Article 4
This Decision is addressed to: Dunlop Slazenger International Ltd, Challenge Court, Barnett Wood Lane, Leatherhead, UK - Surrey KT22 2LW, BTR plc, Vincent Square, UK - London SW1P 2PL, All Weather Sports Benelux BV, Postbus 295, Wattstraat 20, NL-2700 AG-Zoetemeer, Pinguin Sports BV, Postbus 30, Industrieweg 50, NL-2380 AA Zoeterwoude/Rijndijk. This Decision shall be enforceable pursuant to Article 192 of the EEC Treaty. Done at Brussels, 18 March 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) These figures apply only to what are known as 'first-grade tennis-balls', i.e. top quality balls used in matches and competitions, though these are also the ones most commonly used in general. (4) Controlled by the Japanese Sumitomo group. (5) See recital 34 below and Annex 2. (6) See recital 3 above. (7) Letter dated 15 October 1986 to Newitt. (8) See recital 33 below. (9) Letter dated 3 September 1987 from BTR to Newitt's solicitors. (10) Telex sent on 1 February 1989 by Dunlop USA to Newitt. (11) See recital 12 above. (12) See recitals 34 and 35 below. (13) See in particular the telex sent on 10 March 1986 by DSI to AWS. (14) KNLTB: Koninklijke Nederlandse Lawn Tennis Bond. (15) Letters sent on 29 May 1990 by the Commission to DSI, BTR, AWS and Pinguin. However, it should be noted that the Commission's interpretation, in the Statement of Objections, of a number of documents obtained during the investigation at AWS has been challenged by AWS. The Commission's interpretation is not maintained here in respect of the following: Statement of Objections point 37 in fine (not 'various', but 'one' document), point 53 in fine ('eigen kenmerken'), point 64 first paragraph in fine ('inkoop' and 'verkoopprijzen'), point 72 in fine ('artificial exchange rates') and point 74. (16) See recitals 16 to 18 above. (17) See recitals 18 above. (18) See recitals 19 above. (19) See in particular the telefax sent on 16 November 1987 by AWS to DSI and the telefax sent on 17 November 1987 by DSI to AWS. See also recital 21 above. (20) See recitals 22 et seq. above. (21) AWS internal memorandum dated 4 March 1987. (22) Sometimes referred to as 'special net prices' by AWS. (23) For the significance of this measure, see recital 18 above. (24) Meeting of the NSF (Dutch sports federation) on 20 October 1986. (25) See in particular the record of the meeting of Dunlop racket sports goods distributors on 6 and 7 May 1987, record of the meeting between DSI and AWS on 15 and 16 May 1986 and AWS's internal memorandum of 7 November 1986. (26) Meeting on 15 and 16 May 1986. (27) The warning was expressed in the following terms: 'You will not be unaware of the importance the Commission attaches to compliance with the Treaty's competition rules and more particularly those concerning the free movement of goods within the Community. The Commission has always taken the view that any barrier to exports must be considered a particularly serious infringement of those rules. If, therefore, as the complainant maintains - and the documents supporting his complaint seem at first sight to confirm the validity of this claim - you have exerted pressure on him of any kind whatsoever with a view to restricting his freedom to export within the common market, I call upon you to cease doing so immediately.' (28) 'It is just possible that the Commission may contact you as one of our European distributors. If so, please do not make any response without first contacting myself. This is most important. We obviously wish to assist the Commission with their investigations, but to do so in a coordinated way' (letter dated 12 August from the Managing Director). (29) See recital 21 above. (30) See recital 10 above. (31) This was actually implemented by DSI in collaboration with AWS in the Netherlands: see recitals 34 and 35 above. See also recital 56 below on the reasons adduced by DSI to justify these protection measures. (32) Indeed, the very existence of two price-lists, one for all export countries, the other for the United Kingdom only, is questionable in terms of its economic justification or, in any event, in terms of the frequently large disparities between the two sets of prices, which are usually to the disadvantage of the UK. The fact that domestic prices are for the most part considerably higher (15 to 50 %) (see recital 12 above) removes, in many cases, any incentive for UK firms to export. DSI has announced that it intends to do away with this double price list within the Community. The Commission reserves the right - if this intention is not put into effect - to return to this question and examine its compatibility with Article 85 (1) (possible existence of indirect export barriers) and, for products where DSI proves to hold a dominant position, with Article 86 (possible discriminatory pricing practices). (33) Administrative and sales staff, advertising and promotion, storage costs, distribution costs, travel and entertainment expenses, postage, telex, fax, bad debts. (34) DSI acknowledges this, moreover, indirectly in its written reply to the Statement of Objections - and shows that it persists in this view - when, expressing regret at the export bans imposed on Newitt and the interruptions in supply, it adds that 'this matter should have been dealt with entirely through the mechanism of price and discount adjustment' (see recital 53 above). (35) The consumer certainly cannot imagine that the selection of the 'official' balls is carried out solely on a financial basis and not on the basis of their technical properties (see recital 29), particularly when the 'official' sticker is followed by the legend 'the only approved and recommended tennis-ball', - referring to approval and recommendation by the KNLTB. It is significant in this respect that AWS urged DSI to take back its old stocks of balls not marked with this label. (36) See in particular Joined Cases 56 and 58/64 Consten and Grundig v. Commission [1966] ECR 299. See also Article 3 (d) of Regulation (EEC) No 1983/83 (OJ No L 173, 30. 6. 1983, p. 1). (37) See recitals 6 to 9 above. (38) See recital 46 above. (39) See recital 43 above. (40) In this context, BTR communicated to the Commission by letter dated 12 December 1990 a 'competition law compliance manual' and, by letter dated 22 January 1991, a new standard distribution agreement. (41) See in particular 53 above. (42) However, the Commission acknowledges that this export ban was not always applied.