News | By practice area

Tuesday 29th May 2007

On 24 May 2007, the Court of First Instance ("CFI") rejected in their entirety appeals by "Der Grüne Punkt – Duales System Deutschland GmbH" ("DSD") against two decisions of the Commission.

The first decision of the Commission found that DSD had abused its dominant market position by charging licence fees for the use of the "Green Dot" logo on all packaging, even where the collection and recycling services were provided by DSD's competitors.  In the Commission's view, the licence fee requirement meant that customers had no realistic possibility of entering into business relationships with competitors of DSD’s competitors because the customers had the choice either paying for the services provided by DSD's competitors plus an additional licence fee to DSD or to organise separate packaging, distribution and merchandising lines by themselves.  As regards the abuse of a dominant market position, the CFI stated that the Commission's decision did not affect the practical functioning of Germany's collection and recovery system.  According to the CFI, the selective marking of products as required by DSD for its Green Dot had the effect of dissuading manufacturers and distributors from using packaging of competing systems.

The second decision of the Commission concerned long term exclusive collection and recycling service agreements between DSD and local waste collecting companies.  The Commission imposed two obligations in its decision, according to which DSD could not prevent its waste collecting companies from contracting with DSD’s competitors.  According to the Commission, it was essential to grant the competitors access to the existing collection infrastructure, as it would be unduly burdensome to replicate the collection infrastructure at the household level.  The CFI also backed the reasoning the Commission used to justify the obligations in its second decision.  The CFI confirmed that it is economically difficult to duplicate the waste collection infrastructure at household level and that the obligations were therefore justified.

The complete upholding of the Commission's reasoning by the CFI is a further step towards a liberalised sales packaging market in Germany, in which DSD still has at least 80% market share for organising the collection and recycling of sales packaging. 

The Commission has welcomed the CFI's judgment and stressed that the prices for collection and recycling services went down appreciably following its decisions in 2001, which in turn is a significant benefit for German consumers.

The length of time it has taken the CFI to pass judgment on DSD’s appeals (over five and a half years) can be explained in part by the complexity of German recycling laws and in part by the complicated factual circumstances which this case gave rise to.