WRITTEN QUESTION P-1989/99

by Norbert Glante (PSE)to the Commission

(28 October 1999)

Subject: Commission measures to prepare a decision on price-fixing for books

In its resolution (B4-0991/98) of 20 November 1998 on common book price-fixing across borders(1), the European Parliament made the following decisions, inter alia:

2. Calls on the Commission, before a final decision is taken concerning the procedures outstanding, to establish reliable and comparable indicators and information on the overall situation and the situation in sections of the book markets in individual Member States and language areas of the EU;

4. Calls on the Commission to organise a public hearing, with the participation of representatives of the cross-border book trade, on the issue of price-fixing as well as on a review of the meaning of Article 128(4) of the EC Treaty and on other aspects relating to competition, culture and consumer policy;

5. Calls on the Commission to adapt its Community policy on the book-price agreement to the cultural requirements referred to above, especially in cross-border linguistic areas, and to authorise the continuation of existing systems of fixed book prices, especially in the same linguistic areas;

6. Calls for binding rules to be laid down which will enable not only national systems of fixed book prices but also bilateral agreements on fixed book prices within single linguistic areas to be declared legal and not in breach of the rules on competition.

What steps and measures has the Commission taken to satisfy these demands made by the European Parliament?

(1) OJ C 379, 7.12.1998, p. 391.

Answer given by Mr Monti on behalf of the Commission

(15 November 1999)

As regards paragraph 2 of Parliament's resolution (B4-0991/98) on the book price-fixing arrangement between Germany and Austria, the Commission has carried out over a number of years a wide-ranging investigation into the book sector in the Member States, consulting a variety of sources including publishers and booksellers in Germany and Austria, and has conducted a market analysis, the aim being to adopt a Commission decision on the notification submitted to it by German and Austrian publishers and on the various complaints received. 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 therefore has all the indicators and the reliable information it needs to determine its definitive position in the matter.

As regards paragraph 4, the Commission would remind the Honourable Member that on 16 and 17 September 1998, as the procedural arrangements in force provide(1), it held a hearing of the parties, complainants and other third parties, especially writers' representatives, in order to ensure that the procedural rights of the parties concerned were fully respected.

As regards paragraphs 5 and 6, 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(2) 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) (formerly Article 85(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.

(1) Cf. Article 1 of Council Regulation No 17 of 6 February 1962 First Regulation implementing Articles 85 and 86 of the Treaty (OJ 13, 21.2.1962), as last amended by Regulation (EC) No 1216/1999 (OJ L 148, 15.6.1999) and Commission Regulation No 1999/0063/EEC of 25 July 1963 on the hearings provided for in Article 19(1) and (2) of Council Regulation No 17 (OJ L 127, 20.8.1963); Regulation No 1999/0063/EEC has since been repealed and replaced by Commission Regulation (EC) 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty (OJ L 354, 30.12.1998).

(2) 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.