C-180/98

OPINION OF MR JACOBS — JOINED CASES C-180/98 TO C-184/98

OPINION OF ADVOCATE GENERAL JACOBS delivered on 23 March 2000 *

Table of contents

I — Introduction I - 6457 II — National background I - 6458 1. The Law on Compulsory Affiliation to a Professional Pension Scheme I - 6459 2. The statutes and pension regulation of the Medical Specialists' Pension Fund I - 6463 3. The medical specialists' pension scheme I - 6465 III — The main proceedings I - 6467 IV — Admissibility I - 6469 V — Scope of the questions referred I - 6469 VI — The second question: Articles 5 and 85 I - 6470 1. Competition law and the professions I - 6471 2. Applicability ratione materiae of Article 85(1) I - 6476 3. Decision by an association of undertakings I - 6479 (a) Are medical specialists undertakings? I - 6479 (b) Do medical specialists act as consumers or as undertakings when they set up a professional pension scheme? I - 6481 (c) Did the LSV act as an association of undertakings? I - 6482 4. Restriction of competition I - 6484 (a) The substantive element: Harmonisation of the costs and benefits of supplementary pensions within the profession I - 6484 (b) The institutional element: Setting-up of a legal person to monitor compliance with and to manage the pension scheme I - 6486 (c) The political element: Application to the Minister I - 6488 5. The relationship between Articles 5 and 85(1) I - 6488 VII — The first question: Classification of the Fund as undertaking I - 6490 VIII — The third question: Articles 90(1) and 86 of the Treaty I-6492 1. Applicability of Articles 90(1) and 86 I-6493

4. The present cases also raise issues similar to those addressed recently in Albany, Brentjens, and Drijvende Bokken, 2 and the Court decided to suspend proceedings 2. The Community law issue is essentially in the present cases until it gave judgment whether the Netherlands rules on compul- in those earlier cases. In order to avoid sory affiliation to professional supplemen- repetition I will refer extensively to the tary pension schemes infringe either Arti- Opinion and the three judgments in those cles 5 and 85 of the EC Treaty (now cases. When drawing analogies it must Articles 10 and 81 EC) or Articles 90(1) and 86 of the EC Treaty (now Arti- cles 86(1) and 82 EC). As regards Arti- 1 —Joined Cases C-430/93 and C-431/93 Van Schijndel and cles 5 and 85 a preliminary question is Van Veen v SPF [1995] ECR I-4705. 2 — See my Opinion of 28 January 1999 and the judgments of whether and if so under what conditions 21 September 1999 in Case C-67/96 Albany International v Bedrijfspensioenfonds Textielindustrie, Joined Cases decisions of professional associations in the C-115/97, C-116/97 and C-117/97 Brentjens' Handelson- context of the setting up of a compulsory derneming v Bedrijfspensioenfonds voor de Handel in Bouwmaterialen, and Case C-219/97 Drijvende Bokken v professional pension scheme might be con- Pensioenfonds voor de Vervoer- en Havenbedrijven.

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however be kept in mind that those cases — Secondly, in most cases the basic pen- concerned sectoral pension funds which sion is topped up by supplementary were set up on the basis of collective pensions provided in the context of agreements between management and employment or self-employed activity. labour and which provided supplementary Those second pillar pensions are nor- pensions to employees in a certain sector of mally provided by collective schemes industry, whereas the present cases concern covering a sector of industry, a profes- a pension fund set up by members of a sion or the employees of an undertak- profession which provides pensions to the ing. members of that same profession.

10. Under Article 2(2) such a professional pension scheme may take one of three forms:

1. The Law on Compulsory Affiliation to a Professional Pension Scheme (a) A professional pension fund is set up which acts as sole implementing body (uitvoeringsorgaan) of the pension scheme. 8. Under Article 1(1)(b) of the BprW a beroepsgenoot (member of a profession) is a natural person who exercises in a given professional sector the profession corre- sponding to that sector. (b) The members of the profession are required to comply with the rules of the pension scheme by means of indi- vidual insurance contracts to be con- cluded at their choice either with the professional pension fund mentioned 9. Under Article 2(1) of the BprW, the under (a) where the pension scheme Minister for Social Affairs may upon appli- allows that possibility or with a duly cation by one or more organisations authorised insurer. deemed by him to be sufficiently represen- tative of the members of a profession render affiliation to a professional pension scheme (beroepspensioenregeling) set up by members of that profession compulsory for all or certain groups of persons belonging (c) A part of the pension scheme takes the to the profession concerned. The profes- form under (a) and the remaining part sional organisation's application to the the form under (b).

3 — Stb. 400. 4 — Article 3 of the BprW.

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11. It appears from the file that both competent legal person. 5There are sanc- medical specialists and general practition- tions for infringement of that obligation. 6 ers have opted for form (c) in respect of The professional pension funds can issue their relatively large professional pension enforceable orders for recovery of unpaid schemes. The other 10 professional contributions. 7 schemes take form (a).

16. Article 8(1) of the BprW specifies sev- pension fund has to administer the col- eral issues which have to be dealt with in lected funds. In principle pension funds the statutes and regulations of the legal must transfer the risk linked to the pension person, such as for example the definition commitments or reinsure it by means of of the profession to which the pension agreements with insurance companies scheme applies, the governance of the legal (Article 9). By way of exception a fund person, the rights and obligations of affili- may administer and invest the collected ated persons, and the attitude to adopt with capital itself at its own risk where it has regard to persons who on moral grounds presented to the competent surveillance object to any form of insurance. bodies a management plan and actuarial note explaining the way it proposes to handle the actuarial and financial risk and where the Insurance Board has given its approval (Article 10).

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exemption may be limited in time or enable 'younger members of the profession subject to conditions. concerned to contribute, by means of a system of technical average contributions or variants thereof, to the greater cost of providing for older members' and to 'pro- vide for the attribution of pension rights in respect of periods prior to the entry into 22. According to the Netherlands Govern- force of the rules'. The attainment of those ment a ministerial exemption may be objectives by means of a common set of granted only where in the specific circum- rules was 'possible only if [those rules] stances of the case a systematic application apply, in principle, to all members of the of the BprW would disproportionately profession concerned'. prejudice individual interests and where the fund concerned has not provided for appropriate alternative solutions. None the less, an application for a ministerial exemp- tion is not to be regarded as a remedy against any decision of the fund concerned refusing to grant an exemption from com- pulsory affiliation. 25. As regards freedom of competition the Netherlands Government stated in the parliamentary debate 13 that:

26. The Government also stated: 14

'The point of a draft framework law such 28. Under the statutes the Stichting Pen- as this is properly to serve the interests of sioenfonds Medische Specialisten (the Med- the members of the profession concerned, ical Specialists' Pension Fund, hereinafter taken as a composite group. This means 'the Fund') was set up as a legal person that all the members of the particular within the meaning of Article 2(3)(c) of the branch of the profession in question should BprW in the form of a foundation (Sticht- in principle be required to participate in the ing) to operate partly as an insurer in its pension fund. If that leads to a situation in own right and partly as surveillance body which it can be established in certain ensuring that the members of the profession specific cases that that may not accord concerned insure themselves individually. with the individual interests of one or more members of the profession, then that state of affairs must in principle be accepted, since every set of rules applying to a group of persons involves a restriction of the freedom of individuals'.

29. Affiliation to the scheme was made compulsory on the basis of Article 2(1) of the BprW by a ministerial decree issued on 18 June 1973 15 upon request of the LSV. With effect from 31 January 1997 the Orde 2. The statutes and pension regulation of van Medisch Specialisten (Medical Specia- the Medical Specialists' Pension Fund lists' Order, hereinafter 'the OMS') has replaced the LSV in its function as repre- sentative professional organisation. About 8 000 of the 15 000 practising independent 27. The medical specialists' profession or employed medical specialists are mem- represented by the Landelijke Specialisten bers of the OMS.

30. Article 1(1) of the pension regulation 33. As regards the relationship between the defines members of the scheme as any respective powers of the Minister under medical specialist whose name is listed in Article 26 of the BprW and of the Fund the register of recognised medical specia- under Article 1(2) of the pension regulation lists referred to in the internal rules of the to exempt members of the profession from Koninklijke Nederlandse Maatschappij tot compulsory affiliation, the Netherlands bevordering der Geneeskunst (Royal Neth- Government states that the main responsi- erlands Society for the Promotion of Med- bility for setting up and administering the icine), who resides in the Netherlands, who pension scheme lies with the members of practises as a medical specialist in that the profession. The role of the public country and who has not yet reached the authorities is merely to set a regulatory age of 65 years. framework and to guarantee the function- ing of the system. Consequently, the Min- ister's power to exempt is subsidiary to the Fund's power or obligation to do so. Only in so far as the applicable rules (statutes, pension regulation, ministerial guidelines) do not empower the Fund to grant an exemption can the Minister intervene. 31. Article 1(2) of the pension regulation entitles essentially two groups of medical specialists to apply for exemption from membership. Those groups are, first, med- ical specialists who expect to exercise in a given year their profession solely in an employment relationship in which they are covered by another pension scheme such as, for example, a scheme governed by the 34. Under Article 44 of the pension regula- BPW or a scheme set up by the employer tion the management of the Fund may in before 6 May 1972 which grants pension special circumstances grant derogations benefits at least equivalent to those granted from the pension regulation in favour of by the Fund, and, secondly, self-employed affiliated persons, if the derogation does medical specialists who earn revenues not prejudice the rights of others. Accord- below a relatively low threshold. ing to the Fund that hardship rule (hard- heidsclausule) is to be applied in particu- larly inequitable situations, such as, con- ceivably, where a member would build up during a very short period of affiliation only minimal pension rights.

(f) in case of incapacity to exercise the profession due to invalidity, a continu- ing accrual of pension rights with the (a) an old-age pension to be paid from the Fund paying the contributions due; affiliated member's 65th birthday;

(g) a complementary survivor's benefit (Risicoregeling) for widows, widowers (b) a surviving spouse's pension of in and orphans where an affiliated mem- principle 70% of the member's old- ber dies before he reaches 65 years. The age pension as built up during the younger the deceased member, the marriage to be paid to the deceased higher the complementary survivor's member's surviving spouse; benefit.

(c) an orphan's pension of 14% (28% 37. The different elements of the pension where both parents are deceased) of scheme are subject to two different insur- the member's old-age pension to be ance regimes.

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38. A first part of the scheme, the so-called 41. An insurance company providing the normpensioen (reference pension), basi- normpensioen insurance must conclude an cally comprises the old-age pension, the agreement with the Fund. The Fund acts in surviving spouse's pension and the orphan's many respects as intermediary between the pension (elements (a) to (c)) at their nom- medical specialists and the insurer. The inal value, i.e. without adapting the pen- Fund collects for example the contributions sion benefits to the general rise in income for the normpensioen which are then level in accordance with element (d)). transferred to the insurer.

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Fund administers those elements. They cates has a very limited scope and grants cannot be entrusted to a private insurance only survivors' benefits. The professional company. pension schemes of the general practition- ers and the medical specialists are by far the biggest in terms of invested capital.

45. Elements (d) to (f) are financed by contributions calculated on an actuarial basis. Reserves for retroactive pension 49. On 31 December 1997 the Fund had rights (element (e)) are already financed. 5 951 affiliated members, 1 063 former Thus, contributions for that element are members and 4 220 persons receiving pen- currently zero. Element (g) is financed by a sion payments. The latter group was fixed average yearly contribution. composed of 1 238 widows or widowers, 185 orphans and 2 797 persons receiving old-age pensions. At the end of 1997 the invested capital of the Fund was about NLG 6 600 million.

46. There is no selection of risks through questionnaires or medical examination.

52. They consider, however, that since lants could not rely on the exemption in 1 January 1996 they have been entitled to Article 1(2) of the Fund's pension regula- be exempted from affiliation pursuant to tion. Article 1(2) of the Fund's pension regula- tion. 16 Having modified their contractual relationship with the hospital in question, they claim since that date to have practised their profession solely in an employment relationship in which they are compulsorily affiliated to a sectoral pension scheme 56. In the course of the procedure the administered by the Bedrijfspensioenfonds appellants had also claimed that compul- voor de Gezondheid, Geestelijke en sory affiliation to the Fund was contrary to Maatschappelijke Belangen (Sectoral Pen- various provisions of the EC Treaty. sion Fund for the Health Care, Clerical and Social Sector). The appellants therefore stopped paying pension contributions to the Fund.

57. By interlocutory judgment of 8 May 1998 the Kantongerecht decided to refer to the Court the following three questions. 53. The Fund denies that the appellants are The Kantongerecht states in the order for practising their profession in an employ- reference that the questions are modelled ment relationship. It issued enforcement on the questions which had previously been orders against the appellants in respect of referred by the Netherlands Hoge Raad in arrears of premiums. Van Scbijndel.

54. The appellants challenged those orders before the Kantongerecht. '(1) Given the aims of the BprW as described above..., is a professional pension fund, membership of which has been made, pursuant to and in accordance with the BprW, compulsory for all, or one or more specified groups of members of a profession, with 55. By interlocutory judgment of 13 Feb- compulsory affiliation entailing ruary 1998 the Kantongerecht decided that according to the BprW the legal con- owing to the nature of their contractual sequences briefly outlined above..., to relationship with the hospital the appel- be regarded as an undertaking within the meaning of Articles 85, 86 or 90 of the Treaty establishing the European 16 — See paragraphs 31 to 33 above. Economic Community?

59. The observations submitted by the Netherlands and French Governments, by 62. First, are Articles 5 and 85 of the the Commission, and also by the Greek Treaty infringed where public authorities Government (in case the Court were to make affiliation to a professional pension hold the reference admissible) show how- fund compulsory at the request of a profes-

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sional organisation representing the mem- border element. Moreover, the question is bers of that profession? (Question 2) modelled on the last question in Van Schijndel. 17 In that case the Hoge Raad expressly declined to refer a question on the fundamental freedoms of the Treaty. There- fore, the question must be interpreted as relating only to Articles 90 and 86 of the 63. Secondly, is a professional pension fund Treaty. such as that in issue in the present case an undertaking within the meaning of Arti- cle 85 et seq. of the Treaty? (Question 1)

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line of reasoning might be paraphrased as 70. The appellants in the main proceedings follows. 18 Medical specialists are under- have not submitted observations to the takings for the purpose of the competition Court. In their observations the Greek and rules. The setting up of the beroepspen- French Governments have not addressed sioenregeling by the LSV must be analysed the issue. as a decision of an association of under- takings within the meaning of Arti- cle 85(1). That decision restricts competi- tion between medical specialists and com- petition on the pension insurance market and also affects trade between Member States. Article 85(1) is thus infringed. By 71. This case raises among others the issue making affiliation to that pension scheme of the relationship between the competition compulsory the Netherlands favours the rules of the Treaty and the professions. adoption of a decision contrary to Arti- Since this is the first case involving a core cle 85(1) and/or reinforces its effects. profession, namely doctors, 19 and since the Under the Court's case-law the decree is issue is likely to become more important in therefore contrary to Articles 5 and 85. the near future 20 it may be helpful to make some preliminary remarks before starting the analysis of Articles 5 and 85(1).

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73. From a competition law perspective the publicising the price or the quality of the following are typical features of the mar- service offered. kets for professional services. 22

77. Fourthly, some professions are involved in fixing compulsory charges and fees for 74. First, the professions often hold a legal their services. Possible regulatory arrange- monopoly for the provision of their services ments range from the fixing of minimum (e.g. doctors for delivering health care fees by the profession itself to the fixing of services, advocates for pleading in courts, maximum fees by the State after consulting pharmacists for selling drugs). the profession concerned.

78. Finally, in many professions the possi- 75. Secondly, many professions are bility of exercising the profession in certain involved in controlling access to the profes- business structures is limited. Members of a sion. Where the State retains the final profession might for example be precluded decision on access, members of the profes- from setting up limited companies or from sion none the less, for example, fix neces- engaging in partnerships or employment sary training periods, control the content of relations with persons from another profes- studies, or set examinations and act as sion (e.g. lawyers and accountants). examiners. Sometimes the professions are even allowed to determine themselves how many new members can enter the profes- sion each year.

82. The present cases are atypical in that regard because they concern a decision by a 84. Secondly, from an economic point of professional organisation on supplemen- view the markets for professional services tary pensions and not on one of the above- are different in two important respects mentioned five categories of rules. The from normal markets for goods and ser- Court's judgment in the present cases will, vices. however, contribute to defining the frame- work within which professional conduct and regulations will be assessed in the

priced. 26 Beneficial externalities may be purchase by inspection (as he could for created for example by scientific discover- example when buying cheese), but only ies, negative externalities by a badly drafted after consumption. Even worse, he might contract. It is obvious that high quality never fully understand whether or not the professional services regularly generate professional (e.g. doctor, architect, lawyer) beneficial externalities and that the oppo- provided a high quality service. That means site will be the consequence of low quality that the incentives for professionals, who services. Furthermore, the demand for themselves determine how much attention professional services is often of a derivative they give to a client, either deliberately nature, which means that their output (a to lower quality to save time or money or lawyer's advice, an architect's plan) is an to induce clients to have further recourse to intermediate good in a longer production their services in the absence of necessity, are chain. The quality of those services there- high. The usai methods of overcoming or fore plays a crucial role as one of the mitigating the negative effects of asymmet- decisive inputs in many sectors of a ric information, or in other words of national economy. The conclusion to be preventing a 'race to the bottom', can all drawn is that professionals not only serve be found in the professions. Access exam- their clients but also provide benefits to the inations are intended to guarantee a high wider public, which means that society has initial standard of skills. Liability rules, the an extra interest in keeping the average consequences of a good or a bad reputa- quality of their services high. tion, and certification schemes are incen- tives to exploit those skills to the full. Advertising is seen by some as a means of overcoming or mitigating asymmetry, whilst others claim that advertising exacer- bates the problems. One conclusion to be drawn is that in order to counter the effects of asymmetry a certain level of regulation of those markets is necessary.

bodies. Those bodies may even be governed competition within the meaning of Arti- by public law. Their defence in competition cle 85(1) of the Treaty. 29 litigation will often include arguments based on their relationship with the State. They will claim, for example, that the legislature expected or encouraged the conduct under scrutiny or even obliged the body to adopt it (so-called 'State action defence'). It must also be borne in mind 90. In addition, it will have to be examined that in many competition law systems State whether Article 85(3) (where applicable) measures enjoy antitrust immunity. In cases can be interpreted so as to take into involving the professions it is therefore account concerns for the quality of profes- often necessary to establish as a preliminary sional services and its importance for point who is liable for a given conduct or society as a whole. 30 rule (the State or the profession).

91. Then, it will be necessary to apply with care the rules on the respective responsi- bilities of the Member States and of the professions. Critical issues will be whether 88. The conclusions to be drawn for the and under what conditions a profession can present cases 28 and more generally for raise a State action defence and on the basis Community competition law are in my of what arguments a Member State can view the following. justify its own regulatory intervention in the competitive process within the profes- sions.

92. I will conclude this section with the following comment. I have argued that 89. Owing to the heterogeneity of the the specific features of the markets for professions and the specificities of the professional services require some kind of markets on which they operate no general regulation. Opponents of professional self- formula can be applied; it will be necessary regulation insist that the State or at least to assess carefully in each case whether a State-controlled regulatory bodies should given restriction of conduct leads in fact on regulate the professions, since there are the market in issue to a restriction of

93. Against that background and in the light of the observations of the parties I turn now to the analysis of Articles 85(1) and 5 of the Treaty.

95. The Fund and the Netherlands Govern- ment argue, first, that there is no significant difference between the Netherlands rules on sectoral and on professional pension schemes. Council Directive 98/49/EC of 2. Applicability ratione materiae of Arti- 29 June 1998 on safeguarding the supple- cle 85(1) mentary pension rights of employed and self-employed persons moving within the Community 33 does not differentiate between pensions for employed and for self-employed persons. Secondly, several elements of the reasoning in Albany can be directly transposed to the present cases: 94. According to the Fund and the Nether- lands Government the medical specialists' decision to set up a professional pension 31 — Cited in note 2. scheme and to request the competent 32 — See paragraphs 114 to 121 below. Minister to declare affiliation to the scheme 33 — OJ 1998 L 209, p. 46.

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99. I consider, secondly, that that special immunity for collective agreements between management and labour cannot 97. That follows already from the reason- be extended or applied by analogy to other ing in paragraphs 53 to 60 of the judgment types of agreements or decisions. It must be " which may be summed up as follows. The recalled that Article 85(1) expressly covers Treaty and the Agreement on Social Policy all forms of concerted practices. Further- encourage collective bargaining between more, in the present cases the two decisive management and labour, which suggests elements of Albany are absent. Conduct of that that type of concertation between and regulations adopted by the professions economic actors is in general lawful. 37 do not necessarily contain restrictions of On the other hand, it is also clear that competition and no rule of the Treaty collective agreements between employers expressly encourages concertation between and workers on wages and working condi- self-employed professionals. Consequently, tions reached after collective bargaining the conflict between two sets of Treaty necessarily contain certain restrictions of rules which necessitated in Albany 'an competition. 38 If the Treaty encourages interpretation of the Treaty as a whole collective bargaining, its necessary conse- which is both effective and consistent' does quences, namely certain restrictions of not arise. competition, cannot be prohibited by Arti- cle 85(1). 39

34 — Paragraph 54 of the judgment. 35 — Paragraph 59 of the judgment. 36 — Paragraph 63 of the judgment. 37 — Paragraphs 54 to 58 of the judgment. 38 — Paragraph 59 of the judgment. 100. In reality the Fund and the Nether- 39 — Paragraph 60 of the judgment. lands Government are inviting the Court to

102. As regards the third argument, the competence of the Member States to legis- 101. As regards the first two of those late in a given field cannot affect the duty of arguments, I have already stated that in those States 46 (and a fortiori the duty of Community competition law there is no private actors) to comply with the prohibi- general exception for the social field. 42 tions of the Treaty. Contrary to many national competition law systems, the Community rules apply to virtually all sectors of the economy. That is because according to well-established case- law the sectors outside the scope of the competition rules must be expressly men- tioned in the Treaty. 43 The antitrust immu- nity for collective agreements between management and labour accepted in 103. I conclude therefore that Article 85(1) is applicable ratione materiae. 40 — Cited in note 33. 41 — Case 238/82 Duphar v Netherlands [1984] ECR 523, paragraph 16 of the judgment. 44 — See for further details paragraphs 183 to 185 of my 42 — See paragraphs 123 to 130 of my Opinion in Albany, cited Opinion in Albany. in note 2. 45 — See for further details and references paragraph 126 of my 43 — See, for example, Joined Cases 209/84 to 213/84 Ministère Opinion in Albany. Public v Asjes [1986] ECR 1425, paragraph 40 of the 46 — Case C-120/95 Decker v Caisse de Maladie des Employées judgment. Privés [1998] ECR I-1831.

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4 7 — See Case C-41/90 Höfner and Elser [1991] ECR I-1979, paragraph 21 of the judgment. 48 — See Case C-35/96 Commission v Italy, cited in note 19, paragraphs 36 to 38 of the judgment (discussed in more detail in paragraphs 108 to 110 below); Opinion of Advocate General Lenz in Case 170/83 Hydrotherm v Compact [1984] ECR 2999, point B(1) of the Opinion; see 106. It is noteworthy that none of the also Commission Decision 76/743/EEC Reuter/BASF, OJ 1976 L 254, p. 40 (inventor); Commission Decision parties has argued that self-employed med- 78/516/EEC RAI/UNITEL, OJ 1978 L 157, p. 39 (opera ical specialists are as such outside the scope singer). 49 — C a s e 118/85 Commission v Italy [1987] ECR 2599, ratione personae of the competition rules. paragraph 7 of the judgment. The Fund contends, however, that 50 — See for example the Opinion of Advocate General Tesauro in Case C-364/92 SAT Fluggesellschaft v Eurocontrol employed medical specialists cannot be [1994] ECR I-43, paragraph 9. classified as undertakings. 51 — Case C-35/96, cited in note 19.

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profession like that of lawyers, surveyors or exercise of the profession is regulated interpreters; however, customs agents could cannot influence their classification for not be regarded as undertakings because of the purposes of the competition rules. the nature of the services which they provided and because the practice of their profession required authorisation and entailed compliance with certain condi- tions.

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(b) Do medical specialists act as consumers the Treaty. On the other hand, where or as undertakings when they set up a doctors buy medical equipment or lawyers professional pension scheme? rent offices, they are engaged in activities related to their professional activity. In that respect the competition rules should apply.

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which are definitely withdrawn from that earnings which remain within the profes- sphere to be invested in the personal sional sphere. sphere.

121. I conclude therefore that medical specialists agreeing on professional pen- 119. Where a professional uses a portion of sions are acting as undertakings within the his earnings to conclude on a voluntary meaning of Article 85(1) of the Treaty. basis a third-pillar life assurance contract with an insurance company, the revenue in question has been withdrawn from the professional sphere and is reinvested in the personal sphere. That is confirmed by the fact that the same investment could be made with personal revenues coming for example from a vineyard belonging to the (c) Did the LSV act as an association of professional's family. Such an investment is undertakings? therefore comparable to the purchase of a valuable painting or of a holiday home.

124. The Fund argues, first, that one can- which an association's decision is taken and not speak of an association of undertakings the classification given to that framework where several members of the profession by national law are irrelevant as far as the work as employees. Secondly, to qualify the applicability of Article 85 of the Treaty is LSV as an association of undertakings concerned. 56 would be discriminatory since other pro- fessional organisations such as the Neder- landse Orde van Advocaten (Netherlands Bar Association) are governed by public law and have regulatory powers. Thirdly, the main task of the medical specialists' representative organisations is to defend their members' incomes in discussions with the Netherlands authorities on the charges and fees for their services. That task 127. The Fund's third argument is equally encompasses supplementary pensions unfounded. The Court has recognised that which are part of retirement income. In the decisions of a committee or body with the Fund's opinion, the defence of the regulatory powers in a given sector might medical specialists' economic interests fall outside Article 85(1). That is however 'obviously' lies outside the scope of Arti- only the case where the majority of its cle 85 of the Treaty. members are representatives of the public authorities and where that committee or body must observe in its proposals public interest criteria. 57 In the present cases, as in the customs agents case, 58 there is nothing to suggest that the public authorities had any possibility of influencing the LSV's decision-making process and the Fund itself 125. As to the first argument, it is not states that the LSV acts solely in the necessary to decide whether a professional economic interests of the profession. organisation with self-employed and employed members is an association of undertakings, since the LSV was at the material time composed exclusively of self- employed members.

(a) The substantive element: Harmonisa- tion of the costs and benefits of supple- mentary pensions within the profession 130. At the hearing the Fund argued that for the reasons given in my Opinion in Albany 59 there was no such restriction of competition. The Netherlands Government and the Commission did not comment on the issue. 134. The first element of the LSV's decision to be analysed comprises the substantive pension arrangements described in detail above. 60 Under those arrangements each participant in the scheme has to make pension contributions of a certain amount 131. In my view, the reasoning in my depending on age, sex and income. In Opinion in Albany can indeed be trans- return he or she gains corresponding pen- posed to a large extent to the present cases. sion entitlements. In respect of the second part of the scheme, which is managed by the Fund alone, 61 the ultimate costs and benefits of the insurance mechanism are necessarily identical for all participants. They are however not harmonised with regard to the normpensioen. 62 There the 132. The LSV's decision can be analysed as final costs and benefits depend on the containing three elements which for con- insurer chosen by the participant (the Fund venience I will call respectively the sub- or a commercial insurer). stantive, the institutional and the political element. 60 — See paragraphs 36 to 45 above. 61 — See paragraphs 43 to 45 above. 59 — Paragraphs 245 to 294 of the Opinion, cited in note 2. 62 — See paragraphs 38 to 42 above.

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135. It follows that the decision in question the mere identification of restrictions of partly harmonises (as regards the second conduct of individual traders and has made part of the pension) the costs of a supple- an overall assessment of the effects on mentary second-pillar pension for medical competition of the agreement in issue. 65 specialists. Consequently, in the present cases a realis- tic analysis (including economic arguments) of the restrictive effects of the decision under scrutiny is necessary.

137. However, I have argued above that 139. That is, first, because only a cost the markets for professional services are factor and not a price factor is harmonised. different from normal markets. 63 In addi- Competition is obviously less affected tion the complex decision under scrutiny where all professionals have to pay for can obviously not be analysed according to example the same telephone tariffs than the same principles as a simple horizontal where they charge identical fees. price fixing agreement. In that respect I argued in my Opinion in Albany that the broad scope of application of Community competition law (in comparison with some national systems) makes it necessary to take the particular economic features of a given sector or category of agreements into 140. Secondly, in comparison to other cost account when assessing whether or not factors the costs of the pension scheme are competition is restricted. 64 That is the in reality unimportant. It must be borne in reason why in cases involving special mind that the pension contributions to be sectors of the economy or special categories of agreements the Court has gone beyond 65— See for references notes 115 and 116 of my Opinion in Albany. 66 — See Case 5/69 Völk v Vervaecke [1969] ECR 295; see for a 63 — See paragraphs 82 to 86 and 89 above. reasoning similar to the one adopted in the present case the Commission's decision in Irish Banks' Standing Commit- 64 — See paragraphs 250 to 252 of my Opinion in Albany. tee, OJ 1986 L 295, p. 28, paragraph 16.

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142. Fourthly, medical specialists provide 145. The setting-up of the Fund is to be (as do almost all professionals) non-homo- analysed as an institutionalised form of geneous personalised services. That means voluntary horizontal cooperation between that each doctor's services have different self-employed medical specialists. 6 8 qualities and properties. Medical specialists can moreover greatly influence the quality of their services (for example by spending more time on a case). Consequently, even if costs for their services were rigid, competi- tion on the basis of quality would normally 146. Like cooperation between undertak- be vigorous. ings in accounting or tax consultancy matters, the setting-up of a common fund allows the medical specialists involved to 67 — See for the importance of that argument for example Notice concerning the assessment of cooperative joint ventures pursuant to Article 85 of the EEC Treaty, OJ 1993 C 43, p. 2, point III.2(d). 68 — See paragraphs 258 and 259 of my Opinion in Albany.

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spread the insured risks and to achieve intended to secure members' loyalty and a economies of scale with regard to the certain stability in the Fund's and the administration of pension contributions insurer's membership. 71 and payments or custodial arrangements.

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(c) The political element: Application to the 5. The relationship between Articles 5 and Minister 85(1)

152. The LSV decided, thirdly, to request the competent Minister to render affiliation 156. The issue is whether the Netherlands to the scheme compulsory for all medical authorities infringed Articles 5 and 85(1) of specialists established in the Netherlands. the Treaty where at the request of the LSV they made affiliation to the pension scheme compulsory for all medical specialists established in the Netherlands.

159. In the present cases, the Minister's law although the Minister could not have decision to make affiliation to the Fund restricted competition without prior con- compulsory obliged medical specialists who certation by economic actors. did not want to become members of the LSV or make supplementary pension arrangements to join the pension scheme in issue. The decree in question therefore reinforced the effects of the LSV's decision to set up the scheme. 75 162. I have argued above that in every competition law system the rules defining the respective responsibilities of the State and the professions are of crucial impor- tance if that system wants to strike the right balance between the prevention of anti- competitive practices and the preservation 160. However, under the Court's case-law of regulatory autonomy in the profes- as it stands 76 the decree is not contrary to sions. 77 Articles 5 and 85 of the Treaty, since the LSV's decision itself did not restrict com- petition to an appreciable extent and was consequently compatible with Arti- cle 85(1). 163. In cases such as the present ones it would thus be more satisfactory to accept a prima facie infringement justifiable on public interest grounds. In my view, mea- sures taken by Member States comply with Article 5(2) where, although they reinforce the restrictive effects of a concertation 161. I must confess that I do not find that between undertakings, they are taken in case-law with its automatic link between pursuit of a legitimate and clearly defined the legality of a private and a Member public interest objective and where Mem- State's measure very satisfactory in cases ber States actively supervise that concerta- such as the present one: the LSV's decision tion. In some cases Article 90(2) may also is not caught by Article 85(1) because any be applicable. In the present cases there can restrictive effects are the result of subse- be little doubt that the decree rendering quent State intervention; that State inter- affiliation compulsory would be justified vention in turn is not caught by Article 5 on social grounds. because the LSV's decision as such is not restrictive enough. Therefore, neither the concertation between medical specialists nor the State measure in question can be challenged under Community competition 164. A similar solution should also apply if 75 —Case 136/86 BNIC v Aubert [1987] ECR 4789, para- the Court were to decide that the LSV's graphs 22 to 24 of the judgment. 76 — Case C-266/96 Corsica Ferries France v Gruppo Antichi Ormeggiatori dei Porto di Genova and Others [1998) ECR I-3949, paragraph 51 of the judgment. 77 — See paragraphs 87 and 91 above.

166. At issue is whether a professional pension fund such as the Fund is an 170. Secondly, also with regard to the 'undertaking' within the meaning of the normpensioen, it supervises compliance competition rules of the Treaty. It must with the affiliation requirement by mem- therefore be established whether the activ- bers who have chosen to insure that part of ities of the Fund are of an economic nature. the scheme with an insurance company. 80

78 — See Case C-35/96 Commission v Italy, cited in note 19, 79 — See paragraphs 38 to 42 above. patagraphs 52 to 60 of the judgment. 80 — See paragraph 40 above.

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171. Thirdly, with regard to the second 174. The Fund's role in respect of the part of the pension scheme (indexation, second part of the pension scheme is more retroactive pension rights, invalidity difficult to classify. regime, complementary survivors benefit) it acts as an insurer with an exclusive right. 81

175. The following elements are not directly relevant for the classification: the Fund is non-profit-making, 83 it pursues a social objective, 84 and the investments the Fund can make are restricted and con- trolled. 85 As the Court held in Albany, 172. As regards the first function the Fund those constraints might partly justify the is manifestly engaged in an economic exclusive right of the Fund to manage that activity in competition with insurance part of the pension scheme. They do not, companies and acts in that respect as an however, prevent the activity engaged in by undertaking. the Fund from being regarded as an eco- nomic activity. 86

178. Ultimately, however, the following elements of the scheme lead to the conclu- sion that even with regard to that second part the Fund is to be classified as under- 180. I accordingly conclude that when taking: the risk elements in question insuring the normpensioen and the second (including the indexation mechanism) are part of the scheme the Fund acts as an financed according to the capitalisation undertaking within the meaning of the principle; the Fund determines contribu- competition rules of the Treaty. tions and benefits autonomously and according to actuarial principles. Conse- quently, the amount of the benefits provi- ded by the Fund depends on its adminis- trative costs and the financial results of the investments made by it; a State guarantee against the risks flowing from bad invest- ments does not seem to exist. Finally, the Fund is subject to the supervision of the Insurance Board which also controls insur- VIII— The third question: Articles 90(1) ance companies. 88 and 86 of the Treaty

179. The capitalisation principle and con- trol by the insurance board are indicators 181. The last question is whether a Mem- that the insurance in question is at least ber State infringes Articles 90(1) and 86 of potentially an activity in which a normal the Treaty where it sets up a system of insurer might engage. The autonomy of the compulsory affiliation to professional pen- Fund and the risks connected to its invest- sion schemes such as the one established by the Netherlands and where within the framework of that system it makes affilia- 88 — See paragraphs 81 and 82 of the judgment and 338 to 342 tion to a particular professional pension of the Opinion in Albany. scheme compulsory.

184. With regard to the surveillance of the insurance for the normpensioen the Fund does not act as undertaking. Article 90(1) is in that respect inapplicable. 189. However, as the Commission pointed out, where affiliation to a professional pension scheme is compulsory, other forms of insurance or other insurers are no valid substitute for insurance with the scheme. 185. With regard to the insurance for the Medical specialists do not have the possi- second part of the scheme the Fund acts as bility of affiliation elsewhere. An under- an undertaking and enjoys as the only taking such as the Fund which holds a eligible insurer an exclusive right. In that statutory monopoly for the provision of respect Article 90(1) applies. certain insurance services (here the second part of the pension scheme) in a substantial part of the common market (here the Netherlands) must therefore be regarded as holding a dominant position within the meaning of Article 86 of the Treaty. 90

186. It could also be argued that the Fund as an interested undertaking enjoys two 89 — See paragraphs 31 to 35 above. further exclusive rights, namely to grant 90 — See for further details and references paragraphs 91 and 92 of the judgment and 378 to 383 of the Opinion in Albany, exemptions from compulsory affiliation cited in note 2.

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92 — Paragraphs 95 to 97. 91 — See paragraph 93 of the judgment in Albany. 93 — Paragraphs 98 to 111 of the judgment.

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pulsory. Subsequent changes to the scheme (b) The rules on exemption from compul- have to be approved by the Minister. The sory affiliation regulations and statutes of the Fund must respect a number of requirements. Invest- ments are subject to restrictions and the finances of the Fund are permanently controlled. 94 199. According to the Court's judgment in Albany a Member State may consider that the power of exemption should be granted to the concerned pension fund alone. The conflict of interest inherent in the dual role as manager of the scheme and as the authority vested with the power to grant exemption was justified or mitigated by the 196. Finally, the scheme chosen by the special knowledge of the Fund, the freedom medical specialists has relatively limited of choice of the Member States to organise restrictive effects since the Fund enjoys an such a matter according to their priorities, exclusive right only in respect of the second and the possibility of judicial review. 96 part of the scheme.

200. If that case-law is to stand, that reasoning can be directly transposed to the present cases and more specifically to 197. In my Opinion in Albany I proposed the two exemption possibilities in Arti- to leave the question of a prima facie cles 1(2) and 44 of the pension regulation infringement of Articles 90(1) and 86 to the of the Fund. 97 It has also to be kept in national court because too many factual mind that in the present cases medical issues were still unclear. In the present specialists have a further — at least theo- cases, however, in view of the features just retical — possibility of asking for a minis- mentioned, I am inclined to state that there terial exemption under Article 26 of the is no such infringement. BprW. 98

(1) Articles 5 and 85 of the EC Treaty (now Articles 10 and 81 EC) are not infringed where, at the request of a professional organisation representing the members of a given profession, a Member State makes affiliation to a professional pension scheme compulsory for all members of that profession.

(2) A professional pension fund such as the Netherlands Medical Specialists' Pension Fund acts in respect of the insurance of the normpensioen and of the second part of the medical specialists' pension scheme as an undertaking within the meaning of the competition rules of the EC Treaty.

(3) Articles 90(1) and 86 of the EC Treaty (now Articles 86(1) and 82 EC) are not infringed where a Member State sets up a system of compulsory affiliation to professional pension schemes such as the one set up by the Netherlands and where within the framework of that system it makes affiliation to a pension scheme such as the Netherlands medical specialists' pension scheme compulsory.

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