WRITTEN QUESTION P-2752/99

by Gerhard Hager (NI) to the Commission

(7 January 2000)

Subject: Fixing of book prices

The Commission is considering a complaint about the German-Austrian agreement on the fixing of book prices.

I would therefore like to ask the Commission:

1. Does it believe that, given the protective function which competition is meant to perform, the current cross-border fixing of book prices complies with the requirement that the European Union contribute to the flowering of the cultures of the Member States (Article 151 of the EC Treaty) and that this requirement should be rated higher than problems connected with competition law?

2. If not, does it consider national arrangements for the fixing of book prices which include a set of rules that take account of reimports to be compatible with Community law?

Answer given by Mr Monti on behalf of the Commission

(27 January 2000)

In 1993 German and Austrian publishers notified the Commission of cross-border arrangements for the fixing of book prices in Germany and Austria. Following this notification, various complaints were lodged against the said arrangements. With a view to adopting a decision, the Commission carried out a wide-ranging investigation into the book business in the Member States over a number of years. Various sources were consulted, including publishers and booksellers in Germany and Austria, and a market analysis was conducted. In the course of the investigation, the notifying parties and the complainants in the current proceedings were also able to submit extensive information about the situation on the book market in the Community.

The Commission has not yet completed its analysis of the cases in question and will not therefore anticipate its decision in the current proceedings. It can nevertheless answer the general questions raised by the Honourable Member.

1. The Commission would point out that any decision it adopts can be taken only within the legal framework laid down by the EC Treaty, as interpreted by the Community courts. Within that framework, when it comes to examining cross-border book price-fixing systems, the relevant provisions in force are those laid down in Article 81 (formerly Article 85) et seq. of the EC Treaty and the cultural clause in Article 151(4) (formerly Article 128(4)) of the EC Treaty. They permit a thorough case-by-case analysis in which all the relevant factors, including cultural factors, can be taken into account. The decisions that the Commission has already taken in this area and the related case law(1) are illustrative of this approach.

Pursuant to Article 151(4) of the EC Treaty, the Commission is required to take cultural aspects into account in its action under other provisions of the EC Treaty in order, among other things, to respect and promote the wide variety of cultures existing in the Community. When the

Commission applies the EC Treaty rules on competition, it therefore considers, in a positive spirit, whether an agreement or a practice has cultural objectives and contains cultural provisions which are actually put into practice and may justify imposing restrictions on competition commensurate with the objectives in mind. These questions are considered with a view to the possible application of Article 81(3) of the EC Treaty, which lays down that the Commission may exempt restrictive agreements or practices the advantages of which outweigh the disadvantages as regards consumers, provided that they simply impose the restrictions indispensable to the attainment of their objectives and do not eliminate competition in respect of a substantial part of the products in question. The Commission also takes account of any alterations which the parties may make to such agreements or practices. Cultural benefits may constitute advantages for consumers under this rule. Lastly, under Article 151(4) of the EC Treaty, a cross-border book price-fixing agreement cannot be exempted unless the agreement or practice in question satisfies all the conditions laid down in Article 81(3) of the EC Treaty, and this presupposes, among other things, that the cultural benefits adduced are clearly shown to exist.

2. National arrangements for fixing book prices may be based on national legislation or on agreements between companies, in this case between publishers and booksellers. Different provisions of the EC Treaty apply to these two possible approaches. Legislation-based systems have to be examined in the light of Article 28 (the former Article 30), whereas agreements between companies have to be compatible with Article 81. In both cases, of course, the past rulings of the Court of Justice must be followed.

Where arrangements based on legislation are concerned, any Member State may adopt such legislation provided it is compatible with the principle of the free movement of goods as laid down in the EC Treaty. This is a matter for the national authorities.

In this context account must be taken of the Court of Justice's judgment of 10 January 1985 in Case 229/83 Leclerc v Au blé vert (1985 ECR 1), where the Court ruled that in the context of national legislation fixing the price of books, Article 28 of the Treaty prohibited provisions requiring the retail price fixed by the publisher to be applied to books published in the Member State concerned and re-imported following exportation to another Member State, unless it is established that those books were exported for the sole purpose of re-importation in order to circumvent the legislation in question.

National price-fixing arrangements based on agreements between companies are compatible with the Community competition rules if they do not significantly affect trade between Member States. In such situations Article 81 does not apply.

(1) Cf. the Commission's decisions of 25 November 1981 in VBBB and VBVB (OJ L 54, 25.2.1982) and of 12 December 1988 in Publishers Association Net Book Agreements (OJ L 22, 26.1.1989) and the judgments of the Court of Justice of 17 January 1984 in Joined Cases 43 and 63/82 VBVB and VBBB v Commission [1984] ECR 17, of the Court of First Instance of 9 July 1992 in Case T-66/89 Publishers Association v Commission [1992] ECR II-1995 and of the Court of Justice of 17 January 1995 in Case C-360/92 P Publishers Association v Commission [1995] ECR I-23.