C-67/96

OPINION OF MR JACOBS — CASE C-67/96, JOINED CASES C-115/97, C-116/97 AND C-117/97 AND CASE C-219/97

OPINION OF ADVOCATE GENERAL JACOBS delivered on 28 January 1999 *

Table of Contents

I — Introduction I - 5755 II — The national law background I - 5756 III — The facts in the main proceedings I - 5762 A — Case C-67/96 Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie I - 5762 B —Joined Cases C-115/97, C-116/97 and C-117/97 Brentjens' Handelsonder- neming BV v Stichting Bedrijfspensioenfonds voor de Handel in Bouwma- terialen I - 5764 C — Case C-219/97 BV Maatschappij Drijvende Bokken v Stichting Pensioen- fonds voor de Vervoer- en Havenbedrijven I - 5766 IV — Admissibility I - 5769 V — The scope of the questions referred I - 5771 VI — Article 85(1) of the Treaty I - 5772 A — Comparative overview I - 5774 B — Applicability ratione materiae of Article 85(1) of the Treaty I - 5784 1. Is there a general exception for the social field? I - 5785 2. Is there an exception for collective agreements between management and labour? I - 5787 (a) Is there a fundamental right to bargain collectively? I - 5787 (b)Encouragement of collective bargaining under Community law I - 5794 C — Agreement between undertakings I - 5802 1. Undertaking or association of undertakings I - 5802 (a) Employees I - 5803 (b) Trade unions I - 5805 (c) Employers I - 5807 2. Agreement or other form of concertation I - 5808 D — Restriction of competition I - 5809 1. The agreement to set up a single pension fund which employers manage jointly with the trade unions I - 5811 (a) Restriction of competition with regard to employers I - 5812 (b) Restrictions with regard to pension insurance companies I - 5816

2. The cases raise several issues of general importance which have to be addressed 1. In the present cases, referred to the before the more specific substantive ques- Court by the Netherlands Hoge Raad, the tions can be considered. At issue in all three Kantongerecht (Cantonal Court) Roer- cases is whether a national system in which, mond and the Kantongerecht Arnhem, the at the request of the representatives of Court is asked to give a ruling on a number employers and employees in a particular of questions concerning the compatibility sector of the economy, affiliation to a of a system of compulsory affiliation to sectoral pension fund is made compulsory sectoral pension funds with the competition for all undertakings in that sector infringes rules of the Treaty. Those questions arise in either Article 5 of the Treaty in conjunction the context of proceedings brought by three with Article 85 or Article 90(1) of the undertakings challenging orders issued by Treaty in conjunction with Article 86. The

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OPINION OF MR JACOBS — CASE C-67/96, JOINED CASES C-115/97, C-116/97 AND C-117/97 AND CASE C-219/97

4. The present cases are all concerned with second pillar sectoral pension schemes granting supplementary pensions to employees. In that respect they are different — First a statutory basic pension, granted from the supplementary pension scheme at by the State under the Algemene issue in Van Schijndel 2 which granted Ouderdomswet 1(General law on old pensions to members of a profession. age pensions, 'the AOW') and the

2 —Joined Cases C-430/93 and C-431/93 Van Schijndel and 1 — Stb. 1956, 281. Van Veen v SPF [1995] ECR I-4705.

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ALBANY V STICHTING BEDRIJFSPENSIOENFONDS TEXTIELINDUSTRIE

7. The first set of rules applicable to such schemes is the Wet betreffende verplichte deelneming in een bedrijfspensioenfonds of 17 March 1949 3 (Law on compulsory 10. In the parliamentary proceedings lead- ing to the adoption of the BPW the 3 — Stb. 1949, J 121. Government gave the following explana-

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OPINION OF MR JACOBS — CASE C-67/96, JOINED CASES C-115/97, C-116/97 AND C-117/97 AND CASE C-219/97

tion of the objectives of the rules on have attained a certain age can obtain the compulsory affiliation:4 benefits which they need. Where this is done on an individual basis — as it is in certain cases — and matters are left at that, the consequence is that those finding them- selves in the most favourable circumstances are able to provide for themselves with relative ease, by contrast with those who '... The present Bill is intended to lay down are less favourably placed.' rules in the field of pension arrangements for individuals which are similar to those contained in the Wet op het Algemeen Verbindend Verklaren van Bepalingen van Collectieve Arbeidsovereenkomsten (Law on declaring provisions of collective employment agreements generally binding) 11. According to Article 5(2) of the BPW a with regard to conditions of employment. It number of requirements must be fulfilled seeks therefore to avoid the possibility of before the Minister can make affiliation some employers in the sector gaining an compulsory. For example under Arti- advantage over other employers in the same cle 5(2), subparagraph IV, the representa- sector by not granting pensions...' tives of the employers and the workers have to sit in equal numbers on the management board and under subparagraph V the pension fund must have legal personality.

sory affiliation. Pursuant to that provision Article 1(b) states that the benefits granted the competent Minister issued the Beschik- by the special pension arrangements of the king van 29 december 1952 betreffende de firm have to be at least equivalent to the vaststelling van de richtlijnen voor de vrijs- ones granted by the sectoral fund. Arti- telling van deelneming in een bedrijfspen- cle 1(c) requires that the alternative scheme sioenfonds wegen een bijzondere pensions- provides sufficient guarantees for the fulfil- voorziening (Decree of 29 December 1952 ment of its pension obligations. Article 1(d) relating to the adoption of the guidelines on states that if the exemption leads to the the exemption from participation in a withdrawal of employees from the fund sectoral pension fund in case of special then reasonable compensation must be paid pension arrangements, 'the exemption for the actuarial loss incurred. guidelines' or 'the guidelines', since amen- ded on several occasions). 6

16. By virtue of Article 5 of the guidelines the fund must grant an exemption where 14. By virtue of Article 1 of those guide- the special pension arrangements of the lines, in the version applicable to the facts firm concerned meet the first three of the of the main proceedings, it is the sectoral abovementioned conditions and were in pension fund itself which grants exemp- force six months before the submission of the request as a result of which participa- tions. Exemptions have to be requested tion in the pension fund was made com- either by an employee on an individual pulsory. basis or, as in the main proceedings, by an employer for all his employees.

23. Article 1(6) of the PSW makes clear that it also applies to sectoral pension funds 20. Article 3(4) of the BPW empowers the to which affiliation has been made obliga- competent Minister to end compulsory tory under the BPW. affiliation for the whole sector. By virtue of Article 3(5) of the BPW, wherever the rules governing the pension fund are mod- ified, the competent Minister must end compulsory affiliation, unless he declares that he has no objections to the modifica- 24. Under Article 6a and 6b of the PSW, tions. which were introduced in 1990, the man- agement board of each fund has to set up at the request of a certain number of affiliated persons a 'deelnemersrad' (council of affili- ated persons) with consultative tasks regarding the management of the fund.

21. The second set of rules applicable to sectoral pension funds is contained in the Wet van 15 mei 1962 houdende regelen betreffende pensioen- en spaarvoorzienin- gen (Law on pension and savings funds, the 25. In the interest of the members of the 'PSW', as amended on several occasions). scheme Articles 9 and 10 of the PSW The law lays down a general framework for determine the manner in which the col-

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lected funds have to be administered. The must be sufficient to cover pension liabil- general rule is Article 9 which obliges ities. Under Anicie 14 investments have to pension funds to transfer the risk linked be made 'op solide wijze' (in a prudent to the pension commitments or to reinsure way). it. Thus, in order to eliminate the risk of maladministration or bad investments by the fund, the latter may use the collected capital solely for the purpose of entering into agreements with insurance companies.

27. Articles 13 to 16 of the PSW lay down rules on the investment of the collected capital. By virtue of Article 13 the assets of the scheme together with expected income 30. Of the 15 sectoral pension funds where affiliation has not been made compulsory by the State, the Government says that such 7 — E. Lutjens, Pensioenvoorzieningen voor werknemers: jur- intervention of the State is not necessary in idische beschouwingen over ouderdomspensioen. Zwolle 1989, p. 364. most cases either because there are collec-

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OPINION OF MR JACOBS — CASE C-67/%, JOINED CASES C-115/97, C-116/97 AND C-117/97 AND CASE C-219/97

tive agreements obliging de facto all industry was made compulsory at the employers of the sector to affiliate their request of the representatives of employers employees or because there is only a limited and employees by a decree issued in 1952. number of big employers in the sector A number of mergers took place and in which in any event have opted for affilia- 1975 the merger of the last two remaining tion of their employees to the relevant funds in the textile industry and the setting sectoral fund. The Netherlands Govern- up of a single fund for the whole industry ment says that the remaining voluntary made it necessary to issue a new decree sectoral funds'cover only a limited number making affiliation to the defendant Fund of small sectors or sectors where there is no compulsory. Since 1975 Albany has com- longer any significant industrial activity. plied with its obligation to participate in the scheme.

III — The facts in the main proceedings 33. From 1975 onwards the Fund operated on the basis of a so-called fixed-sum plan. The pension benefits were not related to salary but consisted of a fixed sum per year of service. According to Albany the max- imum pension a worker could expect after 50 years of service was merely NLG 200 A — Case C-67/96 Albany International per month. BV v Stichting Bedrijfspensioenfonds Tex- tielindustrie

36. Albany considered that its own pension arrangement was still more generous than the new scheme and that the changes to its 'Since at the time of the introduction of this own plan which became necessary after the amendment (1 January 1989), the complai- modification of the compulsory sectoral nant had for several years provided for its scheme were too burdensome and dispro- staff a supplementary pension plan which is portionate. It therefore asked the Fund to at least comparable to the one introduced exempt it from participation. on that date by the Fund, the Board considers it reasonable to request the Fund to make use of its power to grant exemp- tion or, if it can demonstrate to the Board — which it has not yet done — that there is no justification for a flexible approach in this case, in any event to allow 37. The Fund refused that request by for a period of notice.' decision of 28 December 1990. It argued inter alia that under the exemption guide- lines it was not obliged to grant an exemption because Albany's special pen- sion arrangements had not been in force for six months before the submission of the 40. Despite that ruling, the Fund did not request to make participation in the pen- reconsider its decision and Albany was sion scheme compulsory. Albany would served on 11 November 1992, upon appli- therefore have been entitled to an exemp- cation by the Fund, with an injunction tion only if it had established its own ordering it, pursuant to Article 18 of the scheme before 1975. BPW, to pay the statutory contributions for 1989, interest on that amount and collec- tion costs.

43. As regards the alleged violation of Community law, the Kantongerecht deci- ded by judgment of 4 March 1996 to seek a preliminary ruling on the following ques- 44. By a Decree of 28 June 1958 ('the 1958 tions: ' Decree' or 'the Decree') following a request made on 8 March 1958 by representatives of employers and employees in the building materials trade, the State Secretary for Social Affairs made participation in the Stichting Bedrijfspensioenfonds voor de Handel in Bouwmaterialen ('the Building ' 1 . Is a sectoral pension fund within the Materials Trade Fund' or 'the Fund') com- meaning of Article 1(1)(b) of the Wet pulsory. The Decree, which is based on the betreffende verplichte Deelneming in BPW, has since been further amended on a een Bedrijfspensioenfonds an undertak- number of occasions. Under the Decree, ing within the meaning of Articles 85, participation is compulsory for workers 86, or 90 of the EC Treaty? aged between 23 and 64 years inclusive

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ALBANY V STICHTING BEDRIJFSPENSIOENFONDS TEXTIELINDUSTRIE

who are employed in an undertaking which from contributions in respect of previous is exclusively or principally engaged in periods. Thus the Fund undertook to wholesale trade in building materials. respect Brentjens' existing pension arrange- ments for the period from 1963 to 1 Jan- uary 1990.

50. Brentjens instituted three sets of pro- ceedings before the Kantongerecht Roer- mond seeking annulment of the demands. It appears that Brentjens and Generali also, 47. In 1989 the Fund became aware of acting jointly, lodged a parallel complaint Brentjens' existence and affiliated it to its with the Commission of infringement by scheme as of 1 January 1990, exempting it the Netherlands and the Fund of Arti-

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OPINION OF MR JACOBS — CASE C-67/96, TOINED CASES C-115/97, C-116/97 AND C-117/97 AND CASE C-219/97

cles 3(g), 5 and 85, 90 and 86, and 52 and takings within a particular sector of 59 of the Treaty. activity ?

51. On 18 March 1997 the Kantongerecht 3. Must the term "undertaking", as used delivered three identical judgments in in the competition provisions (Arti- which it dismissed three of the four pleas cles 85 to 94) of the EC Treaty, be raised by Brentjens. As regards Brentjens' interpreted as including a sectoral pen- fourth plea to the effect that compulsory sion fund within the meaning of the participation in the Fund was contrary to Wet betreffende verplichte Deelneming Community law, the Kantongerecht put the in een Bedrijfspensioenfonds (Law on following questions to the Court: Compulsory Participation in a sectoral Pension Fund)?

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ALBANY V STICHTING BEDRIJFSPENSIOENFONDS TEXTIELINDUSTRIE

hoisting heavy loads on to pontoons and employees. The Fund therefore served a ships. final demand on Drijvende Bokken, requir- ing it to pay pension contributions amount- ing to NLG 132 000 together with interest and costs.

53. The respondent in the main proceed- ings, the Stichting Pensioenfonds voor de Vervoer- en Havenbedrijven ('the Dock Fund' or 'the Fund'), is a sectoral pension fund within the meaning of the BPW. By Decree of 9 September 1959 ('the 1959 56. Drijvende Bokken appealed against the Decree' or 'the Decree') the State Secretary demand for payment to the Kantongerecht. for Social Affairs and Public Health, acting It argued, first, that it did not fall within the on behalf of the Minister, made affiliation scope of the Decree and, secondly, that to the fund compulsory for all male compulsory affiliation was contrary to the employees aged 18 years or more who are Community competition rules. employed by a dock business in the dock area of the port of Rotterdam. By Decree of 17 December 1991 the scope of the Decree was extended to cover all employees who are regularly employed in a dock or similar business.

57. The Kantongerecht held that Drijven- de Bokken's employees were not employed in a dock business within the meaning of the Decree and that therefore Drijvende - Bokken's appeal was well founded. 54. According to Drijvende Bokken, the Fund operates on the basis of a fixed-sum plan in which pension benefits are not related to salary.

58. On appeal by the Fund the Rechtbank (District Court) held that Drijvende Bok- 55. Drijvende Bokken considered that it ken's employees were employed in a dock did not fall within the scope of the Decree business or equivalent business and that the and therefore joined another pension fund. Decree therefore applied. The Rechtbank Following the extension of the scope of the further rejected Drijvende Bokken's con- Decree in 1991 the Fund maintained that tention that the requirement of compulsory Drijvende Bokken fell within the scope of affiliation to the Fund was contrary to the Decree and that affiliation to the fund Community competition rules. It held that was compulsory for Drijvende Bokken's the Fund could not be regarded as an

4. If Question 3 is to be answered in the negative, are there other circumstances 2. Where a number of organisations which may render such compulsory which the Minister subsequently affiliation incompatible with the provi- regards as being sufficiently represen- sions of Article 90 of the EC Treaty tative of the employers' associations and, if so, what circumstances ? and trade unions in a particular sector, within the meaning of the first para- graph of Article 3 of the BPW, apply to the Minister pursuant to that provision for affiliation to a particular pension fund within the meaning of that Law to be made compulsory, is that joint action on the part of those organisa- 5. Can such compulsory affiliation be tions to be regarded as an agreement regarded as the grant to a sectoral between undertakings, a decision by pension fund of an exclusive right

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ALBANY V STICHTING BEDRIJFSPENSIOENFONDS TEXTIELINDUSTRIE

within the meaning of Article 90(1) of Metlicke, 8 Telemarsicabruzzo, 9 and Max the EC Treaty, and is such pension fund Mara, 1 0suggest that the questions may placed as a result in a dominant be inadmissible because the referring position which it abuses merely by court does not explain sufficiently the exercising that exclusive right, in par- legislative and factual context in which its ticular on the ground that such com- questions arise. The Commission, too, pulsory affiliation may affect trade expresses doubts on that point. In Joined between Member States and the provi- Cases C-115/97 to C-117/97 Brentjens sions of services is limited, contrary to the French Government raises a similar subparagraph (b) of the second para- objection. graph of Article 86, to the detriment of compulsorily affiliated undertakings and/or employees?

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OPINION OF MR JACOBS — CASE C-67/96, JOINED CASES C-115/97, C-116/97 AND C-117/97 AND CASE C-219/97

background information on the factual and three months respectively before the circumstances in which the cases arise and end of the written procedure in Albany as a on the Netherlands legislation. Notwith- result of the proceedings in Albany being standing any lacunas which there may be in suspended. The Hoge Raad's reference in the referring courts' decisions I therefore Drijvende Bokken, in particular, contains a consider that the Court is in a position to detailed account of the Netherlands legal give a useful reply to the national courts' framework. The French and the Nether- questions. lands Governments and the Commission submitted their written observations in Albany after those in Brentjens and in parallel to those in Drijvende Bokken. It is apparent from their observations in Albany that they were aware of the two other references. In the circumstances, therefore, it is clear that those wishing to submit 63. The requirement to provide adequate observations were sufficiently apprised of information on the legal and factual con- the relevant Netherlands legal background t e x t also serves' a second purpose, namely in time to take a position on the issues 'to give the Governments of the Member raised. States and other interested parties the opportunity to submit observations pur- suant to Article 20 of the Statute of the Court. It is the Court's duty to ensure that this opportunity is safeguarded. 13 In that regard it must be borne in mind that only the orders for reference are notified to the interested parties. 14

69. Albany, Brentjens and Drijvende Bok- ken ask the Court to address as a sixth issue the compatibility of the Netherlands legis- lation with Article 90, read in conjunction 68. First, is Article 85(1) of the Treaty with Article 52 or 59 of the Treaty. They infringed where representatives of employ- argue that the Kantongerecht Arnhem ers and employees within a particular indirectly raises the problem in Albany in sector of the economy agree collectively to its question 3 by asking whether 'other set up a single sectoral pension fund with circumstances' can render compulsory an exclusive right to administer the col- membership incompatible with Article 90 lected contributions and apply jointly to the of the Treaty. authorities to make affiliation to the fund compulsory for all persons belonging to that sector? 1 5Secondly, does a Member State infringe Article 5 read together with Article 85 of the Treaty where, at the request of the representatives of employers and employees, it makes participation in a sectoral pension scheme compulsory for all undertakings belonging to that sector? 16 Thirdly, are the Netherlands sectoral pen- sion funds 'undertakings' within the mean- 70. It is apparent from the order for ing of the competition provisions of the reference in Albany that the Kantongerecht Treaty? 1 7Fourthly, does a Member State modelled its questions on the Hoge Raad's infringe Articles 86 and 90 of the Treaty, last three questions in Van Schijndel, 20 read together, where it provides for com- which for procedural reasons the Court did pulsory affiliation to a sectoral pension not have to answer. It is also clear that the Kantongerecht understood the three ques-

tions as being concerned solely with the lected contributions and apply jointly to the Community competition rules. Nothing in authorities to make affiliation to the fund the file indicates that the parties or the compulsory for all persons belonging to national court discussed the applicability of that sector. Article 52 or Article 59 of the Treaty, which require the abolition of restrictions on the freedom of establishment and on the freedom to provide services within the Community. In Albany, in contrast to the situation in Brentjens where a foreign insurance company acting through its Netherlands branch is involved, there does 72. Albany, Brentjens and Drijvende Bok- not seem to be any cross-border element. I ken contend that in circumstances such as therefore consider that the Kantongerecht's these the employers of a given sector question, despite its apparently broad infringe Article 85(1) of the Treaty. Their wording, cannot be interpreted as including argument runs as follows. the issue of applicability of Article 52 or 59 of the Treaty.

73. First, there are 'agreements between undertakings' within the meaning of Arti- cle 85(1). Every collective agreement between representatives of employers and employees implies an agreement between employers to negotiate jointly and to be bound by the result of the bargaining. In the present cases, all employers have com- mitted themselves to affiliating their VI — Article 85(1) of the Treaty employees to a single pension fund and to complying with the rules of the fund.

74. Secondly, the agreements 'restrict com- 71. I now turn to the first question, namely petition'. Competition with regard to the whether Article 85(1) of the Treaty is employing undertakings is restricted, infringed where representatives of employ- because one important cost factor is har- ers and employees within a particular monised throughout an entire sector, the sector of the economy agree collectively to freedom to choose the most attractive set up a single sectoral pension fund with pension arrangement is limited and an exclusive right to administer the col- employers cannot attract employees

21 —See however the Opinion of Advocate General Lenz in 77. The Commission, the three Govern- Case C-415/93 Union Royale Beige des Sociétés de Foot- ball Association and Others v Bosman and Others (1995) ments who have submitted observations to ECR I-4921, paragraphs 273 and 274; see also the Commission's Decision of 30 September 1986 86/507/ the Court on this point and the Funds EEC Irish Banks' Standing Committee, OJ 1986 L 295, which are parties to the main proceedings p. 28 and the reply to the Written Question No 777/89, OJ 1990 C 328, p. 3. I will discuss those statements in all agree that Article 85(1) of the Treaty is more detail below.

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OPINION OF MR JACOBS — CASE C-67/96, JOINED CASES C-115/97, C-116/97 AND C-117/97 AND CASE C-219/97

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ALBANY V SHOTTING BEDRIJFSPENSIOENFONDS TEXHELINDUSTRIE

single contractor, however, the employers' possibility for employers to subcontract to and employees' representatives were merely independent service providers certain tasks exercising their ordinary right to choose (e.g. cleaning) which were traditionally with which service provider to contract. As fulfilled by employees. The court held that to the extension of the agreement to the only clauses directly affecting working entire sector, the Conseil held that it conditions, such as for example wages, contributed, first, to equal conditions of working time, and protection against dis- competition in the sector and, secondly, to missal, were excluded from the scope of the economic and social progress. There was prohibition of cartels. The restrictions in therefore no infringement of the competi- question were therefore not covered by the tion rules. exception. Employees were sufficiently pro- tected by a legal provision prohibiting dismissal in case of subcontracting.

89. The general prohibition of cartels con- cerns only agreements 'in so far as they are likely to influence... market conditions with 87. It follows also from the travaux pré- respect to trade in goods or commercial paratoires that the exception contained in services'. 31 According to the travaux pré- the new law must be interpreted in con- paratoires dependent labour cannot be formity with the interpretation of the classified as 'commercial services'. Thus, it former laws on monopolies. A judgment is said, collective agreements between man- of the Supreme Court of 1965 30 is there- agement and labour on wages and working fore still of importance. The court had to conditions are sheltered from the prohibi- decide on rules in a collective agreement tion of cartels. 32 which resulted in excluding certain groups of consumers from the supply of clothes produced in a less expensive way. It held that the exception was not applicable since the agreement went further then regulating wages and working conditions. Further- 90. The courts and the Federal Cartel more, the law was applicable ratione Office have on several occasions had to personae to the 'social partners' in so far consider the legality of collective agree- as they were dealing with 'such economic ments between management and labour interests'. Thus, the Danish prohibition of which affected shop opening or more cartels is applicable to rules in collective generally trading hours in certain sectors agreements which are 'related to an eco- of industry, either directly, or indirectly nomic activity' and which 'do not concern through the regulation of working time wages or working conditions'. schedules.

ments between management and labour fell activity on Saturdays and holiday periods as a matter of principle outside the material in the sector of wholesale distribution 34 the scope of the competition rules. There were Office held that such agreements directly several reasons. First, the court stated by affected the markets for goods and com- way of introduction that collective bargain- mercial services and were therefore not a ing was one of the activities protected by priori sheltered from the application of the fundamental rights granted by Arti- paragraph 1 of the GWB. It distinguished cle 9(3) of the Grundgesetz (German Basic those agreements from agreements merely Law). Secondly, the labour market enjoyed regulating working time. a special status (ordnungspolitische Sonder- stellung). Thirdly, the conditions for para- graph 1 of the GWB to apply were not fulfilled: trade unions could not be classi- fied as undertakings for the purpose of competition law, since they were not acting on the markets for goods or services. Thus, collective agreements were not agreements between undertakings. In consequence, the necessary preconditions for the conclusion of such agreements, namely the decision by employers to negotiate jointly, also had to 93. On a second occasion the Office went enjoy antitrust immunity. Fourthly, a bal- even further. 35 Management and labour in ancing of the interests involved was not the retail sector had agreed on harmonised possible because there were no clear nor- working-time schedules which indirectly mative criteria available. Fifthly, the prohi- prevented shop owners from opening after bition of cartels would apply only in the a certain hour. The Office held that the case of abusive collusion by employers who regulation of working time through collec- intentionally used the framework of collec- tive bargaining was a special case due to its tive agreements to cover an anticompetitive dual nature. On the one hand, opening cartel on the markets for goods or services. hours in retailing were an important factor of competition. The trade unions and employers influenced indirectly but effec- tively the activity of the employing under- takings on the markets for goods and services and were therefore engaged in an economic activity. On the other hand, collective bargaining was protected by fundamental rights in so far as it concerned working conditions. In that specific and exceptional case of conflict only a balan- cing of the interests involved could lead to a workable solution. In the case under exam-

¡nation the interest in competition had to could refer restrictive labour practices to prevail. the Monopolies and Mergers Commission for it to consider their impact on the public interest. Until recently that provision was never used: traditionally competition law has not been invoked in the United King- dom to deal with industrial relations issues. 38 In 1988 the first such reference was made under the Act: it concerned labour practices in television and film- 94. The Kammergericht (Higher Regional making. 'The Monopolies and Mergers Court, Berlin), ruling on appeal 36 on the Commission concluded that the practices same working-time schedules on which the in question did not operate against the Bundeskartellamt had commented, 37 public interest. 39 The position does not adopted a third line of reasoning. It held seem to be substantially different under the that neither collective agreements nor the new Competition Act 1998, which is contracting parties to such agreements were broadly modelled on Articles 85 and 86 a priori excluded from the scope of appli- of the Treaty. cation of the German cartel law. Collective agreements on working conditions and wages were nevertheless normally lawful under paragraph 1 of the GWB, since they were not likely to influence 'market condi- tions with respect to trade in goods or commercial services'. As regards the parti- cular collective agreements under scrutiny, the indirect but effective restrictive influ- ence on shop opening hours on the market for goods led in principle to an infringe- ment of the prohibition of cartels. How- ever, agreements on working time were at the heart (im Kernbereich) of the German fundamental right to bargain collectively. Such agreements were fully sheltered from prohibitions contained in ordinary laws. 96. In the United States trade union activ- ities are in principle sheltered from the prohibition of cartels contained in Section 1 of the Sherman Act 40 through a 'statutory' and a 'non-statutory' labour exemption.

97. As to the 'statutory' exemption, Con- gress enacted as early as 1914 the Clayton Act which was designed to confer antitrust immunity on unilateral activities of trade unions in the course of labour disputes. It provided inter alia that '[t]he labour of a human being is not a commodity or article of commerce'. Since the intention of the legislator was partly frustrated by the federal courts' narrow interpretation of 'The non-statutory exemption has its the Act, 41 Congress passed in 1932 the source in the strong labour policy favouring Norris-La Guardia Act, which was meant to the association of employees to eliminate extend the scope of the previous exemp- competition over wages and working con- tion. In United States v Hutcheson 42 the ditions. Union success in organising work- Supreme Court stated the three conditions ers and standardising wages ultimately will for that statutory exception to apply. First, affect price competition among employers, there must be a labour dispute. Secondly, but the goals of federal labour law never the trade union must act in its 'self- could be achieved if these effects on busi- interest'. Thirdly, the union must not ness competition were held a violation of combine with non-labour groups, i.e. the antitrust laws. The Court therefore has employers. acknowledged that labour policy requires tolerance for the lessening of business competition based on differences in wages and working conditions.... Labour policy clearly does not require, however, that a union have freedom to impose direct restraints on competition among those who employ its members. Thus, while the statutory exemption allows unions to accomplish some restraints by acting uni- 98. Although the statutory exemption did laterally..., the non-statutory exemption not cover agreements between unions and offers no similar protection when a union employers, the Supreme Court recognised and a non-labour party agree to restrain in its subsequent case-law the existence of a competition in a business market.'

44 — 7 June 1965, 381 US 657.

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the union and the large coal producers to activity on mandatory subjects of bargain- secure uniform labour standards through- ing under the relevant labour laws was by out the entire industry was not exempt its very nature not subject to antitrust law. from the antitrust laws. They argued primarily that judges had to respect the intentions of the legislator and that there were no normative criteria available to an antitrust judge to distin- guish beneficial from harmful collective agreements.

102. Meat Cutters v Jewel Tea Co., 45 which was decided on the same day, concerned shop opening hours. A local union representing virtually all the butchers in the area agreed with a trade association of food retailers that food store meat departments would be open only from 9 a.m. to 6 p.m. from Monday to Saturday inclusive. Faced with a strike unless it agreed to such terms, an employer signed 104. The minority expressed the view that the contract and then sued the union the agreement directly concerned the pro- seeking invalidation under the Sherman duct market and had no pro-competitive Act. effects whatsoever. It was therefore prohi- bited by the Sherman Act.

103. The majority (6-3) held that the antitrust rules were not applicable, but disagreed on the reasoning. Three of the majority argued that the marketing-hours restriction was so intimately related to 105. In its recent decision in Brown v Pro wages, hours of work and working condi- Football 46the Supreme Court was faced tions that bona fide, arm's-length bargain- with employers collectively and unilaterally ing for such a provision was exempt from imposing employment terms on their the Sherman Act. The three other judges of employees after a collective bargaining the majority, who had dissented in Pen- impasse. The case dealt with the somewhat nington, stated that collective bargaining special case of bargaining between the

— supremacy of a fundamental right to bargain collectively (Germany),

107. The dissenting justice (Justice Stevens) expressed the view that neither the policies — an express exemption in the antitrust underlying the labour and antitrust sta- or other statutes (Denmark, Finland, tutes, nor the purpose of the non-statutory statutory exemption in the United exemption, provided a justification for States),

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— creations of the courts (non-statutory or other working conditions, which are exemption in the United States), core subjects of collective bargaining ?

— To what extent do the agreements — the requirement of a specific condition, affect the markets for goods and ser- normally not fulfilled by the agree- vices on which the employers operate? ments in question, without which the prohibition of cartels is not infringed (Germany),

there is an agreement or concertation bargain collectively recognised by various between undertakings and, thirdly, whether international and European instruments. that concertation restricts competition to an appreciable extent.

116. Thirdly, the applicability of Arti- cle 85(1) would be incompatible with var- ious rules of Community law expressly encouraging andpromoting collective bar- gaining between the representatives of B — Applicability ratione materiae of Arti- employers and employees. cle 85(1) of the Treaty

123. I do not share that view. The Court 1. Is there a general exception for the social has consistently held that 'where the Treaty field? intended to remove certain activities from the ambit of the competition rules, it made an express derogation to that effect' : 47 examples of such Treaty rules are Arti- 120. Article 85(1) of the Treaty is part of cle 42(1) with respect to agriculture, Arti- the 'system ensuring that competition in the cle 223(1)(b) with respect to military internal market is not distorted' which is, equipment and to a limited extent Arti- according to Article 3(g) of the Treaty, one cle 90(2) with respect to certain undertak- of the activities of the Community. ings.

121. Article 3(i) provides that the activities 124. As regards the social field, there is no of the Community shall also include 'a provision in the Treaty which like Arti- policy in the social sphere'. Article 2 cle 42 expressly excludes the application of defines as tasks of the Community inter the competition rules or makes it subject to alia 'to promote... a harmonious and a decision by the Council. balanced development of economic activ- ities' and 'a high level of employment and of social protection'.

125. Furthermore, the Court has unequi- vocally upheld the applicability of the Community competition rules to a number 122. According to the Funds, it follows of other 'special' sectors which fall outside from those provisions that the social field is the scope of the competition rules in certain not subject to the competition rules. Member States. In those sectors, the applic- Because of the special features of that area, competition law cannot and should not interfere. They contend that collective 47 — See, for example, Joined Cases 209/84 to 213/84 Ministère Public v Asjes [1986] ECR 1425, paragraph 40 of the agreements between representatives of judgment.

ability of the competition rules has fre- 127. Moreover, and of particular relevance quently been contested, with arguments to the present cases, the Court has already based on the special features of the sectors accepted in a series of important decisions concerned and on the conflicting policy the principle that the competition rules objectives enumerated in Article 3 of the apply to the social field, and in particular to Treaty. employment and to pensions. Thus the Court accepted that principle as regards labour markets in Höfner 53 and in Job Centre 54 and as regards pensions in Pou- cet 5 5 and in Fédération Française des Sociétés d'Assurances. 56 It will be neces- sary to consider those cases more fully below. It suffices at this stage to note that, in examining whether the bodies concerned were to be classified as undertakings within the meaning of Article 85 or 86, the Court 126. The Court has however regularly implicitly accepted that the competition rejected such arguments and applied Arti- rules applied ratione materiae in those cles 85 and 86 to such sectors as trans- areas. More recently in Sodemare the port, 48 energy, 49 banking 50 and insuran- Court — without even examining whether ce 51 on the basis that there are other private non-profit-making bodies engaged mechanisms such as, for example, exemp- in health-care activities were to be classified tions under Article 85(3) of the Treaty as undertakings — simply applied the through which Community competition competition rules and found that there law allows account to be taken of the was no agreement within the meaning of special characteristics of certain branches Article 85(1). 57 of the economy. 52 In those cases the Court did not take the view that the existence of conflicting policy objectives — as con- tained for example in Article 3(f) (a com- mon policy in the sphere of transport) and Article 3(t) (Community measures in the energy sector) — in itself precluded the application of the competition rules to the sectors concerned. It does not follow from the fact that the Community pursues a 128. That conclusion is not negated by the certain policy that that area of the economy judgment of the Court in Garcia, which is is thereby excluded from the competition relied upon in particular by the French rules. Government. 58 At issue there was the

129. Contrary to the contention of the 131. As I have already noted, two argu- French Government, paragraph 14 of that ments are put forward to support the view judgment deals with the personal scope of that collective agreements between man- the directive in question, i.e. the bodies to agement and labour should be given a which the directive applies, and does not special status. The first is based on an concern the applicability of the competition alleged fundamental right to bargain col- rules to the social field. The Court, in lectively and the second on the fact that referring to the reasoning used in Poucet, Community law itself encourages the con- merely recalled its case-law on the applic- clusion of such collective agreements. ability rattorte personae of the competition rules to certain institutions which provide social benefits. Moreover, paragraph 12 of the judgment confirms that the Court adhered to the approach adopted in Poucet and in Fédération Française des Sociétés d'Assurances already cited. As I have explained, that approach presupposes that (a) Is there a fundamental right to bargain the area of pensions and other social collectively ? benefits does not ipso facto fall outside the material scope of the competition rules.

137. However, the Charter has very limited legal effects. It is not a legal act of the Community but a solemn political declara- tion adopted by Heads of State or Govern- ment of 11 of the then 12 Member States, 134. For analytical purposes, I will distin- and it has not been published in the Official guish between three rights: first, the right Journal. In the Agreement on social policy of individuals to form and join a trade attached to the Treaty on European Union union or an association of employers; the same 11 Member States which adopted secondly, the general right of a trade union the Charter were not willing to confer legal or association to take collective action in effect on the rights to which they had given order to protect occupational interests; their political support in the Charter. and, thirdly, the specific right at issue in the present cases of trade unions and associations of employers to bargain col- lectively.

138. The Court's case-law gives more gui- dance on the general question whether Community law recognises any of the 135. The EC Treaty itself, although — as abovementioned three rights. The Court discussed below — encouraging collective has consistently held that 'fundamental bargaining, does not explicitly grant any of rights form an integral part of the general the three above rights. 62 — Community Charter of the Fundamental Social Rights of Workers, The Heads of State or Government of the 61 — Case C-280/93 Germany v Council [1994] ECR I-4973, Member States of the European Community meeting in paragraphs 78 and 87 or the judgment. Strasbourg on 9 December 1989.

principles of law whose observation the 140. I now turn to the relevant interna- Court ensures. For that purpose the Court tional legal instruments invoked by the draws inspiration from the constitutional Funds, by certain Member States and by traditions common to the Member States the Commission. and from the guidelines supplied by inter- national treaties for the protection of human rights on which the Member States have collaborated or of which they are signatories.' 63 'The European Convention on Human Rights has special significance in that respect.' 64 141. The Commission in particular con- tends that the right to collective bargaining on pay and other conditions of employment is a fundamental right guaranteed by Arti- cle 11 of the European Convention on Human Rights, Article 6 of the European Social Charter, Article 22 of the Interna- 139. In Onion Syndicale, Massa and Kort- tional Covenant on Civil and Political ner 65the Court stated: 'Under the general Rights and Article 8 of the International principles of labour law the freedom of Covenant on Economic, Social and Cul- trade union activity recognised under Arti- tural Rights, as well as Conventions Nos 87 cle 24a of the Staff Regulations means not and 98 of the International Labour Orga- only that officials and servants have the nisation. right without hindrance to form associa- tions of their own choosing, but also that these associations are free to do anything lawful to protect the interests of their members as employees.' Thus, the Court arguably recognised, first, the individual right to form and join an association and, 142. An analysis of the relevant interna- secondly, the collective right to take action. tional legal instruments does not however The fundamental nature of those two rights support that contention. was confirmed in Bosman with respect to freedom of association in general 66 and in Maurissen more specifically with regard to trade unions. 67 The question whether there is a third specific fundamental right to bargain collectively has not yet been deci- ded. 143. Taking first the European Convention on Human Rights, the central relevant right guaranteed by the Convention (Article 11) 63 — Opinion 2/94 [1996] ECR I-1759, paragraph 33. is the individual right to form or to join a 64 — Case C-260/89 ERT [1991] ECR I-2925, paragraph 41 of trade union. That right is also recognised the judgment. 65 —Case 175/73 [1974] ECR 917, paragraph 14 of the by the European Social Charter (Article 5), judgment. the International Covenant on Civil and 66 — Case C-415/93, cited in note 21, paragraphs 79 and 80 of Political Rights (Article 22), the Interna- the judgment. 67 — Joined Cases C-193/87 and C-194/87 Maurissen and tional Covenant on Economic, Social and European Public Service Union v Court of Auditors [1990] ECR I-95, paragraphs 11 to 16 and 21 of the Cultural Rights (Article 8), as well as the judgment. Freedom of Association and Protection of

144. As regards the right of trade unions to take collective action, the European Court of Human Rights relied on the phrase 'for the protection of his interests' in Arti- 146. As to the right to bargain collectively, cle 11(1) of the European Convention on contrary to the contentions of the Funds, Human Rights in holding that freedom of the Commission and the abovementioned association included the rights that were Governments, solely Article 6 of the Eur- 'indispensable for the effective enjoyment' opean Social Charter seems expressly to or 'necessarily inherent elements' of trade recognise its existence. However the mere union freedom. 68 Article 11 therefore also fact that a right is included in the Charter 'safeguards the freedom to protect the does not mean that it is generally recog- occupational interests of trade union mem- nised as a fundamental right. The structure bers by trade union action, the conduct and of the Charter is such that the rights set out development of which the Contracting represent policy goals rather than enforce- States must both permit and make possi- able rights, and the States parties to it are ble'. 69 required only to select which of the rights specified they undertake to protect.

148. In the case-law of the European Court of Human Rights there is a telling absence of any reference to the right to bargain collectively. In Swedish Engine Drivers' Union v Sweden for example the majority of the Commission of Human Rights had argued in favour of the recognition of trade unions' right to engage in collective bar- 150. Secondly, the Court has consistently gaining. The Court held that it did not have stressed that 'trade union freedom is only to give a ruling on that question since, it one form or a special aspect of freedom of said, such a right was not at issue and was association' and that 'Article [11] does not granted to the applicant union under secure any particular treatment of trade national law. 74 Since then, the European unions'. 77 Court of Human Rights has never expressly recognised the existence of that right. On the contrary, there is evidence that the Court is reluctant to do so.

155. Both opinions have in common that the Court would have had to take a definitive position on the existence of such a right.

152. It is interesting to consider first two dissenting opinions.

156. Instead, the majority of the Court chose a third solution. With regard to trade union activities it first held that '[I]n view of the sensitive character of the social and political issues involved in achieving a proper balance between the competing interests... and the wide degree of diver- 153. Eight judges argued in their partly gence between the domestic systems in the dissenting opinion that in reality the particular area under consideration, the employer's claim was not based on his Contracting States should enjoy a wide negative freedom not to join an association margin of appreciation in their choice of but on his negative freedom not to bargain the means to be employed'. 81 Then it collectively. They interpreted the previous merely stressed that it saw 'no reason to case-law as meaning that 'the right of doubt that the union action pursued legit- collective bargaining is not an inherent imate interests consistent with Article 11 of component of freedom of association'. In the Convention'. It continued that '[I]t their view Article 11 was therefore not applicable at all. 79 80 — Dissenting opinion of Judge Martens, joined by Judge Matscher in Gustafsson v Sweden, cited in note 78, paragraph 6. 79 — Partly dissenting opinion of Judges Ryssdal, Spielmann, Palm, Foighel, Pekkanen, LOIZOU, Makarczyk and Repik in 81 — Gustafsson v Sweden, cited in note 78, paragraph 45 of the Gustafsson v Sweden, cited in note 78. judgment.

158. The Community legal order protects the right to form and join trade unions and employers' associations which is at the 162. In that context it may also be recalled heart of freedom of association. that, in its case-law on the free movement of workers and on equal pay, the Court regularly examines whether clauses in agreements between management and labour infringe Community prohibitions of discrimination on grounds of national- 159. In my view, the right to take collective ity 83 or of sex. 84 That could be seen as an action in order to protect occupational application of the general rule that the interests in so far as it is indispensable for exercise of a fundamental right may be the enjoyment of freedom of association is restricted, provided that the restriction in also protected by Community law. fact corresponds to objectives of general interest pursued by the Community and does not constitute in relation to the aim pursued a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed. 85 There can be no 160. However, it cannot be said that there is sufficient convergence of national legal 83 — Case C-15/96 Schöning-Kougebetopoulou v Freie und orders and international legal instruments Hansestadt Hamburg [1998] ECR I-47; Case C-35/97 Commission v france, judgment of 24 October 1998. 84 — Case 170/84 Bilka v Weber von Hartz |1986] ECR 1607. 85 — Case C-44/94 R v Minister of Agriculture, Fisheries and 82 — Gustafsson v Sweden, cited in note 78, paragraph 53 of the Food, ex parte Fishermen's Organizations and Others judgment. (19951 ECR I-3115, paragraph 55 of the judgment.

165. That leads me to the second argument against the applicability of the competition 168. In addition the Agreement on social rules, namely that those rules are incompa- policy concluded between the Member tible with various provisions in the Treaty States of the European Community with encouraging collective bargaining. the exception of the United Kingdom of

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Great Britain and Northern Ireland, 172. Article 4(1) provides: 'Should man- annexed to the Protocol on social policy 86 agement and labour so desire, the dialogue attached to the Treaty on European Union, between them at Community level may contains the following provisions. lead to contractual relations, including agreements.'

169. According to Article 1 of that Agree- ment '[t]he Community and the Member States shall have as their objectives the promotion of... dialogue between manage- ment and labour...'. 173. According to Article 4(2) '[a]gree- ments concluded at Community level shall be implemented... in matters covered by Article 2, at the joint request of the signa- tory parties, by a Council decision on a proposal from the Commission'.

170. Article 2(4) states: 'A Member State may entrust management and labour, at their joint request, with the implementation of directives...'.

175. The Commission maintains in its written submissions that, if Article 85 were applicable, most collective agreements would fulfil the conditions of restriction of competition and effect on trade between Member States. Under Article 85(1) and (2) they would thus be prohibited and void. Even an exemption under Article 85(3) 178. As illustrated by the present cases and would be unlikely, because, it is said, that the comparative survey of national law, provision does not allow social objectives there is in any legal system potential to be taken into account. tension between those two sets of rules. Normal collective agreements on core sub- jects of collective bargaining such as wages and other working conditions admittedly restrict competition between employees: they cannot offer to work for a wage below the agreed minimum. However the main 176. To a certain extent I agree with those purpose of trade unions and of the collec- arguments. tive bargaining process is precisely to prevent employees from engaging in a 'race to the bottom' with regard to wages and working conditions. That is why collective bargaining is encouraged by all national legal orders, international legal instruments and more particularly by the Treaty itself; moreover Community legislation in the 177. This follows, first, from a systematic employment field contains elaborate provi- interpretation of the Treaty. Two poten- sions for measures to be implemented by tially conflicting sets of rules are relevant. means of collective bargaining as well as by On the one hand there are the aforesaid legislation. 87 If such agreements were to rules encouraging the conclusion of collec- fall under the prohibition of Article 85(1), tive agreements. Those rules clearly start it would be necessary to apply to the from the assumption that collective agree- Commission for negative clearance or for ments between management and labour are exemption. Such agreements by their very in principle legal. There is, on the other nature however do not fit comfortably into hand, Article 85. According to Arti- the framework of the competition rules. cle 85(1) certain categories of agreements are prohibited. Those prohibited agree- ments are automatically void under Arti- cle 85(2). Only if the requirements of 87 — See for example Ankles 4, 6, 17(3) and 18(1) of Council Directive 93/104/EC of 23 November 1993 concerning Article 85(3) are satisfied may the Com- certain aspects of working time, OJ 1993 L 307, p. 18.

179. The authors of the Treaty either were measure of equilibrium between the bar- not aware of the problem or could not gaining power on both sides helps to ensure agree on a solution. The Treaty therefore a balanced outcome for both sides and for does not give clear guidance. In those society as a whole. circumstances one has to draw a line according to established principles of inter- pretation. Since both sets of rules are Treaty provisions of the same rank, one set of rules should not take absolute precedence over the other and neither set of rules should be emptied of its entire content. Since the Treaty rules encouraging collective bargaining presuppose that col- lective agreements are in principle lawful, Article 85(1) cannot have been intended to apply to collective agreements between management and labour on core subjects such as wages and other working condi- 182. Furthermore, collective agreements on tions. Accordingly, collective agreements wages, working time or other working between management and labour on wages conditions, although they may restrict and working conditions should enjoy auto- competition between employees, probably matic immunity from antitrust scrutiny. do not have an appreciable restrictive effect on competition between employers. As regards competition on the demand side of the labour market, normally each employer remains free to offer more advan- tageous conditions to his employees. As regards competition on the product or services markets on which the employers operate, first, agreements on wages or 180. There are also considerations of a working conditions harmonise merely one practical nature reinforcing that basic con- of many production cost factors. Therefore clusion. only one aspect of competition is affected. 88 Secondly, as follows from the practice of the Commission, 89 proximity to the market of the factor in issue is an important criterion for assessing apprecia- bility. In the case of collective agreements on wages and working conditions the final price of the products or services in question will be influenced by many other factors before they reach the market. Thirdly, and 181. It is widely accepted that collective agreements between management and perhaps most importantly, production fac- labour prevent costly labour conflicts, 88 — Irish Banks' Standing Committee, OJ 1986 L 295, p. 28, paragraph 16. reduce transaction costs through a collec- tive and rule-based negotiation process and 89 — Notice concerning the assessment of cooperative joint ventures pursuant to Article 85 of the EEC Treaty promote predictability and transparency. A OJ 1993 C 43 p. 2., III.2(d).

185. However, by encouraging the conclu- sion of collective agreements between man- agement and labour, the Treaty recognises the possibility of an exception to the 183. This conclusion in favour of a limited general presumption on the consequences antitrust immunity for collective agree- of agreements between private actors on ments between management and labour is the ground that under normal circum- not incompatible with the arguments devel- stances this particular category of agree- oped above to the effect that there is no ments furthers the public interest. That is exception for the social field as a whole. confirmed by the national law and practice The main difference is that with regard to of the competition authorities and courts of collective bargaining I advocate an excep- the Member States, which treat collective

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bargaining as normally fulfilling a valuable to a certain extent to collective agreements social function. To regard collective bar- between management and labour. As to the gaining as falling within the competition Agreement on social policy, the preamble to rules would in fact reverse the practice the Protocol states expressly that 'this generally followed in the Member States. Protocol and the said Agreement are with- Not only would it require such agreements out prejudice to the provisions of this to be notified under Community and/or Treaty...'. national competition law; it would also make them justiciable in the courts.

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tered, whatever the subject of the coordi- employees or whether it goes beyond that nation may be. and directly affects relations between employers and third parties, such as clients, suppliers, competing employers, or consu- mers. The above survey of national law provides several examples of the latter type of agreement. Since those agreements have potentially harmful effects on the competi- tive process, they should be subject to antitrust scrutiny by the Commission or other competent authorities, which would examine whether there was in fact an 192. Secondly, the agreement should be appreciable restriction of competition. If concluded in good faith. In that context so, the Commission should be able to account must be taken of agreements which balance the different interests involved apparently deal with core subjects of col- and where appropriate grant an exemption lective bargaining such as working time but according to Article 85(3) of the Treaty. which merely function as cover for a Both the Court and the Commission have serious restriction of competition between on occasions recognised the possibility of employers on their product markets. In taking account of social grounds in that those exceptional cases, too, competition context, in particular by interpreting the authorities should be able to examine the conditions of Article 85(3) broadly so as to agreement in question. include concerns for employment. 90

196. It will be recalled that according to Netherlands law employers are in principle free to decide whether or not to offer (c) Both sides of industry apply jointly to supplementary pensions to their employees. the competent Minister seeking com- If they want to do so they can conclude pulsory affiliation for all undertakings collective agreements where management belonging to the sector. and labour merely agree on minimum pensions. In those cases the employing undertakings decide what to do with the collected contributions. Management and labour can also agree to set up a sectoral pension scheme. The sectoral scheme itself 198. As regards the first agreement, pen- can be managed either by the representa- sion contributions of employers are part of tives of management and labour or by an the remuneration employees receive. 91 insurance company. Once management and They raise the same analytical problems labour have decided to set up a sectoral as wages and other working conditions. pension fund they have to decide whether Collective bargaining on harmonised pen- to apply to the competent Minister to make sion contributions is therefore negotiation affiliation to the sectoral fund compulsory on the content of the labour contract and for the entire sector. does not directly affect third parties. Accordingly, it is covered by the immunity I advocated above.

197. It follows from that variety of choices that the agreements under scrutiny can be analysed as three distinct agreements with 199. The position is more difficult with the the following content: other two agreements. They might be regarded as merely ancillary to the first agreement. However, it is possible to con- tend, on the basis of the criterion suggested above, that they should not fall within the immunity. On the one hand, there is a restriction on the freedom of participating (a) For each employee belonging to a given employers to entrust insurance companies sector employers make an agreed pen- sion contribution of a specified amount. 91 — Case C-262/88 Barber [1990] ECR I-1889.

C — Agreement between undertakings 204. I will first examine whether the eco- nomic actors involved can be classified as undertakings or associations of undertak- ings. Secondly, I will consider whether there is an agreement or other form of concerta- 201. According to the Netherlands, French tion. and Swedish Governments and the Com- mission, there is no agreement between 'undertakings' and therefore Article 85(1) of the Treaty is not applicable ratione personae. The employees are not 'under- takings', it is said, because they are not independent entities engaged in an eco- 1. Undertaking or association of undertak- nomic activity but are attached to their ings employer. Their representatives, i.e. the trade unions, are not engaged in an eco- nomic activity, at least not when they are involved in collective bargaining on work- 205. The Court has held that 'the concept ing conditions or pensions. Thus, one of the of undertaking encompasses every entity

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(a) Employees

207. Secondly, the Court has held that 'in 209. The Court stated in Suiker Unie that competition law, the term "undertaking" employees form 'an economic unit' 98 with must be understood as designating an their employing undertaking. 'Auxiliary economic unit for the purpose of the

95 — Case 170/83 Hydrotherm v Compact [1984] ECR 2999 92 — Case C-41/90 Höfner and Eher, cited in note 53. (emphasis added), paragraph 11 of the judgment. 93 — See, for example, Case 30/87 Bodson v Pompes Funèbres 96 — Case C-41/90, cited in note 53. des Régions Libérées [1988] ECR 2479; Case C-41/90 97 — Case C-343/95 Cali e Figli [1997] ECR I-1547. Höfner, cited in note 53, and Case C-364/92 SAT Fluggesellschaft v Eurocontrol [1994] ECR I-43. 98—Joined Cases 40/73 to 48/73, 50/73, 54/73 to 56/73, 111/73, 113/73, and 114/73 Suiker Unie and Others v 94 — Case C-73/95 P Vibov Commission [1996] ECR I-5457 Commission [1975] ECR 1663, paragraph 539 of the and the cases quoted in that judgment at paragraph 16. judgment.

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organs forming an integral part of the economic point of view, that may — argu- principal's undertaking' 99cannot be regar- ably — be true. However, I do not think ded as undertakings. In that case the Court that, from a legal perspective, the assertion merely had to draw the line between is correct. employees and independent commercial agents in their respective relations to third parties. Thus, it could base its reasoning mainly on the attributability of employees' activities to their employer.

214. Secondly, the functional interpretation of the term 'undertaking' which the Court has adopted in its case-law leads to the same result. With respect to public bodies the Court examines whether the activity in 211. Accordingly, the question arises how question is — at least potentially — per- to classify the fact that employees offer formed by private entities engaged in the labour against remuneration. supply of goods or services. 101 Individuals, too, may be classified as undertakings 102 if they are independent economic actors on the markets for goods or services. The rationale underlying those cases is that the entities under scrutiny are fulfilling the 'function' of an undertaking. The applica- tion of Articles 85 and 86 is justified by the 212. One could argue that it is an eco- fact that those public bodies or individuals nomic activity similar to the sale of goods or the provision of services. From an 101 — See the judgments in Case C-343/95 Calì, cited in note 97, and Case C-41/90 Höfner, cited in note 53. 99 — Ibid., paragraph 542 of the judgment. 102 — See recently, with respect to Italian customs agents, Case 100 — Case C-262/88 Barber, cited in note 91. C-35/96 Commission v Italy [1998] ECR I-3851.

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are operating on the same or similar apply Article 85(1) to employees would markets and according to similar principles therefore necessitate the use of uneasy as 'normal' undertakings. 103 analogies between the markets for goods and services and labour markets.

103 — See, for a detailed comparison with 'normal' undertak- ings, the judgment in Commission v Italy, cited in note 102, paragraphs 36 to 38. 220. The mere fact that a trade union is a 104 — For example Articles 48 and 59 of the Treaty. non-profit-making body does not automa-

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tically deprive the activities which it carries decide to whom to address its decision and on of their economic character. 105 whom to fine. 108

221. A trade union is an association of employees. It is established that associa- tions may also be regarded as 'undertak- 224. However, in the case of trade unions ings' in so far as they themselves engage in that delimitation becomes decisive, since, if an economic activity. 106 the trade union is merely acting as agent, it is solely an executive organ of an agree- ment between its members, who them- selves — as seen above — are not addres- sees of the prohibition of Article 85(1).

222. It must be borne in mind that an association can act either in its own right, independent to a certain extent of the will of its members, or merely as an executive organ of an agreement between its mem- bers. In the former case its behaviour is attributable to the association itself, in the 225. With regard to trade union activities latter case the members are responsible for one has therefore to proceed in two steps: the activity. first, one has to ask whether a certain activity is attributable to the trade union itself and if so, secondly, whether that activity is of an economic nature.

231. Since I propose in any event a limited exception to the applicability ratione mate- riae of the competition rules, which covers the category of agreements to which the Netherlands Government and the Commis- sion refer, it is not really necessary to (c) Employers analyse that argument in depth. However it is I think useful to point out that the employers are engaged in economic activ- ities.

228. In the present cases employers are engaged in economic activities on different markets for goods and services. In that respect they are to be classified as under- takings. 232. First, employers engaged in collective bargaining on working conditions, wages or pensions are normally not, or at least not solely, motivated by social considerations. More realistically, there are economic motives, for example prevention of costly 229. In order to be able to produce those labour conflicts, lower transaction costs goods or services they engage employees. through a collective and rule-based nego- To employ persons is therefore an inherent tiation process, and greater planning cer- part of their main economic activities. tainty and transparency in the field of production costs.

230. As already mentioned, the Nether- lands Government contends that employers 233. Secondly, an undertaking's economic participating in collective bargaining on success on the national or international wages or working conditions are not markets for goods and services will depend

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234. Thirdly, the very concept of collective bargaining implies that each side is defend- ing its interests. The employees' side tries to secure a maximum of social advantages. The employers' side tries to defend the 238. The Court held in BNIC v Clair that economic interests of the undertakings 'the legal framework within which such involved. The optimal outcome for both agreements [between undertakings] are parties and for society is allegedly guaran- made and such decisions [by associations teed through an equilibrium in the bargain- of undertakings] are taken and the classi- ing power of each side. It would therefore fication given to that framework by the not even be desirable that employers should various national legal systems are irrelevant be affected by other than economic con- as far as the applicability of the Commu- siderations. nity rules on competition and in particular Article 85 of the Treaty are concerned'. 109

235. Accordingly employers remain under- 239. In Frubo the Court held that 'Arti- takings when they engage in collective cle 85(1) applies to associations in so far as bargaining. their own activities or those of the under- takings belonging to them are calculated to produce the results to which it refers. To place any other interpretation on Arti- cle 85(1) would be to remove its sub- stance.' 110

236. It follows also that the associations of 109 — Case 123/83 BNIC v Clair [19851 ECR 391, paragraph 17 of the judgment. employers in the present cases are associa- 110 — Case 71/74 Frubo v Commission [1975] ECR 563, tions of undertakings. paragraphs 30 and 31 of the judgment.

243. The Commission acted consistently with that approach in the only decision D — Restriction of competition which it has taken on the relationship between Article 85(1) and collective agree- ments concluded by management and 245. The issue is whether the implied 111—Case 28/77 Tepea v Commission [1978] ECR 1391, agreements between employers — as far paragraph 41 of the judgment. as they are not covered by antitrust immu- 112 — Case 107/82 AEG v Commission [1983] ECR 3151, paragraph 38 of the judgment. nity — 'have as their object or effect the 113 — Case 41/69 ACF Chemiefarma v Commission [1970] ECR 661, paragraph 112 of the judgment; and Joined Cases 209/78 to 215/78 and 218/78 Van Landewyck, cited in note 105, paragraph 86. 114 — Cited in note 88.

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prevention, restriction, or distortion of ment's intervention making affiliation to competition' within the meaning of Arti- the fund compulsory. cle 85(1).

249. The analysis must focus on the con- sequences of the implied agreement between employers and thus in each case 246. The Funds and the Netherlands Gov- on the causal link between that agreement ernment contend that neither the object nor and the effects on the different actors and the effect of the collective agreements in markets. question is to restrict competition. Those agreements have a social purpose and are not designed to limit competition between the undertakings involved. If there is any restriction at all then it is caused not by the actions of the employers but by the action of the State making affiliation for all 250. Secondly, in the present cases a careful undertakings in the sector compulsory. analysis taking into account the specific economic context is necessary.

tition' within the meaning of Article 85(1), from Article 85(1). It is in fact an agree- clear-cut rules, which simply identify ment on the remuneration of employees, restrictions of conduct of individual tra- which is a core subject of collective bar- ders, normally provide a valid basis for gaining not directly affecting third parties presuming an anticompetitive effect and or markets. Thus, the antitrust rules should also promote desirable legal certainty. not apply. However, in cases involving specific sec- tors 115 or specific categories of agree- ment, 116 the Court has gone beyond that mechanistic approach and has adopted a more searching analysis. In view of the subject-matter and nature of the agree- ments concerned in the present proceed- 255. At issue here are therefore only the ings, their economic context and the some- second and third parts of the agreements, times complex underlying economic ratio- which have — or are at least alleged to nale have therefore to be taken into have — consequences for insurance com- account. panies and employers which did not take part in the collective agreements in ques- tion. Moreover it must be recalled that only the implied agreement between employers is relevant. Thus, I will examine whether there is an appreciable restriction of com- petition caused by an implied agreement 253. I turn now to the agreements under between employers as regards, first, the scrutiny. As I stated above, the collective agreement to set up a single pension fund agreements in question may be broken up which employers manage jointly with the into three legally and economically inde- trade unions and, secondly, the agreement pendent elements. to apply jointly with the trade unions to the competent Minister to make affiliation compulsory for all undertakings belonging to the sector.

257. In the present cases the representatives of employers and employees have chosen the third option, namely to set up a (a) Restriction of competition with regard common pension fund managed jointly by to employers representatives of both sides of industry.

261. Does the setting up of the pension funds restrict competition between employ- 258. How can that agreement be analysed ers to an appreciable extent? from a competition law perspective? First, it represents a form of voluntary horizontal cooperation between undertakings belong- ing to the same sector as regards the administration of the pensions of their employees. It is only the subsequent inter- 262. With regard to an agricultural buying vention of the Netherlands Government which makes participation in the fund cooperative the Court has held: compulsory. Secondly, that cooperation is carried out not on an ad hoc basis but within a permanent structure separate from the participating undertakings.

'... organising an undertaking in the specific legal form of a cooperative association does not in itself constitute anticompetitive con- duct.... [T]hat legal form is favoured both 259. Thus, the setting up of the pension by national legislators and by the Commu- funds as an institutionalised form of coop- nity authorities because it encourages mod-

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ernisation and rationalisation... and below which are not prohibited by Arti- improves efficiency.' 117 cle 85(1) of the EEC Treaty...

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In such cases, the cooperation involved eration therein do not restrict competi- covers fields that are not concerned with tion because: the supply of goods and services or the economic decisions of the enterprises tak- ing part, and thus does not lead to restraints of competition.'

264. In its 'Notice concerning the assess- — they have as their sole object ment of cooperative joint ventures pursuant management cooperation, to Article 85 of the EEC Treaty' 119 the Commission states at paragraph 15:

— they have as their sole object cooperation in fields removed from the market.' 'Article 85(1) does not therefore apply to certain categories of J[oint] V[entures] because they do not have as their object or effect the prevention, restriction or distortion of competition. This is particu- larly true for: 265. The rationale underlying the Court's judgment and the two Notices is that institutionalised management cooperation which allows the companies involved to achieve significant economies of scale, and which takes place in a field remote from the product or services markets, is generally pro-competitive.

266. That reasoning applies equally to sectoral pension funds. — J[oint] V[entures] with activities neu- tral to competition within the meaning of the 1968 Notice on cooperation between enterprises: the types of coop-

In order to escape that prohibition, the restrictions imposed on members by the statutes of cooperative associations inten- 270. Accordingly, the setting up of a ded to secure their loyalty must be limited voluntary sectoral pension fund is an to what is necessary to ensure that the efficient and rational form of pro-competi- cooperative functions properly and in par- tive cooperation between undertakings ticular to ensure that it has a sufficiently

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wide commercial base and a certain stabi- difficulties experienced by the plaintiffs lity in its membership.' 120 when seeking exemption from compulsory affiliation. The restriction of the plaintiffs' freedom is dependent upon the Netherlands Government's intervention. The compat- ibility of that intervention with Articles 5 and 85(1), and with Articles 86 and 90(1) is a different question and will be analysed 273. Accordingly, while undertakings can below. in certain circumstances create cooperative associations, connected contractual restric- tions of their commercial freedom have to be limited to the necessary minimum.

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examine the agreement in abstracto with- pension insurance companies. As has out taking into account subsequent Gov- already been seen, all participating employ- ernment intervention and starting therefore ers are free not to offer pensions at all or to from the assumption of a voluntary pension offer them through a company pension fund. I will discuss subsequently the effects fund. From the point of view of the of the Government's decision to make insurance companies it makes no difference affiliation compulsory. if several employers decide to pool the pension contributions in a single fund instead of having separate company pen- sion funds.

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283. The decision by the representatives of common sectoral pension fund which they employers and employees to manage the manage jointly with the representatives of pension fund jointly and not to enter into a employees is not caught by Article 85(1). If management contract with an insurance there are any restrictive effects, they are company is again a refusal to deal which is caused by the intervention of the Nether- in principle covered by freedom of contract lands Government. and would be relevant only for the pur- poses of Article 86.

284. Thus, as regards the employers taking 2. The agreement to apply jointly with the part in the original agreement to set up a trade unions to the competent Minister to sectoral pension fund, there are no real make affiliation compulsory for all under- exclusionary effects on the insurance com- takings belonging to the sector panies. An employer's choice of joining a sectoral pension fund instead of entrusting an insurance company with the manage- ment of the contributions is protected by freedom of contract. 287. At issue is the joint application to the Minister to make affiliation compulsory for all undertakings belonging to the sector.

293. Secondly, coordinated application to 290. Secondly, it has just been shown that the State authorities is part of our demo- the original agreement by certain employ- cratic societies. Natural or legal persons are ers and representatives of employees to set entitled to organise themselves and to up a single pension fund is not contrary to submit jointly their requests to the govern- Article 85(1). Therefore, the joint applica- ment or the legislature. The public autho- tion in question can be distinguished from rities then have to decide whether the an application by undertakings to extend proposed action is in the public interest. the effects of a prohibited agreement to They have sole power, but also sole respon- other undertakings belonging to the sector. sibility for their decision.

294. Accordingly, joint application to make affiliation compulsory is not caught by Article 85(1) either. 291. However, in my view, that last point is not decisive for the assessment of the legality of the behaviour in question. Mere efforts on the part of undertakings to convince public authorities to extend the effects of a certain agreement to other 295. As neither agreement restricts com- petition, there is no need to examine 121 — Joined Cases 43/82 and 63/82 VBVB and VBBB v Commission [1984] ECR 19, paragraph 37 of the judgment; Case T-30/89 Hilti v Commission [1991] ECR II-1439, paragraphs 115 to 119; and Cement, OJ 1994 L 343, p. 112, point 8. 122 — Cement, cited in note 121.

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301. The Court's case-law has established cases, as already seen, the agreements in the following principles. 125 Article 85, question do not restrict competition and read in isolation, relates only to the con- are therefore not caught by Article 85(1). duct of undertakings. Thus, it does not in principle cover legislative or regulatory measures adopted by Member States. How- ever, Article 85, read in conjunction with Article 5(2), requires the Member States not to introduce or maintain in force measures, even of a legislative or regulatory 303. With respect to the third issue, namely nature, which may render ineffective the whether the public authorities have dele- competition rules applicable to undertak- gated their powers to private economic

49; and Case C-35/95 Commission v Italy, cited in 127 — See, for a recent example, Case C-266/96 Corsica Ferries note 102, paragraphs 53 and 54. France, cited in note 125, paragraph 51 of the judgment.

306. At issue is whether the Netherlands sectoral pension funds are 'undertakings' within the meaning of the competition provisions of the Treaty. More specifically, — They are funded schemes, operating according to the capitalisation method. 128 — Case C-323/93 Centre d'insémination de la Crespelle v Coopérative de la Mayenne [1994] ECR I-5077, para- graph 15 of the judgment. 129 — See paragraph 207 above.

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— The level of contributions and benefits bers on the management board of the is fixed by the management board of fund. the fund.

— The pension benefits depend on the — Management is under an obligation to reserves made with the contributions, maintain financial equilibrium. on the financial results of the invest- ments of the funds and on the costs of management.

— The funds have to be invested op solide wijze (in a prudent way). — The schemes have a social objective.

ments all agree that the pension funds are zione Autonoma dei Monopoli di Stato 136 not to be classified as undertakings. have been held to be engaged in activities of an economic nature with regard to employ- ment procurement or the offering of goods and services on the market for manufac- tured tobacco. By contrast, the competition rules have been held to be inapplicable to a 310. Before turning to the more specific private company engaged in antipollution cases — Poucet,130 Van Schijndel,131 and surveillance with which it had been FFSAm — it is helpful to recall some entrusted by a Member State. 137 Secondly, general principles concerning the classifica- the non-profit-making character of an tion of an entity's activities in Community entity 138 or the fact that it pursues non- competition law. economic objectives 139 is in principle immaterial. Thirdly, the fact that certain entities have been entrusted by the State with certain tasks in the public interest does not mean that those entities are not under- takings, since Article 90(1) and (2) would 311. As already stated, the Court has in that case be meaningless. Therefore the generally adopted a functional competition rules apply to the activities of, approach. 133 The basic test is therefore for example, public telecommunication 14° whether the entity in question is engaged in and postal service providers, 141 public an activity which could, at least in princi- television broadcasters 142 or dock-work ple, be carried on by a private undertaking companies and undertakings. 143 Finally, in order to make profits. the mere fact that certain activities are normally entrusted to public agencies does

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not suffice to shelter those activities from State exercises its official authority directly the competition rules. 144 through a body forming part of the State administration or by way of a private body on which it has conferred special or exclu- sive rights. 149 An entity acts in the exercise of official authority where the activity in question is 'a task in the public interest 313. In some cases the Court has adopted which forms part of the essential functions an approach which goes beyond that func- of the State' and where that activity 'is tional interpretation. In IAZ, for example, connected by its nature, its aim and the the Court held that 'Article 85(1) of the rules to which it is subject with the exercise Treaty applies also to associations of under- of powers... which are typically those of a takings in so far as their own activities or public authority'. 150 Secondly, it seems to those of the undertakings affiliated to them follow from paragraph 22 of the judgment are calculated to produce the results which in Höfner that the competition rules do not it aims to suppress'. 14S The Court of First apply if the activity in question has always Instance has held to similar effect that been and is necessarily carried out by 'Article 85(1) of the EC Treaty is aimed at public entities. 151 economic units made up of a combination of personal and physical elements which can contribute to the commission of an infringement of the kind referred to in that provision'. 146 315.1 turn now to the three cases in which the classification of bodies similar to the ones in the present proceedings was at issue.

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317. The schemes had the following char- of retired workers. It was also reflected acteristics: by the grant of pension rights where no contributions had been made and of pension rights that were not propor- tional to the contributions paid. Finally, there was solidarity between the various social security schemes, — The old-age pension scheme provided with those in surplus contributing to the basic pension. the financing of those with structural difficulties.

— The schemes were set up by law.

318. Concluding on the nature of the schemes, the Court held:

— Affiliation to the schemes was compul- sory.

322. The characteristics of the scheme and the fund were the following: 320. Concluding on the nature of the funds' activities, the Court held:

— The scheme provided supplementary pensions. '... [O]rganisations involved in the manage- ment of the public social security system fulfil an exclusively social function. That activity is based on the principle of national solidarity and is entirely non-profit-mak- ing. The benefits paid are statutory benefits — The scheme was set up by the physio- bearing no relation to the amount of the therapists' profession. contribution.

— Compulsory membership was provided Accordingly, that activity is not an eco- for by a ministerial decree issued under nomic activity...' a Netherlands pension law.

— The scheme was funded, i.e. pensions 321. In my Opinion in Van Schijndel 153I were financed from reserves rather concluded that the Netherlands physio- than from current contributions. It therapists' occupational pension fund was not financed from the State bud- which had similar features to the ones get. under scrutiny in the present proceedings did not, in its relations with its members, act as an undertaking. However, owing to a lack of information on the factual and legal

— The physiotherapists' scheme per- 153 — Joined Cases C-430/93 and C-431/93 Van Schijndel and Van Veen v Stichting Pensioenfonds voor Fysiotherapeu- formed a social function. The law ten, cited in note 2, paragraphs 53 to 65 of the Opinion. under which membership had been

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— The scheme provided supplementary pensions. — The board of directors was made up exclusively of members of the fund.

— It was set up and regulated by statute.

— Directors received only expenses and 154 — Case C-244/94 Fédération Française des Sociétés d'As- not remuneration. surances, cited in note 56.

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— Membership was optional. questionnaire or medical examination was required and no selection took place. Members unable to pay contri- butions because of illness could be exempted from payment. Payment of — The scheme was a funded scheme, contributions could be temporarily operating according to the capitalisa- suspended for reasons connected with tion method rather than on a redistri- the economic situation of the member. butive basis. In the event of the premature death of a member an amount corresponding to the contributions paid was made avail- able to the scheme rather than to his successors.

benefits to which it confers entitlement limitations do not prevent the activity depend solely on the amount of contribu- carried on by the [managing body] from tions paid by the recipients and the finan- being regarded as an economic activity. A cial results of the investments made by the separate question, still to be examined, managing organisation. The [managing would be whether those limitations could body] therefore carries on an economic be relied upon, for example, in order to activity in competition with life assurance justify the exclusive right of that body to companies. provide old-age insurance in respect of which contributions are deductible from taxable earnings.

Finally, the mere fact that the [managing organisation] is a non-profit-making body does not deprive the activity which it carries on of its economic character since... The elements of solidarity forming part of that activity may give rise to conduct which the scheme... and the other characteristics... the competition rules are intended to pena- cannot alter that conclusion. lise.

328. First, as already stated in my Opinion in Van Scbijndel, pension schemes take a variety of forms ranging from State social security schemes at one end of the spectrum to private individual schemes operated by 331. Fourthly, whether the entity is in a commercial insurers at the other. The task position to adopt a certain line of conduct of classifying intermediate categories of which the competition rules try to prevent schemes is difficult: it is a question of is also relevant according to the case-law degree which requires analysis of a series of and in particular paragraph 21 of the criteria. judgment in FFSA.

329. Secondly, the Court in its judgment in 332. In the light of the foregoing I will now FFSA has considerably refined and clarified discuss which of the features of the Nether- its analysis of the question. I am accord- lands funds under scrutiny-are relevant to ingly in a position to re-consider the the question whether their activity is of an provisional view which I expressed in Van economic nature. Scbijndel.

333. I consider that the following charac- teristics are not relevant. 330. Thirdly, it is clear from the general case-law on the concept of undertaking — particularly the judgment in Höfner and paragraph 20 of the judgment in FFSA — that the decisive factor is whether a certain activity is necessarily carried out by public entities or their agents. Contrary to the 334. First, the way in which the scheme or contentions of the Funds, that issue is to be the managing organisation was set up and distinguished from the separate question the legal status of the scheme are immater- whether and to what extent the grant of ial for the classification of a fund's activ- certain exclusive rights is necessary for the ities. In FFSA the Court held that the fulfilment of tasks in the public interest. activities of the French Caisse Centrale de

la Mutualité Sociale Agricole managing a ingskamer. On the contrary, I agree with scheme set up by law were of an economic Albany, Drijvende Bokken and Brentjens nature. In neither Poucet nor FFSA was the that the identity of the control mechanism legal status of the different Caisses men- for insurance companies and pension funds tioned. The fact that the Court did not is a sign that their activities are similar. consider it to be relevant to its analysis is fully consistent with the general case- law. 155 The fact that in the present cases the supplementary pension schemes were set up by collective agreement and are managed jointly by representatives of man- agement and labour in the legal form of a 336. Thirdly, the funds' pursuit of a social Stichting accordingly has no bearing on the objective and their non-profit-making char- classification of their activities. acter are not relevant either. In Poucet the Court seems to have attached some impor- tance to those two features. 158However, in summarising Poucet in paragraph 15 of its judgment in FFSA the Court did not mention them. Consistently with its general approach of not taking into account the objective pursued or the non-profit-making character, 159 it heldat paragraphs 20 and 21 of its judgment in FFSA that those two characteristics could not influence its assessment. 335. Secondly, the rules governing the composition of the managing body, the restrictions to which it is subject in making investments and the way in which it is controlled by the public authorities are, on the basis of paragraph 20 of the judgment in FFSA, also immaterial. In Poucet the 337. By contrast, the following features are Court still mentioned control by the State relevant for the purposes of the analysis. as relevant. 1 5 6 However, in FFSA that feature is not mentioned despite the fact that the French Government had raised the issue. 15 7Accordingly, it is not relevant in the present cases that representatives of employers and employees sit in equal 338. First, in the light of the FFSA judg- numbers on the management board of the ment (paragraph 16) and contrary to what I fund, that management is under an obliga- stated on a provisional basis in Van Schijn- tion to maintain financial equilibrium and del, the way the pension scheme operates is to invest in a prudent way and that an important factor. I consider that a non- management is controlled by the Verzeker- funded pension scheme operating accord- ing to the redistribution method where 155 — See paragraph 312 above and notes 134 to 137. 156 — Paragraph 14 read in conjunction with paragraph 16 of the judgment. 158 — Paragraph 18 of the judgment. 157 — Paragraph 11 of the judgment. 159 — See paragraph 312 above and notes 138 and 139.

current contributions finance the pensions influence the level of contributions and of the currently retired is necessarily oper- benefits are also relevant. ated directly by the State or indirectly through bodies acting as or in a similar way as agents of the State. I cannot see any — even theoretical — possibility that without State intervention private under- takings could offer on the markets a pension scheme based on the redistribution principle. Nobody would be prepared to 340. On the one hand, schemes in which pay for the pensions of others without a the levels of benefits and contributions are guarantee that the next generation would fixed by the legislator are to be distin- do the same. That is precisely why it was guished from schemes in which those levels historically necessary to introduce such are fixed by independent decision of the systems, managed or at least protected by fund's management board. In that context, the State. I consequently have some diffi- the principle underlying paragraph 21 of culty with the view that the activities of the judgment in FFSA and certain other such a scheme could be of an economic judgments of the Court, 1 6 0which are nature. By contrast, it is clear that the discussed above, is relevant: independent market has generated pension schemes entities which are in a position to generate operating on the basis of the capitalisation effects which the competition rules seek to principle. The fact that the activities of such prevent should be subject to those rules. schemes, like those of many other insurance activities, are regulated by the legislator for the benefit of consumers and investors does not deprive those activities of their eco- nomic character. Restrictions on their activ- ities may fall to be assessed under Arti- cle 90 of the Treaty. It is accordingly significant that in the present cases the 341. In that respect the German Govern- sectoral pension funds operate on a funded ment and the Commission argue that, since basis. the legal effects of collective agreements between management and labour are simi- lar to those of legislation, the situation in the present proceedings is comparable to that in Poucet where contributions and benefits were fixed by law. In my view, however, it is not necessary to take a position on the issue to what extent collec- tive agreements and legislation have similar legal effects. In the present proceedings the decisions on contributions and benefits are not taken by both sides of industry within the formal framework of collective bar- gaining but by majority decisions within the management board of the fund. More-

343. Thirdly, the elements of solidarity 344. All the relevant characteristics of the forming part of the scheme are relevant. Netherlands supplementary pension funds That is clear from the judgment in Pou- so far considered suggest that their activ- cet 163 and from its summary in FFSA. 164 ities are of an economic nature. However, However, the Court considered in FFSA the question arises whether that conclusion that in the case at issue the elements of is affected by the fact that affiliation to the solidarity inherent in the scheme were vast majority of those funds is made compulsory by the Netherlands Govern-

161 — Paragraph 12 of the judgment. 162 — Paragraph 15 of the judgment. 165 — Paragraph 19 of the judgment. 163 — Paragraphs 10 and 18. 166 — Paragraph 9 of the judgment. 164 — Paragraph 15. 167 — Paragraph 10 of the judgment.

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ment on the basis of a special legislative they should be scrutinised by competition framework. It must be borne in mind that authorities. in FFSA membership was optional.

346. In FFSA the Court relied on optional membership in concluding that the sche- me's activities were of an economic nat- ure. 170 I agree with that point. Optional membership is a particularly strong signal IX — Articles 90 and 86 that the activities in question are compar- able to those of a private insurer and that

168 — Paragraph 13 of the judgment. 349. The next question is whether a Mem- 169— Paragraph 15. ber State infringes Articles 90(1) and 86 of 170 — Paragraphs 17 and 22 of the judgment. the Treaty, read together, where it sets up a

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system of compulsory affiliation to sectoral have or wish to have special alternative pension funds such as that in the Nether- pension arrangements. lands and where in the framework of that system it makes affiliation to sectoral pension funds compulsory.

353. In order to be exempted the alterna- 350. It is helpful at this point to recall the tive scheme must fulfil several conditions. main features of the Netherlands system. Most importantly the alternative scheme must grant pension benefits which are at least equivalent to those granted by the sectoral fund.

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356. It appears from the orders for refer- requirements of reasonableness and fair- ence, particularly the Kantongerecht's ness and/or by general principles of sound order in Albany, that the civil courts are administration.' in principle competent to review the leg- ality of the funds' decisions. That may be a direct or indirect consequence of the fact that the funds are legal persons organised in the form of a private Stichting (founda- tion). 359. It appears also from the above for- mula that the Netherlands courts have some doubts as to which principles govern the question. That again may be a conse- quence of the hybrid nature of the pension funds' decision. 357. The extent of the civil courts' powers to review the funds' discretionary decisions on exemptions is, however, not entirely clear. The referring Kantongerecht in Brent- jens stated:

360. According to the Netherlands Gov- ernment a modified version of the exemp- tion guidelines has been in force since 26 April 1998. First, whereas previously the only obligatory ground was the six- 'It is not for this court to rule on the month exemption ground, three new obli- circumstance that the Pension Scheme has gatory exemption grounds have been seen no cause to make use of its discre- added. Now an exemption must also be tionary power to grant Brentjens an exemp- granted where tion, since that power stems from the Pension Scheme's own management policy.'

— the employing undertaking forms part or will form part of a group of under- 358. However, other statements of the takings which does not fall within the referring courts and a formula used in scope of application of the sectoral Albany seem to imply that there is a limited pension fund in question; power to review:

362. Thirdly, the possibility of a complaint to the Insurance Board has been abolished.

367. Article 86 provides:

363. However, since the main proceedings are governed by the previous version of the exemption guidelines, the modified version is not directly relevant for the present proceedings. 'Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be 171 — See paragraph 15 above. prohibited as incompatible with the com-

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372. Secondly, it is necessary to bear in mind that the applicability or even an infringement of Article 90(1) has no auto- matic consequences as to the applicability of Articles 85 and 86 to the undertakings involved. Undertakings enjoying exclusive 369. The Funds, the Netherlands and rights remain subject to the competition French Governments and the Commission rules. 179 The only exception to that rule is all agree — albeit for different reasons — where the actual conduct under scrutiny is that Articles 90(1) and 86 are not infringed or that in any event the Netherlands system is justified under Article 90(2). 174 — See paragraph 301 above. 175 — Case 13/77 Inno v ATAB [1977] ECR 2115, paragraphs 30 and 31 of the judgment; Case 66/86 Ahmed Saeed Flugreisen v Zentrale zur Bekämpfung Unlauteren Wett- bewerbs, cited in note 48, paragraph 48; and Case C-260/89 ERT, cited in note 64, paragraph 35. 176 — See paragraphs 298 to 305 above. 177 — Case 13/77 Inno v ATAB, cited in note 175, paragraphs 32 and 42 of the judgment; and Case 66/86 Ahmed Saeed Flugreisen v Zentrale zur Bekämpfung Unlauteren Wett- bewerbs, cited in note 48, paragraph 50. 370. I should make two introductory 178 — Case C-323/93 Centre d'insémination de la Crespelle v Coopérative de la Mayenne, cited in note 128, paragraph remarks on Articles 90(1) and 86. 15 of the judgment. 179 — Case 83/78 Pigs Marketing Board v Redmond [1978] ECR 2347, paragraphs 43 and 44 of the judgment; Case 311/84 CBEM v CLT and IPB, cited in note 142, 172 — Case C-41/90, cited in note 53. paragraphs 16 and 17; and Case C-323/93 Centre d'insémination de la Crespelle v Cooperative de la 173 — Case C-18/88 [1991] ECR I-5941. Mayenne, cited in note 128, paragraphs 24 to 27.

375. In my view that argument is miscon- ceived since the contributions reserved by employers and employees for supplemen- 373. In order to answer the national courts' tary pensions are bound to be administered questions it must be established, first, by the funds. Therefore, the funds enjoy an whether the funds are undertakings to exclusive right to collect and administer the which the Netherlands have granted special contributions. The funds' exclusive right in or exclusive rights, secondly, whether the that respect is merely the other side of the funds hold a dominant position within a coin of the sector-wide obligation to affili- substantial part of the common market, ate employees to a certain supplementary and thirdly, whether the Netherlands pension fund. has — within the meaning of Arti- cle 90(1) — 'enacted or maintained in force a measure contrary to the rules of the Treaty', in particular contrary to Arti- cle 86, which cannot be justified under Article 90(2).

376. Furthermore, it could also be argued that under the Netherlands rules on indivi- dual exemption the funds enjoy a second exclusive right, namely the right to decide on a discretionary basis on applications for individual exemptions from compulsory A — Applicability of Article 90(1): under- affiliation. takings enjoying special or exclusive rights

374. According to the Netherlands Gov- ernment, the Minister's decree making

377. Accordingly, the funds are the kind of 180 — Joined Cases C-359/95 P and C-379/95 P Commission undertakings to which Article 90(1) and France v Ladbroke (1997] ECR I-6265, paragraphs 32 to 37 of the judgment. applies.

380. Initially in its written observations the Commission contested the existence of dominance, mainly on the basis of the arguments used by the Funds. At the hearing however the Commission adopted 383. Finally, each pension fund covers the the opposite position and in that respect Netherlands' whole territory and therefore joined the French Government. It argued a substantial part of the common market. that where affiliation was compulsory there Each of the funds accordingly holds a was no alternative choice either on the dominant position with regard to the supply or on the demand side of the market. 181 — Case 311/84 CBEM v CUT and IPB, cited in note 142, paragraph 16 of the judgment; Case C-41/90 Höfner and Eher, cited in note 53, paragraph 28; Case C-260/89 ERT, cited in note 64, paragraph 31; Case C-179/90 Merci Convenzionali Porto di Genova, cited in note 143, paragraph 14; Case C-163/96 Raso and Others [1998] ECR I-533, paragraph 25; and Case C-266/96 Corsica Perries France, cited in note 125, paragraph 39. 182 — Case 311/84 CBEM v CUT and IPB, cited in note 142, 381. Ican be brief on that point. The Court paragraph 16 of the judgment. 183 — Case 26/75 General Motors [1975] ECR 1367, paragraph has consistently held that an undertaking 9 of the judgment.

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provision of supplementary pension insur- regime which increases administrative costs ance for a given sector of industry in the and entails other losses of efficiency. Netherlands.

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holding Member States responsible for as such. Thus, it is precisely that dilemma independent anticompetitive behaviour on which'arises. the part of undertakings merely because it takes place within their jurisdiction. Arti- cle 90(1) can therefore be infringed only where there is a causal link between a Member State's legislative or administrative intervention on the one hand and anti- competitive behaviour of undertakings on the other hand. The Court has held that in 391. The Court has consistently held that the context of Article 90(1) alleged abuses the mere creation of a dominant position must be the 'direct consequence' of the by the grant of exclusive rights will not national legal framework. 184 normally infringe Articles 90(1) and 86. 185

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the centres to abuse their dominant posi- exclusive right as such is compatible with tion. Under a different heading, it then Articles 90(1) and 86. In such cases, the examined whether the centres themselves abovementioned dilemma is of course par- had committed any abuse under Article 86, ticularly pronounced. for which they alone would have been responsible.

395. The leading judgments on the com- 393. However, although exclusive rights patibility of an exclusive right with Arti- are not normally contrary to Articles 90(1) cle 90(1) can be divided into three groups. I and 86, the Court has consistently held that shall call them for convenience the ERT the Member States' freedom with regard to type, 190 the Höfner type 1 9 1and the Cor- granting exclusive rights is not without beau type 192 cases. I will analyse each limitations. The Court has stated: group's underlying rationale and apply it to the present cases.

'... even though [Article 90(1)] presupposes the existence of undertakings which have certain special or exclusive rights, it does not follow that all the special and exclusive (a) The ERT-type cases rights are necessarily compatible with the Treaty. That depends on different rules, to which Article 90(1) refers.' 188

400. In those three cases it was not merely the monopoly itself which infringed Arti- 398. In Merci Convenzionali Porto di cles 90(1) and 86 but the monopoly in Genova 194 the Court, ruling on exclusive conjunction with additional features which rights granted to Italian dock-work under- made abuses very likely. Structural mea- takings and companies, held: sures beyond the granting of an exclusive right led the undertakings in question to abuse their dominant position. Only then was there justification for holding the State — at least partly — responsible for the anticompetitive behaviour of the mono- 'In that respect, it appears from the cir- polist. cumstances described by the national court and discussed before the Court of Justice that the undertakings enjoying exclusive rights in accordance with the procedures laid down by the national rules in question are, as a result, induced either to demand payment for services which have not been requested, to charge disproportionate 401. The question arises whether the cases prices...' 195 now before the Court present an ERT-type situation, and whether there are structural features beyond the existence of the exclu- sive right which lead the funds to abuse their dominant position.

399. It is not entirely clear, either from that cited passage or from the rest of the judgment, whether in fact the legislative framework contained features beyond the

193 — Case C-163/96, cited in note 181. 194 — Case C-179/90, cited in note 143. 402. It is argued, first, that no concrete 195 — Paragraph 19 of the judgment. abuse, such as for example excessively high

'... A Member State is in breach of the 404. Nevertheless, I can see nothing in the prohibition contained in those two provi- Netherlands system which induces the sions only if the undertaking in question, funds to commit such abuses. On the merely by exercising the exclusive right contrary, the funds are controlled by dif- granted to it, cannot avoid abusing its ferent State authorities and by a council of dominant position. affiliated persons. They are required to invest the collected funds in a prudent way. The tax rules limit maximum pension benefits. The funds' margin of manœuvre in that respect is therefore limited. Conse- Pursuant to Article 86(b), such an abuse quently, even in the presence of concrete may in particular consist in limiting the abuses of that kind, the funds alone would provision of a service, to the prejudice of be liable on the basis of Article 86. those seeking to avail themselves of it.

A Member State creates a situation in which the provision of a service is limited 405. There are thus no additional struc- when the undertaking to which it grants an tural features in the Netherlands legislation exclusive right extending to executive recruitment activities is manifestly not in

196 — Case C-163/96 Raso and Others, cited in note 181, paragraph 31 of the judgment; and Case C-18/88 GB- INNO-BM, cited in note 173, paragraphs 23 and 24. 197 — Case C-41/90, cited in note 53.

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a position to satisfy the demand prevailing services involved, the monopolist could not on the market for activities of that kind and avoid abusing its dominant position by when the effective pursuit of such activities constantly 'limiting production, markets or by private companies is rendered impossi- technical development to the prejudice of ble by the maintenance in force of a consumers' within the meaning of Arti- statutory provision under which such activ- cle 86(b). In the exceptional circumstances ities are prohibited and non-observance of the Court therefore felt justified in making that prohibition renders the contracts con- a real exception to the principle of not cerned void.' 198 challenging Member States' freedom to grant exclusive rights.

detailed economic and factual assessments. choices. It must therefore be emphasised In a preliminary reference submitted by a that the Court in the Höfner-type situation national court in accordance with Arti- has limited its and the national courts' cle 177 of the Treaty, those assessments are review to national systems which are for the national courts. Some guidance may manifestly inadequate. none the less be helpful concerning the factors which the national courts may find relevant in making such assessments.

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(c) The Corbeau-type cases when considering the exclusive rights of mooring groups in two important Italian ports. Without ruling on a prima facie infringement of Article 90(1), it held that in any event those exclusive rights were justified under Article 90(2). 417. In Corbeau 201 the Court was asked to rule on the compatibility with Arti- cles 90(1) and 86 of the monopoly for postal services in Belgium. The Court did not clearly identify which, if any, features of the Belgian legislation were contrary to Articles 90(1) and 86. Instead it stated that 419. Even the early judgment in Sacchi 204 Article 90(1) had to be read together with falls in my view into that category. In the Article 90(2) and immediately started a operative part of the judgment 205 the balancing process on the justification of Court referred to Article 90 without speci- the scope of the monopoly. It held inter fying, as it did elsewhere in the judgment, alia : the applicable paragraph. In the light of the Opinion of Advocate General Reischl 206 the possibility that the Court had Arti- cle 90(2) in mind cannot be excluded.

'[Article 90(2)] thus permits the Member States to confer on undertakings to which they entrust the operation of services of 420. It follows from that case-law that general economic interest, exclusive rights where the exception in Article 90(2) which may hinder the application of the applies the grant of exclusive rights is in rules of the Treaty on competition in so far any event justified. Is Article 90(2) applic- as restrictions on competition, or even the able in the present cases ? exclusion of all competition, by other economic operators are necessary to ensure the performance of the particular tasks assigned to the undertakings possessed of the exclusive right.' 202 421. Article 90(2) provides:

having the character of a revenue-produ- employed persons moving within the Com- cing monopoly shall be subject to the rules munity. 2 0 8 contained in this Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Community.' 424. Moreover, the funds are, as already mentioned, non-profit-making. They are obliged to accept every employer and employee belonging to the sector. They are therefore not allowed to make any selection of risks through questionnaires or medical examinations. There is no link between the risk and the contributions. All 422. The first issue is whether the funds are persons affiliated pay an average contribu- entrusted with the operation of services of tion which does not take into account, for general economic interest. In my view there example, the age of employees or the size of can be little doubt on that point. the employing undertaking. In case of incapacity for work, exemptions from the obligation to pay contributions are granted.

427. The Funds and the Netherlands Gov- is necessary to achieve the objective of an ernment contend that the maintenance of adequate level of social protection. their exclusive rights is a necessary condi- tion for the survival of the pension schemes. Referring to the Court's judgment in Corbeau, they argue that in the absence of compulsory affiliation their financial equilibrium would be threatened. In that respect they use the argument of a negative spiral, where the 'good risks' (e.g. big undertakings with a young and healthy 430. First, collective agreements containing workforce engaged in non-dangerous activ- minimum pension requirements would suf- ities) would look for more advantageous fice. The detailed rules for the administra- arrangements with private insurers leaving tion of collected pension contributions the funds with a higher concentration of should in principle be left to employers. bad risks. That in turn would lead to an Minimum requirements could also be increase in the cost of pensions for employ- imposed by law where necessary. A good ees of e.g. small and medium sized compa- example of that approach is a law in force nies with an aged personnel engaged in since 1 January 1998 which prohibits prior dangerous activities. As a consequence, it medical examination in the context of would become more and more difficult, group pension insurance contracts. maybe even impossible, to insure bad risks at acceptable prices.

431. With regard to the argument that average premiums and benefits are only feasible in the context of compulsory 428. Furthermore, they contend that it is affiliation, it is said that a system of average only on the basis of compulsory affiliation contributions is in fact no longer an that average contributions (not linked to essential feature of supplementary pension risk) and average pensions (not linked to schemes and is not required by law. Con- salary) are possible. In their view, that kind versely, various sectoral pension schemes of pension insurance could never be offered operate with average premiums and with- by private insurers. out compulsory affiliation.

438. The Court has recently made it clear that for the exception of Article 90(2) to

435. Accordingly, the Court is again not in a position to decide whether abolishing 209 — Case C-157/94 Commission v Netherlands [1997] ECR compulsory affiliation would obstruct the I-5699, paragraph 39 of the judgment. 210 — Case C-157/94, paragraph 37 of the judgment. performance in law or in fact of the 211 — Case C-157/94, cited in note 209, paragraph 40 of the particular tasks assigned to the pension judgment. funds. The detailed examination of all the 212 — Case 283/82 Duphar v Netherlands [1984] ECR 523, paragraph 16 of the judgment; Joined Cases C-159/91 economic, financial and social matters and C-161/91 Poucet and Pistre, cited in note 55, paragraph 6; and Case C-70/95 Sodemare and Others v involved is for the national courts, which Regione Lombardia, cited in note 57, paragraph 27.

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apply it is not necessary that the survival of tions from compulsory affiliation where the undertaking itself is threatened. 213 It employers or employees have made or wish follows from the wording of that rule that to make special alternative pension it is sufficient that the application of the arrangements. Three features of those rules competition rules would obstruct the per- are important. First, the decision on indi- formance, in law or in fact, of the special vidual exemptions is taken by the compe- obligations incumbent upon that undertak- tent sectoral fund itself. Secondly, in most ing. cases the fund enjoys a discretion. Thirdly, as a consequence of that discretion the national courts exercise only marginal review of the fund's decision. 214

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444. The Commission contends, first, that To that extent I agree with the Commis- the possibility of individual exemptions is sion. an exceptional opening in an otherwise hermetically closed system. In its view, it would not be coherent to examine the compatibility of the rules on individual exemptions where compulsory affiliation as such is compatible with the Treaty. 448. However, the problem here is differ- ent. The issue is not the material scope of the funds' exclusive right as determined by the decree on compulsory affiliation and by the available grounds for exemption, but the formal mechanism by which decisions on that scope are taken. Where a fund takes 445. If I correctly understand the Commis- a discretionary decision on an application sion's argument, any rule whatsoever con- for individual exemption, it in fact itself cerning individual exemptions would auto- determines the scope of its statutory mono- matically be lawful once compulsory poly. That delegation of decision-making affiliation, and therefore the funds' exclu- powers is not a necessary and inherent part sive right as such, had been held to be of rules on the material scope of the compatible with Articles 90(1) and 86. exclusive right. It can therefore be severed from those rules and challenged separately.

449. At the hearing, the Commission 446. I do not agree with that view. argued, secondly, that nothing in the Neth- erlands regulatory framework led the funds to misuse their discretion. Referring to Crespelle, 216 the Commission stated that the funds alone would therefore be respon- sible for any abuse.

451. By adopting rules on discretionary 454. It is settled case-law that the creation exemption, the Netherlands legislature has of similar conflicts of interest infringes recognised that there may be situations Articles 90(1) and 86. where undertakings belonging to a certain sector may have legitimate interests in applying for an exemption. One can think for example of undertakings belonging to a group of undertakings with its own group pension policy, or of other situations which are now laid down as obligatory exemption 455. In France v Commission 218 the Court grounds in the latest version of the exemp- was asked to rule on a directive based on tion guidelines. 217 Article 90(1) and (3) 219 which obliged Member States to ensure that with regard to telecommunications terminal equipment responsibility for regulatory and supervi- sory matters was entrusted to a body independent of the undertaking operating the public network. The Court held: 452. By contrast, sectoral funds have an obvious interest in maintaining a high level of affiliation. More affiliated persons means, for example, greater economies of scale as regards administrative costs, more buying power on the investment markets and a more advantageous spreading of '... a system of undistorted competition, as risks. laid down in the Treaty, can be guaranteed only if equality of opportunity is secured as between the various economic operators. To entrust an undertaking which markets terminal equipment with the task of draw- ing up the specifications for such equip- ment, monitoring their application and granting type-approval in respect thereof 453. The exemption guidelines in the ver- is tantamount to conferring upon it the sion applicable to the main proceedings power to determine at will which terminal entrust the funds with the task of balancing equipment may be connected to the public those two sets of interests. Thus, in a

461. In the present cases the dangers inher- 220 — Paragraph 51 of the judgment. ent in such a conflict of interest are 221 — Case C-18/88, cited in note 173, paragraph 26 of the considerably aggravated by the two other judgment. 222 — Case C-91/94 Tranchant [1995] ECR I-3911, paragraph 19 of the judgment. 223 — Joined Cases C-271/90, C-281/90, C-289/90 Spain and Others v Commission ('telecommunications services') 226 — Case C-260/89, cited in note 64, paragraph 37 of the [1992] ECR I-5833, paragraph 22 of the judgment; Case judgment. C-69/91 Decoster [1993] ECR I-5335; Case C-92/91 227 — Case C-163/96, cited in note 181, paragraphs 28 to 31 of Taillandier [1993] ECR I-5383. the judgment. 224 — Cited in note 223. 228 — Case C-18/88, cited in note 173, paragraphs 23 and 24. 225 — Cited in note 223. 229 — Paragraph 31.

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features of the system, namely the discre- fore to check whether the equipment com- tion of the funds and the limited judicial plied with the requirements determined by review of their decisions. the minister. In the absence of any discre- tion, the Court did not find an infringement of Articles 90(1) and 86.

230 —Case 9/56 Meroni v High Authority [1958] ECR 133, p. 152. 232 — Case C-18/88, cited in note 173, paragraphs 34 to 36 of 231 — Joined Cases C-46/90 and C-93/91 Lagauche [1993] ECR the judgment. I-5267. 233 — Cited in note 231, paragraphs 25 to 29 of the judgment.

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first that as a matter of fact the manage- compulsory affiliation which are subject ment board of the fund is the only body in a only to marginal judicial review. position to decide on applications for exemption. Secondly, it invokes the possi- bility of a complaint to the Insurance Board.

X — The legal effects of the Court's judgment

and not on Article 5(2). 23 4 Articles90(1) doubts about the legality of compulsory and 86 have direct effect. 235 Nationallaws affiliation to supplementary pension and decrees making affiliation compulsory funds. 239 would therefore in principle be inapplic- able. 236

473. The Netherlands Government asks 476. In the area of pensions, on the other the Court to limit the temporal effects of hand, the need for a limitation ratione its ruling. temporis is particularly acute. Judgments without such limitations could retroactively upset the financial balance of many pension schemes and put into question legal situa- tions which have exhausted all their effects in the past. 240 I am therefore inclined to 474. An interpretation which the Court support an exceptional limitation ratione gives to a rule of Community law merely temporis of the effects of the judgment. clarifies and defines the meaning and scope of a rule of Community law as it must have been understood and applied from the time of its coming into force. The Court has however held that exceptionally, in appli- cation of the general principle of legal certainty and taking account of the serious 477. It must be stressed that it is for the effects which its judgment might have, the Court alone to decide on such an excep- temporal effects of its ruling, as regards the tional restriction and that it may be past, may be restricted. 237 allowed only in the actual judgment ruling on the interpretation sought. 241

242 — See in a comparable situation the Opinion of Advocate General Tesauro in Case C-69/91 Decoster, cited in note 223, at p. 5371.

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XI — Conclusion

Accordingly the questions referred in these cases should in my opinion be answered as follows:

(1) Article 85(1) of the Treaty is not infringed where representatives of employers and employees within a particular sector of the economy agree collectively to set up a single sectoral pension fund and apply jointly to the authorities to make affiliation to the fund compulsory for all persons belonging to that sector.

Articles 90(1) and 86 of the Treaty preclude rules such as the Netherlands exemption guidelines in so far as they entitle the sectoral pension funds to take discretionary decisions on applications for individual exemption from compulsory affiliation which are subject only to marginal judicial review.

(5) In so far as national rules are held to be contrary to Articles 90(1) and 86 of the Treaty, they are inapplicable, subject to a potential restriction imposed by the Court on the effects ratione temporis of its ruling.

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