Judgment of the Court of 27 October 1993. - Criminal proceedings against Francine Gillon, née Decoster. - Reference for a preliminary ruling: Cour d'appel de Douai - France. - Council Directive 83/189/EEC and Commission Directive 88/301/EEC - Notification of specifications in the telecommunications sector - Independence of the body responsible for laying down rules - Criminal penalties. - Case C-69/91.



European Court reports 1993 Page I-05335

Swedish special edition Page 00099

Finnish special edition Page I-00417



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Competition ° Public undertakings ° Concept ° Bodies forming part of the public administration ° Inclusion

(Commission Directive 88/301, Art. 1, second indent)

2. Competition ° Public undertakings and undertakings to which the Member States grant special or exclusive rights ° Market in telecommunications terminal equipment ° Independence of the body responsible for drawing up technical specifications, monitoring their application and granting type-approval ° Incorporation in an authority also responsible for operating the public network and for the commercial policy on telecommunications ° Not permissible

(Commission Directive 88/301, Art. 6)

3. Competition ° Public undertakings and undertakings to which the Member States grant special or exclusive rights ° National rules prohibiting the marketing of telecommunications terminal equipment without type-approval ° Drawing-up of technical specifications and grant of type-approval by a body not satisfying the condition of independence in relation to any trader operating on the market in telecommunications ° Not permissible

(EEC Treaty, Arts 3(f), 86 and 90; Commission Directive 88/301, Art. 6)

Summary

1. Where the operation of the public telecommunications network and the marketing of terminal equipment are entrusted to bodies forming part of the public administration, that cannot prevent those bodies from being classified as public undertakings for the purposes of Community law and, in particular, the second indent of Article 1 of Directive 88/301. A body carrying on economic activities of an industrial or a commercial nature does not need to have legal personality separate from that of the State in order to be regarded as a public undertaking. If it were otherwise, the effectiveness of the directive in question and its uniform application in all the Member States would be undermined.

2. The different directorates of a single authority, responsible simultaneously for operating the public network, implementing the commercial policy on telecommunications, drawing up technical specifications, monitoring their application and granting type-approval in respect of terminal equipment cannot be regarded as independent of each other for the purposes of Article 6 of Directive 88/301, according to which the body responsible for drawing up technical specifications, monitoring their application and granting type-approval must be independent of public or private undertakings offering goods and/or services in the telecommunications sector, and of the system of undistorted competition laid down by the Treaty.

3. Articles 3(f), 86 and 90 of the Treaty and Article 6 of Commission Directive 88/301/EEC of 16 May 1988 preclude national rules which prohibit economic operators, with penalties for infringement, from manufacturing, importing, stocking for sale, selling or distributing terminal equipment without showing, by the submission of a type-approval certificate or any other document regarded as equivalent, that the equipment complies with certain fundamental requirements relating, in particular, to user safety and the proper functioning of the network, where there is no guarantee of the independence, in relation to any operator offering goods and/or services in the telecommunications sector, of the body which issues the type-approval certificate or other equivalent document and draws up the technical specifications with which such equipment must comply.

Parties

In Case C-69/91,

REFERENCE to the Court under Article 177 of the EEC Treaty from the Cour d' Appel, Douai (France), for a preliminary ruling in the criminal proceedings pending before that court against

Francine Gillon, née Decoster,

on the interpretation of Council Directive 83/189/EEC of 28 March 1983 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ 1983 L 109, p. 8) and Commission Directive 88/301/EEC of 16 May 1988 on competition in the markets in telecommunications terminal equipment (OJ 1988 L 131, p. 73),

THE COURT,

composed of: O. Due, President, G.F. Mancini and J.C. Moitinho de Almeida (Presidents of Chambers), R. Joliet, F.A. Schockweiler, G.C. Rodríguez Iglesias, F. Grévisse, M. Zuleeg and J.L. Murray, Judges,

Advocate General: G. Tesauro,

Registrar: J.-G. Giraud,

after considering the written observations submitted on behalf of:

° the appellant in the main proceedings, by S. Bailleul, of the Lille Bar, and L. Misson, of the Liège Bar,

° the Government of the French Republic by P. Pouzoulet, Deputy Director in the Directorate for Legal Affairs of the Ministry for Foreign Affairs, acting as Agent, and G. de Bergues, Principal Deputy Secretary in the same Ministry, acting as Deputy Agent,

° the Government of the Federal Republic of Germany, by E. Roeder, Ministerialrat in the Federal Ministry for the Economy, and J. Karl, Regierungsdirektor in the same Ministry, acting as Agents,

° the United Kingdom, by R. Caudwell, of the Treasury Solicitor' s Department, and E. Sharpston, Barrister, acting as Agents,

° the Commission of the European Communities, by R. Wainwright, Legal Adviser, acting as Agent, assisted by H. Lehman, of the Paris Bar,

having regard to the Report for the Hearing,

after hearing the oral observations of the appellant in the main proceedings, the French Government, the German Government, the United Kingdom and the Commission at the hearing on 22 January 1992,

after hearing the Opinion of the Advocate General at the sitting on 3 June 1992,

gives the following

Judgment

Grounds

1 By judgment of 6 February 1991, received at the Court on 18 February 1991, the Cour d' Appel (Court of Appeal), Douai (France), referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty three questions on the interpretation of Council Directive 83/189/EEC of 28 March 1983 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ 1983 L 109, p. 8), as amended by Council Directive 88/182/EEC of 22 March 1988 (OJ 1988 L 81, p. 75, hereinafter "the directive on technical standards"), and Commission Directive 88/301/EEC of 16 May 1988 on competition in the market in telecommunications terminal equipment (OJ 1988 L 131, p. 73, hereinafter "the directive on terminal equipment"), in order to assess the compatibility with those directives of the system established by French Decree No 85-712 of 11 July 1985 applying the Law of 1 August 1905 and concerning equipment capable of being connected to the public telecommunications network.

2 Those questions were raised in criminal proceedings against Mrs Gillon, née Decoster, who was charged with selling between May and October 1989 telecommunications terminals (fax machines) without first applying for or obtaining the certificate of approval required by Article L 48 of the Postal and Telecommunications Code and Articles 1 to 7 of Decree No 85-712, referred to above. Taking the view that the marketing of terminal equipment without approval amounted to commercial fraud, an offence under Article 1 of the Law of 1 August 1905, the Tribunal Correctionnel (Criminal Court), Lille, ordered Mrs Gillon at first instance to pay a fine of FF 50 000.

3 As the documents before the Court show, under the aforesaid decree equipment capable of being connected to the public network may not be manufactured for the domestic market, imported for consumption, stocked for sale, marketed or distributed either free of charge or for consideration unless it complies with a number of requirements aimed at safeguarding the proper functioning of the network and user safety (Articles 3 and 4). As evidence that the equipment complies with those requirements, the traders concerned must submit either a report drawn up by a body authorised by the Minister for Industry, or a type-approval certificate issued pursuant to the Postal and Telecommunications Code, or else a certificate of compliance issued pursuant to the law on consumer protection and information or other document recognized as equivalent by decree of the Minister for Industry (Article 6). Article 7 of the decree specifies the penalty to be imposed on those in breach of the obligation to show that the equipment in question complies with the requirements laid down.

4 On 1 November 1985, the Minister for Industrial Redeployment and Foreign Trade issued for the application of Decree No 85/712 a notice relating to terminal equipment capable of being connected to the public telecommunications network. The notice specifies inter alia how the parties concerned can show evidence that the terminal equipment complies with the regulations. It states that the Centre National d' Etudes des Télécommunications (CNET) has been authorized by the Minister for Industry to issue the report referred to in Article 6 of the aforesaid decree, that type-approval is to be granted by the Direction Générale des Télécommunications, pursuant to the Postal and Telecommunications Code, in respect of equipment complying with the specifications set out in the list annexed to the notice, and that the other documents attesting compliance, referred to in Article 6, are to be established in due course. The proceedings before the Court have not made clear whether, following the notice of November 1985, the system of issuing documents other than the type-approval certificate and the CNET report had been established.

5 In the proceedings before the Cour d' Appel, Douai, Mrs Gillon argued that at the material time and in breach of the obligation imposed on Member States by Article 6 of Directive 88/301, the French authority responsible for drawing up technical specifications and verifying whether the equipment complies with the requirements laid down was not a body independent of the authority which operates the public telecommunications network and which, moreover, markets terminal equipment itself. Secondly, she stated that the technical specifications showing that the equipment complied with the aforesaid decree had not been notified, as provided for by Directives 83/189 and 88/301, and they could not therefore be relied upon as against her.

6 In view of the defendant' s allegations, the Cour d' Appel decided to seek a preliminary ruling from the Court on the following three questions:

"1. Does Directive 83/189/EEC of 28 March 1983, which has not been followed by a national implementing measure within the period of 12 months, have direct effect in French law?

2. Does Directive 88/301/EEC of 16 May 1988, which has not been followed by a national implementing measure within the period expiring on 1 July 1989, have direct effect in French law?

3. Do the combined effects of those two directives therefore require the 1985 decree to be disapplied?"

7 Reference is made to the Report for the Hearing for a fuller account of the facts, the legislative background to the dispute in the main proceedings, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

Directive 88/301/EEC

8 In its second question, which should be examined first, viewed in conjunction with the third question, the national court asks in substance whether Article 6 of Directive 88/301 precludes national rules, of the kind referred to in the dispute in the main proceedings, which prohibit economic operators, with penalties for infringement, from manufacturing, importing, stocking for sale, selling or distributing terminal equipment without showing, by the submission of a type-approval certificate or any other document regarded as equivalent, that the equipment complies with certain fundamental requirements relating, in particular, to user safety and the proper functioning of the network, where there is no guarantee of the independence, in relation to any operator offering goods and/or services in the telecommunications sector, of the body which issues the type-approval certificate or other equivalent document and draws up the technical specifications with which such equipment must comply.

9 Article 6 of Directive 88/301 provides as follows: "Member States shall ensure that, from 1 July 1989, responsibility for drawing up the specifications ... monitoring their application and granting type-approval is entrusted to a body independent of public or private undertakings offering goods and/or services in the telecommunications sector."

10 It is apparent from the documents before the Court that, under the provisions of Decree No 86-129 of 28 January 1986 (Articles 13 to 15), the Direction Générale des Télécommunications in the Ministry for Posts and Telecommunications was responsible for operating the public network, implementing the commercial policy on telecommunications, drawing up technical specifications, monitoring their application and granting type-approval for terminal equipment. In the proceedings before the Court, the French Government pointed out that the CNET, whose report was regarded as equivalent to type-approval, formed part of the Direction Générale des Télécommunications as a research centre.

11 By Decree No 89-327 of 19 May 1989, amending Decree No 86-129, the tasks of drawing up technical specifications, monitoring their application and granting type-approval of terminal equipment were transferred to the new Direction de la Réglementation Générale in the same Ministry.

12 It appears from the rules at issue, therefore, that during the relevant period, different directorates of the French Ministry for Posts and Telecommunications were responsible simultaneously for operating the public network, implementing the commercial policy on telecommunications, drawing up technical specifications, monitoring their application and granting type-approval in respect of terminal equipment.

13 In those circumstances, it is necessary to verify, in the light of Article 6 of the directive, first, whether the French postal and telecommunications authorities can be regarded as a public undertaking for the purposes of Community law and, secondly, whether the criterion of the independence of the body responsible for drawing up the specifications, monitoring their application and granting type-approval has been satisfied.

14 With regard to the concept of "undertaking", the second indent of Article 1 of the directive defines it as meaning "a public or private body, to which a Member State grants special or exclusive rights for the importation, marketing, connection, bringing into service of telecommunications terminal equipment and/or maintenance of such equipment".

15 It is important to note that where, as in the main proceedings, the operation of the public network and the marketing of terminal equipment are entrusted to bodies forming part of the public administration, that cannot prevent those bodies from being classified as public undertakings. As the Court stated in connection with Commission Directive 80/723/EEC of 25 June 1980 on the transparency of financial relations between Member States and public undertakings (OJ 1980 L 195, p. 35), a body carrying on economic activities of an industrial or a commercial nature does not need to have legal personality separate from that of the State in order to be regarded as a public undertaking. If it were otherwise, the effectiveness of the directive in question and its uniform application in all the Member States would be undermined (see the judgment in Case 118/85 Commission v Italy [1987] ECR 2599, paragraph 13).

16 So far as concerns the requirement that the body responsible for drawing up the specifications, monitoring their application and granting type-approval must be independent, suffice it to note that the different directorates of a single authority cannot be regarded as independent of each other for the purposes of Article 6 of the directive.

17 Finally, the events material to this case took place between May and October 1989, that is to say during the period in which the time-limit set in Article 6 of Directive 88/301 expired. As regards the period prior to 1 July 1989, the question raised must be regarded as also referring to Articles 3(f), 86 and 90 of the Treaty (see the judgment in Case C-18/88 RTT v GB-Inno-BM [1991] ECR I-5941, paragraph 14).

18 Mrs Gillon considers that the combined functions of marketing terminal equipment and granting type-approval in respect of equipment marketed by competitors may give rise to a conflict of interests within the Ministry for Posts and Telecommunications, since the Ministry will be able to conduct an anti-competitive policy to the detriment of its competitors.

19 In the "Terminals" judgment (Case C-202/88 France v Commission [1991] ECR I-1223, paragraph 51), the Court recognized that a system of undistorted competition, as laid down in the Treaty, can be guaranteed only if equality of opportunity is secured as between the various economic operators. The Court went on to conclude that, in order to maintain effective competition and to ensure transparency, responsibility for drawing up technical specifications, monitoring their application and granting type-approval should be entrusted to a body independent of public and private undertakings offering competing goods or services in the telecommunications sector.

20 In the GB-Inno-BM judgment (cited above, paragraph 28), the Court held that Articles 3(f), 90 and 86 of the Treaty preclude a Member State from granting to the undertaking which operates the public telecommunications network the power to lay down standards for telephone equipment and to check that economic operators meet those standards when it is itself competing with those operators on the market for that equipment.

21 In contrast to the situation in GB-Inno-BM, where those functions were carried out by the RTT, a Belgian body governed by public law, in the present case they were performed by the French Ministry for Posts and Telecommunications. As is clear from paragraphs 14 and 15 of this judgment, however, it makes no difference whether those combined functions are carried out by a body which is legally separate from the State or a Ministry.

22 In those circumstances, the answer to the national court' s question must be that Articles 3(f), 86 and 90 of the Treaty and Article 6 of Directive 88/301 preclude national rules which prohibit economic operators, with penalties for infringement, from manufacturing, importing, stocking for sale, selling or distributing terminal equipment without showing, by the submission of a type-approval certificate or any other document regarded as equivalent, that the equipment complies with certain fundamental requirements relating, in particular, to user safety and the proper functioning of the network, where there is no guarantee of the independence, in relation to any operator offering goods and/or services in the telecommunications sector, of the body which issues the type-approval certificate or other equivalent document and draws up the technical specifications with which such equipment must comply.

Directive 83/189/EEC

23 In view of the above answer, there is no need to give a ruling on the questions relating to Directive 83/189.

Decision on costs

Costs

24 The costs incurred by the Government of the French Republic, the Government of the Federal Republic of Germany, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT,

in answer to the questions referred to it by the Cour d' Appel, Douai, by judgment of 6 February 1992, hereby rules:

Articles 3(f), 86 and 90 of the Treaty and Article 6 of Commission Directive 88/301/EEC of 16 May 1988 on competition in the markets in telecommunications terminal equipment preclude national rules which prohibit economic operators, with penalties for infringement, from manufacturing, importing, stocking for sale, selling or distributing terminal equipment without showing, by the submission of a type-approval certificate or any other document regarded as equivalent, that the equipment complies with certain fundamental requirements relating, in particular, to user safety and the proper functioning of the network, where there is no guarantee of the independence, in relation to any operator offering goods and/or services in the telecommunications sector, of the body which issues the type-approval certificate or other equivalent document and draws up the technical specifications with which such equipment must comply.