C-320/91

OPINION OF MR TESAURO — CASE C-320/91

OPINION OF ADVOCATE GENERAL TESAURO delivered on 9 February 1993 *

Mr President, At the material time the abovementioned Members of the Court, Belgian legislation reserved to the postal administration alone, in general terms and with very few exceptions, the activities of collecting, carrying and distributing corre- spondence. 1. In its four questions the national court is substantially asking to Court of Justice t o decide whether Articles 90 and 86 of the Treaty prevent a Member State from estab- However, the legislation was subsequently lishing or maintaining in force a monopoly amended. The Law of 21 March system which includes, apart from the basic 1991 expressly envisages among the deroga- postal service, also a 'rapid delivery service'. tions from the postal monopoly distribution by rapid delivery ('courrier accéléré').

which is set out in the Report for the Hear- that the Court will not need to make a spe- ing) concern the following points: cific pronouncement on the need for a 'reor- ganization' of the Belgian postal monopoly. The answer to that question will in fact be covered by the answer which the Court is (a) Does a postal monopoly such as that gov- asked to give on the other questions raised erned by the 1956 Belgian Law constitute by the court of reference. In fact, once it has an undertaking having a dominant pos- been established whether and to what extent ition within the meaning of Article 86 of the postal monopoly conforms to the limits the Treaty (see the fourth question)? laid down by the Community legal order it will be superfluous to consider whether the monopoly must be reorganized: it is obvious (b)To what extent may such a monopoly be that in any case the national legislation will regarded as being in conformity with have to be amended to eliminate any Community law and in particular with grounds of incompatibility noted by the Articles 90, 85 and 86 (see the first ques- Court and hence to re-establish a situation tion)? which complies with the requirements of the Treaty. O n the other hand it hardly needs to be pointed out that the question put by the court of reference in this respect seems to (c) To what extent is such a monopoly enti- envisage the requirement to 'adjust' monop- tled to the derogation referred to in Arti- olies of a commercial character referred to in cle 90(2) (see the third question)? Article 37 of the Treaty, a provision which, according to a consistent case-law, concerns exclusively the marketing of goods and is (d) To what extent must such a monopoly be therefore irrelevant as regards exclusive reorganized to comply with Community rights conferred for the provision of services. law (see the second question)?

5. It must also be said that the Régie des Postes, by virtue of the aforesaid Belgian Law of 1956, possesses a statutory monopoly in the performance of the services in ques- First it is appropriate to outline the essential tion and that, according to the case-law of features of the case-law relating to the appli- the Court, 2 a dominant position may be the cation of the competition rules of the Treaty result of laws or regulations conferring — in particular Articles 90 and 86 — to exclusive rights on a given undertaking. exclusive rights conferred by States on cer- tain undertakings, relating to the provision of services.

Finally, as was also confirmed in the ERT judgment, a dominant position over the whole of a Member State's territory must be regarded as affecting a 'substantial part' of the common market within the meaning of In the second place it will be possible to Article 86 of the Treaty. assess the compatibility with those rules of the exclusive right granted to the Belgian postal administration as regards the basic postal service and rapid delivery services of the type at issue in this case. O n that point therefore the answer to the national court may clearly be that a body such as the Belgian Régie des Postes, on which the law has conferred a general monopoly in postal services for the whole Outline of the case-law national territory occupies a dominant pos- ition in a substantial part of the common

2 — See the judgments in Case 311/84 CBEM [1985] 7. First of all, it is well known that, as the E C R 3 2 6 1 and, most recently, ¡n Case C-260/89 ERT"[1991] E C R I-2925. Court has consistently held, and as

The Court further stated that such an 8. Thus in the judgment in Case 10/71 con- appraisal depended 'on the objectives of gen- cerning the Port of Mertért 4— a case not eral economic policy pursued by the States very different from the more recent judg- under the supervision of the Commission' — ment in Case C-179/90 concerning the Port supervision which the Commission was of Genoa, 5 the Court stated that Article required to carry out under the powers con- 90(2) is in principle applicable in the case of ferred on it by Article 90(3) (paragraphs an undertaking which, in ensuring the navi- 15 and 16). 6 gability of the most important waterway of the State to which it belongs, enjoys certain privileges for the accomplishment of the task entrusted to it by law and for such purposes has close links with the public authorities 9. Similarly in the Sacchi judgment, 7 the (see paragraph 11 of the grounds of judg- Court, in stating that Article 90(1) did not ment). It should be stated that in that case prohibit the grant of special or exclusive the 'privileges' took the form of a de facto rights, made it clear that the establishment of monopoly situation enjoyed by the under- a statutory monopoly — such as that granted taking, under provisions adopted by the to Radio Audizione Italiana for radio and public authorities, for loading and unloading television broadcasts — was compatible with goods (the case before the national court concerned a competitor who had been pre- vented from performing such operations by 6 — It should be stated that in the Port de Merten judgment, as in the Inter-Huües judgment (Case 172/82 [1983] ECR 555), the Court takes as its starting point the principle that Article 90(2) is not a provision which is direcdy applicable. That interpretation, already contradicted by other judgments delivered more or less at the same time as the two above- 3 — Spain v Commission [1992] ECR I-5833. mentioned judgments, appears by now to have been entirely 4 — Ministère Public Luxembourgeois v Madeleine Hein, née overruled in the light ofmore recent decisions (see in partic- Muller [1971] ECR 723. ular the judgments in ERT and Porto di Genova). 5 — Mera Convenzionali Porto di Genova [1991] ECR I-5889. 7 — Judgment in Case 155/73 [1974] ECR 409.

10. The next judgment, van Ameyde, 8fol- lows the same line. In that case the Court was once again called upon to decide as to the legality of restrictions on freedom of competition arising from the grant of exclu- With regard to the latter aspect the Court sive rights to certain undertakings. An concluded that the measure in question was undertaking acting as a loss adjuster (investi- not after all incompatible with the combined gating and settling claims for road accidents), provisions of Articles 90, 85 and 86 of the a subsidiary of a Netherlands insurance com- Treaty. The outcome of the examination, it pany, had been prevented from pursuing its should be stressed, is based on a somewhat own business activities by the measure detailed consideration of the objectives of adopted by the Italian authorities under the the measure, assessed in the light of the 'green card' system reserving the business of Community's own requirements. The Court settling claims for damage caused on the stated in fact that the reservation in favour of national territory by vehicles insured abroad, the insurance companies realized one of the solely to insurance companies which were objectives of the 'green card' system (that is, members of the Italian Clearing Office for that of offering full protection to those who International Motor-vehicle Insurance (U. C. have suffered damage, by the creation, in I.) and thus excluding loss adjusters. 9 each member country, of a national bureau composed of insurance companies each one of which is subject to particular checks and each of which must supply the guarantees required by national law); and that, in its turn, that system, recognized and perfected by Community law, was intended to facili- In that respect the Court stressed that in tate the free movement of persons and examining the question in the light of Arti- goods. Moreover the Court, in recognizing cles 85, 86 and 90 of the Treaty it was neces- on those grounds the compatibility of the sary to assess separately the compatibility exclusive right at issue — and that of the with those measures, on the one hand of any ensuing restrictions on competition — was conduct or practices of the undertakings careful to define the limits of such compati- possessed of the exclusive right and, on the bility: it stated that the legality of the national system as regards Article 90 in con- junction with Articles 85 and 86 was subject to the condition that the statutory exclusive 8 — Judgment in Case 90/76 van Ameyde v U. C. I. [1977] E C R 1091. right should in no event conflict with 'the 9 — In the main proceedings the loss adjuster had asked the court freedom of the insurer to whom the settle- to declare illegal U C I ' s claim to entrust investigation and settlement of accident claims solely to insurance companies ment is entrusted to rely, for the purposes of which were members of the U C I itself, and consequently t o declare illegal any action taken by U C I with regard to third the investigation of the accident claim, on persons intended to restrict the plaintiff's freedom of action another undertaking specialized in such and to take over its customers.

It may also be stated that in the van Ameyde judgment the Court did not accept that the grant by the State of an exclusive right involved as such — that is, by the mere fact 11 — The fact that the formula of a situation necessarily leading to an abuse is ambiguous ('a rather confusing formula' of creating a reservation in favour of certain according to L. Gyselen in CMLR 1992, p . 1238) and there- fore capable of arousing some uncertainties in application is undertakings — discrimination based on confirmed by the rather divergent results arrived at by nationality and hence an infringement of national courts called upon to apply, in individual cases, the Porto di Genova judgment.

11. More recently the compatibility of of the Court, the statutory reservation must be considered, as such, to be incompatible with Community law. exclusive rights with the rules of the Treaty Both the Italian Government, in the circular issued to give has been considered by the Court in two effect to the judgment in Porto di Genova and the C o n - siglio di Stato in an opinion given on that circular (Parere groups of judgments. A first group includes 13 May 1992, N o 598, reported in Foro Italiano, 1992, III, 425) have taken the second view. Both took the view that the judgments in Höfner and Eiser, ERT and the judgment of the Court decided that the last paragraph

The Court deduced that Article 90(1) in conjunction tazione. The Consiglio in fact deduced from the Court's ecision a series of criteria which the administrative auth- ority was to observe in granting franchises. Those obliga- tions are based on the statement that, in accordance with with Article 86 is infringed when the States the principles of Community legislation, 'the system of confer exclusive rights creating a situation in administrative franchise must not result in the de facto establishment of illegal monopoly situations owing t o a which the undertaking possessed of them mistaken use of administrative power arising from the issue of a single authorization or a restricted number thereof'. cannot avoid misusing them. It should be According to the Consiglio di Stato, 'the implementation of stated that the said judgments do not define Community rules involves the grant of a number of fran- chises so as to guarantee the free market and a system of (at least not clearly) what factors make it effective competition between undertakings'.

10 — Case 13/77 [1977] ECR 2115.

whole of the grounds of judgment in the monopoly prevents a national operator from aforementioned cases it would seem that, in providing the service for national users. 13 order to establish whether the grant or the maintenance of an exclusive right is able to prejudice the effectiveness of the Commu- nity rules on competition and is thus incom- patible with Article 90(1), it is appropriate to 13. The case-law so far oudined is finally consider features such as the ability of the completed by another group of judgments possessor of the exclusive right to satisfy including those in RTT v GB-Inno-BM 14 demand on the market in question and (at and in Case C-271/90 (telecommunications least) the possibility that he might be encour- services). The latter in particular makes it aged to engage in conduct contrary to Arti- clear that the extension of a statutory cle 86 of the Treaty. monopoly to a neighbouring but separate market without objective justification is pro- hibited as such by the combined provisions of Articles 90(1) and 86.

monopoly entails discriminatory effects to the detriment of broadcasts from other Member States. However, in the subsequent judgment in Case C-353/89 Commission v Still from the RTT v GB-Inno-BM judgment Netherlands, 12 the Court stated that rules it may be seen that: which require broadcasting organizations to have recourse, for the production of pro- grammes, to a national undertaking clearly comes under Article 59 and is therefore pro- — when a national provision extends an hibited unless justified grounds relating to exclusive right to another market without the general interest (see paragraph 31 et seq. any objective justification, it is the exten- of the grounds of judgment). Under Article sion as such which is prohibited by Arti- 59 therefore, a statutory monopoly for ser- cles 90(1) and 86, and it is not necessary vices cannot restrict the freedom of those for to prove that the State has encouraged w h o m the service is intended to have abuses actually committed by the under- recourse to persons providing services who taking possessed of the exclusive right are established in other Member States. (paragraphs 23 and 24); However, Article 59 does not make it possi- ble to deal with a different situation: that in which, as precisely in this case, the statutory 13 — In the Höfner and Eher judgment the Court had stated that Article 59 was not applicable to that case in view of the fact that both the undertaking possessing the exclusive right and the person for whom the service was intended were nation- als of one and the same Member State.

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CORBEAU

— that the activity of producing and mar- the market structure is already affected b y keting products (affected by the exclusive the existence of a prior exclusive right; in right) is an activity which must be open such circumstances to protect other sectors to any undertaking (paragraph 22); of activity from free competition is not in principle compatible with a system intended to guarantee freedom of the market and effective competition between undertakings. — that the exclusion or restriction of com- petition resulting from the national pro- vision in question may be justified on the basis of Article 90(2) on condition that it However, a clarification seems required. P r o - is proportionate to certain 'essential visions extending the scope of an exclusive requirements' (paragraph 22): that case right are not by their nature different from concerned the safety of users and of provisions establishing an exclusive right. those operating the network and the pro- They both eliminate, in a given sector, the tection of the network against any dam- possibility of the free exercise of economic age. activity and hence of competition. They may therefore be examined in the light of Articles 90 and 86. And in both cases what it is essen- tial to check is whether or not the provisions in question are objectively justified. Considerations regarding the case-law as a whole

An examination of such justifications seems to me in fact to be the main feature of the case-law referred to (see the judgments in 14. The review of the case-law so far seems Case 10/71 (Port of Mertert), van Ameyde, to confirm that Community law lays down Sacchi, RTT v GB-Inno-BM and Case precise limits to the power of Member States C-271/90 (telecommunications services). to confer exclusive rights. In the services sec- From that point of view it will therefore be tor provisions conferring such rights may be essential to consider whether the exclusive appraised in the light of the combined provi- rights conferred by the States are justified b y sions of Articles 90 and 86 or, where the requirements of general interest which are conditions are met, Articles 90 and 59. themselves consistent with the Community's objectives.

The case-law is not unambiguous as regards In accordance with its social function, the the question whether an appraisal of such postal service is organized in such a way as requirements must be effected on the basis of to meet certain specific requirements. It is in Article 90(1) (see in that respect the judg- fact: ments in Sacchi and van Ameydé) or on that of Article 90(2) (see the judgments in Case 10/71 (Port of Mertért) and, more recently, RTT v GB-Inno-BM). The first solution — provided on request throughout the would appear to be more consistent with the national territory (public service require- content of the two provisions. In fact Article ment); 90(1) refers to measures adopted by States, whereas Article 90(2) concerns undertakings and restricts the application of the rules o n competition to the conduct of those under- — at an average level of quality; takings. The distinction, however, does not seem to have any considerable legal impor- tance. In any event it will be a matter of determining whether the restrictions on — at a single tariff (that is, irrespective of competition resulting from the national the distance to be covered and the loca- scheme in question are necessary for the tion of the place of despatch or of desti- realization of the requirements of public nation) fixed at a level accessible to all. interest pursued.

For that purpose the postal service carries out a tariff equalization. That consists in fix- ing the tariffs in terms of the average cost of The compatibility of the exclusive rights running the service, thus setting off against granted to the Belgian postal administration one another the surpluses realized on lowest with Articles 90 and 86 must be assessed in unit cost services (in particular the most the light of the abovementioned factors. heavily used and best inter-connected ser- vices) and the deficits borne on the highest unit cost services.

It follows — as is largely confirmed by the has contended that the Belgian postal Commission Green Paper on postal servic- monopoly is no longer justified by reason of es 15 — that in the absence of a statutory its inability to offer qualitatively acceptable monopoly the postal administration would services capable of satisfying demand and the be compelled, in order to maintain its own users' expectations. financial equilibrium, to abolish the system of tariff equalization and to adopt differential tariffs. However, such a solution, apart from the question of its actual practicability, would conflict with the special social func- It is correct that the Court, in the Höfner tion of the postal service, since it would and Elser judgment, took the view that the involve an increase in tariffs for the less-used establishment of a statutory monopoly was services, which are more expensive to run, incompatible with Articles 90 and 86 when and this would mean actually penalizing cor- the monopoly itself was obviously not in a respondence to and from the more isolated position to satisfy demand. It is doubtful, and less thickly-populated areas which are however, whether that case-law may be less developed and where, as a result, the transposed to the case of a postal monopoly, increased tariffs for an essential public ser- which, even though the quality of its services vice such as the postal service would be par- may appear indifferent and below the pub- ticularly harmful from all points of view. lic's expectations, is nevertheless required b y law to provide the service for all who request it.

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OPINION OF MR TESAURO — CASE C-320/91

What characterizes the rapid delivery service That applies in particular to the rapid deliv- is in general the added value which it pre- ery service at issue in these proceedings. sents as compared with the basic service, an

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CORBEAU

added value which, in its turn, consists in area for delivery in that area.' However, one or more additional services such as: there is nothing to prevent international rapid delivery undertakings from performing 'city mail' services. — collection of the correspondence from the sender's address;

The rapid delivery service may also operate in a territorial area of variable size: interna- tional, national or even infranational. 17 In particular the Green Paper specifies, with In the second place, however, there is noth- regard to 'city mail', that 'This is a service ing to prevent the public authorities from operated by private operators. It usually adopting rules on tariffs allowing rapid deliv- refers to mail which is collected in an urban ery services only above a certain threshold. Such rules would make it possible to safe- guard the basic postal service's financial equilibrium but without harming the rapid 16 — The fact that such services are those which most frequently delivery service: in fact, if it is correct that characterize the rapid delivery service may be seen not only from the Green Paper but also from the decisions adopted the latter contains an added value as com- by the Commission under Article 90(3) in relation to the scheme for the operations of the rapid delivery service in pared with the basic postal service it may be Spain (Decision 90/456/EEC of 1 August 1990, OJ 1990 L10, p. 19) and in the Netherlands (Decision assumed that the user will be prepared to 90/16ÆEC of 20 December 1989, OJ 1989 L 10, p. 47). pay for the rapid delivery service a higher 17 — As regards the provision of rapid delivery services in a ter- price than that paid for the normal postal ritorially restricted area, see Commission Decision 90/16/EEC in which it was stated that on 1 January service. Such rules, moreover, on condition 1989 the undertakings providing such services in the Neth- erlands were to a large extent small and medium-sized that they are transparent and remain within undertakings employing for that service some 4000 persons mostly engaged in distributing the correspondence within the limits necessary to guarantee the require- the country. ments of the postal monopoly for basic

O n the other hand it may be stressed that 19. That having been said, and for the exam- the need to liberalize the rapid delivery ser- ination of the compatibility with Articles vice is substantially recognized by the States 90 and 86 of the application of the exclusive themselves, which are in fact fully aware that right not only to the basic postal service but the rapid delivery service is a service objec- also to the rapid delivery services, it should tively different from the basic service and be pointed out that the requirements justify- that it covers a separate market. If, for a ing the maintenance of the monopoly for the period, the statutory monopoly was applied basic postal service do not, on the contrary, also to the rapid delivery service, that did not exist for the rapid delivery service. happen because it was thought for some rea- son necessary to reserve that service to the postal administration but was simply depen- dent on the fact that the postal monopoly was of a general nature and that conse- quently at the time when new services with added value began to spread for the distribu- The latter does not fulfil the special social tion of correspondence, they automatically function of the postal monopoly and is not fell within the sphere of the monopoly. It has subject to the same burdens: as distinct from not however been denied, not only that there the basic postal service, it does not meet a is no justification for monopolizing the rapid generalized need of society, but special delivery service, but that, above all, the requirements of specific categories of users postal administration would not in any event (mostly business customers). Consequently be in a position to provide on its own the it is not subjected to the restraints which rapid delivery services demanded by the characterize the postal service, that is, the market (as may be seen from the Green obligation to provide the service to all who Paper, there are only three Member States within the Community in which the rapid delivery service has not been entirely liberal- ized). 18 — Judgment in Case 66/86 Ahmed Saeed Flugreisen and Oth- ers v Zentrale zur Bekämpfung unlauteren Wettbewerbs [1989] ECR 803 at paragraph 54 et seq. of the grounds of judgment. 19 — In Decision 90/16/EEC the Commission considered t h e Netherlands legislation providing for a minimum tariff for express delivery services. In that case the Commission, without calling in question the minimum tariff as such, w a s critical of the fact that the tariff applied to the private oper- 20. Then as regards the effect on intra- ators and not to the postal administration, which reserved to itself the power to carry out the rapid delivery service Community trade of the restrictions on even below the minimum tariff. competition linked to the application of the It should also be noted that the adoption of a tariff system t o provide a legal distinction between the province of the postal monopoly to the rapid delivery ser- rapid delivery service (liberalized) and the basic postal ser- vice, it is sufficient to state that the national vice (subject to a monopoly) is recommended in the C o m - mission Green Paper (see p p . 43, 201, 359 and 360). legislation in question is such as to prevent

operators from other Member States either It must first be stated that the definition of from establishing themselves on the Belgian rapid delivery service as compared with the market to provide rapid delivery services or basic service must be worked out at Com- from providing such services from other munity level and on the basis of criteria Member States. which are as clear and uniform as possible. O n that definition depends in fact the appli- cation to certain activities of a completely different legal system: on the one hand liber- alization, on the other public monopoly. The activities subject to such systems must be 21. There is one more point. In these pro- defined in identical terms throughout the ceedings both the governments which have Community. submitted observations and the Régie des Postes itself have agreed in taking the view that, in principle, the exclusive rights granted to the postal administration, to be compati- ble with the Treaty, must have a limited scope and cannot be extended to rapid deliv- It has been stated that the rapid delivery ser- ery services showing a genuine added value vice is characterized by the supply to the and consequently differing from the basic user of additional services as compared with service. the basic service and it has been indicated that the accent must be placed not so much on the greater speed of despatch as on the reliability guaranteed to the user. Moreover, provided that the service supplied contains an added value, it is unimportant that it What has been contested in these proceed- should be performed in a greater or smaller ings, on the other hand, is that operations for geographical area. the distribution of correspondence such as those carried out by Mr Corbeau may be regarded as a rapid delivery service. In that respect it has been contended that a service for the distribution of correspondence which is geographically limited, which has delivery As regards Mr Corbeau's operations it periods similar to or slightly less than those should be said, on the basis of the descrip- of the postal service and for which the rates tion appearing in the documents before the demanded are lower (though only slightly Court and subject to the checks which only so) than the normal postal tariffs does not the national court can effect, that: really offer an added value, but that it is comparable to the basic postal service and must therefore be subject to the statutory monopoly. — the defendant collects the correspondence from the sender's address;

23. In the light of the foregoing considerations I think it would be possible to reply to the national court as follows:

(1) A n organization such as the Belgian Régie des Postes to which the law has granted a general monopoly in postal services for the whole national territory constitutes an undertaking having a dominant position in a substantial part of the common market within the meaning of Article 86 of the Treaty.

(2) The provisions of Article 90(1) of the Treaty, in conjunction with Article 86, prevent a Member State from applying the statutory monopoly established for the basic postal service also to rapid delivery services such as those at issue in the main proceedings, which present an actual added value as compared with the operations of collection and delivery of correspondence effected by the basic postal service.

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