In its judgment of 10 February 20118 the Court of Justice dismissed the appeal brought by Activision Blizzard Germany (as legal successor of CD-Contact Data GmbH, the addressee of the decision at the base of this proceedings) against the judgment of the General Court9. The General Court upheld the Commission Decision10, finding that CD-Contact Data had participated in a complex set of agreements and concerted practices designed to restrict parallel exports in the market for Nintendo video games consoles and games cartridges, and also reduced the fine imposed on CDContact Data.
The General Court held in its judgment that although the written distribution agreement between CD-Contact Data and Nintendo did not as such contain any clause prohibited by Article 101(1) TFEU11, and there was thus no direct documentary evidence of a written agreement between Ninetendo and CD-Contact Data to restrict passive exports, CD-Contact Data’s participation in an agreement contrary to Article 101(1) TFEU was nevertheless evidenced by its conduct. In coming to that conclusion, the General Court relied on a fax from CD-Contact-Data to Nintendo of Europe GmbH in which the former referred to itself as being “cautious” in relation to its customers which generally engaged in exports. As regards this fax the General Court, contrary to the view of the Commission, noted that it was inappropriate to conclude from its wording alone that CD-Contact Data had agreed to a policy of restricting parallel trade. The Court, however, highlighted that this fax was sent to Nintendo of Europe as a response to a complaint by Nintendo France about so-called “grey” imports of Nintendo products into France stemming from Belgium. In addition, the General Court noted that several letters and faxes concerning parallel imports into Belgium and Luxembourg made it clear that CD-Contact Data participated in an information exchange system set-up by Nintendo to monitor parallel imports. Finally, the General Court held that CD-Contact Data’s participation in parallel trade by exporting goods outside its allocated territory did not call into question the fact that an anti-competitive agreement restricting passive exports existed and that CD-Contact Data was a party to this agreement. For these reasons, the General Court held that the Commission did not err in finding that CD-Contact Data had indeed participated in an agreement that had the limitation of parallel trade as object. Against this judgment of the General Court, Activision Blizzard appealed on three grounds: (i) it alleged that the General Court did not consider the difference in legal effect between a limitation of active parallel trade and a limitation of passive parallel trade; (ii) it alledged that the General Court had distorted the evidence by considering that the documents exchanged between Nintendo and its dealers and among the dealers themselves indicated the pursuit of an illegal object. Third, CD-Contact Data argued that cases involving vertical agreements require a different standard of proof for demonstrating a concurrence of wills when compared with the standard of proof required in cases involving horizontal agreements. In addition, it argued that the General Court erred in law in finding that the evidence taken into account by the Commission was sufficient to conclude that there was an express or implied invitation by Nintendo to join in the pursuit of an anti-competitive goal and the tacit acquiescence of CD-Contact Data.
The Court of Justice firmly rejected Activision Blizzard’s first argument. In so doing, it first rephrased Activision Blizzard’s first ground of appeal as alleging that the General Court had not proven that CD-Contact Data had participated in an agreement contrary to Article 101(1) TFEU since it had not been properly examined whether CD-Contact Data’s conduct went further than agreeing to a mere limitation of active parallel sales. Then, it concluded that, contrary to Activision Blizzard’s assertions, the General Court had carried out such an examination. Indeed, the General Court had explicitly pointed out that in the absence of any direct documentary evidence of a written agreement concerning the limitation of passive exports, it was necessary to examine, by relying on CD-Contact Data’s correspondence, whether the Commission had established the required legal standard that CDContact Data had participated in an anticompetitive agreement covered by Article 101(1) TFEU. Since the General Court had found that the Commission had met this legal standard, the Court of Justice dismissed Activision Blizzard’s first ground of appeal.
Activision Blizzard’s second ground of appeal claiming a distortion of evidence by the General Court, was dismissed as well. Although the Court considered Activision Blizzard’s arguments to be admissible because it had submitted in a sufficiently detailed manner that the assessment by the General Court of CD-Contact Data’s correspondence was at odds with their wording, it held that Activision Blizzard did not succeed in establishing that the General Court had manifestly exceeded the limits of a reasonable assessment of the evidence. More in particularly, the Court of Justice held that it was “in no way obvious”12 that CD-Contact Data intended only to bring attention to a case of active sales made by another of Nintendo’s distributors in breach of the distribution agreement. The Court of Justice lastly pointed out that its task is not to decide if the Commission could establish participation of CDContact Data in the anti-competitive agreement on the basis of the correspondence and thus discharged the burden of proof necessary to show the infringement, but rather to judge whether the General Court, in finding that the correspondence was sufficient to establish an infringement, construed the correspondence in a manner which was manifestly at odds with their wording. The Court of Justice held this was not so and dismissed the second ground of appeal.
In its third ground of appeal, Activision Blizzard primarily raised two issues. It submitted that the General Court was not correct in finding that CD-Contact Data has acquiesced in the policy unilaterally adapted by Nintendo, precluding the finding of an agreement within the meaning of Article 101(1) TFEU. Also, it maintained that the factors which constitute sufficient evidence for the existence of a horizontal agreement may not in all circumstances be regarded as sufficient evidence for the participation of an undertaking in a vertical agreement, in particular where a concurrence of wills would have to be based on tacit acquiescence in a policy which was adopted unilaterally. In that regard Activision Blizzard referred to the fact that, contrary to the contacts between competitors, contacts between suppliers and distributors concerning business practices are normal and even necessary. Furthermore, Activision Blizzard argued that in a vertical relationship, distributors are dependent on supplies from their supplier and are therefore in a weak position, making it more difficult to dissociate themselves overtly from the policy adopted by the supplier.
The Court of Justice, while agreeing that in a vertical relationship a certain measure of contact is lawful, nonetheless pointed out that, contrary to Activision Blizzard’s suggestions, the standard of proof required for the purposes of establishing the existence of an anti-competitive agreement in the framework of a vertical relationship is not higher than that which is required in the framework of a horizontal relationship. The Court held that for the purposes of assessing whether there is an illegal agreement, regard must be had to all the relevant factors, as well as to the economic and legal context of each case. The question, therefore, whether it could be inferred from the evidence that an agreement contrary to Article 101(1) TFEU had been concluded between CD-Contact Data and Nintendo, could not be determined in the abstract.
In summary, the Court of Justice held that Activision Blizzard had not succeeded in refuting the conclusion of the General Court that CD-Contact Data had accepted Nintendo’s invitation to participate in an agreement to restrict parallel trade. The fact that CDContact Data had, in practice, participated in passive parallel trade, could, in itself, not be deemed decisive and could not automatically preclude the possibility of accepting Nintendo’s invitation. Indeed, an exclusive distributor may have an interest, not only in entering into an agreement with a supplier to limit parallel trade, as a means of further protecting its own distribution area, but also in secretly making sales contrary to that agreement in an attempt to use the agreement for its exclusive benefit. The Court of Justice therefore judged that the General Court was able, without erring law, to conclude that in the specific context of the case, CD-Contact Data had in fact accepted Nintendo’s invitation to collaborate in limiting parallel trade.
Consequently, Activision Blizzard’s appeal was dismissed in its entirety.