C-373/90

OPINION OF MR ADVOCATE GENERAL TESAURO —CASE C-373/90

OPINION OF MR ADVOCATE GENERAL TESAURO delivered on 24 October 1991 *

Mr President, look at the context of the dispute in Members of the Court, national and Community law.

1. In a somewhat brief letter of 12 The French legal provision which the December 1990, the Examining Magistrate parallel importer is accused of infringing is attached to the Tribunal de Grande Instance Article 44 of Law No 73-1193 of 17 (Regional Court) of Bergerac referred a December 1973 on the Orientation of question to the Court on advertising by a Business and Crafts, known as the 'Loi parallel importer of motor vehicles. Royer\ This prohibits all advertising containing any form of false allegation, information or presentation which is likely to deceive and relates to one or more of the following: 'the existence, nature, composition, substantial qualities, material constituents, type, origin, quantity, method The dispute pending before the national and date of manufacture, properties, price court originated with a complaint about and conditions of sale of goods or services untruthful advertising lodged by the which are the subject of the advertising, exclusive importer of Nissan can on French conditions of their use, results to be territory against a Bergerac garage that expected from their use, reasons for the sale advertises along the lines of 'buy your new or the provision of services or the methods vehicle cheaper. The advertising refers to of such sale or provision, the extent of the vehicles imported from Belgium which, obligations undertaken by the advertiser, or while never having been driven, have been the identity, qualities or aptitudes of the registered for the purposes of importation. manufacturer, the retailers, the promoters or The information from the court a quo also the providers'. shows that the vehicles are sold at a lower price than that charged by French dealers, and with fewer accessories than the models normally marketed by them.

The case-law of this Court shows that the Member States' obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article 5 of the Treaty to take all appropriate Misleading advertising is defined in Articles measures, whether general or particular, to 2 and 3 of the directive. In particular, ensure the fulfilment of that obligation is Article 2(2) defines as 'misleading' any binding on all the authorities of Member advertising which in any way, including its States, including, for matters within their presentation, deceives or is likely to deceive jurisdiction, the courts. It follows that, in the persons to whom it is addressed or applying national law, whether the whom it reaches and which, by reason of its provisions in question were adopted before deceptive nature, is likely to affect their or after the directive, the national court economic behaviour or which, for those called upon to interpret it is required to do reasons, injures or is likely to injure a so as far as possible in the light of the competitor. It is important to emphasize wording and the purpose of the directive, in straight away that, as emerges clearly from order to achieve the result pursued by the the wording of the rule, the two essential latter and thereby comply with the third elements of misleading advertising, namely paragraph of Article 189 of the Treaty.2 deception and an effect on the consumer's behaviour, are cumulative.

3. As emerges, in particular, from its own preamble, the directive in question pursues two aims at once. On the one hand, it seeks to guarantee an adequate level of consumer protection by establishing minimum and Article 3 goes on to provide an explanatory objective criteria as a basis for determining list of factors and characteristics to be taken whether any given form of advertising is into account in determining whether adver- misleading, while on the other hand it seeks tising is misleading. to ensure the free movement of goods and services by favouring the execution of advertising campaigns across a number of Member Sutes.

business, craft or profession, and the general Treaty to certain categories of motor vehicle public. distribution and servicing agreements4 provides in Article 10 that the Commission may withdraw the benefit of the exemption granted to selective distribution systems if, in a particular case, the manufacturer or an undertaking within the distribution system 4. Before examining the effect of the above continuously or systematically makes it rules in relation to the case before the difficult for final consumers or other under- Court, it should be emphasized that to takings within the distribution system to forbid the kind of advertising at issue here obtain contract goods or corresponding would be likely in practice to hit parallel goods, or to obtain servicing for such importers particularly hard, by preventing goods, within the common market. them from sufficiently advertising their product. In the first place, it is parallel importers more than anyone else who find it useful to advertise that motor vehicles are nezo-especially those who sell cars that have already been registered in another Community country. It should be emphasized here that, as the Commission confirmed at the hearing, the type-approval Some examples of abusive hindrances are still necessary in the country of 'parallel' then given by the Commission notice importation is made quicker and easier if concerning Regulation (EEC) No 123/85. 5 the vehicle has already been registered in In particular, they may consist in refusal by another Community country. In the second dealers to perform guarantee work on place, the description of the vehicles as vehicles which they have not sold and which cheaper reflects the defining element in the have been imported from other Member parallel importer's business; he naturally Sutes, withholding by manufacturers or buys in a country where, accessories being their importers of their cooperation in the equal, list prices are lower than in the registration of vehicles which European country into which he imports. This is, consumers have imported from other moreover, the phenomenon at the root of Member States, or abnormally long delivery parallel imports and their sole commercial periods. justification.

Again, in the case of Procureur de L· République v Golette and GUIiard,9 the Court held that Articles 30 and 36 of the Treaty must be interpreted as meaning that As long ago as 1975 in the judgment in an approval procedure laid down in a General Motors,7 the Court established that Member Sute for vehicles imported from delegation by a Member State to a manu- another Member Sute and already facturer or 'as authorized agent, in the form approved or authorized for use in that Sute of a legal monopoly, of the duty governed is compatible with the Treaty only if: (a) the by public law which consists in carrying out checking procedure does not entail unrea- the technical inspection of vehicles before sonable cost or delay and the public auth- they are used on the public highway, orities ensure that these conditions are fully combined with the freedom of such manu- met where the manufacturer or his auth- facturer or agent to fix the price for their orized representative is called on to carry service, leads to the creation of a dominant out the necessary checks; and (b) the position. The Court then went on to hold importer may, as an alternative to the that abuse of such a position may consist, in checking procedure, produce documents particular, in the imposition of a price which issued in the exporting Member Sute in so is excessive in relation to the economic far as those documents provide the value of the service provided, and which has necessary information based on checks the effect of curbing parallel imports by already carried out. neutralizing the possibly more favourable price levels applying in other sales areas in the Community or by leading to unfair trading within the meaning of Article 86(2)(a) of the Treaty. Finally, it is apparent from the judgment in Case 154/85 Commission v Italy10 that an increase by a Member Sute in the number of administrative requirements involving the production of documents necessary for parallel imports of vehicles from other Member Sutes is an infringement of Article 30 of the Treaty. Moreover, in the case of ETA v DK Investment,8 on the importation of watches, the Court held, in general terms, that a guarantee scheme under which a supplier of goods restricts the guarantee to customers 7. It is, therefore, in the light of the context of his exclusive distributor places the latter above that it must be determined whether it and the retailers to whom he sells in a is lawful and reasonable to prohibit a type

In the second place, given the particular 9. The above considerations also apply in characteristics of the car market, such large measure to the other aspect of the advertising is in any case not likely to affect advertising, regarding the cost of the the behaviour of consumers, as indicated by product. Article 2 of the directive. Indeed, the consumer who goes to a parallel importer normally confers on him a special written mandate for the purchase of the vehicle " and is therefore perfectly well aware that he is using a particular sales network with its In this regard, I think one must first specific features. The sale and purchase of emphasize, as a general point, that the cars, unlike other goods, is normally lower price of the 'parallel' vehicle is not preceded, moreover, by a certain amount of normally due to its more limited range of negotiation in order to establish precisely accessories but, as already mentioned, is due the characteristics of the product. to the lower cost of the vehicle in the country of origin. That does not, of course, exclude the possibility in individual cases

12 — From that standpoint, I cannot share the assertion nude, in my view too peremptorily, in a recent judgment of the 8. It must also be remembered that it is one French Cour de Cassation of 19 April 1989, according to which a car can be described as new only if it has not thing to make the purchase of a product already been registered. I do, however, agree with that court's decision to overturn the judgment of the appeal court which had acquitted the seller, and I do so in II — By reason of Regulation (EEC) N o 123/85, referred to consideration of the f u t that, in that particular case, the above, which places a duty on producers co allow dealen seller had not told the buyer at the time of the sale that the to sell at least to the agents of the final consumer. registration had already taken place.

In determining whether such advertising is really likely to affect the economic 10. To deal, finally, with the point that behaviour of the persons to whom it is Article 7 of the directive allows Member addressed, one should bear in mind that the States to adopt provisions with a view to car market is characterized by a certain ensuring more extensive protection for price transparency and that the average consumers, I will say only that, in the consumer, who I am convinced is not present case, it is not a question of specific wholly undisceming, is inclined, not least in measures aimed at ensuring such protection, view of the considerable expense he is but of the interpretation of the general defi- contemplating, to make a careful nitions given by the directive, and that, in comparison of the prices on offer and to any case, the rule cited cannot have the enquire of the seller, sometimes very effect of justifying measures that specifically meticulously, about the accessories with hinder advertising by parallel importers of which the vehicle is equipped. In this motor vehicles when, as in this case, regard, I hope I will be forgiven for consumer protection can be achieved by recalling the old saying 'vigiliantibus non measures that are less prejudicial to the dormientibus iura succurrunf. marketing of the products in question.

11. For those reasons, I suggest that the Court reply to the question put by the national court as follows:

Directive 84/450/EEC, in the light of which the national provisions implementing it must be applied, must be interpreted as meaning that it allows motor vehicles to be advertised as new and less expensive when those vehicles, while never having been driven, have been registered for the purposes of importation and are marketed at a price lower than that charged by dealers operating in the Member State in question, even if they are equipped with fewer accessories than the models normally marketed by those dealers.