Opinion of Mr advocate general Capotorti

Mr President,

Members of the Court,

1. The present dispute originated in an application by Tepea, a Netherlands undertaking, against the Commission for the annulment of the decision of the Commission against it following a proceeding under Article 85 of the EEC Treaty.

2. The Commission's decision was based on two points. First: that the agreement between Watts and Theal had as its object and effect the isolation of the Netherlands market in respect of trade in Watts products thereby preventing third panics from competing effectively in the marketing thereof: Article 85 (1) of the EEC Treaty was thereby infringed. Secondly the notification of the agreement by Theal on 24 January 1963 contained incorrect and misleading information and in particular failed to point out the part of the agreement covering the use by Theal of trade-marks owned by Watts: Article 15 (1) (a) of Regulation No 17 of the Council of 6 February 1962 was thereby infringed. On this finding the Commission imposed on Theal and Watts fines of 10000 u.a. each for the infringement of Article 85 (1); furthermore pursuant to the said Article 15 of Regulation No 17 it imposed on Theal a fine of 5000 u.a. for failing in its duty to provide information relating to the notification required under Articles 4 and 5 of that regulation.

3. As the Court is aware agreements between undertakings fall under the prohibition laid down in Article 85 (1) of the EEC Treaty if they may affect trade between Member States and have as their object or effect a negative influence on competition within the Common Market.

4. Let us consider first of all the circumstances before and during the conclusion of the exclusive dealing agreement between Theal and Watts in order to establish whether the two parties, before, during or indeed after that agreement but at any rate before the notification to the Commission came to an understanding on the use in the Netherlands by Theal-Tepea of marks identical to those employed in the United Kingdom by Watts.

5. It appears to me appropriate at this point to try to clarify the reasons for Watts withdrawal of its own application to register the marks in question in the Netherlands. It could with good reason be claimed that the grounds were of a tactical nature in relation to the cases then pending before the Netherlands courts: this is clear from the documents on the file in those cases.

6. I consider that the foregoing considerations convincingly establish that Theal and Watts were bound by an agreement which had its object the use by Theal, the exclusive distributor, of the marks for Watts products in order to obtain for the latter absolute territorial protection in the Netherlands in respect of the trade in Watts products. It follows logically from this finding that both infringements at issue between the Commission and Tepea-Theal (the infringement of the prohibition contained in Article 85 (1) of the EEC Treaty and of the duty to provide accurate information laid down in Regulation No 17), were in fact committed. Let us however suppose for the time being that proof of the existence of the above-described agreement had not been obtained or were held to be insufficient. Even in that case I think that the first and principal infringement which Tepea-Theal is alleged to have committed, that of the said Article 85 (1), must be regarded as proved.

7. In terms of Article 15 (1) of Regulation No 17/62 of the Council the Commission has a discretion to impose fines on undertakings which, intentionally or negligently, supply incorrect information in a notification pursuant to Articles 4 and 5 of the regulation.

On all these grounds the application may be seen to be unfounded. I therefore conclude by suggesting that the application should be dismissed and that the applicant should be ordered to bear the costs of the case, including those relating to the intervention.

1 Translated from the Italian.