C-198/86

CONRADI v DIRECTION DE LA CONCURRENCE ET DES PRIX DES HAUTS-DE-SEINE

OPINION OF MR ADVOCATE GENERAL DA C R U Z VILAÇA delivered o n 2 July 1987 *

Mr President, by the tribunal correctionnel, Nanterre, of Members of the Court, infringing certain rules of French law governing the pursuit of retail trade acti- 1 . I — The cour d'appel, Versailles, has vities. That court held that the business referred to the Court six questions for a carried on by those companies was not preliminary ruling on the interpretation of restricted to wholesale trade but also Article 2 (2) of Council Directive constituted, in various respects, a retail 64/223/EEC of 25 February 1964, which trade activity. was adopted during the transitional period, for the purpose of abolishing restrictions on 4. The accused lodged an appeal with the freedom of establishment and on freedom to cour d'appel, Versailles, which considered it provide services in respect of wholesale necessary to ascertain whether the activities trade activities. carried on by the Metro companies could be described as wholesale trade activities, 2. Article 2 (2) of the directive defines within the meaning of Article 2 (2) of wholesale trade as follows: Directive 64/223/EEC and referred to the Court for a preliminary ruling under Article '2 For the purposes of this directive, 177 of the EEC Treaty the questions which "wholesale trade activities" means acti- are set out in full in the R e p o n for the vities pursued by any natural person, or Hearing. company or firm, who habitually and by way of trade buys goods in his own 5. I I I — In its written observations, the name and on his own account and resells Commission doubted that Directive such goods to other wholesale or retail 64/223/EEC was applicable in this case. In traders, or to processors, or to its view, the definition of wholesale trade professional, trade or large-scale users. activities in Article 2 (2) of that directive seeks merely to delimit ratione materiae the The goods may be resold either in the scope of the directive which relates, as you unaltered state or after such processing, know, to the attainment of freedom of treatment or preparation for sale as is establishment and freedom to provide customary in wholesale trade'. services.

applicable 1 since the end of the transitional a case involving the same companies. period, and their effectiveness or their scope Although it acknowledged the need to are not limited by provisions such as those distinguish beween a wholesaler and a of the directive under consideration. retailer in order to prevent distortions of competition, the Court considered that the directive did not make it possible to solve 7. It must be stated that at first sight and in the problems of competition referred to in spite of the efforts made to that end by the Article 85 of the Treaty.

9. In my view, in formulating the questions trade since the scope of that directive is now before the Court, the referring court is limited to the application of the rules of the in substance inquiring whether Community Treaty relating to the fundamental freedoms law is able to provide any criteria for inter- in question. preting the concept of wholesale trade which would enable that court to decide 13. Moreover, freedom of establishment whether or not the defendants fall within comprises both wholesale trade and retail the scope of the French rules on retail trade. trade.

11. The Court has already stated its view between the two forms of trade — the view regarding the scope of Directive must also be taken that (a fortiori) the 64/223/EEC in the 1977 Metro judgment, 2 directive does not serve in principle to define the scope of each of those forms of 1 — See, on the right of establishment, the judgment of 21 June trade, with a view to subjecting them to the 1974 in Case 2/74 Reyners [19741 ECR 631; and, on freedom to provide services, the judgment of 3 December different national rules, whether governing 1974 in Case 33/74 Van Binsbtrgtn [1974] ECR 1299. fiscal matters or relating to consumer 2 — See the judgment of 25 October 1977 in Case 26/76 Metro v Commission [1977] ECR 1875, at p. 1910. protection or fair trading.

17. In this case, it is not clear to 22. Clearly, the fact that national legislation me — either from the written observations has not been harmonized in this area may to or from what the parties said at the some extent disrupt the implementation in hearing — that the companies involved in the common market of the principle of the main proceedings were or had been freedom of establishment. discriminated against in relation to any other French company carrying on the same kind of business. 23. However, the use of the rules laid down by Directive 64/223/EEC as a general instrument for the harmonization of legis- 18. The Metro companies were already lation clearly goes beyond the objectives of established in France at the time of the that directive. events in question and there is no question of any obstacle being imposed on them by 24. Moreover, the Court has consistently the relevant French legislation or such an held 3 that, according to Article 52 (2) of obstacle arising as the result of its the Treaty, freedom of establishment entails application by the national administration. the right to take up and pursue activities as self-employed persons under the conditions laid down for its own nationals by the law 19. Moreover, that legislation dates back to of the country where such establishment is 1945 and was therefore adopted long before effected. It follows therefrom that, where the date of the companies' establishment legislation has not been harmonized, the (they were first located there in 1971) so application without discrimination of the that it cannot be said that it was adopted legislation of the country of establishment is with a view to discriminating against the lawful under Article 52. In particular, the defendants in the main proceedings. Member States are entitled to distinguish clearly between wholesale trade and retail trade in order to prevent distortions of 20. The criminal proceedings instituted competition which might arise 'if whole- before the national court are concerned with the special and original type of trade 3 — Sec, most recently, the judgment of 12 February 1987 in carried on by the defendant companies Case 221/85 Commission v Belgium [1987] ECR 719, paragraph 9 et seq. of the decision; see also the judgment of which, according to the French authorities, 6 November 1984 in Case 182/83 Fearon v Irish Land are covered by the national rules on retail Commission [1984] ECR 3677 at pp. 3685 et seq.; and the judgment of 28 January 1986 in Case 270/83 Commission v trade. French Republic [1986] ECR 273.

25. However, the situation could be different if, as a result of the 30. In that regard, it is necessary to provide application — even non-discriminatory — of the national court with the criteria for inter- national legislation that is incompatible with preting the concepts contained in the the definition in Article 2 (2) of the aforesaid provision of the directive which directive, the traders concerned were might prove relevant for the purpose of subjected to conditions governing the right resolving the main dispute and be capable of to take up and pursue their activities that affecting the attainment of freedom of were very difficult or impossible for establishment. It would thus be possible to foreigners to fulfil. This would then meet the concern expressed by the national constitute a disguised barrier to estab- court in Questions 2 and 4. lishment, open to criticism on account not so much of a broad interpretation of Article 52 of the Treaty (which the Court does not seem to favour) as of the existence, in that 31. In that respect, it must be case, of a directive whose rules have been acknowledged that, as the defendant infringed. companies suggest in their observations, the definition in Article 2 (2) of the directive, in referring to resale to 'professional, trade or 26. From that point of view, the companies large-scale users', is based on the status of in question sought to persuade the Court the purchasers and not on their number or that only a supranational undertaking would on the nature or quantity of the goods be able, in economic terms, to undertake in bought and sold. France operations of that kind, which would not therefore be within the reach of exclu- sively French companies. 32. However, the definition is relevant only in connection with the application of the directive, that is to say with regard to the 27. However, that contention would not attainment of freedom of establishment and appear to be supported by evidence that is freedom to provide services. sufficiently convincing.

37. I therefore suggest that the questions submitted by the national court should be answered as follows:

'(1) Article 2 (2) of Council Directive 64/223/EEC of 25 February 1964 defines wholesale trade for the purposes of the application of the rules of the Treaty relating to freedom of establishment and freedom to provide services and cannot be interpreted as serving to regulate purely domestic situations which do not call in question those two fundamental freedoms, laid down in Articles 52 and 59 of the EEC Treaty, which have direct effect since the end of the transitional period.

(2) Whether or not the activities carried on by the companies in question may be described as wholesale or retail trade, for the purposes of subjecting those activities to the national rules governing their pursuit, is a question that must be resolved, in principle, by the national court in accordance with national law.

(3) Within its own field of application, Article 2 (2) of the directive must be inter- preted as meaning that, in referring to resale to "professional, trade or large-scale users", the definition of wholesale trade set out therein is based on the status of the purchasers and not on their number or on the nature or quantity of the goods bought and sold. National legislation which adopts a different definition of wholesale trade in order to make it subject to rules different from those governing retail trade should be considered incompatible with the directive only where it creates an indirect barrier to the establishment of undertakings from other Member States in conditions which discriminate against them.'