JUDGMENT OF 12. 7. 1979 — JOINED CASES 32/78 AND 36 TO 82/78 BMW v COMMISSION

In Joined Cases

THE COURT composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), P. Pescatore, M. Sørensen, A. O'Keeffe and G. Bosco, Judges, Advocate General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Conclusions of the parties

III — Submissions and arguments of the parties

A — Case 32/78

1. Infringement of Article 85 of the Treaty

(a) The meaning of the circulars of 29 September 1975

(b) The significance of signing the BMW Belgium circular of 29 September 1975

2. The fine

1. The infringement of Article 85 of the Treaty

(a) The meaning of the circulars of 29 September 1975

(b) The significance of signing the circular from BMW Belgium of 29 September 1975

(2) The fine

B — Cases 36 to 82/78

(1) Submissions and arguments of the applicants

(a) Cases 44 to 82/78 (Dealers other than the members of the Advisory Committee)

(b) Cases 36 to 43/78 (Members of the Advisory Committee)

(2) Submissions and arguments of the Commission

(a) Cases 44 to 82/78

(b) Cases 36 to 43/78

III — Oral procedure

Decision

(1) The infringement of Article 85 (1) of the EEC Treaty

(2) The fines

Costs

I —. Facts and written procedure

1. BMW Belgium SA., Kontich, a subsidiary of Bayerische Motoren Werke AG, Munich, formed in Belgium in July 1973, organized in that Member State, in its capacity as an importer of BMW vehicles, a network of specialized dealers for the distribution of its products. On 13 January 1975 it notified the Commission of the standard form dealership agreement entered into by its dealers and applied for exemption under Article 85 (3) of the EEC Treaty.

2. During 1975 price control measures were introduced or strengthened by the Belgian Government to contain inflation. Those measures, which were responsible for a freeze of prices for a certain number of products including cars resulted in the retail prices of new BMW vehicles during 1975 and early 1976 being lower in Belgium than in other countries of the Common Market.

3. In several letters addressed to BMW Belgium from January 1975 onwards, BMW Munich informed its Belgian subsidiary of the re-importation of BMW vehicles into the Federal Republic of Germany. By letter dated 23 June 1975 BMW Munich indicated that re-imports of new BMW cars into the Federal Republic of Germany had achieved an excessive degree of publicity and were harming its relations with the BMW dealers in certain areas. BMW Belgium was asked to send a circular to its dealers drawing their attention to BMW's distribution policy; the circular was to make the following points:

4. Of the 90 Belgium BMW dealers 48 signed the copy of the letter which was attached to the circular from BMW Belgium of 29 September 1975 and was returnable for the purpose of indicating agreement.

5. On 20 October and 19 November 1975 the Automobilimporte C. Heuer and MGH Motorgesellschaft mbH undertakings, established in the Federal Republic of Germany, informed the Commission that Belgian dealers belonging to the BMW distribution network were no longer willing to supply them certain new BMW models for reexport to the Federal Republic of Germany. That information was supplied in connexion with Article 3 (2) (b) of Regulation No 17/62 of the Council (Official Journal, English Special Edition 1959-1962, p. 87) and with its possible application in view.

6. In the meantime the Commission had followed the procedure laid down in Article 3 of Regulation No 17/62 of the Council, and finally, on 23 December 1977, adopted the decision which is the subject of the present applications and was addressed to BMW Belgium and to the 47 Belgian BMW dealers who signed the circular of 29 September 1975. In that decision, published in the Official Journal of the European Communities of 17 February 1978 (Official Journal 1978 L 46, p. 33), the Commission confirmed the existence in this case of two agreements prohibited under Article 85 (1) of the Treaty:

7. BMW Belgium, the members of the Belgian BMW Dealers' -Advisory Committee and the 39 Belgian BMW dealers mentioned in the decision made the present application, challenging that decision, on 10 and 15 March 1978.

II —. Conclusions of the parties

III —. Submissions and arguments of the parties

A —. Case 32/78

1. Infringement of Article 85 of the Treaty

(a). The meaning of the circulars of 29 September 1975

(i). In order to interpret those circulars correctly, it is necessary in the first place to adhere to the text thereof. The text refers explicitly to the circular of 4 July 1975, which the Commission recognizes is in no way unlawful, and which merely recalls (second paragraph) the undertaking entered into by the Belgian BMW dealers, under the dealership contract not to refrain from selling any BMW product to dealers who have not been appointed for the sale of the BMW goods.

(ii). Secondly, the real meaning of those circulars of 29 September 1976 may be inferred from the legal and factual context in which they are set.

(iii). Thirdly, in order to define the real meaning of the circulars of 29 September 1975, it is necessary to interpret them in the light of the conduct of the parties. Both the conduct of BMW Belgium and that of its dealers prove in fact that the circular of 29 September 1975 must be interpreted as a reminder of the undertakings arising under clause 1 of the agreement.

—. As for the conduct of BMW Belgium, there are numerous factors proving that, during the period from 29 September 1975 to 20 February 1976, BMW Belgium did not at any time object to sales by Belgian dealers to private individuals or approved dealers outside Belgium: it objected only to sales by its dealers of BMW cars to non-approved dealers.

—. As for the dealers, it is established that they continued to sell BMW vehicles to private individuals and to approved dealers outside Belgium after 29 September 1975. Those exports — the reduction in which as from 1 November 1975 was due to a price increase in Belgium, showing that the circular of 20 February 1976 did not have the effect of increasing sales outside Belgium in relation to the situation which was created by the circulars of 29 September 1975 — were effected not only by the dealers who had not signed the circular of 29 September 1975, but also by dealers who had signed that circular. Their conduct confirms that the dealers interpreted the circular as a reaffirmation of clause 1 of the agreement.

(b). The significance of signing the BMW Belgium circular of 29 September 1975

2. The fine

1. The infringement of Article 85 of the Treaty

(a). The meaning of the circulars of 29 September 1975

(i). In the first place, as regards the text of the circulars, although it is true that the circular from BMW Belgium of 29 September 1975 refers to that of 4 July 1975, in which the applicant endeavoured to restrict the sales prohibition to non-approved dealers, it is none the less beyond dispute that, apart from that reference, the circulars taken as a whole refer to export operations in general without distinction. To become convinced of that it is sufficient to read the passages of the circular in which BMW Belgium, after confirming the existence of exports to the Federal Republic of Germany and the Netherlands, without making any distinction between sales authorized under the agreement and those not authorized, and after explaining the reasons for that phenomenon (point 2), lists the difficulties to which it gives rise, both for BMW Munich (point 3) and the purchaser (point 4). It is precisely because of those difficulties that the circular ends by indicating the path to be followed, stating that henceforth no BMW dealer in Belgium will sell cars outside Belgium or to firms who propose to export them (point 5, second paragraph).

(ii). Secondly, as for the argument based on the legal and factual context in which the circulars of 29 September 1975 must be set, that argument may be met by comparing the terms of those circulars with the very different tenor of the letters sent by BMW Munich to BMW Belgium.

(iii). As regards the conduct of the parties, the fact that the applicant did not oppose sales to individuals or to approved dealers abroad by Belgian dealers does not constitute proof of the restricted meaning of the circular of 29 September 1975, in so far as the applicant could know of those exports only after being informed thereof by the network in the neighbouring country in which the sales had taken place, and in the meantime the instructions from BMW Munich of 17 October 1975, the Commission's request for information of 26 November 1975 and the proceedings commenced by MGH in the Rechtbank van Koophandel, Antwerp, on 27 January 1976 must have persuaded it to be somewhat cautious.

(b). The significance of signing the circular from BMW Belgium of 29 September 1975

(2). The fine

B —. Cases 36 to 82/78

(1). Submissions and arguments of the applicants

(a). Cases 44 to 82/78 (Dealers other than the members of the Advisory Committee)

(i). As regards their participation in the agreement restricting competition, the applicants point out in the first place that the question whether the dealers consented freely is a question of fact: in each case it is necessary to consider whether, in the absence of the constraints imposed upon the dealers by the risk of losing their dealership if they were to oppose the will of the supplier, the dealers would have indicated their agreement to the circular of 29 September 1975 in the same way, that is to say without reservation.

(ii). Going on to state their position with regard to the imposition of the fine, the applicants repeat that it was never their intention to subscribe to a general export prohibition. At the time of the two meetings which took place on 13 and 31 October 1975 between BMW Belgium and its dealers, after the issue of the circulars of 29 September 1975, the dealers expressed their concern over the conduct of certain dealers in Belgium and abroad who were reselling outside Belgium, and, in the course of the meeting of 31 October 1975 they protested to BMW Belgium, which in its correspondence was apparently treating in the same manner those who had sold to non-approved dealers and those who had complied with their undertakings (see annex 6 to the defence, p. 6). Besides, the object of the discussion which took place on 31 October 1975 was not to prohibit all sales of vehicles abroad, but to see that all the dealers complied with their undertakings, in particular by taking care not to sell to non-approved dealers.

(b). Cases 36 to 43/78 (Members of the Advisory Committee)

(2). Submissions and arguments of the Commission

(a). Cases 44 to 82/78

(i). On the question of participation in the agreement restricting competition, it points out in the first place that the existence of close ties amounting to economic dependence on BMW Belgium cannot be regarded as sufficient to vitiate consent, at least not to the point of holding that there was not, in spite of the signing of the letter attached to the circular from BMW Belgium of 29 September 1975, genuine agreement, that is to say the expression of an independent will with a real possibility of choice.

(ii). Going on to consider the imposition of the fine, the Commission states that such a fine is based on the dealer's negligence, which, by its very nature, does not require the author of the act to have performed it intentionally.

(b). Cases 36 to 43/78

(i). As regards the imposition of the fine, the Commission observes that the applicants are wrong to claim that they did not intend to commit the infringement in question. When a contractual clause forming part of an agreement clearly has an object which is indisputably restrictive of competition, it necessarily follows that the author intended to commit the infringement. By sending their letter attached to the circular from BMW Belgium of 29 September 1975, supporting the proposals contained therein and urging the dealers to fall in with them, the members of the Advisory Committee actively participated in the infringement: thus their intention to commit it is proved.

(ii). As to the amount of the fine, the Commission denies that the applicants suffered a heavier fine by virtue of the fact — purely fortuitous according to them — that they were members of the Advisory Committee at the time. The greater severity of the fine was due to the fact that, occupying a position which entailed a certain amount of responsibility and authority in the relations between BMW Belgium and its dealers, the applicants supported, with the weight of that authority, the proposals of BMW Belgium and thus took a more active pan in the infringement than the other dealers.

III —. Oral procedure

1. By applications lodged on 10 and 15 March 1978, the applicants asked for the annulment of Commission Decision 78/155/EEC of 23 December 1977 relating to a proceeding under Article 85 of the EEC Treaty (Official Journal 1978, L 46, p. 33), censuring them for having subscribed to an export prohibition contrary to Article 85 (1) of the EEC Treaty and imposing fines on them by reason of that infringement.

2. As Cases 32/78 and 36 to 82/78 were joined for the purpose of the oral procedure, it is proper to keep them joined for the purpose of the judgment.

3. BMW Belgium, which is a wholly-owned subsidiary of the Bayerische Motoren Werke AG company of Munich (hereinafter referred to as BMW Munich), on 13 January 1975 notified to the Commission the standard form distribution agreement entered into by its dealers and applied for exemption under Article 85 (3) of the EEC Treaty. That standard form agreement contains no general export prohibition but prohibits Belgian BMW dealers from selling new BMW vehicles to non-approved dealers. Further, it largely corresponds to the standard agreement which is used as a basis for the selective distribution system operated in the Federal Republic of Germany and West Berlin by BMW Munich, which the Commission, by Decision of 13 December 1974 (Official Journal 1975 L 29, p. 1), exempted under Article 85 (3) from the prohibition laid down in the first paragraph of that article, on the ground in particular that no prohibitions on exports were laid down in the terms of the agreement.

4. In fact one of the essential characteristics of the selective distribution system thus authorized by the Commission is that the BMW dealers, although undertaking not to sell to non-approved dealers, remain free to sell not only within their own area, but also anywhere else in the Common Market, to other BMW dealers, to consumers or to their agents.

5. In 1975 the prices of new BMW cars were appreciably lower in Belgium than in other Member States, by reason, at least in part, of the price-freezing measures imposed by the Belgian Government between 5 May and 1 November 1975.

6. In several letters addressed to BMW Belgium starting in January 1975, BMW Munich informed its Belgian subsidiary of the re-imports of new BMW vehicles into the Federal Republic of Germany. It asked BMW Belgium to send circulars to its dealers drawing their attention to BMW's distribution policy.

7. On 4 July 1975 it addressed to all the Belgian BMW dealers a circular in which it informed them that a number of dealers had been selling BMW cars in the Netherlands and the Federal Republic of Germany, and reminding them that the BMW agreement requires each dealer to refrain from selling any BMW product to dealers who have not been appointed for the sale of BMW goods.

8. As the re-exports from Belgium none the less continued BMW Belgium sent a number of letters of Belgian dealers concerning those exports. Referring to one of those letters, BMW Munich wrote to BMW Belgium on 22 July 1975, in the following terms

9. On 29 September 1975 all the Belgian BMW dealers were sent two circulars on the basis of which the Commission considered that Article 85 (1) had been infringed. The first of those circulars, issued by BMW Belgium itself, stated inter alia:

10. The second circular, also dated 29 September 1975, containing the statement of the eight members comprising the Belgian BMW Dealers' Advisory Committee, under the heading Export sales expressed the unanimous support of the members of the Committee for the statements made by BMW Belgium in its circular of 29 September 1975 and continued as follows:

11. Having been informed of the steps taken by BMW Belgium, BMW Munich reacted with a letter of 17 October 1975 in which, after congratulating BMW Belgium on its action with regard to sales to non-approved dealers, it continued in the following terms:

12. BMW Belgium waited four months before acting upon those instructions by sending a further circular on 20 February 1976 to all the Belgian BMW distributors, in which it stated, inter alia:

13. In the meantime, on 20 October and 19 November 1975 the Auto-mobilimporte C. Heuer and MGH Motorgesellschaft mbH undertakings, established in the Federal Republic of Germany, had informed the Commission that approved dealers belonging to BMW Belgium's distribution network were no longer disposed to deliver them certain models of new BMW vehicles for re-export to the Federal Republic of Germany. That information was given in the context of, and for the purpose of, the possible application of Article 3 (2) (b) of Regulation No 17/62 of the Council (Official Journal, English Special Edition 1959-1962, p. 87).

14. On 3 November 1976 the Commission decided to initiate, against BMW Belgium and the Belgian BMW dealers who had signed the letter attached to its circular of 29 September 1975, the procedure which ended in the adoption of the disputed decision.

15. According to that decision the aforesaid circulars of 29 September 1975 made clear the intention of BMW Belgium and of the members of the Advisory Committee to stop all exports of new BMW vehicles from Belgium. Article 1 of the decision concludes therefrom that BMW Belgium, the members of the aforesaid Advisory Committee and the Belgian BMW dealers who signed the letter attached to the circular from BMW Belgium of29 September 1975, did, on the basis of the said circulars, commit, intentionally in the case of BMW Belgium and of the members of the Advisory Committee, and negligently in the case of the aforesaid Belgian BMW dealers, an infringement of the provisions of Article 85 (1) of the EEC Treaty by agreeing on the general export prohibition and by maintaining that prohibition from 29 September 1975 to 20 February 1976. The disputed decision specifies that by agreeing on such a prohibition the applicants participated in agreements which might affect trade between Member States and which had as their object the prevention, restriction and distortion to an appreciable extent of competition within the Common Market, within the meaning of the aforesaid Article 85 (1).

16. The said decision also declares that as no notification of such agreements has been made in accordance with Article 4 (1) of Regulation No 17/62 of the Council, Article 15 (5) of that regulation is not applicable and the decision imposes, by Article 2 thereof, fines of varying amounts for the infringement in question.

(1). The infringement of Article 85 (1) of the EEC Treaty

17. (a) BMW Belgium raises first the question whether the procedure relating to the disputed decision, initiated as a result of complaints submitted by Heuer and MGH, constitutes a valid legal basis for the said decision. In that regard it submits that, as MGH and Heuer did not act as agents for consumers, they were not entitled to supplies of new BMW cars. Therefore, it submits, there is no reason to ask whether those undertakings really had in this case a legitimate interest, within the meaning of Article 3 (2) (b) of Regulation No 17/62, in the initiation of the procedure in question by the Commission.

18. Under Article 3 (1) of the said regulation the procedure relating to decisions which require undertakings or associations of undertakings to bring to an end an infringement of Articles 85 and 86 of the Treaty may be opened where the Commission, upon application or upon its own initiative, finds that there is such an infringement. In that case it matters little whether Heuer and MGH had in this case a legitimate interest in requesting the opening of the procedure, as the Commission was entitled to do so upon its own initiative.

19. (b) The applicants also challenge the legality of the disputed decision by submitting that a thorough examination both of the text of the circulars of 29 September 1975 and of the general context in which those circulars are set and of the conduct of the parties shows that the sole object of the said circulars was to remind the Belgian BMW dealers of the prohibition on selling to non-approved dealers, occurring in clause 1 of the dealership agreement, and that it was precisely in that sense that they were understood by the dealers who signed the letter attached to the circular from BMW Belgium.

20. Although it is true that the circular from BMW Belgium of 29 September 1975 begins with a reminder of the terms of the dealership agreement concerning sales to non-approved dealers, that does not alter the fact that that reminder is not accompanied by any distinction between the case of non-approved dealers who, acting on their own account, are not entitled to supplies from Belgian BMW dealers and the case of dealers who, acting as agents for consumers, are entitled to such supplies by virtue of the selective distribution system notified to the Commission. Moreover, the text of that circular taken as a whole, and the text of the circular of the same date from the Advisory Committee, refer to export operations in general.

21. Thus paragraph 3 of the circular from BMW Belgium, indicating the foreseeable reaction of BMW Munich to resales of new BMW cars from Belgium to the Federal Republic of Germany and the Netherlands, refers to circumstances which have nothing at all to do with the capacity of the purchaser of the products exported. Similarly, paragraph 4 of that circular, listing the disadvantages arising from re-exports outside Belgium, refers to difficulties — such as the absence of the continued relationship with the purchaser, the impossibility of selling him parts or accessories, etc. — which apply to all sales abroad, whatever may be the capacity of the purchaser, approved dealer or not and, in the latter case, agent or not of the consumer.

22. Finally, the statement contained in the circular from BMW Belgium that our view is therefore that in the present situation there is only one solution: henceforth no BMW dealer in Belgium will sell cars outside Belgium or to firms who propose to export them and the statement occurring in the circular from the Advisory Committee, in which the only advice given was to effect no more sales outside Belgium, express unequivocally the intention to stop all supplies to foreign destinations, whatever may be the capacity of the purchaser, approved dealer or not, consumer or consumer's agent.

23. The legal and factual context in which the circulars of 29 September 1975 are set confirms moreover that, by sending the said circulars to the Belgian BMW dealers, BMW Belgium and the Advisory Committee exceeded the terms of the BMW dealership agreement as regards resales to non-approved dealers. In this regard it is sufficient to compare the terms of those circulars with the reservations expressed by BMW Munich in its communications of 22 July 1975 and 17 October 1975 addressed to BMW Belgium. In the first of its communications, in which reference is made to a letter of 9 July 1975 sent by BMW Belgium to a Belgian dealer on the subject of re-exports of new vehicles, BMW Munich expressly recalls the dealership agreement authorized by the Commission, under which only deliveries to independent dealers are prohibited. In the second communication, subsequent to the circulars of 29 September 1975 and sent to BMW Belgium as a result of those circulars, BMW Munich reverts to the conditions of the dealership agreement, specifically stating that no steps may be taken against the Belgian dealers simply because they have re-exported cars.

24. The argument that BMW Belgium, being a wholly-owned subsidiary of BMW Munich, could not have pursued an aim different from that prescribed by the parent company cannot in this case usefully contribute to the in- terpretation of the circulars in question. The bond of economic dependence existing between a parent company and the subsidiary does not preclude a divergence in conduct or even a divergence in interests between the two companies. The reservations expressed by BMW Munich in the aforesaid communications, particularly in that of 17 October 1975, confirm moreover that the point of view expressed in those circulars, taking into account particularly the wording thereof, called for clarification from the parent company.

25. Having regard to that warning, BMW Belgium should have become aware of the urgent need to amend its circular of 29 September 1975. In fact it was not until 20 February 1976, after four months' delay, that BMW Belgium sent a new circular to all its dealers, stating that its circular of 29 September 1975 should be regarded as null and void in so far as it might be construed as an export prohibition.

26. Moreover, the correspondence between BMW Belgium and some of its dealers during the period from 29 September 1975 to 20 February 1976 does not reveal any factor suggesting that the circulars of 29 September 1975 were conceived by their authors as imposing an export prohibition applying only to non-approved dealers. The individual letters sent by BMW Belgium in the course of that correspondence to some Belgian dealers engendered confusion between permitted activities and prohibited activities and were sometimes worded in such a way as to give the impression that no export sale, even to consumers or their agents, could be allowed.

27. Finally the fact, relied on by the applicants, that in spite of these circulars the Belgian dealers continued to sell new BMW vehicles abroad after 29 September 1975, is not decisive. The information supplied by BMW Belgium in response to a question from the Court concerns only 28 cases out of the 59 cases of re-exportation of which BMW Belgium had knowledge between October 1975 and February 1976.

28. For all those reasons, therefore, it must be concluded that the circular from BMW Belgium of 29 September 1975 and the circular from the Belgian Dealers' Advisory Committee of the same date, considered according to their tenor and in relation to the legal and factual context in which they are set and in relation to the conduct of the parties, indicate an intention to put an end to all exports of new BMW vehicles from Belgium.

29. In sending those circulars to all the Belgian dealers, BMW Belgium played the leading role in the conclusion with those dealers of an agreement designed to halt such exports completely.

30. The Belgian dealers, including the members of the Advisory Committee who gave their consent to the circular from BMW Belgium of 29 September 1975 did, by virtue of that consent, subscribe to such an agreement, the detailed content of which is determined by the said circulars.

31. Having regard to their content and their scope, the above-mentioned agreements had as their object the prevention, restriction or distortion to an appreciable extent of competition within the Common Market in respect of a product of a particular make.

32. By attempting to partition the markets, as regards the export of products of a particular make, those agreements were also capable of affecting trade between the Member States within the meaning of Article 85 (1) of the Treaty.

33. Therefore it follows that BMW Belgium, the members of the Advisory Committee and the Belgian dealers who signed the circular of 29 September 1975 did, on the basis of the circulars in question, subscribe to agreements incompatible with the Common Market and prohibited by the said Article 85 (1).

34. As the agreements were maintained in force until the date of the circular from BMW Belgium of 20 February 1976, the applicants were guilty of an infringement, lasting until that date, of the provisions of the aforesaid article.

35. BMW Belgium and the members of the Advisory Committee, authors of the circular of 29 September 1975, intentionally addressed those circulars to the Belgian dealers, thereby inviting them to subscribe to an agreement whereby they undertook not to re-export the products in question. In so doing, BMW Belgium and the members of the Advisory Committee thus committed the said infringement intentionally.

36. As for the participation in that infringement of the Belgian dealers who signed the circular of 29 September 1975 from BMW Belgium, although it is true that the bonds of economic dependence existing between them and BMW Belgium were liable to affect their freedom of initiative and decision, the existence of those bonds did not make it impossible to refuse to consent to the agreement which was proposed to them, as is shown by the considerable number of dealers who refrained from doing so.

37. Having regard to the terms of the dealership agreement concluded with BMW Belgium, it cannot be accepted that the Belgian BMW dealers did not -understand that the circular from BMW Belgium of 29 September 1975, considered according to its text and in the light of the warning contained in the circular of the same date from the Advisory Committee, as requiring the cessation of all sales abroad, or that they were unaware of the fact that by giving their consent in writing to the proposal of BMW Belgium they were agreeing to an export prohibition which went beyond the selective distribution conditions of BMW Munich.

38. For those reasons the applications are unfounded, in so far as they refer to Article 1 of the disputed decision.

(2). The fines

39. On account of the infringement referred to in Article 1, Article 2 of the disputed decision imposes fines on BMW Belgium and on the 47 Belgian BMW dealers who took part in that infringement by virtue of Article 15 (2) (a) of Regulation No 17/62 of the Council.

40. It is clear from the disputed decision that in imposing those fines the Commission considered, on the one hand, that BMW Belgium and the members of the Belgian Dealers' Advisory Committee were aware that in agreeing a general export prohibition they were infringing Article 85 (1) of the EEC Treaty, and, on the other hand, that the Belgian BMW dealers who signed the letter attached to the circular from BMW Belgium of 29 September 1975 were guilty of negligence.

41. (i) BMW Belgium claims first that, in so far as the circular of 29 September 1975 merely reminded dealers of the prohibition on sales to non-approved dealers, laid down in the clause 1 of the dealership agreement notified to the Commission, Article 2 of the disputed decision was in infringement of Article 15 (5) (a) of Regulation No 17/62, in so far as that provision imposes a fine on BMW Belgium on account of a clause which had been notified.

42. As the interpretation proposed by BMW of its circular of 29 September 1975 has been rejected on the grounds set out above, that argument cannot be upheld.

43. BMW Belgium then submits that, even if there was an infringement of Article 85 (1) of the Treaty it did not commit that infringement intentionally, its true intention being solely to stop sales to non-approved dealers. The alleged proof of that is, inter alia, the fact that it took the precaution of obtaining Counsel's advice on the text of its circular of 29 September 1975.

44. It is clear from the foregoing that the circular from BMW Belgium of 29 September 1975, having regard to its tenor and to the legal and factual context in which it is set and to the conduct of the parties, clearly expresses an intention to stop all exports of new BMW vehicles from Belgium, irrespective of the capacity of the purchasers, be they non-approved dealers, consumers or agents acting on behalf of consumers.

45. BMW Belgium further submits that the duration of the infringement in question could have been considerably shortened if the Commission had notified it of its objections to the circular of 29 September 1975.

46. Finally BMW Belgium alleges that the amount of the fine in question is too high, having regard to the short period between the issue of the circular of 29 September 1975 and of the circular of 20 February 1976 and to the fact that the infringement had no real effect on the trade between Belgium and the other Member States of the Community, other than to. make more difficult the purchase of new BMW vehicles in Belgium by non-approved dealers, that is to say by firms which in any case could not legitimately claim to be entitled to such supplies.

47. As to the first point, it is sufficient to note that the Commission expressly took account, in the sixth subparagraph of paragraph 26 of its decision, of the duration of the infringement in fixing the amount of the fine imposed on BMW and on the eight members of the Advisory Committee and that nothing in the arguments relied on by those concerned shows that that amount was disproportionate in relation to their turnovers.

48. As for the second point, it is to be noted that the applicant itself recognizes that the number of re-exports of new BMW vehicles from Belgium and other Member States was, particularly from August 1975, sufficiently large to induce BMW Belgium to intervene more and more frequently in the affairs of its Belgian distribution network, to the point where it considered it necessary to send out and have distributed throughout that network the circulars of 29 September 1975 which are at issue.

49. (ii) The members of the Belgian Dealers' Advisory Committee also submit that they were wrongly accused in the disputed decision of having intentionally infringed the provisions of Article 85 (1) of the Treaty and that it was wrong to impose a heavier fine on them than on the other dealers simply because they were members of the Advisory Committee at the time. In that regard they emphasize that, although they were elected when they put themselves forward, none the less it was only by chance that the dispute now before the Court occurred during the period in which they were members of the said committee.

50. The members of the Advisory Committee further allege that the circular of 29 September 1975 which they addressed to all the Belgian dealers was drafted by BMW Belgium and was presented to them for signature on the occasion of a meeting convened for that purpose. Thus they conclude that the disputed decision should, as regards also the fine imposed on them, be annulled on the grounds that it is insufficiently and unclearly reasoned, as well as being contrary to Article 15 of Regulation No 17/62 of the Council.

51. The eight members of the Advisory Committee must have known that their capacity as spokesmen for the Belgian dealers placed greater responsibility on them with regard to those dealers, and that their intervention with the Belgian distributors could only confer added weight to the proposals of BMW Belgium which they supported with their authority.

52. (iii) Finally the other Belgian BMW dealers question whether the imposition of fines on them was well-founded, claiming that they never intended to subscribe to a general prohibition on re-export and that their economic dependence on BMW Belgium was of such a nature as substantially to vitiate their consent to the aforesaid circular. Further they submit that the fines are all the more unjustified in their case because in all its previous decisions whereby fines were imposed for infringements of Article 85 (1) of the Treaty the Commission had never penalized dealers but only those granting the dealership. Thus it is claimed that by treating the Belgian BMW dealers, apparently without valid reason, more severely than in the past it had treated dealers placed in comparable situations, the Commission infringed the principle of non-discrimination to the detriment of those dealers.

53. In this case it is clear from the foregoing that the dealers in question committed an infringement of the provisions of Article 85 (1) of the Treaty. The fact that in similar previous cases the Commission did not consider that there was reason to impose fines on resellers as well cannot deprive it of such a power expressly granted to it by the said regulation, where the conditions required for the exercise thereof are satisfied.

54. As regards the amount of the fines, even if it was a question of an infringement committed intentionally, the Commission carefully assessed the gravity of the infringements in relation to the economic dependence of the dealers on BMW Belgium.

55. It follows that the applicants are also unfounded in so far as they concern Article 2 of the disputed decision.

56. For those reasons the present applications must be dismissed in their entirety.

57. Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.

58. Since the applicants have failed in their submissions they must be ordered to pay the costs. Each applicant shall pay a part of the costs of the Commission corresponding to the amount of the fine imposed upon it expressed as a percentage of the total fines.

On those grounds, THE COURT hereby:

1 Dismisses the applications as unfounded.

2 Orders the applicants to pay the costs. Each applicant shall pay a part of the costs of the Commission corresponding to the amount of the fine imposed upon it expressed as a percentage of the total fines.