C-20/87

1. I — André Gauchard, a supermarket 4. The question put to the Court in this manager, was charged by the French auth- case by the national court does not make it orities with infringing the law on planning clear which rules of Community law it rules applicable to commercial premises by- considers applicable and requests the Court extending without authorization the area of to interpret. 1 660 m2 which he had been authorized to operate since 1976. 5. However, the Court has already acknowledged that, 'in the event of 2. Before the tribunal de police, Falaise, the questions having been improperly accused argued that the French legislation formulated or going beyond the scope of in question was contrary to Community the powers conferred on the Court of law, and the national court therefore Justice by Article 177, the Court is free to referred to the Court of Justice under extract from all the factors provided by the Article 177 of the Treaty the following national court and in particular from the question : statement of grounds contained in the reference, the elements of Community law requiring an interpretation . . . having regard 'Is the French town-planning legislation to the subject-matter of the dispute'. 2 relating to commercial premises, in particular Articles 28 to 36 of the Law of 27 December 1973, compatible with the 6. On that basis, I shall therefore endeavour provisions of the Treaty of Rome and the to identify the provisions of Community law directives of the European Economic whose interpretation may be useful for the ~ Community? ' determination of the dispute in the main proceedings. 3. The Court has stated on a number of occasions ' that, in giving a ruling under 7. From the order for reference it is clear Article 177, it 'has no power to apply a rule that the national court considers that 'the of Community law to a particular case or to rule requiring French traders to obtain prior judge a provision of national law by authorization in order to operate a retail reference to that rule. In pursuance of the outlet of an area exceeding 1 000 m2 in a judicial cooperation provided for by that commune with a population of under 40 000 article it may, however, on the basis of the and exceeding 1 500 m2 in other communes material presented to it, provide a national undoubtedly constitutes a restriction on court with information on the interpretation freedom of establishment'; and it is against * Translated from the Portuguese. 2 — See, inter alia, judgment of 29 November 1978 in Case • — See, for example, judgment of 11 July 1985 in Case 137/84 83/78 Pigi Marketing Board v Redmond [1978] ECR 2347, Ministère public v Mutscb [1985] ECR 2681, paragraph 6. at p. 2368.

that background that the national court, in the answer and to dispel any doubts as to order to justify its question, raises the issue the interpretation of Community law 'whether the Treaty of Rome, which lays referred to. down the principle of freedom of trade and of competition, precludes the imposition of any restrictions on the freedom of estab- lishment'. 13. The Court has stressed 3 that 'Article 52 (of the Treaty) is intended to ensure that all 8. It is therefore clear from the proceedings nationals of Member States who establish that the tribunal de police, Falaise, wishes to themselves in another Member State, even if know whether the principle of free that establishment is only secondary, for the movement of goods, the right of estab- purpose of pursuing activities there as a self- lishment and the rules on competition, as employed person receive the same treatment laid down in particular in Articles 30, 52, 85 as nationals of that State and it prohibits, as and 86 of the Treaty respectively, prevent a restriction on freedom of establishment, legislation on planning rules applicable to any discrimination on grounds of commercial premises, such as the French nationality'. In those conditions, 'freedom Law of 27 December 1973 (the 'loi Royer') of establishment includes the right to take and, in particular, Articles 28 to 36 thereof, up and pursue activities as self-employed from requiring prior authorization to be persons under the conditions laid down by obtained for the operation of a retail outlet the legislation of the country of estab- exceeding a specified size. lishment for its own nationals'. From the second paragraph of Article 52 and its context the Court inferred (in the field of 9. I I — First of all, I shall examine the activity considered in that judgment but in situation regarding the right of estab- terms which lend themselves to general lishment, since that is referred to most application) that 'provided that such directly in the order for reference. equality of treatment is respected, each Member State is, in the absence of Community rules in this area, free to lay 10. The first response that comes to mind is down rules for its own territory' governing that the provisions of the Treaty on freedom the activities covered by freedom of estab- of establishment do not apply to purely lishment. internal situations 'in which there is n o factor connecting them to any of the situ- ations envisaged by Community law' (as the Court ruled, with regard to the free movement of workers, in its judgment of 23 14. As regards the legislation referred to in January 1986 in Case 298/84 Iorio v the main proceedings, the present case does Azienda Autonoma delle Ferrovie dello Stato not seem to involve any discrimination [1986] ECR 247, paragraph 14). against nationals of other Member States, since the legislation in question, regardless of its merits, is applicable without 11. In the present case, the undertaking distinction to French nationals and to concerned is French and is established in nationals of other Member States and does France, and the manager in question is not impose any restriction which would be French. particularly burdensome for the latter. The

15. Similarly, no evidence has been adduced to show that in practice the legislation in question discriminates against nationals of other Member States who wish to set up in 20. Both directives were adopted in order France. to promote the attainment of freedom of establishment and freedom to provide services during the transitional period and in accordance with the 'General programmes' 16. It is true that it is not impossible that concerned; they do not affect or restrict the the law might result in discrimination if it direct effect which must be attributed 4 to were incorrectly applied; however, that is Article 52 of the Treaty after the end of the not the case at present, it does not appear transitional period, nor do they contain any ever to have been the case in the past, and it rules applicable to the situation concerned does not seem that there are any legitimate here. grounds for expecting that it will be the case in the future.

21. H I — I shall now consider the issue in 17. Consequently, a national of another the light of the principle of free movement Member State may not rely upon Article 52 of goods (laid down, in particular, in Article of the Treaty to oppose the application of 30 of the Treaty). This was, moreover, the the French legislation at issue, provided that aspect insisted upon at the hearing by it is applied without any intention of Counsel for the accused in the main discriminating against foreign traders. proceedings.

18. A fortiori, Article 52 cannot enable a French national, established in France, to secure exemption from the requirements of 22. Legislation such as that referred to by domestic legislation regulating the exercise the national court cannot affect the of commercial activities and laying down attainment of the objectives of Article 30 the conditions for setting up and extending unless it constitutes a measure having an trading establishments. effect equivalent to a quantitative restriction likely to affect trade between Member States.

27. In the same way, it must be stated that it does not appear that legislation which 24. Similarly, in Commission Directive provides that authorization must be 7 0 / 5 0 / E E C of 22 December 1969 6 there obtained for setting up or extending are considered as measures which have an commercial units exceeding a specified size, effect equivalent to quantitative restrictions such as the French legislation at issue, is 'measures, other than those applicable capable of directly or indirectly affecting, in equally to domestic or imported products, a discriminatory manner, the free movement which hinder imports which could otherwise of goods within the Community. take place, including measures which make importation more difficult or costly than the disposal of domestic production', and also 'measures governing the marketing of 28. Such legislation has no effect on the products . . . which are equally applicable to flow of imported goods; it affects only the domestic and imported products, where the organization of distribution within the restrictive effect of such measures on the country on the basis of objectives of free movement of goods exceeds the effects economic policy defined by the public auth- intrinsic to trade rules'. orities, in particular in order to promote smaller commercial undertakings and to adjust distribution infrastructures by reference to urban planning requirements. 25. That is why the Court ruled in its judgment of 31 March 1982 in Blesgen7 that

authorized centres for the storage or distri- 35. For that purpose, the scope of those bution of goods — regardless of whether rules must first be determined. they are manufactured in France or come from other Member States of the Community. 36. By virtue of Anicie 85 (1) of the Treaty, and having regard to the objective laid down in Article 3 (f) thereof, 'all agreements between undertakings, decisions 32. I V — Lastly, the problem must be by associations of undertakings and considered from the point of view of the concerted practices which may affect trade application of the competition rules laid between Member States and which have as down in Articles 85 and 86 of the Treaty. their object or effect the prevention, restriction or distortion of competition within the common market are incompatible with the common market. I wish to stress the two essential conditions which must be satisfied before certain conduct is covered by Article 33. As the Court has stated, 8 those rules 85: are of course concerned with undertakings and not with the legislation of the Member States. The Court has also stressed 9 that 'Member States are none the less obliged under the second paragraph of Article 5 of (i) It must be capable of affecting trade the Treaty not to detract, by means of between Member States; national legislation, from the full and uniform application of Community law or from the effectiveness of its implementing measures; nor may they introduce or (ii) It must affect competition within the maintain in force measures, even of a legis- common market. lative nature, which may render ineffective the competition rules applicable to under- takings'. 37. I would add that the practices listed by way of example in Article 85 (1) (b) include those which: 'limit or control production, markets, technical development, or investments' and in Article 85 (1) (c) those 34. It must therefore be considered whether which: 'share markets or sources of supply'. or not, in the light of the evidence available, the French legislation at issue is capable of having such an effect on the application of the competition rules of the Treaty, in 38. Furthermore, Article 86 of the Treaty particular by promoting or actually creating provides that 'Any abuse by one or more conditions enabling undertakings to adopt undertakings of a dominant position within practices likely to infringe those rules. the common market or in a substantial part of it shall be prohibited as incompatible with 8 — See in particular judgments of 10 January 1985 in Case the common market in so far as it may affect 229/83 LeckrcvAx bit Ver<[l985] ECR 1, at p. 31, and of 30 April 1986 in Joined Cases 209 to 213/84 Ministère trade between Member States' (emphasis publici Atjes and Others [1986] ECR 1425. added). Such abuse may, in particular, 9 — Judgment in Leclerc, paragraph 14; also, judgment in Asjes, paragraphs 71 and 72. consist in:

41. Even the fact — to which attention was drawn by the accused in the main 45. The Departmental Commissions must proceedings and which was examined by the adopt their decisions in accordance with the Commission at the hearing — that the principles laid down in Articles 1, 3 and 4 of composition of the Commissions dépar- the loi Royer and take into account the tementales d'urbanisme commercial criteria laid down in Article 28, to which I (Departmental Commissions for commercial have already referred; furthermore, they planning) may confer disproportionate decide on the basis of detailed reports power on a certain type of undertaking as drawn up by the Direction départementale compared with others — even if it is du commerce intérieur et des prix relevant — is in itself not necessarily, or (Departmental Directorate for domestic even probably, likely to produce such 'trade and prices), the Chamber of effects, or even to encourage the creation of Commerce and local trade organizations situations in which such effects occur. (Article 31).

42. In view of the fact that the Depart- 46. In those circumstances, there is no mental Commissions operate in each dépar- reason to suppose that any category of tement and regulate the activity of the retail trader (in particular the 'competitors' of the trade, it is clear that the effects of their party applying for authorization) could

MINISTÈRE PUBLIC v GAUCHARD

52. The conclusion which may be drawn from that statement as regards the present 48. It should also be stressed that there are case is confirmed by the principles defined no rules in the loi Royer governing the by the Court in its judgment in Hugin11 to setting up of retail outlets with a sales area the effect that 'the interpretation and not exceeding 1 000 m2 or 1 500 m2, as the application of the condition relating to case may be; authorization is required only effects on trade between Member States for the remaining cases. contained in Articles 85 and 86 of the Treaty must be based on the purpose of that condition which is to define, in the context of the law governing competition, the boundary between the areas respectively 49. As the French Government points out in covered by Community law and the law of its observations, it is clear from Article 1(1) the Member States. Thus Community law of the loi Royer that it is designed to covers any agreement or any practice which promote 'open and fair competition', by is capable of constituting a threat to preventing 'the haphazard growth of new forms of distribution from causing the 10 — Judgment of 10 July 1980 in Joined C u e s 253/78 and 1 to disappearance of small undertakings and 3/79 Procureur de LA République v Giry and Guerlain [1980] ECR 2327, paragraph 15. under-utilization of the facilities available 11 — Judgment of 31 May 1979 in Case 22/78 Hugin v for the conduct of trade' (Article 1 (3)). Commission [1979] ECR 1869, paragraph 17, at p. 1899.

OPINION OF MR DA CRUZ VILAÇA —CASE 20/87