C-286/81

JUDGMENT OF IS. 12. 1912 — CASE 216/11

accepted in so far as those rules, intended for, another Member Sute being applicable to domestic products of national legislation which prohibits and imported products without the offering or giving, for sales distinction, are justifiable as being promotion purposes, of free gifts in necessary in order to satisfy the form of books to purchasers of an mandatory requirements relating, encyclopaedia and requires, for the inter alia, to consumer protection and application of an exception to that fair trading. prohibition, the existence of a relationship between the consumption 3. Articles 30 and 34 of the EEC Treaty or use of the free gift and the product do not preclude the application by a constituting the basis for the offering Member State to products from, or of the gift.

In Case 286/81

REFERENCE to the Court under Article 177 of the EEC Treaty by the Economische Kamer [Commercial Chamber] of the Gerechtshof [Regional Coun of Appeal], Amsterdam, for a preliminary ruling in the criminal proceedings pending before that court against

OOSTHOEK'S UITGEVERSMAATSCHAPPIJ BV

on the interpretation of Articles 30, 34 and 36 of the EEC Treaty, in relation to the Netherlands legislation restricting the offering of gifts for sales promotion purposes,

Facts and Issues

The facts of the case, the course of the Since 1974, in order to promote sales, procedure and the observations sub- Oosthoek has, in its newspaper and mitted under Article 20 of the Protocol magazine advertisements and advertising on the Statute of the Court of Justice of brochures, offered as a free gift to sub- the EEC may be summarized as follows: scribers to an encyclopaedia a dic- tionary, a universal atlas or a small encyclopaedia, depending on the value of the purchase. I — Facts and procedure

2. Oosthoek's Uitgeversmaatschappij On appeal from that decision, the (hereinafter referred to as "Oosthoek") Commercial Chamber of the Gerechts- markets encyclopaedias in the Dutch hof, Amsterdam, by judgment of 9 language throughout the Dutch-speaking October 1981 rejected the arguments territory comprising the Netherlands, the based on national law which Oosthoek Dutch-speaking part of Belgium and a had put forward. Since Oosthoek had small part of the North-West of France. also claimed that the Wet Beperking Among those encyclopaedias, "De Grote Cadeaustelsel 1977 was incompatible Oosthoek" and "De Grote Summa" are with the provisions of Articles 30, 34 and typeset and manufactured in the 36 of the EEC Treaty, the Netherlands Netherlands and "De Grote Nederlandse court considered that the Court of Larousse" is typeset and produced by a Justice should be requested to give a company affiliated to Oosthoek in preliminary ruling on the following Belgium. question:

JUDGMENT OF IS. 12. 1982 — CASE 286/81

4. The order making the reference was received at the Court Registry on 1. Observations of Oosthoek 3 November 1981. Oosthoek emphasizes in the first place that apart from the flow of trade In accordance with Article 20 of the resulting from the fact that its Protocol on the Statute of the Court encyclopaedias are partly manufactured of Justice of the EEC, written obser- in the Netherlands and partly in vations were submitted by Oosthoek, Belgium, there is not insignificant represented by Ch. Gielen of the frontier trade as a result of purchases Amsterdam Bar; the Government of the made direct in the Netherlands by Kingdom of the Netherlands, rep- Belgian residents. resented by the Secretaris-Generaal, Ministry for Foreign Affairs, F. Italiener; Oosthoek and its competitors offer the Government of the Federal Republic books as free gifts because a publisher of Germany, represented by its Agent can produce such gifts cheaply itself and Martin Seidel; the Government of the purchasers are pleased to receive a book Kingdom of Belgium, represented by the as a gift. Practical experience acquired Director of Administration, Ministry for over many years shows that books are Foreign Affairs, Foreign Trade and an excellent means of promoting Cooperation with Developing Countries, encyclopaedias. W. Collins; the Government of the Kingdom of Denmark, represented by Laurids Mikaelsen of the Directorate of The Wet Beperking Cadeaustelsel 1977 External Economic Relations, Ministry made the conditions relating to the for Foreign Affairs, and the Commission system of free gifts in the Netherlands of the European Communities, rep- stricter. Oosthoek's promotion scheme resented by Richard Wainwright, a was held in the course of the main member of its Legal Department, acting proceedings to be in breach of those

stricter conditions on the grounds that difference between the Netherlands the gifts in question were not "of the legislation and the Belgian legislation same type" as the encyclopaedias and entails the consequence, as far as their use moreover was "not related to Oosthoek is concerned, that it is them". In that respect, it was considered impossible to offer a book as a free gift necessary that in the great majority of when an encyclopaedia is purchased even cases where the general encyclopaedia though that means of promotion is auth- was consulted the gift should be orized in Belgium. consulted at the same time, and satis- faction of that requirement had not been It is contrary to the principle of the free established. movement of goods tor a producer to be obliged, within a territory for which his product is specifically intended, to have Oosthoek had been unable to adapt its recourse to different systems of sales sales promotion system to the stricter promotion. Exports are achieved more conditions now in force regarding free effectively and more economically if gifts because of the rules on the sales may be promoted by means of a marketing of books in the Netherlands uniform advertising campaign.

The with the strict conditions in force in the requirement in question does not serve Netherlands, it would also have-to apply the interests of the consumer in the true them in Belgium because to prepare sense of the term and is not necessary differing sets of advertising material to avoid distortion of competitive would be onerous. Moreover, if the relationships. advertising material contained all the information required by the Netherlands law, it would be less attractive from the In conclusion, Oosthoek is of the commercial point of view. opinion that the obstacle to trade deriving from the fact that it cannot avail itself, for the sale of encyclopaedias, of Although Belgian legislation also the exceptions provided for by the contains restrictions on the free gifts Netherlands legislation merely because system, the means of promotion used by the gifts concerned do not exhibit any Oosthoek falls within an exception direct relationship with the encyc- provided for by that legislation. The lopaedias from the point of view of their

2. Observations of the Netherlands Government The Wet Beperking Cadeaustelsel contributes to the ordered functioning of trade and falls within the category of laws which, with a view to protecting the consumer, are intended to ensure fair The Netherlands Government states that competition. Other Member States also the Wet Beperking Cadeaustelsel 1977 have legislation laying down conditions pursues two objectives, namely to relating to gifts and the Wet Beperking preclude the distortion of normal Cadeaustelsel conforms fully with the competitive relationships caused by objectives in the general interest which undertakings which offer products free are pursued by the Treaty. of charge or at a very low price with a view to promoting the sale of their own range of goods, and also to ensure greater transparency of the market. Pursuant to Article 3 of the Wet As regards compatibility with Com- Beperking Cadeaustelsel 1977, the munity law, the Netherlands Govern- prohibition of the offering of products as ment is of the opinion that in view of the free gifts would be inoperative if the circumstances of the case Article.34 of undertaking in question had offered the the EEC Treaty has no rôle to play in consumer products similar to the gift for that respect. a period of at least three months immediately preceding the gift offer, if it continued to offer those products for sale during the period of the gift offer, if Nor does the Law in question constitute it clearly offered the purchaser the a measure contrary to Article 30. It possibility of receiving instead of the applies both to national products and to product a sum of money representing not imported products and makes no less than half the price at which the gift distinction between trade within the was offered for sale or if it indicated in country and import or export trade. If, all publications relating to the gift however, application of the Law were campaign the sale price of that product, likely to influence inter-State trade, that the manner in which it could be obtained influence would be ascribable solely to in the context of the sale and also the the disparity between the applicable sum of money referred to above and the legislation in the various Member States. way in which it could be obtained. It does not limit the import or sale of the Article 4 of the Law provides for certain products as such. exceptions to the prohibition, including the offering of gifts to retailers, the offering of gifts at certain times in accordance with general or local usage In the absence of any applicable and the offering as gifts of articles of low Community provisions the Member

States each retain the power to regulate free of charge when encyclopaedias were the marketing of goods within their own purchased in Belgium unless those items territory. It is only in cases where satisfied those conditions. national rules of that kind might result in obstacles to intra-Community trade that it is appropriate to consider whether or not they may be justified for the reasons set out in Article 36 of the EEC Treaty 4. Observations of the German or whether they are justified by the Government mandatory requirements of fairness in commercial transactions and protection of the consumer. Such an examination, which moreover would in this case In the view of the German Government necessarily lead to the conclusion that a prohibition such as the one in question the rules in question were justified, is does not fall within the scope of Article unnecessary here. 30 of the EEC Treaty. It applies without distinction to national and foreign goods, regardless of their origin, and relates only to the method of marketing. 3. Observations of the Belgian Intra-Community trade is possible Government subject only to the reservation that it is prohibited to describe a product as a gift when two products are offered together. Such rules do not have the effect of The Belgian Government states that restricting imports. pursuant to Article 35 of the Belgian Law on Trade Practices of 14 July 1971 (Moniteur Belge, 30 June 1971), the offering of products or services, free or Even if Article 30 of the EEC Treaty did otherwise, to the consumer at the time of apply to sales promotion methods, the and in conjunction with the sale of other rules relating to fair trading and products or services is prohibited; the consumer protection justify methods offering of a product whose purchase is such as the one in question, by virtue of subject to the purchase of another Article 36 of the EEC Treaty. There has product (the main product) is prohibited. been no harmonization of laws regarding Exceptions to that rule are allowed. gifts or unfair competition and there are Article 37 (5) of the Law allows the no Community rules relating thereto; offering, free of charge and in obstacles caused by disparities in the conjunction with the purchase of a main legislation of the various Member States product, "of objects bearing an relating to the marketing of goods must advertising inscription which is clearly therefore be accepted in so far as such visible and indelible, which are not provisions are necessary to satisfy the marketed as such, provided that the overriding need to safeguard public purchase price paid by the person health and ensure fair trading or the offering them does not exceed 5% of the protection of consumers. The offering of sale price of the main product or of the a gift diverts the customer's attention service in connection with which they are and has the result of distorting given". competition based on commercial rivalry which should have as its focus the quality and value of the goods. Gifts dissimulate the price, giving the impression that Oosthoek would not therefore be something is being obtained for nothing, permitted to offer an atlas or dictionary

5. Observations of the Danish Government The Danish Government suggests that the question referred to the Court be answered to the effect that national legislation, designed to limit sales The Danish Government sutes that accompanied by gifts is not contrary to Article 6 (1) of Danish Law No 297 of the rules of Community law on the free 14 June 1974 relating to the marketing movement of goods even though sales of products and services prohibits the with gifts may be permitted in another offering of gifts in connection with the Member State. sale of goods or services to consumers. That prohibition has existed in Danish law since 1912. It has a twofold objective, namely the protection of consumers and the protection of 6. Observations of the Commission competing traders. In general, gifts are presented so as to give the consumer the impression that they cost nothing, whereas they are in fact taken into The Commission first gives brief details account in the calculation of the price of of the legislation regarding gifts in force the main item. The addition or a gift in the Member States and points out that therefore leads the consumer into error in all except the United Kingdom, and deprives him of the opportunity to Ireland and Greece there are extremely make price comparisons. complicated, heterogeneous and contro-

OOSTHOEK'S UITGEVERSMAATSCHAPPIJ

JUDGMENT OF IS. 12. IOT2 — CASE 286/81

Since the number of judges able to take by order of 16 November 1982. At the pan in the deliberations was no longer sitting on 9 December 1982, the parties sufficient to enable the Court to give a were given an opportunity to present valid decision pursuant to Article 15 of further oral argument. The Advocate the Statute of the Court of Justice of the General delivered a further Opinion at EEC, the oral procedure was re-opened the sitting on the same day.

Decisioni

1 By judgment of 9 October 1981 which was received at the Court on 3 November 1981 the Gerechtshof [Regional Court of Appeal], Amsterdam, referred to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Articles 30 and 34 of the EEC Treaty in order to enable it to determine whether Netherlands legislation intended to restria the freedom to offer or give free gifts within the framework of a commercial activity was compatible with Community law.

2 The question was raised in proceedings brought by the Netherlands company Oosthoek's Uitgeversmaatschappij BV (hereinafter referred to as "Oosthoek") against a judgment of the Arrondissementsrechtbank [District Court], Utrecht, imposing three fines of HFL 85 each on Oosthoek for infringement of the Wet Beperking Cadeaustelsel 1977 [Law on the restriction of free gift schemes].

3 Article 2 (1) of that Law prohibits the offering or giving of products as free gifts within the framework of a commercial activity. There are, however, several exceptions to that prohibition, in particular that provided for in Article 4 (3) of the Law which permits a free gift to be offered or given provided that it is usually used or consumed at the same time as all the products in respect of the purchase of which it is offered or given (a criterion usually described as related consumption or use — in Dutch "consumptiever- wantschap"), if it bears a mark which is indelible and clearly visible when it is used in the normal way and which clearly shows that it is intended for advertising purposes, and if its value does not exceed 4% of the sale price of all the products in respect of the purchase of which it is offered or given.

"Is it compatible with Community law (especially with the principle of the free movement of goods) for a publisher who, by offering free goods in the form of books, seeks to promote sales of various reference works, which are intended for the entire Dutch-speaking area and originate partly in the Netherlands and partly in Belgium, to have to discontinue in the Netherlands that method of promoting sales, which is allowed in Belgium, owing to the Netherlands Wet Beperking Cadeaustelsel solely because that Law requires a relationship to exist between the consumption or use of the free gift and the product which constitutes the basis for the offering of the free gift?"

JUDGMENT OF 15. 12. 1982 — CASE 286/81

7 In its question, the national court seeks in substance to ascertain whether Articles 30 and 34 of the EEC Treaty preclude the application by a Member State to products from, or intended for, another Member State of national legislation which prohibits the offering or giving, for sales promotion purposes, of free gifts in the form of books to purchasers of an encyclopaedia and requires, for the application of an exception to that prohibition, the existence of a relationship between the consumption or use of the free gift and the product sold.

g In their observations, the Netherlands, German and Danish Governments express the view, in limine, that national legislation such as that at issue has no particular impact on intra-Community trade and does not fall within the scope of Articles 30 and 34 of the EEC Treaty.

9 In that regard, it must be stated that the application of the Netherlands legislation to the sale in the Netherlands of encyclopaedias produced in that country is in no way linked to the importation or exportation of goods and does not therefore fall within the scope of Articles 30 and 34 of the EEC Treaty. However, the sale in the Netherlands of encyclopaedias produced in Belgium and the sale in other Member Sutes of encyclopaedias produced in the Netherlands are transactions forming part of intra-Community trade. In the view of the question raised by the national court, it is therefore necessary to determine whether provisions of the type contained in the Netherlands legislation are compatible with both Article 30 and Article 34 of the EEC Treaty.

H As regards the restrictions on imports referred to in Article 30 of the EEC Treaty, it must be remembered that the Court has repeatedly held, since its judgment of 20 February 1979 in Case 120/78 Rewe [1979] ECR 649, that in the absence of common rules relating to marketing, obstacles to movement within the Community resulting from disparities between national rules must be accepted in so far as those rules, being applicable to domestic products and imported products without distinction, are justifiable as being necessary in order to satisfy mandatory requirements relating, inter alia, to consumer protection and fair trading.

,5 Legislation which restricts or prohibits certain forms of advertising and certain means of sales promotion may, although it does not directly attect imports, be such as to restria their volume because it affects markeung opportunities for the imported products. The possibility cannot be ruled out that to compel a producer either to adopt advertising or sales promotion schemes which differ from one Member State to another or to discontinue a

JUDGMENT OF IS. 12. 1982 — CASE 286/81

scheme which he considers to be particularly effective may constitute an obstacle to imports even if the legislation in question applies to domestic products and imported products without distinction.

u It is therefore necessary to consider whether a prohibition of a free gift scheme, such as that contained in the Netherlands legislation, may be justified by requirements relating to consumer protection and fair trading.

i7 In that regard, it is clear from the evidence before the Court that the Wet Beperking Cadeaustelsel 1977 pursues a twofold objective which is, in the first place, to prevent the disruption of normal competition by undertakings which offer products as free gifts or at very low prices with a view to promoting the sale of their own range of goods and, secondly, to protect consumers by the attainment of greater market transparency.

Costs

22 The costs incurred by the Netherlands Government, the Government of the Federal Republic of Germany, the Danish Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT,

in answer to the question referred to it by the Gerechtshof, Amsterdam, by judgment of 9 October 1981, hereby rules:

Articles 30 and 34 of the EEC Treaty do not preclude the application by a Member State to products from, or intended for, another Member Sute of national legislation which prohibits the offering or giving, for sales promotion purposes, of free gifts in the form of books to pur- chasers of an encyclopaedia and requires, for the application of an

Deputy Registrar President

O P I N I O N O F M R ADVOCATE GENERAL VERLOREN VAN T H E M A A T DELIVERED O N 22 SEPTEMBER 1982 « AND C O N F I R M E D A T T H E SITTING O N 9 DECEMBER 1982

Air President, Gerechtshof [Regional Court of Appeal], Members of the Court, Amsterdam, in such a way as to avoid any consequences which conflict with the purport of the extensive case-law of the Court which is relevant to this case. I 1. Introduction shall begin by giving a brief summary of those complications. 1.1. Summary of the problems involved This case shows once again that the point of contact between cartel (a) It appears from the written obser- agreements, divergent legislation of the vations (p. 10) submitted in this case by various Member Sutes on marketing and Oosthoek's Uitgeversmaatschappij BV Community law is an area in which thereinafter referred to as "Oosthoek"] pitfalls, obstacles, snares and traps that it has fallen into a trap presented by abound. In view of certain of those the Vereniging ter Bevordering van de complications, it is not easy to answer Belangen des Boekhandels [Association the question referred to the Court by the for the Promotion of the Interests of

I — Translated from the Dutch.