Opinion of Mr Advocate General Vilaça delivered on 11 February 1988. - Corinne Bodson v SA Pompes funèbres des régions libérées. - Reference for a preliminary ruling: Cour de cassation - France. - Competition - Funeral services - Exclusive special rights. - Case 30/87.



European Court reports 1988 Page 02479



Opinion of the Advocate-General

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Mr President,

Members of the Court,

The French Cour de Cassation ( Court of Cassation ) has asked the Court of Justice for a preliminary ruling on the interpretation of Articles 37, 85, 86 and 90 of the EEC Treaty in order to enable it first to assess the compatibility with Community law of national legislation on the grant of an exclusive concession by French communes to provide the "external services" for funerals, and secondly to determine whether or not the resultant conduct on the part of a firm of undertakers is capable of constituting an abuse of a dominant position .

The French legislation governing the activities of undertakers, together with a description of the state of the French market in the external services for funerals and the facts of the case, are concisely set out in the Report for the Hearing, which makes it unnecessary to repeat them here . However, it is necessary to bear them in mind as a background to the examination of the questions submitted for a preliminary ruling .

I would just point out that the answers to be given in these proceedings are in no way affected by the fact that, after the events which gave rise to the main proceedings, a law was adopted ( No 86-29 of 9 January 1986 ) Article 31 of which liberalized to a certain extent the system involving the grant by communes of an exclusive concession to provide the external services for funerals in so far as it allowed individuals to choose between the holder of

the concession granted by the commune in which the death took place, the commune in which the deceased resided, or the commune in which the deceased is to be buried .

The questions submitted for a preliminary ruling by the Commercial Chamber of the Cour de Cassation, which are also set out in the Report for the Hearing, are not reproduced here .

However, before I examine those questions, I propose to dispel the doubts raised by one of the parties to the main proceedings in its observations as regards the jurisdiction of the Court of Justice .

1 . Jurisdiction of the Court

( a ) The company "Pompes funèbres des régions libérées" ( hereinafter referred to as "PFRL "), the defendant in the main proceedings, which forms part of the "Pompes funèbres générales" group ( hereinafter referred to as "PFG ") and holds an exclusive concession to provide the external services for funerals in the commune of Charleville-Mézières, argues that the Court of Justice has no jurisdiction to answer the questions referred to it by the Cour de Cassation and relies in that respect on the Court' s judgment of 16 December 1981 in Case 244/80 Foglia v Novello (( 1981 )) ECR 3045 .

According to PFRL, the questions submitted to the Court seek an academic answer to a theoretical question, which has no relevance to the settlement of the dispute before the national court between Corinne Bodson, in partnership with Michel Leclerc, and PFRL, which arose because Mrs Bodson began to provide the external services for funerals within the area covered by the concession granted to the defendant .

In Foglia v Novello the Court of Justice laid down a set of principles relating to the making of references for a preliminary ruling .

After restating, in line with its case-law, that it is for the national court to assess, having regard to the facts of the case, the need to obtain a preliminary ruling ( paragraph 15 of the decision ), the Court added, however, that that power of appraisal involves the exercise of a duty "entrusted to ... both" the national court and the Court of Justice of ensuring that in the interpretation and application of the Treaty the law is observed ( paragraph 16 of the decision ).

Accordingly, the problems which may be entailed in the exercise by the national court of its power of appraisal are governed exclusively by the provisions of Community law ( paragraph 16 of the decision ). The duty assigned to the Court of Justice by Community law is not that "of delivering advisory opinions on general or hypothetical questions" but of "assisting in the administration of justice in the Member States ". It follows that the Court does not have jurisdiction to reply "to questions of interpretation which are submitted to it within the framework of procedural devices arranged by the parties in order to induce the Court to give its views on certain problems of Community law which do not correspond to an objective requirement inherent in the resolution of a dispute" ( paragraph 18 of the decision ).

The Court' s aim is thus to prevent the application of the procedure under Article 177 of the EEC Treaty for purposes other than those appropriate to it ( paragraph 18 of the decision ).

Hence, as was the case in Foglia v Novello, the Court has been obliged to examine the specific circumstances surrounding the main action in order to confirm its own jurisdiction ( paragraph 21 of the decision ).

In my view, this is not a situation of that kind . The case pending before the national courts exhibits none of the characteristics of an artificial dispute, contrived by the parties in order to elicit a particular answer from the Court of Justice to a problem of Community law which is unconnected with an existing dispute . Instead, as is clear from the information supplied by the national court, the proceedings before it are the result of a conflict of interests which genuinely pits the parties against one another in the context of the applicable national legislation .

As one of the parties relied on certain provisions of Community law, the Cour de Cassation has remained within its powers or responsibilities thereunder by making a reference to the Court of Justice . Consequently, the line of decisions according to which, in "normal" circumstances, it is for the national court "which is alone in having a direct knowledge of the facts of the case and of the arguments put forward by the parties, and which will have to give judgment in the case, to appreciate, with full knowledge of the matter before it, the relevance of the question of law raised by the dispute before it and the necessity for a preliminary ruling so as to enable it to give judgment" ( 1 )is directly relevant .

In that regard, therefore, the Court' s jurisdiction to answer the questions referred to it is not at issue .

Nevertheless, in the answers to be given, it may be necessary, as we shall see more clearly in due course, to take account of the provisions of Community law constituting the context in which the Court is required to operate by virtue of Article 177 .

( b ) The plaintiff in the main proceedings has also relied, in support of its contention that the questions submitted for a preliminary ruling are unnecessary, on the fact that they have been submitted in summary proceedings ( application for the adoption of interim measures ) which in no way resolve the substantive issue . In that regard the plaintiff has referred to the Court' s judgment of 27 October 1982 in Joined Cases 35 and 36/82 Morson and Jhanjan v State of the Netherlands (( 1982 )) ECR 3723 .

However, what the Court said in that judgment is that a national court or tribunal against whose decisions there is no judicial remedy under national law is not required to refer to the Court a question of interpretation or validity if the question is raised in interlocutory proceedings and the decision to be taken is not binding on the court or tribunal which later has to deal with the substance of the case, provided that each of the parties is entitled to institute proceedings on the substance of the case even before the courts or tribunals of another jurisdictional system and that during such proceedings any question of Community law provisionally decided in the summary proceedings may be re-examined and be the subject of a reference under Article 177 of the Treaty .

It follows that, if the Cour de Cassation, ruling in summary proceedings, has considered it necessary to refer certain questions to the Court of Justice for a preliminary ruling, even though it is not required to do so if the conditions laid down in the aforesaid judgment are satisfied, the Court of Justice is not entitled to take the place of the Cour de Cassation in appraising the need for, or expediency of, a reference simply because it was decided upon in summary proceedings .

Moreover, the Court has already accepted unreservedly that questions may be submitted in proceedings of that kind . ( 2 )

Nor is it for the Court to consider whether the request for a preliminary ruling is in conformity with national rules of procedure, or to examine it in the light of general considerations pertaining to the rationalization of the proceedings .

For that reason, as the questions submitted for a preliminary ruling have not been withdrawn by the national court, the Court of Justice must answer them having regard to the specific circumstances of the case .

( c ) I therefore turn to the questions submitted by the Cour de Cassation .

2 . First question : Article 37 of the EEC Treaty

In its first question, the national court seeks to ascertain whether Article 37 applies to a number of municipal (" communal ") monopolies which are granted to the same undertaking or to the same group of undertakings, which cover a part of the national territory and whose object is the provision of the external services for funerals, an activity encompassing both the provision of certain services and the supply of certain goods .

The first subparagraph of Article 37 ( 1 ) provides that State monopolies of a commercial character are to be progressively adjusted "so as to ensure that when the transitional period has ended no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States ".

Moreover, the second subparagraph of Article 37 ( 1 ) provides that Article 37 "shall apply to any body through which a Member State, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between Member States", and its scope extends to "monopolies delegated by the State to others ".

The Court has already acknowledged that Article 37 ( 1 ) of the Treaty has direct effect and may therefore be relied upon by any Community national as from the end of the transitional period . ( 3 )

Does the aforesaid provision therefore apply to monopolistic situations of the kind referred to by the national court?

The French Government and PFRL argue, in their observations, that the external services for funerals are entrusted not to the State but to communes, which are entirely at liberty either to grant concessions to various undertakings or to operate the services directly or else to refrain from regulating that sector . It follows, in their view, that this state of affairs cannot be regarded as constituting a "State monopoly" within the meaning of Article 37 .

The question, therefore, is whether Article 37 applies not just to State monopolies but also to regional monopolies or to monopolies which are the responsibility of the local authorities .

In my view, the scope of Article 37 must not be restricted to monopolies operated or administered by the State authorities themselves .

I do not believe that the reference to "national" or "State" monopolies ( depending on which language version of the Treaty is used ) is to be interpreted restrictively . On the contrary, where a monopoly for which a public authority is responsible ( whether that authority forms part of the central or local administration of the State or constitutes another territorial, regional or local entity ) produces the effects envisaged by Article 37, it must come within the scope of the prohibition laid down by that article . A restrictive interpretation of Article 37, would, in view of the differences in the organization of the judicial and administrative systems of the Member States, lead to a situation in which that provision could easily be evaded by the creation of a large number of local monopolies, which would call in question the principles of the free movement of goods, competition and non-discrimination . ( 4 )

As the Court has emphasized in its case-law, "recourse to Member States' domestic law in order to limit the scope of provisions of Community law undermines the unity and effectiveness of that law and cannot, therefore, be accepted ". ( 5 )

Moreover, it was precisely in anticipation of the difficulties involved in determining the situations covered by the first subparagraph of Article 37 ( 1 ) that the second subparagraph thereof clarified the principles laid down in the first subparagraph, stating in particular that it was to apply to "monopolies delegated by the State to others ".

It does not seem to me, therefore, that the system of "national" monopolies - that is to say "public" or State monopolies in the broad sense - necessarily excludes those of municipal or "communal" origin since the reasons for which that system was adopted may arise in the case of monopolies of that kind .

That will clearly be the case if the monopoly or group of monopolies is organized in such a way as to permit the authorities of a Member State effectively (" in law or in fact ") to direct or to steer a given sector in a manner that creates disturbances in trade between the Member States .

That would occur, for example, in the event of an agreement between various municipalities or "communes", or between those local authorities and the central authorities, to steer in a given direction or to coordinate the management of a specific sector of the national economy . A particularly glaring instance of this would be where the group of local monopolies led to all or most of the concessions being granted to the same undertaking or to the same group of undertakings . However, the effects would be the same in the case of a large number of concession holders if the authorities bound by the agreement continued to exercise control over their activities .

Essentially, this amounts to applying to a situation of that kind the interpretation which the Court seems to have adopted in its judgment of 28 June 1983 in Case 271/81, ( 6 )which was concerned with the applicability of Article 37 to the territorial monopoly existing in France in favour of regional artificial insemination centres .

In that case, it would appear, the national territory as a whole was covered by the exclusive concession enjoyed by regional centres authorized by the State .

It must be said that, in this case, there is nothing to suggest that, amongst the approximately 5 000 communes ( accounting for 45% of the population of France ) which opted in favour of the system involving the grant to a private undertaking of a concession to provide the external services for funerals, there was any agreement or arrangement to control that sector ( not even amongst the approximately 2 800 communes which had entrusted that service to the same group of undertakings, namely the PFG group ).

However, there would not appear to be any reason why the interpretation should differ in the case of a monopoly limited to only part of the national territory, since Article 37 does not refer to any territorial dimension in the list of conditions for its application, which are defined instead by reference to the effects of the monopoly on intra-Community trade .

As the Court has explained, it follows from the provisions of Article 37 and from their structure that "the obligation laid down in paragraph ( 1 ) aims at ensuring compliance with the fundamental rule of the free movement of goods throughout the common market, in particular by the abolition of quantitative restrictions and measures having equivalent effect in trade between Member States", ( 7 )and at maintaining normal conditions of competition between the economies of the Member States . ( 8 )

In my view, a monopoly does not have to be treated differently according to whether it is established by the State authorities themselves or by the local or regional authorities . A monopoly limited to a region or a municipality may ultimately have the same effects on intra-Community trade as those produced by a State monopoly - particularly since extremely powerful regional monopolies may exist which are capable of exercising full control, throughout the area in which they hold sway, over all imports of certain goods from other countries .

In a case such as this - which, as we shall see more clearly in due course, is concerned essentially with territorial monopolies over services that are capable of exerting only an indirect influence on imports - the question which must be asked is in fact whether recourse to Article 37 is justified in order to ensure the removal of any discrimination in intra-Community trade or whether it is sufficient to examine the situation in the light of Article 30 of the Treaty concerning measures having an effect equivalent to quantitative restrictions .

That is so particularly since, as is clear from the case-law of the Court, commercial monopolies must be regarded as wholly incompatible with the Treaty, and must be "abolished" and not merely "adjusted", only in so far as they involve the grant of an exclusive right to import manufactured products, a right which constitutes in itself and in relation to Community exporters discrimination prohibited by Article 37 ( 1 ). ( 9 )

In this case, the documents before the Court would not appear to show that the monopoly over the external services for funerals involves the grant of exclusive import rights ( whether of urns, hearses or any other equipment used in connection with funerals ).

In those circumstances, all that is required for the objective pursued by Article 37 to be attained is for the monopoly to be adjusted so as to remove any possibility of discrimination between nationals of the various Member States as regards the conditions under which goods are procured and marketed . ( 10 )

However, for that obligation to be imposed on the basis of Article 37, the other conditions for the application of that provision must also be satisfied .

The first point to be considered is connected with the very concept of a commercial monopoly and the range of matters it covers .

In that regard, it must be borne in mind that in Costa v Enel the Court adopted a general definition of monopolies of a commercial character, referring to State monopolies and bodies which, first, have as their object transactions regarding a commercial product capable of being the subject of competition and trade between Member States, and secondly, play an effective part in such trade . ( 11 ) In accordance with that dictum, the Court came to the conclusion in a later judgment, Sacchi, that a monopoly in the provision of services ( in that case, televised commercial advertising ) was not covered by the provisions of Article 37 . ( 12 )

However, as the Cour de Cassation stated in its first question and as the Court has learned in the course of the proceedings, the external services for funerals comprise not only the provision of services but also the supply of certain goods ( in particular coffins and the attendant ornaments ) and the rental of other goods ( hearses and external hangings of the house of the deceased ), which may be imported from other Member States . Hence there is not just a monopoly in the provision of services and, even if that were the case, the services involved are provided through the use of marketable goods which may be of substantial value .

In that regard, it must be remembered that, in paragraph 10 of its judgment of 28 June 1983 in Coopérative du Béarn, the Court acknowledged that a monopoly over the provision of services may have an indirect influence on trade in goods between Member States and that an undertaking or group of undertakings which exercises a monopoly over the provision of certain services may contravene the principle of the free movement of goods if such a monopoly leads to discrimination against imported products as opposed to products of domestic origin .

Moreover, it must be borne in mind, as the Court has already pointed out in a judgment given in 1970, ( 13 )that "the application of Article 37 is not limited to imports or exports which are directly subject to the monopoly but covers all measures which are connected with its existence and affect trade between Member States in certain products, whether or not subject to the monopoly ".

Hence the applicability of Article 37 cannot in principle be ruled out in the case of a monopoly such as that in the external services for funerals .

It may apply in conjunction with provisions or measures concerning the supply of goods subject to the monopoly .

However, as it is not, strictly speaking, a monopoly over the importation of goods but a monopoly over services including the disposal of certain goods on the domestic market, any influence on trade between Member States will be indirect .

In my view, however, it is not apparent from the information available that the French system has the effect of giving rise to any discrimination of the kind prohibited by Article 37 .

As for the services not comprised in the external services for funerals ( such as flowers, funeral notices and marblework ), it is difficult to see how they could come within the scope of Article 37 since the provision of such services is unregulated and families may choose their supplier . Any restrictions on trade between the Member States in this area can stem only from the conduct of the undertakings themselves and not from the manner in which the monopoly is organized .

According to the second subparagraph of Article 37 ( 1 ), however, for the first subparagraph to be applicable, the influence exerted by the monopoly on intra-Community trade in goods must also be appreciable . The intention would appear to be to exclude the application of the prohibition to monopolies which have only an insignificant, negligible or simply marginal effect on trade between Member States .

However, that is a matter which the national court must assess on the basis of the specific circumstances of the case . Without prejudice to that assessment, it may be stated that the information available to the Court seems to be insufficiently conclusive in that regard : the system involving the grant of an exclusive concession covers a number of communes which account for only 45% of the population; the PFG group provides only part of the service in question; and the influence on trade is merely indirect . The considerations referred to by counsel for Mrs Bodson - both in the written observations and at the hearing - concerning the size of the PFG group and the extent to which it is established in France are merely of such a kind as to raise further questions regarding the influence which they might actually have on intra-Community trade .

I therefore suggest that, in answer to the first question, the Court declare that Article 37 of the EEC Treaty is capable of applying to a monopoly in the provision of funeral services, including the supply of certain goods, which is established by communes or other local authorities, only in so far as such a monopoly exerts an appreciable influence on trade between Member States by discriminating against imported products in favour of products of domestic origin .

3 . Second question : Article 90 of the EEC Treaty

The national court asks whether Article 90 of the EEC Treaty applies to an undertaking or to a group of undertakings to which a communal monopoly has been granted over the external services for funerals .

( a ) Article 90 ( 1 ) provides that "in the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in this Treaty, in particular to those rules provided for in Article 7 and Articles 85 to 94 ".

First of all it should be pointed out that, although forming part of the section of the Treaty entitled "Rules (( of competition )) applying to undertakings", Article 90 ( 1 ), as is clear from its wording, is addressed primarily to the Member States and not to undertakings .

Its aim is to prevent the public authorities from using the special relationship whereby certain kinds of undertakings are subordinated to them either to compel those undertakings to act in a manner prohibited by the Treaty or to grant them certain advantages which are incompatible with the common market .

As the Court has stated, ( 14 )"the reason for the inclusion in the Treaty of the provisions of Article 90 is precisely the influence which the public authorities are able to exert over the commercial decisions" of those undertakings .

For that reason, "Article 90 concerns only undertakings for whose actions States must take special responsibility by reason of the influence which they may exert over such actions ." ( 15 )

It is necessary, in substance, to ensure that action taken by the State ( meaning "the public authorities", as interpreted by the Court ) in relation to those undertakings does not have the purpose or effect either of restricting or distorting competition or of introducing distortions in the relationship between those undertakings and private undertakings .

However, as is clear from the reference to Article 7 ( prohibition of discrimination on grounds of nationality ) and from the use of the adverbial phrase "in particular", the provision in question is of general application since it covers any and every measure which is contrary to the rules of the EEC Treaty .

So far as the national court is concerned, the desire to seek an interpretation of Article 90 ( 1 ) is motivated primarily by the need to decide whether the undertakings holding a communal concession to provide the external services for funerals may be regarded as undertakings which enjoy "special or exclusive rights ".

It seems quite clear to me that those undertakings, to which the public authorities, in this case the communes, had lawfully granted the special right to provide, under the system of exclusive concessions, the external services for funerals within their territory, come within the scope of Article 90 ( 1 ).

In referring to the Member States, that provision does not exclude the grant of special or exclusive rights by communes, that is to say by local authorities of the State acting in the exercise of powers conferred upon them under public law . Similarly, the provision in question applies to the relationship between those territorial entities and the undertakings holding concessions .

Moreover, there is nothing in the Treaty to prevent a Member State, for considerations of public interest, of a non-economic nature, from removing some funeral services from the field of competition by conferring on one or more establishments or undertakings holding concessions an exclusive right to provide them . ( 16 )

"However, for the performance of their tasks these establishments (( or undertakings )) remain subject to the prohibitions against discrimination and, to the extent that this performance comprises activities of an economic nature, fall under the provisions referred to in Article 90 ." ( 17 )

Accordingly, it is for the national court to ascertain whether the external services for funerals ( provision of services, sale of coffins or rental of other goods ) which constitute "activities of an economic nature" are organized and operated in compliance with the applicable rules of the Treaty, in particular Articles 52, 59, 85 and 86 thereof .

As for Articles 85 and 86 of the Treaty, they form the subject-matter of the third question and I shall return to them in due course .

As regards Articles 52 and 59, which are referred to by the Commission in its observations, it is not apparent from the information available that a question concerning those provisions was raised in the main proceedings . Nor does the national court expressly refer to them . It is primarily for that court to determine whether, in the light of national legislation, the factual situation was such as to contravene the principles of freedom of establishment and freedom to provide services .

However, this point has not been disputed ( and the French Government itself has undertaken to demonstrate that the relevant legislation was not discriminatory ), hence it is unnecessary to deal with it specifically in the answers to be given, particularly since a purely domestic situation would appear to be at issue in the national proceedings, not affecting either the right of establishment or the freedom to provide services of any undertaking from another Member State .

( b ) I now turn to the question of the applicability of Article 90 ( 2 ), which provides as follows :

"Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in this Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them . The development of trade must not be affected to such an extent as would be contrary to the interests of the Community ."

It is therefore appropriate to raise the question whether undertakings holding a communal concession to provide the external services for funerals may be classified as "undertakings entrusted with the operation of services of general economic interest ".

The classification of the services provided by undertakings is primarily a matter for the national court on the basis of the applicable legislation . ( 18 )

However, it is clear from the documents before the Court that French legislation treats the external services for funerals as services in the general interest and has for that reason entrusted them exclusively to communes, some of which operate the services directly whilst others have given private undertakings a concession to provide them .

In the case of a concession, the documents point to the conclusion, first, that the services and products concerned are supplied for consideration ( a charge or a price ) in connection with an activity of an economic nature, and secondly that the activity is classified, on grounds purportedly relating to public hygiene, health and decency, as a public service which entails for the undertakings that operate it the imposition of various obligations and burdens resulting from its classification as a public service and subjects those undertakings to supervision on the part of the municipal authorities and to the imposition of penalties for any infringements ( see the contract granting a concession to PFRL, annexed to the latter' s observations ).

The burdens and the supervision referred to are connected with the "particular tasks assigned" to those undertakings by an act of the public authorities, with the result that the conditions which in the Court' s view have to be fulfilled for Article 90 ( 2 ) to apply to a private undertaking ( 19 )would appear to be satisfied .

It is clear, therefore, that those undertakings are subject to the rules of the EEC Treaty ( 20 )and that it is only when those rules may obstruct the performance of the particular tasks assigned to them that a situation comes into being which calls for an exception, and even then on condition that intra-Community trade is not affected in a manner which is contrary to the interests of the Community .

Any exception, if it is to be justified, must therefore be strictly interpreted ( 21 )and, as the Commission rightly notes in its observations, must be permitted only if those undertakings have no other technically feasible and economically attainable means of accomplishing their tasks .

There is nothing to indicate that in this case any situation of an exceptional nature is involved which justifies any departure whatever from the rules of competition .

Moreover, it is difficult to envisage any exception being established given that a large number of communes allow unrestricted freedom of competition with regard to the provision of the external services .

I therefore suggest that the Court answer the second question as follows :

"( a ) Article 90 ( 1 ) of the EEC Treaty imposes obligations on the Member States in their relations with public undertakings or with undertakings to which they grant special or exclusive rights, including undertakings to which communes entrust, in accordance with the law, the operation of the 'external services' for funerals;

( b ) Article 90 ( 2 ) of the EEC Treaty applies to undertakings holding a concession to provide the 'external services' for funerals, in so far as their activities are organized by the Member States in such a way as to enable the undertakings concerned to be regarded as undertakings entrusted with the operation of services of general economic interest, the exception laid down by that provision being permissible only in cases where those undertakings have no other technically feasible and economically attainable means of accomplishing their tasks ."

4 . Third question : Articles 85 and 86 of the EEC Treaty

The third question has been submitted by the national court only in the event of Article 90 being inapplicable to the undertaking or to the group of undertakings in question .

As I have reached the conclusion that Article 90 is applicable, the question does not, strictly speaking, call for an express answer . Clearly, as is apparent from the examination of the second question, Articles 85 and 86 must be complied with both by the State in its relations with the undertakings to which it has granted special or exclusive rights and by the undertakings which actually enjoy those rights . ( 22 )

There is a further point I wish to make, however, in response to specific enquiries from the national court .

In particular, the national court asks whether Article 85 is applicable to the contracts for a concession concluded in this area between the communes and the undertakings concerned .

In that regard, it is appropriate to point out that, even though Article 90 may be applicable, that does not mean that the said contracts as such fall within the scope of Article 85 . They are contracts concluded with a public authority, acting in that capacity, whilst Article 85 applies only to agreements between undertakings . The prohibitions laid down by Article 85 do not therefore apply to contracts for a concession to provide public services .

On the other hand, that provision would of course apply to any agreements in restraint of competition and capable of affecting trade between Member States which PFG and its subsidiaries might conclude with any other undertakings, and to any other practices pursued with the same objectives or results .

The most that can be said is that contracts for a concession which contain terms requiring or encouraging concession holders to act in a manner contrary to Article 85 would fall within the scope of Article 90 . ( 23 ) However, that would not appear to be so in the case of the contract granting a concession to PFRL .

Article 86, for its part, prohibits "any abuse by one or more undertakings of a dominant position, even if such abuse is encouraged by a national legislative provision ". ( 24 )

According to the actual wording of Article 86, the application of the prohibition which it lays down depends on fulfilment of various conditions, namely the existence of a dominant position in a substantial part of the common market, the abuse of that position by one or more undertakings and an effect on trade between Member States .

The Court has consistently held ( 25 )that the dominant position referred to in that article relates to "a position of economic strength enjoyed by an undertaking which enables it to hinder the maintenance of effective competition on the relevant market by allowing it to behave to an appreciable extent independently of its competitors and customers and ultimately of consumers ".

However, as the Court has also emphasized, ( 26 )a dominant position "does not preclude some competition, which it does where there is a monopoly or a quasi-monopoly, but enables the undertaking which profits by it, if not to determine, at least to have an appreciable influence on the conditions under which that competition will develop, and in any case to act largely in disregard of it so long as such conduct does not operate to its detriment ".

As we know, within the territory of each commune an undertaking holding a concession has an exclusive right to provide the external services and the PFG group has established itself in approximately two-thirds of the communes which have resorted to the system of granting concessions . In the other communes, either the municipal authorities operate the service themselves, or the service has been entrusted to other undertakings or else there is freedom of competition .

That situation evidently raises the problem of determining the relevant market for the purpose of ascertaining whether a dominant position exists .

As the Court has stated, ( 27 )"the conditions for the application of Article 86 to an undertaking in a dominant position presuppose the clear delimitation of the substantial part of the common market in which it may be able to engage in abuses which hinder effective competition and this is an area where the objective conditions of competition applying to the product in question must be the same for all traders ".

In that connection, it is possible to take account of either the territory of each commune viewed in isolation or the position of the PFG group in relation to the total number of communes or simply in relation to all of the communes which use the system of granting concessions . It remains to be determined, moreover, whether it is necessary to take account of the external services alone or of all the unregulated services as well .

In any event, the examination presupposes a perfect knowledge of a complex factual situation which, in these proceedings, only the national court can possess .

As the Court has pointed out, ( 28 )the existence of a dominant position derives in general from a combination of several factors which, taken separately, are not necessarily decisive .

From that point of view, both the internal structure of an undertaking and its competitive position on the market are important .

In particular, the fact that an undertaking holds a substantial share of the market constitutes evidence of the existence of a dominant position, ( 29 )but it is not necessarily a decisive or a constant factor, and its importance varies from market to market . ( 30 )

The Court has already stated, in particular, that where the market share of an undertaking is between 40% and 45% that does not necessarily permit the conclusion to be drawn that the undertaking automatically controls the market, and the market share must be determined having regard to the strength and number of the competitors . ( 31 )

Moreover, account must be taken of the relationship between the market shares of the undertaking concerned and of its competitors, the technological lead of an undertaking over its competitors, the existence of a highly-developed sales network and the absence of potential competition . ( 32 )

In any event, there must be a dominant position within a substantial part of the common market . In that regard, the Commission has raised the question whether or not the market on which PFG or its subsidiaries have an exclusive concession constitutes a substantial part of the common market . Only 9% of the total number of concessions granted by the communes which have adopted that modus operandi, that is to say 14% of France' s communes, are at issue . In any case, the Commission doubts whether 9% or 14% of a State' s communes are capable of constituting "a substantial part of the common market ".

That conclusion is of course challenged by counsel for Mrs Bodson on the ground that the PFG group controls approximately 50% of the French market as a whole and holds 85% of the contracts for an exclusive concession in towns with over 2 000 inhabitants .

Clearly, that is a question of fact which must be assessed by the national court .

For my part I would merely recall that, as the Court has consistently held, for the purpose of "determining whether a specific territory is large enough to amount to 'a substantial part of the common market' within the meaning of Article 86 of the Treaty the pattern and volume of the production and consumption of the ... product as well as the habits and economic opportunities of vendors and purchasers must be considered", ( 33 )matters which the Court is evidently unable to assess under the procedure provided for in Article 177 of the Treaty .

If the national court considers it necessary to obtain a further ruling on the interpretation of Community law in order to enable it to give judgment, it may, if appropriate, make a fresh request to the Court of Justice.(34 )

As for the requirement of an abuse of a dominant position, the Commission refers to the various complaints submitted to it against undertakings belonging to the PFG group . According to those complaints, PFG charges unfair prices and seeks to strengthen its position by frequently acquiring shareholdings in rival undertakings .

In the circumstances of this case, however, the rates charged by PFG' s subsidiary were allegedly set out in the general conditions themselves . If, therefore, the prices charged bore no reasonable relation to the economic value of the service provided, ( 35 )it would be difficult to attribute the resultant responsibility exclusively to PFG . ( 36 )In those circumstances, however, Article 90 of the Treaty may have been infringed by the Member State in question .

On the other hand, it must be stated that it is not just any acquisition of a shareholding that points to the existence of an abuse of a dominant position or of "conduct restricting competition ". ( 37 )

Having said that, I need only refer to the decisions of the Court concerning the general concept of the abuse of a dominant position . According to the Court, it is "an objective concept relating to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is weakened and which, through recourse to methods different from those which condition normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition ". ( 38 )

Once again, it is for the national court to ascertain the existence of abuse and for the Commission to remedy it within the limits of its powers ( Sacchi, paragraph 18 of the decision ).

Finally, as regards the effect on trade between Member States, which is the third condition for the application of Article 86, I would recall that, as the Court has consistently held, ( 39 )"in order to determine whether trade between Member States is capable of being affected by an abuse of a dominant position in the relevant market for the purposes of Article 86 of the Treaty, account must be taken of the consequences for the effective competitive structure in the common market ". So far as services are concerned, the Court emphasized in the same judgment that intra-Community trade may be affected if the activities of the undertaking in question are conducted "in such a way that their effect is to partition the common market and thereby to restrict the freedom to provide services which constitutes one of the objectives of the Treaty ". ( 40 )

In the case of communal monopolies over funeral services, it is for the national court to determine those effects . However, it must be acknowledged that it is not easy, at first sight, to envisage a situation in which those services may have an appreciable effect on intra-Community trade .

In my view, therefore, the answer to the question submitted by the national court should be that Article 85 of the Treaty is not applicable to the contracts whereby communes grant concessions to undertakings to provide the external services for funerals; however, Article 90 precludes the inclusion in such contracts of terms which require or encourage those undertakings to act in a manner contrary to Article 85 . Moreover, the Court should also state, in my view, that it is for the national court to establish the existence of an abuse of a dominant position within the meaning of Article 86 .

5 . Fourth question

In its final question, the national court wishes to ascertain whether the answers to the preceding questions differ according to the conduct of the undertakings in question with regard to the provision of services and the supply of goods which form part of the unregulated service provided by undertakers .

As we have seen, it is clear from the documents before the Court that, in those circumstances, the holder of a concession for the external services may provide those goods and services in competition with other undertakings . The conclusion can therefore be drawn that Articles 37 and 90 of the Treaty are inapplicable in that sphere .

With regard to the first of those provisions, the Court has already emphasized, ( 41 )moreover, that the rules contained in Article 37 concern only activities intrinsically connected with the specific function of a monopoly - namely its exclusive right - but are irrelevant to national provisions which have no connection with the exercise of that specific function and which apply in a general manner to the production and marketing of certain products, whether or not they are covered by the monopoly in question .

As regards Articles 85 and 86, their applicability will depend on an assessment of the facts, which is a matter for the national court . ( 42 )

6 . Conclusion

In the light of the foregoing considerations, I suggest that the Court answer the questions submitted by the Cour de Cassation as follows :

( 1 ) Article 37 of the EEC Treaty is capable of applying to a monopoly in the provision of funeral services, including the supply of certain goods, which is established by communes or other local authorities, only in so far as such a monopoly exerts an appreciable influence on trade between Member States by discriminating against imported products in favour of products of domestic origin .

( 2 ) ( a ) Article 90 ( 1 ) of the EEC Treaty imposes obligations on the Member States in their relations with public undertakings or with undertakings to which they grant special or exclusive rights, including undertakings to which communes entrust, in accordance with the law, the operation of the external services for funerals;

( b ) Article 90 ( 2 ) of the EEC Treaty applies to undertakings holding a concession to provide the external services for funerals, in so far as their activities are organized by the Member States in such a way as to enable the undertakings concerned to be regarded as undertakings entrusted with the operation of services of general economic interest, the exception laid down by that provision being permissible only in cases where those undertakings have no other technically feasible and economically attainable means of accomplishing their tasks .

( 3 ) ( a ) Article 85 of the EEC Treaty is not applicable to the contracts whereby communes grant concessions to undertakings to provide the external services for funerals; however, Article 90 precludes the inclusion in such contracts of terms which require or encourage those undertakings to act in a manner contrary to Article 85;

( b ) it is for the national court to establish the existence of an abuse of a dominant position by those undertakings within the meaning of Article 86 of the EEC Treaty .

( 4 ) When acting outside the scope of the exclusive concession to provide the external services for funerals, undertakings holding a concession are subject to the rules of the Treaty, in particular Articles 85 and 86 thereof, and the answers to the preceding questions are not affected by the fact that those undertakings also provide services and supply goods which are not subject to the monopoly .

(*) Translated from the Portuguese .

( 1 ) Judgment of 14 February 1980 in Case 53/79 ONPTS v Damiani (( 1980 )) ECR 273, paragraph 5 of the decision . See also the judgment of 26 September 1985 in Case 166/84 Thomasduenger v Oberfinanzdirektion (( 1985 )) ECR 3001, at p . 3009, paragraph 11 of the decision .

( 2 ) Judgment of 12 November 1969 in Case 29/69 Stauder v Ulm (( 1969 )) ECR 419; judgment of 8 June 1971 in Case 78/70 Deutsche Grammophon v Metro (( 1971 )) ECR 487 .

( 3 ) Judgment of 17 February 1976 in Case 45/75 REWE v Hauptzollamt Landau (( 1976 )) ECR 181, at p . 197, paragraph 24 of the decision .

( 4 ) See, to the same effect, the Opinion of Advocate General Roemer in Case 82/71 Pubblico Ministero v SAIL (( 1972 )) ECR 119, at p . 143 .

( 5 ) Judgment of 16 June 1987 in Case 118/85 Commission v Italy (( 1987 )) ECR 2599, paragraph 11 of the decision .

( 6 ) Société coopérative d' amélioration de l' élevage du Béarn v Mialocq (( 1983 )) ECR 2057, at p . 2072, paragraphs 6, 7 and 9 of the decision .

( 7 ) Judgment of 3 February 1976 in Case 59/75 Pubblico Ministero v Manghera (( 1976 )) ECR 91, at p . 100, paragraph 9 of the decision .

( 8 ) Judgment of 13 March 1979 in Case 91/78 Hansen v Hauptzollamt Flensburg (( 1979 )) ECR 935, at p . 956, paragraph 19 of the decision .

( 9 ) Manghera, supra, paragraph 12 of the decision .

( 10 ) Judgment of 7 June 1983 in Case 78/82 Commission v Italy (( 1983 )) ECR 1955, at p . 1967, paragraph 11 of the decision .

( 11 ) Judgment of 15 July 1964 in Case 6/64 Costa v Enel (( 1964 )) ECR 585 .

( 12 ) Judgment of 30 April 1974 in Case 155/73 Sacchi (( 1974 )) ECR 427, paragraph 10 of the decision .

( 13 ) Judgment of 16 December 1970 in Case 13/70 Cinzano v Hauptzollamt Saarbruecken (( 1970 )) ECR 1089, at p . 1095, paragraph 5 of the decision .

( 14 ) Judgment of 6 July 1982 in Joined Cases 188 to 190/80 France, Italy and the United Kingdom v Commission (( 1982 )) ECR 2545, at p . 2579, paragraph 26 of the decision .

( 15 ) Idem, paragraph 12 of the decision .

( 16 ) Sacchi, supra, at p . 429, paragraph 14 of the decision .

( 17 ) Idem, at p . 430 .

( 18 ) Judgment of 21 March 1974 in Case 127/73 BRT v SABAM and NV Fonior (( 1974 )) ECR 313, at p . 318, paragraph 22 of the decision .

( 19 ) BRT, supra, at p . 318, paragraphs 20, 21 and 23 of the decision; judgment of 14 July 1981 in Case 172/80 Zuechner v Bayerische Vereinsbank (( 1981 )) ECR 2021, at p . 2030, paragraph 7 of the decision; judgment of 2 March 1983 in Case 7/82 GVL v Commission (( 1983 )) ECR 483, at p . 504, paragraphs 31 and 32 of the decision .

( 20 ) Judgment of 6 July 1982 France, Italy and the United Kingdom v Commission supra, paragraph 12 of the decision .

( 21 ) BRT, supra, paragraph 12 of the decision .

( 22 ) See the judgment of 3 October 1985 in Case 311/84 CBEM v CLT and IPB (( 1985 )) ECR 3261, at p . 3275, paragraph 17 of the decision .

( 23 ) In that regard I would refer to the analogy with the judgment of 30 April 1986 in Joined Cases 209 and 213/84 Tarifas Aéreas (( 1986 )) ECR 1425, paragraphs 70 and 71 of the decision .

( 24 ) Judgment of 16 November 1979 in Case 13/77 INNO v ATAB (( 1977 )) ECR 2115, at p . 2145; judgment of 20 March 1985 in Case 41/83 Italy v Commission (( 1985 )) ECR 873 .

( 25 ) Judgment of 14 February 1978 in Case 27/76 United Brands v Commission (( 1978 )) ECR 207, at p . 277, paragraph 65 of the decision; judgment of 13 February 1979 in Case 85/76 Hoffmann-La Roche v Commission (( 1979 )) ECR 461, at p . 520, paragraph 38 of the decision; judgment of 11 December 1980 in Case 31/80 L' Oréal v De Nieuwe AMCK (( 1980 )) ECR 3775, at p . 3793, paragraph 26 of the decision; judgment of 9 November 1983 in Case 322/81 Michelin v Commission (( 1983 )) ECR 3461, at p . 3503, paragraph 30 of the decision; and judgment of 30 October 1985 in Case 311/84 CBEM v CLT and IPB (( 1985 )) ECR 3261, at p . 3275, paragraph 16 of the decision .

( 26 ) Hoffmann-La Roche, supra, at p . 520, paragraph 39 of the decision .

( 27 ) United Brands, supra, at p . 274, paragraph 44 of the decision .

( 28 ) United Brands, supra, at p . 277, paragraph 66 of the decision; Hoffmann-La Roche, supra, at p . 520, paragraph 39 of the decision .

( 29 ) Hoffmann-La Roche, supra, paragraph 41 of the decision .

( 30 ) Hoffmann-La Roche, supra, paragraph 40 of the decision .

( 31 ) United Brands, supra, at p . 282, paragraphs 109 and 110 of the decision .

( 32 ) Hoffmann-La Roche, supra, at p . 524, paragraph 48 of the decision .

( 33 ) Judgment of 16 December 1975 in Joined Cases 40 to 48, 50, 54 to 56, 111, 113 and 114/73 Suiker Unie and Others v Commission (( 1975 )) ECR 1663, at p . 1977, paragraph 371 of the decision .

( 34 ) CBEM, supra, at p . 3273, paragraph 10 of the decision .

( 35 ) United Brands, supra, at p . 306, paragraph 250 of the decision .

( 36 ) See the judgment of 30 November 1975 in Case 26/75 General Motors v Commission (( 1975 )) ECR 1367, at p . 1378, paragraphs 8 and 9 of the decision, from which it follows that the existence of a dominant position may not be presumed where a legal monopoly is combined with provisions designed to determine or restrict the charge imposed by way of consideration for the service provided .

( 37 ) Judgment of 17 November 1987 in Joined Cases 142 and 156/84 British-American Tobacco Company v Commission (( 1987 )) ECR 4487, paragraph 37 of the decision .

( 38 ) Hoffmann-La Roche, supra, at p . 541, paragraph 91 of the decision .

( 39 ) Judgment of 2 March 1983 in Case 7/82 GVL v Commission (( 1983))ECR 483, at p . 505, paragraphs 37 and 38 of the decision; see also the judgment of 25 October 1979 in Case 22/79 Greenwich Film Production v SACEM (( 1979 )) ECR 3275, at p . 3288; see also, with regard to the acquisition of shareholdings, the judgment of 6 March 1974 in Joined Cases 6 and 7/73 Commercial Solvents v Commission (( 1974 )) ECR 223, at p . 252, paragraph 33 of the decision .

( 40 ) In relation to Article 85 of the Treaty, see also the judgment of 12 December 1967 in Case 23/67 Brasserie de Haecht v Wilkin (( 1967 )) ECR 407, at p . 415 .

( 41 ) Judgment of 13 March 1979 in Case 119/78 Peureux v Services fiscaux de la Haute-Saône (( 1979 )) ECR 975, at p . 986, paragraph 28 of the decision; see also the judgment of 20 February 1979 in Case 120/78 REWE v Bundesmonopolverwaltung fuer Branntwein (( 1979 )) ECR 649, at p . 662, paragraph 7 of the decision .

( 42 ) On that point, I would merely refer to CBEM, supra, at pp . 3276-8, with regard to the abuse of a dominant position in relation to ancillary activities which could be carried on by another undertaking .

Translation