CELEX: 62019CJ0132
Appeal
Competition
Agreements, decisions and concerted practices
Television distribution
Regulation (EC) No 1/2003
Article 9 and Article 16(1)
Decision making commitments binding
Absolute territorial protection
Misuse of powers
Preliminary assessment
No obligation on the European Commission to take account of considerations relating to the application of Article 101(3) TFEU
Agreements intended to partition national markets
No obligation on the Commission to analyse the relevant national markets one by one
Proportionality
Adverse effect on the contractual rights of third parties

By its appeal, Groupe Canal + SA asks the Court of Justice to set aside the judgment of the General Court of the European Union of 12 December 2018, Groupe Canal + v Commission (
T‑873/16
,
EU:T:2018:904
; ‘the judgment under appeal’), by which the General Court dismissed its action for annulment of the decision of the European Commission of 26 July 2016 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.40023 – Cross-border access to pay-TV), making legally binding the commitments given by Paramount Pictures International Ltd and Viacom Inc., in the context of the licensing agreements on audiovisual content which they had concluded with Sky UK Ltd and Sky plc (‘the contested decision’).
I.

Legal context
Recital 13 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (
OJ 2003 L 1, p. 1
) states:
‘Where, in the course of proceedings which might lead to an agreement or practice being prohibited, undertakings offer the Commission commitments such as to meet its concerns, the Commission should be able to adopt decisions which make those commitments binding on the undertakings concerned. Commitment decisions should find that there are no longer grounds for action by the Commission without concluding whether or not there has been or still is an infringement. Commitment decisions are without prejudice to the powers of competition authorities and courts of the Member States to make such a finding and decide upon the case. Commitment decisions are not appropriate in cases where the Commission intends to impose a fine.’
Article 9 of that regulation provides:
‘1.   Where the Commission intends to adopt a decision requiring that an infringement be brought to an end and the undertakings concerned offer commitments to meet the concerns expressed to them by the Commission in its preliminary assessment, the Commission may by decision make those commitments binding on the undertakings. Such a decision may be adopted for a specified period and shall conclude that there are no longer grounds for action by the Commission.
2.   The Commission may, upon request or on its own initiative, reopen the proceedings:
(a)
where there has been a material change in any of the facts on which the decision was based;
(b)
where the undertakings concerned act contrary to their commitments; or
(c)
where the decision was based on incomplete, incorrect or misleading information provided by the parties.’
Article 16(1) of that regulation states:
‘When national courts rule on agreements, decisions or practices under Article [101 or 102 TFEU] which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated. To that effect, the national court may assess whether it is necessary to stay its proceedings. This obligation is without prejudice to the rights and obligations under Article [267 TFEU].’
II.

Background to the dispute and the contested decision
The facts underlying the dispute were set out by the General Court in paragraphs 1 to 12 of the judgment under appeal as follows:
‘1
On 13 January 2014, the European Commission opened an investigation into possible restrictions [adversely] affecting the provision of pay-TV services in the context of licensing agreements [concluded] between six United States studios and the main paid-for content broadcasters in the European Union.
On 23 July 2015, the Commission sent a statement of objections to Paramount Pictures International Ltd, established in London (United Kingdom), and to Viacom Inc., established in New York (New York, United States), the parent company of the former (together “Paramount”). In that statement of objections, the Commission set out its preliminary finding concerning the compatibility with Article 101 TFEU and Article 53 of the Agreement on the European Economic Area [of 2 May 1992 (
OJ 1994 L 1, p. 3
)] of certain clauses in the licensing agreements which Paramount had concluded with Sky UK Ltd and Sky plc (together “Sky”).
In the context of its investigation, the Commission focused on two related clauses in those licensing agreements. The purpose of the first clause was to prohibit Sky from responding favourably to unsolicited requests from consumers residing in the [European Economic Area (EEA)] but outside the United Kingdom and Ireland to purchase television distribution services, or to limit the possibility of its responding favourably to such requests. The second clause required Paramount, in the context of the agreements which it concluded with broadcasters established in the EEA but outside the United Kingdom, to prohibit those broadcasters from responding favourably to unsolicited requests from consumers residing in the United Kingdom or Ireland to purchase television distribution services, or to limit the possibility of their responding favourably to such requests.
By decision of the hearing officer in certain competition proceedings of 24 November 2015, [Groupe Canal +] was allowed to participate in the proceedings as an interested other person for the purposes of Article 13(1) of Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles [101 and 102 TFEU] (
OJ 2004 L 123, p. 18
).
By letter of 4 December 2015, entitled “Information on the nature and subject matter of the procedure in accordance with Article 13(1) of Regulation (EC) No 773/2004”, the Commission communicated to [Groupe Canal +], in particular, its legal assessment concerning the application of Article 101 TFEU to the facts of the present case, followed by a preliminary conclusion in that respect. According to that preliminary conclusion, the Commission intended to adopt a decision addressed to Sky and to each of the studios covered by its investigation finding that they had infringed Article 101 TFEU and Article 53 of the EEA Agreement, imposing fines on them and ordering them to bring the infringement to an end and to refrain from any measure capable of having a similar object or effect.
On 15 April 2016, Paramount proposed commitments in order to address the Commission’s competition concerns in accordance with Article 9 of [Regulation No 1/2003]. After receiving observations from other interested persons, including [Groupe Canal +], the Commission adopted the [contested decision].
It is apparent from Article 1 of the contested decision that the commitments as listed in the annex to that decision are to be binding on Paramount and its successors and subsidiaries for a period of five years from the date of notification of that decision.
The ninth paragraph of Clause 1 of the annex to the contested decision sets out various types of clauses forming the subject matter of the procedure (“the relevant clauses”). As regards satellite transmission, the relevant clauses are the first clause, according to which reception in territories other than the licensed territory (overspill) is not to constitute a breach of contract by the broadcaster if the broadcaster has not knowingly authorised that reception, and the second clause, according to which reception in the licensed territory is not to constitute a breach of contract by Paramount if Paramount has not authorised the availability of a third party’s descrambling devices in that territory. Furthermore, as regards internet transmission, the relevant clauses are, first, the clause requiring broadcasters to prevent the downloading or streaming of audiovisual content outside the licensed territory; second, the clause according to which internet overspill in the licensed territory is not to constitute a breach of contract by Paramount if Paramount has required broadcasters to use technologies to prevent such overspill; and, third, the clause according to which internet overspill outside the licensed territory is not to constitute a breach of contract by the broadcaster if the broadcaster uses technology to prevent such overspill.
It is also apparent from the third paragraph of Clause 1 of the annex to the contested decision that “Broadcaster Obligation” is to mean the relevant clauses or equivalent clauses preventing a broadcaster from responding to unsolicited requests from consumers residing in the EEA but outside the territories for which the broadcaster has a broadcasting right. Similarly, “Paramount Obligation” is to mean the relevant clauses or equivalent clauses requiring Paramount to prohibit broadcasters located in the EEA but outside the territories for which a broadcaster has exclusive rights from responding to unsolicited requests from consumers residing in those territories.
According to Clause 2 of the annex to the contested decision, from the date of notification of [that] decision, Paramount is to be subject to various commitments. First of all, Paramount is not to enter into … the relevant clauses in the context of licensing agreements as defined in that annex [or renew or extend the application of those clauses] (point 2.1). Next, as regards existing Pay-TV Output Licence Agreements, Paramount is not to seek to enforce broadcasters’ obligations before a court or tribunal (point 2.2(a)). As regards those agreements, it is not directly or indirectly to honour or enforce the “Paramount Obligation” (point 2.2(b)). Last, it is to notify Sky within 10 days of notification of the contested decision, and any other broadcaster in the EEA within one month of notification of that decision, that it will not seek to enforce the relevant clauses as against broadcasters (point 2.3).
[Groupe Canal +] had concluded a Pay Television Agreement with Paramount that entered into force on 1 January 2014 …. Article 12 of that agreement provides that the territory covered by the agreement consists of “exclusive” territories, covering in particular France, and a “non-exclusive” territory, covering Mauritius. Article 3 of [that agreement] provides, moreover, that Paramount will not itself exercise or authorise a third party to exercise retransmission rights to the exclusive territories. Annex A.IV to that agreement specifies the obligations borne by [Groupe Canal +] as regards the use of geo-filtering technologies to prevent retransmission outside the licensed territories.
By letter of 25 August 2016, Paramount notified [Groupe Canal +] of the commitment in point 2.2(a) of the annex to the contested decision … and, consequently, stated that it would not bring legal proceedings against the broadcaster to enforce the relevant clauses and that it waived any obligation of the broadcaster under the relevant clauses. Paramount was also careful to stipulate, in that letter, that the expression “broadcaster obligation” had the same meaning as … in the annex to the contested decision. By letter of 14 October 2016, [Groupe Canal +] replied to that notification and emphasised that commitments entered into in a procedure involving only the Commission and Paramount could not be enforced against it.’
III.

Procedure before the General Court and the judgment under appeal
By application lodged at the Registry of the General Court on 8 December 2016, Groupe Canal + brought an action for annulment of the contested decision under Article 263 TFEU.
By order of the President of the Fifth Chamber of the General Court of 13 July 2017, Groupe Canal + v Commission (
T‑873/16
, not published,
EU:T:2017:556
), first, the Bureau européen des unions de consommateurs (BEUC) was granted leave to intervene in support of the form of order sought by the Commission and, second, the Union des producteurs de cinéma (UPC), the European Film Agency Directors – EFADs and C More Entertainment AB were granted leave to intervene in support of the form of order sought by Groupe Canal +. In addition, by decision of the President of the Fifth Chamber of the General Court of the same date, the French Republic was granted leave to intervene in support of the form of order sought by Groupe Canal +.
In support of its action, Groupe Canal + raised four pleas in law, alleging, first, manifest error of assessment as regards the compatibility of the relevant clauses with Article 101 TFEU and the effects of the commitments imposed; second, infringement of Article 9 of Regulation No 1/2003 as regards the identification of the concerns addressed by the commitments imposed; third, breach of the principle of proportionality; and fourth, misuse of powers.
By the judgment under appeal, the General Court dismissed the action brought by Groupe Canal +.
IV.

Procedure before the Court of Justice and the forms of order sought
By its appeal, Groupe Canal + claims that the Court should:
–
set aside the judgment under appeal in so far as it dismissed the action brought by Groupe Canal + for annulment of the contested decision and ordered it to pay the costs;
–
annul the contested decision;
–
order the Commission to pay the costs in their entirety.
The Commission contends that the Court should dismiss the appeal and order Groupe Canal + to pay the costs.
The French Republic contends that the Court should set aside the judgment under appeal in its entirety and draw from that all the appropriate conclusions in respect of the contested decision.
UPC contends that the Court should:
–
set aside the judgment under appeal in so far as it dismissed the action brought by Groupe Canal + for annulment of the contested decision and ordered the latter to pay the costs;
–
annul the contested decision;
–
in any event, order the Commission to pay all the costs which it has incurred.
EFADs contends that the Court should:
–
declare the appeal to be admissible and well founded in its entirety;
–
set aside the judgment under appeal in so far as it dismissed the action brought by Groupe Canal + for annulment of the contested decision and ordered the latter to pay the costs;
–
annul the contested decision;
–
in any event, order the Commission to pay all the costs which it has incurred.
BEUC asks the Court to dismiss the appeal in its entirety and to order Groupe Canal + to pay all the costs which it has incurred.
V.

Consideration of the appeal
In support of its appeal, Groupe Canal + puts forward four grounds of appeal. The first ground alleges that the General Court erred in law by finding that the Commission had not misused its powers in the contested decision. The second ground alleges that the General Court infringed the
audi alteram partem
principle. The third ground alleges failure to state reasons and incomplete examination of the facts. The fourth ground alleges that the General Court erred in law in its interpretation of Article 9 of Regulation No 1/2003 and point 128 of the Commission notice on best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU (
OJ 2011 C 308, p. 6
; ‘the notice on best practices’) and infringed the principles of proportionality and respect for the rights of third parties.
A.

Admissibility
1.

Arguments of the parties
BEUC submits that the first, third and fourth grounds of appeal are manifestly inadmissible since Groupe Canal + merely repeats the arguments it put forward at first instance.
2.

Assessment of the Court
It follows from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) and Article 169 of the Rules of Procedure of the Court that an appeal must indicate precisely the contested elements of the judgment or order which the appellant seeks to have set aside and the legal arguments specifically advanced in support of the appeal. According to the settled case-law of the Court of Justice, that requirement is not satisfied by an appeal which confines itself to reproducing the pleas in law and arguments previously submitted to the General Court. Such an appeal amounts in reality to no more than a request for re-examination of the application submitted to the General Court, which the Court of Justice does not have jurisdiction to undertake (see, in particular, judgment of 4 July 2000, Bergaderm and Goupil v Commission,
C‑352/98 P
,
EU:C:2000:361
, paragraph
, and order of 3 September 2019, ND and OE v Commission,
C‑317/19 P
, not published,
EU:C:2019:688
, paragraph
and the case-law cited).
However, provided that the appellant challenges the interpretation or application of EU law by the General Court, the points of law examined at first instance may be discussed again in the course of an appeal. Indeed, if an appellant could not thus base his appeal on pleas in law and arguments already relied on before the General Court, an appeal would be deprived of part of its purpose (judgment of 14 October 2010, Deutsche Telekom v Commission,
C‑280/08 P
,
EU:C:2010:603
, paragraph
and the case-law cited).
In the present case, although several of the arguments put forward by Groupe Canal + in its appeal, considered in isolation, are similar to some of the arguments raised before the General Court, the fact remains that, by the grounds of appeal, Groupe Canal + alleges that the General Court committed errors of law in its assessments and clearly identifies the contested paragraphs of the judgment under appeal.
In those circumstances, the first, third and fourth grounds of appeal, viewed as a whole, cannot be regarded as inadmissible. It will, however, be necessary to examine the admissibility of specific complaints put forward in support of those grounds when examining them in turn.
B.

Substance
1.

First ground of appeal
(a)

Arguments of the parties
Groupe Canal +, supported by EFADs and UPC, essentially claims that by rejecting its arguments that the adoption of the contested decision constitutes a misuse of powers – in that it allowed the Commission to obtain, on the pretext of its intention to halt anticompetitive practices, something which the European Parliament had refused to grant it, namely the end of territorial exclusivity in the cinema sector for the whole of the EEA – the General Court erred in law and failed to fulfil its obligation to state reasons.
First, it argues that the General Court erred in law by finding, in paragraph 129 of the judgment under appeal, that the Commission had not misused its powers since Paramount’s commitments were adequate for addressing the competition concerns expressed by that institution in its preliminary assessment. The General Court relied on an incorrect premiss, as that assessment covered the United Kingdom and Ireland alone and the Commission did not even examine the competitive situation concerning France, even though Paramount’s commitments applied throughout the EEA.
Second, Groupe Canal + asserts that the General Court wrongly held, in paragraph 130 of the judgment under appeal, that the Commission could validly adopt the contested decision inasmuch as the legislative process concerning geo-blocking had not yet resulted in the adoption of a legislative measure. The General Court either failed to factor into its analysis or failed to mention in its reasoning the fact that the Commission could not disregard the adoption by the Parliament on 19 January 2016, approximately six months before the adoption of the contested decision, of a resolution entitled ‘Towards a Digital Single Market Act’ (‘the resolution’), in which the Parliament stressed the need not to extend the Commission’s policy of questioning geo-blocking clauses to the cinema sector. The General Court thus overlooked the fact that the Commission decided, in full knowledge of the facts, to require the cinema sector, despite the Parliament’s opposition, to end the geo-blocking of audiovisual services by adopting a decision which would allow it to achieve a more far-reaching objective than ending anticompetitive practices and would have an
erga omnes
effect.
Even if the Commission had been able to disregard the resolution, the General Court should have found – knowing that the Parliament was about to adopt a legislative measure allowing the audiovisual sector to maintain geo-blocking clauses, now Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC (
OJ 2018 L 60
I, p. 1) – that the Commission was at the very least required to include in the contested decision a clause enabling Paramount’s commitments to be reviewed should the legislative landscape change. It follows from recital 8 of that regulation, from Article 1 of Regulation (EU) 2017/1128 of the European Parliament and of the Council of 14 June 2017 on cross-border portability of online content services in the internal market (
OJ 2017 L 168, p. 1
), from recital 10 of Directive (EU) 2019/789 of the European Parliament and of the Council of 17 April 2019 laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organisations and retransmissions of television and radio programmes, and amending Council Directive 93/83/EEC (
OJ 2019 L 130, p. 82
), and from Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC (
OJ 2019 L 130, p. 92
), that the EU legislature accepted, after the adoption of the contested decision, that audiovisual content could be subject, among other things, to geo-restriction systems.
The Commission and BEUC dispute the merits of the arguments put forward by Groupe Canal +. The Commission also contends that the arguments submitted by Groupe Canal + to the effect that the Commission could not disregard the resolution and should have included a clause in the contested decision permitting review in the event of legislative developments are inadmissible because they were raised for the first time before the Court of Justice.
(b)

Assessment of the Court of Justice
In contrast to the Commission, the Court considers admissible the arguments put forward by Groupe Canal + alleging that the General Court erred in law, first, by failing to factor into its analysis or failing to mention in its reasoning the fact that the Commission could not disregard the resolution and, second, by not finding that the Commission should have, in the light of the legislative process concerning geo-blocking, included in the contested decision a clause enabling Paramount’s commitments to be reviewed in the event of legislative developments.
According to the case-law of the Court of Justice, to allow a party to put forward for the first time before the Court of Justice a plea in law which it did not raise before the General Court would in effect allow that party to bring before the Court of Justice a wider case than that heard by the General Court. In an appeal, the Court’s jurisdiction is, as a general rule, confined to a review of the assessment by the General Court of the pleas argued before it. However, an argument which was not raised at first instance does not constitute a new plea that is inadmissible at the appeal stage if it is simply an amplification of an argument already developed in the context of a plea set out in the application before the General Court (judgment of 28 February 2019, Alfamicro v Commission,
C‑14/18 P
,
EU:C:2019:159
, paragraph
and the case-law cited).
In the present case, the arguments referred to in paragraph 27 of this judgment are closely linked to the fourth plea put forward in the application at first instance, alleging misuse of powers, and, in so far as they seek to demonstrate that the General Court was wrong to find that the Commission did not, by adopting the contested decision, circumvent the legislative process concerning geo-blocking, they are an amplification of that plea, not a new plea raised for the first time in the appeal. Moreover, it is apparent from paragraph 252 of the application at first instance that Groupe Canal + relied on the resolution before the General Court.
Those arguments cannot, however, be upheld.
It should be recalled that according to the Court’s case-law, a measure is only vitiated by misuse of powers if it appears, on the basis of objective, relevant and consistent evidence, to have been taken with the exclusive or main purpose of achieving an end other than that stated or of evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (judgment of 31 January 2019, Islamic Republic of Iran Shipping Lines and Others v Council,
C‑225/17 P
,
EU:C:2019:82
, paragraph
and the case-law cited).
In that regard, the General Court was right to find, in paragraph 130 of the judgment under appeal, that as long as the legislative process concerning geo-blocking has not resulted in the adoption of a legislative measure, that process is without prejudice to the powers conferred on the Commission by Article 101 TFEU and Regulation No 1/2003.
Moreover, Groupe Canal + neither claimed nor demonstrated before the General Court that the Commission was not entitled to open the investigation mentioned in paragraph 1 of the judgment under appeal, as cited in paragraph 5 of the present judgment, or to adopt, in the context of that investigation, if appropriate, a decision under Articles 7 or 9 of Regulation No 1/2003, or that any measure precluded or prohibited the adoption of a decision on the basis of Article 9 of that regulation accepting the commitments offered by an undertaking in order to address the Commission’s concerns concerning the compatibility with Article 101 TFEU of contractual clauses restricting the opportunities for the main paid-for content broadcasters in the European Union to make passive cross-border sales of television distribution services.
The secondary law instruments to which Groupe Canal +, EFADs and UPC refer are not such as to call into question the General Court’s analysis, since they were adopted after the adoption of the contested decision.
It follows from the foregoing considerations that the General Court did not err in law by holding, in essence, in paragraph 130 of the judgment under appeal, that by opening the investigation mentioned in paragraph 1 of the judgment under appeal, as indicated in paragraph 5 of this judgment, and by adopting the contested decision, the Commission had acted within its powers and Groupe Canal + had not shown that the Commission had misused its powers.
As regards the complaint submitted by Groupe Canal + alleging that the General Court erred in law by rejecting, in paragraph 129 of the judgment under appeal, its argument that the Commission misused its powers inasmuch as the commitments offered by Paramount did not address the competition concerns expressed by the Commission in its preliminary assessment, it should be pointed out that, even if it were shown that the commitments did not address those concerns, that fact in itself would not be capable of establishing a misuse of powers.
Consequently, that complaint must be rejected, as must the first ground of appeal in its entirety.
2.

Third ground of appeal
The third ground consists of two parts, alleging, first, infringement of the obligation to state reasons in so far as the General Court failed to address the plea raised by Groupe Canal + claiming that the Commission did not take account of the economic and legal context of which the relevant clauses formed part and, second, an incomplete examination of the facts in so far as the General Court considered that any reduction in the revenues of Groupe Canal + from customers in France could be offset by the possibility for it to approach a customer base situated throughout the EEA.
(a)

The first part
(1)

Arguments of the parties
Groupe Canal +, supported by EFADs, UPC and the French Republic, submits that the General Court erred in law by holding, in paragraph 39 of the judgment under appeal, that review of the lawfulness of the contested decision may relate only to the question whether, first of all, the circumstances set out in that decision establish competition concerns; next, if so, whether Paramount’s commitments, made binding, address those concerns; and last, whether Paramount did not offer less onerous commitments that addressed those concerns equally adequately. The General Court also erred in law by holding, in paragraphs 62 to 66 of the judgment under appeal, that the question of whether the conduct giving rise to those concerns satisfies the cumulative conditions for the application of Article 101(3) TFEU has no bearing on the actual nature of a decision such as the contested decision and that, consequently, it was not for the General Court to rule on the arguments whereby Groupe Canal + alleges that the relevant clauses promote cultural production and diversity.
Groupe Canal + states that the General Court failed to address the plea alleging that the Commission did not take account of the French economic and legal context of which the relevant clauses formed part and therefore infringed its obligation to state reasons. It did not enable Groupe Canal + to ascertain the reasons why the General Court did not uphold its arguments. The General Court failed to reflect, in its assessment, the obligation to take into account the economic and legal context of which those clauses formed part. It thus disregarded the case-law of the Court of Justice according to which, first, in order to determine whether an agreement between undertakings reveals a sufficient degree of harm for it to be considered to be a restriction of competition ‘by object’ for the purposes of Article 101 TFEU, regard must be had, in particular, to the economic and legal context of which it forms part, by considering the nature of the goods or services concerned as well as the real conditions of the functioning and structure of the market or markets in question, and, second, it is for the General Court to ascertain whether the evidence relied on contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of supporting the conclusions drawn from it.
The General Court did not carry out a thorough examination of the economic and legal context of which the relevant clauses formed part; it simply made a ‘peremptory’ observation, in paragraphs 40 to 42 of the judgment under appeal, that, having regard to their content, their objectives and their economic and legal context, those clauses, which lead to absolute territorial exclusivity, had as their object the exclusion of all cross-border competition, which, for the General Court, is sufficient to justify the Commission’s concerns.
According to the French Republic, the General Court did not define what constitute competition concerns capable of justifying the adoption of a decision under Article 9 of Regulation No 1/2003 and did not inquire whether the relevant clauses revealed a sufficient degree of harm to be regarded, prima facie, as a restriction of competition by object. Moreover, the objective of promoting cultural diversity is inseparable from the economic and legal context of which the relevant clauses formed part and cannot therefore be excluded from their examination in the light of Article 101(3) TFEU.
Groupe Canal + also submits that by relying, in paragraphs 43 to 50 of the judgment under appeal, on the judgment of 4 October 2011, Football Association Premier League and Others (
C‑403/08 and C‑429/08
,
EU:C:2011:631
), to find that the relevant clauses were such as to give rise to concerns on the Commission’s part owing to their anticompetitive object, the General Court erred in law, since that judgment does not concern the cinema sector. The General Court thus disregarded the specific economic and legal context of the cinema sector, even though the Court of Justice held, in its judgment of 6 October 1982, Coditel and Others (
262/81
,
EU:C:1982:334
, paragraphs
and
), that the characteristics of the cinematographic industry and of its markets in the European Union, especially those relating to dubbing and subtitling for the benefit of different language groups, to the possibilities of television broadcasts, and to the system of financing cinematographic production in Europe, serve to show that an exclusive exhibition licence is not, in itself, such as to prevent, restrict or distort competition.
The Commission and BEUC dispute the merits of those arguments.
(2)

Assessment of the Court
Concerning, first of all, the argument put forward by Groupe Canal + alleging that the General Court did not state the reasons for rejecting its line of argument relating to the taking into account of the economic and legal context of the relevant clauses, it should be recalled that according to settled case-law, the obligation incumbent upon the General Court under Article 36 and the first paragraph of Article 53 of the Statute of the Court of Justice of the European Union to state reasons for its judgments does not require the General Court to provide an account that follows exhaustively and one by one all the arguments articulated by the parties to the case. The reasoning may therefore be implicit, on condition that it enables the persons concerned to understand the grounds of the General Court’s judgment and provides the Court of Justice with sufficient information to exercise its powers of review on appeal (judgment of 14 September 2016, Trafilerie Meridionali v Commission,
C‑519/15 P
,
EU:C:2016:682
, paragraph
).
It should be pointed out that, in paragraph 40 of the judgment under appeal, the General Court essentially identified the Commission’s concerns regarding the relevant clauses, noting that the Commission had stated, in recitals 37 to 44 of the contested decision, that the agreements leading to absolute territorial exclusivity restored the partitions of national markets and frustrated the Treaty’s objective of establishing a single market and that, therefore, such clauses were deemed to have as their object the restriction of competition, unless other circumstances falling within their economic and legal context justify the finding that they are not liable to have that result.
In paragraph 41 of the judgment under appeal, the General Court summarised recitals 46 to 49 of the contested decision, which show that the Commission took the view that, having regard to their content, their objectives and their economic and legal context, the relevant clauses had as their object the exclusion of all cross-border competition and the grant of absolute territorial protection to broadcasters having contracts with Paramount.
While it is true that the General Court stated immediately after paragraph 41 of the judgment under appeal that the Commission’s considerations in that regard were well founded, the fact remains that it is apparent from a careful reading of all the grounds of that judgment that, contrary to what Groupe Canal + submits, by proceeding in that manner, the General Court did not express a ‘peremptory’ conclusion without carrying out a thorough examination of the arguments. Instead, it stated the outcome of its examination before setting out, in paragraphs 43 to 73 of the judgment under appeal, the reasons leading to that outcome, including the reasons why the relevant clauses were, in its view, such as to give rise to concerns on the Commission’s part in the light of Article 101(1) TFEU.
Furthermore, it is apparent from paragraphs 51 to 58 of the judgment under appeal that the General Court specifically examined the arguments of Groupe Canal +, the French Republic, EFADs, UPC and C More Entertainment alleging that the relevant clauses were lawful under Article 101(1) TFEU on account of the economic and legal context of which they formed part, and did not overlook their arguments that those clauses had the effect of favouring cultural diversity without harming competition, which the General Court considered in paragraphs 59 to 72 of that judgment.
Consequently, it must be held that the reasoning set out in paragraphs 40 to 73 of the judgment under appeal enables the persons concerned, and Groupe Canal + in particular, to understand the grounds of the General Court’s judgment and provides the Court of Justice with sufficient information to exercise its powers of review in the present appeal. The General Court did not therefore fail to fulfil its obligation to state reasons when it rejected the arguments put forward by Groupe Canal + concerning the economic and legal context of the relevant clauses.
Next, in so far as Groupe Canal + complains that the General Court erred in law, in paragraphs 43 to 50 of the judgment under appeal, by relying on the judgment of 4 October 2011, Football Association Premier League and Others (
C‑403/08 and C‑429/08
,
EU:C:2011:631
), to find that the relevant clauses were such as to give rise to concerns on the Commission’s part owing to their anticompetitive object, it should be noted that, although the case giving rise to that judgment did not concern the cinema sector, the fact remains that it follows from paragraphs 134, 141 and 142 of that judgment that that case concerned a situation that is comparable – in commercial and competition terms – to the situation in the present case, in which exclusive licensing agreements concluded between a holder of intellectual property rights and broadcasters contained additional obligations designed to ensure compliance with the territorial limitations on exploitation of those licences, particularly the obligation on broadcasters to take measures blocking access to the protected subject matter outside the territory covered by the licensing agreement concerned.
Furthermore, there is no inconsistency between that judgment and the judgment of 6 October 1982, Coditel and Others (
262/81
,
EU:C:1982:334
), which concerns the cinema sector. Far from supporting the argument put forward by Groupe Canal + that clauses such as the relevant clauses may be regarded as perfectly valid in that they are the cornerstone of the cinema financing system, paragraphs 15 and 16 of the judgment of 6 October 1982, Coditel and Others (
262/81
,
EU:C:1982:334
), to which Groupe Canal + refers, state only that an exclusive exhibition licence granted by the holder of the copyright in a film does not, in itself, have as its object the prevention, restriction or distortion of competition. Moreover, in paragraph 17 of that judgment, the Court expressly envisaged that the exercise of copyright in a film and the right deriving from it, namely that of exhibiting the film, could distort competition on the cinematographic market.
Unlike the case giving rise to that judgment, the case which gave rise to the judgment of 4 October 2011, Football Association Premier League and Others (
C‑403/08 and C‑429/08
,
EU:C:2011:631
), dealt specifically with the additional obligations designed to ensure compliance with the territorial limitations on exploitation of licences granted by the holder of an intellectual property right.
In those circumstances, it must be held that the General Court did not err in law by finding, in essence, in paragraphs 46 to 50 of the judgment under appeal, with reference to the judgment of 4 October 2011, Football Association Premier League and Others (
C‑403/08 and C‑429/08
,
EU:C:2011:631
), that it follows from the case-law of the Court of Justice that clauses in licensing agreements laying down mutual obligations which have the object of eliminating the cross-border supply of the services consisting in the broadcast of audiovisual content forming the subject matter of those agreements, and which thus confer absolute territorial protection on each broadcaster, may be regarded, in the light of the objectives they pursue and the economic and legal context of which they form part, as agreements whose object is to restrict competition within the meaning of Article 101(1) TFEU, and that, in so far as the relevant clauses contained such obligations, they were – without prejudice to any decision definitively finding the existence or absence of an infringement of that provision following a full examination – such as to give rise in this case to competition concerns on the Commission’s part.
Lastly, it is also necessary to reject the argument put forward by Groupe Canal + alleging that the General Court erred in law by holding, in essence, in paragraphs 39 and 62 to 66 of the judgment under appeal, that the question of whether the conduct giving rise to competition concerns on the Commission’s part satisfies the conditions for the application of Article 101(3) TFEU has no bearing on the actual nature of a decision adopted under Article 9 of Regulation No 1/2003 and that, consequently, it was not for the General Court, in the context of the review of the lawfulness of such a decision, to rule on the arguments alleging that that provision of the TFEU applied.
As the General Court correctly pointed out in paragraph 62 of the judgment under appeal, Article 101(3) TFEU applies only if an infringement of Article 101(1) TFEU has been found to exist beforehand (see, to that effect, judgment of 7 February 2013, Slovenská sporiteľňa,
C‑68/12
,
EU:C:2013:71
, paragraph
).
Since the Commission is not required to make a finding of infringement when it adopts a decision under Article 9 of Regulation No 1/2003 (judgment of 29 June 2010, Commission v Alrosa,
C‑441/07 P
,
EU:C:2010:377
, paragraph
), it cannot, in the context of such a decision, be required to make a definitive assessment as to whether an agreement, decision or concerted practice satisfies the conditions of Article 101(3) TFEU.
Furthermore, as the General Court rightly stated in paragraph 62 of the judgment under appeal, the application of Article 101(3) TFEU consists in determining the pro-competitive effects produced by the agreement that infringes Article 101(1) TFEU and in ascertaining whether those pro-competitive effects outweigh the anticompetitive effects.
It is apparent from Article 9(1) of Regulation No 1/2003 that decisions adopted by the Commission under that provision are based on a preliminary assessment of the anticompetitive nature of the conduct in question. Accordingly, since such a decision does not involve a full and thorough assessment of all the anticompetitive effects of that conduct, the Commission would not be in a position to compare those effects against the pro-competitive effects, assuming them to be established, relied on before it.
It follows that the General Court did not err in law by finding, in paragraph 62 of the judgment under appeal, that the question whether the conduct giving rise to competition concerns on the Commission’s part satisfies the conditions for the application of Article 101(3) TFEU has no bearing on the actual nature of a decision adopted under Article 9 of Regulation No 1/2003.
As for the fact that the Commission took a preliminary view, in recitals 50 to 52 of the contested decision, on whether Article 101(3) TFEU applied in the present case, it should be noted that those recitals formed part of the explanation of the Commission’s preliminary assessment of the relevant clauses and did not include any definitive determination on that issue. They were simply intended to show that the Commission had taken into account in that assessment the arguments which Paramount had already put forward on the matter prior to the statement of objections.
In those circumstances, the first part of the third ground of appeal must be dismissed as unfounded.
(b)

The second part
(1)

Arguments of the parties
Groupe Canal +, supported by EFADs, UPC and the French Republic, claims that by holding, in paragraphs 57 and 69 of the judgment under appeal, that any reduction in the revenues of Groupe Canal + from customers in France may be offset by the fact that it is now free to approach a customer base situated throughout the EEA and not only in France, the General Court did not take account of the specific features of the cinematographic sector and did not examine all the facts before it. The General Court clearly failed to take account of the study entitled ‘The impact of cross-border access to audiovisual content on EU consumers’, conducted by the firms Oxera and O & O in May 2016 and submitted by Groupe Canal +, which demonstrates that territorial exclusivity is necessary for the financing of European cinema owing to the range of cultural sensitivities throughout the European Union, that the value of European films varies between Member States and linguistic areas, and that production at European level is, at the end of the day, mainly financed by broadcasters on the basis of the system of absolute territorial protection. The reduction in revenues cannot be offset as Groupe Canal + is no longer able to showcase the exclusive nature of the distribution of certain content and as consumers in France primarily opt to subscribe to operators broadcasting attractive content, most often in English. The cost of a multi-territorial licence is much higher than that of a national licence, with the result that the former is out of reach for distributors. The cost of acquiring new subscribers outside the distributor’s traditional territory drastically reduces the distributor’s freedom of action in terms of production. In any event, the geographical restrictions inherent in the licences entered into by Groupe Canal + prevent it from freely approaching a customer base throughout the European Union.
The Commission and BEUC dispute the merits of those arguments.
(2)

Assessment of the Court
It should be noted at the outset that, since the arguments put forward in the second part of the third ground of appeal seek to criticise the considerations set out in paragraph 69 of the judgment under appeal, those arguments must be rejected as ineffective.
It follows from the use, in paragraph 67 of the judgment under appeal, of the words ‘in any event’ and, in paragraph 72 of that judgment, of the words ‘even if the Commission must be considered to have been required to examine the applicability of Article 101(3) TFEU’, that the General Court conducted the assessment set out in paragraphs 67 to 72 of that judgment for the sake of completeness, in the event of a finding that the Commission was required to examine the applicability of Article 101(3) TFEU.
Since the General Court was right to hold that, in the procedure which led to the adoption of the contested decision, the Commission was not required to determine whether the conditions of Article 101(3) TFEU were satisfied, as is apparent from the examination of the first part of the third ground of appeal, the complaints directed at paragraph 69 of the judgment under appeal, even if well founded, could not, in any event, result in that judgment being set aside.
In so far as the arguments put forward in the second part of the third ground of appeal relate to the considerations set out in paragraph 57 of the judgment under appeal, it must be recalled that, under Article 256 TFEU and Article 58 of the Statute of the Court of Justice of the European Union, an appeal is to be limited to points of law. Therefore, the General Court has exclusive jurisdiction, first, to establish the facts and, second, to assess those facts. It is only where the material inaccuracy of the General Court’s findings of fact is evident from the procedural documents submitted to it or where the evidence used to support those facts has been distorted that those findings of fact and the appraisal of evidence constitute points of law subject to review by the Court of Justice on appeal (order of 19 December 2019, OPS Újpest v Commission,
C‑741/18 P
, not published,
EU:C:2019:1104
, paragraph
and the case-law cited).
The arguments of Groupe Canal + merely challenge the appraisal of the facts carried out by the General Court, according to which any reduction in the revenues of Groupe Canal + from customers in France may be offset by the fact that, owing to the implementation of the commitments made binding under the contested decision, Groupe Canal + is now free to approach a customer base situated throughout the EEA and not only in France. No allegation is made that the scope of those commitments was distorted.
The arguments of Groupe Canal + are therefore inadmissible.
In the light of the foregoing considerations, the second partof the third ground of appeal must be rejected as in part ineffective and in part inadmissible.
It follows that the third ground of appeal must be dismissed.
3.

Second ground of appeal
(a)

Arguments of the parties
Groupe Canal + observes that in order to find, in paragraph 72 of the judgment under appeal, that the preliminary assessment carried out by the Commission concluding that the conditions of Article 101(3) TFEU were not met did not contain any error, the General Court held, in paragraph 67 of that judgment, that the relevant clauses imposed restrictions going beyond what is necessary for the production and distribution of audiovisual works that require protection of intellectual property rights and, in paragraph 70 of that judgment, that those clauses eliminated all competition on US films. However, none of those considerations were debated by the parties in the proceedings before the General Court. The General Court therefore infringed the
audi alteram partem
principle.
The Commission disputes the merits of the arguments put forward by Groupe Canal +. The Commission and BEUC contend that the second ground of appeal is, in any event, ineffective because it is directed against grounds included in the judgment under appeal purely for the sake of completeness. BEUC submits, as its main argument, that that ground of appeal is inadmissible because it evidently lacks detail.
(b)

Assessment of the Court
The second ground of appeal is directed against paragraphs 67, 70 and 72 of the judgment under appeal, which concern the applicability of Article 101(3) TFEU in this case.
Without there being any need to examine whether, as BEUC maintains, that ground of appeal should be declared inadmissible, it must be held, for the reasons set out in paragraphs 66 and 67 of this judgment, that it is ineffective.
Accordingly, the second ground of appeal must be dismissed.
4.

Fourth ground of appeal
The fourth ground of appeal consists of two parts, alleging, first, that the General Court infringed the principle of proportionality and respect for the rights of third parties by holding that the Commission was not required to analyse the national markets concerned one by one and, second, that the General Court infringed point 128 of the notice on best practices and the contractual rights of third parties by holding that the contested decision does not affect the possibility for Groupe Canal + to bring an action before the national courts in order to enforce its contractual rights.
(a)

The first part
(1)

Arguments of the parties
Groupe Canal +, supported by UPC and the French Republic, essentially states that by accepting Paramount’s commitments – which cover all contracts entered into with broadcasters in the EEA, even though the Commission’s preliminary assessment and its competition concerns related only to the exclusive rights granted to Sky in respect of the United Kingdom and Ireland – the Commission employed ‘extrapolated’ reasoning, shirking its obligation to examine the other national markets, and, in so doing, failed to take account of the particularities of the other markets, such as the French market, whose particularity is that audiovisual creation is funded by broadcasters, including Groupe Canal +. By upholding the Commission’s approach in paragraph 118 of the judgment under appeal, the General Court infringed the principle of proportionality and the rights of third parties, contrary to the judgment of 29 June 2010, Commission v Alrosa (
C‑441/07 P
,
EU:C:2010:377
, paragraph
).
The Commission, supported by BEUC, disputes the merits of that line of argument.
(2)

Assessment of the Court
It has been established in this case that the Commission’s preliminary assessment related only to certain clauses in the licensing agreements which Paramount had concluded with Sky, under which Paramount granted Sky exclusive licences for the territories of the United Kingdom and Ireland. It is apparent from paragraph 3 of the judgment under appeal that the Commission had focused its investigation on two related clauses in those agreements. The purpose of the first clause was to prohibit Sky from responding favourably to unsolicited requests from consumers residing in the EEA but outside the United Kingdom and Ireland to purchase television distribution services, or to limit the possibility of its responding favourably to such requests. The second clause required Paramount, in the context of the agreements which it concluded with broadcasters established in the EEA but outside the United Kingdom and Ireland, to prohibit those broadcasters from responding favourably to unsolicited requests from consumers residing in the United Kingdom or Ireland to purchase television distribution services, or to limit the possibility of their responding favourably to such requests.
In addition, it is apparent, in particular, from paragraphs 8 to 10 of the judgment under appeal that Paramount’s commitments, made binding by the contested decision, also related to similar clauses in licensing agreements which Paramount had concluded or was likely to conclude with other broadcasters established in the EEA.
The General Court held, in paragraphs 40 and 41 of the judgment under appeal, that the Commission’s concerns regarding the relevant clauses related to the fact that they led to absolute territorial exclusivity, thereby restoring the partitions of national markets and frustrating the Treaty’s objective of establishing a single market.
As the General Court rightly pointed out in paragraph 46 of the judgment under appeal, according to the case-law of the Court of Justice, an agreement which might tend to restore the partitions between national markets is liable to frustrate the Treaty’s objective of achieving the integration of those markets through the establishment of a single market. Therefore, agreements which are aimed at partitioning national markets according to national borders or make the interpenetration of national markets more difficult may be regarded, in the light of the objectives they pursue and the economic and legal context of which they form part, as agreements whose object is to restrict competition within the meaning of Article 101(1) TFEU.
Such agreements are liable to jeopardise the proper functioning of the single market, thereby counteracting one of the principal objectives of the European Union, irrespective of the prevailing situation in the national markets.
Accordingly, the General Court was right to find, in paragraph 118 of the judgment under appeal, that the relevant clauses – in so far as they had as their object the partitioning of the national markets of the whole of the EEA and their economic and legal context does not permit a finding that they are not capable of harming competition – could validly, in the context of the application of Article 9 of Regulation No 1/2003, raise competition concerns for the Commission as regards the whole of the EEA, even though the Commission did not analyse the national markets concerned one by one.
It follows that the first part of the fourth ground of appeal must be rejected as unfounded.
(b)

The second part
(1)

Arguments of the parties
Groupe Canal + submits that by finding, in paragraph 104 of the judgment under appeal, that the contested decision does not constitute an interference in its contractual freedom since it could bring an action before the national courts in order to establish the compatibility of the relevant clauses with Article 101(1) TFEU and to draw, vis-à-vis Paramount, the inferences prescribed by national law, the General Court infringed the principle deriving from Article 9 of Regulation No 1/2003, from point 128 of the notice on good practices and from footnote 76 of that notice, according to which a decision adopted on the basis of Article 9 cannot have the object or the effect of making commitments binding on operators who did not offer them and who have not subscribed to them.
Furthermore, by stating, in paragraph 103 of the judgment under appeal, that if a national court were to require Paramount to contravene its commitments, the Commission would have to reopen the investigation, the General Court expressly acknowledged that the implementation of those commitments is dependent on the will of Groupe Canal + without drawing all the legal inferences from that finding.
Groupe Canal +, supported by the French Republic, essentially submits that by holding, in paragraph 100 of the judgment under appeal, that the contested decision could, at most, influence the findings of the national courts only in so far as it contains a preliminary assessment, the General Court seriously infringed the rights of third parties, in this case those of Groupe Canal +. That decision deprives Groupe Canal + of its contractual freedom, since the fact of the matter is that it would not be able to obtain a declaration from the national courts contradicting the Commission and upholding the validity of the relevant clauses. In that regard, it is apparent from the judgment of 23 November 2017, Gasorba and Others (
C‑547/16
,
EU:C:2017:891
, paragraphs
and
), that national courts cannot overlook decisions taken on the basis of Article 9(1) of Regulation No 1/2003 and they must take account of preliminary assessments made by the Commission and regard them as an indication, if not prima facie evidence, of the anticompetitive nature of the agreement at issue. The freedom of those courts is ensured only if they decide to pursue their investigations into whether the agreements concerned comply with competition law.
The French Republic adds that the influence of a decision taken on the basis of Article 9(1) of Regulation No 1/2003 on a national court’s assessment increases in step with the commitments negotiated with other undertakings in the sector concerned, so that successive commitments are likely to set the standard from which it would be difficult for national courts to depart. In addition, if a national court were to find that the agreement at issue does not infringe Article 101(1) TFEU, the fact that the Commission would necessarily re-open its investigation, in accordance with Article 9(2)(b) of Regulation No 1/2003, might deter national courts from challenging the Commission’s preliminary assessment.
The Commission, supported by BEUC, contends, in essence, that the General Court was right to hold, in paragraphs 83 to 108 of the judgment under appeal, that the implementation of Paramount’s commitments is not dependent on the will of third parties, including Groupe Canal +. By offering those commitments, Paramount exercised its contractual freedom no longer to adhere to or be bound by certain contractual clauses and that decision is not dependent on the will of a third party. Furthermore, the Commission’s acceptance of those commitments does not deprive Groupe Canal + of the possibility of bringing an action before the national courts to ensure the protection of its rights in its contractual dealings with Paramount. If a national court considers that the relevant clauses do not infringe Article 101(1) TFEU or that they satisfy the conditions of Article 101(3) thereof, it will have to assess whether the outcome of the proceedings before it might lead Paramount to contravene the commitments made binding under the contested decision. To prevent the outcome of those proceedings leading Paramount to contravene those commitments, the national court could refuse to require enforcement of the relevant clauses and could make an order against Paramount, in accordance with the applicable national rules, for equivalent enforcement in the form of the payment of damages. The General Court contemplated such a course of action in paragraph 103 of the judgment under appeal.
Furthermore, the General Court was right to hold, in paragraph 102 of the judgment under appeal, that Groupe Canal + could obtain a declaration from the national courts contradicting the Commission and upholding the validity of the relevant clauses. It is apparent from paragraph 29 of the judgment of 23 November 2017, Gasorba and Others (
C‑547/16
,
EU:C:2017:891
), that the national courts should only take account of the preliminary assessment made by the Commission, which is set out in the contested decision, and regard it as an indication, if not prima facie evidence, of the anticompetitive nature of the relevant clauses.
(2)

Assessment of the Court
In its examination of the second part of the third plea in law put forward at first instance, alleging infringement, in breach of the principle of proportionality, of the contractual rights of third parties, such as Groupe Canal +, the General Court held, in essence, in paragraphs 89 and 90 of the judgment under appeal, that a decision adopted on the basis of Article 9 of Regulation No 1/2003 is binding only on undertakings which have offered a ‘commitment’ within the meaning of that provision and cannot have the object or the effect of making such a commitment binding on operators who did not offer it and who have not subscribed to it.
In paragraphs 91 and 92 of the judgment under appeal, the General Court held in particular that where the commitment consists in not executing a contractual clause that confers rights on a third party, recognising that the Commission has the power to make the commitment binding on that third party when, like Groupe Canal +, that third party did not offer it and was not the subject of the proceedings initiated by the Commission would constitute an interference in the contractual freedom of the operator in question going beyond the provisions of Article 9 of Regulation No 1/2003.
The General Court then examined whether, having regard to its wording and also to the legal context in which it was adopted, the contested decision had the object or the effect that the commitment offered by Paramount amounts, contrary to Article 9, to a commitment offered by Groupe Canal +. In that regard, first, it observed, in paragraph 94 of the judgment under appeal, that it does not follow from that decision that it imposes any obligation on Paramount’s contracting partners such as Groupe Canal +.
Second, the General Court took the view, in paragraph 95 of the judgment under appeal, that (i) the fact that Paramount gives a general commitment not to enforce or initiate proceedings before a court to ensure compliance with the broadcasters’ obligation not to make passive sales outside their exclusive territories, as provided for in paragraph 2.2(a) of the annex to the contested decision, automatically means that Paramount will not honour its obligation to prohibit such sales, as provided for in paragraph 2.2(b) of that annex, and (ii) that commitment automatically entails, in turn, an interference in the contractual right enjoyed vis-à-vis Paramount by the broadcasters who have contracted with Paramount, consisting in the guarantee by Paramount to each of them of absolute territorial exclusivity as regards the subject matter of each pay-TV output licence agreement.
In paragraph 96 of the judgment under appeal, the General Court found that the question which arises in such a context is whether that result is brought about by the contested decision itself, in which case it would amount to an irremediable effect as against a third party that neither offered nor subscribed to the commitment made binding, or whether Paramount’s statement that it will no longer honour the relevant clauses is essentially an act that Paramount undertakes at its own risk and does not adversely affect in any way the possibility that its contracting partners will bring proceedings before the national courts in order to enforce those clauses.
Furthermore, the General Court held, in particular, in paragraphs 100 and 102 of the judgment under appeal, that in the context of an action brought by an undertaking to enforce its contractual rights which have been adversely affected by commitments made binding by the Commission pursuant to a decision adopted under Article 9(1) of Regulation No 1/2003, a national court may reach a conclusion which deviates in whole or in part from the preliminary assessment carried out by the Commission in the light of competition law, contained in that decision, and may find that the clauses forming the subject matter of the commitments do not infringe Article 101(1) TFEU.
Furthermore, in paragraph 103 of the judgment under appeal, the General Court considered, in essence, that national courts have the power to adopt a decision which might lead Paramount to contravene the commitments made binding under the contested decision.
In paragraph 104 of that judgment, the General Court inferred from those considerations that the contested decision did not adversely affect the possibility for Groupe Canal + to bring an action before the national courts in order to establish the compatibility of the relevant clauses with Article 101(1) TFEU and to draw, vis-à-vis Paramount, the inferences prescribed by national law.
It found, in paragraph 106 of the judgment under appeal, that by adopting the contested decision, the Commission had acted within the limits of the powers conferred on it by Article 9 of Regulation No 1/2003 and had safeguarded the objective of that provision, which is based on considerations of procedural economy and efficiency, without adversely affecting the contractual or procedural rights of Groupe Canal + in a manner that went beyond what is necessary in order to achieve that objective.
Groupe Canal + complains, in essence, that the General Court infringed the principle of proportionality by downplaying the significance of the effects of the commitments in question – entered into by Paramount and made binding by the contested decision – on the contractual rights of Groupe Canal +, arguing that the General Court relied on an incorrect premiss as regards the effectiveness, in that context, of an action brought before the national courts based on such rights.
In that regard, it must be recalled that according to settled case-law, the principle of proportionality requires that acts of the EU institutions should be suitable for attaining the legitimate objectives pursued by the legislation at issue and should not go beyond what is necessary to achieve those objectives (judgment of 11 December 2018, Weiss and Others,
C‑493/17
,
EU:C:2018:1000
, paragraph
and the case-law cited).
Application of the principle of proportionality by the Commission in the context of Article 9 of Regulation No 1/2003 is confined to verifying that the commitments in question address the concerns it expressed to the undertakings concerned and that they have not offered less onerous commitments that also address those concerns adequately. When carrying out that assessment, the Commission must, however, take into consideration the interests of third parties (judgment of 29 June 2010, Commission v Alrosa,
C‑441/07 P
,
EU:C:2010:377
, paragraph
).
As the Advocate General observed in point 123 of his Opinion, when the Commission verifies commitments not from the perspective of whether they are appropriate to address its competition concerns, but also with regard to their effect on the interests of third parties, the principle of proportionality requires that those third parties’ rights are not rendered meaningless.
In that context, the General Court was right to hold, in essence, in paragraphs 91 and 92 of the judgment under appeal, that the Commission’s decision to make binding an operator’s commitment not to apply certain contractual clauses vis-à-vis its contracting partner, such as Groupe Canal +, when that contracting partner did not offer the commitment and was not the subject of the related proceedings, and when no evidence of its agreement in respect of that commitment has been submitted in accordance with point 128 of the notice on best practices, constitutes an interference in the contractual freedom of that contracting partner going beyond the provisions of Article 9 of Regulation No 1/2003. Having then observed, in paragraph 94 of the judgment under appeal, that it does not follow from the contested decision, adopted on the basis of Article 9, that it directly imposes any obligation on Groupe Canal +, the General Court nevertheless pointed out, in paragraph 95 of that judgment, once again correctly, that Paramount’s commitments, made binding by that decision, automatically mean that Paramount will not honour some of its contractual obligations vis-à-vis Groupe Canal + under the licensing agreement between them, which entered into force on 1 January 2014.
It is true that, as is apparent from recital 13 of Regulation No 1/2003, the decisions which the Commission adopts under Article 9 of that regulation are without prejudice to the powers of, inter alia, the courts of the Member States to make a finding of infringement of Articles 101 and 102 TFEU and to decide on the case concerned. Thus, a commitment decision concerning certain agreements between undertakings, adopted by the Commission under Article 9(1) of that regulation, does not preclude national courts from examining whether those agreements comply with the competition rules and, if necessary, declaring those agreements void pursuant to Article 101(2) TFEU (judgment of 23 November 2017, Gasorba and Others,
C‑547/16
,
EU:C:2017:891
, paragraph
).
However, according to the first sentence of Article 16(1) of Regulation No 1/2003, when national courts rule on agreements, decisions or practices under Articles 101 or 102 TFEU which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission.
A decision of a national court requiring an undertaking which has entered into commitments made binding pursuant to a decision adopted under Article 9(1) of Regulation No 1/2003 to contravene those commitments would clearly run counter to that decision.
It follows that by holding, in essence, in paragraph 103 of the judgment under appeal, that a national court hearing an action for enforcement of the contractual rights of Groupe Canal + could, if necessary, order Paramount to contravene its commitments, made binding by the contested decision, the General Court misconstrued the first sentence of Article 16(1) of Regulation No 1/2003.
Indeed, in accordance with the case-law of the Court of Justice (judgment of 14 December 2000, Masterfoods and HB,
C‑344/98
,
EU:C:2000:689
, paragraph
and the case-law cited), which is now codified in the second sentence of Article 16(1) of Regulation No 1/2003, the coherent application of the competition rules and the general principle of legal certainty require national courts, when ruling on agreements or practices which may subsequently be the subject of a decision by the Commission, to avoid giving decisions which would conflict with a decision contemplated by the Commission in the implementation of Article 101(1), Article 102 and Article 101(3) TFEU.
Since decisions based on Article 9(1) of Regulation No 1/2003 are, as is apparent from the wording of that provision, taken ‘where the Commission intends to adopt a decision requiring that an infringement be brought to an end’, it follows from the case-law referred to in the preceding paragraph that, when a decision based on that provision exists, national courts cannot issue, in relation to the conduct concerned, ‘negative’ decisions finding that there has been no infringement of Articles 101 and 102 TFEU if the Commission may still reopen the proceedings, pursuant to Article 9(2) of that regulation, and, as the case may be, adopt a decision containing a formal finding of an infringement.
Therefore, the General Court also erred in law by holding, in essence, in paragraphs 100, 102 and 104 of the judgment under appeal, that a national court could, where appropriate, declare that clauses such as the relevant clauses do not infringe Article 101(1) TFEU and uphold an action brought by an undertaking for the enforcement of its contractual rights adversely affected by commitments made binding by the Commission or uphold an action for damages.
It follows that the involvement of the national courts is not capable of adequately and effectively redressing a failure to verify, at the stage of the adoption of a decision on the basis of Article 9 of Regulation No 1/2003, whether the measure is proportionate with regard to the protection of the contractual rights of third parties.
In those circumstances, it must be held that the General Court was wrong to hold, in essence, in paragraphs 96 to 106 of the judgment under appeal, that the possibility for Paramount’s contracting partners, including Groupe Canal +, to bring an action before the national courts was capable of remedying the effects of Paramount’s commitments, made binding by the contested decision, on the contractual rights of those contracting parties, established in paragraph 95 of that judgment.
It is true that, as the General Court points out in paragraph 101 of the judgment under appeal, the Court of Justice observed in its judgment of 29 June 2010, Commission v Alrosa (
C‑441/07 P
,
EU:C:2010:377
, paragraph
), in the context of an investigation concerning two undertakings which had concluded an agreement the entry into force of which was conditional upon obtaining negative clearance or an exemption from the Commission, that the fact that the individual commitments offered by an undertaking have been made binding by the Commission does not mean that other undertakings are deprived of the possibility of protecting the rights they may have in connection with their relations with that undertaking. However, in view of the limits on the jurisdiction of the national courts referred to in paragraphs 109, 110, 112 and 113 of this judgment, it must be held that the contractual rights of a third party, such as Groupe Canal +, cannot be adequately protected in an action brought before the national courts in circumstances where the Commission makes binding a commitment under which the third party’s contracting partner is required to refrain from fulfilling some of its obligations towards that third party, obligations that were entered into freely pursuant to an unconditional agreement already in force, when the third party was not the subject of the proceedings initiated by the Commission.
Accordingly, the second part of the fourth ground of appeal must be upheld.
It follows from the foregoing that the judgment under appeal is vitiated by an error of law as regards the General Court’s assessment of the proportionality of the contested decision in relation to the adverse effects on the interests of third parties.
In the light of all the foregoing considerations, the judgment under appeal must be set aside.
VI.

The action before the General Court
In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the decision of the General Court is set aside, the Court of Justice may itself give final judgment in the matter, where the state of the proceedings so permits.
That is the case here.
By the second part of the third plea in law put forward at first instance, Groupe Canal + essentially claims that, by making Paramount’s commitments binding by means of the contested decision, the Commission disproportionately interfered with the contractual rights of third parties, such as Groupe Canal +, and thus infringed the principle of proportionality.
As is apparent from paragraph 107 of this judgment, where the commitment consists in not executing a contractual clause that confers rights on a third party, recognising that the Commission has the power to make the commitment binding on that third party when that third party did not offer it and was not the subject of the proceedings initiated by the Commission would constitute an interference in the contractual freedom of the operator in question going beyond the provisions of Article 9 of Regulation No 1/2003.
In the present case, although it is apparent from the documents before the Court that the contested decision does not impose obligations on the broadcasters who are Paramount’s contracting partners, the fact remains – as the Court held, in essence, in paragraph 107 of this judgment – that Paramount’s commitments, made binding by the contested decision, automatically entail an interference in the contractual right enjoyed by those broadcasters, including Groupe Canal +, vis-à-vis Paramount, consisting in the guarantee by Paramount to each of them of absolute territorial exclusivity as regards the subject matter of each pay-TV output licence agreement. Under that decision, Paramount is required, inter alia, not to honour certain obligations, designed to ensure such exclusivity, arising from its contracts with those broadcasters, in particular the obligations provided for in Articles 3 and 12 of its licensing agreement with Groupe Canal +, which entered into force on 1 January 2014.
As the Advocate General observed, in essence, in point 125 of his Opinion, such obligations are capable of constituting an essential element of the economic balance established by those broadcasters and Paramount in the exercise of their contractual freedom.
In those circumstances, as is clear from the examination of the second part of the fourth ground of appeal, and in particular from paragraphs 108 to 117 of this judgment, the possibility for Paramount’s contracting partners, including Groupe Canal +, to bring an action before the national courts does not adequately remedy the effects of the contested decision on the contractual rights of those contracting partners. It follows that by making Paramount’s commitments binding by means of that decision, the Commission, in breach of the requirement referred to in paragraph 106 above, rendered meaningless the contractual rights of third parties, including those of Groupe Canal +, vis-à-vis Paramount, and thereby infringed the principle of proportionality.
Consequently, the second part of the third plea in law put forward at first instance must be upheld and, therefore, the contested decision must be annulled, without there being any need to examine the other arguments and pleas in law put forward at first instance.
VII.

Costs
Under Article 184(2) of the Rules of Procedure, where the appeal is well founded and the Court of Justice itself gives final judgment in the case, the Court is to make a decision as to costs.
Under Article 138(1) of those rules, applicable to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
Since Groupe Canal +, EFADs, UPC and C More Entertainment have applied for costs and the Commission has been unsuccessful, the Commission must be ordered to bear its own costs and to pay those incurred by Groupe Canal +, EFADs and UPC in the present appeal and in the proceedings at first instance, as well as those incurred by C More Entertainment in the proceedings at first instance.
Since the French Republic has not applied for costs against the Commission, it must be ordered to bear its own costs.
Under Article 140(3) of the Rules of Procedure, applicable to appeal proceedings by virtue of Article 184(1) thereof, BEUC, as intervener before the General Court, is to bear its own costs.

On those grounds, the Court (Second Chamber) hereby:

1.
Sets aside the judgment of the General Court of the European Union of 12 December 2018, Groupe Canal + v Commission (
T‑873/16
,
EU:T:2018:904
);

2.
Annuls the decision of the European Commission of 26 July 2016 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.40023 – Cross-border access to pay-TV);

3.
Orders the European Commission to bear its own costs, to pay those incurred by Groupe Canal + SA, European Film Agency Directors – EFADs and the Union des producteurs de cinéma (UPC) in the present appeal and in the proceedings at first instance, and to pay those incurred by C More Entertainment AB in the proceedings at first instance;

4.
Orders the French Republic to bear its own costs;

5.
Orders the Bureau européen des unions de consommateurs (BEUC) to bear its own costs.

[Signatures]
(
*1
)	Language of the case: French.
(
i
)	The wording of paragraph 118 of this document has been modified after it was first put online.