DEERE v COMMISSION

OPINION OF ADVOCATE GENERAL

RUIZ-JARABO COLOMER

delivered on 16 September 1997 *

1. This case cornes before the Court by wayof appeal by John Deere Limited (hereinafter'John Deere') against the judgment of theCourt of First Instance (hereinafter 'theCFľ) of 27 October 1994 » (hereinafter 'thecontested judgment'). That judgment dis­missed the application for annulmentbrought by John Deere against Decision92/157/EEC2 (hereinafter 'the contesteddecision') in which the Commission foundthat the UK Tractor Registration Exchangeinfringed Article 85(1) of the EEC Treaty,because it gave rise to an exchange of infor­mation which enabled each tractor manufac­turer to learn about the sales of its variouscompetitors and imports and sales by deal­ers.

I — Facts and procedure

2. The facts underlying the dispute weredescribed by the CFI in paragraphs 1 to 18of the contested judgment. I shall now setout those facts, taking a somewhat differentapproach.

3. To be used on the public highway in theUnited Kingdom in accordance with nationallaw, every vehicle must be registered withthe Department of Transport. The responsi­bility for such registration falls to the LocalVehicle Licensing Offices (hereinafter'LVLOs'), of which there are about 60. Theregistration of vehicles is governed by proce­dural guidelines issued by the Ministry,entitled 'Procedure for the first licensing andregistration of motor vehicles'. According tothose guidelines, a special form — form V55— must be used for the application to regis­ter a vehicle.

4. Form V55 contains a considerable quan­tity of information concerning the sales ofvehicles. Manufacturers and importers ofagricultural tractors decided to establish, onthe basis of that information, an informationsystem known as the 'UK Agricultural Trac­tor Registration Exchange' (hereinafter 'theExchange'), providing information about thesales by the various manufacturers and salesand imports by dealers. The application ofthat agreement was suspended in 1988, but in1990 some of the participating undertakings,including John Deere, concluded a new

* Original language: Spanish.1 — Case T-35/92 Deere v Commission [1994] ECR II-957.2 — Commission Decision 92/157/EEC of 17 February 1992

relating to a proceeding under Article 85 of the EEC Treaty(IV/31.370 and 31.446 —UK Agricultural Tractor Registra­tion Exchange, OJ 1992 L 68, p. 19).

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agreement for the dissemination of infor­mation, called the 'UK Tractor RegistrationData System' (hereinafter 'the Data System').

5. In principle, any manufacturer orimporter of agricultural tractors in theUnited Kingdom could join the Exchangeand the Data System. The number of partici­pants in the agreement varied while theinvestigation was being carried out, as aresult of restructuring in the industry. At thedate of notification of the Exchange, eightmanufacturers, including John Deere, wereparties to the agreement. Those eight manu­facturers were the leading economic agentsin the industry, since, according to the Com­mission, they held 87% to 88% of the agri­cultural tractor market in the United King­dom, the remainder being shared by severalsmall manufacturers.

6. Organization of the information exchangesystem was entrusted to the AgriculturalEngineers Association Limited (hereinafter'the AEA'), a trade association open to allmanufacturers and importers of agriculturaltractors in the United Kingdom, which at thematerial time had about 200 members,including in particular Case Europe Limited,John Deere, Fiatagri UK Limited, Ford NewHolland Limited, Massey-Ferguson (UnitedKingdom) Limited, Renault AgriculturalLimited, Same-Lamborghini (UK) Limitedand Watveare Limited.

Processing of the data contained on formV55 was entrusted to the data-processingcompany Systematics International Group ofCompanies Limited (hereinafter 'SIL'), towhich the United Kingdom Ministry ofTransport passed the information obtainedwhen agricultural tractors were registered.SIL invoiced the cost of its services to eachof the members of the agreement, underindividual contracts concluded between SILand those members.

7. The content of the Exchange was deter­mined by the data included on form V55 andthe use of those data under the informationagreement. John Deere and the Commissionhad differing views in that regard, which arereflected in paragraphs 8 to 17 of the con­tested judgment.

8. According to John Deere, form V55 hasfive different versions, numbered V55/1 toV55/5, which are described in the proceduralguidelines mentioned earlier. Forms V55/2and V55/4, which were used only by BritishLeyland, are no longer in use, whereas formV55/3, used when form V55/1 is lost, mis­placed or destroyed, is completed manually.Therefore, only versions 1 and 5 will be con­sidered in this case.

9. In the Commission's opinion, there aretwo main versions of the form: first, forms

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V55/1 to V55/4, which are 'pre-completed'by manufacturers and sole importers andused by dealers to register vehicles deliveredto them, and, secondly, form V55/5, which isdesigned for parallel imports.

10. According to John Deere, the distinctiondrawn by the Commission is misleading.Form V55 is employed both for usedvehicles registered for the first time in theUnited Kingdom and for vehicles importedinto the United Kingdom by independentimporters.

11. John Deere considers that only formV55/1, the reverse side of which is completedby the registered keeper of the vehicle, that isto say the customer or the owner, hasalready been 'pre-completed' on the front bythe manufacturer of the vehicle or itsimporter. With the exception of the infor­mation appearing on the lower part, theinformation on the first page of form V55/1is reproduced on an under-copy, sheet 2. Thebottom half of that sheet is used for statisti­cal data. It can be filled in voluntarily by theregistered keeper of the vehicle. Even wherethe statistical part is not completed by theregistered keeper, the dealer who has carriedout the sale is requested by the departmentalguidelines to insert the postcode of his cus­tomer. The form is then sent to the LVLO

for the relevant area. The LVLO separatesthe two sheets. It sends the first to theDriver and Vehicle Licensing Centre (herein­after 'DVLC'), which produces and issuesthe registration document. Still in compli­ance with the departmental guidelines, thesecond sheet is transmitted to a data-processing company which is designated foreach major category of vehicle to the publicauthority by the trade sector concerned. Inthe case of agricultural tractors, this is SIL.

12. John Deere also considers that formV55/5 is used for all sales other than firstsales. Contrary to the Commission's view, itdoes not enable parallel imports to be identi­fied. SIL uses the data appearing on theform, after which it is destroyed withoutever having been sent directly to the mem­bers of the agreement.

13. According to the Commission, the formcontains the following information, certainpoints being disputed by the appellant:

— Make (manufacturer).

— Model, serial and chassis number; JohnDeere considers that the statement con­tained in the third indent of point 14 ofthe contested decision is in that respect

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incomplete and inaccurate. According toit, that information is purely for SIL'sinternal use in order to avoid double reg­istrations and SIL does not make the •serial numbers of the vehicles available tomembers. In fact, SIL records the infor­mation relating to serial (or chassis) num­bers but, under the system based on thefirst notification, it is no longer dissemi­nated to the members of the Exchange, ithaving been agreed, since 1 September1988, that SIL is not to send the registra­tion form to the members of the agree­ment.

— Original and selling dealer (code number,name, address and postcode). Accordingto John Deere, whose statements on thatpoint were confirmed by SIL, and con­trary to the indication given in the fourthindent of point 14 of the contesteddecision, SIL does not enter into its data­base the name, address and postcode ofthe dealer. Furthermore, the originaldealer code (box 54) is recorded only ifthere is no selling dealer code (box 61).

— Full postal code of the registered keeperof the vehicle.

— Name and address of the registeredkeeper: according to John Deere, andcontrary to the indication in the seventh

indent of point 14 of the decision, SILdoes not extract from form V55 the nameand address of the keeper of the vehicle.In that respect it was confirmed that,although that information may appear onpage 3 of form V55, which is the onlysheet sent to SIL, the information is inany event not recorded by it, so that it isnot passed on to the members of theagreement.

14. According to John Deere, the infor­mation used by SIL which, it explains,relates only to registrations and not sales, isas follows:

— the make of the vehicle (box 18);

— the vehicle model (box 21);

— the description of the body of the vehicle(box 23);

— the selling dealer (box 61);

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— the postcode sector of the registeredkeeper of the vehicle (box 70);

— the date of receipt by SIL of the secondsheet of the form.

15. In the Commission's view, the infor­mation sent to the members of the agreementcan be divided into three separate categoriesas follows:

— Aggregate industry information: aggre­gate industry sales with or without abreakdown by horsepower or by drive-line; the information is available for timeperiods broken down by year, quarter,month or week.

— Information concerning the sales of eachmember: the number of units sold byeach manufacturer and their marketshares for various geographical areas: theUnited Kingdom as a whole, region,county, dealer territory, identified usingthe postcode sectors of which each terri­tory is composed; that information isavailable for time periods broken downby month, quarter or year (and in the lat­ter case by reference to the preceding 12months, the calendar year or rollingyear).

— Information concerning the sales madeby the dealers in the distribution networkof each member, in particular importsand exports in their respective territories.It is therefore possible to identifyimports and exports between the differ­ent dealer territories and to comparethose sales activities with the salesachieved by dealers in their own territo­ries.

16. Furthermore, according to the Commis­sion, until 1 September 1988 SIL providedmembers of the agreement with copies ofform V55/5 which is used by independentimporters. Since that date it has been provid­ing them only with the information takenfrom that form. However, in the Commis­sion's view, that enabled parallel importsfrom other Community countries to be iden­tified, mainly through the use of the serialnumber.

17. For its part, John Deere considers thatthe Data System adopted in 1990 enabledSIL to furnish the members of the agreementwith four types of information:

— Aggregate industry data: each membercan obtain information on aggregateindustry registrations without any prod­uct breakdown by model or with abreakdown by horsepower or by drive-

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line for the United Kingdom as a wholeor each of the 10 regions of the Ministryof Agriculture, Fisheries and Food (here­inafter 'MAFF'), as well as by land use,county, own dealer territories and post­code sector. Those sales can be analysedon a weekly or monthly basis.

— Data about the company's own sales: SILcan provide members with 'tailor-made'reports about their individual total sales,and also sales by model for the UnitedKingdom, by MAFF region, by land use,by county, by own dealer territory andby postcode sector. SIL can also provideto each manufacturer individually infor­mation, in aggregate or broken down bymodel, on sales made by a dealer in itsterritory or in total sales by a dealer,without indicating the location of thesale. Such data can be provided monthly.According to John Deere, it should bepointed out that, although point 26 of thecontested decision correctly describes theinformation which may be sent in thatcontext, the expressions 'imports' and'exports' by dealers must be understoodas meaning, with regard to the former,sales made by other dealers in a given ter­ritory and, with regard to the latterexpression, sales made by a dealer outsidehis own dealer territory. In no case dothose potentially confusing expressionsindicate imports from other MemberStates or exports to such States. The pur­pose of the system is therefore not to

monitor parallel imports. The appellantstates that the Commission's descriptionis liable to mislead. The system gives onlyto certain members of the agreement dataabout total sales to customers within theterritory of a dealer, without indicatingthe dealer who made the sale, and indi­cates the total sales made by a dealer tocustomers within his own territory.

— Data about the sales of each competitor:SIL can indicate the aggregate sales of agiven competitor, with or without break­down by model, for the whole of theUnited Kingdom, by MAFF region, byland use, county, own dealer territoryand postcode sector. Those data are dis­seminated on a monthly basis.

— Information derived from form V55:chassis number and registration, date ofeach tractor of a company's make sold inthe United Kingdom. That information isdisseminated on a monthly basis. It isintended to enable warranty and bonusclaims to be verified.

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18. On 4 January 1988, the AEA notified tothe Commission the Exchange, which estab­lished a system for the exchange of infor­mation based on particulars relating to regis­trations of agricultural tractors, primarilywith a view to obtaining negative clearance,or alternatively an individual exemption. Theinformation exchange agreement replaced anearlier agreement, of 1975, which had notbeen notified to the Commission. TheExchange came to the notice of the Commis­sion in 1984, during investigations carriedout following a complaint made to it con­cerning obstacles to parallel imports.

19. On 11 November 1988, the Commissionissued a Statement of Objections to theAEA, to each of the eight members of theExchange and to SIL. On 24 November 1988the members of the Exchange decided to sus­pend it. During a hearing before the Com­mission, they claimed, relying in particularon a study carried out by Professor Albach,a member of the Berlin Science Center, thatthe information distributed had a beneficialeffect on competition. On 12 March 1990five members of the agreement — includingJohn Deere — notified to the Commission anew agreement for the dissemination ofinformation, the Data System, and under­took not to implement the new systembefore receiving the Commission's responseto their notification.

20. In Decision 92/157, the Commission:

— held that the agreement on the exchangeof information on registrations of agri­cultural tractors infringed Article 85(1) ofthe Treaty 'in so far as it gives rise to anexchange of information identifying salesof individual competitors, as well asinformation on dealer sales and importsof own products' (Article 1);

— rejected the application for exemptionunder Article 85(3) of the Treaty (Article2);

— required the AEA and the members ofthe agreement to put an end to theinfringement, in so far as they had notalready done so, and to refrain in futurefrom entering into any agreement havingan identical or similar object or effect(Article 3).

21. That Commission decision was con­tested by John Deere before the CFI in pro­ceedings for annulment, which were dis­missed in their entirety by the judgment inCase T-35/92. On 13 January 1995, JohnDeere brought the present appeal againstthat judgment.

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II — The grounds of appeal

22. In its appeal against the CFI judgment,John Deere relies on the following eightgrounds:

— contradictory and insufficient reasoning;

— misapplication of Article 85(1) of the ECTreaty concerning the agreement;

— incorrect characterization of the UnitedKingdom agricultural tractor market as aclosed oligopoly;

— misapplication of Article 85(1) concern­ing competition between manufacturers;

— misapplication of Article 85(1) withrespect to AEA meetings;

— misapplication of Article 85(1) concern­ing restriction of intra-brand compe­tition;

— misapplication of Article 85(1) concern­ing the effect on trade between theUnited Kingdom and the other MemberStates, and

— unjustified refusal to apply Article 85(3).

23. Before analysing each of those grounds,I consider it appropriate to give an overviewof the criteria laid down by the Court of Jus­tice for the admissibility of appeals againstCFI judgments.

24. On the basis of the first paragraph ofArticle 51 of the EC Statute of the Court ofJustice, which implements Article 168a(1) ofthe EC Treaty, and Article 112(1)(c) of itsRules of Procedure, the Court of Justice hasprogressively established the criteria for theadmissibility of appeals.

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First, in numerous decisions 3 it has held thatan appeal must specify the alleged flaws inthe judgment which it applies to have setaside and the legal arguments which specifi­cally support that application. That require­ment is not satisfied by an appeal which con­fines itself to repeating or reproducing wordfor word the pleas in law and arguments pre­viously submitted to the Court of FirstInstance, including those based on factsexpressly rejected by that Court. Such anappeal amounts to nothing more than arequest for a re-examination of the applica­tion submitted to the Court of FirstInstance, a matter which falls outside thejurisdiction of the Court of Justice by virtueof Article 49 of its Statute.

Secondly, the Court of Justice has held thatan appeal may be based only on groundsrelating to the infringement of rules of law,to the exclusion of any appraisal of the facts.The Court has thus taken the view that theCFI's appraisal of the evidence submitted toit does not constitute a legal issue which maybe reviewed in an appeal, except where suchevidence has been distorted or where thematerial inaccuracy of the CFI's findings isapparent from the documents in the file. TheCourt of Justice has no jurisdiction to exam­ine evidence accepted by the CFI in deter­mining the facts, provided that it was prop­erly obtained and the general rules and

principles of law concerning the burden ofproof and the appraisal of evidence havebeen observed. On the other hand, the Courtof Justice is entitled to review the legal char­acterization of the facts and the legal conclu­sions drawn from them by the CFI. 4

That case-law lays down relatively strict cri­teria regarding the admissibility of appeals,in order to ensure that the appeal proceduredoes not de facto become a re-analysis of thecase and to ensure that the finding of factsby the CFI is not put in question.

25. In my opinion, in competition cases aris­ing from Commission decisions it is advis­able, as suggested by Advocate GeneralJacobs, 5 to adopt a more restrictive interpre­tation of the criteria for the admissibility ofappeals and in particular of the requirementlaid down in Article 51 of the Statute thatappeals to the Court of Justice are to be lim­ited to points of law. Indeed, in such casesthe CFI reviews a Commission decisionwhich sets out the facts of the dispute andmakes a legal assessment. The CFI, confiningitself to the findings of the Commission orundertaking new investigations, establishesthe facts and the Court of Justice must abideby that finding in appeal proceedings, since

3 — See, inter alia, the orders of 26 April 1993 in Case C-244/92P Kupka-Floridi v ESC [1993] ECR I-2041, of 26 September1994 in Case C-26/94 P X v Commission [1994] ECR I-4379,of 17 October 1995 in Case C-62/94 P Turner v Commission[1995] ECR I-3177 and the judgment of 24 October 1996 inCase C-73/95 P Viho v Commission [1996] ECR I-5457,paragraphs 25 and 26.

4 — Case C-53/92 P Hilti v Commission [1994] ECR 1-667 andJoined Cases C-241/91 P and C-242/91 P RT E and ITP vCommission [1995] ECR I-743, and the order of 17 Septem­ber 1996 in Case C-19/95 P SAN Marco v Commission [1996]ECR 1-4435, paragraph 39.

5 — Opinion of Advocate General Jacobs in Hilti v Commission,cited above, paragraphs 8 to 12 and 46 to 49.

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the function of the CFI would be under­mined if the Court of Justice were required,on request by appellants, to review the fac­tual elements of CFI judgments.

I shall now examine each of the grounds ofappeal relied on by John Deere, hayingregard to the strict criteria of admissibilityjust mentioned. The application of those cri­teria is particularly important in this appeal,in which the appellant frequently puts for­ward arguments identical to those relied onbefore the CFI and often confines itself toquestioning the findings of fact made by theCFI, without identifying legal issues relevantto the appeal.

A. Contradictory and inadequate reasoning

26. In support of its view that the statementof reasons is contradictory, the appellantstates that the CFI erred in law by examin­ing, in paragraphs 39 and 40 of the contestedjudgment, the legality of the Exchange ratherthan that of the Data System, even thoughthe undertakings which notified the latter tothe Commission undertook to cease partici­pating in the Exchange.

27. This part of the plea is inadmissiblebecause it concerns a question of fact,decided by the CFI and not open to questionon appeal. The CFI took the view that thecontested decision properly analysed thelegality of the Exchange and of the Data Sys­tem, because not all the undertakings partici­pating in the former were involved in the lat­ter and because the notification of theExchange was not withdrawn.

28. As regards the inadequacy of the state­ment of reasons, John Deere makes two alle­gations. First, the appellant considers thatthe CFI erred by considering, in paragraph40 of the contested judgment, that the con­tested decision adequately stated its reasonsregarding the legality of the Data System, towhich it improperly applies by extrapolationthe considerations expressed regarding theExchange, despite the differences betweenthe two. The appellant's argument to thateffect is also inadmissible as a ground ofappeal because it challenges a matter of factdefinitively established in the CFI judgment,namely the analogies and differences betweenthe data supplied in the context of theExchange and within the data system.

29. Secondly, the applicant considers that theCFI did not sufficiently explain why it con­sidered that the Commission was right torely on the criterion of 10 tractors sold for aparticular territory, type of product or

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period of time as a threshold below whichthere is a considerable risk that, despite beingpresented in aggregate form, the data mightallow identification of the exact sales figuresof some or all competitors. John Deere con­siders that criterion of 10 units sold to bevery restrictive because in small sales areas itconsiderably delays the dissemination ofinformation.

30. The appellant's argument must berejected. According to the case-law of theCourt of Justice, review by the Court ofcomplex economic assessments must be lim­ited essentially to verifying that there was nomanifest error of appraisal or abuse ofpower. 6 Without doubt, identification of thefactor which prevents exact determination ofthe sales of competitors is a complex econ­omic assessment. In paragraph 92 of the con­tested judgment, the CFI found that nomanifest error of appraisal had been commit­ted by the Commission in applying the cri­terion of 10 units sold, having regard to thecharacteristics of the market and the natureof the information exchanged. The CFI, inundertaking an exhaustive analysis of issuesof fact in competition cases, is in a good pos­ition to carry out the minimal judicial reviewprovided for by the Community case-law inrelation to economic assessments containedin Commission decisions. In my opinion, theCFI's review of those assessments, which are

always closely linked with the facts of thecase, should not in principle be the subject ofan appeal.

31. In view of all the foregoing, I considerthat this ground of appeal is partially inad­missible and that the arguments which areadmissible should be rejected.

B. Misapplication of Article 85(1) of the ECTreaty concerning the agreement

32. John Deere considers that the CFI erredin law by taking the view, in paragraph 66 ofthe contested judgment, that there wasexpress, or at least tacit, connivance betweenthe members of the agreement in definingtheir dealer sales territories by reference tothe United Kingdom postcode districts.

33. This ground of appeal is inadmissiblebecause it repeats the arguments put forwardby John Deere before the CFI and questionspoints of fact definitively settled in the con­tested judgment. The CFI accepted as provedthe fact that there was an, at least tacit,agreement between the economic agents con­cerned in defining, by reference to theUnited Kingdom postcode system, the

6 — Case 42/84 Remia v Commission [1985] ECR 2545, para­graph 34, and Opinion of Advocate General Jacobs in Hilti vCommission, cited above, paragraph 9.

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boundaries of their dealer sales terntones,and that there was an institutional frame­work enabling information to be exchanged,through the AEA and SIL, between the trad­ers.

34. Accordingly, this ground of appeal isinadmissible.

C. Incorrect characterization of the UnitedKingdom agricultural tractor market as aclosed oligopoly

35. In this ground of appeal, the applicantsubmits that the CFI, in classifying theUnited Kingdom agricultural tractor marketas a closed oligopoly, committed the follow­ing five errors:

— incomplete and insufficiently reasonedanalysis of the relevant market;

— failure to examine the expert's reportproduced by John Deere;

— substantive inaccuracy of the CFľs find­ings;

— wrong definition of the relevant geo­graphical market, and

— lack of any restriction of competition.

36. According to John Deere, the first errorcommitted by the CFI in analysing the char­acteristics of the United Kingdom agricul­tural tractor market consists in failing to takeaccount of three essential factors, namelyprice competition, product innovationthrough research and technological develop­ment and the purchasing power of tractormanufacturers' customers.

That argument cannot be upheld. As theCommission points out in its response, theCFI took account in the contested judgmentof those three factors mentioned by JohnDeere, but held that the Commission did notcommit any manifest error of appraisal in thecontested decision by giving preference toother aspects of the relevant market and con­cluding that it constituted a closed oligopoly.Thus, paragraph 74 of the contested judg­ment refers to the factors mentioned by JohnDeere, but paragraphs 78 to 80 state that theCommission was not guilty of any manifesterror of appraisal in relying on other charac­teristics of the market — manufacturers'market shares, relative stability, and high bar­riers to entry — and concluding that therewas a closed oligopoly.

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In my opinion, the CFI took account of thefactors mentioned by John Deere and, in anappeal, it is not permissible to rely again onthe arguments put forward at first instanceregarding the factual characteristics of a mar­ket, a matter to be decided by the CFI.

37. The second error committed by the CFI,according to John Deere, when determiningthe characteristics of the United Kingdomagricultural tractor market consists in thefailure properly to examine the economicreport from Professor Albach, the expertnominated by the appellant. In my view,there was no such error, because the CFIreferred to that report in paragraph 75 of thecontested judgment. 7 In paragraphs 78 to 80of its judgment, the CFI chose to character­ize the United Kingdom tractor market inthe same way as was done in the report ofanother expert, nominated by the Commis­sion, Professor Neumann, and in the reporton the European Community farm equip­ment sector, also produced by the Commis­sion. In my opinion, the CFI sufficientlyexplained its preference for the latter econ­omic analysis of the relevant market and didnot therefore commit any manifest error ofappraisal: the CFI cannot be required torefute, in its judgment, each of the argumentscontained in Professor Albach's report.

38. The third error committed in determin­ing the characteristics of the relevant marketconsists, according to the appellant, in sub­stantive inaccuracies in the findings of theCFI based on the documents before it. JohnDeere considers that it cannot be inferredfrom those documents, as was done by theCFI, that the relevant market is characterizedby relative stability of the competitors' posi­tions, high barriers to entry and sufficienthomogeneity of products.

This argument is inadmissible, because itchallenges factual appraisals, definitivelymade by the CFI, in relation to the structureand characteristics of the United Kingdomagricultural tractor market. The appellantneither invokes nor identifies any irregulari­ties in the documents before the Courtwhich might have led the CFI to make anincorrect assessment of the facts; conse­quently, its argument is inadmissible inappeal proceedings and cannot draw supportfrom the judgment in Commission v Braz-zelli Lualdi and Others. 8

39. Fourthly, the appellant alleges that theCFI incorrectly defined the relevant geo­graphical market by limiting it to the UnitedKingdom tractor market.

7 — Professor Albach regards the United Kingdom tractor mar­ket as a 'wide oligopoly with heterogeneous products inwhich the aggregate market shares of the principal suppliershave declined and in which new entrants have appeared. Themarket is one in which price competition is fierce ...'.

8 — Case C-136/92 P Commission v Brazzetti Lualdi and Others[1994] ECR I-1981, paragraph 48, which states: The Courtof First Instance thus has exclusive jurisdiction to find thefacts except where the substantive inaccuracy of its findingsis apparent from the documents submitted to it.'

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That argument is not admissible in an appealbecause John Deere did not raise the matterbefore the CFI, merely discussing the impactof the information system on trade betweenthe Member States. 9

40. Finally, John Deere alleges that the CFIerred in considering, in paragraph 51 of thecontested judgment, that the fact that themarket could be regarded as highly concen­trated meant that competition within it wasweakened. In its view, fierce competition ispossible in an oligopolistic market.

John Deere's argument to that effect cannotbe upheld. The CFI did not merely establishan automatic correlation between the degreeof concentration on a relevant market andthe intensity of the competition prevailingon it. In fact, the CFI analysed the character­istics of the United Kingdom agriculturaltractor market and from them inferred that itwas a closed oligopoly. It went on to con­clude that in a market with such characteris­tics, the existence of an information systemlike the one under review in these proceed­

ings restricts competition. In its submissions,John Deere puts forward no argument tochallenge that conclusion by the CFI, whichcoincides with the view taken by the Com­mission in the contested decision.

41. In view of the foregoing considerations,I am of the opinion that this ground ofappeal is partially inadmissible and that theadmissible arguments should be rejected.

D. Misapplication of Article 85(1) of the ECTreaty concerning competition betweenmanufacturers

42. This ground of appeal is divided intothree parts:

— the reduction or removal of uncertaintyregarding the operation of the market didnot restrict competition;

— lack of any increased barriers to entry tothe market, and

9 See the judgment in Commission v Brazzelli Lualdi andOthers, cited above, paragraph 59, which states: 'To allow aparty to put forward for the first time before the Court ofJustice a plea in law which it has not raised before the Courtof First Instance would be to allow it to bring before theCourt, whose jurisdiction in appeals is limited, a case ofwider ambit than that which came before the Court of FirstInstance. In an appeal the Court's jurisdiction is thus con­fined to review of the findings of law on the pleas arguedbefore the Court of First Instance.'

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— Article 85(1) does not prohibit 'purelypotential effects on competition'.

I shall examine each of the three parts of thisground of appeal.

1. The reduction or removal of uncertaintyregarding the operation of the market didnot restrict competition

43. John Deere considers that, in the con­tested judgment, the CFI misinterpreted themeaning of the terms in Article 85(1)'restriction ... of competition'. In its opinion,competition is restricted where undertakingscease determining their market behaviourindependently and thus adversely affect com­petition. 10 In the present case, neither theCFI nor the Commission determined theexistence of any restriction of competitionbecause they did not prove that the reduc­tion of uncertainty in the United Kingdomagricultural tractor market brought about bythe information exchange system restrictedthe freedom of undertakings to adopt inde­pendent decisions or that the consequence ofthat system was a reduction of competition.

As regards the freedom of undertakings toadopt independent decisions, John Deereconsiders that the information exchange sys­tem did not limit it because the informationsupplied by SIL relates to the past perfor­mance of competitors and contains no datareflecting business secrets such as prices, cus­tomer names or production plans. Thatinformation does not disclose the futurecommercial strategy of undertakings, whoseconduct in response to the increased trans­parency of the market is unforeseeable anddoes not necessarily coincide. According tothe appellant, the Court of Justice's judg­ment in the Woodpulp case 11confirms thatargument. Moreover, the informationexchange system did not lead to less com­mercial rivalry between the manufacturers ofagricultural tractors and their aggressivecommercial strategies have not disappeared,because the system supplied aggregate dataon sales which, moreover, became knownonly after a delay of several months.

As regards the possible reduction of compe­tition as a consequence of the informationexchange system, John Deere denies that anyreduction occurred. On the contrary, it con­siders that the system had a positive impacton conditions of competition in the UnitedKingdom agricultural tractor market becausethe increased transparency stimulated com­petition, allowing undertakings better toidentify consumers' requirements and mar­

10 — Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73,113/73 and 114/73 Suiker Unic and Others v Commission[1975] ECR 1663 and Casc 172/80 Züchner v BayerischeVereinsbank [1981] ECR 2021.

11 —Joined Cases 89/95, 104/85, 114/85, 116/85, 117/85 and125/85 to 129/85 Ahlström v Commission [1993] ECR 1307,paragraph 64.

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ket trends, so that they could adjust theirproduction planning accordingly.

44. To justify its reasoning, John Deererelies on several arguments which, in myopinion, are inadmissible because they misin­terpret the facts determined by the CFI inthe contested judgment. The CFI took theview that the United Kingdom tractor mar­ket is an oligopolistic market with high bar­riers to entry (paragraphs 78 to 84), that theinformation exchanged under the infor­mation agreement constituted businesssecrets (paragraph 81) and that manufactur­ers exchanged detailed and precise infor­mation at short intervals (paragraph 51).

45. On that basis, I consider that this part ofthe ground of appeal must be dismissed,because the CFI correctly applied the crite­rion of restriction of competition, whichmust be present for an agreement to be con­trary to Article 85(1).

46. According to the case-law of the Courtof Justice, competition is restricted or dis­torted, within the meaning of Article 85(1),where traders cease independently to deter­mine their commercial policy. That require­ment of independence does not deprive themof the right to adapt themselves intelligentlyto the conduct of their competitors, but itdoes preclude any direct or indirect contact

between traders, the object or effect of whichis to change normal conditions of compe­tition in the relevant market, having regardto the nature of the products or servicesoffered, the size and number of undertakingsand the volume of that market. 12

47. The independence of traders to decideon their commercial policy clearly disappearswhen they enter into an agreement whichrestricts their future freedom of action onthe market. Such independence may also beundermined when traders set up cooperationarrangements to promote a common econ­omic interest, which, whilst not directly pro­viding the basis for anti-competitive prac­tices, affects competition betweenmanufacturers.

48. In these proceedings, the main manufac­turers of agricultural tractors in the UnitedKingdom set up cooperation arrangements,in the form of the information exchange sys­tem, intended to enable them to learn aboutthe United Kingdom market. The effect ofthe agreement was very considerably toincrease the transparency of that market andas a result to reduce uncertainty regardingthe commercial strategies of competingundertakings.

12 — Judgments in Suiker Unie, cited above, paragraphs 173 and174, and Züchner v Bayerische Vereimbank, cited above,paragraphs 13 and 14.

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49. In my opinion, that reduction of uncer­tainty, brought about by the informationexchange agreement, restricts the freedom ofundertakings to adopt independent commer­cial decisions and thereby restricts compe­tition within the meaning of Article 85(1).That conclusion, which coincides with theviews put forward by the Commission andthe CFI, is based on the following reasoning:

— Transparency and the consequent reduc­tion of uncertainty only strengthen com­petition in highly competitive markets.However, in oligopolistic markets likethe one in this case excessive transpar­ency enables traders rapidly to learn ofthe commercial policy followed by theircompetitors and this results in 'blocking'the market, acting as a disincentive toaggressive commercial policies. Excessivetransparency annihilates, or at leastrestricts, competition in an oligopolisticmarket.

— The information exchanged between theundertakings participating in the agree­ment relates to business secrets andenables those undertakings to identifytheir dealers' sales inside and outside theterritory allocated to them, and to deter­mine the sales of other competing under­takings and their dealers participating inthe agreement. The numerous sales datasupplied by SIL also enable undertakingsto identify parallel imports from otherMember States.

— The information is supplied by SIL to theundertakings participating in the agree­ment either weekly, monthly or quar­terly. The time lapse between the sale andthe transmission of information is quiteshort and means that the data are not'historic' as far as the undertakings areconcerned but provide information onthe commercial policy being followed bycompeting undertakings.

— Undertakings selling tractors arc the onlyrecipients of the information supplied bySIL, which is not made public. Therefore,purchasers derive no benefit from theinformation agreement. As a result, con­trary to John Deere's contention, theCourt of Justice's judgment in Wood-pulp 13 is not applicable to this casebecause there the system of quarterlyannouncements of woodpulp sale pricescharged by producers furnished usefulinformation to purchasers. However, theagreement in this case facilitates theexchange of information only betweenundertakings selling tractors which arecompetitors on the United Kingdommarket.

50. In view of those considerations, I am ofthe opinion that the first part of this groundof appeal must be dismissed.

13 — Cited above, paragraphs 63 and 64.

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2. Lack of any increased barriers to entry totrie market

51. The CFI took the view in paragraphs 52and 84 of the contested judgment that theinformation agreement had a negative impacton traders who wished to gain access to theUnited Kingdom agricultural tractor marketbecause if they did not participate in theagreement they were deprived of essentialinformation concerning that market andbecause, if they do participate in it, theircommercial policy is rapidly learned by theundertakings already established in the mar­ket.

John Deere argues that that statement isincorrect for two reasons. First, the infor­mation exchange system is available withoutdiscrimination to all manufacturers and sell­ers who decide to set up in the United King­dom and if they do not become membersthey can adopt an independent commercialstrategy, even if they do not have at their dis­posal the information supplied through theagreement. Second, if the new traders partici­pate in the system, their freedom to act inde­pendently in themarket is not removed andtheir commercial strategy is not rapidlyascertained by competitors.

52. That reasoning is not admissible in anappeal, because John Deere is merely repeat­ing to the Court of Justice the same argu­ments which were rejected by the CFI in thecontested judgment, and the appellant has

produced no argument concerning a possibleerror of law in the CFI's assessment.

3. Article 85(1) does not prohibit 'purelypotential effects on competition'

53. John Deere considers that the CFI erredin law by stating, in paragraphs 61 and 92 ofthe contested judgment, that Article 85(1)prohibits both actual anti-competitive effectsand potential effects, provided that they aresufficiently appreciable. Accordingly, theCFI considered it irrelevant that the Com­mission had not proved the actual anti­competitive effects of the informationexchange agreement on the United Kingdomagricultural market.

According to John Deere, the judgments ofthe Court of Justice in Société TechniqueMinière 14 and Salonia 15 and the judgment ofthe CFI in Petrofina v Commission 16 reliedon by the CFI in concluding that Article85(1) prohibits purely potential anti­competitive effects were incorrectly appliedin the contested judgment. The Salonia andPetrofina judgments refer to the potential

14 — Case 56/65 [1996] ECR 235.15 — Case 126/80 [1981] ECR 1563.16 — Case T-2/89 [1991] ECR 11-1087.

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effects of an agreement on trade betweenMember States and not its potential effectson competition. In the Société TechniqueMinière judgment there is no statement thatpurely potential anti-competitive effects aresufficient to prove an infringement of Article85(1).

54. Those arguments cannot be upheld.

55. For an agreement to be contrary toArticle 85(1) it is necessary for it to have asits Object or effect the prevention, restrictionor distortion of competition within the com­mon market ...'. The Court of Justice hasheld 17 that it is necessary to verify firstwhether the object of the agreement itselfconstitutes a restriction of competition. Ifthat is the case, the condition laid down inArticle 85(1) is fulfilled and it is unnecessaryto analyse the effects of the agreement. If theobject of the agreement is not restriction ofcompetition, it is appropriate to analyse itseffects to determine whether or not itrestricts competition. 18

The effects of an agreement must be assessedin relation to the competition which wouldexist in the relevant market if that agreementhad not existed. Accordingly, the Court ofJustice considers that the Commission'sexamination of agreements 'must be basedon an assessment of the agreements as awhole', which means that both the actualeffects and the potential effects of thoseagreements on competition must be takeninto account, 19 and the entire economic con­text in which competition will operate in theabsence of the agreement. 20 It is also neces­sary for the agreement to have an appreciableeffect on competition. 21

Determination of the effects of an agreementon competition constitutes a complex econ­omic appraisal and the Court of Justice hasheld that, although it should undertake acomprehensive review of whether the condi­tions for the application of Article 85(1) arefulfilled, its review of complex economicappraisals by the Commission is necessarilylimited to verifying whether the relevantrules on procedure and on the statement ofreasons have been complied with, whetherthe facts have been accurately stated andwhether there has been any manifest error ofappraisal or a misuse of powers. 22

17 — Sec in particular the judgments in Société TechniqueMinière, cited above, page 247; Joined Cases 56/64 and58/64 Consten and Grundig v Commission [1996] ECR 299Case 31/80 L'Or al [1980] ECR 3775. paragraph 19; Remiav Commission, cited above, paragraph 18; Case 45/85 Ver­band der Saebversicberer v Commission [1987] ECR 405,paragraph 39, and Joined Cases 142/84 and 156/84 BAT andReynolds v Commission [1987] ECR 4487.

18 — Sec the Opinion of Advocate General Tesauro in CaseC-250/92 DLG [1994] ECR I-5641, paragraphs 15 and 16.

19 — BAT and Reynolds v Commission, cited above, paragraph54, and Case T-19/91 Vichy v Commission [1992] ECRII-415, paragraph 59.

20 — Case C-399/93 Oude Lutlikhuis and Others [1995] ECRI-4515, paragraph 10.

21 — Case 5/69 Völk [1969] ECR 295 and Case T-7/93 Langnese-Iglo v Commission [1995] II-1533, paragraph 98.

22 — Remia v Commission, cited above, paragraph 34, and BATand Reynolds v Commission, cited above, paragraph 62.

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56. In the present case, the informationexchange agreement did not have an anti­competitive object and, therefore, it was nec­essary to consider its effects on competitionin the United Kingdom agricultural tractormarket. In the contested judgment, the CFIconsiders that the Commission sufficientlydemonstrated, in the contested decision, therestrictive effects of the informationexchange agreement.

That appraisal by the CFI appears to me tobe consonant with the case-law of the Courtof Justice mentioned above. The Commis­sion duly explained in the contested decisionthe potential restrictive effects on compe­tition of the information agreement, havingregard to the characteristics of the UnitedKingdom agricultural tractor market (closedoligopoly with high barriers to entry) andthe content and periodicity of the infor­mation exchanged between the principaleconomic agents in the market. An analysiswas made of a complex economic situationand the CFI carried out, in the contestedjudgment, the judicial review provided forby the case-law of the Court of Justice.

I do not consider that the CFI should haverequired the Commission to carry out ananalysis of the actual effects of the agreementon competition in the United Kingdom agri­cultural tractor market, in which it wouldhave indicated the prices and market sharesof each trader that would have prevailed ifthere had been no information exchangeagreement.

57. I also consider that the CFFs referencein the contested judgment to the Saloniajudgment and its judgment in Petrofina isnot entirely relevant, because, as John Deerepoints out, it is stated in both cases that thepotential effects of an agreement must betaken into account in assessing whether ornot it affects trade between the MemberStates. That reference to the case-law madeby the CFI in support of its reasoning isaccounted for by the fact that restriction ofcompetition and the impact on intra-Community trade constitute two conditionswhich must be fulfilled for there to be aninfringement of Article 85(1), and they areclosely linked with each other in the case-law of the Court of Justice, 23 and in bothcases the case-law allows account to be takenof the potential effects of agreements. In myopinion, that somewhat imprecise referenceto case-law by the CFI does not constitutean error of law in the reasoning followed inthe contested judgment.

58. Accordingly, I consider that this part ofthe ground of appeal cannot be upheld.

59. In view of the foregoing reasoning, Iconsider that this ground of appeal is par­tially inadmissible and that those parts whichare admissible must be rejected.

23 — See C. Bellamy and D. Child, Derecho de la Competenciaen el Mercado Común,Civitas, Madrid, 1991, p. 142.

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E. Misapplication of Article 85(1) of the ECTreaty with respect to the AEA meetings

60. In this ground of appeal, John Deereargues that the CFI erred in law by accept­ing, in paragraph 87 of the contested judg­ment, the Commission's reasoning to theeffect that the regular meetings within theAEA Committee provided the manufactur­ers of agricultural tractors with 'a forum forcontacts' which made it possible to maintaina policy of high prices and thereby restrictedcompetition within the meaning of Article85(1). The appellant contends that, under theData System, the members only held spo­radic meetings to deal with purely adminis­trative matters and that the Commissionproduced no evidence regarding the exist­ence of high sales prices.

61. In this ground of appeal, John Deeregives no reason for the view that the CFIerred in law by stating that the contactsmaintained by the tractor manufacturerswithin the committee of their professionalassociation were used to decide on arrange­ments for the operation of the informationexchange agreement and, as a result, toreduce price competition. Accordingly, thisground of appeal is inadmissible since itmerely puts to the Court of Justice argu­ments identical to those relied on by JohnDeere before the CFI, which were rejected inparagraphs 87 and 88 of the contested judg­ment.

F. Misapplication of Article 85(1) of the ECTreaty concerning the restriction of intra-brand competition

62. John Deere contends that the CFI erredin law by considering that the informationexchange agreement enabled the participatingundertakings to confer absolute territorialprotection on their dealers (paragraph 96 ofthe contested judgment) and monitor parallelimports by referring to the vehicle chassisnumber, which the manufacturer recordedon form V55/5 (paragraph 97 of the con­tested judgment).

As regards absolute territorial protection ofdealers, the appellant considers that theinformation provided to manufacturersthrough the agreement concerning their totalsales and those of their dealers in each dis­trict did not enable the former to imposepressure on dealers selling tractors outsidetheir territory because they did not know towhich customers and in which other districtthose sales had been made.

As regards the monitoring of parallelimports, John Deere considers that the CFItook no account of the fact that form V55/5ceased to be sent by SIL to the members ofthe Exchange in September 1988 and that,under the Data System, SIL did not supplymembers with the name of the independentimporter.

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63. Both parts of this ground of appeal areinadmissible because the arguments advancedare the same as those put forward by JohnDeere at first instance, which were properly-rejected by the CFI, and because they querymatters of fact determined by the CFIdefinitively in the contested judgment with­out raising any legal issue which can bereviewed in appeal proceedings.

G. Misapplication of Article 85(1) of the ECTreaty concerning the effect on trade betweenthe United Kingdom and the other MemberStates

64. The appellant contends that the CFIerred in law by accepting, in paragraph 101of the contested judgment, the reasoning inthe contested decision to the effect that theinformation exchange agreement substan­tially affects trade between Member States,since the reduction of competition derivingfrom that agreement necessarily has animpact on the volume of imports into theUnited Kingdom, in view of the characteris­tics of the United Kingdom market and thefact that the main traders there operatethroughout the common market. John Deereconsiders that the Commission did not provethat United Kingdom prices were lower thanthose charged in other Member States, andthat was the basic point needed to demon­strate the impact of the informationexchange agreement on intra-Communitytrade.

65. In paragraph 101 of the contested judg­ment, the CFI found that the Commissionhad not been able to prove that prices on theUnited Kingdom market were higher thanthose on continental markets, but JohnDeere was likewise unable to prove that theywere lower.

66. In my opinion, this ground of appealcannot be upheld. In paragraph 101 of thecontested judgment, the CFI properly con­sidered that the information exchange agree­ment substantially affected trade betweenMember States within the meaning of Article85(1). As the CFI pointed out, the character­istics of the United Kingdom tractor market,the large share of that market controlled bythe undertakings participating in the agree­ment (88%), the identification of wholesalesales and the fact that the companies werepresent on the markets of the other MemberStates constitute more than sufficientgrounds for concluding that the agreement inquestion affected intra-Community trade.Without doubt, that reasoning shows with asufficient degree of probability that theagreement had a direct or indirect, actual orpotential impact on trade in agricultural trac­tors between the United Kingdom and theother Member States, in the sense requiredby the case-law of the Court of Justice forthat condition for the application of Article85(1) to be fulfilled. 24

24 — Sec, inter alia, the judgments in Consten and Grundig vCommission, cited above, at p. 344; Saloma, cited above,paragraph 12; Remia v Commission, cited above, paragraph22; DLG, cited above, paragraph 54, and Onde Lutttkhmsand Others, cited above, paragraph 18.

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H. Unjustified refusal to apply Article 85(3)of the EC Treaty

67. The applicant considers that the CFIerred in law by concluding, in paragraph 105of the contested judgment, that the Exchangeand the Data System did not fulfil the neces­sary conditions for the grant of an individualexemption under Article 85(3). John Deeresubmits that the CFI erred by consideringthat that undertaking had not demonstratedthat the restrictions of competition derivingfrom both information exchange agreementswere strictly necessary to achieve animprovement of production and distributionadvantageous for consumers. The applicantalso contends that it would not have beenpossible to obtain such reliable informationconcerning the United Kingdom agriculturaltractor market if the manufacturers had car­ried out individual research.

68. This ground of appeal is inadmissible,because John Deere merely questions assess­ments of fact made by the CFI or raisesagain before the Court of Justice the samearguments which were properly rejected bythe CFI in the contested judgment. JohnDeere even refers to the arguments set out inits originating application to the CFI with­out identifying any possible matter of law inthe reasoning of the CFI to which it takesexception.

Costs

69. Under Article 69(2) of the Rules of Pro­cedure, which apply to appeals by virtue ofArticle 118, the unsuccessful party is to beordered to pay the costs. Consequently, if, asI suggest, the grounds of appeal relied on bythe appellant are dismissed, it should beordered to pay the costs.

Conclusion

70. In view of the foregoing considerations, I suggest that the Court of Justice:

(1) declare the appeal partially inadmissible;

(2) dismiss the admissible grounds of appeal;

(3) order the appellant to pay the costs.

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