Report for the Hearing delivered in Case 75/84

I — Summary of the facts

(1) Metro's commercial activities

(2) SABA's selective distribution system for consumer electronic products

(3) The Commission's decision of 21 December 1983

II — Written procedure and conclusions

Metro's application of 6 February 1984 was received at the Court Registry on 19 March 1984.

By order of 26 September 1984 the United Kingdom was granted leave to intervene in support of the applicant's submissions.

By an order of the same date SABA and the Government of the Feder.al Republic of Germany were granted leave to intervene in support of the defendant's submissions.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry. However, it requested trie parties to indicate which of the annexes to their pleadings were the most important.

By order of 22 May 1985 made under Article 95 (1) and (2) of the Rules of Procedure the Court assigned the case to the Fourth Chamber.

The applicant claims that the Court should:

The defendant claims that the Court should:

The United Kingdom supports the applicant's conclusions.

SABA and the Government of the Federal Republic of Germany support the Commission's conclusions.

III — Submissions and arguments of the parties

A — Admissibility of the application

In Metro''s view, its application is admissible because, although the contested decision was not addressed to it, the decision is of direct and individual concern to it because the effect of the decision is that it cannot obtain supplies of SABA products. It has therefore suffered and will continue to suffer damage as a result of the adoption of the contested decision by the Commission. The Commission acknowledged that Metro was directly interested and concerned in the outcome of the SABA proceedings in inviting it, in a telex message of 28 January 1982, in a letter of 13 September 1982 and in a letter of 8 June 1983, to submit its observations on its proposed decision.

The Commission raises no objection in relation to the admissibility of the application under Article 173 although Metro has not lodged a complaint pursuant to Article 3 (2) of Regulation No 17, as it had in Metro I. It acknowledges that in declaring the prohibition contained in Article 85 (1) inapplicable to the SABA distribution system the decision modified the position of undertakings which, like the applicant, are interested in obtaining supplies of SABA products. Furthermore, the objections of Metro, submitted in accordance with Article 19 (3) of Regulation No 17, were precisely whose which were rejected in Part I C of the contested decision.

SABA expresses reservations as to the admissibility of the application. First, Metro has no interest in bringing proceedings because it does not carry on the business of a wholesaler but is in fact engaged in retail trade and does not fulfil the formal requirements for admission into the SABA distribution system. Secondly, Metro is not directly and individually concerned by the contested decision because the decision was not adopted on an application made by Metro under Article 3 (2) (b) of Regulation No 17. An applicant cannot be directly and individually concerned by a decision which is not addressed to it unless the decision is one that is made on its application. However, it is not sufficient that Metro might be regarded as a party potentially interested in the purchase of SABA's products.

B — The substance

1. The submissions put forward by Metro in support of its application

Metro essentially relies on the following submissions in support of its claim:

Metro is supported on those submissions by the United Kingdom.

The Commission rejects all the submissions as unfounded.

The Commission's position is supported by SABA and by the Government of the Federal Republic of Germany.

2. Misuse of powers by the Commission in failing to take into account the conditions laid down by the Court of Justice in Case 26/76

3. Misuse by the Commission of the power to grant an exemption under Article 85 (3) of the EEC Treaty

4. Misuse of powers by the Commission in failing to take account of the way in which the SABA agreements are implemented in practice

5. Misuse of powers by the Commission in basing the contested decision on limited incomplete and outdated information

6. Misuse of powers by the Commission in authorizing an abuse of a dominant position within the meaning of Article 86 of the EEC Treaty by SABA and the companies in the same group

7. Lack of competence of the Commission to grant an exemption under Article 85 (3) of the EEC Treaty in the absence of notification pursuant to Article 4 of Regulation No 17

IV — Oral procedure

At the sittings on 2 July 1985 and 12 November 1985 oral argument was presented, and answers to questions put by the Court were given, by Metro, represented by R. J. J. Taylor and D. Marks, Solicitors, the United Kingdom, represented by S. Richards, Barrister, the Commission, represented by N. Koch and K. Banks, the Federal Republic of Germany, represented by O. Lieberknecht, and SABA, represented by C. Hootz.

In response to the request made by the Court at the sitting the Commission, by letter dated 12 July 1985, sent documents showing the extent to which the distribution of certain products is covered by selective distribution systems (coverage ratio) in the Federal Republic of Germany and the EEC as regards colour television sets. According to Annex I to the letter, concerning the selective distribution systems operating on the German market, the Commission does not mention simple EEC-wide distribution systems whereas the systems with promotional obligations which it mentions cover 33.6% of the market (SABA, Nordmende, Grundig, Bang & Olufsen, Sony); according to the Commission, there are also national selective distribution systems on the German market covering 10% of that-market (a simple selective distribution system operated by Panasonic and two, more intricate, systems operated by ITT and Mitsubishi). Together, all those systems therefore cover 46.6% of the market. According to Annex 5, concerning the EEC market, the Commission does not mention simple selective distribution systems whereas the more intricate systems it mentions cover 17% of the market (SABA, Nordmende, Grundig, Bang & Olufsen, Sony).

When commenting on the figures submitted by the Commission, Metro claimed that the figures given in Annex I provide a misleading view of the structure of competition on the German market inasmuch as the Commission left out of account unnotified and de facto simple selective distribution systems and other marketing systems which also excude the non-specialist trade. Metro therefore contests the figures given by the Commission and submits its own table showing the coverage ratio on the German market of marketing systems for colour television sets which exclude non-specialist dealers. According to Metro, the formal selective distribution systems, including Telefunken's partner system, cover 58% of the market (Grundig, Telefunken ITT/Groetz, Sony, Panasonic and Mitsubishi) whereas the informal systems, incuding Philips' allegedly discriminatory distribution system, cover 33% of the market (Siemens, Blaupunkt, Loewe-Opta, Metz, Toshiba, Hitachi, Sharp, Sanyo and Philips). The total share of the market covered by simple or qualified selective distribution systems is therefore 91%, in which Metro includes 16% for SABA and Nordmende.

The Advocate General delivered his Opinion at the sitting on 12 November 1985.

1 Language of the Case: English.