Italian Republic v Commission of the EEC. (Transitional Period ) [1963] EUECJ C-13/63 (17 July 1963)

[ Home ] [ Databases ] [ World Law ] [ Multidatabase Search ] [ Help ] [ Feedback ] [ DONATE ] Court of Justice of the European Communities (including Court of First Instance Decisions) You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Italian Republic v Commission of the EEC. (Transitional Period ) [1963] EUECJ C-13/63 (17 July 1963) URL: https://www.bailii.org/eu/cases/EUECJ/1963/C1363.html Cite as: [1963] EUECJ C-13/63 [ New search ] [ Help ] IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities . The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice . This electronic version is not authentic and is subject to amendment. 61963J0013 Judgment of the Court of 17 July 1963. Italian Republic v Commission of the European Economic Community. Case 13-63. European Court reports French edition 1963 Page 00337 Dutch edition 1963 Page 00351 German edition 1963 Page 00359 Italian edition 1963 Page 00335 English special edition 1963 Page 00165 Danish special edition 1954-1964 Page 00433 Greek special edition 1954-1964 Page 00967 Portuguese special edition 1962-1964 Page 00305 Spanish special edition 1961-1963 Page 00435 Swedish special edition I Page 00189 Finnish special edition I Page 00189 ++++ 1 . TRANSITIONAL PERIOD - PROTECTIVE MEASURES - PRELIMINARY HEARING OF THE GOVERNMENTS CONCERNED - ADEQUATE OBSERVANCE OF FORMALITIES ( EEC TREATY, ARTICLE 226 ) 2 . TRANSITIONAL PERIOD - PROTECTIVE MEASURES - SECTOR OF THE ECONOMY - CONCEPT ( EEC TREATY, ARTICLE 226 ) 3 . TRANSITIONAL PERIOD - PROTECTIVE MEASURES - SERIOUS DIFFICULTIES - CONCEPT ( EEC TREATY, ARTICLE 226 ) 4 . TRANSITIONAL PERIOD - PROTECTIVE MEASURES - EFFECTS ON THE COMMON MARKET - MINIMUM OF DISTURBANCE - GEOGRAPHICAL LIMITATION ( EEC TREATY, ARTICLE 226 ) 5 . TRANSITIONAL PERIOD - PROTECTIVE MEASURES - POSSIBLE DISTINCTION BETWEEN MEMBER STATES ( EEC TREATY, ARTICLE 226 ) 6 . DISCRIMINATION - INDICATIONS - DISCRIMINATION OF FORM AND OF SUBSTANCE - CRITERIA ( EEC TREATY, ARTICLE 7 ) 1 . INDEPENDENTLY OF THE QUESTION TO WHAT EXTENT THE COMMISSION, WHEN RECEIVING AN APPLICATION UNDER ARTICLE 226, IS OBLIGED TO GIVE A PRELIMINARY HEARING TO ANY GOVERNMENT CONCERNED, THERE IS NO FAILURE TO DO SO IF THE COMMISSION HAS INFORMED THE GOVERNMENT IN QUESTION OF THE EXISTENCE OF THE APPLICATION AND THAT GOVERNMENT HAS NOT REPLIED TO THE QUESTIONS PUT TO IT BY THE COMMISSION WITHIN A PERIOD OF TIME COMPATIBLE WITH THE URGENCY REQUIRED BY THE TREATY . 2 . THE PRODUCTION OF A COMMODITY MAY CONSTITUTE A SECTOR OF THE ECONOMY WITHIN THE MEANING OF ARTICLE 226 OF THE EEC TREATY IF THAT COMMODITY, ACCORDING TO GENERALLY ACCEPTED IDEAS, IS CLEARLY DIFFERENT FROM OTHER RELATED PRODUCTS . 3 . THE EXISTENCE OF DIFFICULTIES WHICH ARE SERIOUS AND LIABLE TO PERSIST IS NOT PRECLUDED BY THE FACT THAT THOSE INVOLVED SUPPORT THE COMMISSION'S MEASURES BY THEIR OWN EFFORTS, AS SUCH EFFORTS ARE PRESUPPOSED BY ARTICLE 226 WHICH IS INTENDED TO PERMIT THE SECTOR IN DIFFICULTY TO ADJUST ITSELF TO THE COMMON MARKET . 4 . AS THE COMMISSION IS OBLIGED BY ARTICLE 226 OF THE EEC TREATY TO GIVE PRIORITY TO SUCH MEASURES AS WILL LEAST DISTURB THE FUNCTIONING OF THE COMMON MARKET, IT MUST TAKE INTO ACCOUNT THAT IN CASES OF DOUBT THE 'COMMON' CHARACTERISTIC OF THE MARKET SUFFERS LESS IF DEROGATION FROM THE RULES OF THE TREATY IS MADE ONLY WITHIN THE FRAMEWORK OF THE RELATIONS BETWEEN TWO MEMBER STATES . 5 . IN AUTHORIZING PROTECTIVE MEASURES, THE COMMISSION IS ENTITLED TO MAKE A DISTINCTION ACCORDING TO THE COUNTRIES AND NOT ONLY ACCORDING TO THE UNDERTAKINGS OF THE COMMON MARKET, ASSUMING THAT THERE ARE REASONABLE GROUNDS FOR SUCH A DISTINCTION . THIS IS SO WHEN IT IS POSSIBLE TO FIND, WITHIN A GIVEN COUNTRY, A PRICE LEVEL WHICH IS CLEARLY DIFFERENT FROM THE PRICE LEVEL IN THE OTHER COUNTRIES . 6 . THE DIFFERENT TREATMENT OF DISSIMILAR SITUATIONS DOES NOT LEAD AUTOMATICALLY TO THE CONCLUSION THAT THERE IS DISCRIMINATION, AS AN APPEARANCE OF DISCRIMINATION IN FORM MAY CORRESPOND IN FACT TO AN ABSENCE OF DISCRIMINATION IN SUBSTANCE . DISCRIMINATION IN SUBSTANCE MAY CONSIST NOT ONLY IN TREATING SIMILAR SITUATIONS DIFFERENTLY, BUT ALSO IN TREATING DIFFERENT SITUATIONS IDENTICALLY . IN CASE 13/63 GOVERNMENT OF THE ITALIAN REPUBLIC, REPRESENTED BY PROFESSOR RICCARDO MONACO, HEAD OF THE LEGAL DEPARTMENT OF THE MINISTRY OF FOREIGN AFFAIRS, ACTING AS AGENT, ASSISTED BY PIETRO PERONACI, DEPUTY AVVOCATO GENERALE DELLO STATO, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE EMBASSY OF THE ITALIAN REPUBLIC, APPLICANT, V COMMISSION OF THE EUROPEAN ECONOMIC COMMUNITY, REPRESENTED BY ALBERTO SCIOLLA-LAGRANGE, LEGAL ADVISER OF THE EUROPEAN EXECUTIVES, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF HENRI MANZANARES, SECRETARY OF THE LEGAL SERVICE OF THE EUROPEAN EXECUTIVES, 2 PLACE DE METZ, DEFENDANT, APPLICATION FOR ANNULMENT OF THE DECISION OF 17 JANUARY 1963 ( OFFICIAL JOURNAL OF 13 FEBRUARY 1963, PP . 268 ET SEQ .) AUTHORIZING THE FRENCH REPUBLIC TO TAKE PROTECTIVE MEASURES UNDER ARTICLE 226 OF THE EEC TREATY AGAINST THE IMPORTATION OF DOMESTIC ELECTRIC REFRIGERATORS AND CERTAIN SPARE PARTS OF ITALIAN ORIGIN; I - ON THE INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS 1 . ON THE FAILURE TO GIVE THE ITALIAN GOVERNMENT A HEARING THE APPLICANT MAINTAINS THAT THE COMMISSION SHOULD HAVE GIVEN IT A HEARING BEFORE MAKING ITS DECISION . IT IS NOT NECESSARY IN THIS CASE TO EXAMINE TO WHAT EXTENT SUCH A PRELIMINARY CONSULTATION WAS REQUIRED . IN FACT, IT IS NOT DISPUTED THAT AFTER TELEPHONE CONVERSATIONS WITH THE OFFICE OF THE ITALIAN PERMANENT REPRESENTATIVE IN BRUSSELS INFORMING THE OFFICE OF THE FRENCH GOVERNMENT'S REQUEST, THE DEFENDANT ADDRESSED TO THE SAID REPRESENTATIVE VARIOUS QUESTIONS IN WRITING RELATING TO THE REQUEST, TO WHICH THERE WAS NO REPLY . BECAUSE OF THE APPLICANT'S SILENCE, WHICH LASTED A MONTH, THE DEFENDANT CANNOT BE REPROACHED FOR HAVING ADOPTED THE DISPUTED DECISION WITHOUT FURTHER ADO . THIS COMPLAINT MUST THEREFORE BE DISMISSED . 2 . ON THE COMPLAINT OF INSUFFICIENT REASONING THE APPLICANT HAS RAISED A SERIES OF COMPLAINTS TO THE EFFECT THAT THE STATEMENT OF REASONS ON WHICH THE DISPUTED DECISION IS BASED DOES NOT SATISFY THE CONDITIONS REQUIRED BY ARTICLE 190 OF THE TREATY AND CLAIMS THAT THE REASONS GIVEN FOR THE DECISION ARE INSUFFICIENT TO MAKE IT POSSIBLE TO SINGLE OUT IMPORTS FROM ITALY AS THE ORIGIN OF THE DIFFICULTIES IN QUESTION . HOWEVER, THE DECISION WAS NOT LIMITED TO CONSIDERING THE VOLUME OF THE VARIOUS IMPORTS, BUT ALSO MADE A COMPARISON BETWEEN THE PRICE OF THE ITALIAN PRODUCTS AND THE PRICES BOTH OF FRENCH PRODUCTS AND OF OTHER IMPORTED PRODUCTS, WHICH ACCORDING TO IT WERE NOTICEABLY HIGHER . IT IS INCORRECT TO ARGUE THAT THE DECISION SHOULD ALSO HAVE CONSIDERED THE DIFFERENCE BETWEEN THE SALE PRICES TO THE CONSUMER, SINCE IT IS IMPOSSIBLE TO MAKE A DEFINITE FINDING AT THIS STAGE BECAUSE OF THE DISCOUNTS GIVEN AND BECAUSE THE DIFFICULTIES HAVE TO BE ASSESSED IN RESPECT OF THE PRODUCERS; IT WAS THEREFORE NECESSARY TO TAKE INTO CONSIDERATION THE PRICES CHARGED TO THE WHOLE-SALERS . THERE WAS NO POINT IN EXAMINING WHETHER THE MARGIN OF PROFIT ALLOWED TO THE WHOLESALERS BY THE FRENCH PRODUCERS WAS REASONABLE OR NOT, SINCE IT WAS A MATTER OF JUDGING THE PRICE DIFFERENCE BETWEEN THE FRENCH PRODUCT AND THE ITALIAN PRODUCT ON ITS ARRIVAL ON FRENCH TERRITORY, THAT IS TO SAY, AT THE MOMENT WHEN THESE TWO PRODUCTS ARE IN THE SAME MARKET AND AT THE SAME COMMERCIAL STAGE . ACCORDING TO THE APPLICANT, THE PREAMBLE SHOULD HAVE TAKEN INTO ACCOUNT THE QUESTION WHETHER THE GREATER MARGIN ALLOWED BY THE ITALIAN PRODUCERS TO THEIR DISTRIBUTORS IN FRANCE WAS JUSTIFIED BY THE HEAVIER CHARGES WHICH FELL UPON THE LATTER . HOWEVER, AS THE SAID PREAMBLE FINDS THAT THE DIFFERENCE BETWEEN THE FREE-AT-FRONTIER PRICE OF THE ITALIAN PRODUCTS AND THE EX - FACTORY PRICE OF THE FRENCH PRODUCTS WAS 30% THE CLEAR CONSEQUENCE OF THIS, IN THE OPINION OF THE DEFENDANT, IS THAT THERE WERE NO OTHER ELEMENTS CAPABLE OF REDUCING IN ACTUAL FACT THE COMPETITIVE ADVANTAGE REPRESENTED BY THIS PERCENTAGE . THE APPLICANT COMPLAINS THAT THE DEFENDANT OMITTED TO ASCERTAN WHETHER THE PRODUCERS OF OTHER EXPORTING COUNTRIES OFFERED THEIR DISTRIBUTORS IN FRANCE PROFITS COMPARABLE WITH THOSE ENJOYED BY THE IMPORTERS OF ITALIAN PRODUCTS . ALTHOUGH THE PREAMBLE STATES THAT THE ITALIAN PRICES WERE NOT COMPARABLE WITH THE PRICES OF PRODUCTS IMPORTED FROM OTHER COUNTRIES, IT IMPLIES CLEARLY THAT IMPORTERS OF ITALIAN PRODUCTS COULD BUY MORE CHEAPLY THAN OTHER IMPORTERS . CONSEQUENTLY THE REFERENCE DESIRED BY THE APPLICANT WAS SUPERFLUOUS . THE APPLICANT IS WRONG IN CLAIMING THAT THE DECISION COMPARES FRENCH PRODUCTION CALCULATED OVER TEN MONTHS WITH EXPORTS AND IMPORTS CALCULATED OVER SEVEN AND SIX MONTHS RESPECTIVELY; WHEREAS THE TABLE INCLUDED IN THE DECISION COMPARED DATA FROM CORRESPONDING PERIODS . FINALLY, THE APPLICANT MAKES THE POINT THAT THE RECITAL DEALING WITH THE DIFFERENCE BETWEEN FRENCH AND ITALIAN PRICES IS NOT CLEAR AND IS BASED UPON INACCURATE FACTS . FROM THE POINT OF VIEW OF REASONING, THE WORDING IN QUESTION DOES NOT LACK CLARITY, SINCE IT SHOWS IN A CLEAR FORM THE DATA WHICH THE DEFENDANT CONSIDERED DECISIVE . IT FOLLOWS FROM THE FOREGOING THAT THE COMPLAINT OF INSUFFICIENT REASONING MUST BE DISMISSED . II - ON MISUSE OF POWERS THE APPLICANT COMPLAINS THAT THE COMMISSION USED ITS POWERS UNDER ARTICLE 226 TO REACH A RESULT FALLING WITHIN THE SCOPE OF THE ANTI-DUMPING MEASURES OF ARTICLE 91 . NOTHING, HOWEVER, EITHER IN THE DISPUTED DECISION OR IN THE ATTITUDE OF THE DEFENDANT ALLOWS THIS DECISION TO BE REGARDED AS A DISGUISED ANTI-DUMPING MEASURE, SINCE NO COMPLAINT OF DUMPING HAD BEEN MADE . THE FACT THAT THE DISPUTED DUTY WAS OF A LIMITED DURATION, AND WAS ON A DIMINISHING SCALE, IS INCOMPATIBLE WITH AN ANTI-DUMPING MEASURE WHICH WOULD HAVE TO BE APPLIED ACCORDING TO THE DURATION OF THE PRACTICES TO BE RESISTED WHICH CANNOT NORMALLY BE FORESEEN . THIS COMPLAINT SHOULD, THEREFORE, BE DISMISSED . III - ON INFRINGEMENT OF THE TREATY 1 . ON THE CONCEPT OF 'SECTOR OF THE ECONOMY' THE APPLICANT DISPUTES THAT THE FRENCH REFRIGERATOR INDUSTRY IS A 'SECTOR OF THE ECONOMY' WITHIN THE MEANING OF ARTICLE 226 . THE PRODUCTION OF A COMMODITY CAN CONSTITUTE SUCH A 'SECTOR' IF THAT COMMODITY, ACCORDING TO GENERALLY ACCEPTED IDEAS, IS CLEARLY DIFFERENT FROM OTHER RELATED PRODUCTS . THESE CONDITIONS ARE FULFILLED HERE . 2 . ON THE TAXATION OF COMPRESSOR UNITS IT IS NOT DISPUTED THAT FOR COMPRESSOR UNITS THERE EXISTED NONE OF THE DIFFICULTIES ESTABLISHED BY THE DEFENDANT IN THE SECTOR OF COMPLETED REFRIGERATORS . HOWEVER, THE DEFENDANT HAS ALLEGED THE NEED TO AVOID DIVERSION OF TRADE, AND POINTS OUT THAT THE INSTALLATION OF COMPRESSOR UNITS IN REFRIGERATORS WHICH ARE NOT EQUIPPED WITH THEM IS A VERY EASY OPERATION . THE APPLICANT ITSELF MOREOVER MADE THE POINT THAT THE IMPORTERS OF ITALIAN PRODUCTS INTO FRANCE HAS TO UNDERTAKE THE REPAIR OF THE PRODUCTS SOLD . THEREFORE, IT SEEMS PROBABLE THAT THEY ARE SUFFICIENTLY WELL EQUIPPED TO ASSEMBLE COMPRESSOR UNITS ALSO, WITHOUT BEING FORCED TO SET UP NEW FACTORIES . CONSEQUENTLY THE APPLICANT HAS NOT SHOWN THAT THE DESIRE TO AVOID DIVERSION OF TRADE WAS WITHOUT FOUNDATION . THIS COMPLAINT MUST THEREFORE BE DISMISSED . 3 . ON THE APPLICATION OF THE CONCEPT OF 'DIFFICULTIES WHICH ARE SERIOUS AND LIABLE TO PERSIST' UNDER ARTICLE 226 ( 1 ) OF THE TREATY, PROTECTIVE MEASURES MAY BE AUTHORIZED IN CASE OF DIFFICULTIES WHICH ARE SERIOUS AND LIABLE TO PERSIST IN ANY SECTOR OF THE ECONOMY . ( A ) TAKEN BY THEMSELVES, THE FIGURES PUT FORWARD BY THE DEFENDANT, MARKING THE DECREASE IN FRENCH PRODUCTION FROM 1961 TO 1962 AS WELL AS THE INCREASE IN IMPORTS INTO FRANCE DURING THE SAME PERIOD - FIGURES NOT DISPUTED BY THE APPLICANT -, ALLOW THE INFERENCE THAT SUCH DIFFICULTIES DID EXIST . HOWEVER, IT SHOULD BE EXAMINED WHETHER THE ARGUMENTS ADVANCED BY THE APPLICANT ARE SUCH AS TO REBUT THIS PRESUMPTION . ( B ) THE APPLICANT STATES THAT FRENCH PRODUCTION FOR 1962, TO THE EXTENT OF 265 000 APPLIANCES, WAS NOT ENOUGH TO SATISFY THE NEEDS OF THE DOMESTIC MARKET . THIS ALLEGATION IS IRRELEVANT . IN FACT, THIS CIRCUMSTANCE DOES NOT NECESSARILY PRESUPPOSE INSUFFICIENT MANUFACTURING CAPACITY, BUT MAY EQUALLY BE ASCRIBED TO THE FACT THAT THE IMPORTS THEMSELVES CAUSED THE RECESSION IN FRENCH PRODUCTION . ( C ) THE APPLICANT NEXT ATTEMPTS TO SHOW THAT, OF THE FRENCH PRODUCTION FOR 1962, THE NUMBER OF REFRIGERATORS UNSOLD AT THE END OF THE YEAR AMOUNTED TO ROUGHLY 8 000 AT MOST . HOWEVER, ADOPTING THE APPLICANT'S METHOD OF CALCULATION, AND SUBSTITUTING FOR ITS ORIGINAL FIGURES THOSE WHICH WERE ACCEPTED AT THE HEARING BY BOTH PARTIES, APART FROM INSIGNIFICANT DIFFERENCES, ONE ARRIVES AT A NUMBER BETWEEN 48 000 AND 57 000 . ONE MUST TAKE INTO CONSIDERATION NOT ONLY THE SITUATION EXISTING IN 1962, BUT ABOVE ALL THE DEVELOPMENT WHICH HAS TAKEN PLACE SINCE THE LIBERALIZATION OF TRADE . IN THIS RESPECT, THE CONSIDERABLE SIZE OF THE STOCKS HELD BY THE PRODUCERS AT THE END OF 1961 AND 1962 ( 145 000 AND 193 000 RESPECTIVELY ), AS WELL AS THE DIFFERENCE BETWEEN THESE TWO FIGURES, TAKE ON THEIR FULL SIGNIFICANCE . THE APPLICANT MAINTAINS THAT THE STOCKPILED MODELS WERE OUT OF DATE . HOWEVER, A CRISIS AT THE RETAIL STAGE MAY EQUALLY BE DUE TO THE FACT THAT THE PRODUCER IS NOT SUCCEEDING IN DISPOSING OF THE PRODUCTION OF PREVIOUS YEARS . FINALLY, THE APPLICANT'S ARGUMENT ASSUMES THAT THE FRENCH PRODUCTS SOLD IN 1962 CAME EXCLUSIVELY FROM THAT SAME YEAR'S PRODUCTION, WHICH HAS NOT BEEN SHOWN . ( D ) FINALLY, THE PARTIES DISAGREE ON THE QUESTION WHETHER THE PRICE REDUCTION CARRIED OUT BY THE FRENCH PRODUCERS IMMEDIATELY PRIOR TO THE DISPUTED DECISION APPLIED TO THE WHOLE OR THE GREATER PART OF THE PRODUCTS, AS THE APPLICANT CONSIDERS, OR ONLY A SMALL QUANTITY OF THEM . THE APPLICANT'S STATEMENT, SUPPOSING IT TO BE ACCURATE, REVEALS RATHER THE EXISTENCE OF 'SERIOUS DIFFICULTIES', SINCE IT IS OBVIOUS THAT A CONSIDERABLE REDUCTION, SPONTANEOUSLY DECIDED UPON BY PRODUCERS, MAY BE A SYMPTOM OF KEEN COMPETITION . FURTHERMORE, ALTHOUGH ARTICLE 226 IS INTENDED TO PERMIT THE SECTOR IN DIFFICULTY TO ADJUST ITSELF TO THE COMMON MARKET, IT ASSUMES THAT THOSE INVOLVED ARE IN A POSITION TO SUPPORT THE COMMISSION'S MEASURES BY THEIR OWN EFFORTS . THE FACT THAT SUCH EFFORTS ARE MADE DOES NOT THEREFORE PRECLUDE THE EXISTENCE OF 'SERIOUS DIFFICULTIES '. ( E ) IT IS THUS NOT ESTABLISHED THAT THE DEFENDANT HAS WRONGLY APPLIED THE CONCEPT OF 'SERIOUS DIFFICULTIES '. IN THESE CIRCUMSTANCES, THE COURT MUST DISMISS THIS COMPLAINT . 4 . AS TO DISCRIMINATION ( A ) COMPLAINT IS MADE THAT THE DECISION IMPROPERLY INFRINGED THE PRINCIPLE OF NON - DISCRIMINATION BY AUTHORIZING THE FRENCH GOVERNMENT TO IMPOSE A SPECIAL DUTY ON ITALIAN PRODUCTS ALONE, TO THE EXCLUSION OF THE SAME PRODUCTS ORIGINATING EITHER IN OTHER STATES OF THE COMMUNITY OR IN THIRD COUNTRIES . THE DIFFERENT TREATMENT OF NON-COMPARABLE SITUATIONS DOES NOT LEAD AUTOMATICALLY TO THE CONCLUSION THAT THERE IS DISCRIMINATION . AN APPEARANCE OF DISCRIMINATION IN FORM MAY THEREFORE CORRESPOND IN FACT TO AN ABSENCE OF DISCRIMINATION IN SUBSTANCE . DISCRIMINATION IN SUBSTANCE WOULD CONSIST IN TREATING EITHER SIMILAR SITUATIONS DIFFERENTLY OR DIFFERENT SITUATIONS IDENTICALLY . ( B ) FURTHER, AS THE COMMISSION IS REQUIRED TO LIMIT ITS INTERVENTIONS TO WHAT IS 'STRICTLY NECESSARY', IT MUST BE PERMISSIBLE FOR IT TO INTERVENE ONLY IN RESPECT OF THOSE PHENOMENA WHICH CONSTITUTE THE CAUSE OF THE DIFFICULTIES IN QUESTION . BESIDES, IT IS OBLIGED TO GIVE 'PRIORITY... TO SUCH MEASURES AS WILL LEAST DISTURB THE FUNCTIONING OF THE COMMON MARKET '. IN THIS RESPECT IT MUST TAKE INTO ACCOUNT THAT IN CASES OF DOUBT THE 'COMMON' NATURE OF THE MARKET WILL SUFFER LESS IF DEROGATION FROM THE RULES OF THE TREATY IS MADE ONLY WITHIN THE FRAMEWORK OF THE RELATIONS BETWEEN TWO MEMBER STATES . MOREOVER, THE ARGUMENT JUST REJECTED IS ITSELF LIABLE TO FAVOUR DISCRIMINATION WHICH MIGHT JUST AS WELL TAKE THE FORM OF DISSIMILAR SITUATIONS BEING TREATED IDENTICALLY . FINALLY, IN AUTHORIZING PROTECTIVE MEASURES, THE COMMISSION IS ENTITLED TO MAKE A DISTINCTION BETWEEN COUNTRIES RATHER THAN BETWEEN UNDERTAKINGS IN THE COMMON MARKET WHEN THERE ARE REASONABLE GROUNDS FOR SUCH A DISTINCTION . THIS IS SO WHEN IT IS POSSIBLE TO FIND, WITHIN A GIVEN COUNTRY, A PRICE LEVEL WHICH IS CLEARLY DIFFERENT FROM THE PRICE LEVEL IN OTHER COUNTRIES . ( C ) IT IS NECESSARY TO ASCERTAIN THEREFORE WHETHER THE CIRCUMSTANCES IN THIS CASE CAN JUSTIFY A LIMITATION OF THE PROTECTIVE MEASURES TO ITALIAN IMPORTS ALONE . THE DEFENDANT SAW THE ORIGIN OF THE FRENCH DIFFICULTIES IN 'THE HUGE INCREASE IN IMPORTS ORIGINATING IN THE ITALIAN REPUBLIC', AND CONSEQUENTLY IT LIMITED THE PROTECTIVE MEASURES TO ITALIAN PRODUCTS . IN ORDER TO JUSTIFY ITS JUDGMENT AND THE CHOICE OF THIS MEASURE, THE COMMISSION TOOK AS ITS PRINCIPAL BASIS THE FINDING THAT, ON THE ONE HAND, THE VOLUME OF IMPORTS FROM THIRD COUNTRIES 'HAS NOT INCREASED TO AN ABNORMAL DEGREE' AND IS THEREFORE 'NOT LIABLE TO HINDER THE REORGANIZATION OF THE FRENCH SECTOR IN QUESTION' AND, ON THE OTHER HAND, THAT THE PRICE OF PRODUCTS IMPORTED FROM OTHER MEMBER STATES 'DOES NOT DIFFER APPRECIABLY FROM THE PRICE OF SIMILAR FRENCH PRODUCTS AND THAT THE INCREASE IN THE VOLUME OF IMPORTS, WHILST HIGHER, IS NOT CONSIDERED AS ABNORMAL '. IT DOES NOT APPEAR FROM THE EVIDENCE BROUGHT TO THE NOTICE OF THE COURT THAT THIS ASSESSMENT BY THE COMMISSION IS CLEARLY ERRONEOUS . IT IS NOT DISPUTED THAT IMPORTS FROM THIRD COUNTRIES ARE INCONSIDERABLE . IT HAS NOT BEEN SHOWN THAT THE COMMISSION WAS MISTAKEN IN STATING THAT THE PRICE OF PRODUCTS ORIGINATING IN OTHER MEMBER STATES DID NOT DIFFER APPRECIABLY FROM THE PRICE OF SIMILAR FRENCH PRODUCTS . IT WAS THEREFORE ABLE, BY THIS COMPARISON WITH THE VOLUME OF IMPORTS ORIGINATING IN OTHER MEMBER STATES ( WHICH IT DID NOT CONSIDER TO BE ABNORMAL ), TO COME TO THE CONCLUSION THAT THE HUGE INCREASE IN IMPORTS FROM ITALY WAS A FACTOR CAPABLE OF JUSTIFYING THE SPECIFIC MEASURE WHICH WAS THE SUBJECT OF THE DECISION . ( D ) IN VIEW OF ALL THE PRECEDING CONSIDERATIONS, IT FOLLOWS THAT THE SIXTH TO THE ELEVENTH RECITALS IN THE PREAMBLE TO THE DISPUTED DECISION JUSTIFY THE IMPOSITION OF DUTY ON ITALIAN PRODUCTS ALONE . THE COMPLAINT OF DISCRIMINATION MUST THEREFORE BE DISMISSED . 5 . ON THE COMPLAINT RELATING TO MATERIAL ERROR IN THE CALCULATION OF THE PRICE DIFFERENCES IN THE WORDS OF THE DECISION, THE DIFFERENCE 'BETWEEN THE AVERAGE PRICE PER LITRE OF ITALIAN REFRIGERATORS FREE-AT-FRONTIER AND THE AVERAGE PRICE PER LITRE OF THE SAME FRENCH APPLIANCES AT THE WHOLSALE STAGE', THAT IS TO SAY, THE EX-FACTORY PRICE, AS THE DEFENDANT EXPLAINED DURING THE PROCEEDINGS, 'AMOUNTED TO 30% OF THE ITALIAN PRICE FREE-AT-FRONTIER IN FRANCE WHILST THE EXISTING CUSTOMS PROTECTION IS NO HIGHER THAN 7.5 %'. THE APPLICANT CONSIDERS THAT THE COMMISSION SHOULD ALSO HAVE TAKEN ACCOUNT OF OTHER FACTORS WHICH WOULD HAVE CONSIDERABLY REDUCED THIS DIFFERENCE . ( A ) THE APPLICANT DOES NOT DISPUTE THE FIGURES PUT FORWARD BY THE DEFENDANT RELATING TO THE FRENCH PRICE INVOICED TO THE WHOLESALERS ( 2 946 FFRS ) AS WELL AS THE ITALIAN PRICE FREE-AT-FRONTIER ( 2 245 FFRS ), FIGURES FROM WHICH AN ARITHMETICAL DIFFERENCE AMOUNTING TO AS MUCH AS 31.2% APPEARS . IT RESTRICTS ITSELF TO COMPARING THE METHOD OF CALCULATION CHOSEN BY THE DEFENDANT WITH ANOTHER METHOD OF CALCULATION BASED ON THE RESPECTIVE DISCOUNTS . HOWEVER, IT HAS NOT BEEN SHOWN THAT THIS METHOD OF CALCULATION WOULD BE MORE SOUND AND MORE APPROPRIATE IN THE CIRCUMSTANCES THAN THAT ADOPTED BY THE COMMISSION . IN FACT, THE DEFENDANT CANNOT BE CRITICIZED FOR HAVING USED THE MOST IMPORTANT AND THE MOST CERTAIN PRICE FACTORS . FURTHER, THE APPLICANT HAS IN NO WAY EXPLAINED OR SPECIFIED HOW THE UNDISPUTED DIFFERENCE BETWEEN THE PRICES OF THE FRENCH PRODUCTS AT THE MOMENT WHEN THEY LEAVE THE FACTORY AND THE PRICES OF THE ITALIAN PRODUCTS AT THE MOMENT WHEN THEY ARRIVE ON FRENCH TERRITORY IS REDUCED LATER BY THE OPERATION OF DISCOUNTS . NOR HAS IT INDICATED THE BASIS ON WHICH IT HAS CALCULATED THE SAID DISCOUNTS . ( B ) IN ORDER TO DEMONSTRATE THE EXISTENCE OF THE SPECIAL CHARGES WHICH THE DISTRIBUTORS OF ITALIAN PRODUCTS HAVE TO BEAR, THE APPLICANT MERELY SETS FORTH CERTAIN FIGURES EXTRACTED FROM THE BALANCE-SHEETS OF TWO IMPORTING COMPANIES . HOWEVER, THESE FIGURES HAVE NO PROBATIVE VALUE . FIRST, THEY WERE CALCULATED ON THE BASIS OF THE TURNOVER OF THE COMPANIES IN QUESTION, AND THUS ON A BASIS WHICH IT IS DIFFICULT TO COMPARE WITH THE PRICES IN PRACTICE PAID BY THE WHOLESALERS, WHICH IS THE ONLY ISSUE HERE . SECONDLY, THE SAID FIGURES LEAVE ENTIRELY OPEN THE QUESTION WHETHER THE BALANCE-SHEETS OF THE DISTRIBUTORS OF FRENCH PRODUCTS CONTAIN COMPARABLE ENTRIES . FINALLY, A CONSIDERABLE PROPORTION OF THE BALANCE-SHEET ENTRIES RELIED ON CONSISTS OF 'EXTRA COMMERCIAL EXPENSES', A FORMULA TOO GENERAL TO ALLOW ANY CONCLUSIONS TO BE DRAWN FROM IT . FOR THE FOREGOING REASONS THIS COMPLAINT MUST BE DISMISSED . BY ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE OF THE COURT OF JUSTICE, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS . AS THE APPLICANT IN THIS CASE HAS FAILED IN ALL ITS SUBMISSIONS IT MUST BE ORDERED TO BEAR THE COSTS . THE COURT HEREBY : 1 . DISMISSES THE APPLICATION AS UNFOUNDED; 2 . ORDERS THE APPLICANT TO PAY THE COSTS . © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII URL: https://www.bailii.org/eu/cases/EUECJ/1963/C1363.html