Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - PROHIBITION - AGREEMENTS WHICH CONTINUE TO PRODUCE THEIR EFFECTS AFTER THEY HAVE FORMALLY CEASED TO BE IN FORCE - APPLICATION OF ARTICLE 85 OF THE EEC TREATY
( EEC TREATY ART . 85 )
2 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - AGREEMENTS CONCLUDED BETWEEN A DISTRIBUTION AGENCY AND THE MAJORITY OF PUBLISHERS - AGREEMENTS UNDER WHICH THE APPROVAL OF RETAIL SALES OUTLETS IS A MATTER FOR THE AGENCY - PROHIBITION
( EEC TREATY ART . 85 ( 1 ))
3 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - NEWSPAPERS AND PERIODICALS - SELECTIVE DISTRIBUTION SYSTEM - PERMISSIBILITY - CONDITIONS - NEWSPAPERS AND PERIODICALS - QUANTITATIVE SELECTION CRITERIA - PROHIBITION - EXEMPTION - POWERS OF THE COMMISSION - DISCRIMINATORY APPLICATION OF THE SYSTEM - PROHIBITION
( EEC TREATY ART . 85 ( 1 ) AND ( 3 ))
4 . COMPETITION - AGREEMENTS , DECISIONS AND CONCERTED PRACTICES - PRICE FIXING - PROHIBITION - NEWSPAPERS AND PERIODICALS - SELECTIVE DISTRIBUTION SYSTEM - EXEMPTION - POWERS OF THE COMMISSION
( EEC TREATY ART . 85 ( 1 ) AND ( 3 ))
Summary
1 . ARTICLE 85 IS APPLICABLE WHERE THE PARALLEL CONDUCT OF A NUMBER OF UNDERTAKINGS WAS DUE ORIGINALLY TO AN AGREEMENT AND WHERE IT CONTINUES AFTER THE TERMINATION OF THAT AGREEMENT WITHOUT ITS REPLACEMENT BY A NEW AGREEMENT . WITH REGARD TO AGREEMENTS WHICH ARE NO LONGER IN FORCE , IT IS SUFFICIENT , FOR ARTICLE 85 TO BE APPLICABLE , THAT THEY CONTINUE TO PRODUCE THEIR EFFECTS AFTER THEY HAVE FORMALLY CEASED TO BE IN FORCE . THE SYSTEM OF COMPETITION RULES ESTABLISHED BY ARTICLE 85 ET SEQ . OF THE EEC TREATY IS CONCERNED WITH THE ECONOMIC EFFECTS OF AGREEMENTS OR OF ANY COMPARABLE FORM OF CONCERTED PRACTICE OR COORDINATION RATHER THAN WITH THEIR LEGAL FORM .
2 . ARTICLE 85 ( 1 ) OF THE EEC TREATY APPLIES TO A SET OF AGREEMENTS BETWEEN AN AGENCY WHICH SPECIALIZES IN THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS IN ONE MEMBER STATE , THE MAJORITY OF THE PUBLISHERS OF NEWSPAPERS AND PERIODICALS WHO ARE ESTABLISHED IN THAT STATE AND A NUMBER OF PUBLISHERS ESTABLISHED IN OTHER MEMBER STATES , IF THE EFFECT OF THAT SET OF AGREEMENTS IS THAT IN PRACTICE THE APPROVAL OF RETAIL SALES OUTLETS IS A MATTER FOR THAT AGENCY OR A BODY SET UP BY IT WITHIN THE FRAMEWORK OF THE SAID AGREEMENTS .
3 . SELECTIVE DISTRIBUTION SYSTEMS CONSTITUTE AN ASPECT OF COMPETITION WHICH ACCORDS WITH ARTICLE 85 ( 1 ) OF THE EEC TREATY , PROVIDED THAT RE-SELLERS ARE CHOSEN ON THE BASIS OF OBJECTIVE CRITERIA OF A QUALITATIVE NATURE RELATING TO THE TECHNICAL QUALIFICATIONS OF THE RE-SELLER AND HIS STAFF AND THE SUITABILITY OF HIS TRADING PREMISES IN CONNECTION WITH THE REQUIREMENTS FOR THE DISTRIBUTION OF THE PRODUCT AND THAT SUCH CRITERIA ARE LAID DOWN UNIFORMLY FOR ALL POTENTIAL RE-SELLERS AND ARE NOT APPLIED IN A DISCRIMINATORY FASHION . SUCH A SYSTEM MAY BE ESTABLISHED FOR THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS , WITHOUT INFRINGING THE PROHIBITION CONTAINED IN ARTICLE 85 ( 1 ), GIVEN THE SPECIAL NATURE OF THOSE PRODUCTS AS REGARDS THEIR DISTRIBUTION .
A SELECTIVE DISTRIBUTION SYSTEM FOR NEWSPAPERS AND PERIODICALS WHICH AFFECTS TRADE BETWEEN MEMBER STATES IS PROHIBITED BY ARTICLE 85 ( 1 ) OF THE TREATY IF RE-SELLERS ARE CHOSEN ON THE BASIS OF QUANTITATIVE CRITERIA . HOWEVER , THE COMMISSION MAY , WITHIN THE FRAMEWORK OF AN APPLICATION FOR EXEMPTION UNDER ARTICLE 85 ( 3 ), EXAMINE WHETHER , IN A PARTICULAR CASE , CRITERIA OF THAT KIND MAY BE JUSTIFIED .
IN ANY EVENT A SYSTEM OF THAT KIND IS PROHIBITED BY ARTICLE 85 ( 1 ) IF THE CRITERIA DETERMINING THE CHOICE OF RE-SELLERS ARE APPLIED LESS STRICTLY IN RELATION TO UNDERTAKINGS WHICH ARE PART OF A PARTICULAR GROUP OF UNDERTAKINGS THAN IN RELATION TO OTHER RETAILERS .
4 . PROVISIONS WHICH FIX THE PRICES TO BE OBSERVED IN CONTRACTS WITH THIRD PARTIES CONSTITUTE , OF THEMSELVES , A RESTRICTION ON COMPETITION WITHIN THE MEANING OF ARTICLE 85 ( 1 ) OF THE EEC TREATY . WHERE AN AGREEMENT WHICH ESTABLISHES A SELECTIVE DISTRIBUTION SYSTEM AND WHICH AFFECTS TRADE BETWEEN MEMBER STATES INCLUDES SUCH A PROVISION , AN EXEMPTION FROM THE PROHIBITION CONTAINED IN ARTICLE 85 ( 1 ) OF THE EEC TREATY MAY BE GRANTED ONLY BY MEANS OF A DECISION ADOPTED BY THE COMMISSION IN THE CONDITIONS LAID DOWN BY ARTICLE 85 ( 3 ).
IF , IN SO FAR AS THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS IS CONCERNED , THE FIXING OF THE RETAIL PRICE BY PUBLISHERS CONSTITUTES THE SOLE METHOD BY WHICH A WIDE SELECTION OF NEWSPAPERS AND PERIODICALS CAN BE MADE AVAILABLE TO READERS , THE COMMISSION MUST TAKE ACCOUNT OF THOSE FACTORS WHEN EXAMINING AN AGREEMENT FOR THE PURPOSES OF ARTICLE 85 ( 3 ).
Parties
IN CASE 243/83
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNAL DE COMMERCE ( COMMERCIAL COURT ), BRUSSELS , FOR A PRELIMINARY RULING IN THE ACTION BEFORE THAT COURT BETWEEN
SA BINON & CIE , CHARLEROI ,
AND
SA AGENCE ET MESSAGERIES DE LA PRESSE , ANDERLECHT ,
Subject of the case
ON THE INTERPRETATION OF ARTICLES 85 AND 86 OF THE EEC TREATY ,
Grounds
1 BY JUDGMENT OF 21 OCTOBER 1983 , WHICH WAS RECEIVED AT THE COURT ON 25 OCTOBER 1983 , THE PRESIDENT OF THE TRIBUNAL DE COMMERCE ( COMMERCIAL COURT ), BRUSSELS , REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A NUMBER OF QUESTIONS ON THE INTERPRETATION OF ARTICLES 85 AND 86 OF THAT TREATY .
2 THE QUESTIONS WERE RAISED IN THE COURSE OF PROCEEDINGS BETWEEN SA BINON & CIE ( HEREINAFTER REFERRED TO AS ' BINON ' ), AN UNDERTAKING WHICH CARRIES ON A BUSINESS IN CHARLEROI SELLING BOOKS , STATIONERY AND EDUCATIONAL TOYS , AND SA AGENCE ET MESSAGERIES DE LA PRESSE ( HEREINAFTER REFERRED TO AS ' AMP ' ). THE PURPOSE OF THE ACTION IS TO OBTAIN AN ORDER DIRECTING AMP TO CEASE REFUSING TO SELL OR DELIVER TO BINON THE NEWSPAPERS AND PERIODICALS , BOTH BELGIAN AND FOREIGN , WHICH IT DISTRIBUTES IN BELGIUM .
3 ORIGINALLY BINON HELD A FRANCHISE FROM CLUB SA , WHICH RUNS A CHAIN OF SHOPS UNDER THAT NAME . SINCE 29 JANUARY 1982 BINON HAS CARRIED ON ITS BUSINESS UNDER ITS OWN NAME WITHOUT A FRANCHISE . FROM 8 MARCH 1983 BINON REQUESTED AMP TO SUPPLY IT WITH THE NEWSPAPERS , MAGAZINES AND PUBLICATIONS FOR WHOSE DISTRIBUTION IT IS RESPONSIBLE . SINCE AMP REFUSED TO SUPPLY IT , BINON APPLIED DIRECTLY TO VARIOUS PUBLISHERS BUT WITHOUT SUCCESS .
4 THE JUDGMENT OF THE TRIBUNAL DE COMMERCE STATES THAT , WITH THE EXCEPTION OF NEWSPAPERS AND PERIODICALS DISTRIBUTED ON THE BASIS OF SUBSCRIPTIONS , AMP IS RESPONSIBLE , EITHER ITSELF OR THROUGH ITS SUBSIDIARIES , FOR THE DISTRIBUTION TO RETAILERS OF A LARGE PROPORTION - CLOSE TO 70% - OF BELGIAN NEWSPAPERS AND PERIODICALS AND VIRTUALLY ALL NEWSPAPERS AND PERIODICALS PUBLISHED ABROAD . THE FULL SIGNIFICANCE OF THIS MAY BE SEEN FROM THE FACT THAT , IN THE FIRST PLACE , AMP AND THE NEWSPAPER AND PERIODICAL PUBLISHERS ESTABLISHED A SELECTIVE DISTRIBUTION SYSTEM IN 1976 WHEREBY EVERY RETAIL OUTLET WAS SUBJECT TO THE APPROVAL OF A REGIONAL CONSULTATIVE COMMITTEE AND , IN THE SECOND PLACE , AMP WAS A MEMBER OF A GROUP OF UNDERTAKINGS SOME OF WHICH OCCUPIED AN IMPORTANT POSITION IN THE FIELD OF THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS .
5 WITH REGARD TO THE SELECTIVE DISTRIBUTION SYSTEM THE NATIONAL COURT STATES THAT ORIGINALLY , PURSUANT TO THE AGREEMENT CONCLUDED IN 1976 , ANY PERSON WISHING TO COMMENCE BUSINESS SELLING NEWSPAPERS AND PERIODICALS HAD TO SUBMIT AN APPLICATION FOR APPROVAL TO THE REGIONAL CONSULTATIVE COMMITTEE , WHOSE OPINION WAS FOLLOWED BY THE MAJORITY OF PUBLISHERS ; ANYONE FAILING TO SUBMIT SUCH AN APPLICATION WAS REFUSED ALL SUPPLIES BY THE PUBLISHERS . NEVERTHELESS , TWO JUDGMENTS DELIVERED IN 1982 DECLARED THAT AGREEMENT TO BE INCOMPATIBLE WITH BELGIAN LEGISLATION AND ARTICLES 85 AND 86 OF THE EEC TREATY . IN ADDITION , ON 10 MAY 1983 THE CONSEIL DU CONTENTIEUX ECONOMIQUE ( COUNCIL FOR ECONOMIC DISPUTES ) ISSUED , PURSUANT TO THE BELGIAN LAW ON PROTECTION AGAINST ABUSE OF ECONOMIC POWER , AN OPINION IN WHICH IT STATED THAT AMP AND THE DELIBERATING MEMBERS OF THE CONSULTATIVE COMMITTEES WIELDED ECONOMIC POWER OVER THE RETAIL MARKET IN NEWSPAPERS AND PERIODICALS AND THEIR DISTRIBUTION AND HAD ABUSED THAT POWER . SINCE THAT TIME THE DISTRIBUTION SYSTEM HAS BEEN AMENDED BY AN AGREEMENT CONCLUDED IN 1983 BY AMP AND THE PUBLISHERS SO AS TO ABOLISH THE SYSTEM OF COLLECTIVE APPROVAL , AMP HAVING DRAWN UP A SET OF RULES WHICH THE PUBLISHERS DECIDED INDIVIDUALLY WHETHER TO ACCEPT OR REJECT . ACCORDING TO ARTICLE VI ( 3 ) ( 2 ) OF THOSE RULES AMP DELIVERS AN OPINION ON EVERY APPLICATION FOR THE OPENING OF A NEW RETAIL OUTLET , WHICH IS NOTIFIED TO BELGIAN PUBLISHERS ; THOSE PUBLISHERS ARE REGARDED AS FOLLOWING THAT OPINION UNLESS THEY INFORM AMP WITHIN EIGHT DAYS OF A DECISION TO THE CONTRARY BY MEANS OF A SPECIAL FORM .
6 IN ADDITION , THE NATIONAL COURT FOUND THAT AMP HAD A MAJORITY HOLDING IN AMP TRANSPORTS SA AND A 9.35% HOLDING IN LECTURE GENERALE SA , A RETAILER OF NEWSPAPERS AND PERIODICALS . THOSE HOLDINGS MUST , ACCORDING TO THE NATIONAL COURT , BE CONSIDERED IN THE LIGHT OF THE FACT THAT A COMPANY INCORPORATED UNDER FRENCH LAW , HACHETTE , WHICH IS A MAJOR PUBLISHING HOUSE IN PARIS , HAS A HOLDING OF 48.84% IN AMP AND ONE OF 24.55% IN LECTURE GENERALE SA .
7 THE NATIONAL COURT CONCLUDES FROM THE AFOREMENTIONED FINDINGS THAT AMP CONTROLS THE APPROVAL OF DISTRIBUTION OUTLETS AND HAS , AT THE SAME TIME , TOGETHER WITH HACHETTE , A VERY SUBSTANTIAL INTEREST IN THE BUSINESS OF LECTURE GENERALE SA . FOR THAT REASON THE VERY STRICT RULES ON THE OPENING OF OUTLETS , INVOLVING MINIMUM GEOGRAPHICAL CRITERIA , AS PROVIDED FOR BY AMP ' S RULES FOR THE DISTRIBUTION OF NEWSPAPERS AND PERIODICALS , WERE NOT APPLIED IN THE CENTRE OF CHARLEROI TO THE BUSINESS OF VARIOUS OUTLETS BELONGING TO LECTURE GENERALE SA , BUT THOSE RULES AND CRITERIA WERE RELIED UPON AS JUSTIFICATION FOR THE REFUSAL TO SUPPLY BINON .
8 THE NATIONAL COURT CONSIDERED IT NECESSARY IN THOSE CIRCUMSTANCES TO REFER THE FOLLOWING QUESTIONS TO THE COURT FOR A PRELIMINARY RULING :
' ( 1 ) IS IT COMPATIBLE WITH ARTICLES 85 AND 86 OF THE TREATY ESTABLISHING THE EEC FOR A GROUP OF UNDERTAKINGS OR A NUMBER OF UNDERTAKINGS WHOSE CONDUCT IS IDENTICAL AND WHICH CONSTITUTE AN IMPORTANT PART OF THE RELEVANT MARKET ( IN THIS CASE , THE MARKET IN DAILY AND WEEKLY NEWSPAPERS AND PERIODICALS IN BELGIUM ) TO MAINTAIN A PRACTICE WHEREBY , IN THE ABSENCE OF EXPRESS INTERVENTION OR ACTION ON THEIR PART , A SPECIALIZED UNDERTAKING IS ENTRUSTED EITHER IMPLIEDLY OR EXPRESSLY WITH THE TASK OF SELECTIVELY REGULATING THE DISTRIBUTION OF THEIR PRODUCTS BY REQUIRING RETAILERS WISHING TO SELL THOSE PRODUCTS TO SUBMIT AN APPLICATION FOR APPROVAL AND BY DECIDING WHETHER TO GRANT THAT APPLICATION BY REFERENCE TO BOTH QUALITATIVE AND QUANTITATIVE CRITERIA , NAMELY A CRITERION BASED ON THE DISTANCE FROM ONE SALES OUTLET TO ANOTHER AND A CRITERION REQUIRING A MINIMUM NUMBER OF INHABITANTS PER SALES OUTLET , THUS LIMITING COMPETITION WITHIN THE RELEVANT MARKET?
( 2)IS IT COMPATIBLE WITH ARTICLES 85 AND 86 OF THE TREATY ESTABLISHING THE EEC THAT IN BELGIUM THE DISTRIBUTION OF FOREIGN NEWSPAPERS AND PERIODICALS IS ENTRUSTED TO A SINGLE UNDERTAKING WHICH IS IN SUCH A POSITION AS TO BE RESPONSIBLE FOR THE DISTRIBUTION OF MORE THAN 50% OF FOREIGN PUBLICATIONS IN BELGIUM AND THAT THE CONTRACTS WHICH THAT UNDERTAKING REQUIRES BOTH NEWSPAPER PUBLISHERS AND RETAILERS TO SIGN ARE DRAWN UP SO AS TO ENABLE IT TO DEMAND RESCISSION OF THECONTRACT OR TO REFUSE DISTRIBUTION OF THE PUBLICATIONS IN QUESTION IF THE PUBLISHER UNDER CONTRACT SUPPLIES CERTAIN NON-APPROVED RETAILERS DIRECTLY , OR TO WITHDRAW APPROVAL FROM RETAILERS WHO RE-ASSIGN OR RESELL OR EFFECT ANY SALE OTHER THAN A RETAIL SALE OR ANY HIRE OR LOAN?
( 3)IS IT COMPATIBLE WITH ARTICLES 85 AND 86 OF THE TREATY ESTABLISHING THE EEC THAT THE DISTRIBUTOR IN QUESTION RESERVES THE RIGHT TO FIX PRICES AND COMPELS RETAILERS TO RESPECT THE PRICES LAID DOWN?
( 4)IS IT COMPATIBLE WITH ARTICLES 85 AND 86 OF THE TREATY ESTABLISHING THE EEC THAT THE NEWSPAPER DISTRIBUTOR IN QUESTION IS A BELGIAN COMPANY IN WHICH AN IMPORTANT SHARE IS HELD BY A FINANCE GROUP GOVERNED BY FOREIGN LAW WHICH ITSELF CONTROLS VARIOUS UNDERTAKINGS PUBLISHING DAILY NEWSPAPERS AND PERIODICALS IN FRANCE , WHILE THAT FINANCE GROUP AND THE BELGIAN DISTRIBUTOR JOINTLY HOLD SHARES IN A BELGIAN COMPANY HAVING AS ITS PURPOSE THE RETAIL DISTRIBUTION OF NEWSPAPERS AND PERIODICALS IN BELGIUM , IT BEING ESTABLISHED THAT THE DISTRIBUTOR APPLIES LESS STRICT CRITERIA FOR APPROVAL TO THAT RETAILER THAN TO OTHERS?
'
9 IT FOLLOWS FROM THE SECOND QUESTION THAT THE DISTRIBUTION SYSTEM REFERRED TO BY THE JUDGMENT REQUESTING A PRELIMINARY RULING FROM THE COURT APPLIES TO THE DISTRIBUTION OF FOREIGN NEWSPAPERS AND PERIODICALS IN BELGIUM . ACCORDING TO THE GROUNDS OF THE JUDGMENT VIRTUALLY THE WHOLE OF THE DISTRIBUTION OF FOREIGN NEWSPAPERS IN BELGIUM IS COVERED BY THAT SYSTEM . THOSE FACTS ARE SUFFICIENT FOR THE SYSTEM TO BE REGARDED AS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES . IT IS THEREFORE NOT NECESSARY TO EXAMINE THAT PARTICULAR QUESTION WHEN REPLYING TO THE QUESTIONS WHICH RELATE IN GENERAL TERMS TO THE APPLICATION OF ARTICLES 85 AND 86 OF THE EEC TREATY .
10 THE FIRST AND SECOND QUESTIONS RELATE , WITH REGARD TO NEWSPAPERS AND PERIODICALS PUBLISHED IN BELGIUM AND WITH REGARD TO THOSE PUBLISHED ABROAD , TO THE SYSTEM GOVERNING THEIR DISTRIBUTION IN BELGIUM AS ORGANIZED BY A SPECIALIZED DISTRIBUTION AGENCY . THE NATIONAL COURTWISHES TO KNOW HOW THE COMPATIBILITY OF SUCH A SYSTEM WITH ARTICLES 85 AND 86 IS TO BE ASSESSED WITH REGARD TO THREE DIFFERENT FACTORS :
( A ) THE PRACTICE OF THE PUBLISHERS ;
( B)THE OPERATIONS OF THE DISTRIBUTION AGENCY ;
( C)THE SELECTIVE DISTRIBUTION SYSTEM ESTABLISHED BY THAT AGENCY IN THE RETAIL TRADE .
THE THIRD QUESTION SINGLES OUT ONE SPECIFIC ASPECT OF THAT SYSTEM , NAMELY COMPLIANCE WITH FIXED PRICES , WHILST THE FOURTH QUESTION RELATES MORE PARTICULARLY TO THE POSSIBLE ABUSE BY THE DISTRIBUTION AGENCY OF ITS DOMINANT POSITION IN THE MARKET OR OF THE SELECTIVE DISTRIBUTION SYSTEM .
( A ) THE PRACTICE OF THE PUBLISHERS
11 THE JUDGMENT OF THE TRIBUNAL DE COMMERCE DESCRIBES THE PRACTICE OF THE PUBLISHERS , ESPECIALLY THOSE ESTABLISHED IN BELGIUM , AS CONSISTING OF THE DISTRIBUTION OF THEIR PRODUCTS IN BELGIUM THROUGH A DISTRIBUTION AGENCY AND AS INVOLVING A REFUSAL TO SELL THEM DIRECT TO RETAILERS . MOREOVER , ACCORDING TO THAT JUDGMENT , THE PUBLISHERS DEALT IN THE SAME WAY WITH EVERY APPLICATION FOR APPROVAL BY A RETAIL TRADER .
12 AMP CONTENDS THAT THE MERE FACT THAT THE PUBLISHERS , OR SOME OF THEM , ENTRUST THE DISTRIBUTION OF
