C-9/99

ECHIROLLES DISTRIBUTION-

OPINION OF ADVOCATE GENERAL ALBER delivered on 6 June 2000 *

I — Introduction particular those relating to the free move- ment of goods. In the main proceedings, the Court d'Appel de Grenoble is confronted with the question whether the legal situa- tion has now been altered by the incor- poration into the EC Treaty of the provi- sions on the internal market.

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for the purpose of circumventing the system 5. In its reference for a preliminary ruling, for fixing book prices. the referring court points out inter alia that the fixing of book prices in France gener- ally affects both private and professional purchasers and covers cultural and techni- cal books without distinction. The system thus increases the operating costs of under- takings or individuals for which or for whom information from books is necessary and important, such as lawyers, doctors I I I— Facts and architects. Individual booksellers or organised groups of booksellers are not therefore permitted to pass on, in the retail prices charged by them, gains which nor- mally result from better productivity, com- bined purchasing or more efficient manage- 3. Echirolles Distribution SA (hereinafter ment of their commercial activities or even 'the appellant') operates a retail outlet from the quality of the services provided. trading as 'Centre Leclerc'. Since it was The price-fixing for books, where the price offering books for sale at a price more than is fixed by a third party not party to the 5% lower than that fixed by the publisher contract, thus affects the free operation of or importer, contrary to the fourth para- the market. Through this practice France graph of Article 1 of the Law of 10 August has made the book trade an area in which 1981, it was ordered to pay damages to the competition is excluded. bookseller Patrick Corbet, to the 'Associa- tion du Dauphiné pour le Maintien et l'Application de la Loi du 10 août 1981 sur le Prix Unique du Livre', to the 'Association des Libraires de Bandes Dessi- nées' and to the 'Union des Libraires de France' (hereinafter 'the respondents').4

7. However, the question whether this also applies following the establishment of the 'Is the French legislation requiring publish- internal market has not (yet) been decided. ers to impose on booksellers fixed prices for On the assumption that the internal market the resale of books, regardless of their is to be regarded as the merger of national contents, to consumers and to business markets into a single market, the national purchasers compatible with the internal court considers that the provisions on the market established on 1 January 1993, internal market may also affect systems for and in particular with Articles 3(c) and fixing book prices which apply only nation- (g), 3a and 5, the second paragraph of ally. It is possible that the internal market Article 7a and Articles 102a and 103(3) may not be treated merely as an area for the and (4) of the Treaty establishing the free movement of goods: it may also have European Economic Community, as amen- to be regarded as a single market whose ded by the Single European Act and the operating rules are as binding on States as Treaty on European Union?' they are on individuals.

V — Arguments of the parties

books are to be recognised as forming part is inadmissible in its present form since it of a cultural patrimony, there still exists a essentially asks the Court of Justice to connection with economic life, as is demon- consider the compatibility with Commu- strated inter alia by the fact that the fixing nity law of a national provision. However, of book prices in France has led to an if the Court of Justice does consider it overall increase in book prices. necessary to give a ruling, the question should be reworded. The Austrian Govern- ment considers that it should be reworded because it also refers to provisions of Community law whose interpretation can- not affect the main proceedings because they are not directly applicable so that the 11. Although in its previous judgments on parties cannot rely on them. The Commis- the fixing of book prices in France the sion submits that the question must be Court of Justice has held that the principle construed as relating essentially to Arti- of price-fixing by publishers is compatible cle 85 of the EC Treaty, read in conjunction with Community law, it referred specifi- with the provisions referred to. Considera- cally to Community law as it stood at that tion of Articles 30 and 36 of the EC Treaty, time, that is to say at a time at which the on the other hand, is not necessary, since notion of the internal market was not yet the national court concludes that they do part of the EC Treaty. However, following not preclude the application of the French the incorporation of the provisions on the provisions. internal market, the relevant rules of the EC Treaty might might now render the French legislation at issue incompatible with it.

order to be able to assess whether Com­ of a question concerning the compatibility munity law precludes the application of of a national rule with Community law. national systems for fixing book prices it is However, in proceedings for a preliminary necessary to examine whether a competi­ ruling pursuant to the first paragraph of tion policy exists at Community level Article 177 of the EC Treaty (now Arti­ which relates to purely national systems cle 234 EC), only questions relating to the or practices concerning the fixing of prices interpretation and validity of Community for books. However, no such competition law may be referred to the Court of Justice. policy at Community level exists even now. In Article 177 proceedings, the jurisdiction of the Court of Justice does not extend to reviewing provisions of national law. The national courts themselves have to rule on those provisions in the light of the pre­ liminary ruling. 15. The French and Norwegian Govern­ ments further point out that the Treaty establishing the European Union intro­ duced significant changes in the field of culture. In that Treaty, and in particular in Article 128 thereof (now, following amend­ ment, Article 151 EC), the Community has an appropriate legal basis for Community 17. However, it is clear from the order for action. The fact that the Community has to reference that by its question the national take cultural aspects into account in its court is essentially seeking to ascertain action under other provisions of the Treaty whether the provisions of the EC Treaty means, in the view of the French Govern­ on the internal market must be interpreted ment, that the French provisions on the as allowing a Member State to enact or fixing of prices for books are not contrary maintain provisions relating to the fixing of to Community law. prices for books. The national court is therefore asking the Court of Justice to provide criteria for interpreting the relevant provisions in order to be able itself to assess the compatibility of the national law at issue with Community law. Thus, the question is admissible if it is so interpreted and reworded. VI — Appraisal

19. However, it should be borne in mind that, according to well-established case-law of the Court of Justice, it is solely for the national court before which the dispute has been brought to determine the relevance of the questions which it submits to the Court 2. Substance of Justice. This follows from Article 177 of the Treaty which provides the basis for close cooperation between national courts and the Court of Justice. Therefore, if the questions referred concern the interpreta- tion of Community law, the Court of Justice is required, as a matter of principle, 21. Under Article 5 of the EC Treaty (now to give a ruling on them. Consequently, an Article 10 EC), the Member States must order for reference may be rejected only take appropriate measures to ensure fulfil- where it is evident that no link exists ment of the obligations arising out of the between the interpretation of Community Treaty and abstain from any measure law requested by the national court and the which could jeopardise the attainment of circumstances or subject-matter of the main the objectives of the Treaty. It is open to proceedings, that is to say that the question question whether this provision has inde- is not actually necessary. That would be the pendent legal effect or whether its wording case, for instance, if answering the question is too general, with the result that it can amounted to the Court of Justice giving its have binding effect only when read in opinion on general or hypothetical ques- conjunction with other provisions of the tions. Treaty. Admittedly, it is possible to imagine cases in which no further elements of Community law need be raised because the obligations may stem solely from the duty to cooperate sincerely with the Com- munity. This applies in particular to the obligation to abstain from adopting mea- sures which may jeopardise the objectives 20. Even though the direct applicability of of the Treaty. However, these objectives the provisions to which the national court must be specified in an adequately precise refers may be a matter of doubt, there is an manner. This is certainly not so in the case obvious connection between the provisions of the notion of the internal market which on the internal market and the national law is set out in only general terms.

22. Articles 3, 3a and 7a of the EC Treaty, which must be interpreted in order to answer the question referred, concerns the introduction of the concept of the internal 24. Therefore, the notion of the internal market and the nature thereof. Therefore, market is inextricably linked to that of the in the present case, it is necessary above all common market from which it emerged. to define the substance of that concept. In According to the established case-law of order to do so, it must first be placed in its the Court of Justice 6 concerning the origi­ historical and systematic context. nal treaty, the creation of the common market is one of the objectives of the Community. The Court of Justice describes it as an economic area with structures similar to those of a domestic market. Its establishment is intended to remove bar­ 23. The original EEC Treaty, like the riers to intra-Community trade with a view present version of the Treaty, contained to merging national markets into a single the concept of the common market, with­ market achieving conditions as close as out, however, referring to the internal possible to those of a genuine domestic market, as is still the case. This concept market. was incorporated into the then EEC Treaty by the preamble to and Article 13 of the Single European Act of 28 February 1986. The Single European Act set the Commu­ nity the objective of establishing the inter­ 25. The present case hinges on whether the nal market and provided for a number of establishment of the internal market is a further amendments to that end. The treaty objective which has effect only in Treaty on European Union, which entered conjunction with other provisions of the into force on 1 January 1993, confirmed Treaty, such as those relating to the free the integratory function of the establish­ movement of goods (Article 30 et seq. of ment of the internal market — literally, the the EC Treaty) or to competition (Arti­ creation of an area without internal fron­ cle 85 et seq. of the EC Treaty) or whether tiers — and adopted it as an objective of it is a self-standing provision which lays the European Union (first indent of Arti­ down independent obligations without fur­ cle B of the Treaty on European Union 5 ). ther measures to attain the objective being The aim of setting up an internal market necessary on the part of the Member States. was to eliminate the barriers dividing If it were only a treaty objective, it would Member States so that the national domes­ tic markets could merge into a single 6 —See inter alia Case 270/80 Palydor ( 1982) ECR 329, paragraphs 16 to 18, and Case C-41/93 France v Commis­ sion [1994] ECR I-1829, paragraph 19, and the references 5 — Now, following amendment, first indent of Article 2 EU. contained therein.

27. Under Articles 3 and 3a of the EC Treaty, the activities of the Member States and the Community are to include, as 29. It is true that the second paragraph of provided in the Treaty and in accordance Article 7a of the EC Treaty defines the with the timetable set out therein, the internal market as an area without internal adoption of an economic policy of the frontiers in which the free movement of Member States which is based on the goods, persons, services and capital is internal market and conducted in accor- ensured, but the same article expressly adds dance with the principle of an open market 'in accordance with the provisions of [the] economy with free competition. In its Treaty'. Therefore, although the concept of judgment in Alsthom Atlantique, 7 the the internal market has become positive Court of Justice ruled that '[t]he institution of a system ensuring that competition in the 8 — Now Article 3(g) EC. 9 —See inter alia Case C-341/95 Bettati [1998] ECR 1-4355, paragraph 75, and the references contained there. 7 — Case C-339/89 [1991] ECR I-107. 10 — See footnote 9 above.

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law though Article 7a, it needs to be controls of persons at the internal frontiers developed by other provisions of the Treaty of the Community, that obligation auto­ in order to have binding effect. This may matically arises from expiry of that period.' also be inferred from the term 'ensured' Therefore, if the internal market on its own since it does not state it 'is' an area of free is unable to establish rights having direct movement. However, conceptually, further effect for Community nationals, no obliga­ special measures form an integral part of tions on the Member States having direct ensuring such free movement. effect may likewise be inferred from it alone.

31. Reference must also be made to the judgment of the Court of Justice in Wij- senbeek. 1 2 Admittedly, this case concerned the free movement of persons who — 33. Previous cases decided by the Court of prior to the integration of the 'Schengen Justice concerning the fixing of book prices acquis' into Community law — claimed in France also corroborates that reasoning. the right to cross borders without controls Pursuant to several judgments of the Court as a consequence of the internal market. At of Justice concerning this French law, those paragraph 40, the Court held: 'That arti­ sections which were contrary to Commu­ cle [that is to say Article 7a] cannot be nity law, in particular in respect of Arti­ interpreted as meaning that, in the absence cle 30 of the EEC Treaty, have been of measures adopted by the Council ... adapted. In its judgments the Court of requiring the Member States to abolish Justice examined the legislation concerned

11 — See the Declaration on Article 7a annexed to the Final Act 13 — Case C-41/93 (cited in footnote 7 above). of the Single European Act. 14 — Opinion of 14 December 1991 [1991] ECR 1-6079, para­ 12 — Case C-378/97 [1999] ECR I-6207. graph 50.

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(b) Articles 5 and 85 of the EC Treaty 37. At that time — as now — there was, as regards purely national systems or practices in the book trade, no Community competition policy to which the Member States had to adhere on account of their obligation to abstain from measures which could jeopardise the attainment of the 35. It should be noted that, as far as the objectives of the Treaty. Therefore, the present case is concerned, no submissions

16 — Cited in footnote 3 above. 15 — See footnote 9 above. 17 — Cited in footnote 3 above, paragraph 15.

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Court of Justice considered that the Mem- agreements, decisions or concerted prac- ber States' obligations stemming from Arti- tices between the publishers or retailers cle 5, read in conjunction with Arti- concerning the fixing of book prices. In cle 3(f) 18 and 85 of the EEC Treaty, were that regard, no causal link can be estab- not sufficiently precise to preclude them lished between the legislation and the from enacting legislation governing compe- practices of the undertakings concerned tition in respect of retail prices for books. which would render Article 85(1) applic- able.

39. Although the French law concerning 41. There is no need to consider this point the fixing of prices for books delegates to in greater depth since there is, as regards publishers responsibility for fixing the purely national systems for fixing book prices for books which retailers can prices, no Community competition policy demand from final consumers and thus to which the Member States had to adhere affects an economic decision, as I have on account of their obligation to abstain already mentioned, it is not evident from from measures which could jeopardise the either the order for reference or the sub- attainment of the objectives of the Treaty. missions of the parties that there are any In that regard, reference should also be made to Article 128(4) of the EC Treaty under which the Community has to take 18 — See footnote 9 above. cultural aspects into account in its action, 19 —Case C-2/91 Meug [1993] ECR I-5751, Case C-245/91 which therefore includes the way in which Ohra [1993] ECR I-5851 and Case C-185/91 Reiƒƒ [1993] ECR I-5801. it takes action in the field of competition.

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46. However, in the present case, it must be concluded that the French legislation on the 44. In its case-law, the Court of Justice has fixing of prices for books as a whole is not ruled that an agreement covering the entire likely to affect trade between Member territory of a Member State has, by its very States within the meaning of Article 85(1) nature, the effect of reinforcing the com- of the EC Treaty. This is also indirectly partmentalisation of markets on a national evident from the fact that books written in basis, thereby holding up the economic a particular language are not necessarily interpenetration which the Treaty is subject to cross-border trade in large quan- designed to bring about. 22 In order that tities. Consequently, the enactment of leg- an agreement between undertakings may islation on the fixing of prices for books affect 'trade between Member States, it does not constitute a failure by a Member must be possible to foresee with a sufficient State to fulfil its obligation to abstain from degree of probability on the basis of a set of measures which could jeopardise the attain- ment of the objectives of the Treaty, particularly since no relevant Community 20 — Cited in footnote 3 above. competition policy exists. 21 — Decisions on the British Net Book Agreement, the Nether- lands cases of trade regulations and Reiber/KvB and the cases of collective and individual written undertakings concerning Germany and Austria. 23 — See, for instance, Joined Cases C-215/96 and C-216/96 22 — Case C-35/96 Commission v Italy [1998] ECR I-3851, Bagnasco and Others [1999] ECR I-135, paragraph 47, paragraph 48, and the references contained therein. and the references contained therein.

(d) Economic policies and the 'principle of ber States and of the Community 24 con- an open market economy with free compe- tains observations on better functioning tition' — Articles 3a, 102a and 103(3) and product and services markets. According to (4) of the EC Treaty (now Article 99 EC) those provisions, in order to safeguard and promote the Community's competitiveness, employment and living standards in a world of free trade and constant technolo- gical change, it is essential that Member States and the Community, in line with the 47. The principle of an open market econ- Broad Guidelines for Economic Policies, omy with free competition is set out in intensify their efforts to modernise their Articles 3a(1) and (2), 102a and 105(1) of markets for goods, services and labour. As the EC Treaty (now Article 105 EC) and is part of the strategy to foster growth and related to the provisions on economic and employment, while achieving price stabi- monetary policy. Thus, the Treaty estab- lity, it is essential to improve the operation lishing the European Union, which intro- of product and service markets, to stimu- duced these provisions, sees this principle late competition, to foster invention and more in the context of the Community's innovation and to ensure efficient price economic and monetary policy than as a setting. factor in defining the term 'internal mar- ket'. Under Article 102a, Member States are to conduct their economic policies 'with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2, and in the context of the broad guidelines referred to in Arti- cle 103(2).' The Member States and the Community are to act in accordance with the principle of an open market economy with free competition, favouring an effi- cient allocation of resources, and in com- pliance with the principles set out in Article 3a. 49. Price-fixing systems such as that at issue here do, however, contain elements which suggest an inefficient allocation of resources. However, these provisions of Community law are merely Treaty objec- tives and policies of the Member States or 48. The term 'economic policies' as used in the Community, which do not impose on Article 102a is not defined more closely in the Member States clear and sufficiently the Treaty itself. The broad guidelines for specific obligations regarding their con- the economic policies of the Member States duct. According to the objectives set out and the Community which the Council in Articles 2 and 3 of the EC Treaty, they formulated pursuant to Article 103(2) also are rather principles which, on their own, include micro-economic ideas for the reg- have no binding legal effect but which are ulation of certain, particular markets. For to be viewed in conjunction with the other instance, Chapter V of Council Recommen- dation of 7 July 1997 on the broad guide- lines of the economic policies of the Mem- 24 —OJ 1997 L 209, p. 12.

The second paragraph of Article 5 (now the second paragraph of Article 10 EC), read in conjunction with Article 3(c) and (g) (now, after amendment, Article 3(c) and (g) EC) and 85 of the EC Treaty (now Article 81 EC) and Article 3a (now

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Article 4 EC), the second paragraph of Article 7a (now, after amendment, Article 14(2) EC), 102a and 103(3) and (4) of the EC Treaty (now Articles 98 EC and 99 EC) are to be interpreted as meaning that, as Community law stands at present, they do not preclude the Member States from enacting legislation under which the retail price of books is to be fixed by the publisher or by the importer and is binding on all retailers, provided that such legislation is consonant with the other specific provisions of the EC Treaty.

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