C-362/88
ECLI:EU:C:1990:5
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GB-INNO-BM
OPINION OF MR ADVOCATE GENERAL LENZ delivered on 10 January 1990 *
Mr President, 3. Objecting to this advertising, the Members of the Court, Confédération du commerce luxem bourgeois (hereinafter referred to as 'CCL') applied to the competent Luxembourg court for an injunction against GB-INNO-BM ordering it to desist from the practice. After an unsuccessful appeal against the resulting A — Facts injunction issued by the Chamber for Commercial Matters of the tribunal d'arrondissement, Luxembourg, GB- INNO-BM sought an order quashing the appeal judgment from the Cour supérieure 1. A somewhat unusual problem, which de justice in its capacity as Cour de may fall within the area governed by Article cassation. 30 et seq. of the EEC Treaty, has given rise to this reference for a preliminary ruling on which I am called to deliver an opinion today. 4. Pursuant to Article 177 of the EEC Treaty, the Cour de cassation referred the following question to the Court of Justice for a preliminary ruling:
2. In September 1986, the Belgian company GB-INNO-BM, which operates super markets in Belgium inter alia in the Arlon area, close to the Belgium-Luxembourg border, distributed in the Grand Duchy of 'Is a legislative provision of a Member State Luxembourg advertising leaflets to promote whereby the offering of goods for retail sale the sale of its products. The leaflets referred at a temporarily reduced price, other than in to price reductions valid for a limited period special sales or clearance sales, is permitted of time and the reduced prices were only on condition that the offers may not advertised by reference to the previous state their duration and that there may be prices. That advertising complied with the no reference to previous prices contrary to Belgian legislation ' relating to unfair Article 30, the first paragraph of Article 31 competition, but not with the Grand and Article 36 of the EEC Treaty, properly Duchy's legislation in force at the time, construed?' which prohibits the offering of goods for retail sale at a temporarily reduced price, other than in special sales or clearance sales, when those offers state their duration or refer to previous prices. 5. I shall deal with any additional facts and the submissions of the parties as necessary in 6 Original language: German. the course of my analysis. For the rest I At all events the Court has before it no indication that the reference is made to the Report for the Belgian authorities had raised any obļection to the adver tisements. Hearing.
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B — Analysis 30 of measures having an effect equivalent to quantitative restrictions applies, as the Court has consistently held, to all trading rules enacted by Member States which are capable of hindering, directly or indirectly, 6. CCL, the Federal Republic of Germany actually or potentially, intra-Community and the Grand Duchy of Luxembourg take trade. the view that the contested legislation should not be assessed in the light of Article 30 et seq. of the Treaty, because it relates not to cross-frontier movement of goods but only to advertising. The sale of goods by GB-INNO-BM takes place exclusively on 9. Although a prohibition on advertising Belgian territory, so that it is inconceivable such as that in issue here does not preclude that the legislation should hinder intra- the importation of products originating in Community trade. other Member States or in free circulation in those States, it may none the less make their marketing more difficult and is thus capable of impeding, at least indirectly, 3 trade between Member States. Legislation 7. GB-INNO-BM, the Commission and the which restricts or prohibits certain forms of French Republic, on the other hand, regard advertising and certain means of sales the contested Luxembourg legislative promotion may, although it does not provisions as measures having an effect directly affect imports, nevertheless be such equivalent to quantitative restrictions on as to restrict their volume because it affects imports within the meaning of Article 30 of marketing opportunities for the imported 4 the EEC Treaty, since legislation which products. restricts or prohibits certain forms of adver tising could tend to restrict the volume of imports because it might affect marketing opportunities for the imported products. 10. The fact that national provisions on advertising could have an effect on intra- Community trade only indirectly rather than directly does not mean that Articles 30 et 1. The applicability of Article 30 et seq. of seq. are inapplicable. the EEC Treaty
8. It must first of all be conceded that the 11. Nor does the fact that the sales trans contested national legislation does not actions advertised by GB-INNO-BM in directly govern the importation of goods Luxembourg take place in Belgium mean from other Member States of the Community but solely the advertising of 2 — Since the judgment of 11 July 1974 in Case 8/74 Dassonmlle[l97*] ECR 837, at p. 852. those goods. That, however, does not rule 3 — See in particular the judgments of 16 December 1980 in out an examination of such legislation in the Case 27/80 Criminal proceedings against Fietje [1980] ECR 3839, at p. 3853, and of 14 July 1988 in Case 298/87 light of the provisions of Article 30 et seq. of Smanor[i9SS] ECR 4489. the EEC Treaty, because the admittedly 4 — See the judgment of 15 December 1982 in Case 286/81 far-reaching prohibition expressed in Article Oosthoek's Uitgeversmaatschappij [1982] ECR 4575, at p. 4587.
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that Articles 30 et seq. are inapplicable. conditions of sale in another Member State Those provisions of the EEC Treaty make if the necessary advertising can be no distinction between cross-frontier trade prohibited by reference to the legislation in carried on by traders and transactions where force in the former Member State? Such an private customers cross a frontier to shop interpretation would simply deprive the and then import the goods they have frontier population of the advantages of the purchased in their private capacity into the common market and keep them in a territory of their own Member State. These marginal position marked by 'dividing different aspects of sales transactions were, frontiers'. The elimination of those barriers it would appear, first mentioned by the is an objective to be pursued by common Court in its judgment of 31 January 1984 in action undertaken by the Member States of 5 7 Joined Cases 286/82 and 26 / 83 , where it the Community. The continued existence stated as regards freedom to provide of such a frontier for advertising is thus services that in order to enable services to incompatible with the establishment of a be provided, the person providing the common market, which is specified as a service may go to the Member State where prime objective of the Treaty in Article 2. the person for whom it is provided is estab lished or else the latter may go to the State in which the person providing the service is established. In its judgment of 7 March 6 1989 in Case 250 / 87 the Court seems to have taken a similar approach in respect of the importation of goods when it assessed 14. In addition, such an interpretation an import transaction carried out by an would restrict the significance of the individual in the light of the rules of Articles objective of Title I of Part Two of the 30 and 36 and held it to be incompatible Treaty, 'Free movement of goods', because with those provisions. in a market economy the provision of infor mation to market participants on market conditions is an essential pre-condition of its functioning. It has not been argued that the authors of the Treaty desired such a restriction. The general clause of the 12. This case is similar. Here people from prohibition 'all measures having equivalent one Member State go to another Member effect [to quantitative restrictions on State in order to shop at better prices. They imports]' suggests the construction put can only do so, however, if they are given forward above. information about the conditions of sale which apply in the neighbouring country.
15. There is thus a connection with cross- frontier movement of goods. That distin 13. How can the people of one Member guishes the national legislation at issue in State obtain information about the this case from other national legislation which falls solely within the area of 5 — Judgment of 31 January 1984 in Joined Cases 286/82 and 26/83 Luisi and Carbone v Minutero del Tesauro [1984] domestic economic and social policy and ECR 377, at p 401. 6 — Judgment of 7 March 1989 in Case 215/87 Schumacheri Haiiplzollaml Frank/url am Afmii-0«[1989] ECR 617 7 — Second recital in the preamble to the EEC Treaty.
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has no effect on the external trade of the countries with the same language and State in question, such as, for instance, currency. legislation on night work in bakeries or a 9 ban on Sunday trading.
11 18. As the Court has consistently held, in 16. As a preliminary conclusion, it is thus the absence of common rules relating to the clear that provisions in the legislation of a marketing of the products concerned, Member State on advertising for goods may obstacles to free movement of goods within be assessed in the light of the principles of the Community resulting from disparities Article 30 et seq. even where the sales trans between the national laws must be accepted action is to take place in another Member in so far as such rules, applicable to State and the goods sold are then imported domestic and imported products without into the territory of the former Member distinction, may be justified on one of the State simply by a private individual. grounds of public interest mentioned in Article 36 of the EEC Treaty or by mandatory requirements relating to consumer protection and fairness of commercial transactions. Such legislation must also be reasonable in relation to the 2. The details of the advertising prohibition aim in view. If a Member State has a choice between various measures to attain the same objective, it is bound to choose the means which least restricts freedom of trade.
17. As has already been stated, legislation which restricts or prohibits certain forms of advertising and certain means of sales promotion may well be capable of restricting imports because it affects 19. In the light of the foregoing consider marketing opportunities for the imported ations it is clear that common or products. The possibility cannot be ruled harmonized provisions on advertising are to out that to compel a producer either to be found only in the Council Directive of 10 adopt advertising or sales promotion September 1984 relating to the approxi schemes which differ from one Member mation of the laws, regulations and adminis State to another or to discontinue a scheme trative provisions of the Member States u which he considers to be particularly concerning misleading advertising. That effective may constitute an obstacle to directive, however, is concerned solely with imports even if the legislation in question misleading advertising, as its title indicates, applies to domestic and imported products and furthermore, according to Article 7 10 thereof, it is left to the Member States to without distinction. That is especially true if, as in this case, the advertising is for two adopt provisions to ensure more extensive
8 — Judgment of 14 July 1981 in Case 155/80 Oebel [19811 11 — See in particular the judgments of 20 February 1979 in ECR 1993. Case 120/79 Rewe v Bundesmonopolverwaltung för Branntwein [1979] ECR 649, at p. 662, of 10 November 9 — Judgment of 23 November 1989 in Case C-145/88 Torfaen 1982 in Case 261/81 Rau v Desmedi [1982] ECR 3961, at Borough Council* B & Q p/c[1989] ECR 3851. p. 3972, and of 12 March 1987 in Case 178/84 Commission 10 — See the judgment of 15 December 1982 in Case 286/81 v German)'[1987] ECR 1227, at p. 1270. Oosthoek, supra in note 4, at p. 4587. 12 — OJ 1984, L 250, p. 17.
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protection for consumers, persons carrying 23. CCL points out in addition that special on a business and the general public. sales over a limited period of time whose duration is published disrupt normal compe tition between businesses to the detriment of the consumer.
20. Since, therefore, definitive Community rules on advertising do not exist, the question must be examined whether the national legislation at issue in this case may 24. The Government of the Federal be justified by the mandatory requirements Republic of Germany shares that point of mentioned above. The two prohibitions view. An individual business in competition regarding advertising must be discussed with others should not be permitted, by separately. organizing sales which take place outside the usual trading patterns, to place before the public special inducements in order to gain a lead on its competitors. Furthermore, there is the aspect of protection of the consumer against excessive and unobjective (a) The prohibition on publishing the influence on his economic freedom of duration of a sales offer choice. In that connection protection against psychological pressure to buy caused by limiting the offer in time plays a major role.
21. The Luxembourg Government sought to justify the legislation by referring to the need to ensure price transparency in the interests of all market participants and to 25. GB-INNO-BM, the French Govern distinguish sales at reduced prices from the ment and the Commission consider that the authorized clearance sales that take place prohibition on publishing the duration of twice a year. The Luxembourg legislature the sales offer is not justified. Withholding wished to regulate the market and restrict that pertinent information from the commercial practices likely to harm the consumer does not serve to protect him. consumer and disrupt normal competition. The proliferation of such commercial practices resulting in an increase of the profit margin in normal periods to compensate for the losses suffered on the 26. In examining the question whether the occasion of special sales is not, it is said, in prohibition against publishing the duration the consumer's interest. of the sales offer can be justified, reference should first be made to the Luxembourg Government's explanation, since it must be in the best position to give information on the objectives of provisions in its legislation. 22. At the hearing the Luxembourg The Luxembourg Government essentially Government shifted its emphasis somewhat justified the prohibition by explaining that and stated that the main purpose of the special sales must, in the interest of the contested legislation was to protect the consumer, be clearly distinguishable from consumer, not to protect domestic trade. the permitted twice-yearly clearance sales.
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27. However, no explanation why such a any case be unaffected by the fact that the decision must be regarded as a 'mandatory duration of the special offer was made requirement' for the protection of the known. consumer and fair competition was put forward by the Luxembourg Government. It would indeed be hard to explain, because the normal clearance sales take place twice yearly at fixed times, so that it must be quite (b) The prohibition against comparing clear to the consumer that special sales at prices other times cannot be clearance sales. Nor, moreover, was it shown how it can be in the consumer's interest to distinguish between special sales and clearance sales. 31. The Luxembourg Government justifies the prohibition against referring to the price previously applicable on the practical grounds, first, that traders should be prevented from using a special sale to disguise a clearance sale outside the periods laid down by law. Secondly, it wished to 28. In addition no reason was given why avoid the need to check previous prices. the principle of price transparency should require the withholding of information, such as the duration of a special sale, which can be useful to the consumer when deciding whether to make purchases. 32. At the hearing the Luxembourg Government also referred to the danger that the purchaser might be misled. The consumer can never, after all, check whether the previous price given was genuine. The prohibition against comparing prices thus serves to protect the consumer. 29. All in all it is thus clear that the existence of mandatory requirements for ensuring consumer protection was not made out. 33. The Luxembourg Government's view is supported by the Federal Republic of Germany and CCL, while the French Government, GB-INNO-BM and the Commission disagree. 30. The same applies with regard to protection of fair competition. If special sales offers are permitted — and they are under Luxembourg law, which only 34. Information should only be withheld prohibits the publishing of their from the consumer for his own protection duration — it is not obvious how the giving for convincing reasons. After all, it must be of information to consumers on the assumed that any accurate information can duration of the offer can interfere with the only be useful to the consumer. The point interests of competitors. The interference in that where price comparisons are prohibited the competitive structure feared by some of checks on the genuineness of the prices the parties, even were it to exist, would in indicated are rendered unnecessary does not
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suffice to justify the prohibition. The 38. In that connection it should be pointed interests of administrative simplicity cannot out that under Belgian law, to which be accepted as a 'mandatory requirement' GB-INNO-BM's advertising conformed, a which can restrict the principle of free price comparison is only permissible if movement of goods. reference is made to the price normally applicable. Usually that will be the price charged in the month preceding the 3 reduction. '
35. Protection of the consumer from misleading advertising is not, on the other hand, to be rejected out of hand as a justifi cation. It is true that misleading advertising 39. Effective control under such rules is may cause a consumer to take decisions ensured not only by the authorities and prejudicial to him when acquiring goods or consumers, but also by competition. The property or using services, as is stated in the plaintiff in the main proceedings was right preamble to the directive on misleading to make that point. advertising.
36. Nevertheless, an absolute prohibition 40. The Government of the Federal against comparing prices appears to be Republic of Germany takes the view that disproportionate where consumer protection protection againt unfair competition forms is concerned. If the interest of the consumer part of the protection of industrial and in obtaining comprehensive information on commercial property referred to in Article the one hand is weighed against that of 36 of the EEC Treaty. On that point it protecting him from misrepresentation on suffices to state that in my opinion there is the other, it would appear to be sufficient to no question here of unfair competition and prohibit price comparisons based on the provisions of Article 36 cannot be relied incorrect and thus misleading facts. That on against lawful competition. means that a price comparison may be prohibited where the price said to have applied previously is in fact not correct.
41. It follows that the Luxembourg legis lation at issue may not be applied to the advertising distributed in Luxembourg by 37. Since under Article 8 of the Council the Belgian-registered plaintiff GB-INNO- directive on misleading advertising, to which BM, although it remains applicable to the frequent reference has been made, all the Luxembourg business community. It is for Member States of the Community have the Luxembourg legislature, not the Court, been bound since 1 October 1986 to take to draw the necessary conclusions. The action against misleading advertising, a French Government was right to make that general prohibition against price comparison point. in the interest of consumer protection would appear disproportionate: the prohibition of 13 _ Article 4(1) of the Law on commercial practices of 14 July incorrect price comparisons is sufficient. 1981
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(c) The standstill clause in Article 31 of the reference for a preliminary ruling itself. In EEC Treaty particular, there are no grounds for concluding that the Grand Duchy's legis 42. On the question of the extent to which lation of 23 December 1974 introduced the standstill clause in the first paragraph of quantitative restrictions that did not Article 31 of the EEC Treaty may apply, previously exist. For that reason no nothing can be deduced from the comment can be made on the applicability conclusions of the parties or from the of Article 31 of the EEC Treaty.
C — Conclusion
43. In conclusion I propose that the Court answer the question referred to it as follows :
'Legislative provisions of a Member State whereby the offering of goods for retail sale in other Member States at a temporarily reduced price, other than in special sales or clearance sales, is permitted only on condition that the offers may not state their duration and that there may be no reference to previous prices is contrary to Articles 30 and 36 of the EEC Treaty, properly construed.'
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