2.

However, if this approach is thought inadvisable, on the grounds that in Netherlands law the effects inherent in the bringing of an appeal are not altogether clear and that in such a case it is not for this Court to interpret national law, or else because by reason of the importance of the questions posed it is thought better to accept the risk of delivering a superfluous judgment than to slow down the reference proceedings, it is then necessary to make the following remarks with regard to the content of the questions put before the Court : (a) You will recall that the substance of the first question is whether the EEC Treaty prohibits the inclusion in a sales agreement concluded between a manufacturer in one Member State and a trader in another Member State of a clause prohibiting export to other Member States. On this point the plaintiff in the main action has submitted, in particular, that the question does not relate to the facts which are the subject of the national proceedings. One ought in fact to assume that it envisaged sales to a country situated outside the Economic Community, in which the Netherlands trader defending the action was only to act as an intermediary on commission and to ensure transit through the Netherlands of articles corning from France and destined for Indonesia. That is what seems to emerge from the contents of the memoranda and documents which the plaintiff has communicated to the court making the reference, to the European Court of Justice and to the national court of appeal. If this elucidation is taken into account in replying to the first question—and the Court has already adopted this approach on several occasions in the course of reference proceedings—it is quite clear that the intricacy of the problems of cartel law is lessened. I am not, in fact, thinking here of the communication from the Commission published in the Official Journal of 24 December 1962 to which the plaintiff refers, relating to exclusive dealing agreements concluded with commercial agents; this, as you know, expresses the view that the prohibition set out in Article 85 (1) does not apply to agreements concluded with such agents who negotiate or conclude business on behalf of another undertaking over a given part of the territory of the Common Market. The statements of the plaintiff justify the conclusive dealing agreements concluded with commercial agents; this, as you know, expresses the view that the prohibition set out in Article 85 (1) does not apply to agreements concluded with such agents who negotiate or conclude business on behalf of another undertaking over a given part of the territory of the Common Market. The statements of the plaintiff justify the conclusion that the defendant acted as commission agent for an Indonesian purchaser, that is, on his behalf. But the Commission's communication mentions only those acting on behalf of the vendor and certainly does not apply to the present situation. On the other hand, one might accept the following arguments, also advanced by the plaintiff: since, according to the express will of the parties, there was, without question, a sale via an intermediary to a commercial partner established outside the Economic Community, with a precise destination well away from the Common Market, for purely practical reasons there was no need to include a condition prohibiting reimportation. Consequently, all that the Netherlands court had to consider was a simple sales agreement with no supplementary conditions, that is to say, a situation which in no way involves competition law and to which, therefore, there is no reason to apply Article 85 (1). One could even go a little further and say that the result would not be different even supposing the contract had contained a tacit prohibition of reimportation. Indeed, if one considers the facts of the case there is a clear analogy with the Grosfillex case. As you know, the Commission then gave negative clearance, that is, it declared that there were no grounds for it to intervene under Article 85 (1) with regard to the exclusive dealing agreement, which included a prohibition against reimportation, concluded between a French manufacturer of plastic articles and a Swiss trader. If one examines that decision closely, particularly what was said on the price structure and the actual likelihood of reimportation (I refer to the Official Journal, 1964, p. 915) it is difficult to see how any other conclusion could be justified in this instance. However, such a radical alteration to the questions referred by the national court may be considered impossible, since in proceedings brought under Article 177 the Court is not concerned to give judgment on the actual facts or to apply national law. If, consequently, the Court feels bound, in interpreting the Treaty, by the description which the court making the reference has given of the agreements in question, the only relevant question is how to regard a contract of sale concluded by a manufacturer situated in one Member State with a trader situated in another Member State which contains a prohibition against export to the territory of another Member State. On that question, several interested parties have justly remarked during the proceedings that having regard to the criteria set out in Article 85 (1) it is impossible to give a precise answer which will be generally valid if one is not in possession of all the facts. Referring to the well-known Bosch case ([1962] ECR 45). I can say, first, that it is not impossible that such export prohibitions should correspond to a ‘definition contained in Article 85 (1)’. In fact, the prohibitions in question do prevent a certain quantity of goods from entering a member country of the Community and to that extent restrict competition and affect trade between Member States. However, it must also be remembered that at an early stage the Court approved the argument of the Commission that Article 85 (1) applies only to appreciable restrictions on competition and effects on trade. In order properly to judge the validity of prohibitions on exportation, account must be taken of all the circumstances of the actual case, as has been emphasized in other cases relating to cartels. In particular, the fact may be relevant that only a few supply contracts, involving a small volume of trade, are concerned. Account should be taken of the market in the branded products in question in the Member State covered by the prohibition on exportation, including any substitution products, and the number of manufacturers and traders which carry on their activities there must be ascertained, and it must be determined, particularly in the light of the price structure, whether competition on that market is sufficiently intensive for it not to be substantially affected by the conditions of sale under discussion. It is only after this has been done that it is possible to decide finally whether the prohibitory provisions of Article 85 (1) are applicable or not. On the other hand, as regards the first question, the period at which the agreements in question were concluded does not seem relevant. In view of the provisions of Regulation No 67/67, it is clear that this factor is relevant only to the second question. I think it is not possible for me to give a more precise answer to the first question. However, the preceding considerations show clearly enough that Article 85 (1) scarcely covers the prohibition upon which the court making the reference has to give judgment. (b) In its second question, the Rotterdam court asks whether Article 85 (1) does not in any case apply when the prohibition on exportation in question is designed to protect a sales organization in another Member State and when the sales organization has been set up in accordance with Regulation No 67/67. Several interested parties consider that this question, too, needs to be amended, inasmuch as the plaintiff maintains a sales organization not only in the Member State to which the product has been exported in contravention of the agreement, but also over the whole of the territory of the Common Market, and so also in the Netherlands; that is to say, in the country in which the party contracting with the plaintiff is established and to which the product was delivered in the first place, albeit only in transit. Taking this amendment into account and supposing also that the sales organization in question is legal under the conditions of Regulation No 67/67, the reply to be given to the second question raises no difficulties. As you know, in Regulation No 67/67 the Commission affirmed as a general rule that in accordance with Article 85 (3) of the Treaty Article 85 (1) was not applicable to agreements to which only two undertakings are party, those undertakings being subject, for purposes of resale, to mutual obligations in respect of exclusive supply and purchase within the meaning of Article 1 (a) and (b) of Regulation No 67/67. That exemption applies on condition that no absolute territorial protection is given to any exclusive purchaser. Thus parallel imports should be possible, or, more precisely, retailers in the Member State in question should not be prevented from buying the articles in question from wholesalers established in other sales territories. Commerce has thus been given an important tool for encouraging the effective marketing of branded products and permitting a certain control to be exercised over sales outlets. But the modus operandi of these sales organizations makes it perfectly clear that there is no question of manufacturers supplying other purchasers situated in the respective sales territories. That would not be compatible with the obligation as to exclusive supply. The lawfulness of the distribution system therefore implies the lawfulness of the sales prohibitions imposed on purchasers outside the distribution system. From the point of view of cartel law, this is justified by the fact that sufficient competition is ensured by the possibility given to purchasers bound by the agreement, of supplying interested persons established outside the territory conceded to them and thus entering into competition with the authorized exclusive dealer in the territory in question. On the other hand, the sales prohibition which is applied to purchasers outside the distribution system represents no additional, substantial restriction of competition, or else it is accepted under Article 85 (3). Supposing that the conditions laid down in Regulation No 67/67 are met, the reply to the second question should therefore be as follows: Article 85 (1) does not apply to the prohibition on exportation in dispute. As for the question whether the conditions laid down in Regulation No 67/67 are in fact met, that is not for us to judge. The plaintiff insists that this is so in view of the alteration of the sales agreements which took place in 1967. During the oral procedure, the Commission, to whom the agreements and their amendments were notified, expressed certain reservations. It mentioned an investigation currently in progress, and manifested some doubts, inasmuch as the process of selecting authorized retailers was not dictated by objective criteria so much as by the desire to limit their number. One can indeed consider such factors to go beyond what can be considered as a permissible restriction under Article 2 of Regulation No 67/67. This has to be considered in detail by the referring court. If the latter reaches the conclusion that Regulation No 67/67 is not applicable it can then judge the present case only on the basis of the reply to be given to the first question.