OPINION OF ADVOCATE GENERAL SIR GORDON SLYNN

DELIVERED ON 6 MAY 1982

My Lords,

Lord Bethell wishes to bring before the Coun a matter which is of great concern to him and which is of interest to many members of the public throughout the Community. His view is that air fares inside the Community are fixed in a way which violates the competition rules of the Community. As a result, such fares are higher than they ought to be. He contends, broadly, that the Commission has failed to take the action which it should have taken and he asks the Court so to rule by means of an application under Article 173 and Article 175, read with Article 176, of the EEC Treaty.

The Commission's first reply is that the application is inadmissible; the Treaty does not enable him to pursue his claim before the Court in any of the ways he has sought to put it. That objection is the sole issue to be decided at this stage of the proceedings. If the application is admissible it is accepted by the Commission, that there is a substantial and important matter to be investigated by the Court.

Although Lord Bethell has actively advanced his contentions for some years, both in a personal capacity and as a Member of the European Parliament, the present question turns essentially on a letter dated 13 May 1981, written on his behalf to the Commission with its annexes, and the Commission's reply dated 17 July 1981 with its annexes. In the former his lawyers set out the facts which indicated to Lord Bethell's mind that there was a lack of competition between scheduled airlines, and that “in practice, fares are fixed between airlines and not between governments”. Having stated the legal grounds upon which the Commission was said to be under a duty to take action, the letter asked that the Commission “make a start with discharging the duty it should have been discharging in the past, that it announce that it is going to act under Article 89, and that it surt to do so by demanding information and explanations from the airlines”. Inaction would not be accepted. What was sought was a prompt reply “in the form of a decision” which could be brought before the Court under Article 173 of the Treaty.

Following an interim acknowledgement on 26 May 1981 the Commission, by the Director-General for Competition, wrote on 17 July 1981 to reiterate the Commission's view, already published, that “in most cases the final fixing of air fares is the sole responsibility of Member Sutes”. This being so, the Commission considered that there was no ground in principle to scrutinize the activity of both Sutes and companies on the basis of Article 85. It undertook, however,“within the limits of its powers in this field”, to examine the subject further and “ if it finds that the underlying reality of fare-fixing enters into conflict with the provisions of Article 5, Article 90 and/or Article 85 of the Treaty, it will take the necessary action under those provisions”. It expressed the view that Article 86 imposed a limit on the ability of governments to fix air fares. Having referred to the difficulty and complexity “of an analysis intended to establish the abusive character of a given air fare”, the Commission stated that the examination of air fares which had been completed was to be reported to the Council. The Commission added that it was to do five things:

(a) to begin an analysis of cases where the level of a given tariff suggested that Article 86 was being infringed;

(b) to write to Member States setting out its views emphasizing that where tariffs were fixed by governments, they should not be unfair and thereby infringe Article 86;

(c) to write to airlines within the Community asking for deuils of practices other than the fixing of fares, which might in the Commission's view involve infringements of Article 85;

(d) to propose “in the near future” a draft directive on air fares laying down objective criteria to be observed by Member Sutes when approving air fares ;

(e) to approve “shortly” a draft regulation for submission to the Council applying Articles 85 and 86 of the Treaty to air transport.

On 23 July 1981 the Commission published the Repon on Scheduled Passenger Air Fares in the EEC, to which it had alluded in the letter (COM(81) 398 final). This concluded firstly that one of the fields for future action in the Community should be to achieve a less rigid tariff-setting procedure, that the airlines did not reap excessive earnings in local journeys in Europe overall but sales costs in Europe were extremely high; and secondly that although on shorter routes there was a reasonable relationship between the fare and the costs, the margin of profit increased considerably on longer disunces. On 31 July 1981, the Commission published the draft regulation to which it had referred (COM(81) 396 final). On 26 October 1981 it published the draft directive on air fares (COM(81) 590 final).

Lord Bethell took the view that the Director-General's letter dated 17 July 1981 was inconsistent with the repon published only six days later; and that the letter was in any event unsatisfactory and obscure. Accordingly, he instituted proceedings which were registered at the Court on 10 September 1981. He asked for a declaration, under Anide 175 of the Treaty, that the Commission had failed to act in response to that pan of the letter dated 13 May 1981 which dealt with allegations of concerted practices between airlines in fixing air fares within the Community. In the alternative, he asked the Court to annul, under Article 173 of the Treaty, the whole of the Director-General's letter dated 17 July 1981 or that pan of the letter which (in the words used in the application) “declares that the competition rules are not applicable to airlines with respect to the fixing of air tariffs within the Community”. He asked that the Court should take such further action pursuant to Articles 175, 173 or 176 of the Treaty as the Court found appropriate, and that the Commission should pay his costs.

Since the first claim for relief is under Article 175, I consider that before dealing with the claim under Article 173. Article 175 enables Member Sutes and other institutions to bring an anion before the Court to establish that the Council or the Commission has failed, in infringement of the Treaty, “to act”. Such an action may not be brought unless the institution has been “called upon to act”, and within two months of such a demand has “not defined its position”. “Any natural or legal person may, under the conditions laid down in the preceding paragraphs, complain to the Court of Justice that an institution of the Community has failed to address to that person any act other than a recommendation or an opinion.”

The applicant was asked “what is the ‘act’ within the meaning of the third paragraph of Article 175 which the applicant claims the Commission has failed to address to him?” His Counsel at the hearing replied:

“The act to which we contend Lord Bethel] was entitled and which we contend he did not get was very simple: a response, an adequate answer to his complaint, saying either that the Commission was going to act or saying that it was not, and if not, giving reasons.”

Taking the words in their ordinary meaning “a failure to act” seems to be a different concept from a “failure to address to (a) person any act other than a recommendation or an opinion”. It may be that the more limited words in the French text of the first paragraph (“s'abstient de statuer”) give a more precise idea of the kind of action covered by the first paragraph, but the third paragraph seems to me to cover a narrower category of acts than that covered by the words “a failure to act” in the first paragraph. The third paragraph seems to be dealing with anions similar to, though not necessarily limited to, those spelled out in Article 189 and which the Council and the Commission are empowered to take. Whether or not that is so, there are clearly differences between the content of the first and the third paragraphs which are in part parallel to the distinction drawn in the first and second paragraphs of Article 173.

There is, however, a significant distinction between the second paragraph of Article 173 and the third paragraph of Article 175. Unlike Article 173, Article 175 does not state that there is to be a right of action in respect of a failure to adopt a measure addressed to another person provided that it is of direct and individual concern to the applicant. As Mr. Advocate General Capotorti observed in Case 125/78 GEMA v Commission [1979] ECR 3173 at page 3199, the difference in wording indicates that the right to institute proceedings for a failure to an is more limited in this respect than the right to institute proceedings for annulment. The object of Article 175 is to secure the adoption of an act which, by its nature and purpose, must be addressed to the person making the request (Case 103/63 Rhenania v Commission [1964] ECR 425 at page 433 per Mr. Advocate General Roemer; cf., however, the opinion of Mr. Advocate General Dutheillet de Lamothe in Case 15/71 Mackprang v Commission [1971] ECR 797 at page 807).

Moreover it seems to me to be clear that a complainant under the third paragraph of Article 175 must be able to show that there has been a failure to address an an to him in a situation where there is a duty to address an an to him. That duty must, it seems to me, be created by the Treaty or (as I think) by legislation made under the Treaty as properly construed. It is not sufficient that good administration or courtesy require that a carefully prepared and considered letter be answered.

The first difficulty I find in Lord Bethell's way is that there is no express provision conferring on a complainant in the present context an entitlement to demand that the Commission initiate an enquiry into allegations of concerted practices in the field of air transport.

Article 3 (2) of Council Regulation No 17 sutes that natural or legal persons who claim a legitimate interest shall be entitled to apply to the Commission for a finding that there is a breach of Articles 85 or 86 of the Treaty; if the Commission considers that there are insufficient grounds for granting such an application it must inform the applicant of its reasons: see Article 6 of Commission Regulation No 99/63 of 25 July 1963 (OJ Special Edition 1963-64, p. 47). Those provisions do not, however, apply to allegations of fixing of air transport rates and conditions, for such maners are expressly exempted from the application of Regulation No 17 by Article 1 of Council Regulation No 141 of 26 November 1962, (OJ Special Edition 1959-62, p. 291).

It is contended on behalf of Lord Bethell that the entitlement made explicit in Article 3 (2) of Regulation No 17 is implicit in Article 89 of the EEC Treaty. That article makes no mention of individual complainants. True the Commission “shall investigate cases of suspected infringement” not only on application by Member States, but also “on its own initiative”. Even if this means that under the Treaty the Commission is under a specific duty to investigate each case reported to it where a suspected infringement is alleged (and perhaps (sed quaere) to give reasons for not doing so) it does not seem to me that this is a duty owed to the person bringing the matter to the Commission's attention and enforceable at his initiative.

It is argued that, if such a right cannot be implied in Article 89, the person complaining of a suspected infringement is wholly without redress if his representations are not acceded to by the Commission. This seems to me to be put too widely, since there may be cases where a challenge can be brought through the procedure established by Article 177 and Member States may be induced to act under Article 175.

In any event I do not find it possible to read into Article 89 the implied right for which Lord Bethell's Counsel contends.

The fan that Article 3 (2) of Regulation No 17 was found to be necessary, and that air transport is expressly excluded from its scope, seems to me, if anything, to confirm the view to which I have come independently of reference to them. Whether Article 3 (2) of Regulation No 17 should be applied to the field of air transport is a different matter.

Accordingly I am of the opinion that the applicant in this case is not a person to whom a duty to address an act is owed under the Treaty or under subordinate legislation. I do not think in any event that Lord Bethell could complain of a failure by the Commission to find that there had been an infringement by the airlines concerned, since such a finding would be addressed to the airlines concerned, and not to him (see e.g. Case 125/78 GEMA v Commission, supra at p. 3197 in which Mr. Advocate General Capotorti refers to the judgment in Case 26/76 Metro v Commission [1977] ECR 1875).

If I had come to the conclusion that it was sufficient for an applicant to show that he was direcdy and individually concerned by the failure of the Commission to act, I would still have been of the opinion that this application could not be made under Article 175. An airline could not challenge under Article 173 a decision to initiate enquiries into its conduct for the purpose of determining whether such conduct was in conformity with the Community's competition rules (Case 60/81 IBM v Commission,11 November 1981, paragraph 21). It seems to follow that an airline could not challenge a failure to initiate such enquiries under Article 175. Even less can a complainant do so. Nor could he compel the Commission to act in a particular way during the course of the investigation (Case 8/71 Komponistenverband v Commission [1971] ECR 705 at p. 710).

I turn, therefore, to the application under Article 173. In this context the Court asked “what is the decision within the meaning of the second paragraph of Article 173 of which the applicant seeks the annulment?”. The applicant's Counsel replied “If the Commission's letter contained a decision to the effect that concertation by the airlines regarding air fares did not constitute an infringement by the airlines of Article 85 (1) and therefore that the Commission would not investigate Lord Bethell's contrary contentions (it) was thus in effect rejecting his complaint”.

On the face of it, the Commission's letter dated 17 July 1981 does not amount to a “decision” subject to review in accordance with Article 173. It does not produce legal effects for Lord Bethell (in the sense intended in the jurisprudence of the Court) and in the absence of those effects it is not reviewable (see Joined Cases 8 to 11/66 Cimenteries v Commission [1967] ECR 75 at p. 91). Furthermore, it does not represent the culmination of a procedure, but rather it is one of those “procedural measures adopted preparatory to the decision which represents their culmination”. Such measures are not “decisions” within the meaning of Article 173: Case 60/81 IBM supra.

I see no reason to characterize the letter as a decision by reason only of the fan that it constitutes a response to a request to define a position, within the meaning of Article 175. Indeed, in Case 48/65 Luttickev Commission [1966] ECR 19 at p. 27, the Court found inadmissible an application under Article 173 for the annulment of a letter constituting a definition of the Commission's position.

It was argued on behalf of Lord Bethell that the Commission's letter amounted to “an implied decision to shelve the proceedings”. In support of this argument Lord Bethell's Counsel relied on the words of Mr Advocate General Capotorti in the GEMA case at 3200. Those words certainly support the view that an implied decision by the Commission to shelve proceedings initiated under the Community's competition rules may constitute an “act” such as may be reviewed under Article 173 of the EEC Treaty on the initiative of another enterprise. This is the case, however, when the complainant is legally entitled to apply to the Commission to find that there is an infringement of the Treaty, committed by another enterprise. It is in those circumstances that the Commission's implied decision to shelve proceedings has legal effects for the complainant. For this reason, Mr Advocate General Capotorti makes it clear (in the passage to which Lord Bethell's Counsel refers) that the applicant in the GEMA case was entitled, under Article 3 (2) of Council Regulation No 17 and Article 6 of Regulation No 99/63, to make the application and to receive the Commission's response. The applicant in this case, however, cannot claim the benefit of Regulation No 17 and does not, for the reasons given, have the same legal entitlement as the applicant in GEMA.

The considerations which lead to the conclusion that the application under Article 173 is inadmissible, when taken as a whole, lead also to the conclusion that the Court should declare inadmissible the application for annulment of that part of the Commission's letter of 17 July 1981 which declares that the competition rules are not applicable to airlines with respect to the fixing of air tariffs. It is, therefore, unnecessary to determine whether that letter contains any such declaration (which the Commission denies) or whether such a declaration would be contrary to law.

I am therefore of the opinion that the application under Article 173 has to be declared inadmissible also. It follows that there is in my view no scope for the grant of further relief under Articles 175, 173 or 176 of the EEC Treaty.

I have deliberately avoided expressing a view as to whether (a) the Commission has in fact failed to take any action which it was bound in law to take contrary to its contention that what it did subsequent to the letter of 17 July 1981 was in full discharge of its Treaty obligations and (b) whether the Commission can under Article 89 of the Treaty initiate enquiries designed to determine the existence of a breach of the Community's competition rules in the field of air transpon (which is denied by the airlines represented at the hearing). I have assumed for the purposes of this opinion that Lord Bethell is to be regarded as a person directly and individually concerned and have not expressed any view as to whether he is in fact a person directly and individually concerned by a finding on the part of the Commission that certain airlines are acting in breach of the Community's competition rules. These do not seem to me to be matters to be resolved in relation to the question of admissibility.

It was contended on behalf of Lord Bethell that the Commission's letter dated 17 July 1981 was so obscure that it calls for an award of costs in the applicant's favour, irrespective of the Court's decision on admissibility. Passages in that letter are by no means clear. I am not, however, satisfied that the Commission has, by that letter, unreasonably and vexatiously caused Lord Bethell to incur costs. Accordingly this is not a case for applying Article 69 (3) of the Court's Rules oí Procedure.

Although I see much force in the argument that natural and legal persons should have a wider right of challenge before the Court in regard to the activities of the Commission, I am, for the reasons given, of the opinion that the present application has to be declared inadmissible and that the Court should order the applicant to pay the Commission's costs. Since the interveners have not asked in their pleadings for an award of costs, no order should, in my view, be made in respect of these.