25. 1. 94 Official Journal of the European Communities No L 20/1§ (Acts whose publication is not obligatory) COMMISSION COMMISSION DECISION of 21 December 1993 relating to a proceeding under Article 85 of the EC Treaty (IV/29.420 — Grundig’s EC distribution system) (Only the German text is authentic) (94/29/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, ' Having regard to Council Regulation No 17 of 6 February 1962, first Regulation implementing Articles 85 and 86 of the Treaty ('), as last amended by the Act of Accession of Spain and Portugal, and in particular Articles 6 and 8 thereof, Having regard to the application submitted by Grundig AG on 12 January 1989 for extension of the exemption, Having published a summary of the notification in - accordance with Article 19 (3) of Regulation No 17 (3, Having consulted the Advisory Committee on Restrictive Practices and Dominant Positions, Whereas : A. THE FACTS (1) By Decision 85/404/EEC(}), the Commission exempted until 28 March 1989 the EC dealership agreements for the distribution of consumer elec- tronics products notified by Grundig AG on 29 () OJ No 13, 21. 2. 1962, p. 204/62. ) O No C 181, 17. 7. 1992, p. 3. ° () OJ No L 233, 30. 8. 1985, p. 1. @ @) @ March 1977. On 12 January 1989, Grundig AG applied for the exemption to be extended. 1. The market The market for consumer electronics products is one in which there is keen competition, due to the large number of manufacturers with different distri- bution strategies and to rapid technical develop- ment, resulting in constant technical innovation. Since the early 1980s, manufacturers from the Far East in particular have penetrated the European market, resulting not only in fierce price competi- tion and falling prices, but also in a decline in market shares for European manufacturers. At the same time, at the distribution level, there has been not only an increase in concentration, but also a trend towards new forms of distribution, in particular the ‘cash-and-carry’ wholesale markets. In contrast to the specialized dealers, the cash- and-carry outlets offer the consumer neither advice nor after-sales service. For this reason, and also because of the advantages of size associated with the wholesale markets, particularly chains of such markets, they charge prices which independent small and medium-sized dealers cannot match. Consequently, many such dealers are squeezed out of the market, which in turn results in further concentration at the distribution level. This sort of development at the distribution level has certain disadvantages both for consumers and for manufacturers. While consumers may benefit from falling prices, they also lose the advantages