Judgment of the Court (Sixth Chamber) of 5 June 1997. - VT4 Ltd v Vlaamse Gemeenschap. - Reference for a preliminary ruling: Raad van State - Belgium. - Free movement of services - Television broadcasting - Establishment - Evasion of domestic legislation. - Case C-56/96.



European Court reports 1997 Page I-03143



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

Freedom to provide services - Television broadcasting - Directive 89/552 - Television broadcaster under the jurisdiction of a Member State - Determining criterion - Establishment - Broadcaster established in more than one Member State

(Council Directive 89/552, Art. 2(1))

Summary

Article 2(1) of Directive 89/552 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities is to be interpreted as meaning that a television broadcaster comes under the jurisdiction of the Member State in which it is established.

Although the directive contains no express definition of the phrase `broadcasters under [the] jurisdiction [of a Member State]', it follows from the wording of Article 2(1) that the concept of jurisdiction of a Member State has to be understood as necessarily covering jurisdiction ratione personae over television broadcasters, which can be based only on their connection to that State's legal system, which in substance overlaps with the concept of establishment as used in the first paragraph of Article 59 of the Treaty, the wording of which presupposes that the supplier and the recipient of a service are `established' in two different Member States.

Where a television broadcaster is established in more than one Member State, the Member State having jurisdiction over it is the Member State in which the broadcaster has the centre of its activities, in particular the place where decisions concerning programme policy are taken and where the programmes to be broadcast are finally put together.

Parties

In Case C-56/96,

REFERENCE to the Court under Article 177 of the EC Treaty by the Raad van State, Belgium, for a preliminary ruling in the proceedings pending before that court between

VT4 Ltd

and

Vlaamse Gemeenschap,

Third parties:

Intercommunale Maatschappij voor Gas en Elektriciteit van het Westen (Gaselwest) and Others,

Vlaamse Uitgeversmaatschappij NV (VUM) Integan Intercommunale CV and Others,

Vlaamse Televisie Maatschappij NV (VTM),

on the interpretation of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (OJ 1989 L 298, p. 23),

THE COURT

(Sixth Chamber),

composed of: G.F. Mancini, President of the Chamber, J.L. Murray, C.N. Kakouris, P.J.G. Kapteyn (Rapporteur) and H. Ragnemalm, Judges,

Advocate General: C.O. Lenz,

Registrar: H. von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

- VT4 Ltd, by D. Vandermeersch, of the Brussels Bar,

- Vlaamse Gemeenschap, by E. Brewaeys and J. Stuyck, of the Brussels Bar,

- Vlaamse Televisie Maatschappij NV (VTM), by L. Neels, of the Antwerp Bar, and F. Herbert, of the Brussels Bar,

- the German Government, by E. Röder, Ministerialrat at the Federal Ministry for Economic Affairs, and S. Maaß, Regierungsrätin at the same Ministry, acting as Agents,

- the French Government, by C. de Salins, Deputy Director at the Legal Affairs Directorate of the Ministry of Foreign Affairs, and P. Martinet, Foreign Affairs Secretary at the same Directorate, acting as Agents,

- the Commission of the European Communities, by B.J. Drijber, of its Legal Service, acting as Agent,

having regard to the Report for the Hearing,

after hearing oral observations from VT4 Ltd, represented by D. Vandermeersch; Vlaamse Gemeenschap, represented by E. Brewaeys and J. Stuyck; Vlaamse Televisie Maatschappij NV (VTM), represented by F. Herbert; and the Commission, represented by B.J. Drijber, at the hearing on 12 December 1996,

after hearing the Opinion of the Advocate General at the sitting on 6 February 1997,

gives the following

Judgment

Grounds

1 By judgment of 14 February 1996, received at the Court on 26 February 1996, the Raad van State (Council of State), Belgium, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Article 2 of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (OJ 1989 L 298, p. 23, hereinafter `the Directive').

2 The question has been raised in an action for annulment brought by VT4 Ltd (hereinafter `VT4') against a decision adopted on 16 January 1995 by the Flemish Minister for Culture and Brussels Affairs (hereinafter `the Decision') refusing VT4 access for its television programme to the cable distribution network.

3 Article 2 of the Directive, which is contained in Chapter II entitled `General provisions', provides:

`1. Each Member State shall ensure that all television broadcasts transmitted

- by broadcasters under its jurisdiction, or

- ...

comply with the law applicable to broadcasts intended for the public in that Member State.

2. Member States shall ensure freedom of reception and shall not restrict retransmission on their territory of television broadcasts from other Member States for reasons which fall within the fields coordinated by this Directive.

...'.

4 According to the documents provided by the national court, under two decrees of the Flemish Executive of 28 January 1987 on, in particular, licensing of private television broadcasters (Belgisch Staatsblad of 19 March 1987) and of 12 June 1991 regulating radio and television advertising and sponsoring (Belgisch Staatsblad of 14 August 1991, hereinafter `the Flemish Executive Decrees'), Vlaamse Televisie Maatschappij NV (hereinafter `VTM') holds a monopoly in commercial television and television advertising in the Flemish Community.

5 According to Article 10(1), No 2, of the Flemish Executive Decree of 4 May 1994 on television and radio cable networks, on licences for installing and operating such networks and on the promotion of the dissemination and production of television programmes (Belgisch Staatsblad of 4 June 1994, hereafter `the Cable Decree'), cable distributors must transmit simultaneously and in their entirety the programmes of VTM, the only private company licensed by the Flemish Executive.

6 Article 10(2) of the Cable Decree provides:

`Without prejudice to the provisions of paragraph (1), a cable distributor may retransmit the following programmes on his radio or television cable network:

...

4. Television and radio programmes of broadcasters licensed by the government of a Member State of the European Union other than Belgium, provided that the broadcaster concerned is subject, in that Member State, to proper supervision of broadcasters broadcasting to the public of that Member State and the supervision exercised covers compliance with European law, in particular copyright and associated rights and international obligations of the European Union and provided that the broadcaster concerned and the programmes which it broadcasts do not undermine public order, morality or public safety in the Flemish Community.

...'.

7 VT4, which is established in London, is a company incorporated under English law whose main activity is the broadcasting of radio and television programmes. The Luxembourg company Scandinavian Broadcasting Systems SA is the sole shareholder of VT4. The United Kingdom authorities have granted it a non-domestic satellite licence.

8 VT4's programmes are aimed at the Flemish public. They are either recorded or subtitled in Dutch. The television signals are transmitted via satellite from the territory of the United Kingdom. At Nossegem (a Flemish locality in Belgium), VT4 has what it calls a `subsidiary' which is in contact with advertisers and production companies. It is also in this locality that information for the news programmes is collected.

9 By the Decision, the Flemish Minister for Culture and Brussels Affairs refused to allow the VT4 television programme to have access to the cable distribution network. The Decision was based mainly on two arguments. First, VT4 did not come within the scope of Article 10(1), No 2, of the Cable Decree because it was not licensed as a private television broadcaster broadcasting to the entire Flemish Community. VT4 is in fact the only licensed broadcaster. Secondly, VT4 could not be regarded as a television broadcaster licensed by another Member State since it was a Flemish body which had been established in another Member State in order to circumvent application of the Flemish Community legislation. Even if VT4 were a British broadcaster, this still would not be sufficient to fulfil the conditions laid down in Article 10(2), No 4, of the Cable Decree and, in particular, the requirement that proper supervision must be exercised with regard to compliance with Community law.

10 On 24 January 1995, the Raad van State suspended the Decision on VT4's application. It considered that the ground for annulment based on infringement of Article 2(2) of the Directive was sufficiently serious and that the requirement for serious damage was fulfilled. As a result, as from 1 February 1995 VT4 was able to distribute its programme on the cable television network in Flanders and Brussels. By judgment of 2 March 1995 the Raad van State then confirmed the suspension it had previously ordered, so that the VT4 programme could continue to be broadcast on the network for as long as the Raad van State had not given a ruling in the main proceedings.

11 Before the national court, reference was made to the Commission proposal adopted on 22 March 1995 for amendment of the Directive (OJ 1995 C 185, p. 4) and which it submitted to the Council and European Parliament on 31 May 1995 at the same time as the report on the application of the Directive [COM(95)86 final-95/0074(COD)]. The point raised by that argument was the extent to which those texts and the provisional results of negotiations which have been going on within the Council could have an effect on the assessment of the Decision's legality.

12 It was in those circumstances that the Raad van State decided, before ruling on the substance, to stay proceedings and to refer the following question to the Court for a preliminary ruling:

`At the time of the contested decision, may regard be had, for the purposes of interpreting Article 2 of Council Directive 89/552/EEC of 3 October 1989 with regard to its scope ratione personae, to the abovementioned report and proposal of 31 May 1995 of the Commission and to the abovementioned text provisionally adopted by the Council of Ministers on 20 November 1995? If so, what meaning overlapping the three different texts must be inferred for the purposes of that interpretation?'

13 It is apparent from the documents submitted to the Court that, by this question, raised before the Court delivered its judgment of 10 September 1996 in Case C-222/94 Commission v United Kingdom [1996] ECR I-4025, the Raad van State in effect seeks to ascertain the criteria for determining which broadcasters come within a Member State's jurisdiction for the purposes of Article 2(1) of the Directive.

14 In Case C-222/94 Commission v United Kingdom the Court examined the interpretation to be given to the term `jurisdiction' in the phrase `broadcasters under [a Member State's] jurisdiction' contained in the first indent of Article 2(1) of the Directive.

15 As the Court held in paragraph 26 of that judgment, the Directive contains no express definition of the phrase `broadcasters under its jurisdiction'.

16 In paragraph 40, after analysing the wording of Article 2(1) of the Directive, the Court concluded that the concept of jurisdiction of a Member State, used in the first indent of that provision, had to be understood as necessarily covering jurisdiction ratione personae over television broadcasters.

17 In paragraph 42 the Court went on to state that a Member State's jurisdiction ratione personae over a broadcaster can be based only on the broadcaster's connection to that State's legal system, which in substance overlaps with the concept of establishment as used in the first paragraph of Article 59 of the EC Treaty, the wording of which presupposes that the supplier and the recipient of a service are `established' in two different Member States.

18 It follows therefore that Article 2(1) of the Directive is to be interpreted as meaning that a television broadcaster comes under the jurisdiction of the Member State in which it is established.

19 Where a television broadcaster has more than one establishment, the competent Member State is the State in which the broadcaster has the centre of its activities. It is therefore for the national court to determine, applying that criteria, which Member State has jurisdiction over VT4's activities, taking into account in particular the place where decisions concerning programme policy are taken and the programmes to be broadcast are finally put together (Case C-222/94 Commission v United Kingdom, paragraph 58).

20 According to Vlaamse Gemeenschap, in order for the provisions concerning free provision of services to apply, it is not sufficient for the provider of a service to be established in another Member State; it is also necessary, as is clear from the judgment in Case C-55/94 Gebhard [1995] ECR I-4165, that the person providing the service must not also be established in the host Member State.

21 That argument disregards the fact the activity of a television broadcaster which consists in providing, on a permanent basis, services from the Member State in which it is established for the purposes of Article 2(1) of the Directive does not imply, as such, the pursuit in the host Member State of an activity in regard to which it must be determined whether it is temporary or not, as was the case in Case C-222/94 Commission v United Kingdom.

22 It must also be emphasized that the mere fact that all the broadcasts and advertisements are aimed exclusively at the Flemish public does not, as VTM claims, demonstrate that VT4 cannot be regarded as being established in the United Kingdom. The Treaty does not prohibit an undertaking from exercising the freedom to provide services if it does not offer services in the Member State in which it is established.

23 It follows from the foregoing that Article 2(1) of the Directive is to be interpreted as meaning that a television broadcaster comes under the jurisdiction of the Member State in which it is established. If a television broadcaster is established in more than one Member State, the Member State having jurisdiction over it is the one in whose territory the broadcaster has the centre of its activities, in particular where decisions concerning programme policy are taken and the programmes to be broadcast are finally put together.

Decision on costs

Costs

24 The costs incurred by the German and French Governments and by 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

(Sixth Chamber)

in answer to the question referred to it by the Raad van State, Belgium, by judgment of 14 February 1996, hereby rules:

Article 2(1) of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities is to be interpreted as meaning that a television broadcaster comes under the jurisdiction of the Member State in which it is established. If a television broadcaster is established in more than one Member State, the Member State having jurisdiction over it is the one in whose territory the broadcaster has the centre of its activities, in particular where decisions concerning programme policy are taken and the programmes to be broadcast are finally put together.