CJEC, December 12, 1967, No 23-67

THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES,

By a judgment of 8 May 1967, received by the Court on 27 June, the Tribunal de commerce, Liege, referred to the Court under Article 177 of the EEC treaty for a preliminary ruling on the interpretation of Article 85(1) of the said treaty. The court is asked whether, ' in order to judge whether the contracts in question are prohibited by Article 85(1) of the EEC treaty, it is necessary to take into account the economic context and the whole of the market, that is to say, in this case, the simultaneous existence of a large number of contracts of the same type imposed by a small number of Belgian breweries upon a very large proportion of liquor licensees ', or whether ' consideration must be limited to an examination of the effects on the market of the said agreements considered in isolation '. According to this judgment the question refers to agreements whereby a dealer undertakes for a certain period to obtain his supplies solely from a given supplier, to the exclusion of all others.

P.415

The prohibition in Article 85(1) of the treaty rests on three factors essential for a reply to the question referred. After stating the limits within which the prohibition is to apply, Article 85(1) mentions agreements, decisions and practices. By referring in the same sentence to agreements between undertakings, decisions by associations of undertakings and concerted practices, which may involve many parties, Article 85(1) implies that the constituent elements of those agreements, decisions and practices may be considered together as a whole.

Furthermore, by basing its application to agreements, decisions or practices not only on their subject-matter but also on their effects in relation to competition, Article 85(1) implies that regard must be had to such effects in the context in which they occur, that is to say, in the economic and legal context of such agreements, decisions or practices and where they might combine with others to have a cumulative effect on competition. In fact, it would be pointless to consider an agreement, decision or practice by reason of its effects if those effects were to be taken distinct from the market in which they are seen to operate and could only be examined apart from the body of effects, whether convergent or not, surrounding their implementation. Thus in order to examine whether it is caught by Article 85(1) an agreement cannot be examined in isolation from the above context, that is, from the factual or legal circumstances causing it to prevent, restrict or distort competition. The existence of similar contracts may be taken into consideration for this objective to the extent to which the general body of contracts of this type is capable of restricting the freedom of trade.

Lastly, it is only to the extent to which agreements, decisions or practices are capable of affecting trade between Member States that the alteration of competition comes under Community prohibitions. In order to satisfy this condition, it must be possible for the agreement, decision or practice, when viewed in the light of a combination of the objective, factual or legal circumstances, to appear to be capable of having some influence, direct or indirect, on trade between Member States, of being conducive to a partitioning of the market and of hampering the economic interpenetration sought by the treaty. When this point is considered the agreement, decision or practice cannot therefore be isolated from all the others of which it is one.

P.416

The existence of similar contracts is a circumstance which, together with others, is capable of being a factor in the economic and legal context within which the contract must be judged. Accordingly, whilst such a situation must be taken into account it should not be considered as decisive by itself, but merely as one among others in judging whether trade between Member States is capable of being affected through any alteration in competition.

The costs incurred by the Commission of the EEC, which has submitted observations to the Court, are not recoverable, and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the Tribunal de commerce, Liege, the decision on costs is a matter for that court.

The COURT

In answer to the question referred to it for a preliminary ruling by the Tribunal de commerce, Liege, hereby rules :

Agreements whereby an undertaking agrees to obtain its supplies from one undertaking to the exclusion of all others do not by their very nature necessarily include all the elements constituting incompatibility with the common market as referred to in Article 85(1) of the treaty. Such agreements may, however, exhibit such elements where, taken either in isolation or together with others, and in the economic and legal context in which they are made on the basis of a set of objective factors of law or of fact, they may affect trade between Member States and where they have either as their object or effect the prevention, restriction or distortion of competition;

The decision on costs is a matter for the Tribunal de commerce, Liege.