2.4.2.1. Gravity of the infringement... 48 2.4.2.2. Duration of the infringement... 49 2.4.2.3. Aggravating or mitigating circumstances... 50 2.4.2.4. Conclusion..... 50
THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to the Agreement on the European Economic Area, Having regard to Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty1, as last amended by Regulation (EC) No 1216/992, and in particular Article 3 and Article 15(2) thereof, Having regard to the Commission Decision of 3 May 2002 to initiate proceedings in this case, Having given the undertakings concerned the opportunity to make known their views on the objections raised by the Commission pursuant to Article 19(1) of Regulation No 17 and Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty3, After consulting the Advisory Committee on Restrictive Practices and Dominant Positions, Having regard to the final report of the Hearing Officer in this case,

Whereas:

OJ 13, 21.2.1962, p. 204/62 OJ L 148, 15.6.1999, p. 5. OJ L 354, 30.12.1998, p. 18.
1. FACTS 1.1.Introduction 1. This case concerns the agreements and practices governing the distribution of musical instruments manufactured and sold by the Yamaha group (hereinafter Yamaha, unless a more specific name for a subsidiary is used) run by Yamaha Corporation Japan. Most of the Yamaha products described hereinafter are distributed by authorised dealers under a selective distribution system4 throughout Europe. However, in Finland, Greece, Iceland and Ireland, Yamaha has appointed country-specific exclusive importer-distributors. According to Yamaha, the nature of the relevant products does require a selective distribution system in order to preserve their quality and ensure their proper use. Yamaha has developed a strategy based on personalized customer advice by selected dealers which takes into account the need to demonstrate Yamaha products in accordance with Yamahas reputation for quality and its recognized brand image and also reflects the complexity of the products and the need to demonstrate their audio quality. The case was initiated by the Commission and is based on information gathered via requests for information. In October 2000 the Commission sent out simultaneous requests for information to all European based subsidiaries of Yamaha, and to several dealers as well. In December 2000, Yamaha Europa GmbH, Germany, submitted its answers, which consist in documents covering each EEA Contracting Party. From copies of the contracts submitted by Yamaha Europa GmbH, Germany, or by dealers, it became evident that a number of infringements of competition law had been committed. In January 2001, Yamaha Europa GmbH, Germany, wrote to the Commission to explain that prior to this inquiry, it had begun an internal review of its European distribution agreements with a view to adopting a standardised European distribution agreement. In connection with this review, Yamaha Europa GmbH, Germany, had identified provisions in its distribution agreements which it had decided should be modified even before the adoption of the standardised European distribution agreement. Yamaha Europa GmbH, Germany, had therefore written to its dealers and/or importers to clarify and/or amend the relevant provisions. Yamaha Europa GmbH, Germany, submitted copies of these letters. However, not all the restrictions of competition had been amended or identified. In May 2001, Yamaha Europa GmbH, Germany, submitted its new draft Agreement to the Commission. It intended to build a European wide distribution system which would be selective for certain products on the basis of objective criteria, with a Europe-wide guarantee and similar prices. On 5 March 2002, Yamaha Europa GmbH, Germany, notified its new distribution Agreements in accordance with

1.3.2.5. High tech electronic musical instruments 21. High tech electronic musical instruments include stage pianos, synthesizers and ancillary specialised components used for composing and/or professional performance. Stage pianos are usually input devices with a sophisticated keyboard (some even use the hammer technique of acoustic pianos), and usually with no, or a rather limited choice, of voices. The input is then sent to a synthesiser, (sometimes a
sound card of a computer) whereby several voices can be added and effects can be played. 1.3.2.6. Pro audio products 22. The pro audio market covers various types of products such as speakers, microphones, sound mixing equipment, multi-track recorders and power amplifiers. This segment is worth about [.]% of Yamaha Europas turnover in musical instrument.
1.3.2.7. Drums 23. Acoustic drums and drum sets are an individual sort of instrument. They are characterised by a substantial degree of production substitutability and full line portfolio at both the manufacturing and the distribution level. Yamaha also manufactures electronic drums, which comprise an electronic microprocessor equipment (drum machine, sequencer) to produce a digital sound most similar to portable keyboards or high-tech instruments. Some can also be used to play accompanying rhythms to other instruments. Electronic pads convert the speed and place where the drummer hits the pad, so that the same sounds are reproduced as if they were generated by striking acoustic drum kits. Electronic drums also offer the opportunity to play with headphones or at a very low volume.
1.3.2.8. Guitars 25. Yamaha supplies a full line portfolio of acoustic and electric guitars. Yamaha argues that a single market for acoustic and electric guitars exists, as there is supply side substitutability. Most suppliers like Kaman, Cort, Arai, Fener, Gibson and KHS offer a full line of both electric and acoustic guitars, and most European wholesalers/distributors purchase and resell full lines of guitars. It seems however more relevant to distinguish two different markets, one for acoustic guitars, and one for electric guitars.
1.3.2.9. Wind instruments 26. Wind instruments are musical instruments in which air itself is the primary vibrating medium for the production of sound. They are traditionally grouped into woodwind12 instruments composed of the flutes and reed pipes (namely, clarinet, oboe, bassoon, and saxophone) and brass instruments (for example, trumpet, trombone, tuba horn).

1.3.2.10. Electronic string instruments (Yamaha SV Series) 27. Yamaha has a rather restricted selection of silent string instruments (for example, violins, cellos, bass) whereby the output is in an electronic form in order to allow
Flutes and reed pipes were traditionally made of wood, but now they may also be constructed of metal. Unlike brass instruments in which the airstream passes through the player's vibrating lips directly into the air column, flutes are sounded by directing a narrow stream of air against the edge of a hole in a cylindrical tube. In reed pipes a thin strip of flexible material, such as cane or metal, is placed against the opening of the mouthpiece, forcing the airstream to pass through the reed before it reaches the column of air that is to vibrate.
playing using headphones or an amplifier. Yamaha did not specify these products as a separate market and did not provide any additional information. 1.3.3. Geographic market 28. In its decision on interim measures IV/32.279 - BBI/Boosey & Hawkes13 the Commission defined a market for the particular needs of British-style brass bands which was national in scope. The distribution networks are organised on a country by country basis or groups of countries. For some products, price differences amount to up to 50% and differences in taste and traditions are considerable. Therefore the geographic market is considered to be national. The parties assumed national markets as well.
Commission Decision 87/500/EEC of 29 July 1987, OJ L 286 , 9.10.1987 p. 36.
1.4.Yamahas position in Europe 30. Yamahas market shares are vary widely between countries. In 1999, Yamaha was the market leader in most of the relevant markets for musical instruments, as can be seen from table 1. No other company was similarly represented in all the markets for musical instruments. Table 1 Overview of Yamahas market shares in 1999 (in %) Data provided by Yamaha
UK New Pianos I E P DK NO S FIN Fr EL D B NL A IRL IS Avg
ac. 30-40 20-30 20-30 30-40 20-30 20-30 40-50 30-40 20-30 20-30 10-20 50-60 20-30 10-20 20-30 30- 10-20 20-30 10-20 20-30 10-20 10-20 20-30 10-20 10-20 20-30 10-20 30-40 10-20 10-20 10-20 1020

New&used pianos

New digital 30-40 30-40 30-40 10-20 30-40 30-40 30-40 20-30 50-60 50-60 30-40 20-30 20-30 20-30 40-50 10- 30pianos New electronic organs New portable keyboards High tech Woodwind Brass Acoustic guitars Electric guitars 50-60 30-40 50-60 <10 <10 <10 <10 <10 70-80 80-90 10-20 <10 <10 10-20 40-50 * 2030
40-50 20-30 20-30 10-20 30-40 30-40 30-40 30-40 30-40 40-50 30-40 40-50 40-50 40-50 80-90 30- 10-20 10-20 10-20 <10 <10 10-20 10-20 10-20 20-30 10-20 <10 10-20 10-20 <10 10-20 20- 1020 <10
20-30 20-30 10-20 10-20 20-30 20-30 20-30 30-40 30-40 10-20 30-40 50-60 20-30 30-40 10-20 * 10-20 10-20 10-20 30-40 10-20 20-30 10-20 10-20 30-40 10-20 10-20 20-30 20-30 20-30 10-20 * 10-20 20-30 <10 <10 <10 <10 <10 10-20 <10 10-20 10-20 10-20 10-20 10-20 <10 10-20 10-20 10-20 * <10 <10 <10 <10 <10 <10 <10 <10 10-20 10-20 <10 10-20 10-20 10-20 *

Total guitars 10-20 10-20 <10 Acoustic drums Electric drums
<10 10-20 10-20 10-20 10-20 10-20 <10 10-20 10-20 10-20 30- 1020 3040
10-20 10-20 10-20 <10 10-20 20-30 10-20 10-20 10-20 10-20 20-30 <10 10-20 10-20 30-40 * 40-50 40-50 50-60 20-30 10-20 <10 40-50 10-20 60-70 20-30 20-30 <10 20-30 10-20 40-50 *
total drums 20-30 20-30 10-20 <10 10-20 20-30 10-20 10-20 20-30 20-30 20-30 <10 10-20 10-20 30-40 10- Pro audio <10 <10 <10 <10 <10 <10 <10 <10 10-20 <10 <10 <10 10-20 <10 20-30 10- <10 20
AVERAGE 20-30 20-30 10-20 10-20 10-20 10-20 10-20 10-20 20-30 20-30 10-20 10-20 10-20 10-20 20-30 20- 1030 20

(*Data not available)

Table 2 Yamaha sales sales values at wholesale prices in 1999 (Data provided by Yamaha)
000 New ac. & hybrid Pianos New digital pianos New portable keyboards Hi tech Electronic organs, portable keyboards and hi-tech Wind instruments Woodwind Brass Total guitars Total drums Pro audio

FIN []

IRL []

[] [] [] [] [] []

1.5.Agreements and practices in the operation of Yamahas distribution network 1.5.1. Restrictions on direct or indirect export sales into other Member States 1.5.1.1. Obligations on official distributors to sell solely to final customers and/or to buy solely from Yamahas national subsidiary 31. In Germany, Italy and France, Yamahas authorised dealers were obliged to buy solely from Yamahas national subsidiary and/or to sell solely to final consumers. Yamaha does not dispute the existence of these provisions. Germany Yamahas distribution contracts obliged the authorised German dealers to sell only to final customers and therefore not to any other dealers. These contracts concerned pianos, grand pianos, Gran Touch pianos14; Clavinovas (digital pianos), Electone electronic organs, and the Portatone product range (keyboards)15; but also PAC16 (ProAudio, guitars and drums) and orchestra instruments17. For example, Article 1 of the distribution contract for grand pianos stated that: The specialist dealer undertakes to sell Yamaha grand pianos solely to final customers.18

(a) 32.

Distribution agreements between January 1996 and March 2000 provided by Yamaha with for pianos (8 May 1998), grand pianos (8 May 1998); Distribution agreements signed with [ ] for pianos (1 April 1986), grand pianos (4 December 1995), gran touch pianos (16 July 1996); Distribution agreements signed with [ ] for pianos and grand pianos (11 June 1987, new contracts signed on 20 July 1999); Distribution agreement signed with [ ] for Gran Touch pianos (3 April 1997); Distribution agreements signed with [ ] for pianos, grand pianos, gran touch pianos (4 August 1998). Distribution agreements between January 1996 and March 2000 provided by Yamaha for Electone, Portatone, Portasound and Clavinova signed with [ ] (2 January 1997); Distribution agreements signed with [ ] for Electone (1 April 1986), Clavinova (30 June 1987), Portasound (30 November 1987) and Portatone (30 Novembre 1987); Distribution agreements signed with [ ] for Electone (1 April 1986), Portatone and Portasound (18 December 1987), Clavinova (June 1987); Distribution agreements signed with [ ] for Electone (13 January 1994), Portasound (3 April 1987); Distribution agreements signed with [ ] for Portatone and Portasound (June 1987), Electone (1 April 1986), Clavinova (15 January 1988); Distribution agreements signed with [ ] Portasound and Portatone (20 August 1990, new contract signed on 23 December 1999), Clavinova ( 26 March 1992, new contract signed on 23 December 1999). Distribution agreements signed with [ ] for professional equipment (10 May 1986); distribution agreements signed with [ ] for professional equipment (16 October 1987, new contract signed on 5 March 1996), for acoustical guitars (15 August 1994, 31 October 1995); distribution agreements signed with [ ] for PA, drums, guitars, amps (19 October 1989, 9 October 1996, 19 August 1997, 5 December 1997). Sample distribution Agreement with [ ] of 19 March 1996 (Holzblasinstrumente, Blechblasinstrumente, Blockflten); Distribution Agreement with of 16 June 1977 (Holzblasinstrumente, Blechblasinstrumente, Gitarren, Verstrker, Combo-Orgeln, Synthetiser, Schlagzeuge, Combo-pianos), of 26 March 1993 (concert percussion), of 15 November 1995 (Blockflten); Distribution agreement with [. ] of 3 October 1979 (Kleinmusikinstrumente, Professional equipment), of 4 May 1977 (Blasinstrumente, Gitarren, Verstrker, Combo-Orgeln, Drums); Distribution agreement with [. ] of 12 September 1986. Standard agreement for Eterna Pianos, File p. 8358; for Pianos p. 8362; for grand pianos p. 8372; for electronic Grand Touch Pianos p. 8375. The translation was provided by the Commissions services as all following translations. Original version: Artikel 1:Der Fachhndler verpflichtet sich, Yamaha Flgel nur an Endabnehmer weiter zu veruern.
The contracts, the oldest of which in the Commissions possession is dated June 1977, ended in March 2000, the date of entry into force of the Euro-distribution contract. Italy In Italy, Yamahas distribution contract obliged the dealer to buy pianos exclusively from Yamaha Musica Italia s.p.a. and to sell products solely to final customers. Article 4 of the distribution contract for pianos stated as follows: Besides the obligations foreseen in article 2, the authorised retailer undertakes: to buy Yamaha pianos or other products distributed by YAMAHA MUSICA ITALIA only from the latter company only to sell the products to the final customers.19

Hndler erfolgt eine Abmahnung durch die Anwlte von Yamaha. In der Abmahnung wird verlangt, da der vertragsbrchige Hndler sich verpflichtet, es- bei Meidung einer Vertragsstrafe von mindestens 3.000 Euro, fr den Fall einer Zuwiderhandlung zu unterlassen, an nicht autorisierte Hndler zu verkaufen. Read: Yamaha Europa GmbH, Wien. File, p. 962 [. ],Convention de commercialisation, dated 14 March 2000. Yamaha, dfini comme Yamaha Europa GmbH, Germany, Succursale Yamaha Music Belgium: Article 1.3: Le contractant ne peut procder des livraisons ou ventes dautres dtaillants qui nauraient pas t agrs par YAMAHA. File, p. 1087 [. ] Artikel 1.3:De contractant verbindt zich ertoe niet te leveren aan handelaars die niet door YAMAHA erkend zijn. identical: [. ] [. ] [. ] [. ] [. ] [. ] Defined as YAMAHA EUROPA GmbH, Germany, acting under the name of Yamaha Music Nederland, Utrecht.
The Dutch contracts were in force from October 2000 to March 2002, date of expiry of the Euro distribution agreement.
1.5.1.3. Obligation to contact Yamaha Europa GmbH, Germany, before exportation via the Internet 51. In the so-called Euro distribution agreements -a standardized contract covering each product- of Austria, Belgium and Germany, signed in 2000, official Yamaha distributors were obliged to contact Yamaha Europa GmbH, Germany, or its corresponding national branch before exportation. A circular letter31 dated January 2001 from Yamaha Europa GmbH, Germany, explained that the dealer had to contact Yamaha only in case of exports outside the EEA. Austria The Austrian distribution contract obliged the dealer to contact Yamaha Europa GmbH, Wien, before it delivered goods to a customer outside its Member State. Article 11 of the contract, called Internet clause, read: Because of diverging security standards like for instance the CE standard, standards for the protection of intermittent radio frequencies, the dangerous material regulation and technical standards etc. cross border deliveries have to be arranged beforehand with Yamaha.32 As long as the authorised dealer advertises according to the contents of Article 11(Internet) the use of Yamahas rights is permitted33 (b) 53. Belgium Article 11 of the distribution contract read: The party to the contract will have to agree with Yamaha the conditions concerning supplies abroad because of diverging security standards including for example the

(a) 52.

File, p. 2030. Euro-distribution Agreement between Yamaha Europa GmbH, acting under the name of Yamaha Music Nederland, and [. ] ,dated October 20, 2000, Hout- en Koperblaasinstrumenten; Eurodistribution Agreement between Yamaha Europa GmbH, acting under the name of Yamaha Music Nederland, and [. ],Upright Pianos, inkl Silent, Disklavier, GranTouch Clavinovas, Portable Keyboards, Gitaren/Amplifiers; Acoustic and electronic drums, Synthesizer and PA Equipment; Eurodistribution Agreement between Yamaha Europa GmbH, acting under the name of Yamaha Music Nederland, and [. ] dated October 5, 2000, upright pianos, vleugels, silent, disklavier grantouch, clavinova digital pianos, p. 2160. Artikel 1: Het is de contractant niet toegestaan YAMAHA producten ten behoeve van wederverkoop aan detailhandelaren door te leveren, welke niet door YAMAHA als officile YAMAHA-dealer worden erkend. File, p. 13565, Letter from Yamaha Europa GmbH, Germany, January 2001. File, p. 10982. Article 11, Euro-Vereinbarung zwischen Yamaha Europa GmbH, Zweigniederlassung Wien und der Firma [. ] betreffend Piano & Flgel, Orchester-Instrumente, Tasteninstrumente & Keyboardsysteme, Gitarren & Drums und Pro Audio, 28.03.2000: Aufgrund nach wie vor unterschiedlichen Sicherheitsstandards, wie zB CE-Norm, Funkschutzzeichen, Gefahrstoffverordnung etc. und technischer Standards sind grenzberschreitende Lieferungen im Vorwege mit Yamaha abzusprechen. Article 10 of the distribution agreement with [. ] Sofern der Vertragshndler entsprechend dem Inhalt des 11 (Internet) wirbt, ist eine Nutzung der Rechte der YAMAHA zulssig, sofern diese sich im Rahmen des Inhaltes des 11 bewegt.

1.5.1.4. Guarantees only valid in the country of origin 57. (a) 58. In Germany, Belgium and Denmark, the guarantee was only valid in the country of origin of the purchase. Germany The Commission has found German guarantee cards for Clavinova Keyboards (YAM-EKB-07-98) which stated that: 1.The guarantee will only be granted to the first consumer and is only valid in the Federal Republic of Germany and Switzerland. 2. The deal must have been effected by an authorised Yamaha dealer in the Federal Republic of Germany or Switzerland. 3. The warranty document must be completed by the authorised Yamaha dealer. The data given on the guarantee document and the instrument must coincide39. 59. The German guarantee card is dated 07/98. In March 2002, a new Pan-European distribution agreement, establishing an EEA-wide guarantee, was notified to the Commission. Belgium In Belgium, the Yamaha Benelux Brussels office only guaranteed the product for one year within the Benelux network. The guarantee card had to be received by this office within 15 days following the purchase. The text was as follows40 : Guarantee certificate Important: The right to the guarantee is only valid if YAMAHA MUSIC BENELUX B.V41. is in possession of the reply coupon within 15 days following the purchase. A purchaser wishing to have recourse to the guarantee must contact the YAMAHA distributor indicated on the back, together with this guarantee certificate. The distributor must, if necessary, call upon the technical service of YAMAHA MUSIC BENELUX B.V. The guarantee becomes null and void in the case of repairs or interventions done by persons not approved for that purpose by YAMAHA MUSIC BENELUX B.V.42

(b) 60.

File, p.314 bis. 1. Die Garantie wird nur dem in der Garantie- Urkunde eingetragenem Erstkufer gewhrt und gilt nur fr die Bundesrepublik Deutschland und die Schweiz. 2. Der Kauf des Gertes mu durch einen autorisierten Yamaha- Fachhndler in der Bundesrepublik Deutschland oder der Schweiz erfolgt sein. 3. Die Garantieurkunde mu von dem unter Ziffer zwei autorisierten Yamaha Fachhndler vollstndig ausgefllt sein. Die Angabe in der Garantie- Urkunde und auf dem Gert mssen bereinstimmen. File, p. 11682. Conditions de garantie de lappareillage lectronique Yamaha. Yamaha Music Benelux B.V. was replaced in 1995 by Yamaha Music Nederland and Yamaha Music Belgium, which are branches of Yamaha Europa GmbH. Certificat de garantie

61. (c) 62.

There is no date on the guarantee card. Denmark Paragraph 6 of the standard distribution agreement concerning country-wide guarantees43 stated: Yamaha Profil-dealers and Yamaha Partner-dealers have the right to, and are obliged to, in all marketing of the company name to add authorised Yamaha dealer() which include that Yamaha, on top of the right to complain, offers oneyear country-wide guarantee to the end-user on new products sold by authorised dealers to the end-user44.
The Danish standard agreement entered into force in April 1998. On 30 January 2001, Yamaha Scandinavia AB sent a circular letter to Yamaha Danish dealers explaining that the warranty was valid also for Yamaha products purchased in another EEA country.

1.5.1.5. Parallel trade provisions in Iceland 64. Article 4.01 of the exclusive distribution contract between Yamaha Scandinavia AB and the distributor [. ] signed in 1995 prohibited parallel imports and exports: Distributor shall sell the products only within the TERRITORY (defined as the Republic of Iceland in article 1 of the distribution contract, ndlr) and shall not, directly or indirectly resell or reexport the PRODUCTS to any place or country outside the TERRITORY and shall not resell the products to any other person, firm or corporation in the TERRITORY in case, DISTRIBUTOR and/or EXPORTER knows or has reason to believe that said person, form or corporation is going to resell or reexport the PRODUCTS outside the TERRITORY. EXPORTER will exert its best efforts to prevent persons other than distributor from selling the products in the TERRITORY; provided, however, that exporter shall not be responsible for any unauthorised use of sale of the products, when such use or sale is caused by some third party who is not under control of EXPORTER45. 65. This clause was declared null and void in a circular letter from Yamaha Scandinavia AB dated 30 January 2001.
Important : Le droit la garantie est uniquement acquis si Yamaha Music Benelux BV est en possession du coupon rponse dans les 15 jours suivant lachat [] Lacheteur qui souhaite avoir recours la garantie, doit sadresser au distributeur YAMAHA renseign au verso, muni du prsent certificat de garantie. Le distributeur doit, si ncessaire, faire appel au service technique de YAMAHA MUSIC BENELUX B.V. La garantie devient caduque au cas o des rparations ou des interventions sont effectues par des personnes non habilites cet effet par YAMAHA MUSIC BENELUX B.V. File, pp. 11110 and 11150. Yamaha Profil-forhandlere og Yamaha Partner-forhandlere er berettiget og forpligtet til I al markedsfring af firmanavn at tilfje autoriseret Yamaha forhandler (), hvilket indebrer, at Yamaha, udover ovennvnte reklamationsret, yder et aars landsdkkende garanti overfor slutbruger paa nye produkter solgt af autoriserede forhandlere til slutbruger. File, p. 12822.
1.5.2. The pricing policy of Yamaha 66. It is apparent that in The Netherlands, Italy and Austria, some official Yamaha distributors have been restricted in their ability to determine their resale prices or discounts.

In France, the obligation to buy exclusively from Yamaha Musique France S.A. can be proven between March 198983 and December 199684.
Annex 18 of Yamahas reply to the Statement of Objections, Study submitted by Frontier Economics on Dealer discounting in Germany, p. 2. See Yamahas reply to the Statement of Objections, p. 43-46. Distribution contract with [. ] for pianos of 31 March 1992, ended in October 1996. Distribution agreement with [. ] of 16 June 1977 (Holz- und Blechblasinstrumente, Gitarren, ElektroGitarren, Verstrker, Combo-Orgeln, Synthesizer, Schlagzeuge, Combo-pianos). Distribution contract for pianos between Yamaha Musique France SA and [. ] dated March 3, 1989. In the new distribution contract between Yamaha Musique France SA and [. ] dated February 24, 1997, the obligation to sell to final customers does not appear any longer. Distribution contract for pianos between Yamaha Musique France S.A. and [. ] dated March 3, 1989. In the new distribution contract between Yamaha Musique France S.A. and [. ] dated February 24, 1997,the obligation to buy solely from Yamaha Musique France S.A. does not appear any longer.

101. (c)

In Italy, the obligation to buy exclusively from Yamaha Musica Italia s.p.a. can be proven between March 1992 and October 199685. Obligations on Yamahas distributors to supply solely distributors authorised by the national subsidiary of Yamaha (i) Restrictive object or effect
In France, the authorised dealers were obliged to buy pianos exclusively from Yamaha France or another dealer authorised by Yamaha France (recitals 42-43). The Austrian, Belgian and Dutch contracts oblige the dealers to sell products only to dealers authorised by the national subsidiary of Yamaha (recitals 44-50). These contracts have the object of defining national distribution networks. As explained above (recitals 89-95 and 99), it prevents the dealers from purchasing Yamaha instruments from other authorised dealers in other Member States. It has the object of partitioning national markets and sheltering the markets concerned from cross supplies, thereby restricting competition and infringing Article 81(1) of the Treaty and 53(1) of the EEA Agreement. Yamaha does not dispute the existence of these contractual provisions. However, it does not accept the Commissions interpretation of the Euro distribution agreement86. Yamaha submits that, as drafted, the provisions did not prevent Austrian, Belgian, Dutch and German dealers from supplying each other. In the Austrian, Belgian and Dutch agreements Yamaha was defined as Yamaha Europa GmbH and/or as Yamaha Europa GmbH and the relevant branch or subsidiary. As a result, the agreements permitted cross supplies between dealers in Germany, Austria, Belgium and The Netherlands. The clause contained in the French contract restricts competition by defining a national distribution network and it allows no room for interpretation. As regards the Austrian, Belgian and Dutch agreements, the Commission acknowledges that these agreements may be open to different interpretations. However, it is obvious that the Austrian, Belgian and Dutch dealers may have been confused by such a clause, especially since there was a clear ban in a neighbouring country (France) on supplying or purchasing from authorised dealers in other Member States, and such bans had also existed in a number of Member States. This may have had the effect of discouraging cross-supplies among dealers in Germany, Austria, Belgium and the Netherlands. In any event, the clause clearly prohibited cross-supplies between dealers in these countries and other countries. (ii) Duration of the restriction

Yamahas reply to the Statement of Objections, p.21-22. Judgment of the Court in Case 19/77 Miller International v. Commission [1978] ECR 131 paragraph 15. See Judgments in Ferriere,Volkswagen or Accinauto, cited above; Commission notice Guidelines on vertical restraints, OJ C 291, 13.10.2000, p. 1, paragraph 7.
list. Even if discounts may have been possible, it is clear that the dealer was severely restricted in its freedom to communicate to the customer the price it fixed, and that such discounts, if the dealer was still willing to offer them, could not be communicated in a way contrary to the guidelines. 126. Besides, even if the circular letter does not totally rule out discounts, it strictly prevents any discount above 15%. This also constitutes a restriction of the dealers ability to determine its sale prices. This practice has the object of fixing the maximum level of discount and, as a consequence, the minimum level of resale prices, thereby restricting or distorting price competition. The Commission has recognised that resale price maintenance can also be achieved through indirect means, such as fixing the maximum level of discount the distributor can grant from a prescribed price level103. If Yamaha prohibits rebates of more than 15%, then in reality there is an obligation to respect a minimum price: the recommended prices minus 15%. A practice concerning resale prices, between Yamaha Music Nederland and its distributors, influences these distributors in the course of their business conduct. The prices charged by the dealers would otherwise have been different, irrespective of the exact degree to which the agreement was implemented. This is a restriction by object. In its reply, Yamaha submits that the circular letter was sent by two employees who did not have the authority to do so. The letter was not signed or approved by Mr. Veenstra, who is the General Manager of Yamaha Music Nederland. It was an isolated incident involving only two models of a mixing desk and 14 dealers and thus cannot be relied on to establish that Yamaha had a policy of imposing resale prices on its Dutch dealers, thereby appreciably affecting trade between Member States104. Such arguments are not acceptable. Firstly, Yamaha is responsible for the conduct of its employees. The Court of Justice has established that when an undertaking has been guilty of an infringement, it is not necessary for there to have been action by, or even knowledge on the part of, the partners or principal managers of the undertaking concerned; action by a person who is authorised to act on behalf of the undertaking suffices105. In any event, Yamaha has in fact acknowledged in its reply (paragraph 302 and 310) that the letter constituted an infringement. Secondly, a provision restricting the dealers ability to determine their resale prices, even concerning 14 dealers, necessarily had potential effects on competition. Furthermore, such a letter has to be assessed in a context where the dealers' ability to communicate their prices was already severely limited. (ii) 130. Duration of the restriction

See Judgment of the Court in Case 19/77 Miller International Schallplatten GmbH v Commission of the European Communities[1978] ECR 131. Judgment of the Court in Case C-7/95 John Deere Ltd v Commission of the European Communities [1998] 3111.

108 109

supplier, the higher the risk that a supposedly recommended resale price which was, in Yamahas case, accompanied by provisions to strongly limit the freedom of the dealer to diverge from this price- will lead to a more or less uniform application of that price level by the dealers, because they may use it as a focal point110. 142. As regards the document sent to [. ],it is obvious from its title and content that it constitutes an annex to the contract. First, it is designed to be signed by both parties. Secondly, while Yamaha referred to this document in its reply to the Statement of Objections as a letter, the company, in a previous reply to a Commission request for information, had defined this document as the distribution agreement with [. ]111. It is clear from its wording that its object is to fix resale prices. The argument according to which it was sent by an employee who did not have the authority to do so cannot be accepted, as explained in recital 129, Yamaha is responsible for the conduct of its employees112 and the document is written in the official Yamaha format. This incident is a demonstration that Yamaha wanted to have some control of resale prices. Besides, in its written reply (paragraph 301), Yamaha actually acknowledged the restrictive object of this clause. (ii) 143. Duration of the restriction
The distribution contracts with the restrictive clauses run from March 1992113. The restrictions ended on 9 January 2001, when Yamaha Musica Italia Spa sent its distributors a letter stating that dealers were free to determine their resale prices and that clause 15 was no longer valid114, thus clearly conveying the idea that such type of clauses (including those that may have been included in other documents) were no longer enforceable Consequently, this restriction can be proved from 31 March 1992 to 9 January 2001. Resale price maintenance in Austria (i) Restrictive object
The distribution contract for oboes and bassoons stated that the sale price to other dealers will be calculated as follows: Your purchasing price x 1,0877= net purchasing price distributor (recitals 81-82). This clause has the object of directly fixing resale prices when selling to other dealers and of artificially harmonising selling prices and discounts between territories, thereby restricting or distorting price competition. In its reply to the Statement of Objections, Yamaha states that the price calculation formula was addressed to only three Austrian dealers who had no experience in pricing at the wholesale level. These provisions were intended as recommendations and were in fact never applied. As a result, the calculation method did not appreciably affect trade between Member States115.

File, p. 3012. Contratto di Distribuzione selettiva per i pianoforti verticali Distribuiti dalla Yamaha Musica Italia s.p.a. & [. ], 31.03.92,Art. 4 and 10. Cited above Rodenstock/Metzler, point 64 and 65; Mitsui/Bridgestone, ibid, point 60; and also Interlbke, ibid, at point 61 where both a positive obligation to sell only to end-users and a prohibition on cross-supplies to other dealers were held to fall within Article 85(1)
before the entry into force of Regulation No 2790/99, and are therefore considered as serious. 191. Some of the contractual provisions objected to in the Decision were contained in a limited number of agreements, were sometimes applied to only a limited number of dealers and products and were not systematically included in all Yamaha agreements throughout the EEA. Besides, the bans on cross dealer supplies still allowed sales to end-users outside the territory, as evidenced by Yamaha. The provisions requiring Yamahas dealers to sell exclusively to end users were included in agreements with dealers in France, Germany and Italy. The obligation on Yamaha dealers to buy solely from the national subsidiary were included in agreements with dealers in France and Italy. In Germany, these last two restrictions concerned all products. Concerning France, the Commission has evidence of these two restrictions only for pianos and disklaviers, and concerning Italy only for pianos. The Euro distribution agreements, signed in 2000 and applied in Germany, Austria, Belgium and the Netherlands, which contained an obligation to supply only dealers that had been authorised by the national subsidiary and an obligation to contact Yamaha before exporting via the internet, covered all products. As regards the guarantees only valid in the country of origin, it concerned all products in Denmark. In Germany, the Commission has only evidence of such a restrictive provision for clavinovas, and in Belgium only for electronic equipment. The restrictions on parallel trade in Iceland concerned all products but applied to a small and remote market. As regards resale price maintenance, the Guidelines for shops in The Netherlands concerned all products, but the circular letter excluding rebates above 15% only concerned proaudio products. In Italy, the restrictive provisions concerned a large number of products. In Austria, resale price maintenance applied to only three dealers and only to oboes and bassoons. Some of the provisions appear not to have been implemented in full, and the Commission has no evidence of substantial effects of the restrictions on the market. With regard to the size of the market it must be recalled that, as far as the geographical scope of these different elements of the infringement is concerned, the agreements containing restrictive clauses concerned eight national markets: Germany, Italy, France, Austria, Belgium, The Netherlands, Denmark and Iceland. The measures involved, because of their nature, may also have affected dealers and end-consumers located in other Member States. However, some elements of the infringement applied to a limited number of dealers in such markets or only to some products and may, consequently, have had a limited effect in terms of value of the goods concerned. Consequently, in the light of these considerations, the infringement committed by the addressees is serious. In the light of the seriousness of the infringement, EUR 2 million is an appropriate amount to take as a basis for calculating the fine.

2.4.2.4. Conclusion 200. In view of all these circumstances, the amount of the fine should be set at EUR 2.56 million. 50
HAS ADOPTED THIS DECISION: Article 1 Yamaha Corporation Japan, Yamaha Europa GmbH, Yamaha Musica Italia s.p.a, Yamaha Musique France S.A. and Yamaha Scandinavia AB have infringed Article 81(1) of the Treaty by entering into agreements and/or concerted practices with authorised dealers, containing the following restrictions on competition within the common market, for the periods indicated: (a) obligations on official dealers to sell only to final customers : (i) (ii) (iii) (b) from June 1977 until March 2000 in Germany, from March 1992 until October 1996 in Italy, from March 1989 until December 1996 in France;
obligations on official dealers to purchase exclusively from the Yamaha national subsidiary : (i) (ii) from March 1989 until December 1996 in France from March 1992 until October 1996 in Italy;
obligations on official dealers to only supply dealers authorised by the national subsidiary of Yamaha : (i) (ii) (iii) from February 1997 until March 2002 in France, from November 2000 until March 2002 in Austria and in Belgium, from October 2000 until March 2002 in The Netherlands;
obligations on official dealers to contact Yamaha before exporting via the internet : (i) (ii) from March 2000 until December 2000 in Austria and Belgium, from April 2000 until January 2001 in Germany;
territorial protection concerning the manufacturer's guarantees : (i) (ii) for one year in Germany and Belgium, from April 1998 to January 2001 in Denmark;
restrictions of parallel trade in Iceland from September 1995 to January 2001;
resale price maintenance : (i) (ii) (iii) in The Netherlands from September 1988 until February 2001. in Italy from March 1992 until January 2001. in Austria from December 1999 until February 2001. Article 2
A fine of EUR 2.56 million is imposed on Yamaha Corporation Japan, Yamaha Europa GmbH, Yamaha Musica Italia s.p.a, Yamaha Musique France S.A. and Yamaha Scandinavia AB, which are jointly and severably liable for the fine, in respect of the infringement referred to in Article 1. The fine shall be paid, within three months of the date of notification of this Decision, into bank account of the Commission of the European Communities: 001-3953713-69 (IBAN BE 9537 1369, SWIFT GEBABEBB) FORTIS BANK Rue Montagne du Parc 3 B-1000 Brussels After the expiry of that period, interest shall automatically be payable at the interest rate applied by the European Central Bank to its main refinancing operations on the first day of the month in which this Decision is adopted, plus 3.5 percentage points , namely 5.60 %. Article 3 This Decision is addressed to: Yamaha Corporation 10-1, Nakazawa-cho Hamamatsu 430-8650 Japan Yamaha Europa GmbH Siemenstrasse 22-34 D-25462 Rellingen Yamaha Musique France S.A. Rue Ambroise Croizat F-77183 Croissy-Beaubourg Yamaha Musica Italia S.p.A. Viale Italia 88 I-20020 Lainate (Milano) Yamaha Scandinavia AB Box J A Wettergrens Gata 1 52