C-344/98

OPINION OF MR COSMAS — CASE C-344/98

B — The exclusivity clauses at issue and Article 85(1) of the EC Treaty I -11394 (a) The Delimitis judgment I -11394 (b) Application of the Delimitis case-law to this case 1-11395 (c) Objective justification for the exclusivity clauses in question 1-11400 C — The exclusivity clauses in question and Article 86 of the EC Treaty I -11403 VI — The third question referred to the Court I -11407 VII— Conclusions 1-11409 VIII—Conclusion 1-11409

I — Introduction I I — Facts and procedure

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summer of that year many retailers began since they were contrary to Articles 85 and to stock Mars ice cream in the freezer 86 of the EC Treaty; thirdly, in the alter- cabinets supplied by HB. HB asked them to native, to order the case to be reheard by comply with the exclusivity clause con- the High Court; and fourthly, to order the tained in the freezer cabinet agreement. other party to pay the costs.

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1998, it adopted Decision 98/531/EC 1 10. On 21 April 1998 HB brought an (hereinafter 'Decision 98/531'). action before the Court of First Instance of the European Communities for the annulment of the Commission decision (Case T-65/98).

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(ii) Does a decision of the Commission icle 85(1) and/or Article 86 of the EC which is addressed to an individual Treaty? party (and which is the subject of an application for annulment and suspension by that party) declaring such party's freezer cabinet agree- ment to be contrary to Art- icle 85(1) and/or Article 86 of the EC Treaty thereby prevent such party from seeking to uphold a 3. Are freezer exclusivity agreements pro- contrary judgment of the national tected from challenge under Articles 85 court in that party's favour on the and 86 of the EC Treaty by reason of same or similar issues falling under the provisions of Article 222 of the EC Articles 85 and 86 of the Treaty Treaty?' where that decision of the national court is appealed to the national court of final appeal?

12. In addition, in the case brought before the Court of First Instance by HB's applic- ation of 21 April 1998, by order of 7 July Questions 2 and 3 only arise in the event of 1998, 2the President of the Court of First a negative answer to Question 1(i). Instance suspended the operation of the Commission decision until the Court of First Instance had given judgment termin- ating the proceedings in that case (T-65/98).

2. Having regard to the legal and eco- nomic context of the cabinet agree- ments at issue in the market for single- wrapped items of impulse ice cream, 13. By order of 28 April 1999, the Presi- does the practice whereby a manufac- dent of the Fifth Chamber of the Court of turer and/or supplier of ice cream First Instance, pursuant to the third para- provides a freezer to a retailer at no graph of Article 47 of the EC Statute of the direct charge — or otherwise induces Court of Justice, stayed the proceedings in the retailer to accept the freezer — Case T-65/98 until the Court of Justice had subject to the condition that the retailer delivered judgment in the present case. stock no ice cream in such freezer other than that supplied by the said manu- facturer and/or supplier constitute an 2 — Case T-65/98 R Van den Bergh Foods v Commission [1998] infringement of the provisions of Art- ECR II-2641.

14. The central issue arising in the case before the Court is clearly the avoidance of inconsistency between the decisions of national courts and those of Community institutions in the context of the interpreta- tion and application of Articles 85 and 86 of the EC Treaty (now Articles 81 EC and 82 EC). That danger arises, as the Court observed in Delimitis, 3because in respect of certain issues dealt with by Articles 85 and 86 of the EC Treaty — including the question whether the conduct of an under- 16. In order to establish such a form of taking should be classified as compatible conflict, a connection between the legal with Articles 85(1) and 86 of the EC problem which arises before the national Treaty —· the Commission does not have courts and that being examined by the exclusive competence but rather shares Commission is not in itself sufficient. 4Nor competence with the national courts. is the similarity of the legal problem where the legal and factual context of the case being examined by the Commission is not completely identical to that before the national courts. 5The Commission's deci- sion may provide important indications 6 as to the appropriate way to interpret Art- A ·— When does a risk of inconsistent icles 85(1) and 86, but in this case there is decisions arise? no risk, from a purely legal point of view, of the adoption of conflicting decisions. Such a risk only arises when the binding authority which the decision of the national court has or will have conflicts with the grounds and operative part of the Com- (a) Generally 4 — Such as, for instance, when national courts are examining the legality of an exclusivity clause in respect of the use of ice cream freezer cabinets and the Commission is assessing an exclusivity agreement on the use of a newspaper 15. The following introductory remarks distribution network. must be made with regard to the question 5 — Such as, for instance, the case in which the national courts are examining the legality of an exclusivity agreement in of when there is a conflict or the risk of a respect of the use of ice cream freezer cabinets between a conflict between, on the one hand, a particular company and retailers 1, 2 and 3 in Ireland, whilst the Commission is monitoring a similar agreement in respect of the same products in the same market between another company and retailers 4, 5 and 6. 6 — See points 20 and 21 of the Commission's Notice on 3 — Case C-234/89 [1991] ECR I-935, paragraphs 43 to 46. See cooperation between national courts and the Commission also Case 127/73 BRT v SABAM [1974] ECR 35 and Case in applying Articles 85 and 86 of the EEC Treaty, 93/C 48/72 Brasserie de Haecht [1973] ECR 355. 39/05, OJ 1993 C 39, p. 6.

17. In this case it must be emphasised, by way of introduction, that the subject- matter of the High Court's decision appears prima facie to be the same as that of the 19. The Commission's decision is based, Commission's decision; it consists in the principally, on market research carried out determination of the compatibility with in 1996, 8taking into account in addition Articles 85(1) and 86 of the EC Treaty of the fact that the agreements proposed by the exclusivity clause contained in the HB to retailers for the supply of freezers freezer agreements between HB and ice were revised after 1995. As far as its cream retailers in Ireland. That does not operative part is concerned, the Commis- mean, however, that those decisions, in so sion's decision is clear: the contractual far as they reach contrary conclusions, are clauses regarding the exclusive use of the wholly in conflict with each other. freezers supplied by HB to retailers are invalid, because they are contrary to Art- icles 85(1) and 86 of the EC Treaty; HB is required 'immediately to cease' 9 the said infringements and to inform retailers accordingly within three months of notifi- 18. In particular, the High Court's decision, cation of the Decision. 10 inasmuch as it finds that the contested exclusivity clauses imposed by HB are not contrary to Articles 85(1) and 86 of the EC Treaty as far as their effects on competition are concerned, is based on evidence and

7 — I do not deny that, in cases where the similarity of the 20. From the above the two following subject-matter of the Commission's decision and that of the decision of the national court is more obvious, the adoption conclusions may be drawn. First, the of conflicting solutions by those two bodies does not further the uniform application of Community law. They are not, however, cases of unmixed conflict between the Community and the national decision. Any other interpretation to the effect that the above risk of giving contradictory decisions 8 — See points 28 to 38 of Commission Decision 98/531. was limited more broadly would result in the national court 9 — Article 4 of Commission Decision 98/531. being overly bound. 10 — Article 5 of Commission Decision 98/531.

reasoning in the Commission's decision is since by order of the President of the Court not founded on an assessment of the same of First Instance its operation was sus- facts as those before the Irish court. 11 It is pended. 13 Furthermore, there is a risk that theoretically possible that the exclusivity the Supreme Court will hand down a clause in freezer agreements which were in decision contrary to that of the Commis- force and applied before 1992 does not sion on the basis of the grounds of the contravene the Community competition decision of the High Court at first instance rules — as the High Court held — but or of fresh evidence and assessments. I shall for the opposite to be the case for post- examine that possibility in the next point of 1992 agreements, on which the Commis- my analysis. sion's examination focused. Secondly, the two decisions are clearly in conflict as regards their legal consequences, at least from the date on which the Commission's decision was issued and notified. In par- ticular, according to the Commission's decision, from 11 March 1998 the exclu- sivity clause is to cease to apply immedi- B — The case-law of the Court of justice ately because it is not in keeping with the on dealing with the possibility of conflict- Community competition rules. Conversely, ing decisions the High Court's injunction, which contin- ued to apply after 11 March 1998, requires compliance with the exclusivity clause. 22. It has already been mentioned that in its judgment in Delimitis 14 the Court of Justice focused on the risk of conflicting decisions on the part of the national courts and the Commission in the context of application of the Community competition rules. It emphasised that the handing down of conflicting decisions was contrary to the fundamental principle of legal certainty and 'must, therefore, be avoided when national courts give decisions on agree- ments or practices which may subsequently be the subject of a decision by the Commis- sion'. 15 21. Consequently we are faced with a partial conflict between the decision of the High Court and the Commission's decision. 12 The conflict is conditional on the Commission's decision being applied, 23. The Court of Justice then considered it useful to give certain guidance to the 11 — That would be the case if the Commission founded its decision on the conditions prevailing on the ice cream market in Ireland during the period 1990 to 1992 and on the share of the market held by the undertakings involved during that same period. 13 — See footnote 2 above. 12 — See also paragraph 7 of the Order of the President of the 14 — Cited in footnote 3. Court of First Instance of 7 July 1998 referred to above. 15 — Paragraph 47 of Delimitis, cited in footnote 3.

First, as already mentioned, there is not merely a potential, but a clear and immi- 24. It should be noted that Delimitis was a nent, conflict between the decision of the case in which a national court had to rule first instance Irish court and a decision of on the application of Articles 85(1) and 86 the Commission that has already been of the EC Treaty at a time when the adopted. 20That conflict would have occur- Commission was dealing with the same red already had the Court of First Instance problem but had not yet issued a decision. not suspended the operation of the Com- Moreover, the Court's exhortation to use mission's decision. 21 Furthermore, there the procedural means of Article 177 of the will be contradictory decisions of the EC Treaty refers to a stage in the procedure Commission and the Irish court if, in the at which the national court is not ques- tioning the legality of an act of the Com- mission that has already been adopted. In 20 — It should also he noted that in this case the national court considered that the exclusivity clauses in question were compatible with the Community competition rules, whereas the Commission adopted precisely the opposite 16 — Paragraph 50 of Delimitis, cited in footnote 3. view. The consequences of the existence of contrary positions would be less dangerous for the equilibrium of 17 — Paragraph 52 of Delimitis, cited in footnote 3. the Community legal structure if it was the national court 18 — An application of the principle of the duty to cooperate that had taken a negative position on the exclusivity owed by the Commission to national authorities pursuant clauses and the Commission considered them compatible to Article 5 of the EC Treaty (now Article 10 EC). with Articles 85(1) and 86 of the EC Treaty. 19 — Paragraph 54 of Delimitis, cited in footnote 3. 21 — See point 12 above.

Thirdly, the present case may lead the Court of Justice to set out the position on the relationship between legal proceedings under Articles 173 and 177 of the EC (a) Subject-matter of the dispute in the Treaty (now Articles 230 EC and 234 main proceedings EC), and also on the relationship between the Court of Justice and the Court of First Instance. 26. First of all, consideration must be given to the subject-matter of the case pending before the Supreme Court. Although there is no need to enter into details which Fourthly, one of the parties to the main depend on Irish procedural law, I would proceedings, HB, which supports the first point out that the concern of the national court is to assess the correctness of both the grounds and operative part of the first 22 — On the one hand, because the views of the competent instance judgment. The correctness of the Community administrative authority (the Commission) will not have been taken into account and, on the other positions taken by the High Court as to the hand, because the jurisdiction of the Community judicial compatibility of the exclusivity clauses at bodies will not have been respected — namely the jur- isdiction of the Court of First instance and, if an appeal is issue with Articles 85(1) and 86 of the EC lodged, that of the Court of Justice — to rule on the Treaty will be examined first, in the light of legality of acts of the Community authorities and to ensure that they are complied with. the facts and points of law on which the

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(b) The questions referred to the Court

30. (i) Let us assume that, from the guid- 28. The first question refers to the fact that ance on interpretation that the Court will Commission Decision 98/531, which con- give in the context of the second and third flicts with the operative part of the first questions referred for a preliminary ruling,

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and the Commission decision. If, by ascer- observed, because such a course would taining the defect in the first instance constitute a direct challenge on its part to decision and lifting the permanent injunc- the validity of the Commission's decision tion in favour of HB, the main proceedings and an infringement of what is required of pending before the Supreme Court will be the Member State in question pursuant to brought to an end, I consider that it would Article 10 EC. 23 It is certain, therefore, be best for the national court to complete that the national court is not in a position its judicial task without having to know to bring the case in the main proceedings to whether Decision 98/531 is valid or not an end without knowing whether Decision and without giving rise to the risk of its 98/531 is valid or not, a question which delivering a decision contrary to that of the that court is not competent to decide itself.

decision? In that connection, the Supreme 23 — Furthermore, the Supreme Court is not, of course, bound Court might lift the High Court's perman- to comply yet with the Commission's decision, inasmuch as ent injunction and be called upon to decide its operation is suspended. If, nevertheless, the Irish court were to apply that decision, such application would be the case on the substance, examining whe- wrong in so far as that would be to ignore, in a manner contrary to the Community procedural rules in force, the ther, at the time of that fresh assessment, order of the Court of First Instance suspending operation HB's clauses are or are not compatible with of Decision 98/531 (cited above in point 12). 24 — I presume that the Supreme Court does not intend to await

at first instance? Kruger [1997] ECR I-4517.

B — is review of the validity of Decision 26 — On that point it is essential to point to a further special 98/531 possible by way of a reference for a feature of the present case which might alter the facts in respect of the legal issue raised: the Court of First Instance preliminary ruling in this case? has suspended the operation of the Commission Decision in question. Does that development, in so far as suspension of operation does not allow the measure in question to produce its effects, ipso facto provide the national court with the possibility of deciding the case pending before it without raising the issue of the validity of the Commission 34. In the following analysis I shall attempt decision in question?

on its legality. Suspension is granted in order to regulate raise the question of the validity of the Commission provisionally certain situations so that they will not be decision i n question. In so far as that issue is fundamental difficult to reverse if the decision is subsequently annulled. to the correct resolution or the case in the main proceed- The decision remains part of the legal setting, however, and ings and to the extent that the position of the national constitutes the expression of the wishes of the competent court is crucial m that respect, it could be argued that the Community administrative body, in relation to the appli- most appropriate solution is to ask that court whether it cation of c e r t a i nlegal rules governing specific situations. intends to challenge the validity of Commission Decision Thus legal certainty, but also the principle of the primacy 98/531. of Community law, require, not that the decision be applied, but nevertheless that it be observed by national The Court of Justice appears, however, to follow a

. . conforms, more- of operation, in so far as it allows the Commissions over, to the principle of procedural economy, in that the decision to retain some binding character while in reality it question whether the decision was lawful has also been has been suspended. Such dogmatic objections ignore, raised directly before the Court in Case C-157/98 Nether- however, the particularity or the problem under examina- lands v Commission, the proceedings in which have been tion which does not arise within the context of a single stayed pending the delivery of this judgment' (paragraph legal order (the national or the Community legal order) but 49). From that point of view, De Haan shows similarities touches upon the relationship between those two legal to the present case, in so far as Commission Decision orders and cannot be dealt with exclusively on the basis of 98/531 has already been challenged in the Court of First what is generally accepted under national law. Instance, which has stayed proceedings until the Court of An additional argument for the view that I have put Justice has given judgment. forward is provided by the Delimitis case-law. In that Certain differences between the two cases should, however, judgment the Court of Justice calls upon national judicial be noted. In De Haan, the national court was unaware of bodies to avert any decision that is contrary to a decision the Commission decision when it made the order for of the Commission on the same issue even at a point when reference (paragraph 47); in that same case, moreover, the the Commission has not yet reached a decision, in other decision had 'been the subject of both written and oral words, when it has not yet issued an administrative submissions' by the parties (paragraph 49).

Community law. A fortiori, therefore, when the Commis- Commission decision. sion has not only examined a particular case but has also adopted a decision on it, the national court must avoid Even though the above problems may be put to one side, I giving a contrary decision, even when the operation of the consider that review of the validity of the Commission Commission measure at issue has been suspended. decision at issue comes up against another, more signifi- cant obstacle, as I will explain straight away.

first question referred to the Court in the Delimitis. 28 Nevertheless, it can be con- event that an assessment of the validity of cluded from that judgment that, in setting Commission Decision 98/531 is a pre- in motion the Article 234 EC procedure, a condition for the decision in the main national court confronted with the risk of proceedings. reaching a decision contrary to the views of the Commission, on the one hand is meet- ing the needs of the national proceedings and, on the other, is safeguarding Commu- nity legality and legal certainty. 29 Con- versely, a solution according to which the bringing of an action against a Commission (a) Introductory remarks decision pursuant to Article 230 EC suf- fices to preclude the procedure under Article 234 EC and to require the national court to stay proceedings in the case until 35. I would preface my analysis with the the outcome of the action for annulment so following two remarks. as to avoid the possibility of a conflicting decision would appear problematic. At first sight that solution appears to involve the national court being overly bound, and it is not obvious that that corresponds to the 36. First, it is worth emphasising that if the existing division of powers between national court were itself to decide to stay national and Community bodies, or that it proceedings until final review of the legality is consistent with the generally accepted of the Commission measure in question by view of the relationship between the the competent judicial bodies of the Com- national and Community legal orders. 30 munity, that decision would avoid in the best way possible the risk, as far as it was concerned, of reaching a decision contrary to that of the Commission. However, neither from the Delimitis judgment nor from any rule of Community law can it clearly be concluded that the national court 38. Secondly, it should be noted that the is under an obligation to await the outcome Court of Justice has also been confronted of the action for annulment under Art- on other occasions with questions referred icle 230 EC before proceeding to final to it for a preliminary ruling in which the judgment in the case pending before it. To issue of the validity of a Community the contrary, in Delimitis the Court of measure is raised, where that measure has Justice speaks of a discretion not a duty on the part of the national court to stay the national proceedings in order to forestall 28 — See footnote 3 and point 22 et seq. conflicting decisions. 29 — That appears to be suggested by the Commission as well, in points 22 and 32 of its Notice on cooperation between national courts and the Commission, referred to above in footnote 6. 30 — In any event, the appeal to the principle of cooperation between national courts and the Commission implicit in Article 5 of the EC Treaty, (now Article 10 EC) is not, in my opinion, sufficient to impose on the national court a 37. The case before the Court differs sig- g eneral obligation to stay the main proceedings solely because an action against a Commission decision is nificantly from the case in point in pending before the Court of First Instance.

39. If we confine ourselves to the above general principles, we are led to formulate a guiding principle to the effect that even in (b) The fact that the parties are the same in cases where the national court is facing the the main proceedings is an impediment to a risk of conflict with a Commission decision reference for a preliminary ruling on the that has already been adopted, the validity validity of Decision 98/531 of which has been challenged pursuant to Article 230 EC, that court is not obliged to await the outcome of the action for annul- ment, even if it is essential, before it hands down judgment in the main proceedings, 41. The national court's discretion to for it to know whether the Commission employ the preliminary reference procedure decision in question is valid or not. That is not limitless. Until now the Court has question may be dealt with by making an held that a challenge to the validity of a appropriate reference to the Court of Community measure via the procedural Justice for a preliminary ruling. route of Article 234 EC is not possible when one of the parties to the main proceedings belongs to the following cat- 31 — It is the Court's settled practice to entrust to the national egory: on the one hand he is the addressee court's judgment the question whether it is necessary to of the Community measure in question refer for a preliminary ruling a question affecting the validity of a Community administrative measure. The who would certainly be entitled to chal- national court is competent to decide whether it is possible to await the outcome of annulment proceedings before the lenge its validity pursuant to Article 173 of Court of First Instance or Court of Justice or whether it the EC Treaty, but has, however, lost that considers it necessary to have recourse to the means provided by Article 177 of the EC Treaty. In the second procedural right by allowing the time-limit case, the Court replies as a rule to the questions referred to it with a ruling on the legality of the Community measure prescribed in the last paragraph of that in question. article to elapse; on the other hand, he is a 32 — See the third paragraph of Article 47 of the EC Statute of party to the national proceedings who will the Court of Justice. It is not excluded that priority will be given to the procedural route of Article 177 as against that gain an advantage from a challenge to the of Article 173. That solution will also be followed when an action has been brought before the Court of First Instance. validity of the measure at issue by means of See, for example, Case C-183/95 Affish [1997] ECR I-4315, and the order of the Court of First Instance in a reference of an appropriate question for a Case T-136/98 G. preliminary ruling.

44. Such an exceptional case does not appear to have been dealt with directly by the Court of Justice. At first sight, however, recognition of the possibility of submitting a question for a preliminary ruling does not give rise in this case to the same risks of 43. The facts of the case under examination infringing the binding character of either differ from those which the Court was the Community measures or the Commun- considering in the above-cited case-law. HB ity procedural rules, risks which clearly is the party in the main proceedings which existed in the above-cited case-law.

From that judgment it seems to follow that a person who is able to bring an action within the time-limit pursuant to Art- icle 230 EC against a Community measure may challenge the legality of that measure in the context of national law. I have reservations as to whether the solution reached in 33 — See the Opinion of Advocate General Van Gerven in Case Ran continues to apply after the judgment in TWD (see C-128/92 Banks v British Coal [1994] ECR I-1209; Case footnote 33 above) and also after the establishment of the C-188/92 TWD [1994] ECR I-833; Case C-178/95 Wiljo Court of First Instance. Regardless of that, however, the [1997] ECR I-585; and Case C-408/95 Eurotunnel [1997] facts of Ran were not identical to those of the case before ECR I-6315. the Court. A difference in treatment is established between 34 — Paragraph 21 of Wiljo, cited in footnote 33. In that the case of a person who is a party in national proceedings judgment the Court emphasises the need to avoid the risk and theoretically has locus standi to bring an action of abuse of process and the distortion of the Community against a Community decision before the Court of First procedural rules, even though the discretion of the national Instance and the case of a party in national proceedings court to determine the questions it will refer to the Court who has already brought an action or has already of Justice for a preliminary ruling is thereby limited. In intervened in an action for annulment in the context of other words, in that special case, there is a deviation from Article 230 EC. As I will explain below, the simultaneous the independent nature of the reference for a preliminary participation in two actions constitutes a situation sui ruling. generis which should be dealt with in a special way.

36 — The particular solution which I propose in the light of the facts of this case does not wholly exclude a national court being recognised as having the possibility of challenging the legality or a Community decision by á reference for a preliminary ruling, despite the fact that'the same decision has already been challenged by means of the Article 230 EC procedure. Specifically, when parties to the national 47. In this case the parties confronting each proceedings are persons who do not have (or it is not other in the national proceedings before the certain that they havel locus standt to challenge the Community measure before the Court of First Instance- Supreme Court are already participating in directly — a case which is the most common —, it would perhaps be unjust for those persons to have to depend, for the action for annulment before the Court their legal protection, on the development of the action for annulment already pending, whose outcome they are of First Instance. In particular HB, which unable to influence. For instance, if an applicant under would risk suffering unfair damage if the Article 230 EC; does not put forward the appropriate grounds for annulment or withdtaws from the action Commission measure in question — instituted, there is the possibility that the measure chal- lenged, albeit unlawful, will not be annulled by the should it prove to be unlawful — were Community judicial bodies; that development may harm applied in the national proceedings, is third persons who are also affected by the unfavourable consequences produced by the Community measure to protected in an effective way from that their detriment, without being able to oppose its imple- mentation. If, consequently, the submission of a reference risk: first, it has activated the procedural for a preliminary ruling on the legality of the measure at rights provided under Article 230 EC by issue is prohibited, the parties to the national proceedings who cannot bring an action against that measure before bringing an action before the Court of First the Court of First Instance will not be able either to defend themselves in an appropriate way against that unlawful Instance; secondly, the operation of the measure, as they could if they convinced the national court Commission measure at issue has been to set in motion the preliminary reference procedure and subsequently submitted observations to the Court of suspended so that there is no question of Justice. Nevertheless, the solution of a reply to a question referred for a preliminary ruling affecting the validity of a Community measure already the subject of an action for 37 — For t h a t reason, with the rules on litispendence and annulment, in particular in cases where the parties to the jurisdiction, each legal system seeks inter also to avoid such m a i nproceedings do not have locus standt to employ the cases, not only by requiring each action to be heard by a Article 230 EC procedure, also comes up against serious specific judicial authority, but also by precluding the practical difficulties, which I will explain in the following possibility of bringing a further action on a dispute that is point of my analysis (see below, point 49 et seq.). already pending before the courts.

48. Moreover, if HB and Masterfoods were 40 — It could be objected to the above reasoning that the recognised as having the option of obtain- suggested solution involves delaying the national proceed- ing review of the validity of Commission ings, which are independent of the Community action for annulment, and that it encroaches on the jurisdiction of the Decision 98/531 by means of a reference national court to determine when it is essential to obtain a preliminary ruling in order to reach a decision in a dispute for a preliminary ruling to the Court of pending before it. Justice by the Supreme Court, that would In fact to exclude the possibility of referring a question for a preliminary ruling in this case amounts to obliging the create, in my opinion, the risk of abuse of national court to wait until the procedure before the Court of First Instance is terminated before giving final judgment.

preliminary ruling. consistent with the effective administration As regards the possible delay provoked by exclusion of the of justice. I therefore consider that, in the possibility of making a preliminary reference in conjunc- light of the particular circumstances of the tion with the obligation to await the outcome of the action for annulment, the following should be borne in mind. case before the Court, it is preferable to That delay does not amount to a denial of justice on the part of the national court but constitutes a temporary stay exclude the possibility of a challenge to the of the national proceedings. Stays of that kind are not, of course, beneficial to the effective administration of justice. They may be necessary, however, in particular when they affect the relationship between two legal orders (Commu- nity and national), and the relationship between the 38 — The second remark has particular significance. If operation national and Community courts.

accordance with what was held in Atlanta, cited in observations apply when the parallel development of the footnote 25. cases brings the national court up against the competent judicial authority of the Community legal order, that is to 39 — There is a risk that one of the parties to an action for say the Court of First Instance, rather than the adminis- annulment being heard before the Court of First Instance trative authority, in other words the Commission. Lastly, might think that its interests would be better served if it the delay caused is not so very significant.

I do not, of course, mean EC. Once again, however, any time gained from bypassing to imply that anything of the kind is occurring here; the Article 230 EC procedure does not, for the reasons however, the risk of abuse of process, at least theoretically, already given, justify the adoption of that solution. exists.

52. I would refer, first, to the difference between the procedure under Article 234 50. I would begin my reasoning with the EC and that under Article 230 EC. The following question. Is it possible for the approach taken by the Court of Justice in Court of Justice to consider a Commission the first case is purely legal. It is confined to decision lawful, assessing it within the the interpretation and assessment of the limits of the review which it may carry legality of legislative and individual acts of out under Article 234 EC, and for the the Community institutions. 41 Conversely, Court of First Instance to annul the same the procedural route of Article 230 EC may decision, having found, for example, a lead to the Community court reviewing defect in the findings of fact, in the context issues of substance such as the finding and of the full review of the substance carried assessment of facts. 42 out by that judicial body? In that situation, if, in other words, the Court of First 41 — From that point of view if resembles tile appeal function Instance finds a defect in the decision also conferred upon it. which falls outside the powers of review 42 — It should also be noted that the procedural position of the parties to an action for annulment under Article 230 EC is of the Court of Justice, the declaration of clearly distinct from that of the parties who submit invalidity will be wholly correct albeit in observations in the context of the Article 234 EC proc- edure. The pleas, submissions and arguments put forward direct contradiction to the replies given by in an action for annulment influence its outcome, whereas conversely the observations submitted in the context of the the Court of Justice to the questions Article 234 EC procedure clearly have less procedural weight. referred for a preliminary ruling. If there I would add the following remark to the above: the court is such a possibility, the mere chance of the hearing the substance on an Article 230 EC case has discretion as to the evidence it will ask to examine in order above undesirable situation of conflicting to determine the facts of the case; conversely, when it Community judicial decisions arising replies to a reference for a preliminary ruling, the Court of Justice is bound, in principle, by the facts described in the should dissuade the Court of Justice from order for reference; those facts are not necessarily those giving rise to doubt as to the validity of the Community reviewing the validity of the Commission measure.

55. In conclusion, I consider that judicial review in an action for annulment, both before the Court of Justice and before the Court of First Instance, of individual administrative measures, such as that at issue, is more effective than that achieved by way of a reply to a reference for a preliminary ruling pursuant to Article 234 EC. 44 Moreover, it would not be wise to transform the nature of the Article 234 EC 54. Further, the Commission decision before the Court in this case has another special feature. It relates to the application 43 — As the Court of Justice emphasised in its recent judgment in a particular case of the provisions of in Case C-185/95 P Baitstahlgeivebe [1998] ECR I-8417, paragraph 41, 'the purpose of attaching the Court of First Articles 85(1) and 86 of the EC Treaty. It Instance to the Court of Justice and of introducing two levels of jurisdiction was, first, to improve the judicial presupposes, in other words, complex protection of individual interests, in particular in proceed- technical and economic assessments which, ings necessitating close examination of complex facts, and, second, to maintain the quality and effectiveness of judicial if they are to be correct, require exhaustive review in the Community legal order...'. review of the substance by a specialised 44 — I do not wish, by that remark, to underestimate the importance of the preliminary reference procedure. As judicial authority. In order to meet that Advocate General Jacobs stated in his Opinion in Extramet, there are categories of legal disputes which, need, inter alia, the Community legislature because of their nature and special characteristics, it is on constitutional matters was led to set up preferable to submit for judicial assessment by way of an action for annulment — in cases where that is procedu- the Court of First Instance. By its system- rally possible — rather than bringing a case before the Court of Justice by way of the Article 234 EC procedure atic hearing of actions for the annulment of (Opinion of Advocate General Jacobs in Case C-358/89 Commission decisions resembling the deci- Extramet [1991] ECR I-2501): 'a reference from a national court on the validity of a regulation does not sion at issue here, that Court has succeeded always give the Court as full an opportunity to investigate the matter as a direct action against the adopting in deepening and strengthening judicial institution ...' (point 73). If nothing else it is neither review of those decisions, thus contributing logically nor legally consistent to maintain in those special cases that the Article 234 EC procedure may replace that to the improvement of the Community of Article 230 EC.

57. The national court is not bound to stay proceedings and await the outcome of the action for annulment simply because an 58. After the above has been ascertained, action has already been brought against the question arises of the way that the Commission Decision 98/531 before the second and third questions referred to the Court of First Instance. There is such an Court for a preliminary ruling should be dealt with. I consider it probable that the 45 — In the hypothetical case of the Court of Justice acting as a court of annulment in the context of a reply to a question referred to it for a preliminary ruling, that would throw 46 — The following question arises: is the Irish court unable to into question the very existence of the Court of First challenge the validity of Commission Decision 98/531 only

annulment. proceedings. In application of TWD (see footnote 33), it I would not labour further the arguments set out imme- would not be procedurally correct for one of the parties to diately above, from which it appears to follow nevertheless the proceedings before the Court of First Instance which that the Court of Justice may well examine generally had lost the right to lodge an appeal to be able to challenge whether a reply to a question referred for a preliminary the Court of First Instance judgment indirectly before the ruling raising the issue of the validity of a Commission national courts. decision on the application of Articles 85( 1 ) and 86 of the Conversely, if an appeal has already been lodged against EC Treaty to a particular case would he useful where the the decision of the Court of First Instance, a reference by validity of the same decision lias been challenged before the Irish court for a preliminary ruling in which the the Court of First Instance. As I explained m the previous position of the Court of First Instance is challenged point of my analysis, despite the possible imperfections of appears less problematic in practice.

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Supreme Court will not able to hand down question with Article 85(1) and 86 of the a decision in the case before the action for EC Treaty (now Articles 81(1) EC and 82 annulment in the Court of First Instance EC) is raised. has been concluded, because the issue of the validity of Decision 98/531 appears to constitute a preliminary to the resolution of the main proceedings. If that is, in fact, right, a reply to the following two ques- tions is redundant. Since it is not for the Court of Justice to touch upon the question of the validity of Decision 98/531, which — for the reasons explained A — The price of ice cream and the above — it is not possible for the national compatibility of the agreements at issue court to raise, that answer is not necessary with the provisions of Article 86 of the EC for a resolution of the case in the main Treaty proceedings.

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given; in addition, the cost of supplying ectly to be accepted by HB itself, which HB's freezers to other retailers without amended the policy in 1995, introducing a consideration (or for symbolic considera- system of differential pricing corresponding tion) was passed on to them. to whether the retailer was supplied with a freezer by HB or not in addition to being supplied with ice cream. 50

That effect need not be appreciable, exclusivity clauses in question suffer a clear direct or actual but merely indirect or potential (Joined Cases 56/64 and 58/64 Consten and Grundig v Commis- competitive disadvantage as compared with sion [1966] ECR 299 and Joined Cases 6/73 and 7/73 retailers who enter into agreements for the Commercial Solvents (1974J ECR 113). In the present case the following remarks should be made: supply of freezers with HB. 49 Moreover if it is ascertained, in accordance with the above, that HB's conduct is an abuse, the following situation on the market the Commission reached that same conclu- is created: because of HB's dominant position on the sion in its statement of objections sent to market, most retailers in Ireland purchase ice cream from HB, regardless whether the latter supplies them with a

See, for first, because or its dominant position, it deals with the instance. Case 85/76 Hoffmann-La Roche [1979] ECR majority of retailers in Ireland. Secondly, because of its 215. In this case exactly the opposite has occurred: the abusive conduct, it is thereby able to drive into a same price is imposed in different situations in such a way disadvantageous competitive position those retailers with as to benefit some contracting parties at the expense of whom it is dealing who may be supplied with ice cream by

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the policy of uniform ice-cream pricing, (a) The Delimitis judgment were contrary to the above Community provision and an obligation to comply with them could not be imposed by a court. 66. The legal route by which the issue will be judged is mapped out by the above- mentioned Delimitis judgment. 53

effect constitutes 'one factor amongst 52 — The particular feature of the case consists in the fact that others' for the purpose of ascertaining the exclusivity clause does not concern the supply of the whether, by way of a possible alteration product in question (HB does not prohibit the supply to retailers in Ireland of other commercial brands of ice of competition, trade between Member cream) but the use of the freezers for stocking products States is capable of being affected. (HB prohibits the stocking in the freezers of other commercial brands).

Iglo [1995] ECR II-1533. That judgment examined the of an agreement together with similar legality of a Commission decision concerning the compat- ibility with Article 85 of exclusive supply agreements agreements presupposes, first of all, defini- entered into between ice-cream manufacturers and sellers of ice cream for street consumption. Investigating the tion of the relevant market. Subsequently, question whether, apart from the agreements in question, in order to ascertain whether the existence there were other significant factors contributing to the partitioning of the market, the Commission found that entry of new competitors to the market was hindered by of several exclusivity agreements impedes the existence of a system of giving away a large number of access to the market so defined, it is freezer cabinets which were placed at the disposal of retail businesses in exchange for their promising to use the freezers exclusively for stocking the supplier's products. The Court of First Instance considered 'that the Commis- sion was right to treat that factor as contributing to 53 —That judgment concerned exclusivity agreements for the making access to the market more difficult. The necessary supply of beer entered into between the supplier (the consequence of that situation is that any new competitor brewery) and the reseller (restaurants or public houses). entering the market must either persuade the retailer to The former supplied the latter with certain financial and exchange the freezer cabinet installed by the applicant for economic benefits such as the granting of favourable loans, another, which involves giving up the turnover in the the leasing of premises and the supply of equipment; the products from the previous supplier, or persuade the latter committed itself to being supplied with beer retailer to install an additional freezer cabinet, which may exclusively by the former and to avoiding selling compet- prove impossible, particularly because of lack of space in ing products on its premises. small sales outlets' (paragraph 108). 54 — Paragraph 13 of Delimitis, cited in footnote 3.

71. To summarise, an exclusivity agree- ment is prohibited if it is ascertained that, first, the network of similar agreements, in 69. Subsequently the need to examine the light of the general economic and legal whether 'there are real concrete possibili- context in which they are applied, has as its ties for a new competitor to penetrate the cumulative effect the closing off of the bundle of contracts' is emphasised. 58 market and, secondly, the specific agree- ment contributes appreciably to that result.

73. First of all it is essential to examine the characteristics of the retail outlets. From the High Court's findings in its judgment under appeal in the Supreme Court, it appears that retailers make up the majority of outlets; 62 these effect the majority of sales. In addition a very small number of 74. I consider that the agreements to supply retailers have their own freezers, that is to freezers to retailers significantly affect the say freezers in which they may stock ice possibility of a new competitor entering the cream of other commercial brands. 63 The market. Taking into account the small to great majority of retailers only have one or non-existent likelihood of persuading a two freezers for exclusive use from one retailer to replace a freezer that is already supplier. The limited number of freezers installed or to install an additional freezer seems to result from lack of space in retail (owned by him or for another commercial premises and the absence of commercial brand) there are serious indications that the interest on the part of shopkeepers; the retail outlets controlled by means of the latter do not expect to obtain a substantial exclusivity clauses by one supplier are de increase in their profits from the addition facto tied to it. Since there are many more retail outlets in respect of which freezer agreements with an exclusivity clause have 61 — The primary concern of those responsible for applying the been entered into than there are outlets law is the definition of the product market and the with their own 'free freezers', it is clear that geographical market. The formulation of the second question referred to the Court indicates that the national the great majority of retail outlets in court appears to consider the relevant market to be the Ireland are de facto tied to a supplier. market in single-wrapped items of impulse ice cream in Ireland. 62 — They are mostly small general stores, kiosks and petrol stations. There are approximately 9 000 outlets out of a total of 10 279 (market research conducted in 1990). 64 — On that point it is also worth examining whether the 63 — The basic reason for the lack of a larger number of freezer market in question is saturated as far as freezers are cabinet owners is the cost of purchase and maintenance concerned. If, in other words the number of freezers and the ease with which a freezer can be supplied by an ice- already installed has reached its greatest relative value, it cream producing company even though there is a binding cannot be expected that retailers will have an interest in exclusivity clause. installing extra freezers in their shop.

75. In particular, in the case of HB, it has contrary to the Community provisions on yet another advantage because of its posi- competition. tion in the market. It is the ice-cream manufacturer with the greatest range of products and the most popular. Conse- quently, retailers — who, as stated, do not usually own their own freezer — have every interest, when deciding to buy ice cream, to turn to HB; the latter, because of its position on the market, presumably ensures that they achieve a greater volume of sales. For the same reason, there are very few cases where HB freezers are installed and then replaced with freezers for the exclusive use of another commercial brand. Lastly, the addition of an extra freezer for 77. I do not disagree with the above the purpose of stocking another commer- reasoning. Nevertheless, the large number cial brand of ice cream is not likely to of retail outlets de facto tied by reason of substantially increase retailers' profits; the clauses requiring exclusive use of HB's ice cream will continue to constitute freezers constitutes a significant indica- the main volume of sales in the shop. The tion — which it is for the national court above is also confirmed by the first instance to confirm — that the restriction of com- Irish court. petition caused by the bundle of agreements in question is so serious that there is not the necessary (minimum) margin for access to the market. That finding is not invalidated by the fact that certain competitors, such as Mars, despite the existing restrictions, manage to enter a small part of the market. Moreover, it is not right to maintain — as HB tries to do — that entry on the market of suppliers of ice cream in Ireland pre- supposes that a newly-arrived supplier of ice cream should consider setting up its 76. With regard to the possibilities of new own 'fleet of freezers' so as to obtain competitors entering the existing distribu- control of certain retail outlets. The above tion network and, by extension, the rele- approach appears to justify the further vant market, HB puts forward a number of tying of the market as a precondition to arguments to show that the agreements in freeing it up; it is worth emphasising that question do not have as their cumulative the relevant market is that of the supply of effect the closing off of the market to new impulse ice cream rather than a single competitors. HB maintains that, for the market for the supply of ice cream and correct application of Article 85(1) to the freezers. 65 Lastly, HB makes the telling present case, it is essential to define the 'threshold level of market access' that should be given to new competitors. If such 65 — The proper functioning or the competition rules does not permit manufacturers of ice cream to be forced to provide minimum access is ensured in this case, the freezers in order to exercise their activities inthe ice cream market. Competition between brands may not be replaced exclusivity clauses in questions are not by competition for access to retail shops.

66 — It could be considered that an alternative method of entry on the market might be, in accordance with Delimitis, the addition of new retail outlets, the creation of a profitable 79. There remains to be examined the distribution network, or the use of an existing system of independent intermediaries. From the documents in the file question whether application of the de it does not appear, however, that there is an independent impulse ice cream wholesale trade in Ireland which would minimis proviso set out in the Delimitis give newly-arrived suppliers access to distribution. Fur- judgment is called for; whether, that is to thermore, if the relevant market as regards the number of retail outlets and the total number of freezers installed is in fact saturated, it is cleat that alternative solutions open to say, the freezer agreements concluded by newly-arrived operators (particularly small to medium- HB in particular 'make an appreciable sized businesses) are significantly restricted. In my opinion, the acquisition of other existing undertakings with a contribution' 69 to producing the above distribution network, as suggested by HB, cannot be regarded as such a solution; even if there were such a negative effects on the market. On the possibility, the cost of entry on the market would in all basis, at least, of the evidence referred to in probability be a deterrent for the economic operators interested. Also it could not be considered compatible with the first instance decision of the Irish court, the Community competition rules for operators already I consider that that question should be established to be allowed to tie the market in such a way that the only prospect for a new competitor to enter the answered in the affirmative. Of all the said market would be for it to buy out one of the already existing competitors; freedom of competition would not freezer agreements, the lion's share is held then exist. by HB. That company appears to be the The question whether the present position of existing ice- cream suppliers and their reputation with consumers constitute an insurmountable obstacle to new arrivals must also be examined. 67 — The national court will examine that question in the light 68 — See point 85 et seq. below. of paragraph 21 of Delimitis, cited in footnote 3. 69 — Paragraph 24 of Delimitis.

80. The above observations are not under- mined by HB's contentions. 83. HB also states that for the proper determination of the way in which its own agreements contribute to closing off the market, it is essential to make the following distinction. The total number of the retail outlets which are removed from free competition because they are de facto tied to HB should not include the cases of 81. That company refers, first, to the retailers who, although they have one or criterion of the length of the exclusivity more of HB's freezers, are also not inter- clauses, which the Court of Justice ested in selling any other commercial brand employed in Delimitis. It argues that, in of ice cream for purely commercial reasons, contrast with the facts in Langnese Iglo,70 in particular the low demand for ice cream the agreements for the exclusive use of other than HB's on the part of consumers. freezers are freely entered into by retailers and can, on request, be terminated by them without further commitment to the supplier company. According to HB, that factor indicates that those agreements are compat- ible with Article 85(1) of the EC Treaty.

84. I cannot agree with that line of reason- ing, which the High Court appears in the main to support. The effects of an agree- ment restricting competition must be assessed objectively, independently of the 82. I do not find myself in agreement with reasons for which those taking part in the that view. In any case, it is expedient to restrictive agreement enter into it. The significant exclusion from the market of other suppliers may, in principle, constitute 70 — Cited in footnote 52. an infringement of Article 85(1) of the EC

87. Furthermore, HB maintains that the exclusivity clause accompanying the above agreements is essential for the proper operation of the system and brings about only minor and legitimate restrictions on (c) Objective justification for the exclusiv- competition. Without the clause, observes ity clauses in question HB, the proper organisation of the market in impulse ice cream and appropriate distribution of the products would be jeopardised. By means of those clauses suppliers ensure better access to their 85. HB maintains that the clauses in ques- products, have latitude to shoulder the cost tion introduce a minor restriction on com- of the freezers because they anticipate a petition which is entirely legitimate because greater volume of sales, better monitor the it is objectively justified. It relies in that hygiene and refrigeration conditions of the connection on Pronuptia 71 and the theory ice cream, facilitate advertising and the of objective justification for certain re- general promotion of their products and ciprocal conduct which, for that reason, are protected from abusive conduct on the falls outside the scope of application of part of their competitors, 75 while safe- Article 85(1) of the EC Treaty. guarding their property rights in the

freezers. All the above is achieved, accord- the consumer; that does not mean, how- ing to HB's assertions, without excessive ever, that the existence and correct opera- restriction of competition. tion of the market in impulse ice cream in Ireland depends on those agreements. 78 On the other hand, and more importantly, the exclusivity clause accompanying the supply of freezers does not constitute a conditio sine ana non for the conclusion of freezer 88. My comments on the above line of agreements. Despite what was said to the argument are as follows: contrary by HB, it has not been shown that the organisation by ice cream suppliers of a functional distribution network with the supply of freezers to retailers cannot exist without the free supply of a freezer together with an exclusivity clause as regards its use. 79 First, I would observe that it is hard to construe and apply the criterion of object- ive justification in practice; it is question- able whether it constitutes an apt criterion for construing the Community competition provisions. 76 Nevertheless, it is not com- pletely absent from the case-law of the Court. 77

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Thirdly, I consider that even on the con- beyond which they cannot be regarded as struction that certain restrictions on com- justified. 81 Secondly, as I have already petition could be justified on the ground of explained, it has not been shown that the maintaining a system which ultimately restrictions in question to which the agree- functions for the benefit of the market ments on exclusivity before the Court give and those participating in the market, those rise are essential for achieving the goal restrictions cannot go beyond a limit which sought, even if it were legitimate. 82 may be determined by applying the prin- ciple of proportionality. 80 Where, conse- quently, in accordance with the preceding analysis, from the overall assessment of the legal and factual context of HB's agree- ments, it is ascertained that they contribute significantly, with other similar agreements, to producing a cumulative negative effect on competition so as to close off the market, those agreements, despite the posi- 89. In conclusion, in respect of the first tive aspects emphasised by HB, are con- limb of the second question referred to the trary to Article 85(1) of the EC Treaty. Court for a preliminary ruling, the follow- First, because of the gravity of the negative ing answer should be given: In the light of consequences for competition, the restric- the legal and factual features of the relevant tions in question exceed a specific limit market, an agreement or practice such as that being examined in the main proceed- ings is contrary to Article 85(1) of the EC Treaty if three conditions are satisfied: first, in conjunction with similar agreements or practices in the same market it de facto precludes access by other competitors to a particularly large share of the existing retail outlets, leading to closing off of the market; second, it contributes appreciably to the said closing off of the market; third, the

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restriction on competition in question may conjunction with other factors, 86 leads to affect trade between Member States. 83 the natural conclusion that HB has a dominant position in the above market. 87

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the effect that 'if an undertaking having a in question are de facto retail outlets dominant position on the market ties exclusively for HB's products. From the buyers — even if it does so at their foregoing analysis, it follows that the request —· by an obligation or promise on number of retail outlets in question is their part to obtain all or most of their particularly high, and appears to amount requirements from that undertaking, this to 80% of small shops. 93 constitutes an abuse of a dominant posi- tion'. 91

91 — See Hoffmann-La Koche, cited in footnote 84, paragraph 89, and Akzo-Chemie, cited in footnote 85, at paragraph 95. The correctness of the above conclu- 149. In Case T-65/89 BPB v British Gypsum [19931 ECR II-389, paragraph 68, the Court of First Instance held that sion is not undermined by HB's contentions 'where, as in the present case, an economic operator holds to the contrary. a strong position in the market, the conclusion of exclusive supply contracts in respect of a substantial proportion of purchases constitutes an unacceptable obstacle to entry to that market'. 92 — See points 74 and 75 above. 93 — See point 73 above.

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98. Furthermore, the suggested application of Article 86 of the EC Treaty may indeed deprive HB of the possibility of exploiting all the advantages which flow from its position on the market, but it does not, however, require it to act to the detriment 97. There is no doubt that freezer agree- of its interests. It is wholly legitimate to ments constitute a normal commercial limit a company's leeway in its business strategy pursuant to Article 86, in so far as an undertaking with a dominant position 94 — HB cites the Opinion or Judge Kirschner, of the Court of First Instance, who acted as Advocate General in Case always has the particular responsibility of T-51/89 Tetra Pal; | 1 9 9 0 | ECR II-309, at point 63. In that not harming, by its conduct, legitimate Opinion he maintained that no company, even if it has a dominant position, can he forced to harm its own interests. undistorted competition in the common 95 — Case C-7/97 |1998| ECR I-7791. market.

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101. As concerns the argument relating to Objective justification' for HB's conduct, I would emphasise, first of all, that the case- 100. In connection with HB's argument to law does not appear to use that express the effect that the number of retailers who concept in its interpretation of Article 86 of are tied by reason of the exclusivity clauses the EC Treaty. Nevertheless, I agree that it in question is negligible, I would observe would be difficult to accept that an objec- that the criteria on which HB makes the tively justified business measure was also relevant calculations and reaches the above an abuse. 99The question whether conduct conclusion are not correct. HB appears not is justified or not is assessed on the basis of to include in its research the retailers who the principle of proportionality. 100 A com- only have HB freezers but state that they pany which holds a dominant position is are not in any case interested in selling any not entitled to bring about disproportion- other commercial brand of ice cream for ate restrictions to free competition, even if the goals sought are wholly legitimate. In

relation to the freezer agreements at issue, I ing single-wrapped items of impulse ice consider that the seriously negative conse- cream which holds a dominant position on quences ascertained above for the function- the relevant market, in encouraging retai- ing of the market, the extent of the lers to enter into agreements with it for the restrictions caused to competition and the supply of freezers free of any direct charge supervening impossibility of ensuring con- that contain a clause requiring the freezers ditions of healthy and normal competition to be used exclusively for stocking its make it a foregone conclusion that HB's products, given the characteristics of the conduct is unjustified. 101 Even if the 'pre- market succeeds de facto in tying a large sumption of abuse' as set out above is not number of retail outlets and restricting accepted, the activities of HB under exam- further the already weakened competition ination are not objectively justified because by not allowing the market to function in they introduce obstacles and distortions to conditions of healthy competition, and has free competition which go beyond the goal thereby infringed its obligations under sought and are not essential for its achieve- Article 86 of the Treaty. ment. 102

VI — The third question referred to the Court

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accordance with the principles found in the the freezers, 105 but introduce limits on the Constitutions of the Member States; those contractual clauses laid down by HB in fundamental national rules distinguish the connection with the use of the freezers core of the right in question, infringement which are provided to retailers, limits of which is in principle prohibited, from the which are necessary to safeguard condi- exercise of that right, which may be tions of competition in the relevant market. restricted on the ground of the general That company can seek means of protect- interest in so far as that is necessary. 103 ing its property 106 other than by the There is no doubt that Articles 85 and 86 imposition of the exclusivity clauses; it of the EC Treaty occupy an important cannot, however, rely on Article 222 of position in the system of the Community the EC Treaty in order to avoid conforming legal order and serve the general interest to what is required under the correct which consists in ensuring undistorted interpretation and application of Art- competition. 104 Consequently, it is per- icles 85 and 86. fectly comprehensible for restrictions to be placed on the right to property ownership pursuant to Articles 85 and 86 of the EC Treaty, to the degree to which they might be necessary to protect competition. Arti- cle 222 of the EC Treaty may in no event be used as a shield by economic operators to avoid application of Articles 85 and 86 to their detriment.

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V I I— Conclusions

107. In conclusion, for the reasons explained above, the above analysis in respect of the second and third questions referred to the Court enable an answer to be given on the issues of Community law raised without a review of the legality and validity of Commission Decision 98/531. In my opinion, however, the Court could perfectly well not reply to those questions if it considers that the dispute in the main proceedings should not be heard before a ruling on the validity of Decision 98/531, and that, as I have explained, in the light of the particular features of the case, will be given by the Court of First Instance in the context of the action for annulment pending before it. However, if the Court of Justice considers that it must give a reply to the second and third questions referred to it for a preliminary ruling, examining at the same time the validity of Decision 98/531, I would confine myself in the alternative to observing that that decision, examined in the light of the judicial review possible in the context of the Article 234 EC procedure, is correct and that the freezer agreements concluded by HB with retailers in Ireland are contrary to Articles 81 and 82 EC.

VIII— Conclusion

108. In the light of the foregoing, I would suggest that the Court reply as follows to the first question:

An undertaking supplying single-wrapped items of impulse ice cream which holds a dominant position on the relevant market, in encouraging retailers to enter into agreements with it for the supply of freezers free of any direct charge that contain a clause requiring the freezers to be used exclusively for stocking its products, given the characteristics of the market succeeds de facto in tying a large number of retail outlets and restricting further the already weakened competition by not I- 11410

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allowing the market to function in conditions of healthy competition, and has thereby infringed its obligations under Article 86 of the EC Treaty (now Article 82 EC).

Protection of property ownership, as provided for in Article 222 of the EC Treaty (now Article 295 EC), does not preclude exclusivity agreements such as those under examination by the national court from being classified as contrary to Articles 85(1) and 86 of the EC Treaty (now Articles 81(1) and 82 EC).

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