The Gazette 1975

Legal Europe SUGO SEMINAR on E.E.C. LAW—OCTOBER 1974

THE E.E.C. A ND THE ORD I NARY SOLICITOR—SOME RELEVANT CASES

By JOHN F. BUCKLEY, Solicitor

Part III

status of an agreement which has been notified to the Commission but which has not been adjusted on by the Commission, although already the subject of num- erous cases, is still not entirely clear, particularly 4ft relation to the new Member States but there have been a number of cases which have had to clarify the in- terpretation of Article 85 and Regulation 17 in general. The Five v Mertons (No. 2) case, (1963) C.M.L.R. 329, was decided by the Amsterdam District Court which held there was no breach of Article 5 of Regul- ation 17 where (1) there was no proof that any under- taking other than those resident in the territory of a Member State had participated in a Restrictive Practices Agreement; (2) the product originated from a Manu- facturer resident within the territory of a Member State and (3) the Restrictive Practices Agreement was wholly domestic in character and did not regulate imports or exports as between Member States. A particular and familiar kind of Restrictive Prac- tices Agreement came before the Turin Appeal Court in the Lagattolla case, (1964) C.M.L.R. 84, where it was held that an agreement entered into between a Company and a former employee under which the latter undertook not to compete with the Company for a period of five years after the termination of his employment, in a golden handshake situation, did not contravene Article 85. The Cadillon case (No. 1 of 1971) (1971) C.M.L.R. 420 gave the European Court an opportunity to con- sider the same area as had been dealt with in the Five case and it held (1) that an agreement was cap- able of affecting trade within Member States if, looked at on the basis of a whole pattern of legal and factual elements, it appeared with a sufficient degree of prob- ability that it could exercise an influence direct or in- direct, actual or potential, on the trade patterns be- tween Member States so as to hinder the realization of the objectives of a single market and (2) an Exclusive Dealing Agreement could escape the prohibitions of Article 85 if, in view of the weak position of the parties on the market in the products and the area in question it was not capable of hindering the realization of the objectives of a single market even when it established an absolute territorial protection. The de Haecht case No. 23 of 1967 (1968) C.M.L.R. 26 held that an exclusive dealing agreement was not necessarily incompatible with the Common Market and void as such but it could be void if it was cap- able of affecting trade between Member States and had as its object or effect the prevention, restriction or distortion of competition. The de .Haecht case is of interest because it was not, as most 156

Transport

The provisions of the Treaty relating to Transport provide for the drafting of a common policy on trans- port and also make provisions for the abolition of re- strictions which have the effect of limiting competit- ion. Very few cases have in fact come before the Courts arising out of the provisions of this portion of the Treaty but a trio of cases heard together are worthy of note. They are the Grad Lesage and Haselhorst cases being Number 9, 20 and 23 of 1970 (1971) C.M.L.R. 1 which decided that an obligation under Article 4 (2) of a Council decision of 13th May 1965 as completed by Article 1 of the First Directive on turn- tax of 11th April 1967 was unconditional and suf- ficiently clear and precise. It was consequently capable of creating direct effects anl legal relations between the Member States and individuals and so could be invoked by individuals in litigation. It also provided that a tax on freight where the criterion was the mere fact of trans- portation and the basis of assessment was the load to which the roads were exposed did not correspond 'o a usual form of Turnover Tax. There is a fairly recent transport case, Commission v French Republic 167/ 1973, (1974) ECR 359 which held that France was in default in not complying with Regulation No. 1612/ 68 dealing with the freedom of movement for workers by not amending a French Law which provided that such proportion of the crew of a ship as is laid down by order of the Minister for the Merchant Fleet must be French Nationals. There were orders that, subject to special exemptions, employments on the bridge, in the engine room, and in the wireless service, on French vessels was limited to persons of French Nationality and general employment on ships was limited in the ratio of three French to one non French. Article 85 and 86 of the Treaty which govern Re- strictive Trade Practices and Monopoly situations are among the most diligently litigated of the entire Treaty. Article 85 provides for the prohibition of all agreements, decisions and concerted practices which may affect trade between Member States and which have, as their object or effect, prevention, restriction or dis- tortion of competition. This has been implemented by Regulation 17 of 1962 which provided for the notifi- cation of agreements to the Commission and for block exemptions to be given for certain categories of agree- ments. It is unfortunate that the question of the Competition Policy