French Republic v Commission of the European Communities.
Date: 1991-03-19
12 In allowing derogations to be made from the general rules of the Treaty on certain conditions, that provision seeks to reconcile the Member States' interest in using certain undertakings, in particular in the public sector, as an instrument of economic or fiscal policy with the Community' s interest in ensuring compliance with the rules on competition and the preservation of the unity of the Common Market.
14 Inasmuch as it makes it possible for the Commission to adopt directives, Article 90(3) of the Treaty empowers it to lay down general rules specifying the obligations arising from the Treaty which are binding on the Member States as regards the undertakings referred to in Article 90(1) and (2).
15 Accordingly, the parties' pleas in law and arguments must be considered in the light of the question whether in this case the Commission has remained within the bounds of the legislative power thus conferred upon it by the Treaty.
II - Misuse of procedure
21 As far as the first argument is concerned, it must be held in the first place that the supervisory power conferred on the Commission includes the possibility of specifying, pursuant to Article 90(3), obligations arising under the Treaty. The extent of that power therefore depends on the scope of the rules with which compliance is to be ensured.
22 Next, it should be noted that even though that article presupposes the existence of undertakings which have certain special or exclusive rights, it does not follow that all the special or exclusive rights are necessarily compatible with the Treaty. That depends on different rules, to which Article 90(1) refers.
25 It must therefore be held that the subject-matter of the power conferred on the Commission by Article 90(3) is different from, and more specific than, that of the powers conferred on the Council by either Article 100a or Article 87.
26 It should also be noted that, as the Court held in Joined Cases 188 to 190/80 (France, Italy and United Kingdom v Commission [1982] ECR 2545, at paragraph 14), the possibility that rules containing provisions which impinge upon the specific sphere of Article 90 might be laid down by the Council by virtue of its general power under other articles of the Treaty does not preclude the exercise of the power which Article 90 confers on the Commission.
33 With regard to exclusive importation and marketing rights, it should be borne in mind that, as the Court has consistently held (see, in particular, the judgment in Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837, at paragraph 5), the prohibition of measures having an effect equivalent to quantitative restrictions laid down in Article 30 of the Treaty applies to all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade.
37 With regard to the question whether such rights can be justified, it should be noted that in Article 3 of the contested directive the Commission specified the extent and the limits of the withdrawal of special and exclusive rights so as to take into account certain requirements such as those listed in Article 2(17) of Council Directive 86/361, namely user safety, safety of employees of public telecommunications network operators, protection of public telecommunications networks from harm and interworking of terminal equipment in justified cases.
38 For its part, the French Government has not challenged Article 3 of the contested directive, nor has it argued that there are other essential requirements which the Commission should have complied with in this case.
39 In those circumstances, the Commission was right to consider exclusive importation and marketing rights in the telecommunications terminal sector incompatible with Article 30 of the Treaty.
45 As far as special rights are concerned, it should be noted that neither the provisions of the directive nor the preamble thereto specify the type of rights which are actually involved and in what respect the existence of such rights is contrary to the various provisions of the Treaty.
51 It should be observed that a system of undistorted competition, as laid down in the Treaty, can be guaranteed only if equality of opportunity is secured as between the various economic operators. To entrust an undertaking which markets terminal equipment with the task of drawing up the specifications for such equipment, monitoring their application and granting type-approval in respect thereof is tantamount to conferring upon it the power to determine at will which terminal equipment may be connected to the public network, and thereby placing that undertaking at an obvious advantage over its competitors.
52 Consequently, the Commission was justified in seeking to entrust responsibility for drawing up technical specifications, monitoring their application and granting type-approval to a body independent of public or private undertakings offering competing goods and/or services in the telecommunications sector.
3. Legality of Article 7 of Directive 88/301 (termination of leasing or maintenance contracts)
55 In that regard, it should be noted that Article 90 of the Treaty confers powers on the Commission only in relation to State measures (see paragraph 24) and that anti-competitive conduct engaged in by undertakings on their own initiative can be called in question only by individual decisions adopted under Articles 85 and 86 of the Treaty.