Europa/Competition/notice on cooperation

Notice on cooperation between national courts and the Commission in applying Articles 85 and 86 of the EEC Treaty

I. Introduction

1. The abolition of internal frontiers enables firms in the Community to embark on new activities and Community consumers to benefit from increased competition. The Commission considers that these advantages must not be jeopardized by restrictive or abusive practices of undertakings and that the completion of the internal market thus reaffirms the importance of the Community's competition policy and competition law.

2. A number of national and Community institutions have contributed to the formulation of Community competition law and are responsible for its day-to-day application. For this purpose, the national competition authorities, national and Community courts and the Commission each assume their own tasks and responsibilities, in line with the principles developed by the caselaw of the Court of Justice of the European Communities.

3. If the competition process is to work well in the internal market, effective cooperation between these institutions must be ensured. The purpose of this Notice is to achieve this in relations between national courts and the Commission. It spells out how the Commission intends to assist national courts by closer cooperation in the application of Articles85 and86 of the EEC Treaty in individual cases.

II. Powers

4. The Commission is the administrative authority responsible for the implementation and for the thrust of competition policy in the Community and for this purpose has to act in the public interest. National courts, on the other hand, have the task of safeguarding the subjective rights of private individuals in their relations with one another. (2)

5. In performing these different tasks, national courts and the Commission possess concurrent powers for the application of Article85(1) and Article86 of the Treaty. In the case of the Commission, the power is conferred by Article89 and by the provisions adopted pursuant to Article87. In the case of the national courts, the power derives from the direct effect of the relevant Community rules. In BRT v Sabam, the Court of Justice considered that `as the prohibitions of Articles85(1) and 86 tend by their very nature to produce direct effects in relations between individuals, these Articlescreate direct rights in respect of the individuals concerned which the national courts must safeguard'. (3)

6. In this way, national courts are able to ensure, at the request of the litigants or on their own initiative, that the competition rules will be respected for the benefit of private individuals. In addition, Article85(2) enables them to determine, in accordance with the national procedural law applicable, the civil law effects of the prohibition set out in Article85. (4)

7. However, the Commission, pursuant to Article9 of Regulation No 17, (5) has sole power to exempt certain types of agreements, decisions and concerted practices from this prohibition. The Commission may exercise this power in two ways. It make take a decision exempting a specific agreement in an individual case. It may also adopt regulations granting block exemptions for certain categories of agreements, decisions or concerted practices, where it is authorized to do so by the Council, in accordance with Article87.

8. Although national courts are not competent to apply Article85(3), they may nevertheless apply the decisions and regulations adopted by the Commission pursuant to that provision. The Court has on several occasions confirmed that the provisions of a regulation are directly applicable.(6) The Commission considers that the same is true for the substantive provisions of an individual exemption decision.

9. The powers of the Commission and those of national courts differ not only in their objective and content, but also in the ways in which they are exercised. The Commission exercises its powers according to the procedural rules laid down by Regulation No 17, whereas national courts exercise theirs in the context of national procedural law.

10. In this connection, the Court of Justice has laid down the principles which govern procedures and remedies for invoking directly applicable Community law.

`Although the Treaty has made it possible in a number of instances for private persons to bring a direct action, where appropriate, before the Court of Justice, it was not intended to create new remedies in the national courts to ensure the observance of Community law other than those already laid down by national law. On the other hand ... it must be possible for every type of action provided for by national law to be available for the purpose of ensuring observance of Community provisions having direct effect, on the same conditions concerning the admissibility and procedure as would apply were it a question of ensuring observance of national law.' (7)

11. The Commission considers that these principles apply in the event of breach of the Community competition rules; individuals and companies have access to all procedural remedies provided for by national law on the same conditions as would apply if a comparable breach of national law were involved. This equality of treatment concerns not only the definitive finding of a breach of competition rules, but embraces all the legal means capable of contributing to effective legal protection. Consequently, it is the right of parties subject to Community law that national courts should take provisional measures, that an effective end should be brought, by injunction, to the infringement of Community competition rules of which they are victims, and that compensation should be awarded for the damage suffered as a result of infringements, where such remedies are available in proceedings relating to similar national law.

12. Here the Commission would like to make it clear that the simultaneous application of national competition law is compatible with the application of Community law, provided that it does not impair the effectiveness and uniformity of Community competition rules and the measures taken to enforce them. Any conflicts which may arise when national and Community competition law are applied simultaneously must be resolved in accordance with the principle of the precedence of Community law. (8) The purpose of this principle is to rule out any national measure which could jeopardize the full effectiveness of the provisions of Community law.

III. The exercise of powers by the Commission

13. As the administrative authority responsible for the Community's competition policy, the Commission must serve the Community's general interest. The administrative resources at the Commission's disposal to perform its task are necessarily limited and cannot be used to deal with all the cases brought to its attention. The Commission is therefore obliged, in general, to take all organizational measures necessary for the performance of its task and, in particular, to establish priorities. (9)

14. The Commission intends, in implementing its decisionmaking powers, to concentrate on notifications, complaints and owninitiative proceedings having particular political, economic or legal significance for the Community. Where these features are absent in a particular case, notifications will normally be dealt with by means of comfort letter and complaints should, as a rule, be handled by national courts or authorities.

15. The Commission considers that there is not normally a sufficient Community interest in examining a case when the plaintiff is able to secure adequate protection of his rights before the national courts.(10) In these circumstances the complaint will normally be filed.

16. In this respect the Commission would like to make it clear that the application of Community competition law by the national courts has considerable advantages for individuals and companies:

- the Commission cannot award compensation for loss suffered as a result of an infringement of Article85 or Article86. Such claims may be brought only before the national courts. Companies are more likely to avoid infringements of the Community competition rules if they risk having to pay damages or interest in such an event,

- national courts can usually adopt interim measures and order the ending of infringements more quickly than the Commission is able to do,

- before national courts, it is possible to combine a claim under Community law with a claim under national law. This is not possible in a procedure before the Commission,

- in some Member States, the courts have the power to award legal costs to the successful applicant. This is never possible in the administrative procedure before the Commission.

IV. Application of Articles85 and 86 by national courts

17. The national court may have to reach a decision on the application of Articles85 and 86 in several procedural situations. In the case of civil law proceedings, two types of action are particularly frequent: actions relating to contracts and actions for damages. Under the former, the defendant usually relies on Article85(2) to dispute the contractual obligations invoked by the plaintiff. Under the latter, the prohibitions contained in Articles85 and 86 are generally relevant in determining whether the conduct which has given rise to the alleged injury is illegal.

18. In such situations, the direct effect of Article85(1) and Article86 gives national courts sufficient powers to comply with their obligation to hand down judgment. Nevertheless, when exercising these powers, they must take account of the Commission's powers in order to avoid decisions which could conflict with those taken or envisaged by the Commission in applying Article85(1) and Article86, and also Article85(3).(11)

19. In its case-law the Court of Justice has developed a number of principles which make it possible for such contradictory decisions to be avoided.(12) The Commission feels that national courts could take account of these principles in the following manner.

1. Application of Article85(1) and (2) and Article86

20. The first question which national courts have to answer is whether the agreement, decision or concerted practice at issue infringes the prohibitions laid down in Article85(1) or Article86. Before answering this question, national courts should ascertain whether the agreement, decision or concerted practice has already been the subject of a decision, opinion or other official statement issued by an administrative authority and in particular by the Commission. Such statements provide national courts with significant information for reaching a judgment, even if they are not formally bound by them. It should be noted in this respect that not all procedures before the Commission lead to an official decision, but that cases can also be closed by comfort letters. Whilst it is true that the Court of Justice has ruled that this type of letter does not bind national courts, it has nevertheless stated that the opinion expressed by the Commission constitutes a factor which the national courts may take into account in examining whether the agreements or conduct in question are in accordance with the provisions of Article85.(13)

21. If the Commission has not ruled on the same agreement, decision or concerted practice, the national courts can always be guided, in interpreting the Community law in question, by the case-law of the Court of Justice and the existing decisions of the Commission. It is with this in view that the Commission has, in a number of general notices, (14) specified categories of agreements that are not caught by the ban laid down in Article85(1).

22. On these bases, national courts should generally be able to decide whether the conduct at issue is compatible with Article85(1) and Article86. Nevertheless, if the Commission has initiated a procedure in a case relating to the same conduct, they may, if they consider it necessary for reasons of legal certainty, stay the proceedings while awaiting the outcome of the Commission's action.(15) A stay of proceedings may also be envisaged where national courts wish to seek the Commission's views in accordance with the arrangements referred to in this Notice.(16) Finally, where national courts have persistent doubts on questions of compatibility, they may stay proceedings in order to bring the matter before the Court of Justice, in accordance with Article177 of the Treaty.

23. However, where national courts decide to give judgment and find that the conditions for applying Article85(1) or Article86 are not met, they should pursue their proceedings on the basis of such a finding, even if the agreement, decision or concerted practice at issue has been notified to the Commission. Where the assessment of the facts shows that the conditions for applying the said Articlesare met, national courts must rule that the conduct at issue infringes Community competition law and take the appropriate measures, including those relating to the consequences that attach to infringement of a statutory prohibition under the civil law applicable.

2. Application of Article85(3)

24. If the national court concludes that an agreement, decision or concerted practice is prohibited by Article85(1), it must check whether it is or will be the subject of an exemption by the Commission under Article85(3). Here several situations may arise.

25.

(a)

The national court is required to respect the exemption decisions taken by the Commission. Consequently, it must treat the agreement, decision or concerted practice at issue as compatible with Community law and fully recognize its civil law effects. In this respect mention should be made of comfort letters in which the Commission services state that the conditions for applying Article85(3) have been met. The Commission considers that national courts may take account of these letters as factual elements.

26.

(b)

Agreements, decisions and concerted practices which fall within the scope of application of a block exemption regulation are automatically exempted from the prohibition laid down in Article85(1) without the need for a Commission decision or comfort letter.(17)

27.

(c)

Agreements, decisions and concerted practices which are not covered by a block exemption regulation and which have not been the subject of an individual exemption decision or a comfort letter must, in the Commission's view, be examined in the following manner.

28. The national court must first examine whether the procedural conditions necessary for securing exemption are fulfilled, notably whether the agreement, decision or concerted practice has been duly notified in accordance with Article4(1) of Regulation No 17. Where no such notification has been made, and subject to Article4(2) of Regulation No 17, exemption under Article85(3) is ruled out, so that the national court may decide, pursuant to Article85(2), that the agreement, decision or concerted practice is void.

29. Where the agreement, decision or concerted practice has been duly notified to the Commission, the national court will assess the likelihood of an exemption being granted in the case in question in the light of the relevant criteria developed by the caselaw of the Court of Justice and the Court of First Instance and by previous regulations and decisions of the Commission.

30. Where the national court has in this way ascertained that the agreement, decision or concerted practice at issue cannot be the subject of an individual exemption, it will take the measures necessary to comply with the requirements of Article85(1) and (2). On the other hand, if it takes the view that individual exemption is possible, the national court should suspend the proceedings while awaiting the Commission's decision. If the national court does suspend the proceedings, it nevertheless remains free, according to the rules of the applicable national law, to adopt any interim measures it deems necessary.

31. In this connection, it should be made clear that these principles do not apply to agreements, decisions and concerted practices which existed before Regulation No 17 entered into force or before that Regulation became applicable as a result of the accession of a new Member State and which were duly notified to the Commission. The national courts must consider such agreements, decisions and concerted practices to be valid so long as the Commission or the authorities of the Member States have not taken a prohibition decision or sent a comfort letter to the parties informing them that the file has been closed.(18)

32. The Commission realizes that the principles set out above for the application of Articles85 and 86 by national courts are complex and sometimes insufficient to enable those courts to perform their judicial function properly. This is particularly so where the practical application of Article85(1) and Article86 gives rise to legal or economic difficulties, where the Commission has initiated a procedure in the same case or where the agreement, decision or concerted practice concerned may become the subject of an individual exemption within the meaning of Article85(3). National courts may bring such cases before the Court of Justice for a preliminary ruling, in accordance with Article177. They may also avail themselves of the Commission's assistance according to the procedures set out below.

(1)

(2) Case C 234/89, Delimitis v Henninger Bräu [1991] ECR I-935, paragraph 44; Case T24/90, Automec v Commission judgment of 17 September 1992, paragraphs 73 and 85 ECR 1992, II-2223.

(3) Case 127/73, BRT v Sabam [1974] ECR 51, paragraph 16.

(4) Case 56/65, LTM v MBU [1966] ECR 337, Case 48/72, Brasserie De Haecht v WilkinJanssen [1973] ECR 77; Case 319/82, Ciments et Bétons v Kerpen & Kerpen [1983] ECR 4173.

(5) Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles 85 and 86 of the Treaty (OJ 13, 21.2.1962, p. 204/62; Special Edition 195962, p. 87).

(6) Case 63/75, Fonderies Roubaix v Fonderies Roux [1976] ECR 111; Case C234/89, Delimitis v Henninger Bräu [1991] ECR I935.

(7) Case 158/80, Rewe v Hauptzollamt Kiel [1981] ECR 1805, paragraph 44; see also Case 33/76, Rewe v Landwirtschaftskammer Saarland [1976] ECR 1989; Case 79/83, Harz v Deutsche Tradax [1984] ECR 1921; Case 199/82, Amministrazione della Finanze delo stato v San Giorgio [1983] ECR 3595.

(8) Case 14/68, Walt Wilhelm and Others v Bundeskartellamt [1969] ECR 1; Joined Cases 253/78 and 1 to3/79, Procureur de la République v Giry and Guerlain [1980] ECR 2327.

(9) Case T24/90, Automec v Commission, judgment of 17 September 1992, paragraph 77 ECR 1992, II2223.

(10) Case T24/90, cited above, paragraphs 91 to 94.

(11) Case C23489, Delimitis v Henninger Bräu [1991] ECR I935, paragraph 47.

(12) Case 48/72, Brasserie de Haecht v WilkinJanssen [1973] ECR 77; Case 127/73, BRT v Sabam [1974] ECR 51; Case C234/89, Delimitis v Henninger Bräu [1991] ECR I935.

(13) Case 99/79, Lancôme v Etos [1980] ECR 2511, paragraph 11.

(14) See the notices on:

- exclusive dealing contracts with commercial agents (OJ 139, 24.12.1962, p. 2921/62),

- agreements, decisions and concerted practices in the field of cooperation between enterprises (OJ C 75, 29.7. 1968, p. 3, as corrected in OJ C 84, 28.8.1968, p. 14),

- assessment of certain subcontracting agreements (OJ C 1, 3.1.1979, p. 2),

- agreements of minor importance (OJ C 231, 12.9.1986, p. 2).

(15) Case 127/73, BRT v Sabam [1974] ECR 51, paragraph 21. The procedure before the Commission is initiated by an authoritative act. A simple acknowledgement of receipt cannot be considered an authoritative act as such; Case 48/72, Brasserie de Haecht v WilkinJanssen [1973] ECR 77, paragraphs 16 and 17.

(16) Case C234/89, Delimitis v Henninger Bräu [1991] ECR I935, paragraph 53, Part V of this Notice.

(17) A list of the relevant regulations and of the official explanatory comments relating to them is given in the Annex to this Notice.

(18) Case 48/72, Brasserie de Haecht v WilkinJanssen [1973] ECR 77; Case 59/77, De Blos v Bouyer [1977] ECR 2359; Case 99/79, Lancôme v Etos [1980] ECR 2511.