JUDGMENT OF 21. 12. 1954 — CASE 1/54 FRANCE v HIGH AUTHORITY

In Case 1/54,

THE COURT composed of: M. Pilotti, President, P. J. S. Serrarens and Ch. L. Hammes (Presidents of Chambers), O. Riese, L. Delvaux, J. Rueff and A. van Kleffens, Judges, Advocate General: M. Lagrange Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

Law

1 — Admissibility

2 — The Substance of the Case

A — The Submission of infringement of the Treaty

I — Decision No 1/54

II — Decision No 2/54

III — Decision No 3/54

B — The submission of misuse of powers

Costs and reference of the case back to the High Authority

A. Infringement of the Treaty;

B. Misuse of powers.

(a). Infringement of the Treaty by reason of Decision No 1/54: Article 60 (2) links the means (that is the duty to publish and adhere strictly to price-lists) so closely to the end (that is the prohibition of discriminatory practices) that any infringement of the rules as to publication must, at the same time, be deemed to be a discriminatory practice. Furthermore, the new ruling (Decision No 1/54) no longer amounts to prohibiting discriminatory practices: on the contrary, it makes these possible, for it makes the criterion meaningless, by basing itself on the completely abstruse notion of comparable transactions and by allowing continual variations in prices; the result is that only strictly simultaneous transactions remain subject to the same conditions, which is practically meaningless. At the same time, the new ruling makes any form of supervision impossible.

(b). Infringement of the Treaty by reason of Decisions Nos 2/54 and 3/54: the easing of the duty of publication amounts to a breach of the Treaty, for the result of the use of the words prices charged and must be made public is that the Treaty categorically lays down a duty both to publish all new prices prior to transactions and to adhere strictly to price-lists; it entrusts the High Authority only with the duty of deciding how publications are to be effected but not with that of deciding their content and scope. The new ruling (Decision No 2/54) does not allow purchasers to ascertain the validity of the prices charged. Furthermore it makes the use of the right of alignment, laid down in Article 60, impossible, since the prices actually charged are not known. The High Authority fails to recognize the distinction made in the Treaty between the duty to publish price-lists and the right to demand information and statistics.

(c). Misuse of powers: in adopting the decisions which are now being contested, the High Authority's motive was its intention to lower the general price-level and prevent price agreements. However, the powers which have been vested in the High Authority under Article 60 were conferred on it only so as to prevent discriminatory practices; if it wished to pursue other objects, it could only do so within the framework of Articles 61 and 65.

(a). The allegation of infringement of the Treaty by reason of Decision No 1/54 cannot be regarded as well founded: a clear distinction can be drawn between prohibiting discrimination and duty to publish, as a breach of the latter does not in itself necessarily amount to discrimination where published price-lists are departed from in a uniform manner in all comparable transactions. Moreover the only absolute rule is that discrimination is prohibited, whereas the duty to publish is not an end in itself but merely a means of maintaining this rule. The prohibition on discrimination has in no wise been negated by the new rules, nor indeed has it been jeopardized by them. Objective criteria must be used in deciding whether transactions are comparable; this can be more effectively verified than formerly as a result of the measures provided for in Decision No 3/54.

(b). The allegation of infringement of the Treaty by reason of Decisions Nos 2/54 and 3/54 cannot be regarded as well founded: in fact, the decisions contested also rely upon the principle of prior publication, although Article 60, which speaks of prices applied rather than to be applied, does not make this mandatory. What is decisive is that the provisions of the Treaty give the High Authority power to fix equitably to what extent and in what form publication shall take place. If prices were tending to come down, which was the case at the time when the decisions were adopted, purchasers could not be expected to exercise any effective supervision over prices, as the variations from price-lists were downward variations, that is, to the advantage of purchasers; nor could undertakings be expected to denounce themselves, so that under the old system, the High Authority had virtually no means of exercising supervision. This is only possible under the new system; the High Authority cannot be criticized for combining the duty of publication with the duty to give information.

(c). The allegation that there has been a misuse of powers cannot be regarded as well founded: in fact, Article 60 — as can be seen from the use of the words in particular — requires the High Authority in regulating publication, not merely to seek to prevent any discrimination, but also to seek to attain all the objectives laid down in Articles 2 and 4 of the Treaty, so that it must campaign both against price agreements and in support of tendencies to lower prices. Article 57 requires the High Authority to give preference to indirect means of action; it is therefore surprising that the Government of the French Republic should be calling upon the High Authority to seek to attain these objectives by making use only of its powers of direct intervention, as laid down in Articles 61 and 65.

1 —. Admissibility

2 —. The Substance of the Case

A —. The Submission of infringement of the Treaty

I —. Decision No 1/54

(1). Decision No 1/54 introduces a clear distinction between publication and discrimination, thereby creating two kinds of infraction, namely the more serious one of discrimination and the less serious one of infringing the rules as to price publication. However, whilst recognizing that the two paragraphs of Article 60 are linked as regards purpose, the Court does not consider that this distinction amounts to an infringement of the Treaty. In fact, nowhere does the Treaty prescribe that any infringement of the rules governing price publication amounts in itself to one of the practices prohibited under Article 60 (1). As regards the prohibition of discriminatory practices in particular, it cannot be disputed that the fact of departing, to whatever extent, from the prices or conditions laid down in the price-list of an undertaking does not amount to discrimination when it is a case of an exceptional transaction or when the same variation is made in the case of all comparable transactions. On this point, Decision No 1/54 is therefore consistent with the Treaty. On the other hand, it might be objected that Decision No 30/53 was open to criticism, since without expressly admitting evidence to the contrary it held certain transactions to be discriminatory which, in fact, were not.

(2). Decision No 1/54 in no way does away with the duty to publish prices: on the contrary, it expressly retains it. There is therefore nothing in the objection that the decision is contrary to the rules governing price publication and that it sacrifices the principle of publication as a means of preventing prohibited practices. The Court, when it investigates Decision No 2/54, will consider whether the fact of permitting variations and, within certain limits, exempting undertakings from making a new publication is in accordance with the Treaty; in any case this is not a fact which can be relied on in contesting Decision No 1/54, which in no way affects the principle of publication.

(3). Decision No 1/54 in no way prevents the imposition of penalties if there is discrimination. If comparable transactions are entered into at different prices and under different conditions of sale, the penalties provided for by Article 64 still apply.

(4). Lastly, there is nothing in the applicant's argument that Decision No 1/54, instead of defining prohibited practices, in fact legalizes certain practices which were illegal under the old system. It has been shown above that Decision No 1/54 gives a new definition of prohibited practices by distinguishing between the rules as to non-discrimination and the provisions governing publication. If the new definition permits practices, which were previously prohibited, namely departures from published prices, it also lays it down that prices or conditions must be departed from uniformity in all comparable transactions, apart from any exceptional transaction which cannot give rise to discrimination. The principle of prohibiting any discriminatory practice is therefore strictly observed; Decision No 1/54, whilst doing away with the former automatic system, stays within the definition of prohibited practices.

II —. Decision No 2/54

(1). Before Article 60 (2) of the Treaty is interpreted in detail, it is proper to examine what the High Authority's objectives must be when it defines prohibited practices and regulates the publication of prices and conditions of sale.

(2). Article 60 (1) directly and categorically prohibits certain practices; the High Authority is authorized to define them but it may not derogate from the rule that they are prohibited.

(3). Article 60 (2) (a) does not expressly state the time when price-lists and conditions of sale must be published. One only has to read subparagraph (2) (b) on the methods of quotation to understand that the price-lists must precede any sale effected in the Common Market.

(4). Now that it is established that the price-lists and conditions of sale be published before they are applied on the Common Market, it remains to be decided whether the Treaty requires the publication of exact prices or whether it is enough to publish average or approximate prices. There is no doubt that the Treaty requires the publication of exact prices in the form of price-lists. This follows from the objectives to which the principle of price publication is intended to lead: the information acquired by purchasers is only of value to them if it informs them of the exact prices at which they can buy. Likewise publication must make alignment possible and this must be based on a competitor's exact prices. Alignment is a right granted to undertakings by the Treaty, not a mere possibility to which effect could only be given if undertakings were in a position to gain information by other more or less fortuitous means as to prices charged by their competitors.

(5). It now remains to consider whether the conclusion to which the Court has come as a result of its examination of the words used and the reasons underlying them is contrary to the Treaty's other objectives, or whether it may be invalidated by other considerations. This is not the case. It must first be repeated, that the method of prior publication of the exact prices is the mandatory rule laid down by Article 60 (2). It follows that this rule cannot be disregarded, even if this would facilitate some other method which might better attain the aims in view. It is not for the Court to express a view as to the desirability of the method laid down by the Treaty, or to suggest a revision of the Treaty, but it is bound, in accordance with Article 31, to ensure that in the interpretation and application of the Treaty as it stands the law is observed.

III —. Decision No 3/54

B —. The submission of misuse of powers

(1). Under the terms of Article 60 of the Rules of Procedure of the Court, in any contentious matter the unsuccessful party shall be ordered to pay the costs. Nevertheless the Court may, in accordance with paragraph (2) of that article, order that the parties bear their own costs wholly or in part, where each party succeeds on some and fails on other heads.

(2). Under Article 34 of the Treaty, if the Court declares a decision void, it shall refer the matter back to the High Authority, which must take the necessary steps to comply with the judgment.

Upon reading the pleadings; Upon hearing the parties; Upon hearing the opinion of the Advocate General; Having regard to Articles 31, 33, 34 and 60 of the Treaty; Having regard to the Protocol on the Statute of the Court of Justice; Having regard to the Rules of Procedure of the Court including those regarding costs; Taking formal note of the declaration by the Agent of the Government of the French Republic stating that the French Government has not asked for costs in its pleading; THE COURT hereby:

1 Translator's Note: The English version speaks in Article 60 (2) (a) of price-lists … applied.