C-368/95

At the origin of this case is just such a prize draw, organized by a German weekly maga- zine, which is also distributed in Austria, and open to all its readers who submit the cor- rect solution to puzzles appearing in the magazine. Since this is prohibited by the 2. An Austrian law enacted in 1992 ' intro- Austrian legislation on unfair competition, duced far-reaching liberalization in the area the Handelsgericht Wien (Commercial of competition and repealed inter alia provi- Court, Vienna), before which the main pro- sions prohibiting traders from awarding ceedings are pending, has asked the Court if prizes and other benefits to consumers. At Article 30 of the Treaty precludes the appli- the same time, however, a new paragraph, 9a, cation of national rules, such as those con- was inserted into the Unfair Competition tained in the relevant Austrian legislation, Law (Gesetz gegen den unlauteren Wettbe- which result in the outright prohibition of werb; hereinafter the 'UWG') which, as the sale in that country of periodicals con- amended in 1993, in addition to the more taining prize competitions or games, even if general prohibition on free gifts linked to

* Original language: Italian. 1 — Law No 1992/147 on the 'deregulation of competition'.

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2 — Parzgraph 9a, inserted into the UWG by the aforementioned Law N o 1992/147, was amended one year later by Law N o 1993/227 specifically to the effect of precluding any possibil- ity of giving away free gifts or the chance to compete for prizes in connection with sales of periodicals. 3 — More precisely, Paragraph 9a(l) does not apply when the gift 4. In view of the fact that the German legis- consists of 'the opportunity to take part in a competition lation on unfair competition does not con- (lottery) in which the value of the potential individual entries, obtained by dividing the total number of prizes at stake by the number of entry vouchers, does not exceed 5 schillings and the total value of the prizes competed for does not exceed 300 000 schillings'. Prize competitions and games are thus permitted, within these limits, in conjunction with 4 — Issue 9 of 22 February 1995. The subsequent issues of the the supply of services and the sale of products other than magazine had competitions of the same type with the same periodicals. prizes on offer.

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tain any rule to the same effect as Paragraph relevant national legislation satisfies the test 9a of the U W G 5 and that the prohibition on for a measure having equivalent effect to a the sale of periodicals contained in the con- quantitative restriction by being capable, in tested provision is capable of affecting intra- accordance with the well-known Dassonville Community trade, the Handelsgericht Wien formula, of 'hindering, directly or indirectly, considered it necessary, in order to reach its actually or potentially, intra-Community decision, to refer the following question to trade'. 6 the Court of Justice for a preliminary ruling:

6 — Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837, paragraph 5. 5 — Pursuant to Paragraph 1 of the German Law on unfair com- 7 — Joined Cases C-267/91 and C-268/91 Keck and Mithouard petition the sale of periodicals containing free items is [1993] ECR 1-6097. See also the recent decision in Joined unlawful only if in the particular instance they are for some Cases C-418/93, C-419/93, C-420/93, C-421/93, C-460/93, reason indecent or immoral. However, prize competitions C-461/93, C-462/93, C-464/93, C-9/94, C-10/94, C-ll/94, arc lawful where, as in the present case, they form an integral C-14/94, C-15/94, C-23/94, C-24/94 and C-332/94 Casa part of the publication's recreational content. Uno and Others [1996] ECR 1-2975.

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does not come within the scope of Article 30 which take precedence over the requirements of the Treaty in the first place. of the free movement of goods.

7. It should be borne in mind at this point that in Keck and Mithouard the Court pri- 8. In the light of that distinction it is there- marily confirmed the 'Cassis de Dijon'8 fore necessary to examine whether the pro- case-law by reaffirming that Article 30 of the hibition laid down in the Austrian legislation Treaty, in the absence of harmonization of on unfair competition constitutes a measure legislation, prohibits obstacles to the free which concerns the product characteristics movement of goods lawfully manufactured or the selling arrangements. It is undoubt- and marketed in the Member State of origin, edly true that the inclusion of prize competi- which are the consequence of applying rules tions in a magazine may well constitute a that lay down requirements to be met by method of promoting sales of the magazine, such goods, such as those relating, for as the Austrian Government argued. Yet the example, to presentation, labelling or pack- fact remains that the competitions in ques- aging, and that this is so even if those rules tion, together with the prizes on offer, form apply without distinction to domestic prod- part of the magazine's content and thus ucts and imported products. In such cases relate directly to the product. The contested the national measures in question can be jus- prohibition, although of a general and non- tified only by public-interest objectives discriminatory nature, may not therefore be

8 — Case 120/78 REWE-Zentral v Bundesmonopolverwaltung 9 — Keck and Mithouard judgment (cited in footnote 7), para- für Branntwein [1979] ECR 649. graph 16; emphasis added.

In this regard I would point out that when after the Keck and Mithouard decision the Court had to give judgment on the prohibi- tion of a particular type of publicity, carried on the actual packaging of the relevant prod- uct, it stated that '[A]Ithough it applies to all products without distinction, a prohibition (...) which relates to the marketing in a Mem- ber State of products bearing the same pub- In this case, it is clear that the impugned licity markings as those lawfully used in measure prohibits the access to the market of other Member States, is by nature such as to periodicals having the characteristics of the hinder intra-Community trade. It may com- weekly magazine 'Laura'. Even if one pel the importer to adjust the presentation of regards it as having to do with selling his products according to the place where arrangements, it is still the case that the they are to be marketed and consequently to measure in question, by preventing the access incur additional packaging and advertising to the market of the product in question, does costs'. 1 0 not fall within the scope of the Keck and Mithouard case-law. This point is borne out by the decision in Alpine Investments in which the Court, given an opportunity to extend by analogy the criteria applied in Keck and Mithouard to the area of services, emphasized the fact that, in contrast to the

At a general level then I think it can reason­ ably be inferred that the only measures excluded from the scope of Article 30 are those which are absolutely general in nature, which apply — needless to say — without 10. It is also instructive to recall the mea­ distinction, which do not impede imports sures which the Court has hitherto held to and which might lead at most to a (hypo­ relate to 'selling arrangements' and thus to thetical) reduction in the volume of imports fall outside the scope of Article 30. In addi­ only as a consequence of an equally hypo­ tion to the prohibition on below-cost selling thetical reduction in the overall volume of considered in Keck and Mithouard, other sales. Moreover, the Court itself has not hesi­ measures deemed to come within this cat­ tated to emphasize, and indeed has laid down egory have included: a prohibition on selling as a basic premiss underlying this approach, at a very low profit margin; 1 5 rules govern­ that 'the fact that national legislation may ing the opening hours of shops 1 6 and filling restrict the volume of sales generally, and stations; 1 7 a prohibition on selling infant hence the volume of sales of products from formula otherwise than in pharmacies; 1 8 a other Member States, is not sufficient to retailing system for manufactured tobacco characterize such legislation as a measure p r o d u c t s ; , 9 a prohibition on pharmacists having an equivalent effect to a quantitative advertising quasi-pharmaceutical products restriction'. Ώ outside pharmacies; 2 0 a prohibition on tele­ vision advertising by distribution compa­

The Court has consistently h e l d 2 i that potential obstacles to trade — which are due, as here, to differences in national legislation — are acceptable if the 'mandatory require- In conclusion, the measure in question, by ments' pleaded to justify the national meas- prohibiting the importation of magazines of ure in question satisfy the following three a certain format and having certain character- conditions: (a) they are regarded as meriting istics, amounts to an outright ban on the protection by Community law; (b) they are importation of a specific product, which is suitable for the purpose of attaining the therefore simply denied access to the market objective pursued; (c) they are appropriate for as long as it retains that format and con- and necessary for the purpose of attaining tent. The measure is thus by nature such as that objective, which is the case where there to impede intra-Community trade and there- are no alternative measures less restrictive of fore falls clearly, at least on the face of it, trade. within the scope of Article 30.

These are mandatory requirements which become the determining factor in the pur- have been recognized as such in previous chase decision'. judgments of the Court and which therefore, it goes without saying, are worthy of protec- tion by Community law. In my view, how- ever, there are not a few well-founded con- cerns regarding the suitability of some of them, even in terms of the causal connection alone, to justify the national measure under discussion. Accordingly I think it sensible to Going by the explanatory memorandum clear up some confusion which may have therefore, the prohibition on the sale of peri- arisen in the course of the procedure and, by odicals containing prize competitions or examining the premisses on which they are games has as its essential purpose the main- based, to narrow the range of justifications tenance of press diversity 24 and, to a lesser which may be taken into consideration in extent, consumer protection and fair trading. this case. These then are the mandatory requirements which may justify the impugned prohibition; these are indeed the only justifications adduced by the Austrian Government t o defend the compatibility of the prohibition with the Treaty provisions on the free move- ment of goods.

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appear. 2? The social policy and tax evasion considerations which form the basis of the Schindler judgment thus do not even arise in this case, since there is no connection between such considerations and the prohi- 16. As regards the relevance of the Schindler bition in question. Moreover, the fact that judgment to the case in hand I think that one the Austrian legislation makes no mention of further point must be made. The special fea- such matters is significant and one may infer tures of lotteries and games of chance in gen- that 'requirements' not expressly set out in eral led the Court to state that 'national authorities [have] a sufficient degree of lati- tude to determine what is required to protect the players and, more generally, in the light 26 — The Court added that 'A final eround which is not without relevance, although it cannot in itself be regarded as an objective justification, is that lotteries may make a signifi- cant contribution to the financing of benevolent or public interest activities such as social works, charitable works, 28 — Even if one sides with the great philosopher Benedetto sport or culture' (paragraph 60; emphasis added). Croce, who said that lotteries are 'a tax on fools', I do not 27 — It would be different only if the periodical were built think that the undoubted benefit to the State of such a 'tax' around the lottery, in other words if it were merely a pre- can justify the outlawing of the activity when the proceeds text for organizing a large-scale lottery of major propor- flow not to the State of which the player is a citizen but to tions, particularly in respect of the size of the prizes on another Sute or, as in the present case, to some entity other

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of the specific social and cultural features of to be regarded as applying to every game of each Member State, to maintain order in chance, meaning by that any drawing of lots society, as regards the manner in which lot- for prizes, irrespective of the scale and extent teries are operated, the size of the stakes, and of the game in question, thus also including the allocation of the profits they yield. In the present case, a dangerous and wholly those circumstances, it is for them to assess unwarranted breach would be opened in the not only whether it is necessary to restrict exercise of the fundamental freedoms guar- the activities of lotteries but also whether anteed by the Treaty. Any restriction placed they should be prohibited, provided that on these freedoms, needless to say, must be those restrictions are not discriminatory'. 29 an exception which must be strictly con- In other words, the Court, while taking due strued and hence subjected to a rigorous test account of the suitability of the prohibition of proportionality. in question for the purpose of attaining the aims to be achieved, found that by reason of the particular nature of games of chance the Member States have broad discretion in their regard with the result that it is not even nec- essary, again provided the measures are not discriminatory, to test their proportionality by examining whether there are other mea- sures less restrictive of trade by which the 17. In the light of all those considerations, I same aims could be achieved: the Court now turn to examine the proportionality of therefore did not embark on a rigorous test the measure in question in relation to the of proportionality. 'mandatory requirements' which are rel- evant, that is, those which were expressly set out as the basis for its adoption: consumer protection and fair trading, together with the maintenance of press diversity.

It was also argued that the lawfulness of restrictions on trade through measures such as the one under discussion had been upheld by the Court in the Oosthoek case, 30 in which it was held that 'the offering of free While it is true that offering a free gift could gifts as a means of sales promotion may mis- lead purchasers to think that the gift in ques- lead consumers as to the real prices of certain tion was in fact entirely free and thus mis- products and distort the conditions on which lead them as to the real price of the product genuine competition is based. Legislation they are about to buy, I do not think that the which restricts or even prohibits such com- same holds true in relation to the purchase of mercial practices for that reason is therefore a periodical containing crossword puzzles. In capable of contributing to consumer protec- this regard it is pertinent to recall that the tion and fair trading'. consumer taken into consideration by the Court in its judgments and to whom proper protection must be given against conduct which may be misleading or otherwise harm- ful, is the average consumer, that is, a 'rea- sonably circumspect consumer'. 3 2 Such a consumer, in my opinion, would be very unlikely to be misled as to the real price of a periodical by reason solely of the fact that it 19. It must first be said that the reference to Oosthoek is only partly relevant. That case concerned a general prohibition on the offer- 31 — See point 2, above, and in particular footnote 3. ing of free gifts; in our case, by contrast, we 32 — This is, for example, the expression used in the Mars judg- are concerned with a prohibition which ment (cited in footnote 10), paragraph 24. With this in mind, I do not think wc need dwell unduly on the argu- affects only periodicals and not other publi- ment advanced by the Portuguese Government that the consumer could be led into purchasing hundreds of copies cations or communications addressed to the of the same magazine with a view to increasing his chances public: prize competitions or games are of being the lucky winner of the draw. Anyone w h o buys hundreds of copies of the same magazine and solves the same crossword puzzle hundreds of times requires, if I may say so, quite a different form of protection. Such an indi- vidual might, by the same token, buy hundreds of tickets for a single lottery draw or buy several scratch-cards every 30 — Case 286/81 [1982] ECR 4575, paragraph 18. day, yet such games arc not prohibited.

21. Since the Court has included the safe- guarding of diversity among the general interest grounds 'which can justify restric- Conversely, the measure must be regarded as tions on the freedom to provide services, 33 not necessary if it transpires that the prize competitions do not constitute an induce- ment to purchase which causes a shift by 33 — Sec, for example, Case C-353/89 Commission v Netherlands consumers towards that type of periodical [1991] ECR 1-4069, in which the Court held that 'the main- and/or if in any event the said prize competi- tenance of ... pluralism (...) is connected with freedom of expression, as protected by Article 10 of the European tions, by reason of their target market and Convention for the Protccoon of Human Rights and Fun- damental Freedoms, which is one of the fundamental rights the different needs for which they cater, do guaranteed by the Community legal order' (paragraph 30). not affect the sales of Austrian periodicals Another case in point is Case 4/73 Nola [1974] ECR 491, paragraph 13. produced by small publishers. If, as stated in

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23. In view of the-foregoing, I take the view 24. I would add, in case the measure should that the suitability of the measure in ques- be found to be necessary for the fulfilment tion to attain the objective pursued cannot of the requirement in question, that it is also be determined a priori but requires an inves- proportionate, in view of the absence of any tigation of the specific circumstances, to be means less restrictive of trade which would conducted on the basis of statistical data on be capable of ensuring the same result. In the Austrian press market. The matters to be this regard I would dismiss the argument determined include the market shares held advanced in the course of the procedure to by the various publishers or publishing groups and the trend in market shares, the relevant product market and thus the substi- 35 — During the course of the hearing, the Austrian Government tutability, from the point of view of the con- confined itself to stating the existence of a problem in Aus- tria due to the media market being concentrated in the sumer, of periodicals which, at first sight, hands of a small number of traders and that in the early appear to cater for altogether different 1990s the largest Austrian publishing group had a market share of 50%, which subsequently fell to 40%. It is not needs; 34 and, finally, what impact the sale in clear, however, whether the drop was due to an increase in the share held by small local publishers or rather, and more Austria of periodicals such as 'Laura' has on significantly, whether it was due to the presence on the market of periodicals from other Member States. small publishers. 36 — What has to be determined, therefore, is whether it is the presence of prize competitions that constitutes the deciding factor in the purchase of a particulai periodical, within the category of 'recreational' magazines, regardless of the char- acterisucs it possesses. Put another way, would the con- 34 — In this regard let me say that whiic it may be true, as argued sumer who chooses to purchase a weekly such as 'Laura' be by the Commission, that it is not possible to draw a distinc- equally likely to purchase a sports, current affairs, literary tion between informative publications and entertainment or scientific periodical provided it also offered a chance to publications and that it is not only in respect of the former win a prize? Or would the consumer in question still buy a that diversity must be safeguarded, it is equally true that a 'recreational' periodical and choose from among that cat- weekly magazine such as 'Laura' cannot, by its very nature, egory on the basis of personal preferences, which could of but be in competition with periodicals of the same kind and course be influenced by the presence of prize competitions certainly docs not compete with periodicals devoted to but could also be affected by other factors such as, for local news, current affairs or sport. instance, a particularly attractive cover.

As it is in my opinion in any event for the national court to determine, in order to decide on the necessity of the contested measure, whether the inclusion of prize com- petitions indeed constitutes an inducement to purchase, I do not think I need say any more on this issue. None the less, it must be This solution might very well be adopted by emphasized that Paragraph 9a of the U W G the trader in question, perhaps in order to be must be identical in its application to domes- able to continue to distribute the magazine tic and imported periodicals. If it were other- 'Laura' in Austria if the Court should find wise the measure in question, or rather the the impugned measure to be compatible with manner of its implementation in practice, the Treaty provisions on the free movement would be discriminatory and accordingly of goods, but that has no bearing on the pro- could not under any circumstances be justi- portionality of the measure itself. The latter, fied by the need to maintain press diversity. it is hardly necessary to point out, prohibits the sale of periodicals containing prize com- petitions precisely because they offer the possibility of winning a prize and not because they contain games. If the magazine In other words, if the national court should 'Laura' excluded Austrian residents from the find that it is indeed the case that Austrian possibility of winning a prize the Court periodicals may freely and lawfully offer to would never have been called upon to give the public that which periodicals from other judgment on the contested prohibition. Member States are precluded from offering, the matter would be immediately resolved, because that would constitute a discrimina-

27. The Court has previously recognized that the maintenance of diversity in the audiovisual sector is a ground of justification 26. Although it is not the subject of a spe- in the general interest: precisely because the cific question by the referring court, I feel value at stake was one connected to the right that the issue of the compatibility of the of freedom of expression enshrined in national provision under discussion with Article 10 of the Convention. 4° At first sight Article 10 of the European Convention for it might therefore appear self-evident that the Protection of Human Rights and Funda- the justification advanced is compatible with mental Freedoms (hereinafter 'the Conven- Article 10 of the Convention. 41 tion'), which was raised during the course of the procedure, merits a response on the part of the Court. That is, of course, if the Court comes to the conclusion that the provision in 39 — On this point see Cise C-260/89 ERT [1991] E C R 1-2925. question can be justified on the basis of the In its judgment in that case the Court held that 'where a Member State relics on the combined provisions of Articles mandatory requirements discussed above. 56 and 66 in order to justify rules which are likely to obstruct the exercise of the freedom to provide services, such justification, provided for by Community law, must be interpreted in the light of the general principles of law and in particular of fundamental rights. Thus the national rules in question can fall under the exceptions provided for by the combined provisions of Articles 56 and 66 only if they arc compatible with the fundamental rights the obser- vance of which is ensured by the Court' (paragraph 43). The Court therefore found that 'in such a case, it is for the national court and, if necessary, the Court of Justice to It is firmly established by the case-law on appraise the application of those provisions having regard the subject that the Court's supervisory to all the rules of Community law, including freedom of expression, as embodied in Article 10 of the European jurisdiction, in addition to the power to Convention on Human Rights, as a general principle of law the observance of which is ensured by the Court' (para- review measures adopted by the Community graph 44). The same considerations also apply, obviously, to institutions in the exercise of their functions requirements put forward to justify national measures which may hinder trade in goods. and measures adopted by the Member States 40 — Sec footnote 33. in order to give effect to Community mea- 41 — On this point sec also the decision of the Austrian Consti- sures, or other acts or omissions by national tutional Court referred to above (cited in footnote 24), which emphasizes that the information media are not mere authorities, include the power to review the loods but also an essential clement in the formation of pub- justifications put forward by a Member State { ic opinion. Legislation which aims, by measures which prohibit certain forms of publicity, to ensure the survival of for a national measure which would other- small publishing houses, promotes the observance not just of the Austrian Constitution but also of Article 10 of the wise be incompatible with Community European Convention on Human Rights.

But in the present case two rights both pro- protected by Article 10. 45 In such instances, tected by the same provision are to be con- however, the Court of Human Rights con- sidered: on the one hand, freedom of the ducts a less rigorous test of proportionality, press to be accorded to every trader in the on the basis that in this area the States have a sector, as a general principle, together with greater margin of discretion. 46 the highly important and correlative right of the public to receive every kind of infor- mation and ideas; on the other hand, the maintenance of media diversity in a demo-

28. With those considerations in mind, let to be placed on individual freedom of me first observe that freedom of the press may be restricted only in the name of a 'pressing social need', 43 an exhaustive list of 45 — On this point see for example Grapperà Radio AG v Swit- such needs being set out in Article 10.2 of zerland (28 March 1990, Scries A N o 173). In response to the argument advanced by the defendant government, the Convention. ** The case-law of the Euro- which had raised doubts about the possibility of relying on pean Court of Human Rights itself leaves Article 10 in relation to broadcasts consisting mainly of light music and commercials, the Court of Human Rights not the slightest doubt that a 'commercial held that Article 10.1 applies without 'there being any need to draw distinctions according to the content of the pro- message' or, if one prefers, the commercial grammes' (see in particular paragraphs 54 and 55).

In that case N o 90); Lingens v Austria (8 July 1986, Series A N o 103). the Court affirmed that pluralism in the media constitutes 44 — Article 10.2 provides, I need scarcely recall, that the exercise an essential value in a democratic society and may therefore of the freedoms it protects 'may be subject to such formali- entail a limitation on freedom of expression. However the ties, conditions, restrictions or penalties as are prescribed Court did not accept the defendant government's argument by law and arc necessary in a democratic society, in the that a television monopoly was an appropriate and neces- interests of national security, territorial integrity or public sary means to ensure pluralism, particularly in relation to safety, for the prevention or disorder or crime, for the pro- quality and balance in programmes and opinions.

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expression and information, on condition marketing of periodicals containing prize however that they are necessary and propor- competitions is not in conflict with the obli- tionate to the objective to be achieved. gation to guarantee freedom of expression and is therefore in conformity with Article 10 of the Convention, but only within the limits of what is actually necessary and pro- portionate to the attainment of the objective of safeguarding press diversity. These limits, I can only repeat, are strict and are outlined 29. In the light of the foregoing, in particu- above in my discussion of the suitability and lar the recognition given by the Court of proportionality of the contested measure vis- Human Rights to the two values in issue, I à-vis the mandatory requirement relied take the view that the prohibition on the upon. 48

Conclusion

30. In t h e light of t h e above considerations, I suggest that the C o u r t give the fol- l o w i n g reply t o the question submitted b y the Handelsgericht Wien: