Jones and Others v Commission (Competition) [2011] EUECJ T-320/07 (23 November 2011)

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(ECSC Treaty – Supply of coal intended for the United Kingdom electricity generation industry – Rejection of a complaint alleging discriminatory pricing – Commission’s competence to apply Article 4(b) CS following expiry of the ECSC Treaty, on the basis of Regulation (EC) No 1/2003 – Assessment of Community interest – Obligations in relation to the investigation of a complaint – Manifest error of assessment )

European Commission, represented by V. Di Bucci and J. Samnadda, acting as Agents,

United Kingdom of Great Britain and Northern Ireland, represented initially by E. Jenkinson, and subsequently C. Gibbs and V. Jackson, and finally by S. Hathaway, acting as Agents, and J. Flynn QC,

E.ON UK plc, established in Coventry (United Kingdom), represented by P. Lomas, Solicitor,

International Power plc, established in London (United Kingdom), represented by D. Anderson QC, M. Chamberlain, Barrister, S. Lister and D. Harrison, Solicitors,

1 The applicants, Daphne Jones, Glen Jones and Fforch-Y-Garon Coal Co. Ltd, are private coal producers established in South Wales. By the present action, they are seeking the annulment of the Commission Decision SG-Greffe (2007) D/203626 of 18 June 2007, pursuant to Article 7 of Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 [EC] and 82 [EC], (Case COMP/37.037-SWSMA) (OJ 2004 L 123, p. 18) (‘the contested decision’), by which the Commission rejected a complaint lodged on their behalf against discriminatory pricing alleged to have been applied, before 1 April 1990, to private coal producers by the Central Electricity Generating Board (‘the CEGB’), a public undertaking operating electricity generating plants in England and Wales.

2 During the period under consideration, the applicants operated underground coal mines under licences granted by the British Coal Corporation (‘British Coal’), a public undertaking set up by the Coal Industry Nationalisation Act 1946.

3 British Coal owned almost all of the coal reserves in the United Kingdom prior to the privatisation of its activities in 1994. It had the exclusive right to extract that coal and was authorised to grant licences for the extraction of coal to private operators. The production of coal by licensed private operators represented around 3% of the coal extracted in Great Britain, according to the figures referred to in the contested decision (point 23).

4 Prior to 1 April 1990, the CEGB was responsible for securing the electricity supply in England and Wales, and had a de facto monopoly in the generation of wholesale electricity in those countries. Under Section 2(5) of the Electricity Act 1957, the CEGB was required to develop and maintain an efficient, co-ordinated and economical system of supply of electricity in bulk for all parts of England and Wales, and for that purpose, to generate or acquire supplies of electricity and to provide bulk supplies of electricity to local distribution boards.

5 The electricity generating sector was the largest market for coal in the United Kingdom. Apart from the financial year 1984/1985, affected by the miners’ strike, more than 80% of coal production was used in electricity generators, according to the data provided by British Coal, set out in the contested decision (point 9 of the contested decision). The CEGB occupied the position of leading buyer on that market (footnote 34 to point 30 of the contested decision).

6 In 1979 and then in 1986, the CEGB concluded with British Coal five-year contracts for the supply of coal, which covered pricing, volumes and other conditions governing the purchase of coal. It is apparent from the contested decision (point 34) that the contract concluded in 1986 (‘the 1986 Joint Understanding’) introduced a three-tranche system of supply to the CEGB:

7 It can be seen from the contested decision (point 35) that, under the 1986 Joint Understanding, the amount of coal which British Coal undertook to supply to the CEGB represented 95% of the CEGB’s coal requirements. The remaining 5% was covered by licensed private producers and imports.

8 With regard to coal supplied by the private producers, the CEGB purchased that coal either directly from the main private producers or from certain approved intermediaries known as ‘blenders’. In order to meet the requirements in terms of both quantity and quality, in particular to ensure the correct volatile matter content for power station consumption, these ‘blenders’ blended coal from various sources, including that produced by the applicants.

9 It can be seen from the table relating to coal prices, reproduced in point 42 of the contested decision, that, in the financial year 1987/1988, the prices paid to the South Wales blenders were 23% less than the average price paid to British Coal, in the financial years 1986/1987 and 1988/1989, they were 27% less and in the financial year 1989/1990, they were 33% less, all tranches combined.

The liberalisation and/or reform of the electricity and coal sectors, and the new contracts for the supply of coal concluded by electricity producers in 1990

10 On 1 April 1990, the activities of the CEGB were divided up for the purposes of privatisation, and were taken over, inter alia, by National Power plc and PowerGen plc, now respectively International Power plc and E.ON UK plc. The obligation of ensuring the security of the electricity supply in England and Wales no longer fell on the producers, but on downstream power distribution companies. Furthermore, under the Coal Industry Act 1990, the number of people who could be employed in one underground mine – which under a clause of the standard licence granted by the CEGB to private producers could not exceed 30, while the number of persons employed in a British Coal underground mine was, on average, 900 – was increased to 150. Lastly, in March 1991, the Community ban on the gas-fired generation of electricity was lifted.

11 In the context of the liberalisation of the electricity generation sector, the 1986 Joint Understanding was terminated at the end of March 1990 and replaced, from 1 April 1990, by new three-year supply contracts between British Coal, on the one hand, and International Power (formerly National Power) and E.ON UK (formerly PowerGen) on the other hand. Those new contracts ended the three-tranche supply system and laid down a single price and fixed volumes for the purchase of coal from British Coal. New contracts, which had retroactive effect from 1 April 1990, were also concluded by the two electricity producers referred to above with the licensed private mines and, in South Wales, with the blenders (see paragraph 15 below).

12 On 5 June 1990, the South Wales Small Mines Association (‘the SWSMA’) lodged the abovementioned complaint with the Commission (see paragraph 1 above), alleging the application of discriminatory pricing by the CEGB, which in its view was contrary to the relevant provisions of the ECSC Treaty and to Articles 81 EC and 82 EC, in respect of 14 members of that association, including the applicants. That complaint expressly referred to the 1986 Joint Understanding, and in particular the tranche supply system of different kinds of coal at different prices (see paragraph 6 above).While acknowledging that the supply of very large quantities of coal could reasonably justify a higher purchase price than that paid for smaller quantities to licensed private producers, the complainants pointed out in substance that the pricing differences at issue in the present case were disproportionate. Furthermore, they stated that they intended to bring a legal action before the national courts.

13 It is apparent from the documents before the Court and from the contested decision (points 78 and 79 thereof) that a further complaint, relating to the period from 1984 to 1986 was lodged by the SWSMA, by letter of 18 July 1996, following the delivery of the judgment of the Court in Case C-18/94 Hopkins and Others [1996] ECR I-2281; see paragraphs 17 and 18 below.

The Commission decision of 23 May 1991 relating to the period after 1 April 1990

14 By decision of 23 May 1991, the Commission rejected the abovementioned complaint by the SWSMA, as well as the parallel complaint lodged on 29 March 1990 by, inter alia, the National Association of Licensed Opencast Operators (‘the NALOO’), in so far as those complaints referred to the period after 1 April 1990. Consideration of the situation prior to that date was expressly excluded from that decision. In so far as it referred to royalties imposed by British Coal on licensed mines, the action brought by NALOO against that decision was dismissed by the judgment in Case T-57/91 NALOO v Commission [1996] ECR II-1019.

15 It is clear from the decision of 23 May 1991 (points 32, 56 and 81 thereof) that, at the time of entry into force on 1 April 1990 of the new supply contracts (see paragraph 11 above), which set a basic price of GBP 170 per gigajoule (GJ) gross and GBP 177.9 /GJ net for British Coal, National Power and PowerGen had initially offered the private licensed producers prices from GBP 122/GJ to GBP 139 /GJ, which had been considered by the Commission to be discriminatory. Following an exchange of correspondence and meetings between the Commission and the United Kingdom authorities, which led to an offer in November 1990 to the SWSMA concerning the conditions for purchasing coal from private producers, National Power and PowerGen went on to conclude individual three-year contracts with the private producers, with retroactive effect from 1 April 1990. Those new contracts provided, in particular, with regard to South Wales, where the small mines sold their output to blenders, for the small mines themselves to organise and manage the activity of blending. Those contracts provided a guarantee to the blenders of the purchase of fixed volumes as well as payment of GBP 157/GJ and provided that blenders should pay a minimum of GBP 147/GJ to licensed mines (points 38, 41, 58 and 67 of the decision of 23 May 1991).

16 In that decision (points 58 and 61), the Commission considered that the new difference of 12% between the prices offered for coal supplied by the private mines or, in South Wales, by the blenders, and that provided by British Coal was not so significant as to constitute discrimination. In that regard, it took the view that the new price differential reflected the inability of the complainants to supply the same volume as British Coal and the additional costs involved in dealing with a large number of small transactions.

17 On a reference for a preliminary ruling from the High Court of Justice (England and Wales), before which members of the SWSMA had brought an action for a declaration of liability, the Court of Justice ruled in Hopkins and Others, paragraph 13 above, in particular, that the price discrimination practised by the purchasers against coal producers fell within the scope of Articles 4(b) CS and 63(1) CS applied together and was therefore not caught by Article 82 EC (paragraphs 15 to 22). In that regard, it stated that the powers conferred on the Commission by Article 63(1) CS enabled it not only to bring to an end for the future any systematic discrimination found to exist, but also, to act appropriately upon that finding as regards the effects which such discrimination might have had in relationships between purchasers and producers within the meaning of Article 4(b) CS even before the Commission took action (paragraph 19). Furthermore, the Court of Justice noted the absence of direct effect of Article 4(b) CS, since, under the aegis of the ECSC Treaty, that article did not apply by itself, and of Article 63(1) CS, since it empowered the Commission to make appropriate recommendations to the governments concerned (paragraphs 26 and 27).

18 In the light of that judgment, by letter dated 18 July 1996, the SWSMA called on the Commission to continue examining its complaint and to rule on the discrimination alleged to have taken place between 1984 and 1990.

Commission decision of 30 July 1998 relating to the period before 1 April 1990

19 By decision of 30 July 1998, the Commission rejected the complaint, on the ground that it considered that it was not competent to adopt recommendations under Article 63(1) CS with regard to infringements which had already ceased.

20 Prior to the notification of that decision, the applicants had informed the Commission that they were no longer represented by the SWSMA and that they wished to take part in the investigation of the complaint lodged inter alia on their behalf by that association.

21 By applications lodged at the Registry of the General Court on 21 September and 6 October 1998 respectively, the complainant undertakings, including the applicants, on the one hand, and the SWSMA, on the other hand, brought proceedings based on the second paragraph of Article 33 CS and Article 35 CS against the abovementioned decision of 30 July 1998 (Cases T-148/98 and T-162/98).

22 By order of 29 September 1999 in Joined Cases T-148/98 and T-162/98 Evans and Others v Commission [1999] ECR II-2837, the Court dismissed both those appeals as inadmissible on the ground that they were time-barred.

23 By judgment in Case C-480/99 P Plant and Others v Commission and South Wales Small Mines [2002] ECR I-265, the Court of Justice set aside that order, in particular in so far as it had dismissed the action in Case T-148/98 as inadmissible on the ground that it was time-barred and had joined Cases T-148/98 and T-162/98. Furthermore, it ruled that the order under appeal was final in nature with regard to the action in Case T-162/98. It referred Case T-148/98 back to the General Court to enable it to give judgment on the substance of the case.

24 In parallel proceedings, by decision of 27 April 1998, the Commission had rejected the complaint lodged to supplement the parallel complaint lodged by NALOO (see paragraph 14 above). NALOO had lodged that supplemental complaint on 15 June 1994, after the dismissal of its action for a declaration of liability before the High Court of Justice (England and Wales) following the judgment of the Court of Justice on a reference for a preliminary ruling in Case C-128/92 Banks [1994] ECR I-1209 (‘Banks I’). The dismissal of that supplemental complaint was based, like the dismissal of the SWSMA’s complaint in the decision of 30 July 1998, at issue in Case T-148/98 above, on the Commission’s alleged lack of competence to consider infringements which had already ceased. By judgment in Joined Cases C-172/01 P, C-175/01 P, C-176/01 P and C-180/01 P International Power and Others v NALOO [2003] ECR I-11421, the Court of Justice partially upheld the judgment in Case T-89/98 NALOO v Commission [2001] ECR II-515, which had annulled the decision of 27 April 1998 rejecting NALOO’s supplementary complaint. In particular, the Court of Justice confirmed that, contrary to the Commission’s claims, Article 63(1) CS conferred on that institution competence to take action in respect of systematic discrimination which had already ceased (paragraphs 80 and 91).

25 Following that judgment, the Commission, by decision of 8 March 2004, withdrew the decision of 30 July 1998, in so far as it concerned the applicants.

26 Consequently, by order of 28 September 2005 in Case T-148/98 Evans and Others v Commission, not published in the ECR, the General Court held that the appeal brought against that decision of 30 July 1998 had become devoid of purpose and that there was no further need to proceed to judgment.

27 Following the withdrawal of the abovementioned decision of 30 July 1998, a meeting was held on 7 May 2004 between the Commission and the applicants. By letters dated 16 June 2006 and 8 and 26 February and 15 March 2007, the applicants submitted their observations on the letters from the Commission dated, respectively, 4 May 2006 and 17 January 2007 informing them that, pursuant to Article 7 of Regulation No 773/2004, it considered that there were not sufficient grounds for acting on their complaint.

28 On 18 June 2007, the Commission adopted the contested decision rejecting the complaint.

29 As regards the applicable substantive rules and the legal basis for its competence, the Commission, referring to paragraph 31 of the Communication of 26 June 2002 concerning certain aspects of the treatment of competition cases resulting from the expiry of the ECSC Treaty (OJ 2002 C 152, p. 5), points out that, in the framework of the ECSC Treaty, the price discrimination referred to in the complaint fell within the scope of the substantive provisions of Article 4(b) CS in conjunction with Article 63(1) CS. It states in that regard that, if a purchaser practising discriminatory pricing occupies a dominant position, Article 82 EC may, since the expiry of the ECSC Treaty, impose obligations corresponding, in substance, to those imposed by Article 4(b) CS in conjunction with Articles 63(1) CS and 66(7) CS. Consequently, in the contested decision, the Commission examines the alleged price discrimination in the light of the substantive provisions of Article 4(b) CS, based on the procedural rules for applying Articles 81 EC and 82 EC, set out in Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1), and Regulation No 773/2004 (points 70 and 71 of the contested decision).

30 In that connection, the Commission states that it is only necessary to verify whether, after the expiry of the ECSC Treaty, it remains competent in certain circumstances to apply Article 4(b) CS. Since it does not appear from its examination of the substance of the complaint that the complainants were discriminated against, the Commission takes the view that no definitive position needs to be taken by it on the question whether the CEGB had a dominant position on the market for the purchase of coal at the relevant time (point 71 of the contested decision).

31 In its examination of the complaint, the Commission draws a distinction between, firstly, the period from 1984 to 1986 and, secondly, that from 1986 to 1990. As regards the first period, the Commission rejects the complaint on two grounds. Firstly, it considers, in essence, that the complaint, lodged in 1990, did not cover that period and that the applicants did not have a legitimate interest in submitting a new complaint in 1996, extending the initial complaint to the period before 1986 (points 78 and 79 of the contested decision). Secondly, it considers that the complaint must also be rejected owing to a lack of Community interest (points 80 to 86 of the contested decision).

32 As regards the second period, from 1 April 1986 to 31 March 1990, the Commission contends that the higher prices paid by the CEGB to British Coal, as regards the first and second tranches of coal referred to in the 1986 Joint Undertaking, were justified by the fact that only British Coal was able to guarantee to the CEGB that it could supply it with significant quantities in the medium term and thus meet the CEGB’s core coal requirements to enable it to fulfil its legal obligation to provide adequate supplies of electricity in England and Wales (points 88 to 90).

33 The Commission explains that, during the period under consideration, the CEGB’s heavy dependence on coal stemmed in particular from the fact that it could not substitute coal with other fuels on a long-term basis owing, firstly, to the fact that substitution by oil would not have been sufficient and to the risk of volatility of international oil prices, particularly following the oil shocks of 1970; secondly, to the ban on the use of gas as fuel in electricity generating plants until the start of the 1990s, and, thirdly, to difficulties involved in agreeing the schedules for new nuclear power stations. Moreover, it would have been impossible to erect in the short and medium term new interconnectors between the United Kingdom and France, to increase the capacity for importing electricity. Furthermore, during the period under consideration, the level of coal imports was limited owing, in particular, to the inadequacy and unsuitability of the port infrastructures (points 91 to 96 of the contested decision).

34 As regards the private coal producers, they were able to guarantee only marginal and short-term coal supplies, because, under the Coal Industry Nationalisation Act 1946, the licensing rules did not allow them to develop their operations on a large scale. Furthermore, there was no evidence that the blenders were linked to their suppliers by binding agreements. As blenders were exposed to the fluctuations in production experienced by the private mines and to the competition between them on the spot market, they were not able to offer medium or long-term supplies, whereas British Coal undertook in the 1986 Joint Undertaking to supply the CEGB for the following five years. The prices paid to the private producers, in this case to the blenders, were therefore determined on the basis of the quantities available, in terms of both the CEGB’s core requirements and the negotiation and transaction costs, the duration of coal supply and the risk of downward fluctuation in the price of coal (points 98 to 104 of the contested decision).

35 In those circumstances, the Commission considers the relevant reference price to be that paid to British Coal for the coal supplies provided under the third tranche covered by the 1986 Joint Undertaking.

36 The Commission adds that the CEGB’s pricing policy had to take into consideration the risk, in the event of adverse conditions, of an irreversible reduction in British Coal’s production capacity. It concludes that the higher prices paid for the first two tranches must be regarded as a justified increase to pay for British Coal’s contribution towards maintaining secure supplies of electricity in the medium term, since the price differences represent a proportionate response to all the aforementioned market conditions and since consumer welfare was not affected (points 106 to 108 and 127 to 130 of the contested decision).

37 Lastly, the Commission rejects the argument put forward by the complainants in their response to the Commission’s letter of 4 May 2006 pursuant to Article 7 of Regulation No 773/2004, in which they alleged that the Commission’s conclusion as to the absence of price discrimination in this case is not consistent with its decision of 23 May 1991, in which it had held that there was evidence of price discrimination prior to the United Kingdom Government’s offer to improve the purchasing conditions of small mines (see paragraph 15 above). The Commission points out that the market conditions in the periods prior to and after 1 April 1990 were very different, in particular in the light of the liberalisation of the electricity sector and the overhaul of the licensing rules (points 117 to 126 of the contested decision).

38 By application lodged at the Court Registry on 24 August 2007, the applicants brought the present action.

39 By documents lodged at the Court Registry on 27, 28 and 29 November 2007 respectively, E.ON UK, International Power and the United Kingdom of Great Britain and Northern Ireland applied for leave to intervene in support of the form of order sought by the Commission. By orders of 10 March 2008, the President of the Sixth Chamber granted such leave to intervene.

40 The written procedure was closed on 17 August 2008. By letters lodged at the Court Registry on 6 and 21 November 2008 respectively, the applicants Glen Jones and Daphne Jones submitted an application for legal aid. By order of 28 April 2009 in Case T-320/07 AJ Jones and Others v Commission, not published in the ECR, the President of the Sixth Chamber granted the application, for a sum not to exceed EUR 4 000, excluding value added tax (VAT).

41 Owing to a change in the composition of the chambers of the Court, the Judge-Rapporteur was assigned to the Fourth Chamber, to which, in consequence, the present case was assigned.

42 In the context of measures of organisation of procedure, the Court put a series of written questions to the parties, to which the latter replied in writing within the prescribed period, as well as written questions to be answered at the hearing.

43 By documents lodged at the Court Registry on 14 February 2011, Glen Jones and Daphne Jones submitted an application for additional legal aid. By order of 10 March 2011 in Case T-320/07 AJ II Jones and Others v Commission, not published in the ECR, the President of the Fourth Chamber granted that application, for an additional sum not to exceed EUR 2 000, thereby increasing the level of legal aid granted to EUR 6 000.

44 Upon hearing the report of the Judge-Rapporteur, the Court (Fourth Chamber) decided to open the oral procedure without any preparatory inquiry.

45 The parties did not enter an appearance at the hearing on 22 March 2011. The Commission and the undertakings to have intervened were requested to reply in writing to the written questions which they had originally been intended to answer orally. They complied with that request within the prescribed period. The oral procedure was closed on 15 April 2011.

47 The Commission, as well as E.ON UK and International Power which have intervened in support of the Commission, contend that the Court should:

48 The United Kingdom of Great Britain and Northern Ireland contends that the Court should dismiss the application.

49 The Commission submits, in the rejoinder, that there is no evidence that one of the applicants, Fforch-Y-Garon Coal, properly granted authority to its lawyers to bring the present action. Furthermore, the reply lodged by the applicants is, in the Commission’s submission, inadmissible.

50 The Commission contends that, in the absence of any proof that the company Fforch-Y-Garon Coal has authorised its representatives to bring this action, the latter is inadmissible by virtue of Article 44(5) of the Rules of Procedure, so far as it has been brought by that company.

51 It argues that the power of attorney dated 3 March 2003, granted by Fforch-Y-Garon Coal to Ms S. Llewellyn Jones, and that of 5 September 2007 granted by that company to Mr I. Jeffreys, concerned solely an action against the decision of 30 July 1998. However, the contested decision rejected the complaint on grounds different from those stated in the decision of 30 July 1998, and therefore cannot be considered to be an action associated with the proceedings of 1998.

52 The Court recalls that, under Article 44(5) of the Rules of Procedure, ‘an application made by a legal person governed by private law shall be accompanied by … (b) proof that the authority granted to the applicant’s lawyer has been properly conferred on him by someone authorised for the purpose’.

53 In the present case, the application signed by the applicants’ representatives, MsLlewellyn Jones and Mr Jeffreys, was registered at the Court Registry on 24 August 2007.

54 The company Fforch-Y-Garon Coal supplemented the documents attached to the application by lodging at the Court Registry, on 29 August 2007, the power of attorney dated 3 March 2003, granted to Ms Llewellyn Jones by the director of the company, as legal representative of that company. Under the power of attorney: ‘The Attorney has authority in England and Wales and in Luxembourg in the name and on behalf of the Company and on such terms and conditions as may seem to him expedient to bring or defend any action or other legal proceedings and in particular to conduct the action against the European Commission concerning the application to the Court of … First Instance for the Annulment of the decision of the Commission of the 30 July 1998 in Case IV/E/3/SWSMA and all other actions associated with the same and in pursuance of that action’.

55 In addition, on 6 September 2007, Fforch-Y-Garon Coal produced the power of attorney dated 5 September 2007 granted by its legal representative to Mr Jeffreys. The wording of that power of attorney is exactly the same as that of the power of attorney granted to Ms Llewellyn Jones in 2003.

56 In those circumstances, it is sufficient to note that, in the present case, Ms Llewellyn Jones was duly authorised, prior to the commencement of this action on 24 August 2007, by Fforch-Y-Garon Coal to represent it in legal proceedings in the context of the dispute between that company and the Commission as regards the action to be taken on the initial complaint. There is no need for the power of attorney to make express mention of the contested decision for it to be found in this instance to comply with Article 44(5) of the Rules of Procedure, invoked by the Commission.

57 Admittedly, as the Commission points out, the abovementioned power of attorney granted to Ms Llewellyn Jones refers in particular to the decision of 30 July 1998. In fact, the power of attorney was granted in 2003, following the annulment by the Court of Justice of the order of the General Court dismissing as inadmissible the applicants’ action against the decision of 30 July 1998 (Case T-148/98) and referring that case back to the General Court to enable it to give judgment on the substance of the case (Plant and Others v Commission and South Wales Small Mines, paragraph 23 above).

58 However, as is shown especially by the use of the words ‘in particular’, the wording of the power of attorney explicitly makes clear that it did not concern solely the conduct of the proceedings seeking annulment of the decision of 30 July 1998, by which the Commission had rejected the complaint (Case T-148/98), but also covered the bringing, in particular before the Courts of the European Union, of ‘any action’ to defend the rights of the company concerned in the dispute between it and the Commission, with regard to the action to be taken following the initial complaint. The withdrawal by the Commission, in 2004, of the decision of 30 July 1998 did not terminate that dispute, since examination of the initial complaint continued and eventually culminated, in 2007, in the rejection of that complaint in the contested decision (see paragraphs 25 to 28 above).

59 It follows that the present action against the contested decision is covered by the abovementioned power of attorney, inasmuch as it follows on from the previous actions. In that regard, the fact, mentioned by the Commission, that the contested decision is based on other reasons from that of 30 July 1998 and was adopted after the expiry of the ECSC Treaty is irrelevant, since the contested decision forms part of the dispute between the company Fforch-Y-Garon Coal and the Commission as regards the action taken by the Commission on the complaint.

60 Furthermore, although the second power of attorney mentioned above, dated 5 September 2007, was granted to Mr Jeffreys a few days after the commencement of this action, that power – granted a number of years after the withdrawal of the decision of 30 July 1998 and the subsequent decision in Case T-148/98 not to proceed to judgment – confirms, by the fact that it is worded in strictly identical terms to that granted to Ms Llewellyn Jones, that the two powers of attorney in question, even though they refer in particular to the decision of 30 July 1998, may only be taken to cover all the actions relating to the dispute between Fforch-Y-Garon Coal and the Commission as regards the action taken on the complaint.

61 For all those reasons, the plea of inadmissibility based on Article 44(5) of the Rules of Procedure must be rejected. This action cannot therefore be declared inadmissible in so far as it has been brought by Fforch-Y-Garon Coal.

62 The Commission maintains that the reply is inadmissible since it has not been drawn up by a lawyer and as a result infringes Article 43(1) of the Rules of Procedure.

63 The effect of the third and fourth paragraphs of Article 19 of the Statute of the Court of Justice, which govern the procedure before the General Court pursuant to Article 53 of the Statute, is that only a lawyer authorised to practise before a court of a Member State or of another State which is a party to the Agreement on the European Economic Area (EEA) may validly undertake procedural steps before the General Court on behalf of parties other than the States and institutions referred to in the first and second paragraphs of Article 19 of the Statute.

64 Furthermore, under Article 43(1) of the Rules of Procedure of the General Court, the original of every pleading must be signed by the party’s agent or lawyer.

65 In this case, the applicants lodged, as a reply, a letter, dated 1 April 2008, sent by the law firm to which their representatives belonged, to which were attached three letters addressed to the Court, dated 17 January 2008. The first of those three letters was sent to the Court by the Chairman of SWSMA on behalf of Fforch-Y-Garon Coal, the second came from Mr Glen Jones and Ms Josy Jones and the third from two applicants who have subsequently withdrawn.

66 Those three letters were countersigned by one of the applicants’ lawyers. However, it emerges quite clearly from the letter of 1 April 2008 that the three letters concerned were drawn up by their respective authors, without the assistance of a lawyer, since they were initially sent directly to the Court by the applicants before their lawyers had even been made aware of their content.

67 In those circumstances, the mere fact that one of the applicants’ lawyers subsequently countersigned those letters does not permit the inference that he assumes responsibility for the execution and content of those documents, in accordance with Article 19 of the Statute of the Court of Justice and Article 43(1) of the Rules of Procedure of the General Court.

68 For all those reasons, the document comprising the letter of 1 April 2008 and the three letters annexed to it cannot be regarded as having the effect of a reply and must therefore be declared inadmissible.

69 The applicants dispute the various grounds on which the Commission rejected the complaint with regard, firstly, to the period from 1984 to 1986 and, secondly, to the period from 1986 to 1990.

70 Before examining the merits of the contested decision with regard to those two periods, it should be recalled that the Commission considered that it was competent to adopt the contested decision on the basis of Regulation No 1/2003 (see paragraphs 29 and 30 above). None of the parties challenges that competence.

71 The applicants challenge the two alternative grounds on which the complaint was rejected as regards the financial years 1984/1985 and 1985/1986: those grounds were, on the one hand, the inadmissibility of that complaint before the Commission owing to the complainants’ lack of any legitimate interest (see paragraph 31 above) and, on the other, the lack of any Community interest.

72 The Court considers it appropriate to examine first the plea alleging a manifest error in the assessment of the Community interest.

73 It should be observed, as a preliminary point, that according to well-established case-law (see, inter alia, Case C-449/98 P IECC v Commission [2001] ECR I-3875, paragraphs 45 and 46), confirmed by the Commission Notice on the handling of complaints by the Commission under Articles 81 [EC] and 82 [EC] (OJ 2004 C 101, p. 65, ‘the notice of 27 April 2004’) (points 41 to 44), although the Commission has a discretion to give differing degrees of priority to the complaints brought before it, it is required, in order to assess the Community interest in further investigation of a case, to examine carefully the factual and legal elements brought to its attention by the complainants.

74 Furthermore, given that the assessment of the Community interest raised by a complaint depends on the circumstances of each case, the number of criteria of assessment to which the Commission may refer should not be limited, nor conversely should it be required to have recourse exclusively to certain criteria (Case C-119/97 P UFEX and Others v Commission [1999] ECR I-1341, paragraph 79 and the notice of 27 April 2004, point 43).

75 Review by the Courts of the European Union of the Commission’s exercise of the discretion conferred on it in this regard must not lead them to substitute their assessment of the Community interest for that of the Commission, but focuses on whether the contested decision is based on materially incorrect facts, or is vitiated by an error of law, manifest error of appraisal or misuse of powers (Case T-193/02 Piau v Commission [2005] ECR II-209, paragraph 81).

76 In the contested decision (point 80), the Commission concluded that there were three reasons why there was no Community interest in investigating the complaint so far as the period 1984 to 1986 was concerned. It claimed, in the first place, that since the expiry of the ECSC Treaty, the relevant substantive provisions of that Treaty have had direct effect and consequently the complainants may assert their rights before the national courts. In the second place, the alleged infringement took place a very long time ago. It no longer produces any anti-competitive effects and the undertakings concerned have modified their conduct as of 1 April 1990. In the third place, the investigation of the complaint has not advanced so far as the period 1984 to 1986 is concerned, since the complainants referred to it only in the letter from the SWSMA of 18 July 1996.

77 The applicants challenge those three reasons. The arguments of the parties relating to each of them should therefore be examined in turn.

The direct effect of the relevant substantive provisions of the ECSC Treaty and whether it is possible for the applicants to enforce their rights before the national courts

78 Relying in particular on the judgment in Hopkins and Others, paragraph 13 above, the applicants have, in the application, cited the absence of direct effect of the relevant provisions of the ECSC Treaty to support their challenge to the Commission’s conclusion concerning the lack of Community interest. The Commission and the United Kingdom, which has intervened in support of the form of order sought by the Commission, have, by contrast, maintained that those provisions may be relied on directly by individuals in national court proceedings following the expiry of the ECSC Treaty.

79 However, in their reply to a written question asked by the Court – concerning the direct effect of the relevant provisions of the ECSC Treaty following its expiry on 23 July 2002 and the competence of the Commission and the national courts to apply those provisions in the present case – the applicants acknowledged that, since that date, Article 4(b) CS has been directly effective and that competence to apply it is shared by the Commission and the national courts.

80 The applicants added, however, that they would probably be time-barred before the national courts and would have to appeal to the discretion of those courts, which have power under Section 32 of the Limitation Act 1980 to postpone the start of the limitation period where there has been fraud, concealment or mistake.

81 In that regard, a distinction must be drawn, for the purposes of the assessment of Community interest, between (i) the question whether a provision of the ECSC Treaty has direct effect and (ii) the question whether, in practical terms, the complainants actually have a legal remedy before the national courts.

82 Firstly, as regards the criterion of direct effect, the Commission could not, without infringing the complainants’ rights and exceeding its discretion, reject for lack of Community interest, on the basis of Regulation No 1/2003, a complaint concerning an infringement of a provision of the ECSC Treaty which – like Articles 81 EC and 82 EC – pursues the objective of healthy and effective competition, if the provision of the ECSC Treaty concerned, initially not having direct effect, were not to have direct effect following the expiry of the ECSC Treaty. In that regard, it must be recalled that, under Council Regulation (EEC) No 17 of 6 February 1962, First Regulation implementing Articles [81 EC] and [82 EC] (OJ, English Special Edition 1959-1962, p. 87), the Commission was required to investigate complaints which fell within its exclusive competence (see Case T-186/94 Guérin automobiles v Commission [1995] ECR II-1753, paragraph 23 and the case-law cited). Following the expiry of the ECSC Treaty, that conclusion can be applied to the treatment by the Commission, on the basis of Regulation No 17 or, since 1 May 2004, Regulation No 1/2003, of a complaint concerning an infringement of a substantive provision of the ECSC Treaty for whose application the Commission continued to have exclusive competence.

83 In the present case, it should therefore be ascertained, in the light of the reasoning adopted by the Court of Justice in particular in Hopkins and Others, paragraph 13 above, whether, following the expiry of the ECSC Treaty on 23 July 2002, the relevant substantive provisions of that Treaty became directly effective.

84 Under the ECSC Treaty, the practices referred to in the complaint were covered by Article 4(b) CS in conjunction with Article 63(1) CS, which could, in certain circumstances, be interpreted as containing special rules as compared with the provisions of Article 82 EC (Hopkins and Others, paragraph 13 above, paragraphs 14 and 22).

85 Article 63(1) CS, which gave effect to Article 4(b) CS (Hopkins and Others, paragraph 13 above, paragraph 17), contained procedural provisions which, in cases where discrimination was being systematically practised by purchasers, conferred power on the Commission to enforce, by means of appropriate recommendations to the governments concerned, the prohibition on discriminatory pricing more broadly stated in Article 4(b) CS.

86 In accordance with the principles governing the temporal application of the law, in the absence in the ECSC and EC Treaties of transitional provisions providing that the substantive rules of the EC Treaty are to apply as regards situations that obtained before the expiry of the ECSC Treaty, the substantive provisions of Article 4(b) CS continue, following the expiry of that Treaty, to be applicable to the discriminatory practices predating 1 April 1990 to which the complaint refers.

87 By contrast, the procedural provisions of Article 63(1) CS, which conferred power on the Commission to apply the substantive provisions of Article 4(b) CS, ceased to be in force following the expiry of the ECSC Treaty.

88 As regards the situation obtaining prior to expiry of the ECSC Treaty, the Court of Justice ruled, in Hopkins and Others, paragraph 13 above, that, because of the more specific rules in Article 63(1) CS, which gave effect to Article 4(b) CS and conferred exclusive competence on the Commission to apply Article 4(b) CS, the latter had to be applied in conjunction with Article 63(1) CS (paragraphs 15 to 18 of the judgment; see also Banks I, paragraph 24 above, paragraph 11, in which the Court of Justice stated that Article 4 CS applied by itself only in the absence of more specific rules). The Court relied on the fact that Article 4(b) CS did not apply by itself when concluding that it could not have direct effect (Hopkins and Others, paragraph 13 above, paragraph 26; see also, by analogy, as regards Article 4(d) CS, Banks I, paragraph 24 above, paragraph 16).

89 It follows from that reasoning that, since, following the expiry of the ECSC Treaty, the procedural provisions of Article 63(1) CS are no longer in force, the substantive provisions of Article 4(b) CS now apply by themselves. The obstacle to the recognition of direct effect, constituted by the procedural provisions of Article 63(1) CS which conferred exclusive competence on the Commission, has thus been removed (see, to that effect, the Opinion of Advocate General Fennelly in Case C-390/98 Banks [2001] I-6117, I-6122, paragraphs 35 and 36).

90 Consequently, as the substantive provisions of Article 4(b) CS are unconditional and sufficiently precise, it has, since the expiry of the ECSC Treaty, been possible for individuals to rely on them directly before the national courts.

91 Accordingly, since the Commission did not have exclusive competence following the expiry of the ECSC Treaty, the applicants were not entitled to obtain a decision from the Commission on whether or not there was an infringement of Article 4(b) CS as alleged (see paragraph 82 above).

92 Secondly, with regard to the criterion concerning the complainants’ access to the national courts, it should be recalled that the fact that it would actually be impossible to bring an action before the national courts is only one of the criteria that may be taken into account by the Commission in its assessment of the Community interest (see paragraphs 73 to 75 above) and thus does not remove the Commission’s right to determine the degree of priority to be afforded to the complaint (see, to that effect, Case T-575/93 Koelman v Commission [1996] ECR II-1, paragraph 79).

93 In the present case, the Commission was therefore entitled to state, in the contested decision (point 85), that, contrary to the contentions of the complainants during the administrative procedure, the fact that they would be time-barred before the national courts would not be sufficient to establish a Community interest.

94 In addition, the onus is on the applicants to show that it would actually be impossible for them to bring an action before the national courts (Koelman v Commission, paragraph 91 above, paragraphs 78 and 79, and the judgment of 3 July 2007 in Case T-458/04 Au Lys de France v Commission [2007], not published in the ECR, paragraph 84).

95 In the present case, it must be stated that the applicants do not dispute, either in their pleadings or in their reply to a written question put by the Court, (see paragraph 80 above), the Commission’s statement in the contested decision (point 85) that they did not show, during the administrative procedure, that their actions before a national court would be time-barred, having regard to the discretion which the national courts would have in view of the particular circumstances of the case.

96 It follows from all the foregoing considerations that the applicants have not established that the Commission made a manifest error of assessment in relying on the first of the abovementioned reasons for the purpose of assessing the Community interest in investigating the complaint, despite the applicants’ unsubstantiated contentions concerning the fact that they would be time-barred before the national courts.

The lapse of time since the practices referred to in the complaint took place and the absence of continuing anti-competitive effects

97 In the contested decision (point 86), the Commission discounts the argument concerning the continuing harmful effects of the alleged discrimination, put forward by the complainants during the administrative procedure. It contends that the competitive situation on the United Kingdom coal market has fundamentally changed, there being three successor companies to British Coal. In any event, it contends that no connection can be established between continuing anti-competitive effects and the insolvency of private coal producers, on the one hand, and the alleged price discrimination, on the other.

98 According to the case-law confirmed by the notice of 27 April 2004 (point 44), the Commission may decide that it is not appropriate to investigate a complaint where the practices in question have ceased. However, in deciding to take no further action on a complaint against those practices on the ground of lack of Community interest, the Commission cannot rely solely on the fact that practices alleged to be contrary to the Treaty have ceased, without having ascertained that anti-competitive effects have ceased and, if appropriate, that the seriousness of the alleged interferences with competition or the persistence of their effects has not been such as to give the complaint a Community interest (Ufex and Others v Commission, paragraph 74 above, paragraph 95, and Case T-115/99 SEP v Commission [2001] ECR II-691, paragraphs 33 and 42).

99 In the present case, the applicants confine themselves to claiming that the delay in processing the complaint can be attributed to the Commission and to arguing that Article 63(1) CS has no direct effect. Those two arguments of a procedural nature are unconnected with the criterion for assessing the Community interest relating to the possible persistence of anti-competitive effects resulting from the alleged price discrimination.

100 In the present case, the applicants do not advance any specific evidence such as to give grounds for assuming that the alleged price discrimination continued to have an effect on their competitive situation or their viability once those practices had ceased.

101 Accordingly, since they have provided no specific evidence that the structure of the market was permanently altered as a consequence of the practices at issue, the applicants have not established that the Commission’s reliance on the lapse of time since those practices took place in assessing the Community interest and deciding whether it was appropriate to investigate the complaint entailed a manifest error of assessment.

102 In the contested decision (point 80), the Commission argues that, although the investigation of the complaint is very advanced with regard to the practices postdating 1986 referred to in the initial complaint of 5 June 1990, that is not the case of the practices prior to 1986, because the complainants referred to those practices only in the letter from the SWSMA of 18 July 1996.

103 According to the case-law confirmed in the notice of 27 April 2004 (point 44), the Commission’s discretion to determine the degree of priority of a complaint does not depend on how advanced the investigation of a case is. However, that element forms part of the circumstances of the case which the Commission is required to take into consideration when exercising its discretion (IECC v Commission, paragraph 73 above, paragraph 37).

104 In this case, it is not disputed that the Commission’s investigation concerned solely the period between 1986 and 1990, during which the 1986 Joint Understanding was in force and not the earlier period, governed by the supply agreement concluded between the CEGB and British Coal in 1979. In particular, the Commission did not undertake an examination of the situation prior to 1986, since it had not been claimed that that situation was identical to the situation resulting from the 1986 Joint Understanding. Indeed, the applicants do not claim that a mechanism for fixing price differentials, by reference to supply tranches, similar to the mechanism complained of in the initial complaint, which had been set up by the 1986 Joint Understanding, was already used in the period 1984 to 1986.

105 In those circumstances, the Commission did not make a manifest error of assessment in taking into account, for the purposes of the assessment of Community interest, the fact that the investigation was not very far advanced so far as the period 1984 to 1986 was concerned.

106 In view of all the foregoing considerations concerning the examination of the three factors relied on by the Commission in concluding that there was no Community interest so far as the period prior to 1986 is concerned, the Court finds that the applicants have not established that the Commission’s conclusion entailed a manifest error of assessment.

107 Accordingly, the Commission was entitled to reject the complaint on the ground of lack of Community interest so far as the period 1984 to 1986 was concerned, even if that complaint was admissible.

108 This action must therefore be dismissed as unfounded in so far as it seeks annulment of that aspect of the contested decision which rejects the complaint with regard to the period 1984 to 1986. There is no need to examine the arguments put forward by the applicants against the second alternative ground for rejecting the complaint (see paragraph 71 above), concerning inadmissibility of the complaint on account of the complainants’ lack of a legitimate interest because the supplementary complaint concerning that period was allegedly made out of time (see, to that effect, judgment of 12 July 2007 in Case T-229/05 AEPI v Commission, not published in the ECR, paragraphs 24 to 26).

109 With regard to the financial years 1986/1987 to 1989/1990, the Commission rejected the applicants’ complaint, in essence, on the ground that the differences between the purchase prices for coal applied by the CEGB in respect, firstly, of British Coal and, secondly, of the blenders who processed the coal produced by the operators of private licensed mines were, in the Commission’s view, objectively justified by the fact that only British Coal was in a position to meet the CEGB’s core requirements for unworked coal.

110 The applicants put forward two pleas to counter that reasoning. In the first place, they submit that the Commission made a manifest error of assessment when considering the alleged discrimination, by referring to the national coal market, whereas the complainants operated on the local market of South Wales. In the second place, they deny that the licensed private mines of South Wales were able to provide only limited quantities of coal for a brief period.

111 Before considering the two pleas mentioned above, certain matters should first be made clear concerning, first of all, the legal framework applicable to the rejection of a complaint on the substance, second, the identification of the practices at issue in the context of the relationship between the complainants and the blenders and, third, the subject-matter of the legal dispute.

112 Neither Regulation No 1/2003 nor Regulation No 773/2004 contains express provisions relating to the action to be taken concerning the substance of a complaint and the obligations of the Commission in respect of the investigation of that complaint. Article 7 of Regulation No 773/2004 merely lays down the procedure to be followed when a complaint is to be rejected, laying down the complainant’s right to make known its views in writing on the reasons for the Commission’s conclusion that there are insufficient grounds for acting on its complaint.

113 According to settled case-law, confirmed by the notice of 27 April 2004 (point 41), the Commission is not required to take a decision within the meaning of Article 249 EC on the existence or non-existence of the alleged infringement (Ufex and Others v Commission, paragraph 74 above, paragraph 87).

114 In particular, as the Commission pointed out in the notice of 27 April 2004 (point 79), a decision to reject a complaint does not definitively rule on the question of whether or not there is an infringement of Article 81 EC or Article 82 EC, even where the Commission has assessed the facts on the basis of those articles.

115 It is on the basis of those principles that the case-law has recognised that, since the Commission is under no obligation to rule on the existence or non-existence of an infringement, it cannot be compelled to carry out an investigation, because such an investigation could have no purpose other than to seek evidence of the existence or non-existence of an infringement which it is not required to establish (see Case T-204/03 Haladjian Frères v Commission [2006] ECR II-3779, paragraph 28 and the case-law cited).

116 It follows that, in order to reject a complaint on the ground that the conduct complained of does not infringe the competition rules or does not fall within their field of application, the Commission is not as a rule obliged to take into account circumstances that have not been brought to its attention by the complainant and that it could have uncovered only by the investigation of the case (notice of 27 April 2004, point 47; Case T-319/99 FENIN v Commission [2003] ECR II-357, paragraph 43; and Case T-432/05 EMC Development v Commission [2010] ECR II-00000, paragraph 59).

117 However, the Commission is obliged to examine carefully the factual and legal particulars brought to its attention by the complainant (order in Case C-59/96 P Koelman v Commission [1997] ECR I-4809, paragraph 42, and judgment in Case T-206/99 Métropole television v Commission [2001] ECR II-1057, paragraph 58).

118 When the complaint concerns, as in the present case, price discrimination, it is for the complainant to provide specific evidence from which it may be inferred that the disputed price differences cannot be explained by the relationship between the price and the economic value of the supply provided (see, as regards a complaint in which it was alleged that the different prices paid by television companies for the purchase of broadcasting rights for films was unfair within the meaning of point (a) of the second paragraph of Article 82 EC, Case 298/83 CICCE v Commission [1985] ECR 1105, paragraphs 22 and 25).

– Identification of the practices at issue in the context of the relationship between the complainants and the blenders

119 It can be seen from the complaint lodged, on 5 June 1990, by the SWSMA on behalf of, inter alia, the applicants as well as from the contested decision and the arguments put forward by the parties, that the practices at issue consist in the price differences applied by the CEGB with regard to British Coal, on the one hand, and to the South Wales blenders, on the other, pursuant to the 1986 Joint Understanding.

120 In fact, it is clear from the documents before the Court that, in South Wales during the period under consideration, that is to say, before 1 April 1990, most of the small private mines did not sell their coal directly to the CEGB but to approved intermediaries known as ‘blenders’ (see paragraph 8 above). That was the case of the complainants including the applicants. The invitations to tender to national coal suppliers other than British Coal were open to the blenders, which in their turn purchased coal on a ‘spot’ basis from inter alia private mines or providers of tip-washed or recovered coal (point 39 of the contested decision).

121 The CEGB applied to the South Wales blenders the prices provided for at national level by the 1986 Joint Understanding for the third tranche of its coal supply (see paragraph 6 above).

122 The Commission noted in the contested decision (see footnote 81) that, in their comments of 4 May 2006, the complainants had maintained that the price comparison should have been between the prices paid by the CEGB to British Coal and those paid by the blenders to the private mines. The Commission rightly discounted that method of calculation on the ground that the price comparison had to be carried out as between undertakings operating at the same market level. Furthermore, since the complaint concerned the price differences practised by the CEGB under the 1986 Joint Understanding, only the price differences practised by the CEGB were in issue. In that regard, the Commission was correct in holding that the CEGB cannot be held responsible for the blenders’ actions with regard to the small private mines so far as pricing is concerned (footnote 81, in fine, to the contested decision).

123 Moreover, it should be noted that the blenders did not lodge a complaint with the Commission. In this case, the Commission acknowledged, in the contested decision (footnote 81) the complainants’ interest in lodging a complaint directly against the CEGB because ‘the prices paid to the blenders were of crucial importance in determining prices, which in turn were paid to the small private mines’.

124 It is settled case-law that the principle of non-discrimination requires that comparable situations must not be treated differently and different situations must not be treated in the same way, unless such treatment is objectively justified (Case T-156/94 Aristrain v Commission [1999] ECR II-645, paragraph 143; see also, as regards the prohibition on discriminatory practices employed by sellers, set out in Article 60(1) CS, Case 29/67 Wendel v Commission [1968] ECR 263).

125 In the complaint (see paragraph 12 above), the complainants invoked the disproportionate nature of the differences in the price paid for coal by the CEGB to British Coal and that paid to the private producers (in this instance the blenders).

126 The discrimination resides, in the applicants’ submission, in the fact that the prices paid to the South Wales blenders were between 23% and 33% less than the average price paid by the CEGB to British Coal under the three-tranche system (see paragraph 9 above).

127 The 1986 Joint Understanding (see paragraphs 6 and 7 above) provided that 95% of the CEGB’s coal requirements was to be supplied exclusively by British Coal, under the first two tranches. Those first two tranches covered the CEGB’s core coal requirements at national level to enable it to meet its legal obligation to provide adequate electricity supplies in England and Wales. The third tranche, covering the remaining 5% of the CEGB’s requirements, consisted of coal purchased from British Coal, from private producers under licence (in this case the South Wales blenders) and from importers.

128 Different prices were paid for each tranche. As regards the third tranche, corresponding to ‘marginal coal’, the 1986 Joint Understanding set a price aligned to the price of imported coal. The price paid to the private producers – in this instance the South Wales blenders – was established by reference to the price paid to British Coal under the third tranche. During the first three years of the period under consideration the price paid to the blenders was, successively, 2%, 11% and 10% higher than the price paid to British Coal. It was 1% lower than that price during the year 1989/1990 (see point 42 of the contested decision).

129 In the contested decision, the Commission concluded that British Coal and the South Wales blenders belonged to different categories of coal suppliers. The dispute between the parties results in the present case from the Commission’s choice, as a reference price for assessing whether there was price discrimination, of the prices paid to British Coal under the third tranche.

130 It is clear from the contested decision that the Commission concluded that there were two reasons why the terms of supply offered by British Coal, on the one hand, and the South Wales blenders, on the other, were not comparable. First, even at local level, the South Wales blenders were not able to guarantee in advance, in 1986, a stable supply in the medium term of sufficient quantity (points 98 to 104 of the contested decision). Second, only British Coal was capable of ensuring security of the CEGB’s coal supply at national level and of thereby enabling it to fulfil its public service obligations (points 105 to 108 of the contested decision).

131 In the present case, the applicants complain that the Commission did not conduct an adequate investigation concerning the questions (i) whether the conditions of sale offered by, respectively, British Coal and the private producers should rather have been compared at local level (see paragraphs 132 to 144 below) and (ii) whether those terms were comparable in South Wales (see paragraphs 145 to 152 below).

132 The applicants, while acknowledging that the CEGB was required by a public service obligation to manage the entire electricity network in England and Wales, submit that the Commission made a manifest error of assessment by comparing the conditions of coal supply proposed by British Coal and the licensed private producers, respectively, at national level.

133 They submit that that manifest error of assessment derives from the inadequacy of the investigation. The applicants do not in fact make a substantiated claim that the relevant geographic market was that of South Wales. Their sole complaint is that the Commission failed to carry out an investigation designed to establish whether the electricity network in England and Wales could be operated by the CEGB as one entity, or whether, on the contrary, in order to fulfil its public service obligation, the CEGB had in practice to operate the various geographical sub-systems separately and ensure the proper operation of each of them, owing, for example, to restraints or costs linked to the distribution of electricity.

134 According to the applicants, if – as they believe to be the case – the whole of the electricity network in England and Wales could not be operated as a single unit, the Commission was required to consider whether, on the local market (South Wales), on which the complainants operated, the terms of supply offered by British Coal and the private producers, respectively, were comparable. The applicants accept, however, that, in the case of comparable supply conditions in South Wales, the Commission should also have verified whether British Coal’s ability to supply coal on other local markets was affected by its relationship with the CEGB in South Wales.

135 It should be observed as a preliminary point that the 1986 Joint Understanding could not, on its own, justify a practice of discriminatory pricing within the meaning of Article 4(b) CS. The Understanding is therefore not conclusive when determining the geographic scope of the market for coal supply on which the CEGB was operating.

136 In view of the arguments put forward by the applicants, it is necessary to ascertain whether, taking account of the material submitted to it by the complainants during the administrative procedure, it was for the Commission to pursue its investigation, on the basis of Regulations Nos 1/2003 and 773/2004, with a view to determining whether the coal-supply conditions offered to the CEGB by British Coal, on the one hand, and by the private producers, on the other, should have been compared at local level, that is to say, on the South Wales market on which the complainants were operating, instead of at national level, in order to establish whether the differences in the price paid for coal by the CEGB were discriminatory for the purposes of Article 4(b) CS.

137 In the contested decision (footnote 27 to point 26), the Commission disputed the complainants’ argument that the figures relating to the quantities of coal supplied by the private sector to the electricity generating plants in South Wales, to which the complainants referred, should have been compared to the volumes of coal supplied by British Coal to those South Wales electricity generators. It maintained that the comparison of the conditions of supply should be carried out at national level, because the CEGB’s purchasing policy was subordinate to its public service obligation to ensure the security of electricity supply in England and Wales. In particular, the Commission noted in that regard that the CEGB, which was legally responsible for the production and supply of wholesale electricity in England and Wales, and British Coal, which held the monopoly for coal production in Great Britain, were linked by supply contracts at national level, as shown by the 1986 Joint Understanding, referred to in the complaint. It pointed out that the CEGB’s purchasing policy was subordinate to its legal obligation to operate the entire electricity network of England and Wales, which should be distinguished from operating individual power plants in isolation from the rest of the system.

138 It is in particular clear from the above explanation, contained in footnote 27 to the contested decision, that the Commission essentially took as its basis the idea that the security of the CEGB’s coal supply, in order to allow it to meet its public service obligations, had to be ensured at national level, by means of a purchasing and coal-pricing policy which was also determined at national level (see also paragraphs 32, 33 and 36 above). Furthermore, the Commission noted that the data relating to the operation of electricity generating plants at local level were not relevant for determining whether the conditions of supply offered by British Coal were comparable to those offered by the South Wales blenders.

139 Before the Court, the applicants do not dispute that only British Coal was capable of meeting the CEGB’s core coal requirements on a national level. Nor do they invoke the disproportionate nature of the price differences at issue, even in the case in which it is claimed that the coal purchasing policy had to be set by the CEGB on a national scale in order to ensure security of supply.

140 The applicants merely maintain that the Commission failed to ascertain whether the CEGB had in practice to operate separately the various local sub-systems making up the electricity-supply network of England and Wales, taking account in particular of the restraints and costs associated with the distribution of electricity.

141 In that regard, it is to be noted that the practices at issue consist in the CEGB’s conduct on the market for the purchase of coal. The way in which the CEGB manages the downstream electricity network in England and Wales is unrelated to the supply conditions applying to it on the market for coal. Moreover, the applicants do not put forward any argument from which it may be supposed that the manner in which the electricity network is run, either as a single entity or by sub-systems, has any effect on the arrangements for supplying coal to the CEGB in such a way as to ensure that its core coal requirements are met, whether at national level or at local level. Consequently, even if the activity of supplying electricity were carried out on local markets – which is not established – such a finding would not support the conclusion that the market for the purchase of coal, located upstream, has the same geographic scope.

142 In that context, the applicants’ arguments relating to the arrangements for operating the electricity network must be held to be irrelevant to the question whether the CEGB’s conditions of supply on the market for coal had to be set at national level, in this case by the 1986 Joint Understanding, or whether they could, without jeopardising the CEGB’s fulfilment of its public service obligations in the whole of England and Wales, be set at local level, in which case, in South Wales, the conditions of supply offered by the blenders would have been comparable with those offered by British Coal on that local market, a matter which has not, however, been established (see paragraph 151 below).

143 In those circumstances, there was no onus on the Commission to carry out an investigation with regard to the arrangements for operating the electricity network.

144 The Court must therefore reject as unfounded the plea concerning a manifest error of assessment so far as the definition of the relevant geographic market is concerned.

145 The applicants allege that the Commission failed to carry out an adequate investigation, and that it thus made a manifest error of assessment by basing its analysis of price discrimination on the unsubstantiated premise that licensed private mines were only in a position to offer coal in limited amounts and for a brief period, because of British Coal’s licensing policy. On that point, the applicants submit that the Commission appeared to use as its basis Paragraph 37(2) of the standard licence, which gave British Coal the right to terminate licences (see point 22 of the contested decision). The Commission inferred from that that licensed private producers were not a secure source of supply, without taking into account the fact that it was highly unlikely that the conditions allowing licence withdrawal would be met or that, in any event, British Coal would exercise that right.

146 First, that argument is based on an incorrect reading of the contested decision.

147 It is in fact expressly stated in the contested decision that the Commission’s conclusions as to the inability of the private producers to meet the CEGB’s coal requirements were based not on British Coal’s right to withdraw their licences, but on the volume of coal supplied by the entire private sector compared with that supplied by British Coal, as well as on the fluctuations in supplies from private producers, their organisational weakness and their inability to ensure continuity of sales during a five-year period (see points 93 to 102 of the contested decision). In its legal assessment, the Commission at no time referred to the right to revoke licences. The stringent licensing conditions laid down by the rules for granting licences, referred to in point 98 of the contested decision, concerned in particular the restrictions, described in point 20 of the contested decision, to which point 98 of the decision refers, laid down in respect of the number of persons to be employed below ground and, consequently, the volume of production. The fact that the Commission refers, in point 98 of the contested decision, generally to points 19 to 21 thereof describing the licensing system, does not undermine that interpretation. That analysis is borne out by point 101 of the contested decision which also refers to the limited number of personnel able to work in each mine to explain the weakness and fluctuations in the production capacity of licensed private mines. Likewise, point 108 of the contested decision states that the strict licensing regime was an obstacle to large-scale mining operations, referring back to point 20 of the decision.

148 Second, it should be noted that the applicants do not substantiate the challenge to the Commission’s argument that it is not relevant to verify whether, in practice, individual blenders provided on a stable basis sufficient quantities of coal between 1986 and 1990, since those blenders were not in a position to guarantee, from 1986 onwards, a stable supply in the medium term of overall volumes comparable to those guaranteed by British Coal.

149 In that regard, the Commission affirmed, in the contested decision (point 103), that ‘… even if it were possible to ex-post demonstrate that individual blenders were supplying stable quantities throughout the entire period at stake, that would not change the fact that there had been no such assurance [of stable deliveries in the mid to long term] at the time [British Coal] committed itself to supply the CEGB for the forthcoming five years’.

150 In support of that statement, the Commission argued in essence that, when the 1986 Joint Understanding was concluded between the CEGB and British Coal, the South Wales blenders were not in a position to secure stable supplies for the CEGB over a five-year period, since they were exposed to abrupt changes in production of private mines and to competition among each other on the spot market (point 102 of the contested decision; see paragraph 34 above).

151 The applicants put forward no specific evidence suggesting that, on the local market for coal in South Wales, the blenders (who, the applicants do not deny, bought coal on a spot basis from the private producers) were none the less in a position to conclude with the CEGB a similar contract, at local level, to the 1986 Joint Understanding, concluded at national level, and to ensure security of supply in the medium term on that local market.

152 Accordingly, the second plea, alleging that the Commission made a manifest error of assessment as regards the capacity of the licensed private mines in South Wales, cannot be accepted.

153 It follows from all the foregoing that the application must be dismissed in its entirety.

154 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

155 However, under Article 87(3) of those Rules, the Court may order that the costs be shared or that each party bear its own costs, where each party succeeds on some and fails on other heads, or where the circumstances are exceptional.

156 Under Article 87(4) of the Rules of Procedure, the Member States and institutions which intervened in the proceedings are to bear their own costs.

157 In the present case, the Court notes that this action was brought against the rejection of a complaint lodged on behalf of the applicants in 1990. The contested decision represents the end of a complex procedure the length of which is explained first by the fact that the Commission declined, in 1991, to examine the complaint so far as the period before 1 April 1990 was concerned (see paragraph 14 above), primarily on grounds of expediency, (Opinion of Advocate General Alber in International Power and Others v NALOO, paragraph 24 above, ECR I-11425, paragraphs 92 and 100), and then by the withdrawal of the decision of 30 July 1998, since it was vitiated by an error of law (see paragraphs 24 and 25 above). Furthermore, following Hopkins and Others v Commission, paragraph 13 above, an action by the applicants to assert their rights directly before the national court had been declared inadmissible (see paragraph 17 above).

158 Having regard to that combination of exceptional circumstances, the Court considers it fair in the circumstances of the case to order the Commission to bear its own costs and to pay those of the applicants.

159 The United Kingdom of Great Britain and Northern Ireland and the two undertakings that have intervened are to bear their own costs.

2. Orders the European Commission to pay, in addition to its own costs, the costs of Glen Jones and of Daphne Jones, as well as those of Fforch-Y-Garon Coal Co. Ltd.

3. Orders the United Kingdom of Great Britain and Northern Ireland, E.ON UK plc and International Power plc each to bear their own costs.

The liberalisation and/or reform of the electricity and coal sectors, and the new contracts for the supply of coal concluded by electricity producers in 1990

The Commission decision of 23 May 1991 relating to the period after 1 April 1990

The direct effect of the relevant substantive provisions of the ECSC Treaty and whether it is possible for the applicants to enforce their rights before the national courts

The lapse of time since the practices referred to in the complaint took place and the absence of continuing anti-competitive effects

– Identification of the practices at issue in the context of the relationship between the complainants and the blenders

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	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) >> Jones and Others v Commission (Competition) [2011] EUECJ T-320/07 (23 November 2011) URL: http://www.bailii.org/eu/cases/EUECJ/2011/T32007.html Cite as: [2011] EUECJ T-320/07, [2011] EUECJ T-320/7

Court of Justice of the European Communities (including Court of First Instance Decisions)