Opinion of Mr Advocate-General Roemer

Mr President,

Members of the Court,

In the proceedings with which I shall deal today, the Court has for the first time to concern itself with a decision made by the Commission pursuant to Article 86 of the EEC Treaty, i.e., pursuant to the provision according to which any abuse by one or more undertakings of a dominant position within the Common Market or any substantial part of it shall be prohibited as incompatible with the common market, insofar as it may affect trade between Member States.

As regards the facts at the base of these proceedings I must first of all say the following.

Continental Can Company Inc. of New York (Continental) are internationally important manufacturers both of metal packages and of other packaging materials, as well as machines for manufacturing and using packages. They are the owners of industrial rights and have granted international licences for their exploitation. On 6 February 1969 they acquired a majority holding of the capital — and thus also control — in Schmalbach-Lubeca-Werke AG of Brunswick (Schmalbach), who are important manufacturers of light metal packages, of other kinds of packages and of can-sealing machines. This share was in the course of the same year increased to 85.8 % of the authorized capital.

After this operation Continental attempted further to extend their activities and influence within Europe. They drew up a plan, under which in collaboration with European undertakings in the packaging industry they would incorporate a company, into which to fit their European activities. Their suggestion was that a British producer of packaging materials, (the Metal Box Company Ltd. of London), as well as licensees of Continental having their registered offices in France and the Netherlands, should participate. This plan did not receive the approval of the companies that were approached and it accordingly could not be implemented. Thereupon Continental concentrated their endeavours in the direction of a close relationship with a Dutch licensee, Thomassen & Drijver-Verbliga NV of Deventer (Thomassen) who produce metal packages and other packages. On 16 February 1970 Continental entered into an agreement with Thomassen, which provided for Continental to incorporate a holding company, Europemballage Corporation (Europemballage) in Wilmington (in the State of Delaware, USA), and for the transfer to that holding company of the shareholding in Schmalbach. Pursuant to the agreement entered into with Thomassen, Continental was also to induce (and provide the means for) Europemballage to make an offer to the Thomassen shareholders (apart from Metal Box and Continental) to acquire shares in Thomassen for a payment of Fl. 140 per share. The Thomassen board agreed to recommend to their shareholders the sale of the shares to Europemballage. On 20 February 1970 there followed the incorporation of Europemballage which is 100 % controlled by Continental. As had been envisaged there were transferred to that company Continental's shareholdings within Europe, including that in Schmalbach. Europemballage opened an office in New York as well as in Brussels. On 16 March 1970 this holding company published the offer to purchase to the Thomassen shareholders. The offer of acquisition was also announced by the Thomassen board. On 8 April 1970, Europemballage acquired shares and convertible debentures from Thomassen for a total amount of 44.7 million units of account and thus increased their holding, which at first had amounted to 10.4 %, to a total of 91.07 % of the Thomassen capital.

All this attracted the Commission's attention. The Commission thought it right to raise objections, having regard to Article 86 of the EEC Treaty. Between March and April 1970 it sent appropriate communications to the interested parties, that is Continental, Thomassen, Schmalbach and Europemballage, by both letters and telex. These approaches on the part of the Commission not having resulted in a change of the arragements entered into, it decided on 9 April 1970 to institute proceedings against Continental and Europemballage under Article 3 of Regulation No 17 (OJ No 13, 21. 2. 1962, p. 204) by reason of its acquisition of a controlling share in the Thomassen capital. On 15 March 1971 Europemballage were served at their Brussels office with the objections of the Commission's Directorate-General for Competition. The parties replied on 9 August 1971 and were subsequently heard in oral proceedings.

Since the Commission was unable to observe in the course of these negotiations any narrowing-down of the opposing points of view, it made on 9 December 1971 a formal decision (OJ L 7, 8. 1. 1972, p. 25) which contains a legal assessment of the facts investigated by it and the consequences in law to be deduced therefrom. This decision contains the finding that through the medium of Schmalbach, Continental held in Germany, i.e., in a substantial part of the common market, a dominant position in respect of light packaging for preserved meat and fish, as well as metal caps for glass jars. By acquiring a majority shareholding in the competing undertaking Thomassen in the Netherlands, the dominant position had been reinforced to such an extent that competition had practically ceased. Thus there existed an abuse within the meaning of Article 86 of the EEC Treaty. Since Thomassen and Schmalbach had been in a position to effect deliveries across frontiers, particularly into West Germany and in the Benelux countries, and since accordingly by reason of the merger the possibility of competition across frontiers had been excluded, one was forced to the conclusion that the combination of these companies was capable of affecting the flow of trade between Member States in a way that might be damaging to the goal of a unified market between the countries. On this basis, the Commission decided that Continental was obliged to cease the contravention against Article 86 that had been found to exist and to this end to submit proposals to the Commission before 1 July 1972.

In the course of further negotiations with the Commission the representatives of the companies attempted to find a solution acceptable to the Commission. Since Continental and Europemballage were however in principle of the opinion that the Commission had wrongly applied Article 86 in relation to their course of conduct, there followed on 9 February 1972 the institution of proceedings before this Court for the purpose of annulling the Commission's decision of 9 December 1971.

At the current, oral stage of the proceedings it is now my task to examine whether the decision arrived at by the Commission ought to be allowed to stand or whether on the basis of one of the applicants' arguments (which I shall deal with in detail) it ought to be revoked. Since the parties to the proceedings are at issue upon a vast number of factual and legal questions, I think it is right to preface my examination by indicating the order in which I shall deal with points. Thus I wish at first to say a few words on the subject of capacity to sue; I shall then turn to the legal question whether Article 86 of the EEC Treaty can be applied at all to circumstances such as the present ones. Following upon this, there will be examinations of a predominantly economic kind, i.e., whether Schmalbach held a dominant position in the Federal Republic and what was the nature of the competitive relationships between Schmalbach and Thomassen. Finally, I shall also consider the problem whether the Commission has the power to make a decision in relation to a company resident in the USA and also whether that company can be made responsible for the acts of a subsidiary company. In this context it will also be necessary to deal with a numer of procedural criticisms.

1. As regards capacity to sue

The appeal against the Commission's decision was lodged by Continental, of New York. Nothing need be said in this respect, for in Article 3 of the decision it is expressly stated to be addressed to that company. Furthermore, in its wording it contains the finding that Continental has abused a dominant position and that it is obliged to cease the contravention of Article 86 of the EEC Treaty and in this respect to submit suitable proposals to the Commission.

Apart from this however, there is also a claim by Europemballage (Europemballage Corporation, of Brussels) i.e. the subsidiary of Continental, which in its name had carried out the criticized acquisition of the Thomassen shares. In this connection, it is argued that the French version of the decision — according to the Commission's declaration the only binding one — expressly mentions in its title Europemballage Corporation. Likewise, that the letter accompanying the decision was served on Europemballage Corporation and there too the case was called Europemballage. No objection can in fact be raised against this view. No doubt Europemballage also is directly affected by a decision which complains that the acquisition of the shares had taken place through it.

It is therefore clear that both companies possess the capacity to sue. Since apart from this there appear to be no other objections to the admissibility of the actions, we can now without further preliminaries turn to a consideration of the matters in issue.

2. In this connection, as has been stated, we are first of all concerned with the question whether Article 86 can be applied at all to processes of concentration.

3. As I have already said, I shall not after this finding break off my examination. I would now rather like to go further into the question whether the Commission's finding that Continental, via Schmalbach, had a dominant position on a substantial part of the Common Market, is justified. I shall further examine whether the Commission has correctly evaluated the effects upon the competitive conditions in the Common Market flowing from Schmalbach's merger with Thomassen into the holding company Europemballage. In this connection it is admittedly not my object — a fact which may be understandable in the light of my conclusions so far — to be exhaustive in my examination of the questions, which are somewhat complex and of a predominantly economic kind. My intention is purely to point to some of the problems that arise and to attempt a summary appreciation thereof.

4. Two further objections by the applicants, with which I shall now deal in a cursory fashion refer solely to Continental's legal position.

5. There finally remains a series of criticisms of both form and procedure on which a few words will also have to be said.

6. After having said all this, allow me to summarize my views for the purposes of this opinion.

1 Translated from the German.