Opinion of Mr Advocate General Capotorti
Mr President,
Members of the Court,
1. The present cases arise from applications submitted under Article 36 of the ECSC Treaty by iron and steel undertakings from various Member States, which produce concrete reinforcement bars. The purpose of the applications is to obtain the annulment of individual decisions whereby the Commission imposed pecuniary sanctions on the applicants for infringement of the rules on compulsory minimum prices. Those rules were introduced under Article 61 of that Treaty by General Decision No 962/77 of 4 May 1977. Almost all of the applicants admit to having charged prices lower than those fixed by the Commission for sales during 1977 (however, the sales made by the applicants Rumi and Feralpi took place during the first months of 1978); the disputes as to whether the individual decisions impugned are factually wellfounded concern only the scale of the underpricing, or the quantities of products in relation to which the fines were calculated proportionately. Thus the case raises mainly questions of law, and in that regard the principal submissions and arguments relied on by the majority of the applicants seek to prove that the aforesaid general decision setting up the system of minimum prices was illegal. The illegality is alleged for the purposes referred to in the last paragraph of the said Article 36, that is to say in support of the applications made against the individual decisions imposing fines.
2. Before going on to consider the numerous matters raised in the applications, it will be convenient to reconstruct briefly the context in which the Commission adopted the general decision fixing minimum prices, and the function assigned to that decision.
3. In that situation the Commission considered that the conditions laid down by Article 61 (b) of the ECSC Treaty for the introduction of compulsory minimum prices within the Common Market were satisfied. By Decision No 962 of 4 May 1977 it therefore imposed such prices upon the Community producers for their sales of concrete reinforcement bars to buyers both within the territory of the Community and within the territory of certain nonmember countries (the members of EFTA), which are specifically mentioned in Article 5 of the measure and with which the Community has concluded particular commercial agreements.
4. What are the limitations upon the review which the Court is asked to undertake concerning the legality of General Decision No 962/77? I pointed out at the beginning that the applicants' criticisms are based on the last paragraph of Article 36, which provides: In support of its appeal (that is to say, the appeal in which the Court has unlimited jurisdiction against pecuniary sanctions imposed upon undertakings pursuant to the Treaty), a party may, under the same conditions as in the first paragraph of Article 33 of this Treaty, contest the legality of the decision or recommendation which that party is alleged not to have observed.
5. Amongst the numerous arguments relied on by the applicants in support of their claim that the Treaty was infringed, I shall begin by examining the criticisms concerning the existence of the legal conditions prescribed by Article 61 for introducing the system of minimum prices. Under that article, the Commission may fix for one or more products subject to the jurisdiction of the ECSC minimum prices within the Common Market, if it finds that a manifest crisis exists or is imminent and that such a decision is necessary to attain the objectives set out in Article 3.
6. Another criticism based on the notion of crisis has been put forward by the applicant Rumi. It maintains that Article 61 permits the introduction of minimum prices only as a preventive measure, whilst in the presence of a manifest crisis recourse should have been had to Article 58 which provides for the adoption of a system of production quotas.
7. I shall go on now to consider whether the second of the two conditions to which Article 61 (b) subjects the introduction of a system of minimum prices was satisfied, namely whether it was possible in this case to say that that type of measure was necessary to attain the objectives set out in Article 3. Many applicants, in particular the Italian undertakings, deny that Decision No 963/77 complied with that condition. But let me emphasize that, in discussing the question, it is necessary to avoid confusing the requirement concerning the necessity of the introduction of minimum prices, in relation to Article 3, in the market situation of the product in question, with the separate aspects of the functionality, the practicability and the suitability of the system of intervention which in fact took place.
8. That Decision No 962/77 was necessary in order to attain the objectives laid down by Article 3 has been challenged by the Italian applicants in two other respects : on one hand the level of the compulsory minimum prices (which in their opinion was too high) and on the other the inadequacy of the intervention measure adopted. The first of these objections may be discussed in the light of Article 61 and Article 3, since it amounts to an argument that it was not necessary, in order to attain the objectives laid down by Article 3, to fix the prices at the level determined by the said decision (in other words, it would have been sufficient to fix lower prices). But I think that the other objection raises the problem of the appropriateness of the measure adopted in relation to its purpose, with which I shall deal later in relation to the principle of proportionality.
9. As well as alleging that Decision No 962/77 is contrary to Article 61 of the ECSC Treaty — and Article 3, to which Article 61 (b) refers — the applicants also rely on certain other provisions of Title I of the Treaty, namely Articles 2, 4 and 5, arguing that they, too, were infringed by. the adoption of that measure. Thus it is now necessary to consider those complaints.
10. With reference to Article 4 of the Treaty — which lays down the main prohibitions relating to the establishment and maintenance of the common market for coal and steel — the applicants complain above all of discrimination between producers, basing their argument on the fact that measures and practices which so discriminate are prohibited by Article 4 (b). In this case, it is alleged that such discrimination between producers took place essentially because the system of minimum prices favoured some of them (the less competitive) to the detriment of the others. Clearly it is not the formal aspect of the measures criticized that has been taken into consideration, since the minimum prices laid down by Decision No 962/77 are identical for all Community producers. , The. discrimination is said to exist de facto, in the sense that two different situations — that of the more competitive producers and that of the undertakings in a state of crisis — were treated in the same way, by the imposition of the uniform system of minimum prices. And, since the level of those prices is below the list prices previously quoted by all the Community undertakings, with the exception of the producers in Brescia, the latter submit that in adopting the general measure contested the Commission took into account the situation of the other undertakings, and not the position and the market share of the small and medium-sized Italian undertakings, thus infringing the prohibition on discrimination in that respect also.
11. Apart from those provisions of the Treaty which I have mentioned and discussed so far, two unwritten principles of Community law have been invoked in support of the applications. I refer to the fundamental right of respect for private property, and the principle of proportionality.
12. The argument that the measure fixing minimum prices infringed the principle of proportionality has been put forward on the basis of the claim that the burden imposed by that measure on a section of the persons to whom it was addressed (the more competitive undertakings) was excessive. The applicants maintain that in order to comply with Decision No 962/77 they had to reduce appreciably the scale of their activities, at considerable financial and commercial risk, leading to a negative effect on the level of employment. The burden of such consequences was even greater for small steel producers specializing in the manufacture of concrete reinforcement bars, in that only the full utilization of their productive capacity enables them to remain in business in spite of high fixed management costs; in other words, they lack the compensating element which in larger undertakings is represented by the manufacture of other products. Besides, the burden imposed upon the more competitive undertakings is said to have been a pointless sacrifice, because of the inadequacy of Decision No 962/77 in relation to the aim pursued.
13. In the context of the complaints directed against that decision, the Italian applicants also plead misuse of powers, arguing that by adopting the measure fixing minimum prices the Commission pursued objectives different from those stated. Two main arguments have been adopted in support of that claim. In the first place, it is stated that the said decision served essentially to protect the large-scale iron and steel producing concerns which were not able to withstand the competition in the concrete reinforcement bar sector and which were able to retain a share of the market only as a result of the level fixed for the binding minimum prices. Instead, it is argued, the aim of restructuring the sector should have been pursued by respecting the law of the market, which would have forced the large-scale, unproductive undertakings to cease manufacturing reinforcement bars.
14. The applicants also plead infringement of essential procedural requirements, in relation to Decision No 962/77, on the basis of criticisms concerning both the statement of reasons accompanying the measure and the procedure followed before its adoption. In their opinion, the statement of reasons contains incomplete and unsubstantiated affirmations which do not take into account the reality of the situation in Italy. As regards the procedure, it is denied that the preliminary studies were made jointly with undertakings and associations of undertakings, as is required by the first paragraph of Article 61, or that the consultation with the Consultative Committee specifically concerned the measure based on Article 61.
15. The Feralpi company submits that, as regards Italy, the measure prolonging the period of application of the minimum prices for the whole of 1978 was repealed by implication as a result of the decision of 28 July 1978, already referred to, by which the Commission authorized the setting-up of the UCRO, that is to say the office designed to facilitate the channelling of export sales of concrete reinforcement bars, by coordinating such sales through a voluntary allocation of the quantities, The applicant infers an intention oh the part of the Commission to repeal the previous measure from one of the recitals in the preamble to the aforesaid decision, which states that there is to be no interference with the undertakings' sales on the Italian market.
16. Thus far I have examined the arguments whereby the applicants have sought to sustain the submission that General Decision No 962/77 was illegal, within the meaning of and pursuant to the last paragraph of Article 36 (or even, as we have just seen, that it has been repealed). The inquiry undertaken has not made it possible to identify any element demonstrating the illegality of that decision. Therefore it is necessary now to go on to discuss the criticisms which seek to obtain the annulment thereof. In this sphere, it will be convenient to deal first of all with the claim made by the applicant Feralpi that it behaved lawfully, selling at prices which were determined by alignments in accordance with Community provisions.
17. Another submission put forward by various undertakings, in support of their applications against the individual decisions imposing fines, amounts to an affirmation of the legality of the sales at prices below the compulsory minimum prices because they took place in circumstances of necessity or force majeure, or because they were justified by legitimate self-protection. Those three types of exonerating circumstances have been intermingled in some applications without sufficient clarification of their value in Community law and of the limits of their applicability. However, I think that an atempt at clarification is necessary prior to an investigation of the facts.
18. Thus far I have dealt with questions common to all the applicants, or to a large number of them. I shall now have to consider specific problems raised in the context of individual applications which it is not appropriate to discuss generally.
19. I recalled at the outset that, purely as an alternative remedy, the majority of the applicants are seeking an amendment to the individual decision impugned, in the form of a reduction in the fines imposed by the Commission. There is no doubt that, as the Court is invested with unlimited jurisdiction in these cases, it has the power to grant such requests, altering the amount of the pecuniary sanctions if it finds it just and appropriate to do so.
20. I would conclude by suggesting that, in its judgment on the applications in Joined Cases 154/78, 205 and 206/78, 226 to 228/78, 263 and 264/78 and 39/79, as well as in Joined Cases 26/79 and 86/79, and Cases 31/79 83/79 and 85/79, the Court should:
1 Translated from the Iulian.