Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
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1 . FREE MOVEMENT OF PERSONS - FREEDOM OF ESTABLISHMENT - AIM - PROHIBITION OF DISCRIMINATION ON GROUNDS OF NATIONALITY - NATIONAL RULES GOVERNING COMMERCIAL DISTRIBUTION - WHETHER PERMISSIBLE - CONDITIONS - COMPLIANCE WITH THE PRINCIPLE OF EQUAL TREATMENT
( EEC TREATY, ART . 52 )
2 . FREE MOVEMENT OF PERSONS - FREEDOM OF ESTABLISHMENT - DIRECTIVE 64/223 - DEFINITION OF WHOLESALE TRADE ACTIVITIES - INAPPLICABLE OUTSIDE THE CONTEXT OF FREEDOM OF ESTABLISHMENT
( COUNCIL DIRECTIVE 64/223, ART . 2 ( 2 )*)
Summary
1 . ARTICLE 52 OF THE TREATY IS INTENDED TO ENSURE THAT ALL NATIONALS OF MEMBER STATES WHO ESTABLISH THEMSELVES IN ANOTHER MEMBER STATE, EVEN IF THAT ESTABLISHMENT IS ONLY SECONDARY, RECEIVE THE SAME TREATMENT AS NATIONALS IN THAT STATE AND IT PROHIBITS, AS A RESTRICTION ON FREEDOM OF ESTABLISHMENT, ANY DISCRIMINATION ON GROUNDS OF NATIONALITY .
CONSEQUENTLY, IN THE CASE OF COMMERCIAL ACTIVITIES IN THE DISTRIBUTION SECTOR, FOR WHICH THERE ARE NO COMMON RULES, THE MEMBER STATES ARE AT LIBERTY, PROVIDED THAT THEY COMPLY WITH THAT OBLIGATION TO ACCORD EQUAL TREATMENT, TO ADOPT RULES GOVERNING WHOLESALE TRADE OR RETAIL TRADE AND TO LAY DOWN THE CRITERIA FOR DISTINGUISHING BETWEEN THOSE TWO FORMS OF DISTRIBUTION .
2 . ARTICLE 2*(2 ) OF DIRECTIVE 64/223 CONCERNING THE ATTAINMENT OF FREEDOM OF ESTABLISHMENT AND FREEDOM TO PROVIDE SERVICES IN RESPECT OF ACTIVITIES IN WHOLESALE TRADE DEFINES WHOLESALE TRADE ACTIVITIES SOLELY IN ORDER TO DEFINE THE MATTER COVERED BY THE OTHER PROVISIONS OF THE DIRECTIVE . IN VIEW OF ITS SPECIFIC FUNCTION IN THE CONTEXT OF DIRECTIVE 64/223/EEC, THAT ARTICLE CANNOT BE INTERPRETED AS BEING INTENDED TO PROVIDE A GENERAL COMMUNITY DEFINITION OF WHOLESALE TRADE ACTIVITIES WHICH CAN BE APPLIED IN CASES IN WHICH NO PROBLEM ARISES WITH REGARD TO FREEDOM OF ESTABLISHMENT . THEREFORE IT CANNOT BE RELIED UPON BY AN INDIVIDUAL BEFORE THE COURTS OF A MEMBER STATE IN ORDER TO OPPOSE THE APPLICATION TO HIM OF NATIONAL RULES GOVERNING THE PURSUIT OF RETAIL TRADE ACTIVITIES .
Parties
IN CASE 198/86
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE COUR D' APPEL, VERSAILLES, FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN
( 1 ) ERWIN CONRADI,
( 2 ) HANNJORG HERETH
AND
( 3 ) SOCIETE METRO,
AND
DIRECTION DE LA CONCURRENCE ET DES PRIX DES HAUTS-DE-SEINE
AND
MINISTERE PUBLIC,
ON THE INTERPRETATION OF ARTICLE 2*(2 ) OF COUNCIL DIRECTIVE 64/223/EEC OF 25 FEBRUARY 1964 CONCERNING THE ATTAINMENT OF FREEDOM OF ESTABLISHMENT AND FREEDOM TO PROVIDE SERVICES IN RESPECT OF ACTIVITIES IN WHOLESALE TRADE ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION, 1963-64, P.*123 ),
THE COURT ( FIRST CHAMBER )
COMPOSED OF : G . BOSCO, PRESIDENT OF CHAMBER, R . JOLIET AND F.A . SCHOCKWEILER, JUDGES,
ADVOCATE GENERAL : J . L DA CRUZ VILACA
REGISTRAR : D . LOUTERMAN, ADMINISTRATOR
AFTER CONSIDERING THE OBSERVATIONS SUBMITTED ON BEHALF OF :
ERWIN CONRADI, HANNJORG HERETH AND SOCIETE METRO, THE APPELLANTS IN THE MAIN PROCEEDINGS, BY MR PETTITI, BATONNIER, AND MR BLOCH, BOTH OF THE PARIS BAR,
THE FRENCH GOVERNMENT, BY G . GUILLAUME, ACTING AS AGENT,
THE COMMISSION OF THE EUROPEAN COMMUNITIES, BY E . LASNET, LEGAL ADVISER,
HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 13 MAY 1987,
AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 2 JULY 1987,
GIVES THE FOLLOWING
JUDGMENT
Grounds
1 BY A JUDGMENT OF 9 JULY 1986, WHICH WAS RECEIVED AT THE COURT REGISTRY ON 31 JULY 1986, THE COUR D' APPEL ( COURT OF APPEAL ), VERSAILLES, REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY SIX QUESTIONS ON THE INTERPRETATION OF ARTICLE 2*(2 ) OF COUNCIL DIRECTIVE 64/223/EEC OF 25 FEBRUARY 1964 CONCERNING THE ATTAINMENT OF FREEDOM OF ESTABLISHMENT AND FREEDOM TO PROVIDE SERVICES IN RESPECT OF ACTIVITIES IN WHOLESALE TRADE .
2 THOSE QUESTIONS WERE RAISED IN CRIMINAL PROCEEDINGS AGAINST ERWIN CONRADI AND HANNJORG HERETH, JOINT MANAGERS OF TWO COMPANIES INCORPORATED UNDER FRENCH LAW WHICH BELONG TO THE METRO GROUP, A DISTRIBUTOR WHICH OPERATES ACCORDING TO THE CASH-AND-CARRY SYSTEM .
3 BY A JUDGMENT OF 1 FEBRUARY 1985, THE TRIBUNAL CORRECTIONNEL, NANTERRE, FOUND MR CONRADI AND MR HERETH GUILTY OF CONTRAVENING THE RULES ON PRICE ADVERTISING CONTAINED IN THE FRENCH LEGISLATION GOVERNING THE PURSUIT OF RETAIL TRADE ACTIVITIES .
4 MR CONRADI AND MR HERETH APPEALED AGAINST THAT JUDGMENT TO THE COUR D' APPEL, VERSAILLES . THEY CHALLENGED THE APPLICABILITY OF THOSE NATIONAL RULES IN THIS CASE ON THE GROUND THAT THE METRO COMPANIES DID NOT PURSUE RETAIL TRADE ACTIVITIES BUT WHOLESALE TRADE ACTIVITIES, AS DEFINED IN ARTICLE 2*(2 ) OF DIRECTIVE 64/223/EEC .
5 THOSE WERE THE CIRCUMSTANCES IN WHICH THE COUR D' APPEL, VERSAILLES, STAYED THE PROCEEDINGS AND REFERRED TO THE COURT THE FOLLOWING QUESTIONS :
"( 1 ) DOES ARTICLE 2*(2 ) OF COUNCIL DIRECTIVE 64/223/EEC OF 25 FEBRUARY 1964 CONCERNING THE ATTAINMENT OF FREEDOM OF ESTABLISHMENT AND FREEDOM TO PROVIDE SERVICES IN RESPECT OF ACTIVITIES IN WHOLESALE TRADE SATISFY, FOR THE PURPOSES OF ARTICLE 189 OF THE TREATY OF ROME, THE CONDITIONS JUDGED NECESSARY BY THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES FOR IT TO BE DECLARED DIRECTLY APPLICABLE IN THE TERRITORY OF THE MEMBER STATES OF THE COMMUNITY?
IN THE EVENT OF AN AFFIRMATIVE ANSWER :
( 2 ) CAN THE COURT STATE THE INTERPRETATION TO BE GIVEN TO THE SUBPARAGRAPH OF ARTICLE 2*(2 ) OF THE DIRECTIVE WHICH DEFINES WHOLESALE TRADE ACTIVITIES AS ACTIVITIES PURSUED BY ANY PERSON WHO HABITUALLY AND BY WAY OF TRADE BUYS GOODS IN HIS OWN NAME AND ON HIS OWN ACCOUNT AND RESELLS SUCH GOODS 'TO PROFESSIONAL, TRADE OR LARGE-SCALE USERS' ? IS IT POSSIBLE TO MAKE A DISTINCTION BETWEEN SUCH ACTIVITIES AND RETAIL TRADE ACTIVITIES EVEN WHERE, FOR EXAMPLE, SUCH ACTIVITIES ARE VOLUNTARILY RESTRICTED TO A LIMITED NUMBER OF PURCHASERS HOLDING A TRADE CARD?
( 3 ) SINCE MOST CONSUMERS CAN BE DESCRIBED AS 'TRADE' CUSTOMERS, WHAT CRITERIA SHOULD BE APPLIED TO DISTINGUISH BETWEEN THE CASE WHERE THE WHOLESALER SELLING TO 'PROFESSIONAL, TRADE OR LARGE-SCALE USERS' WHO POSSESS A QUALIFYING CARD ISSUED BY HIM ACTS IN HIS CAPACITY AS WHOLESALER AND THE CASE WHERE HE ACTS AS RETAILER?
( 4 ) DO CASUAL SALES, EVEN OF SINGLE ITEMS, TO A 'TRADE USER' TO WHOM THE WHOLESALER HAS PERMITTED ACCESS TO HIS STORES WHICH IS RESERVED FOR HOLDERS OF A QUALIFYING CARD ALWAYS NECESSARILY CONSTITUTE WHOLESALE SALES?
( 5 ) WHAT EVIDENCE SHOULD THE WHOLESALER BE ABLE TO PRODUCE IN ORDER TO SHOW THAT THE TRANSACTIONS UNDERTAKEN BY HIM WITH A 'PROFESSIONAL, TRADE OR LARGE-SCALE USER' FALL WITHIN HIS WHOLESALE TRADE?
( 6 ) HOW IS THE PROTECTION OF THE CONSUMER TO BE ENSURED WHERE, AS A 'TRADE USER' AND HOLDER OF A QUALIFYING CARD GIVING HIM ACCESS TO WHOLESALE STORES, HE PURCHASES GOODS FOR HIS PERSONAL NEEDS BY THE CASH-AND-CARRY METHOD?"
6 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULLER ACCOUNT OF THE FACTS OF THE CASE, THE COURSE OF THE PROCEDURE AND THE OBSERVATIONS SUBMITTED TO THE COURT, WHICH ARE MENTIONED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .
FIRST QUESTION
7 THE FIRST QUESTION OF THE NATIONAL COURT IS ESSENTIALLY DESIGNED TO ASCERTAIN WHETHER THE DEFINITION OF WHOLESALE TRADE SET OUT IN ARTICLE 2*(2 ) OF DIRECTIVE 64/223/EEC MAY BE RELIED UPON BY AN INDIVIDUAL BEFORE THE COURTS OF A MEMBER STATE IN ORDER TO OPPOSE THE APPLICATION TO HIM OF NATIONAL RULES GOVERNING THE PURSUIT OF RETAIL TRADE ACTIVITIES .
8 BEFORE THAT QUESTION IS EXAMINED AND IN ORDER TO DEFINE THE FRAMEWORK AND THE SCOPE OF THE RULES OF COMMUNITY LAW REFERRED TO BY THE NATIONAL COURT, IT IS APPROPRIATE TO POINT OUT THAT THE AIM OF DIRECTIVE 64/223/EEC IS THE ATTAINMENT, IN THE FIELD OF WHOLESALE TRADE ACTIVITIES, OF FREEDOM OF ESTABLISHMENT, AS GUARANTEED BY ARTICLE 52 ETSEQ . OF THE TREATY, AND OF FREEDOM TO PROVIDE SERVICES, AS GUARANTEED BY ARTICLE 59 ET SEQ . OF THE TREATY .
9 AS REGARDS FREEDOM OF ESTABLISHMENT, THE COURT HAS CONSISTENTLY HELD ( SEE IN PARTICULAR THE JUDGMENT OF 12 FEBRUARY 1987 IN CASE 221/85 COMMISSION V BELGIUM (( 1987 )) ECR 719 ) THAT ARTICLE 52 OF THE TREATY IS INTENDED TO ENSURE THAT ALL NATIONALS OF MEMBER STATES WHO ESTABLISH THEMSELVES IN ANOTHER MEMBER STATE, EVEN IF THAT ESTABLISHMENT IS ONLY SECONDARY, RECEIVE THE SAME TREATMENT AS NATIONALS IN THAT STATE AND IT PROHIBITS, AS A RESTRICTION ON FREEDOM OF ESTABLISHMENT, ANY DISCRIMINATION ON GROUNDS OF NATIONALITY .
10 CONSEQUENTLY, IN THE CASE OF COMMERCIAL ACTIVITIES IN THE DISTRIBUTION SECTOR, FOR WHICH THERE ARE NO COMMON RULES, THE MEMBER STATES ARE AT LIBERTY, PROVIDED THAT THEY COMPLY WITH THAT OBLIGATION TO ACCORD EQUAL TREATMENT, TO ADOPT RULES GOVERNING WHOLESALE TRADE OR RETAIL TRADE AND TO LAY DOWN THE CRITERIA FOR DISTINGUISHING BETWEEN THOSE TWO FORMS OF DISTRIBUTION .
11 NEITHER ARTICLE 52 OF THE TREATY NOR ANY OTHER PROVISION OF COMMUNITY LAW CONCERNING THE ATTAINMENT OF FREEDOM OF ESTABLISHMENT PRECLUDES THE APPLICATION BY THE AUTHORITIES OF THE MEMBER STATES OF NATIONAL RULES GOVERNING THE PURSUIT OF RETAIL TRADE ACTIVITIES, PROVIDED THAT SUCH RULES DO NOT LEAD TO DISCRIMINATION AS REGARDS THE NATIONALS OF OTHER MEMBER STATES IN RELATION TO A MEMBER STATE' S OWN NATIONALS .
12 IN THE LIGHT OF THOSE OBSERVATIONS, IT MUST BE CONSIDERED WHETHER THE DEFINITION OF WHOLESALE TRADE IN ARTICLE 2*(2 ) OF DIRECTIVE 64/223/EEC MAY BE RELIED UPON BY INDIVIDUALS BEFORE NATIONAL COURTS IN A CASE SUCH AS THAT TO WHICH THE MAIN PROCEEDINGS RELATE .
13 AS THE COMMISSION RIGHTLY POINTS OUT IN ITS OBSERVATIONS, ARTICLE 2*(2 ) DEFINES WHOLESALE TRADE ACTIVITIES SOLELY IN ORDER TO DEFINE THE MATTER COVERED BY THE OTHER PROVISIONS OF DIRECTIVE 64/223/EEC .
14 IN VIEW OF ITS SPECIFIC FUNCTION IN THE CONTEXT OF DIRECTIVE 64/223/EEC, THAT ARTICLE CANNOT BE INTERPRETED AS BEING INTENDED TO PROVIDE A GENERAL COMMUNITY DEFINITION OF WHOLESALE TRADE ACTIVITIES WHICH CAN BE APPLIED IN CASES IN WHICH NO PROBLEM ARISES WITH REGARD TO FREEDOM OF ESTABLISHMENT .
15 IT FOLLOWS THAT THE DEFINITION IN ARTICLE 2*(2 ) CANNOT BE RELIED UPON OUTSIDE ITS OWN CONTEXT IN ORDER TO DETERMINE WHETHER OR NOT A DISTRIBUTOR UNDERTAKING IS TO BE REGARDED AS A RETAIL TRADER FOR THE PURPOSES OF THE APPLICATION OF NATIONAL RULES GOVERNING THE PURSUIT OF RETAIL TRADE ACTIVITIES .
16 CONSEQUENTLY, THE ANSWER TO THE FIRST QUESTION SUBMITTED BY THE COUR D' APPEL, VERSAILLES, MUST BE THAT ARTICLE 2*(2 ) OF COUNCIL DIRECTIVE 64/223/EEC OF 25 FEBRUARY 1964 CANNOT BE RELIED UPON BY AN INDIVIDUAL BEFORE THE COURTS OF A MEMBER STATE IN ORDER TO OPPOSE THE APPLICATION TO HIM OF NATIONAL RULES GOVERNING THE PURSUIT OF RETAIL TRADE ACTIVITIES .
THE OTHER QUESTIONS SUBMITTED BY THE NATIONAL COURT
17 SINCE THE NATIONAL COURT SUBMITTED THE OTHER QUESTIONS ONLY IN THE EVENT THAT THE COURT SHOULD GIVE AN AFFIRMATIVE ANSWER TO THE FIRST QUESTION, THERE IS NO NEED TO ANSWER THOSE QUESTIONS .
Decision on costs
COSTS
18 THE COSTS INCURRED BY THE GOVERNMENT OF THE FRENCH REPUBLIC AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN PROCEEDINGS ARE CONCERNED, IN THE NATURE OF A STEP IN THE PROCEEDINGS PENDING BEFORE THE NATIONAL COURT, THE DECISION ON COSTS IS A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS,
THE COURT ( FIRST CHAMBER ),
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE COUR D' APPEL, VERSAILLES, BY JUDGMENT OF 9 JULY 1986, HEREBY RULES :
ARTICLE 2*(2 ) OF COUNCIL DIRECTIVE 64/223/EEC OF 25 FEBRUARY 1964 CANNOT BE RELIED UPON BY AN INDIVIDUAL BEFORE THE COURTS OF A MEMBER STATE IN ORDER TO OPPOSE THE APPLICATION TO HIM OF NATIONAL RULES GOVERNING THE PURSUIT OF RETAIL TRADE ACTIVITIES .
Full & Egal Universal Law Academy