1.

The defendant in the main proceedings objects to the fact that television can be transmitted in Italy only by the RAI and that private cable television is not allowed there. According to him this rules out re-transmitting by means of cable television foreign television programmes which can be received. Likewise it is not possible to transmit to an Italian audience television films and advertisements from other Member States. Mr Sacchi regards this in the first place as an obstacle to free movement of goods, that is as making it more difficult to sell products from other Member States, since there can be no unrestricted television advertising in respect of them. It can also be said that imports are made more difficult if television programmes as such, as intangible assets, are equated with goods, or if the material which carries the programmes (tapes and films) is considered, the full utilization of which runs into difficulties in view of the monopoly of RAI. This is the basis of the first group of questions which had been referred to the Court apparently at the instigation of Mr Sacchi. (a) Let us then look first at those questions by which the court making the reference, and referring in particular to Articles 2, 3 (f) and 5 of the EEC Treaty, seeks to know whether the principle of free movement of goods in the Common Market gives rise to subjective rights in favour of individuals which must be respected by the national courts. In so far as these provisions are concerned the answer to the questions put is not difficult, since as regards Article 5, decided cases have already made it clear that on account of its general wording it is not directly applicable in the sense of giving rise to subjective rights in favour of individuals. The judgment in Case 78/70 (Deutsche Grammophon Gesellschaft v Metro, Rec. 1971, p. 498) stresses that Article 5 gives rise only to a general obligation on Member States, the substance of which depends in the individual case on the provisions of the Treaty or the rules which arise from the general system of the Treaty. Further, there is for me no doubt that the two other provisions mentioned must, in view of their wording — it is noteworthy that Article 3 (f) clearly refers to other provisions of the Treaty — be regarded in the same way. One should not be led astray by certain observations in the judgment in Case 6/72 (Europembatlage and Continental Can v Commission, [1973] ECR (215)). They only stress the great significance of Articles 2 and 3 with regard to the interpretation of another principle of the Treaty (Article 86), which is in fact directly applicable. In no way can the conclusion be drawn from this judgment that the introductory articles of the Treaty contain in themselves sufficiently specific legal principles to give rise on their own to subjective rights in favour of individuals. In the absence of establishment of clear principles and in the absence of the statement of clear legal consequences it must therefore be maintained that it appears out of the question that Article 2, 3 (f) and 5 of the Treaty, either alone or jointly, can have a legal character which is of significance in dealing with proceedings in national courts. As regards the principle of the free movement of goods, which is at the centre of the first question, it may certainly be said that it has basic significance for the Common Market and that it expresses a fundamental concern of the Community. This already follows from Article 3 (a), according to which the activities of the Community include ‘the elimination, as between Member States, of customs duties and of quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect’. Support is also provided for this by the fact that Title I of Part Two of the Treaty, ‘Foundations of the Community’, has the heading ‘Free Movement of Goods’. Nevertheless, the observation which the Italian and German Governments and likewise the Commission make, that the said principle is not so clearly expressed and defined that it can be treated as a legal rule to which specific legal consequences attach, must be regarded as correct. The expression of what, as Mr Sacchi significantly says, has to be established under the Treaty is terms of ‘relationships similar to those of a domestic market’ must rather be derived in detail from the specific provisions of the Treaty. It is therefore significant that Article 9 provides that the Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect. Further, Articles 12 et seq., which regulate in detail the abolition of customs duties between Member States, are also significant, and so too are Articles 30 et seq., which deal in detail with the abolition of quantitative restrictions between Member States. These detailed provisions can, at least since the end of the transitional period, be described as directly applicable rules, giving rise to subjective rights in favour of individuals. Reference must therefore be made to them if it has to be determined what obstacles to free movement of goods are inadmissible under the Treaty. Moreover, Articles 85 et seq., which likewise mention affecting trade between States, come into consideration, as does Article 92 (but it must not be overlooked that the latter is not appropriate for direct application within the meaning of the relevant case law). Accordingly, to summarize in respect of the first question, it must be stated that the principles of free movement of goods is not rooted in the Treaty in such a way that subjective rights in favour of individuals which could over-rise national rules could be derived from it alone. There is, moreover — it may be said for the sake of completeness — nothing decisive against this view even in the judgment in Case 78/70. It is true it is stated in it (Rec. 1971, p. 499) that the exercise of industrial property rights may not infringe the rules on free movement of goods in the Common Market. But it should not be forgotton that the only function of the principle of free movement of goods in this connexion is to assist in determining the limits of a definite exempting provision, namely Article 36. Regarded strictly, the same attitude was adopted here as in Case 6/72, in which the principles of Articles 2 and 3 were referred to for the interpretation of Article 86. In no way can it be said against this that Judgment 78/70 affords an independent significance to the principle referred to, and this is a manner which would allow subjective rights in favour of individuals. (b) In view of the above conclusion it is not necessary to go into the second question, since it arises only in the event of the first question being answered in the affirmative. On the other hand, a few remarks seem to be appropriate in this connexion with regard to the point referred to under (b) of the second question, i.e. with regard to the mention of the ‘ban on television advertisements (treated as necessary instruments for the promotion of trade) being broadcast for the purpose of advertising given products at regional or local centres within the territory concerned …’. This obviously means the effects of the television monopoly on the movement of goods in the true sense, (i.e. leaving aside the problem of whether television programmes as such represent ‘goods’ within the meaning of the Treaty, which is still to be dealt with in a later connexion). This part of the question is to be seen in the light of the view voiced by Mr Sacchi according to which foreign products are particularly affected by the television monopoly, in particular the monopoly of television advertising, for which only a limited time is available. Their sales opportunities are on a par with those of domestic products only if additional advertising possibilities, such as those afforded by private cable television, are made available, either by direct advertising by this means or by the transmission of foreign television advertising by means of the so-called Rediffusion. Accordingly, there must be an examination of whether there is an infringement of the prohibition on the maintenance of measures having equivalent effect to quantitative restrictions on imports within the meaning of Article 30 et seq. In particular it must be considered whether the Commission Directive of 22 December 1969 on the abolition of measures having equivalent effect to quantitative restrictions on imports is significant in this respect, since publicity is specifically mentioned in Article 2 (3) (m) thereof. It is apparent however that there is nothing relevant to the present case in the said Article 2, according to which certain measures have to be abolished. As appears from paragraph 1, Article 2 covers only measures which are not applicable equally to domestic or imported products, ‘including measures which make importation more difficult or costly than the disposal of domestic production’. In this connexion it must be stated that the restriction on television advertising arising as a result of RAI's television monopoly applies equally to domestic and to foreign products. Further, if it is said that foreign products are handicapped and therefore particularly need additional publicity in the interests of equal treatment, it must not be overlooked that substantial improvement, so far as the requirement of equal treatment is concerned, could not be achieved by private cable television. This too would have to be open to domestic products in the same way, that is, the situation would not be different from the present system. Article 2 of the Commission Directive can therefore certainly be disregarded in the present proceedings. In so far as Mr Sacchi goes beyond this and refers to Article 3 of the Commission Directive, which states that the Directive also covers ‘measures governing the marketing of products which deal, in particular, with shape, size, weights, composition, presentation, identification or putting up and which are equally applicable to domestic and imported products, where the restrictive effect of such measures on the free movement of goods exceeds the effects intrinsic to trade rules’, the following may be said. The very wording of this article makes it highly dubious whether it includes measures which limit publicity in general. Apart from this and assuming Article 3 applies to the present facts, it is nevertheless difficult to follow Mr Sacchi when he says that the exclusion of private commercial television is not indispensable, as is required by the second paragraph of Article 3 of the Commission Directive; the Italian legislator is essentially concerned only with the control of information and this objective can be obtained by other means which are of a hindrance to trade. The most important point here is that purely commercial television does not seem conceivable; an entertaining or instructive accompanying programme is indispensable. However, the general structure of television programmes, i.e. the selection of what will be transmitted over this effective means of mass-communication, can, according to the proper view, not be left to private groups. Rather, it is a public task, which in the interests of the maintenance of the freedom of radio reporting can be dealt with only in a way which ensures the appropriate participation of all social groups. Looked at in this light, the exclusion of purely private groups, even in the context of commercial television, does not indeed go beyond what is indispensable for the purpose of properly providing for the matter, and to bring into play Article 3 of the Commission Directive, and the principle of proportionality enshrined in it, in connexion with RAI's monopoly of commercial television, is for this reason unthinkable. If it is at all necessary, then, this is the attitude that should be adopted to the consequence referred to in Question 2 (b). (c) Departing from the order of questions adopted by the court making the reference, it appears to me right, in view of the connexion with the principle of free movement of goods, to deal immediately with those questions which relate to Article 37 (the provisions on State monopolies of a commercial character). On this topic, in connexion with the point just dealt with, it remains to observe that the Commission Directive, according to Article 5 thereof, does not apply to measures which fall under Article 37 (1) of the EEC Treaty. We must first examine — Questions 6 to 10 are to be understood thus — whether Article 37 applies in the case of a company on which the exclusive right to transmit televisions broadcasts has been conferred, whether such a monopoly had to be so adjusted by the end of the transitional period that the exclusive right (in relation to all broadcasts) vis-à-vis other Member States lapsed by 1 January 1970 at the latest, and whether an extensive widening of an exclusive right to broadcast can be regarded as a new measure within the meaning of Article 37 (2). (aa) A preliminary observation can be made without any difficulty on this series of questions: As is known, Article 37 applies only to State monopolies, to monopolies delegated by the State to other bodies, and to any institution through which a Member State controls, etc., imports or exports between Member States. In so far as the term ‘State’ is important in this connexion there should be indeed no hesitation in contemplating companies such as RAI. This may be said quite simply because the exclusive right of transmission has been granted it by a sovereign act of a State and because the company — as we saw at the beginning — is also under State control. (bb) Much more difficult, on the other hand, is the examination of the question what meaning is to be attributed to the adjective ‘commercial’ and whether it is to be understood in the restrictive sense that Article 37 applies only to monopolies which relate to the production and sale of goods in the conventional sense, or whether it also includes a monopoly of services. On this it must certainly be said that there are good grounds in favour of a wide interpretation, as is occasionally used in the literature on the subject. Reference may be made — the Commission has done so in an objective way — to the wide interpretation of the term ‘goods’ in Article 85 (3); further, to the increasing significance that services have in economic life, or to the necessity to apply the same rules to cases which have the same economic effects on the movement of goods and of services. This may support the view that ‘goods’ means everything which can be the subject of a commercial transaction. If, however, the established rules of interpretation on the application of the Treaty are not completely disregarded, then on the other hand it will have to be recognized that a series of weighty arguments cogently suggest a narrower interpretation. First the place of the provision in the Treaty must not be overlooked: it is part of the Chapter on the elimination of quantitative restrictions between Member States. This Chapter relates, as clearly appears from Article 30 et seq., to goods, and is part of Title I on the free movement of goods, in which the significant Article 9 appears. Services, on the other hand, are provided for in Title III of the Treaty. The arrangement of Article 37 itself is also significant. Paragraph 1 — and this appears basic — speaks of ‘the conditions under which goods are procured and marketed’. This doubltess conjures up ‘products’ in the conventional meaning, and trade in such products. Paragraph 2 refers to the scope of the Articles dealing with the abolition of customs duties and quantitative restrictions. Paragraph 3 requires that the measures referred to shall be harmonized with those which are provided for in Articles 30 to 34 dealing with the abolition of quantitative restrictions, that is, a parallel development is laid down, as appears reasonable primarily if similar goods are envisaged. Finally, it is significant that the second paragraph of Article 37 (3) refers expressly to products which are subject to a monopoly of a commercial character. From this in my view the conclusion may be drawn that the so-called monopoly of services does not come under Article 37. Nor can any different conclusion be derived from the previous case-law, in particular from Case 6/64 Costa/Enel, Rec. 1964, p. 1167), which relates to the nationalization of the Italian electricity industry. According to this, it is true, for the purposes of Article 37 it must be determined whether a monopoly is concerned with the procuring and marketing of goods in respect of which competition and trade between Member States is possible; this depends on whether its activity is indeed important in relation to trade, and whether the economic activity concerns goods which are important in import and export. It must not however be forgotton that it is likewise stressed in the judgment that Article 37 must be considered in the context of the Chapter in which it appears (namely in that on the elimination of quantitative restrictions). Moreover, the accent in the judgment was decisively placed upon ‘goods’. Although, it was admittedly not ruled out that electricity too could come under it, this is no doubt only because such a view is in accordance with the view taken of trade. Accordingly, there is nothing to be derived from this judgment which is relevant to the question at present being investigated (Article 37 and monopolies of services). (cc) Now Mr Sacchi has endeavoured to show that television programmes are to be regarded as goods. He bases his proposition on the suggestion that they are intangible assests, and he also refers to the fact that the articles which carry the programmes (tapes and films) must in any case be regarded as goods. On this it must be first of all be made quite clear that it is not at all a question of the monopolistic import of such goods, with which restrictive effects are associated. Italian law places no obstacle on import either of television programmes as such or of the material which carries such programmes. Rather, the decisive point is that the holder of the national television monopoly is alone entitled to re-transmit such programmes (television relay) and to make use of the material (films and tapes), that is, to show their contents. If this is clearly understood, then it is obvious that there is little substance in Mr Sacchi's reference to the fact that television programmes are transmitted by means of electric energy and that this is to be regarded as goods according to the case law (Judgment 6/64). It is not a question of electric energy (which moreover in our case cannot be utilized as such by the receiver, as it can in the case of supply by electricity undertakings), but rather of the broadcasting of information, for which the electric energy represents only the technical means. Much more significant, therefore is what the Commission has said on the exchange of films, that is cinema films between Member States, and the solution of this question under Community law from the standpoint of the abolition of possible obstacles. There is no doubt that this is an extraordinarily complex question. In the last analysis, however, the fact which has been recognized as crucial to its proper comprehension is that the main objective of films lies in their projection and it is mainly a question of the exercise of commercial copyright. On this ground, and also having regard to the fact that under Article 106 (3) of the EEC Treaty the abolition of restrictions on transfers connected with the invisible transactions listed in Annex III (authors' royalities, too are mentioned here) had to be effected in accordance with the provisions of Articles 63 to 65, a Directive was issued for the film industry, which Directive was based on Article 62 of the EEC Treaty, that is on a provision on freedom to provide services, and thus a solution of the question was not sought by reference to the provisions on the free movement of goods. It is but a short step to treat in the same way television transmissions, in the context in which we are concerned with them here (namely the re-transmission of a broadcast for a foreign broadcaster or the transmission of a broadcast for the possessor of apparatus who pays a fee for the service), not least because here, questions of copyright are generally paramount. It accordingly seems proper to include the activity of television undertakings in the category of services, in view of the focal point of the activity in question and also in view of the fact that the abolition of obstacles in the sphere of television services is provided for in the general programme on services. The possibility is therefore ruled out of including a State television monopoly under Article 37 of the EEC Treaty. (dd) This conclusion by itself would make it unnecessary to go into further questions in connexion with Article 37, namely those on the direct application of this provision as from a particular date, those relating to the requirements to adjust commercial monopolies within the meaning of Article 37 and the question as to the scope of the standstill provision of Article 37 (2) (i.e. whether it is relevant — in the sphere of television — to a prolongation and extension of the exclusive rights granted to RAI). I will however make at least two observations (although disregarding the question of direct application, on which authority already exists). Article 37 does not prescribe the abolition of the monopolies, but only their adjustment so that no possibility of discrimination against products from other Member States shall any longer exist. If the matter is seen in this light, it must appear doubtful whether Article 37, assuming it applies to television, necessarily requires the abolition of the exclusive right of transmission granted to an institution, at least in relation to other Member States. Certainly it must not be overlooked that the fact that the monopoly undertaking itself or a company controlled by it produces advertisements, and that close associations of the monopoly undertaking exist with other commercial undertakings via the State holding company IRI, can lead to a tendency to give preference in the transmission of advertisements, and that it is therefore possible to speak of the inherent danger of discrimination against foreign products. However, with an undertaking whose whole activity is subject to public control, other ways of neutralizing the danger and excluding the possibility of discrimination are conceivable, such as — considering only advertising, in which Mr Sacchi is particularly interested — by carefully separating the preparation of advertisements from broadcasting undertakings and by ensuring a clear separation of the broadcasting undertaking from other commercial undertakings. As the Commission has rightly observed, this requires careful examination in the individual case; on the other hand it cannot at all be said a priori that adjustment of the monopoly is conceivable only in such a way that exclusive rights of transmission, with which the main proceedings are basically concerned, are abolished. On the other hand, as far as the prolongation of the exclusive rights beyond 1972 and the extension of the monopoly to cable television, that is the application of Article 37 (2), are concerned, it appears to me highly questionable, with regard to the extension, whether this can indeed be described as such, if the text of the law of 1936 (which already mentions television) is compared with that of 1973 (in which cable television is expressly mentioned). In addition, Article 37 does not prohibit the creation of new monopolies or the extension of existing monopolies. All that is prohibited are measures which infringe the principle of Article 37 (1), that is, care must be taken that no possibility of discrimination exists. It therefore appears highly questionable whether Article 37 (2) has any relevance to the facts in the main action. With this everything has been said on Article 37 which could be of significance in judging the national proceedings.