61979C0106
OPINION OF MR ADVOCATE GENERAL CAPOTORTI
DELIVERED ON 28 FEBRUARY 1980 (
1
)
Mr President,
Members of the Court,
1.
The preliminary questions submitted to the Court in this case concern a particular aspect of the Community provisions on free competition applying to undertakings. Essentially it is a question of the procedure for notification to the Commission of agreements, decisions and concerted practices within the meaning of Article 85 (1) of the Treaty of Rome, existing at the date of the entry into force of Regulation No 17 of the Council of 6 February 1962.
The facts of the case may be summarized as follows:
The Netherlands Association for the Promotion of the Interests of the Book Trade (which I shall hereinafter refer to as “the Association”), based in Amsterdam, drew up a set of rules in 1961 on the book trade in the Netherlands (which I shall refer to hereinafter as “the agreement”), which contained clauses on prices and other conditions of sale intended to bind publishers, wholesalers, importers and dealers, including retailers, belonging to the Association or officially recognized by it. On 30 October 1962 the Association sent to the Commission of the Communities Form B, prescribed by Regulation No 27 of the Commission of 3 May 1962, intended for the notification of agreements, decisions or concerted practices for which the persons concerned wish to obtain exemption under Article 85 (3) of the EEC Treaty. In that notification the Association referred only to two clauses of the agreement, concerning trade in foreign books. With the form was sent the complete text of the agreement.
From 30 October 1962 to the present date the procedure for exemption under the said Article 85 (3) has remained pending. However, on 18 March 1975 the Commission asked the Association for certain supplementary information, expressly mentioning in the letter the agreement, the text of which it had, as I have said, received. On 23 March 1979 the Association and three of its members, all of them Netherlands undertakings in the book sector (the companies Casterman-Nederland, Dupuis Zonen en Co. and Uitgeverij en Distributie) instituted summary proceedings against the Eldi Records Company before the Amsterdam district court, seeking an injunction restraining it from selling to the public the books of publishers recognized by the Association at a price other than that fixed under the agreement (which, according to the plaintiffs, should also apply to traders “not recognized”, such as the Eldi Company).
For its part, the defendant objected inter alia that the understanding was null and void as being contrary to Article 85 (1) of the EEC Treaty and that, not having been properly notified in its entirety, it could not even be considered to be covered by provisional validity.
In the context of those proceedings the Netherlands court, by a judgment of 3 May 1979, referred four questions to the Court of Justice for a preliminary ruling. In spite of the fact that they were drafted solely with regard to the facts of the particular case and thus completely neglected the general nature of the function assigned to this Court by Article 177 of the EEC Treaty, it may be deduced from their wording that the problems of interpretation requiring to be dealt with are the following:
(a)
Whether under Article 5 (1) of the said Regulation No 17 an agreement between undertakings may be considered to have been properly notified (and therefore provisionally valid) when its entire text has been transmitted to the Commission, even though only certain clauses thereof have been expressly mentioned on the special form;
(b)
Whether and in what way the reply to the previous question may be influenced by the fact that by a letter from the Commission the undertaking responsible for the notification was informed that the entire agreement would be examined “as to its compatibility with the competition rules of the European Economic Community”;
(c)
Whether, if the first question is answered in the negative, the agreement must be considered provisionally valid at least as regards the clauses mentioned on the form, or whether it must be denied provisional validity in its entirety;
(d)
Whether, if the first question is answered in the affirmative, the question must be answered in a different way as regards certain clauses of the agreement, which initially made it applicable to particular products, but subsequently underwent amendments leading to a more restricted application and were more recently restored to their original form.
2.
With regard to the first question, it may be noted in the first place that it does not involve — contrary to what might appear to be the case — an examination of the question of the provisional validity of agreements existing prior to Regulation No 17 and notified under Regulation No 17 of the Commission. In fact, the court making the reference, faced with a notification which, because of the way in which the form was filled in, seems to be confined to two clauses, but which was accompanied by the transmission of the entire text of the agreement, has doubts about its capacity to produce the effects of a proper notification (that is to say, not confined to those two clauses); however, it does not raise, or put to the Court, any question regarding the limits within which the system of provisional validity may be considered to be in accordance with the Treaty and Regulation No 17: in other words, regarding the nature of the effects which the notification of “old” agreements may lawfully have. Obviously it acts on the premise that when agreements prior to 13 March 1962, which have been properly notified, are concerned, their provisional validity must be recognized, and thus there is no ground for a national court to decide on the compatibility or otherwise of the agreement with Article 85 (1) of the Treaty of Rome.
Moreover, the attitude of the Netherlands court is quite understandable, when the case-law of the Court on “old” agreements is considered. According to that case-law, “The general principle of contractual certainty requires, particularly when the agreement has been notified in accordance with the provisions of Regulation No 17, that the [national] court may only declare it to be automatically void after the Commission has taken a decision by virtue of that regulation” (see, amongst the most interesting judgments, those of 14 December 1977 in Case 59/77, De Bloos [1977] ECR 2359; 6 February 1973 in Case 48/72, Brasserie de Haecht [1973] ECR 77; 9 July 1969 in Case 10/69, Portelange [1969] ECR 309). It is also significant that the Hoge Raad der Nederlanden [Supreme Court of the Netherlands] has expressed a similar view: see Judgment No 74 of 18 May 1979, cited in the written observations.
I do not consider that the position recently adopted by the Court in Joined Cases 253/78 and 1 to 3/79 can lead to an extension of the scope of the inquiry in this case beyond the questions submitted by the national judge so as to include the problem of the effects of the notification of old agreements. In those cases the Court, by an order of 16 January 1980, stated that the reasons hitherto used to justify the provisional protection given to old agreements might be nullified when there was no likelihood that the Commission would within a foreseeable period adopt a decision to grant exemption or give a negative clearance under Regulation No 17. Such a ruling, which was in any case interlocutory, cannot in my opinion influence the outcome of this case, for two reasons. In the first place, as I have already had occasion to observe, the legal effects of notification do not constitute a doubtful or contentious aspect of the main action. In the second place, even if the intention were to follow the reasoning of the aforesaid order, it would be necessary to conclude that there is no need to call in question the effects of the notification of old agreements, since the present case differs in one very important aspect from Joined Cases 253/78 and 1 to 3/79. In the said order, the Court referred to a situation in which a decision of the Commission on the validity of the agreement notified is not foreseeable, whereas in this case a decision is foreseeable in view of the fact that the Commission took a specific step in that direction when it asked the Association, by a letter of 18 March 1975, for further information, and specified that that information would help to put it in a position to rule on the compatibility of the agreement with the competition law of the Treaty of Rome.
3.
Thus our examination of the first question must be confined to the subject of the formalities or, if the term is preferred, the content of the notification. On this point no assistance is given by Article 5 of Regulation No 17 of the Council, which merely provided: “Agreements, decisions and concerted practices of the kind described in Article 85 (1) of the Treaty which are in existence at the date of entry into force of this regulation... shall be notified to the Commission before 1 August 1962”. But Article 4 (2) of Regulation No 27 of the Commission provides that for notifications under Article 4 and 5 of Regulation No 17 undertakings shall use a special form, called Form B. That form is divided into a series of questions concerning the various aspects of the agreements; the second section concerns, as is stated in the heading, “ Information regarding contents of agreement, decision, or concerted practice”. In that second section, at point 1 to be precise, it is laid down inter alia that, if the contents were reduced to writing, the persons concerned must “attach a copy of the full text” of the agreement, whilst point 2 requires a statement of the contents which “were not, or were only partially, reduced to writing” and point 3 requires that in every case certain items of “additional information” be given.
In this case the reference to the two clauses of the agreement concerning foreign books is to be found in the second section of the form. According to the defendant company in the main action, a notification carried out in that way covers only a part of the agreement, with the result that all the clauses other than those specifically stated (in effect, all the provisions concerning trade in books by publishers in the Netherlands) should be regarded as not having been notified, and therefore not covered by provisional validity. The fact that the Association attached the entire text of the agreement to the form would not, according to this view, affect the outcome. Expressed in general terms, that view is tantamount to saying that, when the undertaking effecting the notification has referred in Part II of the form to some clauses of the agreement only, the notification does not cover the other clauses, even if the complete text of the agreement is made known to the Commission.
In my opinion, to uphold that submission would mean adopting an excessively formalistic attitude: the decisive point remains the transmission, together with the form, of the text of the agreement. The transmission of that text enables the Commission to carry out its investigation without being confined to the clauses mentioned in the form; the erroneous restrictive reference made by the undertaking which effected the notification will not prevent the Commission's investigation from covering the entire agreement. In fact, neither the possibly mistaken belief in which the persons concerned acted nor such intention as may be inferred from the drafting of the form are such as to restrict the Commission's exercise of its powers under Regulation No 17. The objective function of notification is to enable the Commission to take cognizance of the agreements and to examine them in order to ascertain whether they are of such a nature as to escape from the prohibition imposed by Article 85 (1), or whether they may benefit from the derogation laid down by paragraph (3) of that article. It seems clear to me that the Commission is put in a position to carry out that task if the entire text of the agreement is brought to its knowledge.
In this case the conduct of the Association is understandable: the events took place in 1962, that is to say, at the time when Regulation No 17 was first being applied, and many traders believed that the tasks of the Community in the maintenance of free competition concerned mainly the import and export trade. Thus no one should be surprised at the fact that in completing Form B the Association referred expressly only to the provisions contained in its rules which dealt with the trade in foreign books.
Therefore, I conclude that the notification of an agreement carried out in the way described must be considered to be in order and effective as regards all the terms contained in the text of the agreement sent to the Commission together with Form B.
4.
The second question raised by the Netherlands court is closely connected with the first. It asks the Court of Justice whether the legality of the notification of the entire agreement is affected in any way by the fact that by a letter of 18 March 1975 asking for further information the Commission informed the Association that the rules would be examined in their entirety as to their compatibility with the competition rules of the EEC.
I am of the opinion that a letter such as the one referred to does not affect the question of the legality or otherwise of a notification such as the one in question. In fact, the letter of 18 March 1975 was a request under Article 11 of Regulation No 17, which enabled the Commission to seek further information about the agreement notified to it in 1962; but it said nothing about the lawfulness of the notification (even though it may appear significant that the Commission reserved the right to examine the agreement and not only the clauses on the trade in foreign books). In general terms, the adoption of a provisional position by the Commission for the purpose of obtaining information does not prejudge the issue of the legality of the notification.
5.
The affirmative reply given to the first question renders the third question otiose, as it is based on the premise of a negative reply to that question.
Instead, it is necessary to examine the fourth and final question, whereby the Netherlands court wishes to know whether the clauses concerning strip-cartoons also benefit from, provisional validity, in view of the fact that initially such goods fell within the scope of the agreement were then excepted from its scope for a certain period subsequent to the notification and were finally included within it again with effect from 1 August 1978.
I will observe in the first place that it is not for the Court to inquire whether strip-cartoons did or did not fall within the scope of the agreement according to the text notified in 1962. It is a question which concerns the interpretation of the agreement notified and thus lies outside the jurisdiction of this Court. Moreover, it is a question on which the Netherlands court has already adopted a clear position; indeed, paragraph 13 of the judgment making the reference states that “in the Rules of 1962 the broad concept of books is used, which is certainly intended to cover strip-cartoon books”, and that “in the Rules as applying from 1 August 1978 the category of strip-cartoon books is expressly included...”. Thus the question raised by that court seeks solely to establish whether the fact that the Rules ceased to be applied for a certain period in relation to strip-cartoons implies that it ceased to be effective as regards those goods. Once again of course it is necessary to translate the question into general terms, as I have already done.
In my opinion, the decisive factor governing the reply remains the purpose for which the system of notification of agreements is required. I repeat that that purpose is to supply the Commission with the information necessary to enable it to appraise an agreement in accordance with Article 85 of the Treaty. It may be added that, whilst notification produces certain legal effects beneficial to the trader who effects it, it also enables the Commission to exercise its powers in that field. If, after notifying an agreement which restricts free competition in respect of a certain range of products, the parties concerned decide temporarily to suspend its operation in relation to one or more of those products, that clearly does not affect the Commission's supervisory function, which remains possible in respect of the agreement's entire field of application.
Thus I do not see any reason to hold that that temporary suspension affects the scope of the notification; on the contrary, I believe that that notification remains unaltered so that once the temporary suspension of some clauses has ceased the effects of notification start to operate again in relation to the entire agreement. Of course, such an interpretation, which is shared by the Commission, would no longer be valid if the temporary amendments to the agreement made it more stringent, that is to say involved a greater restriction of competition (for example, if it happened that the persons concerned provided for an extension of the agreement to other products or to include new markets): in such a case it would be impossible to maintain that the initial notification covered those aspects also and that the Commission had been informed of all the elements of the agreement so as to be in a position to effect supervision and to take the appropriate decisions.
6.
Thus I conclude by proposing that in answer to the questions submitted by the Vice-President of the Arrondissementsrechtbank, Amsterdam, by a judgment of 3 May 1979, the Court should declare as follows:
1.
An agreement between undertakings must be deemed to have been properly notified under Article 5 of Regulation No 17 of the Council of 6 February 1962 (as amended by Regulation No 59 of the Council of 3 July 1962) and under Article 4 of Regulation No 27 of the Commission of 3 May 1962, if the entire text was sent to the Commission in good time, even though the person effecting the notification referred in Form B prescribed by the said Regulation No 27 to some clauses of the agreement only.
2.
The legality of the notification of an agreement between undertakings is not affected by the adoption of a provisional attitude by the Commission, which, in requesting further information from the undertaking which effected the notification, has reserved the right to examine the agreement.
3.
The temporary suspension inter partes of the application of certain clauses of an agreement between undertakings, which results in an extension of the matters lying outside the agreement, does not prejudice the effects of the initial notification; therefore those effects start to operate again in relation to the entire agreement when the aforesaid suspension comes to an end.
(
1
)	Translated from the Italian.