Judgments nº T-203/01 of Court of First Instance of the European Communities, September 30, 2003

• Resolution Date: September 30, 2003
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-203/01

JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

30 September 2003 (1) (Article 82 EC - Rebate system - Abuse)

In Case T-203/01,

Manufacture française des pneumatiques Michelin, established in Clermont-Ferrand (France), represented by J.-F. Bellis, M. Wellinger, D. Waelbroeck and M. Johnsson, lawyers, with an address for service in Luxembourg,

applicant,

v

Commission of the European Communities, represented by R. Wainwright, acting as Agent, and A. Barav, lawyer, with an address for service in Luxembourg,

defendant,

supported by

Bandag Inc., established in Muscatine, Iowa (United States), represented by H. Calvet and R. Saint-Esteban, lawyers, with an address for service in Luxembourg,

intervener,

APPLICATION for annulment of Commission Decision 2002/405/EC of 20 June 2001 relating to a proceeding pursuant to Article 82 of the EC Treaty (COMP/E-2/36.041/PO - Michelin) (OJ 2002 L 143, p. 1),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: K. Lenaerts, President, J. Azizi and M. Jaeger, Judges,

Registrar: J. Plingers, Administrator,

having regard to the written procedure and further to the hearing on 3 April 2003,

gives the following

Judgment

The applicant's commercial policy in the markets in question

1.

Manufacture française des pneumatiques Michelin (‘the applicant’ or ‘Michelin France’) has as its main activity the manufacture of tyres for various vehicles. In France, it inter alia manufactures and sells new and retreaded tyres for heavy trucks.

2.

So far as concerns new tyres, a distinction is drawn between the original equipment market and the replacement market. Original equipment tyres are sold by the tyre manufacturer direct to the vehicle producer, without passing through an intermediary. Replacement tyres, on the other hand, are sold to the final consumer primarily through a large number of specialised commercial outlets.

3.

The demand for tyres for heavy goods vehicles is not satisfied only by the supply of new tyres. Provided the casing is in a sound condition, used tyres may be given a new tread: this is the retreading operation.

4.

This case concerns the commercial policy pursued by Michelin in the French markets for new replacement tyres for trucks and for retreaded tyres for trucks. The policy consisted of the following three components, which will be examined in greater detail below: ‘the general price conditions for France for professional dealers’, the ‘agreement for optimum use of Michelin truck tyres’ (‘the PRO agreement’) and the ‘agreement on business cooperation and assistance service’ (known as the ‘Michelin Friends Club’).

1. The general price conditions for France for professional dealers

   5.
   The ‘general price conditions for France for professional dealers’ (‘the general conditions’) laid down, first, a ‘list’ price known as the ‘invoicing scale’ (net price invoiced, less any rebates) and, secondly, a set of rebates or refunds.
   6.
   From 1980 to 1996, the rebates provided for in the general conditions were divided into three categories: ‘quantity rebates’, rebates for the quality of the dealer's service to users (‘service bonus’) and rebates dependent on increases in new tyre sales (‘progress bonus’). These were not ‘invoice rebates’ but were paid at the end of February of the calendar year following the financial year in question.
   7.
   The quantity rebates system provided for an annual refund expressed as a percentage of the turnover achieved by the dealer with the applicant, the rate increasing gradually according to the quantities purchased. In that regard, the general conditions provided for three scales, depending on the tyres in question (‘all types’, ‘heavy plant tyre’ and ‘retreads’).
   8.
   In 1995, for example, the ‘all types’ scale consisted of 47 steps. The rebate percentages ranged from 7.5% on a turnover of FRF 9 000 to 13% on a turnover of over FRF 22 million. The ‘heavy plant tyre’ and ‘retreads’ categories each had their own scale. In 1995 for example, the rebates ranged, in the case of retreads, from 2% on a turnover of over FRF 7 000 to 6% on a turnover in excess of FRF 3.92 million.
   9.
   In 1995 and 1996, the general conditions provided, under certain conditions, for three advances on quantity rebates, payable in May, September and December of the current financial year.
   10.
   The ‘service bonus’ was paid to the specialist dealer to improve his facilities and after-sales service. To qualify for such a bonus, a minimum annual turnover had to be achieved with the applicant in the course of the year. The amount ranged from FRF 160 000 in 1980 to FRF 205 000 in 1985. It then became FRF 50 000, falling to FRF 45 000 in 1995 and 1996. The size of the bonus, which was fixed at the beginning of the year by annual agreement with the dealer in a document entitled ‘Service bonus’, depended on compliance with commitments entered into by the dealer in a number of areas. Each commitment corresponded to a number of points, and where certain thresholds of points were exceeded the dealer was entitled to a bonus corresponding to a percentage of the turnover achieved with the applicant for all tyre types combined. This percentage ranged from 0% to 1.5% during the period 1980 to 1991 and from 0% to 2.25% for the period 1992 to 1996. The maximum score was 35 points and the maximum bonus was earned for a score of at least 31 out of 35 points. Amongst the commitments for which points could be earned were promoting the sale of the applicant's new products and providing the applicant with market information. The dealer earned an extra point if he systematically had Michelin casings retreaded by Michelin France. In 1996 only the systematic first retreading of Michelin tyres by Michelin was insisted upon. The service bonus was abolished in 1997.
   11.
   The ‘progress bonus’ was intended to reward dealers who agreed at the beginning of the year to undertake in writing to exceed a minimum base (expressed in numbers of casings purchased per annum) fixed by mutual agreement, depending on past performance and future prospects, and who managed to exceed it. The base was proposed each year and was negotiated with the dealer. In 1995 and 1996, if the amount by which the base was exceeded was equal to or greater than 20%, the dealer was entitled to a rebate rate of 2% or 2.5% applied to the entire turnover in respect of new truck tyres achieved with the applicant.
   12.
   Furthermore, dealers who, during two consecutive financial years, exceeded a fixed maximum turnover with the applicant could negotiate a ‘commercial cooperation agreement’ (known as an ‘individual agreement’), which entitled them to additional rebates. Between 1993 and 1996, 16 to 18 major dealers signed this type of agreement .
   13.
   As from 1997, the applicant changed its business conditions for dealers. So far as concerns new truck tyres, the main changes concerned the disappearance of quantity rebates, the service bonus and the progress bonus, and the appearance of new categories of rebate, namely ‘invoice rebates’, the ‘achieved-target bonus’, ‘end-of-year rebates’ and a ‘multiproduct rebate’. Those rebates were applicable in 1997 and 1998. As from 1997, the bulk of the rebates previously paid at the end of February in the year following the reference period was ‘shown on the invoice’.
   14.
   ‘Invoice rebates’ (of between 15% and 19%) were granted on the basis of the number of new truck/earthmover/light plant tyres purchased the previous year, the average purchases for the two previous years or the average purchases for the three previous years, depending on which was most favourable to the dealer.
   15.
   Dealers wishing to obtain a larger invoice rebate than the amount to which they would have been entitled by virtue of their previous services were required to sign a target contract drawn up in agreement with the applicant which took account of the dealer's potential together with foreseeable market trends. The invoice rebate obtainable then corresponded to the tranche within which the commitment entered into by the dealer fell.
   16.
   In 1997 dealers who had signed a target contract obtained an ‘achieved-target bonus’ of 2% of their net annual invoiced turnover, paid at the end of February, if the target was reached. In 1998 the bonus was set at 1.5%.
   17.
   Depending on the invoice rebate originally granted and the net invoiced turnover, an ‘end-of-year rebate’ of between 0% and 3% was paid at the end of February. The ‘multiproduct rebate’ was granted to dealers whose total turnover in respect of tyres of all types accounted for more than 50% of their total turnover and who achieved significant sales in at least two of the following four categories: car/van, motorcycle/scooter, truck and agricultural tractor. They were entitled to an end-of-year rebate on their invoiced turnover in respect of new products (with the exception of heavy plant) and retreaded products according to a scale ranging from 1% to 2.20% in 1997 and from 1.5% to 2.70% in 1998.
   18.
   As regards retreaded truck tyres, from 1997 the system comprised two rebates: (i) a 5% invoice rebate on all retreaded products; and (ii) an end-of-year quantity rebate depending on total net turnover in respect of retreads (van, truck, earthmover, agricultural tractor, light and heavy plant), increasing progressively from 1% (above FRF 6 500) to 4% (above FRF 2 500 000) of total net turnover in respect of retreads, according to a 16-step scale ranging from 1% at the bottom of the scale to 0.1% at the top.
   19.
   Dealers who had signed an individual agreement continued to enjoy additional rebates (for both new tyres and retreads).

2. Agreement for optimum use of Michelin truck tyres (‘the PRO agreement’)

   20.
   The agreement for optimum use of Michelin truck tyres (the PRO agreement), which was...