Judgment of the Court (Fifth Chamber) of 4 May 1993. - Federación de Distribuidores Cinematográficos v Estado Español et Unión de Productores de Cine y Televisión. - Reference for a preliminary ruling: Tribunal Supremo - Spain. - National rules intended to promote the distribution of national films. - Case C-17/92.



European Court reports 1993 Page I-02239

Swedish special edition Page I-00181

Finnish special edition Page I-00191



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Freedom to provide services ° Provisions of the Treaty ° Field of application ° Exploitation, in a Member State, in a cinema or on television of cinematographic films produced in other Member States ° Inclusion

(EEC Treaty, Art. 59 et seq.)

2. Freedom to provide services ° Restrictions ° Rules linking the grant of licences to dub cinematographic films from third countries to the distribution of national films ° Discriminatory effect with regard to producers established in other Member States ° Not permissible ° Derogations ° Grounds of public policy ° Pursuit of objectives of an economic nature ° Not permissible

(EEC Treaty, Arts 56 and 59)

Summary

1. The exploitation of cinematographic films in a cinema or on television, in the context of which the producers authorize the distributors to make copies of their films and to organize public performances by means thereof, all in return for remuneration, constitutes a provision of services. Where it is of a trans-frontier nature, since producers and distributors are not established in the same Member State, it comes under the provisions of the Treaty with regard to freedom to provide services.

2. The provisions of the Treaty concerning freedom to provide services must be interpreted as precluding national rules which reserve the grant of licences for dubbing cinematographic films from third countries into one of the official national languages to distributors who undertake to distribute national films.

Such rules are discriminatory inasmuch as, to the extent to which the public preference is very largely for films from third countries dubbed into one of the national languages, they award preferential treatment to the producers of national films who, by reason of the heavy demand for dubbing licences, have a guarantee that their films will be distributed and that they will receive the corresponding receipts, in comparison with producers established in other Member States who are dependent solely on the choice of the distributors, and do not come within an express derogation of the kind contained in Article 56 of the Treaty, to which Article 66 refers. In that respect, apart from the fact that the pursuit of a cultural policy is not amongst the justifications set out in Article 56, rules which promote the distribution of national films, whatever their content or quality, pursue only an objective of a purely economic nature which does not constitute a ground of public policy within the meaning of that article.

Parties

In Case C-17/92,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal Supremo for a preliminary ruling in the proceedings pending before that court between

Federación de Distribuidores Cinematográficos (Fedicine)

and

The Spanish State

supported by Unión de Productores de Cine y Televisión,

intervener,

on the interpretation of Articles 30 to 36, 59 and 92 of the EEC Treaty, of Council Directive 63/607/EEC of 15 October 1963 implementing in respect of the film industry the provisions of the General Programme for the abolition of restrictions on freedom to provide services (OJ, English Special Edition 1963-1964, p. 52), of the Second Council Directive 65/264/EEC of 13 May 1965 implementing in respect of the film industry the provisions of the General Programme for the abolition of restrictions on freedom of establishment and freedom to provide services (OJ, English Special Edition 1965-1966, p. 62) and of the General Agreement on Tariffs and Trade (GATT),

THE COURT (Fifth Chamber),

composed of: G.C. Rodríguez Iglesias, President of the Chamber, R. Joliet, J.C. Moitinho de Almeida, F. Grévisse and D.A.O. Edward, Judges,

Advocate General: W. Van Gerven,

Registrar: J.-G. Giraud,

after considering the written observations submitted on behalf of:

° the Federación de Distribuidores Cinematográficos, by Manuel Lanchares Larre, Procurador de los Tribunales, and Manuel Villar Arregui, of the Madrid Bar,

° the Spanish Government, by Alberto José Navarro González, Director- General of Community Legal and Institutional Co-ordination, and Gloria Calvo Díaz, Abogado del Estado, member of the State Legal Department for Matters before the Court of Justice, acting as Agents,

° the Commission of the European Communities, by Pieter Van Nuffel and Daniel Calleja, of its Legal Service, acting as Agents,

having regard to the report of the Judge-Rapporteur,

after deciding in pursuance of Article 104(4) of the Rules of Procedure not to hear the parties' oral observations, and

after hearing the Opinion of the Advocate General at the sitting on 18 February 1993,

gives the following

Judgment

Grounds

1 By order of 12 December 1991, which was received at the Court Registry on 22 January 1992, the Tribunal Supremo, Sala Tercera de lo Contencioso-Administrativo (Supreme Court, Third Chamber for Contentious Administrative Proceedings, hereinafter "the Tribunal Supremo") referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of the provisions of the Treaty for the purpose of determining the compatibility with Community law of national rules making the grant of licences to dub films from third countries with a view to their distribution in Spain in a version dubbed into one of the official languages of Spain, subject to a prior contractual undertaking by the distributor applying for the licence to distribute a Spanish film.

2 That question was raised in the course of administrative proceedings brought by the Federación de Distribuidores Cinematográficos (hereinafter "Fedicine"), an association governed by Spanish law, for the annulment of the sole article of the Real Decreto Legislativo 1257/1986 of 13 June 1986, issued so as to adapt the Law of 27 April 1946 and the Law 3/1980 of 10 January 1980 to the rules of Community law in pursuance of the enabling legislation contained in the Enabling Law of 27 December 1986 (Boletin Oficial del Estado No 153 of 27 June 1986, p. 23427) (hereinafter "the Decree-Law").

3 That sole article, which came into force on 1 July 1986, is worded as follows:

"1. Legally constituted distribution undertakings may freely distribute films produced in the Community.

2. The said undertakings shall also be entitled to a maximum of four licences for dubbing films originating in third countries into one of the official languages of Spain for each Spanish film for which they show that they have concluded a distribution contract in the following circumstances:

(a) the first licence shall be granted when the Instituto de Cinematografía y de las Artes Audiovisuales (Cinema and Audiovisual Arts Institute) has been informed of the commencement of filming of a Spanish film for which the distributor applying for the licence has previously signed a contract. That licence shall be automatically cancelled if the film is not presented for approval within 200 days following the commencement of filming. The Instituto de la Cinematografía y de las Artes Audiovisuales may extend that period where the persons concerned show good cause;

(b) the second, third and fourth licences shall be granted upon its being demonstrated that the said film has realized gross takings of PTA 30, 60 and 100 million respectively.

3. The distribution in dubbed version of a film originating in a third country shall require the prior grant of a licence for that purpose."

4 Fedicine claimed before the national court that the Decree-Law was a protectionist, restrictive and discriminatory measure contrary to Articles 30 to 36, 59 and 92 of the EEC Treaty, to Council Directive 63/607/EEC of 15 October 1963 implementing in respect of the film industry the provisions of the General Programme for the abolition of restrictions on freedom to provide services (OJ, English Special Edition 1963-1964, p. 52) (hereinafter "the General Programme"), to the Second Council Directive 65/264/EEC of 13 May 1965 implementing in respect of the film industry the provisions of the General Programme for the abolition of restrictions on freedom of establishment and freedom to provide services (OJ, English Special Edition 1965-1966, p. 62) (hereinafter "the Second Directive") and to the General Agreement on Tariffs and Trade (GATT).

5 The Tribunal Supremo took the view that, as a problem concerning the interpretation of Community law had been raised before it and as it was sitting in first and last instance, it was obliged to refer a question to the Court for a preliminary ruling.

6 The question was worded as follows:

"Is a measure making the grant of licences to dub films from non-member countries, with a view to their distribution in Spain in a version dubbed into one of the official languages of Spain, subject to a prior contractual undertaking by the distributor applying for the licence to distribute a Spanish film compatible with Community law?".

7 Reference is made to the Report of the Judge-Rapporteur for a fuller account of the facts, the procedure and the written observations of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

8 It is appropriate to point out at the outset that in the context of Article 177 of the EEC Treaty the Court has no jurisdiction to decide either as to the interpretation of the provisions of national laws or regulations or their conformity with Community law. It may however supply the national court with a ruling on the interpretation of Community law to enable that court to resolve the legal problem before it. It may be seen from the file that, by the question referred to the Court, the national court seeks to ascertain whether the rules of the Treaty on the freedom to provide services and the free movement of goods must be interpreted as precluding national rules which reserve the grant of licences for dubbing films from third countries into one of the official national languages to distributors who undertake to distribute national films.

The applicable provisions of Community law

9 First it is appropriate to determine which provisions of the Treaty relate to the distribution of films.

10 It follows from the judgment in Case 262/81 Coditel v Ciné-Vog Films ([1982] ECR 3381, paragraph 11) that the exploitation of films in a cinema or on television implies that the author may make any public projection of the work subject to his authorization and that the commercial exploitation of films by such means, which involves the grant of performing licences, is an activity which comes under the freedom to provide services.

11 That service is in particular one which producers of films provide to distributors by allowing them to make copies of their films and to organize public performances by means of such copies. When the producers and distributors are not established in one and the same Member State, that service is of a trans-frontier nature. Finally, since it is common ground that the distributors pay back to the producers a part of their box-office takings, that service is also provided for remuneration within the meaning of Article 60 of the Treaty.

12 It follows that the problems raised by the national court must be considered from the angle of Article 59 of the Treaty.

The freedom to provide services

13 As regards Article 59, the Court has consistently held (see, in particular, the judgments in Case C-288/89 Collectieve Antennevoorziening Gouda [1991] ECR I-4007, paragraph 10, and in Case C-353/89 Commission v Netherlands [1991] ECR I-4069, paragraph 14) that freedom to provide services entails in particular the abolition of any discrimination against the person providing services on account of his nationality or the fact that he is established in a Member State other than that in which the service is to be provided.

14 In that respect it should be pointed out that, by linking the grant of licences for dubbing films from third countries to the filming and distribution of Spanish films, the Decree-Law is granting an advantage to the producers of such films in comparison with producers established in other Member States who wish to distribute their films in Spain.

15 It appears from the information furnished by the Commission that Spanish public preference as regards the cinema is to a very large extent for films from third countries, in particular those from the United States of America when they are dubbed into one of the official languages of Spain. However, the Decree-Law links the grant of licences for dubbing such films to the obligation to distribute a Spanish film. It thus accords preferential treatment to the producers of national films in comparison with producers established in other Member States, since the former have a guarantee that their films will be distributed and that they will receive the corresponding receipts, whereas the latter are dependent solely on the choice of the Spanish distributors. That obligation therefore has the effect of protecting undertakings producing Spanish films and by the same token places undertakings of the same type established in other Member States at a disadvantage. Since the producers of films from other Member States are thus deprived of the advantage granted to the producers of Spanish films, that restriction is of a discriminatory nature.

16 As the Court has stated in its judgments in Case 352/85 Bond van Adverteerders v Netherlands State ([1988] ECR 2085, paragraphs 32 to 34) and in Collectieve Antennevoorziening Gouda (paragraph 10) and Commission v Netherlands (paragraph 15), previously cited, national rules which are not applicable to services without distinction whatever their origin are compatible with Community law only if they can be brought within the scope of an express derogation such as Article 56 of the Treaty, to which Article 66 refers. It may also be seen from those judgments that objectives of an economic nature cannot constitute grounds of public policy within the meaning of that article.

17 There is no doubt that the Decree-Law pursues such an economic objective since by seeking to guarantee the distribution of a large number of national films it succeeds in ensuring sufficient receipts for the producers of such films.

18 However, the Spanish Government has contended that the Decree-Law pursued a cultural aim, namely that of protecting the national film industry.

19 That argument cannot be upheld.

20 Apart from the fact that cultural policy is not one of the justifications set out in Article 56, it is important to note that the Decree-Law promotes the distribution of national films whatever their content or quality.

21 In those circumstances, the link between the grant of licences for dubbing films from third countries and the distribution of national films pursues an objective of a purely economic nature which does not constitute a ground of public policy within the meaning of Article 56 of the Treaty.

22 The answer to the national court' s question must therefore be that the provisions of the Treaty concerning freedom to provide services must be interpreted as precluding national rules which reserve the grant of licences for dubbing films from third countries into one of the official national languages to distributors who undertake to distribute national films.

Decision on costs

Costs

23 The costs incurred by the Spanish Government 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 proceedings pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (Fifth Chamber),

in answer to the question referred to it by the Tribunal Supremo by order of 12 December 1991, hereby rules:

The provisions of the Treaty concerning freedom to provide services must be interpreted as precluding national rules which reserve the grant of licences for dubbing films from third countries into one of the official national languages to distributors who undertake to distribute national films.