands v. Commission, Case 27/76, 1978 E.C.R. 207, 293 (ground 189)).
36. Hoffmann-LaRoche v. Commission, Case 85/76, 1979 E.C.R. 461, 551, [1979] 3 C.M.L.R. 211, Common Mkt. Rep. (CCH) ¶ 8527.
37. BPB Industries and British Gypsum pic v. Commission, Case C-310/93P, 1995 E.C.R. 1-865, 876, [1995] 4 C.M.L.R. 718, Common Mkt. Rep. [1995] 2 CEC 15.
38. Hoffmann-LaRoche v. Commission, Case 85/76, 1979 E.C.R. 461, 540, [1979] 3 C.M.L.R. 211, Common Mkt. Rep. (CCH) ¶ 8527. See also Michelin v. Commission, Case 322/81, 1983 ECR 3461, 3514-15, [1985] 1 C.M.L.R. 282, Common Mkt. Rep. (CCH) ¶ 14031.
39. Hoffmann-LaRoche v. Commission, Case 85/76, 1979 E.C.R. 461, 547, [1979] 3 C.M.L.R. 211, Common Mkt. Rep. (CCH) ¶ 8527.
40. Id., 1979 E.C.R 461, 540; AKZO v. Commission, Case 62/86, 1991 E.C.R. I-3359, 3473, [1993] 5 C.M.L.R. 215, Common Mkt. Rep. [1993] 2 CEC 115; Almelo, Case C-393/92, 1994 E.C.R. I-1477, ¶ 44.
41. Hoffmann-LaRoche v. Commission, Case 85/76, 1979 E.C.R. 461, 551, [1979] 3 C.M.L.R. 211, Common Mkt. Rep. (CCH) ¶ 8527.
42. Tetra Pak v. Commission, Case T-51/89, 1990 E.C.R. 11-309, 358, [1991] 4 C.M.L.R. 334, Common Mkt. Rep. [1990] 2 CEC 409.
43. Delimitis v. Henninger Bräu, Case C-234/89, 1991 E.C.R. 1-935, 983-87, [1992] 5 C.M.L.R. 210, Common Mkt. Rep. [1992] 2 CEC 530.
44. Langnese-Iglo GmbH v. Commission, Case T-7/93, 1995 E.C.R. II-1533, 1574-75, [1995] 5 C.M.L.R. 602, Common Mkt. Rep. [1995] 2 CEC 217, confirming Mars/Langnese, Case No. IV/34.072 (Dec. 23, 1992), O.J. 1993 (L 183/19), [1994] 4 C.M.L.R. 51, Common Mkt. Rep. (CCH) 2 [1993] 2123; Schöller Lebensmittel GmbH & Co. KG v. Commission, Case T-9/93, 1995 E.C.R. II-1611, 1644-46, [1995] 5 C.M.L.R. 602.
45. Van den Bergh Foods Limited, Case Nos. IV/34.073, IV/34.395 and IV/35.436 (Mar. 11, 1998), 1998 O.J. (L 246) 1.
46. See supra note 22.
47. Commission Regulation 1984/83 on the Application of Article 85(3) of the Treaty to Categories of Exclusive Purchasing Agreements, 1983 O.J. (L 173) 5, amended 1983 O.J. (L 281) 24 and 1997 O.J. (L 214) 27 [hereinafter Regulation 1984/83]. The Regulation also contains special provisions on block exemptions for exclusive dealing in beer supply agreements (Arts. 6-9) and service station agreements (Arts. 10-13). See also Commission Notice Concerning Commission Regulations 1983/83 & 1984/83, 1984 O.J. (C 101) 2, amended, 1992 O.J. (C 121) 2.
48. Because of the Commission's own very wide interpretation of the concept of restriction of competition, the Regulation expressly provides that the reseller may be required to purchase minimum quantities, advertise, maintain a stock of goods, provide customer and guarantee services, and employ specialized staff. Regulation 1984/83, supra note 48, Art. 2, ¶ 3.
49. Subject to limited exceptions in Art. 4, ¶ 2, of Regulation 17, supra note 7.
50. Under the draft block exemption Regulation for vertical restraints, Regulation 1984/ 83 would continue to apply until the entry into force of the new Regulation, scheduled for June 1, 2000.
51. Commission Regulation 1983/83 on the Application of Article 85(3) of the Treaty to Categories of Exclusive Distribution Agreements, 1983 O.J. (L 173) 1, amended 1983 O.J. (L 281) 24 and 1997 O.J. (L 214) 27 [hereinafter Regulation 1983/83]; Commission Regulation 4087/88 on the Application of Article 85(3) of the Treaty to Categories of Franchise Agreements, 1988 O.J. (L 359) 46 [hereinafter Regulation 4087/88]. The Commission's other "vertical" block exemption, Regulation 1475/95 on the Application of Article 85(3) of the Treaty to Certain Categories of Motor Vehicle Distribution and Servicing Agreements, 1995 O.J. (L 145) 25 [hereinafter Regulation 1475/95], will not immediately be made subject to the proposed reforms.
52. In September 1999 the Commission published on its Internet website a draft Commission Regulation on the application of Article 81 (3) of the Treaty to categories of vertical agreements and concerted practices and draft Guidelines on Vertical Restraints, together with a communication inviting all interested parties to comment on the drafts. See also Commission Communication of Nov. 26, 1998, 1998 O.J. (C 365) 3, following up on the Commission's Green Paper on Vertical Restraints, COM (98) 544. On July 10, 1999, the Council adopted an amendment to Council Regulation 19/65/EEC, 1965 O.J. (36) 533/ 65, as amended, enabling the Commission to proceed with adoption of the new block exemption regulation. Council Regulation (EC) No. 1215/1999, 1999 O.J. (L 148) 1. On the same date the Council adopted an amendment to Art. 4(2) of Regulation 17, supra note 7, permitting vertical agreements to obtain a retroactive individual exemption even in the absence of a notification, Council Regulation No. 1216/1999, 1999 O.J. (448) 5.
53. According to the Commission's draft Regulation, the hard-core restrictions will include the following: fixed resale prices or minimum resale prices; maximum resale prices or recommended resale prices which in reality amount to fixed or minimum resale prices as a result of pressure or incentives created by any of the parties; the prevention or restriction of active or passive resales, imports or exports to final or non-final buyers other than certain listed exceptions; the prevention or restriction of cross-supplies between distributors in a selective distribution system; and the restriction of sales of spare parts to the relevant market. The inapplicability of the block exemption would relate only to that market.
54. The Commission would no longer adopt exemption decisions under Article 81(3). However, it would retain the power to adopt individual decisions that are not prohibition decisions. According to the White Paper, where a transaction raises new issues, the Commission may adopt a "positive" decision in order to "provide the market with guidance regarding the Commission's approach to certain restrictions in it." However, the White Paper goes on to state that positive decisions of this nature would be taken only in exceptional cases, on grounds of general interest, and would confine themselves to a finding that the agreement in question is compatible with Article 81 as a whole. White Paper, supra note 7, at 22-23.
55. Regulation 1983/83, supra note 52, and Regulation 4087/88, supra note 52.
56. Regulation 1475/95, supra note 52.
57. Consten & Grundig v. Commission, Cases 56 & 58/64, 1966 E.C.R. 299, 342-43, [1966] C.M.L.R. 418, Common Mkt. Rep. (CCH) ¶ 8046.
58. E.g., VW, Case No. IV/35.733, 1998 O.J. (L 124) 62, [1998] 5 C.M.L.R. 333, Common Mkt. Rep. [1998] CEC 2, 189, (appeal pending); Tretorn, Case Nos. IV/32.948-IV/34/ 590 (Dec. 21, 1994), 1994 O.J. (L 378) 45, Common Mkt. Rep. [1995] 1 CEC 2, 543; TippEx, Case Nos. IV/31.192, IV/31.507 (Jul. 10,1987), 1987 O.J. (L 222) 1, [1989] 4 C.M.L.R. 425, Common Mkt. Rep. (CCH) ¶ 10,899. See Commission Guidelines on the Method of Setting Fines Imposed Pursuant to Article 15(2) of Regulation No 17, 1998 O.J. (C 9) 3.
59. Regulation 1983/83, supra note 52, Art. 2, ¶ 2(c).
60. Metro v. Commission, Case 26/76, 1977 E.C.R. 1875, 1904, [1978] 2 C.M.L.R. 1, Common Mkt. Rep. (CCH) ¶ 8435.
61. Hasselblad v. Commission, Case 86/82, 1984 E.C.R. 883, 907-10, [1984] 1 C.M.L.R. 559, Common Mkt. Rep. (CCH) ¶ 14,014.
62. Concerning discrimination under Articles 85 and 86, see Michel Waelbroeck, Price Discrimination and Rebate Policies Under EU Competition Law, 1995 FORDHAM CORP. L. INST. 147 (Barry Hawk ed., 1996).
63. But see Alpha Flight Services/Aéroports de Paris (June 11, 1998), 1998 O.J. (L 230) 10, and Irish Sugar (May 14, 1997), 1997 O.J. (L 258) 1 at recitals 140 et seq.
64. Michelin v. Commission, Case 322/81, 1983 E.C.R. 3461, 3514-15, [1985] 1 C.M.L.R. 282, Common Mkt. Rep. (CCH) ¶ 14,031.
65. Making discounts conditional on the customer's buying different categories of products also constitutes an abuse of dominant position. For example, in Tetra Pak (II), Case No. IV/31.043 (July 24, 1991), 1992 O.J. (L 72) 1, [1992] 4 C.M.L.R. 551, Common Mkt. Rep. [1992] 1 CEC 2, 145, the Commission stated that orders for different types of carton could not be aggregated by a dominant undertaking for the purpose of granting even a quantity rebate. Following Commission intervention, the Coca-Cola Corporation (CCC) undertook not to offer target rebates that are paid on the basis of the customer reaching a total aggregate purchase of both "Coca-Cola" and other beverages produced by CCC.
66. Michelin v. Commission, Case 322/81, 1983 E.C.R 3461, 3517-18, [1985] 1 C.M.L.R. 282, Common Mkt. Rep. (CCH) ¶ 14,031.
67. EUROPEAN COMM'N, NINETEENTH REPORT ON COMPETITION POLICY ¶ 50 (1989).
68. Belgian National Airport (Jun. 28, 1995), 1995 O.J. (L 216) 8, [1996] 4 C.M.L.R. 232.
69. Article 6 of the EC Treaty prohibits "any discrimination on grounds of nationality". As described by one well known authority on EC competition law: This is a directly applicable Treaty provision. It confers rights and imposes obligations not only on Member States but also on private persons, including business undertakings. For a difference in treatment to be prohibited, it is sufficient that it be based, even indirectly, on nationality. Thus, a difference in treatment based on the domicile of the parties, the place where they are established, or the nationality of their owners or employees is equally prohibited. Waelbroeck, supra note 67, at 150. This principle has been applied in several cases to condemn unilateral discrimination. E.g., Corsica Ferries, Case C-18/93, 1994 E.C.R. I-1783. GVL v. Commission, Case 7/82, 1983 E.C.R. 483, 508-09, [1983] 3 C.M.L.R. 645, Common Mkt. Rep. (CCH) ¶ 8910; Sacchi, Case 155/73, 1974 E.C.R. 409, 431, [1974] 2 C.M.L.R. 177, Common Mkt. Rep. (CCH) ¶ 8267; Portuguese Airports, Case No. IV/35.703 (Feb. 10, 1999), 1999 O.J. (L 69) 31; Ilmailulaitos/Luftfartsverket, Case No. IV/35.767 (Feb. 10, 1999), 1999 O.J. (L 69) 24; Brussels National Airport (June 28, 1995), 1995 O.J. (L 216) 8, [1996] 4 C.M.L.R. 232.
70. Michelin, Case No IV/29.481 (Oct. 7, 1981), [1981] O.J. (L 53) 33, [1982] 1 C.M.L.R. 643, Common Mkt. Rep. (CCH) ¶ 10,340.
71. In Portuguese Airports, Case No. IV/35.703 (Feb. 10, 1999), 1999 O.J. (L 69) 31, the Portuguese airport authorities offered discounts on landing charges which varied, inter alia, according to the number of monthly landings, in respect of the same runway, taxiway, apron area, and approach control services. In condemning this form of discriminatory pricing under Article 81, the Commission noted that no evidence was supplied to demonstrate that there exist economies of scale resulting in cost savings according to frequency of use.
72. Irish Sugar, Case No. IV/34.621, 35.059/F-3, (May 14, 1997), 1997 O.J. (L 258) 1, [1997] 5 C.M.L.R. 666, Common Mkt. Rep. (CCH) [1997] 2380.
73. Irish Sugar v. Commission, Case T-228/97, Oct. 7, 1999, not yet reported, at ground 112.
74. Id. at ground 189. The CFI took the position at ground 186 that the circumstances in which a dominant company may react "to the limited competition which exists on the market form part of the competitive process which Article [82] is designed to protect."
75. Irish Sugar, Case No. IV/34.621, 35.059/F-3, (May 14, 1997), 1997 O.J. (L 258) 1, [1997] 5 C.M.L.R. 666, Common Mkt. Rep. (CCH) [1997] 2380.
76. AKZO v. Commission, Case 62/86, 1991 E.C.R. 1-3359, 3453-56, [1993] 5 C.M.L.R. 215, Common Mkt. Rep. [1993] 2 CEC 115, confirming ECS/AKZO, Case No. IV/30.698 (Dec. 14, 1985), 1985 O.J. (L 374) 1, [1986] 3 C.M.L.R. 273, Common Mkt. Rep. (CCH) ¶ 10,748.
77. AKZO v. Commission, Case C-62/86, 1991 E.C.R. 1-3359, 3465-66, [1993] 5 C.M.L.R. 215, Common Mkt. Rep. [1993] 2 CEC 115.
78. Digital recently offered commitments to the Commission in the course of proceedings on the compatibility of Digital's marketing and pricing policies with Articles 81 and 82. Pursuant to the commitments, Digital reserves the right to offer non-standard price reductions to meet competition. However, Digital also acknowledges that the Commission may initiate proceedings if such reductions result in prices below average total costs.
79. 1997 O.J. (L 258) 1. In its judgment on the appeal, however, the CFI appears to have based its conclusion that the border rebates violated Article 81 (c) not so much on their being part of such a broader set of measures but rather on their own unjustified discriminatory effects vis-à-vis other customers and their aim of discouraging imports of sugar from Northern Ireland, thereby restricting competition on the Irish retail sugar market to the detriment of purchasers and consumers.
80. Compagnie Maritime Belge and Dafra v. Commission, Cases C-395 & 396/96P (still pending).
81. Cewal & Ors (Decision 93/82) Case Nos. IV/32.448 & IV/32.450 (Dec. 23, 1992), 1993 O.J. (L 34) 20, [1995] 5 C.M.L.R. 198, Common Mkt. Rep. [1993] 1 CEC 2, 144, confirmed in Compagnie Maritime Belge Transports SA v. Commission, Cases T-24-T-26 & 28/93, 1996 E.C.R. II-1201, [1997] 4 C.M.L.R. 273, Common Mkt. Rep. [1997] CEC 74.
82. Pursuant to Art. 166 of the EC Treaty, supra note 1, the ECJ is assisted by a number of Advocates General whose duty is to provide impartial and independent reasoned opinions on cases brought before the ECJ. The opinions of the Advocates General, who have the status of judges, are not binding on the ECJ, although the opinions are followed in the majority of cases.
83. Opinion of Advocate General Fennelly, at ¶ 132, delivered on Oct. 29, 1998 in Compagnie Maritime Belge NV and Dafra-Lines v. Commission, Cases C-395 & 396/96P .
84. Id. ¶ 136.
85. United Brands v. Commission, Case 27/76, 1978 E.C.R. 207, [1978] 1 C.M.L.R. 429, Common Mkt. Rep. (CCH) ¶ 8429, confirming Chiquita, Case No. IV/26.699 (Dec. 17, 1975), 1976 O.J. (L 95) 1, [1976] 1 C.M.L.R. D28, Common Mkt. Rep. (CCH) ¶ 9800.
86. Tetra Pak v. Commission, Case T-83/91, 1994 E.C.R. II-755, Common Mkt. Rep. (CCH) 1 [1995] 34, confirming Tetra Pak II, Case No W/31.043, (Jul. 24, 1991), 1992 O.J. (L 72) 1, [1992] 4 C.M.L.R 551, Common Mkt. Rep. [1992] 1 CEC 2, 145.
87. Geographically differentiated pricing may also be used to eliminate competitors where the dominant undertaking faces competitors in some countries but not in others. This form of selective pricing is covered in the preceding section.
88. As pointed out by Waelbroeck, supra note 66, at 155, the ECJ's "reasoning pays more attention to legal form than to economic reality. Paradoxically, it results in treating integrated firms better than those that sell to independent distributors. By objecting to the fact that United Brands had, as it were, appropriated to itself a 'slice of the profit' which would otherwise have been earned by the distributors, the Court seems to give more attention to considerations of social justice than of competition."
89. Id. at 155-56.
90. Viho Europe v. Commission, Case C-73/95P, 1996 E.C.R. I-5457, 5491, [1997] 4 C.M.L.R. 419 (emphasis added).
91. Waelbroeck, supra note 66, at 149.
92. Id. (citing Canenbley, Das Diskriminierungsverbot in den Wettbewerbsregeln der Europäischen Wirtschaftsgemeinschaft 69-73 (1971)).
93. Waelbroeck notes that the German authorities have considered such a clause to be contrary to German competition law even though its effect is to avoid discrimination. Waelbroeck, supra note 66, at 149 (citing BKA, September 23, 1975 (Metro case), WuW, 1976, p. 33 (EBKA 1583) and BGH January 27, 1981, WRP, 1981, p. 314). As noted by Waelbroeck, the Commission has not yet had the occasion to consider this issue, although it examined a similar "most favored licensee" clause in a 1975 decision, Kabelmetal-Luchaire and concluded that the clause fell within Article 85(1). Regulation 240/96, the block exemption for technology transfer agreements, permits a most-favored-licensee provision in Article 2(1) (10).
94. Distillers, Case No. IV/28.282 (Dec. 20, 1977), 1978 O.J. (L 50) 16, [1978] 1 C.M.L.R. 400, Common Mkt. Rep. (CCH) ¶ 10,011; Pittsburgh Corning Europe, Case No. IV/26.894 (Nov. 23, 1972), 1972 O.J. (L 272) 35, [1973] C.M.L.R. D2, Common Mkt. Rep. (CCH) ¶ 9539. Such a requirement will presumably amount to a "hardcore" restriction on resale not covered by the proposed new vertical restraints block exemption.