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General Motors (ECJ)

Court of Justice of the European Communities
Case 26/75, General Motors Continental NV v Commission
[1975] ECR 1367
Judgment available online from EUR-Lex

Article 82: disruption of parallel trade; excessive pricing
Article numbers refer to the 1997 consolidated version of the EC Treaty.

In General Motors the European Court of Justice overturned a decision by the European Commission that General Motors had infringed Article 82 through the use of a dominant position to impose an excessive price.

The case concerns conduct by General Motors that affected the ability of third parties to import General Motors' cars into Belgium from another Member State: such importation was dependent on an approval certificate being issued by General Motors and the issue at stake was the charge set by General Motors for issuing approval. The Commission had found General Motors to have charged

"an excessive amount on the import of five motor vehicles manufactured in another Member State for the inspection for conformity with the specifications contained in the approval certificate prescribed by the Belgian Authorities which it must carry out as the sole authorized agent of the manufacturer in Belgium" (paragraph 1).

General Motors argued to the Court that, in essence, its high-pricing was short-lived, had stemmed from a new responsibility imposed on it by the Belgian authorities, and had ceased before the Commission's intervention. The Court accepted this and annulled the Commission's decision.

In reaching its decision, the Court describes a basis on which the use of dominant position to impose an excessive price might be found to infringe Article 82 (paragraph 12):

"Such an abuse might lie, inter alia, in the imposition of a price which is excessive in relation to the economic value of the services provided, and which has the effect of curbing parallel imports by neutralizing the possibly more favourable level of prices applying in other sales areas in the Community, or by leading to unfair trade in the sense of Article 82(a)".

A point of interest is the use of the "economic value" concept. Some commentators have attached significance to this term, as the basis for a potential economic test for abuse of dominance through excessive pricing. However, the role that this term plays in General Motors deserves attention: the "and" in the sentence above implies that the type of abuse described by the Court requires not only (i) pricing above economic value but also (ii) an effect of curbing parallel imports or an effect of unfair trade.

It is also noteworthy that the excessive pricing considered in this case is pricing conduct that can be associated with a potential anti-competitive effect, in particular through possible impediments to parallel trade in cars within the Community. This might be distinguished from other cases where the use of a dominant position to impose a high price is not linked with an anti-competitive objects or effects, but is directly exploitative of customers (see for example the Bodson case).

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Last changed by Franck at 5:23 PM on Tuesday 1 November 2005.

Reference for this page:
Reckon Open "General Motors" 2005-11-01T17:23:51
Link within Reckon Open: [[General Motors]]