93/46/EEC: Commission Decision of 15 December 1992 relating to a proceeding pursuant to Article 85 of the EEC Treaty (IV/31.400 - Ford Agricultural) (Only the English text is authentic)

• Articles: 5

Article 1

The contractual relations between Ford New Holland Limited, previously Ford Motor Company Limited, and the other companies within the group, of which the parent company was the Ford Motor Company and which distributed tractors within the Community, that forbade, discouraged or hindered parallel trade in its products constituted an infringement of Article 85 (1) of the EEC Treaty. Article 2

An exemption under Article 85 (3) of the EEC Treaty for the arrangements mentioned in Article 1 is hereby refused. Article 3

1. Ford New Holland Limited shall refrain from taking any measure having the same object or effect as those referred to in Article 1.

2. Ford New Holland Limited shall ensure that its resellers are free and know that they are free to sell, if so asked, and the purchasers of its products to buy its products wherever they choose within the Community. Article 4

This Decision is addressed to:

Ford New Holland Limited,

Cranes Farm Road,

GB-Basildon, Essex SS14 3AD.

Done at Brussels, 15 December 1992.

For the Commission

Leon BRITTAN

Vice-president

(1) OJ No 13, 21. 2. 1962, p. 204/62.

(2) OJ No 127, 20. 8. 1963, p. 2268/63.

(3) OJ No L 15, 18. 1. 1985, p. 16.

(4) OJ No L 173, 30. 6. 1983, p. 1.

(5) OJ No L 376, 31. 12. 1985, p. 21.(6) Agricultural tractors are not covered by Regulation (EEC) No 123/85 - see Commission press release IP(90) 917 of 16 November 1990.

Article 3

of Regulation No 17

(19) It appears necessary to condemn these infringements and require Ford so to act that its end users are free, and know that they are free, to buy Ford's products where they choose and that its dealers know that they are free to supply them.

Article 15

(2) of Regulation No 17

(20) Ford's infringement was serious since it impeded competition from which consumers could have derived substantial benefits.

(21) The Commission is, however, aware that its tolerance of the claims by Ford to benefit from the exemption afforded for motor vehicle distribution contracts by Regulation (EEC) No 123/85, even after it had carried out the greater part of its investigation in this case, has contributed to allowing Ford to believe that the tracing and prevention of sales to unauthorized dealers was legitimate.

(22) The Commission also takes into account that the greater bulk of the infringements that have been established relate to a period six or more years ago and recognizes that, for example, the use made of registration documents (recitals 5 and 8) has ceased.

(23) In these exceptional circumstances, and recognizing, in addition, that Ford's new owners now accept that Ford's conduct amounted to an infringement going beyond the limits of the activities described in Ford's various notifications, and are taking vigorous steps to avoid any repetition of these infringements, the Commission feels that it would be inappropriate to impose a fine on Ford,

HAS ADOPTED THIS DECISION:

Article 85

(1)

(11) Ford and its dealer customers are undertakings within the meaning of Article 85 (1). The agreements between these parties, as written or applied, constitute agreements between undertakings within the meaning of Article 85 (1).

(12) The facts set out above show that Ford's contractual relations with its customers included a provision not to export or import or allow the export of the products, and other provisions for the hindrance of parallel trade in the products. These were general provisions relating to importing and exporting; they were not restricted to sales to unauthorized dealers which, whether exports or not, were forbidden by the notified dealer contracts. Therefore, these contractual relations constituted restrictions of competition within the meaning of Article 85 (1).

(13) Special mention must be made of discounts dependent on non-export or penalties for exporting. It has been argued that, as the Commission accepts that it is lawful to prohibit active marketing outside an exclusive territory, it would be logical for the Commission to allow rewards for active marketing within.

(14) However, as the Commission has already said in recital 55 of Decision 85/617/EEC in the Sperry New Holland case (5): 'Dealers must have the right to supply farmers from other territories without being penalized by the withdrawal of bonuses. Therefore agreements or practices concerning bonuses which are conditional on the machine not subsequently being exported by the customer, are prohibited. The same rationale might apply to the condition that the machine is registered for use within the territory of the dealer or that the warranty service be completed within that territory'.

(15) Special mention should also be made of national safety legislation. The users of independently imported machinery should, of course, use it both safely and legally. Cooperation between Ford and its local dealers aimed at helping these users, at a reasonable price, to respect national law would have been a proper course of action. Contractual relations between them, however, aimed at exploiting safety regulations so as to discourage such importing constitutes an infringement.

(16) Ford's actions examined above had the object and effect of preventing trade between Member States. There was no justification for Ford's seeking to deny the benefits of free trade to prospective purchasers of its products situated in a State in which the domestic price of its products was higher.

(17) It must be concluded that these contractual relations constitute an infringement of Article 85 (1).

Article 85

(3)

(18) As has been said in recital 4, Ford had been adapting its tractor dealer contracts so that their wording conformed with the conditions of Regulation (EEC) No 123/85, in order to claim benefit from the exemption under Article 85 (3) afforded by that Regulation (but, in 1990 and 1991, modified these contracts to conform with the conditions of Regulation (EEC) No 1983/83) (6). Earlier, Ford had notified a number of these contracts with a view to obtaining individual exemptions. These notifications did not, however, disclose the unwritten provisions of the contractual relations described in recitals 8 and 9 which are not, therefore, covered by those notifications. No exemption under Article 85 (3) could, therefore, have been granted.