JUDGMENT OF 6. 3. 1979 — CASE 92/78 SIMMENTHAL v COMMISSION

In Case 92/78

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

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Written procedure

III — Conclusions of the parties

IV — Submissions and arguments of the parties during the written procedure

A — Admissibility

B — Substance

V — Oral procedure

Decision

The category of proceedings to which the application belongs and its object

Admissibility of the application and the plea of illegality

Substance

The submission that the Commission has omitted to justify its introduction of the system known as linking

The submission that the category of beneficiaries has been excessively enlarged

The submission that the system introduced by the Commission has an effect on the level of the prices of meat sold by intervention agencies to reduce stocks in the context of the linking system

Submissions based on certain features of the linking system relating to the quantities involved

The amount of publicity given to the tendering procedure

Costs

I —. Facts and procedure

(a). The Council, on a proposal from the Commission, before 1 December each year, shall draw up an estimate of meat which may be imported under suspension of the levy. This estimate shall take account, on the one hand, of the expected Community supplies of meat of a quality and type of cut suitable for industrial use, and, on the other, of industrial needs (new Article 14 (2)).

(b). The Commission shall determine each quarter the quantities of the said meat which may be imponed under total suspension of the levy and shall adopt detailed rules for the application of Article 14 and particularly those concerning control of the end use of imported meat (new Article 14 (4)).

(c). Importation under total suspension of the levy shall be made conditional on production of an import licence issued for a quantity falling within the limits laid down each quarter; it may be made conditional, as far as necessary, on production of a purchase contract for frozen meat held by an intervention agency (new Article 14 (3)).

II —. Written procedure

III —. Conclusions of the parties

IV —. Submissions and arguments of the parties during the written procedure

A —. Admissibility

B —. Substance

(a). The contested decision is vitiated because it infringes an essential procedural requirement in that it does not state any. of the reasons upon which it is based.

(b). Commission Regulation No 2900/77 and in particular Article 4 thereof, and the General notice of periodic invitations to tender of 13 January 1978, and especially section 4 thereof, are in breach of the principle that a public service must be impartial and are vitiated for lack of any statement of reasons.

(c). Neither Regulation No 2900/77 nor the General notice of periodic invitations to tender contains any indication of the reasons which led the Commission to apply the procedure known as linking (couplage or jumelage) to imports of beef and veal with total suspension of the levy for 1978. Article 14 (3) (b) of Regulation No 805/68, as amended by Regulation No 425/77, only provides for the possibility; since the decision whether or not to apply this procedure falls wholly within the Commission's discretion the latter was under an obligation to give, if only in a few words, the reasons which prompted it to have recourse to that procedure. It did not do so.

(d). The detailed rules for the application of the special import arrangements adopted by the Commission in its Regulations No 985/77, No 1384/77 and No 2901/77 are in breach of the principles and contrary to the objectives of Article 14 of the basic Regulation No 805/68 of the Council.

(e). Regulation No 2900/77, and especially Articles 3 and 5 thereof, contains discrimination between processors themselves. Entitlement to participate in the tendering system is based on a fixed quantitative restriction of the individual applications and on a general limitation of the tenders without giving any consideration either limitation of the tenders without giving any consideration either to the kind of processing envisaged or the size of the industries or the previous pattern of trade; for this reason it in fact penalizes, in a way which is unjustified, processors operating on a large scale and those who only produce a modest added value.

(f). The linking system, having regard to the manner in which it has been provided for in Regulations No 2900/77 and No 2901/77, is not in keeping with the spirit and the objectives of the special import arrangements and may be vitiated on the ground of misuse of powers and is in breach of the principle of proportionality.

(a). The contested decision contains all the requisite factors for its justification, which are based on the regulations underlying it.

(b). As far as concerns the objections that Regulation No 2900/77 does not state the reasons upon which it is based and is in breach of the principle of proportionality it should to begin with be borne in mind, with regard to the first objection, that the formal decision to initiate the linking procedure is contained in Article 1 of the regulation itself.

(c). The objections that Regulations No 585/77 and No 2900/77 are in breach of the principles upon which the special import system is based and discriminate between traders is tantamount to saying that, when the Commission adopted the provisions which are criticized, it should have excluded as participants in the invitations to tender any middlemen, that is to say the entire category of operators which makes up the trade. Now by far the greater part of the processing industries has to have recourse to commercial middlemen. To deprive the latter of the opportunity of importing would damage undertakings which normally make use of their services.

(d). With reference to the objections that Regulations No 2900/77 and No 2901/77 represent a misuse of the Commission's powers and are in breach of the principle of proportionality it should first of all be borne in mind that Regulation No 805/68 expressly provides that there must or may be linking and that the Commission has merely applied these provisions.

(e). To claim that Regulation No 2900/77 is in breach of the principle that there must be no discrimination is astounding.

(f). The fact that the Commission is aware of the names of the tenderers and of the particulars of their tenders is solely due to its concern to be able to find out whether one undertaking has submitted several tenders in the different Member States, since such a practice is specifically forbidden by Article 3 (5) of Regulation No 2900/77. This prohibition, like the restricting of individual tenders to a maximum of 100 tonnes, is prompted by the need to ensure that the quantities available are apportioned fairly among all the processing industries which are interested.

V —. Oral procedure

1. The applicant by an application lodged on 13 April 1978 pursuant to the second paragraph of Article 173 of the EEC Treaty requests the Court in its finally amended statement of claim to annul Commission Decision No 78/258 of 15 February 1978 fixing the minimum selling prices for frozen beef put up for sale by the intervention agencies in accordance with Regulation (EEC) No 2900/77 and specifying the quantities of frozen beef for processing which may be imported under special terms in the first quarter of 1978 (Official Journal L 69, p. 36).

2. In support of its application the applicant has relied on Article 184 of the EEC Treaty and invoked the inapplicability of the following measures which constitute the legal basis of the decision which is challenged.

3. It should in the first place be borne in mind that Article 14 of Regulation No 805/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English Special Edition 1968 (I), p. 192) had provided in Article 14 thereof for special import terms consisting of the suspension of the levy for the benefit of certain frozen meat intended for processing, namely:

4. These rules from which the preserved food industry derives very great benefit were later made subject to more restrictive conditions by Council Regulation No 425/77 of 14 February 1977 (Official Journal L 61, p. 1).

5. The second recital in the preamble to that regulation, after having drawn attention to the fact that the previous rules were justified because there was a shortage accompanied by a rise in prices, states that this situation has since then degenerated into a market price slump made worse by massive imports.

6. The fifth recital states that certain special systems should be adapted so that account may be taken in annual estimates of both the supplies available to the Community and the Community's needs.

7. To this end Article 3 of Regulation No 425/77 amends, inter alia, Article 14 of Regulation No 805/68 in that, as provided for in Article 14 (1) (a) of the new version of that article, the total suspension of the levy on meat intended for the manufacture of preserved food, which does not contain characteristic components other than beef and jelly is retained on the understanding however that these imports may themselves henceforth also be subject to the linking system.

8. With this in mind the new Article 14 (3) (b) provides that as far as concerns all the frozen meat intended for processing and defined in the relevant tariff headings importation under total suspension of the levy may be made conditional, as far as necessary, on production of a purchase contract for frozen meat held by an intervention agency.

9. The new Article 14 (4) provides that detailed rules for the application of the said article are to be settled by the Commission in accordance with the Management Committee procedure.

10. It was on the basis of this procedure that the Commission adopted the regulations laying down the detailed rules for the application of the system as provided for in the new Article 14 of Regulation No 805/68, namely Regulation No 585/77 which was in turn amended and supplemented by Regulation No 1384/77 of 27 June 1977 (Official Journal L 157, p. 16), laying down the rules for issuing import and export licences provided for by Article 14 (3) (a) and also Regulations No 2900/77 and No 2901/77 of 22 December 1977 which lay down, in various ways, the detailed rules for the application of the system known as linking.

11. The General notice of periodic invitations to tender of 13 January 1978 and a complete set of specific invitations to tender for the first quarter of 1978 published on the same date including Notice of invitation to tender No It P 1 relating to Italy have been issued pursuant to those regulations.

12. Out of all these regulations the following provisions have special relevance in these proceedings:

13. The applicant submitted to AIMA on 20 January 1978 a tender for the purchase of 100 tonnes of frozen beef offering a price of Lit 1124000 per tonne (1091.26 units of account per tonne).

14. AIMA forwarded this tender forthwith to the Commission together with all the other tenders collected in Italy.

15. The Commission having considered all the tenders forwarded by the intervention agencies of the various Member States adopted Commission Decision No 78/258 of 15 February 1978 addressed to the Member States. Its purpose is to fix the minimum selling prices applicable in the different Member States, the minimum selling price for Italy as far as concerns the category in which the applicant is interested being fixed at 1601 units of account per tonne.

16. Subsequent to this decision AIMA informed the applicant by a letter of 23 February 1978 that its tender had been rejected because it had no chance of being considered when the contracts were awarded.

17. This latter communication has not been the subject-matter of any action before the Italian courts since the applicant has brought his application in respect of Commission Decision No 78/258 directly against the Commission.

18. The Commission admits that, although the contested decision was addressed to the Member States, it is of direct and individual concern to the applicant in that, by excluding all tenders tendering prices lower than the minimum price, it also provided that the tender submitted by the applicant would be rejected because the price tendered was below that price.

19. On the other hand the Commission denies that the application is admissible on the ground that the applicant does not have any interest in instituting proceedings.

20. In fact the Commission takes the view that the annulment of the decision cannot bestow upon the applicant the advantage which it is seeking now that the contracts in accordance with the invitation to tender have been concluded, the licences have been issued and the imports have been effected, while the tenders which have not been accepted are henceforth non-existent.

21. Since the applicant has elected to apply to this Court and directly challenge the Commission decision, and not to apply to the national courts and there challenge the decision of refusal addressed to it individually by the Italian intervention agency, any decision as to the admissibility of the application is concerned with the division of jurisdiction between this Court and the national courts.

22. Consequently it is necessary for the Court to consider of its own motion the question whether the application is admissible viewed as a whole and not just from the standpoint of the objection raised by the Commission.

23. The Commission adopted the decision at issue after the national intervention agencies had forwarded to it the tenders which the latter had received in answer to the invitations to tender issued by the notices of 13 January 1978.

24. The Commission therefore took into consideration the applicant's tender together with the other tenders submitted within the whole of the Community with a view to fixing a price which was to ensure that a predetermined quantity of meat held by the intervention agencies was disposed of at the most profitable prices for them.

25. Thus, although the Commission decision was adopted in the form of a decision addressed to the Member States and through them to the intervention agencies, it has directly determined the fate, be it favourable or unfavourable, of each of the tenders submitted in answer to the notices of invitations to tender of 13 January 1978.

26. Since the invitation to tender in question is in fact one which covers the whole of the Community and was decided upon by the Commission alone — the intervention agencies only acting as agents for the purpose of collecting the tenders and notifying the participants of the result — it cannot be denied that the Commission decision is of direct and individual concern to the applicant and that its application is therefore admissible.

27. It must however be stressed that the subject-matter of the application to the Court must be restricted to the effect which the contested decision may have been able to have on all those to whom it was addressed and who were directly and individually concerned by it.

28. It is in fact apparent from the relevant regulations and from the general notice of invitations to tender that it is the duty of the intervention agencies, in addition to accepting and rejecting tenders within the scope of the tendering procedure, to solve, by using their own discretion, a certain number of subsidiary questions, directly connected with the system of invitations to tender or with the conclusion and performance of the contracts of sale.

29. In so far as disputes may arise as a result of the intervention agencies carrying out appropriate duties of this kind the national courts alone have jurisdiction as Section 12 Final provisions of the General notice of invitations to tender correctly states.

30. This jurisdiction is also conferred upon national courts should the intervention agencies disregard any Community legal provisions, since the responsibilities assumed by the institutions of the Community do not cover the disputes which might arise out of such actions.

31. Contrary to the Commission's submissions it cannot be denied that the applicant has an interest in the application which it has brought.

32. Even though the contested decision has already been fully implemented for the benefit of the other tenderers participating in the same invitation to tender the applicant retains an interest in the annulment of this decision; such interest consists either in its being restored sufficiently by the Commission to its original position or in inducing the Commission to make suitable amendments in the future to the system of invitations to tender if the latter is found to be incompatible with certain legal requirements.

33. The plea of inadmissibility which the Commission has raised must therefore be rejected.

34. While the applicant formally challenges Commission Decision No 78/258 it has at the same time criticized, in reliance on Article 184 of the EEC Treaty, certain aspects of the linking system in the form in which it has been implemented pursuant to the new Article 14 of Regulation No 805/68, by Regulation No 2900/77 and No 2901/77 and also by the notices of invitations to tender of 13 January 1978.

35. Article 184 reads: Notwithstanding the expiry of the period laid down in the third paragraph of Article 173, any party may, in proceedings in which a regulation of the Council or the Commission is in issue, plead the grounds specified in the first paragraph of Article 173, in order to invoke before the Court of Justice the inapplicability of that regulation.

36. There is no doubt that this provision enables the applicant to challenge indirectly during the proceedings, with a view to obtaining the annulment of the contested decision, the validity of the measures laid down by regulation which form the legal basis of the latter.

37. On the other hand there are gounds for questioning whether Article 184 applies to the notices of invitations to tender of 13 January 1978 when according to its wording it only provides for the calling in question of regulations.

38. These notices are general acts which determine in advance and objectively the rights and obligations of the traders who wish to participate in the invitations to tender which these notices make public.

39. As the Court in its judgment of 12 June 1958 in Case 15/57, Compagnie des Hauts Fourneaux de Chasse v High Authority of the European Coal and Steel Community [1957 and 1958] ECR 211, and in its judgment of 13 June 1956 in Case 9/56, Meroni & Co., Industrie Metallurgische S.p.A. v High Authority of the European Coal and Steel Community [1957 and 1958] ECR 133, has already held in connexion with Article 36 of the ECSC Treaty, Article 184 of the EEC Treaty gives expression to a general principle conferring upon any party to proceedings the right to challenge, for the purpose of obtaining the annulment of a decision of direct and individual concern to that party, the validity of previous acts of the institutions which form the legal basis of the decision which is being attacked, if that party was not entitled under Article 173 of the Treaty to bring a direct action challenging those acts by which it was thus affected without having been in a position to ask that they be declared void.

40. The field of application of the said article must therefore include acts of the institutions which, although they are not in the form of a regulation, nevertheless produce similar effects and on those grounds may not be challenged under Article 173 by natural or legal persons other than Community institutions and Member States.

41. This wide interpretation of Article 184 derives from the need to provide those persons who are precluded by the second paragraph of Article 173 from instituting proceedings directly in respect of general acts with the benefit of a judicial review of them at the time when they are affected by implementing decisions which are of direct and individual concern to them.

42. The notices of invitations to tender of 13 January 1978 in respect of which the applicant was unable to initiate proceedings are a case in point, seeing that only the decision taken in consequence of the tender which it had submitted in answer to a specific invitation to tender could be of direct and individual concern to it.

43. There are therefore good grounds for declaring that the applicant's challenge during the proceedings under Article 184, which relates not only to the above-mentioned regulations but also to the notices of invitations to tender of 13 January 1978, is admissible, although the latter are not in the strict sense measures laid down by regulation.

44. The applicant, supported by the Government of the Italian Republic as intervener, in order to show that the contested decision is a nullity puts forward various submissions intended to establish, on the one hand, that there has been an infringement of Article 14 of Regulation No 425/77 and, on the other hand, that some of the acts constituting the subject-matter of the application are vitiated by defects as to form.

45. The submissions on the substance of the application may be summarized by the objection that when the Commission made the arrangements for the system known as linking it misused its powers having regard to the rules laid down in the new Article 14 of the basic regulation.

46. In particular the applicant submits that

47. The applicant's submissions dealing with procedural requirements relate, on the one hand, to a failure to give a statement of the reasons upon which several of the contested acts were based and, on the other hand, to the fact that the tenders submitted in answer to the invitation to tender organized pursuant to the provisions which are at issue were not anonymous.

48. As far as concerns the failure to give a statement of reasons an analysis of the objections shows that the applicant's submission is in fact directed against the Commission's actual justification of its introduction of the linking system, in the light of the provisions of the basic regulation, and the failure to set out the economic reasons which justify the fixing by Commission Decision No 78/258 of the minimum price, which was responsible for the applicant's not qualifying for the award of a contract.

49. These objections will be considered in connexion with the substance of the case.

50. The applicant submits that none of the Commission's acts — that is to say neither Regulation No 2900/77 which lays down the rules for the linking system nor the General notice of periodic invitations to tender of 13 January 1978 — contains any justification for introducing into the sector of commercial operations under consideration the linking system, which was regarded simply as an option in the new Article 14 of the basic regulation.

51. It is claimed in this connexion that the reasons on which the measures adopted by the Commission were based have not been duly stated as required by Article 190 of the Treaty nor are those measures intrinsically justified.

52. The Commission takes the view that Regulation No 2900/77 has put in concrete form an option expressly provided for by the new Article 14 (3) (b) of Regulation No 805/68 with the result that the statement of the reasons on which that measure was based are exactly the same as the reasons which led the Council to anticipate this option taking into account the market conditons at the period under consideration.

53. When the Council amended Article 14 of Regulation No 805/68 by Regulation No 425/77 it laid stress, in the second and fifth recitals in the preamble to the latter regulation, on the fact that the main feature of the situation on the beef and veal market at that time was a market price slump, made worse by massive imports, with the result that it was necessary to adapt certain special systems so that account might be taken of both the supplies available to the Community and the Community's needs.

54. It is for the purpose of dealing with this situation that the new Article 14 (3) (b) of Regulation No 805/68 has provided that in future imports of beef and veal under suspension of the levy, required for the manufacture of pure preserved beef, may be made conditional on production of a purchase contract for frozen meat held by an intervention agency.

55. As the Commission has with good reason explained, the object of this system is to achieve a reasonable balance between, on the one hand, the interest of the processing industry in importing beef and veal at world market prices and, on the other hand, the need to reduce the pressure on the market caused by the stocks held by the intervention agencies which had accumulated within the Community.

56. When the Commission exercised the enabling powers conferred upon it by Regulation No 425/77 immediately after the entry into force of the new Article 14 of Regulation No 805/68 it did not have to justify once more the introduction of the linking system for the importation under suspension of the levy on meat intended for the manufacture of pure preserved beef seeing that the objective of this implementing measure is the same as the aim defined as clearly as anyone could wish in the Council's basic regulation.

57. Consequently the reference to the new Article 14 of Regulation No 805/68 in the second citation in the preamble to that regulation was sufficient justification for the linking system and an adequate statement of the reasons on which its introduction by Article 1 of Regulation No 2900/77 was based.

58. This submission must therefore be rejected.

59. The applicant blames the Commission for having by Regulation No 2901/77, Article 1 whereof adds a new Article 11a to Regulation No 585/77, permitted natural and legal persons, who for at least 12 months have been carrying on business in the meat and livestock sector and are officially registered in a Member State to import beef and veal under suspension of the levy.

60. The opportunity for importation provided by Regulation No 805/68 for the benefit of the processing industry has thereby been offered also to a large and indeterminate number of persons, the definition of whom is merely based on the fact that they are interested in some way or another in the meat and livestock sector without being in any way connected with processing.

61. This system of distribution, by limiting the tonnage of meat held by the intervention agencies which is subject to linking to a maximum of 100 tonnes per purchaser, pursuant to Article 3 (4) of Regulation No 2900/77, has led to many intermediaries coming into import transactions and to the creation for their benefit of profits which are unjustified and wholly unearned.

62. In the view of the Italian Government the wide definition of the category of beneficiaries of the system in question has meant that the latter no longer has any meaning and has thus reduced to nothing any kind of advantage which the Council regulation intended to give to the processing industries of the sector concerned.

63. The Commission defends itself with the submission that there was nothing to stop the meat processors from participating in the invitation to tender and from importing directly.

64. The wide definition of the category of beneficiaries by Regulation No 2900/77 takes account of the fact that many meat processors are in the habit of using commercial intermediaries for their imports.

65. Furthermore the Commission was under an obligation when it organized the system in question to abide by the principles of equal access to the goods and equality of treatment of all the potential purchasers.

66. Finally Article 11a of Regulation No 585/77, as worded in Regulation No 2901/77, expressly provided in paragraph (5) thereof that the importer shall undertake either to carry out himself the processing referred to in the basic regulation or have it carried out in his own responsibility.

67. It is clear from the new Article 14 (1) (a) of Regulation No 805/68 that the import system under total suspension of the levy is only intended to further the manufacture of preserved food of a specific kind.

68. It is not denied that the economic objective for which this special system was created by the original Article 14 of Regulation No 805/68 and kept in being, with new rules, by the amended version of the same provision, is to protect the competitiveness of the processing industry vis-à-vis competitors who are established outside the Community and as such enjoy the benefit of world market prices.

69. Although the aim of the new version of Article 14 is to make this branch of industry bear its share of the costs of marketing the surplus stocks of beef and veal in the Community by making linking obligatory, it is nevertheless a fact that the advantage derived from the total suspension of the levy on the quantities imported from non-member countries under this system must be reserved for the beneficiaries defined by the Council regulation.

70. It appears therefore that Regulation No 2901/77, which adds Article 11a to Regulation No 585/77, is inconsistent with the objective of the new Article 14 of the basic regulation in that it gives persons or undertakings unconnected with the sector of industry for which the benefit of the total suspension of the levy was to be reserved by the new Article 14 (1) (a) of Regulation No 805/68 the right to take advantage of this special import system.

71. The Commission's argument that it is under a duty to treat all potential importers equally cannot be upheld seeing that the specific aim of suspending the levy as provided for in Article 14 of Regulation No 805/68 is to give for particular economic reasons an advantage to one branch of the food industry.

72. Similarly the Commission's argument that many processors are obliged to have recourse to the import trade in order to meet their requirements is irrelevant in view of the fact that the minimum quantity accepted for the purchase of meat from the intervention agencies is 5 tonnes with the result that even small processing undertakings are able to take advantage of the system in question and moreover other legal steps could have met all the practical requirements in such cases without excessively enlarging the category of persons benefiting from the system.

73. It should therefore be held that the Commission has prevented the special system provided for in the new Article 14 (1) (a) of Regulation No 805/68 from attaining its objective by allowing an indeterminate number of intermediaries to take advantage of them.

74. The applicant, with the support of the Italian Government, also submits in this context that the operation of the linking mechanism has been distorted by the fact that the meat bought from the intervention agencies under this system may be used by the purchaser for any purpose he likes, since it is only the meat imported free of the levy which has to be used for the preserved food industry.

75. Thus intermediaries who do not carry on business in the processing sector are able to reap a substantial part of the benefit to be derived from the suspension of the levy on imported meat by transferring that benefit to the meat from the intervention agencies which they are free to dispose of as they like.

76. It cannot be denied that the absence of any condition that meat bought from the intervention agencies under the linking system is to be used for a specific purpose may in fact distort the functioning of the mechanism, since, as a result of a definition of the category of beneficiaries which is too wide, manipulations of the prices of this meat, which cannot be supervised, may be effected by persons who do not have a direct interest in the processing industry as far as concerns, on the one hand, meat imported free of the levy for processing and, on the other hand, meat from intervention stocks which can be disposed of without restriction and may be unsuited for such a use.

77. This freedom available to the buyer may in fact, in the particular circumstances, have prevented the suspension of the levy as provided for in Article 14 of Regulation No 805/68 from achieving the objective which that Council regulation sought to attain.

78. The applicant submits that the system of invitations to tender, taking into account the rules adopted by the Commission, has led to an excessively high price being fixed for meat sold by intervention agencies to reduce stocks which are to be bought under the linking system by purchasers wishing to benefit from importing with suspension of the levy meat originating in non-member countries.

79. Consequently the minimum price fixed by the Commission in the contested decision was considerably higher than the normal price of meat sold by intervention agencies to reduce stocks and therefore it in fact offset to an appreciable extent the advantage derived from suspending the levy as provided for in the Council regulation.

80. Thus the advantage provided for the processing industry has been switched for the benefit of an operation intended to bring about a reduction of stocks of meat held by the intervention agencies at a higher price than the price normally adopted for reducing stocks.

81. This argument has the support of the Italian Government which describes the results of the invitation to tender in question as absurd and points out that a system of invitations to tender which forces up prices cannot be reconciled with the objectives of the special system applicable to importing meat for processing with the suspension of the levy.

82. The Commission defends the system of invitations to tender by submitting that account had to be taken at the relevant time of a difficult situation on the Community market, characterized by surplus stocks of formidable dimensions, and that the aim of the linking system consists in finding a proper balance between meeting the requirements of the processing industries and taking into consideration the general market conditions within the Community, the mechanism of the invitation to tender being the best way of finding the point of equilibrium between these interests.

83. The introduction of the mechanism of an invitation to tender for quantities of meat which had to be bought by importers under the linking system cannot be challenged in itself, since this system is of such a kind as to guarantee, by means of the comparison of the tenders which those qualified to do so have submitted, the disposal of stocks held by intervention agencies on the best possible terms, at a particular point in time, taking into account the profitability of the undertakings concerned.

84. However it has to be acknowledged that in this particular case the normal operation of this mechanism has been upset as a result of extraneous factors, namely allowing competitors to participate in the invitation to tender whose interests differ from those of the processing industry to which, according to Article 14 of the basic regulation, the benefit of importing free of the levy was to be reserved, as has been shown above.

85. The fact that the minimum price fixed by the Commission on the basis of the outcome of the tenders submitted in answer to the invitation to tender reached a very much higher level than the normal price of meat sold by the intervention agencies to reduce stocks is due to these factors.

86. It must therefore be acknowledged that the objection by the applicant and the Italian Government that the abnormally high level of this price in fact offset partially an advantage that the Council had intended, for specific economic reasons, to give to the processing industry is justified.

87. Consequently the system organized by the Commission for the purpose of implementing the new Article 14 of Regulation No 805/68 must also be regarded for this reason as contrary to what this regulation anticipated.

88. The applicant also submits in this context that the fixing by the Commission of different minimum prices for the various Member States discriminates between traders depending on where their undertakings are situate.

89. Thus, as the Commission has with good reason explained, the object of fixing differing minimum prices as set out in the annex to the contested decision is to take account of the regional differences, for both economic and monetary reasons, between the markets of the various Member States so as to arrive at a fair apportionment of the quantities of meat made available under the special system introduced by Article 14 of Regulation No 805/68 between the processing industries of the different regions of the Community.

90. Therefore this objection must be rejected.

91. The applicant challenges certain features of the linking system relating to the quantities involved which features are contained in the various measures forming the basis of the contested decision.

92. In the applicant's view the Commission arbitrarily fixed in the annex to Regulation No 2901/77 the ratio between the quantities of intervention meat and of meat imported free of the levy and the manner in which it fixed in the notices of invitations to tender the tonnages of meat held by the intervention agencies released under the same system was equally arbitrary.

93. The applicant also criticizes the fact that Section 3 of the General notice of periodic invitations to tender lays down that the quantity for sale shall relate to a quantity, for each tenderer, of not less than five tonnes and not more than 100 tonnes whereas in its view the undertakings should have been allowed to submit tenders corresponding to their actual processing capacity.

94. Finally the applicant complains of the arbitrary way in which the quantities released by the invitation to tender of 13 January 1978 were determined.

95. Placing an upper limit on the quantities of intervention meat which may be bought by one successful tenderer cannot be criticized in so far as it enables a fair apportionment of the advantage provided for the benefit of the processing industry by Article 14 of Regulation No 805/68 to be made among the persons for whom that advantage was intended.

96. However it is apparent in this case that the upper limit chosen by the .Commission had the effect, on the one hand, of causing excessive fragmentation of the import quota and on the other hand of placing large processing undertakings in a particularly unfavourable position, owing to the fact that they could only benefit to a very small extent from the opportunities for importing under the linking system in the form in which the Commission has organized it.

97. Consequently the applicant's objections to the exceptionally low ceiling for the tonnage which may be purchased by any one successful tenderer appear to be in principle justified.

98. On the other hand it is proper to reject the applicant's objections to the proportion of meat imported free of the levy and of meat released by intervention agencies to reduce stocks under the linking system fixed by the Commission as well as the criticisms of the fixing of the tonnage for which tenders were invited for the quarter which was considered and of the apportionment of the latter between the two branches of the processing industry between which a distinction is drawn in the basic regulation.

99. In fact these steps remain within the discretion in economic matters which the Commission lawfully exercises in administering the market in beef and veal, taking into account the date in the Council estimate and the quarterly estimates prepared on this basis with a view to maintaining a reasonable balance between meeting the import requirements of the processing industry and the need to dispose of stocks of beef and veal originating in the Community.

100. The applicant has not produced any convincing evidence which would enable the Court to find that the Commission has exceeded the discretion which it has in the field.

101. The applicant's final complaint is that, contrary to what it considers to be the general practice in conducting invitations to tender, the Commission insisted on being given a list of all the tenders received, with the names of the tenderers, following the opening of the invitation to tender.

102. This, it is claimed was a breach of the principles that the procedure for selecting successful tenderers must be objective and jeopardize the independence of the body responsible for choosing to whom the contracts should be awarded.

103. Although it is true that maintaining anonymity is a precaution, taken under national as well as Community law, in certain kinds of invitations to tender and especially in those which involve the exercise of a discretion in relation to individual tenders, such a precaution seems to be unnecessary in the context of an invitation to tender such as the one in the case in point, the outcome of which is decided with reference to a price fixed by the Commission after an evaluation of all the tenders received, taking into account the need for a fair apportionment of the aggregate quantity among the undertakings of the different regions of the Community.

104. This must be more especially the case in these proceedings as the identification of the tenders by name is essential in order to prevent the same person submitting two or more tenders.

105. This objection must therefore be rejected.

106. For the foregoing reasons Commission Decision No 78/258 must be annulled — to the extent hereinafter stated — because it is in breach of a rule relating to the application of the Treaty, namely the new Article 14 of Regulation No 805/68, and because the Commission has misused its powers when laying down certain rules for the implementation of the linking system provided for by the regulation quoted.

107. For reasons of legal certainty and taking special account of the established rights of those participants in the invitation to tender whose tenders have been accepted having regard to the minimum price fixed by the Commission the annulment must be restricted to the specific decision to reject the applicant's tender which stemmed from Commission Decision No 78/258.

108. Consequently the Commission, pursuant to the first paragraph of Article 176 of the EEC Treaty, has to reconsider the particular situation of the applicant and adopt another decision affecting it through the competent intervention agency.

109. It will be for the Commission to adopt its decision with due regard to the grounds of this judgment and especially after taking account of the fact that the system introduced by the new Article 14 of Regulation No 805/68 may in no circumstances have the effect of ensuring that the processing industry buys intervention meat at a price lower than the price for reducing intervention agency stocks usually charged at the relevant terms in the case of meat of the qualities in question.

110. Therefore the applicant's tender should be rejected if it appears it was below that price level.

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

112. The defendant has failed in the main in its submissions.

113. By an order of 22 May 1978 the President of the Court rejected the application for the adoption of interim measures made by the applicant and reserved the costs of the application.

On those grounds, THE COURT hereby:

1 Annuls Commission Decision No 78/258 of 15 February 1978 fixing the minimum selling prices for frozen beef put up for sale by the intervention agencies in accordance with Regulation No 2900/77 and specifying the quantities of frozen beef for processing which may be imported under special terms in the first quarter of 1978 in so far as the decision affects the applicant;

2 Orders the Commission to pay the costs of the proceedings, including those of the intervener, except for the costs of the application for interim measures which are to be borne by the applicant.