In its judgment of 22 March 201127 the General Court rejected the action for annulment lodged by Altstoff Recycling Austria (‘ARA’) against the Commission decision in which the Commission imposed some obligations on ARGEV (now a part of ARA) in order to benefit from the exemption provided in Article 101(3) TFEU.
The facts of the case can be summarised as follows: ARA groups undertakings from the packaging industry and trade, and runs a national system of collection and recycling of packaging waste. In the framework of this system of operations, ARA concluded agreements with economical, independent recycling companies from each industry sector, the so-called “Branchen Recycling Gesellschaften” (“BRGs”). In turn, these BRGs concluded agreements for each region with companies or regional authorities that effectively collected and sorted the waste (“partnership agreements”). ARGEV, one of the BRGs, controlled at that time three collection systems: (i) household collection for light packaging, (ii) household collection for metal packaging, and (iii) industrial collection of light and metal packaging. ARGEV had concluded several exclusive partnership agreements with regional collecting companies. The Commission held in its decision that these exclusive partnership agreements, although limiting competition on the market of collecting packaging and on the vertical up-stream market of taking back and valorising packaging waste, could benefit from the exemption provided in Article 101(3) TFEU upon the fulfilment of certain conditions. These conditions imposed that the collecting societies could conclude agreements with competitors of the ARA-system to make use of the containers or other installations used for the collection and sorting of household generated packaging waste and that ARGEV could only demand proof of the collecting societies for the amount of packaging waste which corresponds with the share of the ARA-system in the total amount of packaging waste. ARGEV lodged an action for annulment against these conditions.
ARGEV basically argued that the partnership agreements did not contain any exclusivity clause and in any event, the agreements did not have any anti-competitive effects and were therefore not prohibited by Article 101 TFEU; at least the agreements should benefit from the vertical block exemption regulation. Furthermore, ARGEV claimed that the Commission decision violated the ‘essential facilities theory’ and invoked that the imposed conditions could not be realised in practice and were disproportionate. The General Court rejected all of these arguments.
First of all, the General Court held that—although it was true that the partnership agreements did not contain any territorial exclusivity clause in benefit of the collecting societies—the facts surrounding those partnership agreements made clear that they do in fact install a system of territorial exclusivity for a period between 3 and 5 years. Furthermore, the General Court held that the Commission was correct in concluding that a network of such territorial exclusive agreements, concluded by the company with the biggest demand for waste disposal services, restricts competition on the market for collection and sorting of waste due to the exclusion of collecting companies that were not selected to conclude an agreement with ARGEV for a period of 3 to 5 years. The General Court continued and stated that the Commission was also correct to have held that the system of partnership agreements created the risk of imposing a factual exclusivity on the collecting societies only to supply to ARGEV which would lead to the restriction of competition on the market of waste disposal systems (competitors of ARGEV/ ARA) due to lack of input. Therefore, the conditions imposed were justified. Thus, the Commission decision did not violate Article 101 TFEU.
Secondly, the General Court judged that the Commission rightly did not apply the vertical block exemption regulation. The General Court clarified that although the Commission rightly held that the relevant geographic market to determine whether there was a notable restriction of competition was national, this did not mean that the Commission could not use the regional markets for which a partnership agreement was concluded for the calculation of the 30% market share used in the vertical BER. In fact, from the perspective of the collecting societies, each collection region is a relevant market as the conditions for executing the services are homogenous within that region and differ from other regions. As such, the collecting societies have a market share which clearly exceeds 30%, and thus the agreements cannot benefit from the vertical BER.
Thirdly, regarding the wrong application of the essential facilities theory, the General Court simply pointed out that this theory is applicable to cases concerning the abuse of a dominant position and not in cases of restriction of competition due to the effect of several agreements which fall under Article 101 TFEU. Thus the Commission did not have to and did not apply the essential facilities theory to the present case. Consequently, the plea in law based on a erroneous application of the essential facilities theory was rejected.
Fourthly, the General Court held that the imposed conditions could in practice be executed, which is proven by the fact that the conditions are already successfully applied for a reasonable amount of time, and also held that the conditions imposed did not violate the principle of proportionality. In fact, the General Court found the conditions imposed to be useful in achieving the goal of the decision (i.e., to exclude the risk of restriction of competition on the up-stream market of waste disposal systems) and that these conditions did not go beyond what was necessary to achieve that goal