(a)

I note first that the purpose of the present action is to be found solely in the submissions and claims made by Oswald Schmidt. According to the actual terms thereof his first claim is not that he should receive supplies but that the notice whereby the Commission notified him of its refusal to act on his formal complaint should be declared void. Although that application, made on 7 June 1980, was intended to force the intervener to supply the applicant immediately, it must in fact be interpreted as a request that the Commission should confirm the existence of an infringement of Articles 85 and 86 of the Treaty pursuant to Articles 3 (1) and 2 (b) of Regulation No 17 and should adopt a decision requiring Revox to bring such infringement to an end.

The Commission's notice of 11 May 1981 in response to that application cannot therefore be construed as anything other than a refusal by the Commission to act on it.

The first head of claim in the application submitted under the second paragraph of Article 173 of the EEC Treaty relates solely to that refusal.

The second head of claim is not that the Commission should act against an infringement of Article 85 or 86 but only that it should issue a fresh notice to the applicant taking account of a correct legal assessment.

(b)

In view of the purpose of the proceedings the admissibility of the action does not therefore depend on whether the applicant has the right to require the Commission to act in respect of restrictions on competition or whether he has a right that his application should be made the subject of an actionable decision. According to the consistent case-law of the Court which was summarized in the IBM case ( 4 ) the first head of claim is in any case admissible if the contested notification amounts to a “measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position”. As the Court also recalled in that case, the admissibility of an action does not depend in particular on the form in which such a measure is cast or its categorization in respect of Article 189 of the Treaty; the substance of the measure must be considered.

According to those criteria it is therefore important not only that the letter sent to the applicant on 11 May 1981 amounts in the eyes of the Commission to a decision in respect of which proceedings may be instituted under the second paragraph of Article 173 of the Treaty but also that the person to whom it is addressed is capable of understanding from its content and form that it amounts to such a decision. It is clear, in particular from the wording of the letter that following the applicant's comments on the notice under Article 6 of Regulation No 99/63 the Commission was notifying him of its “definitive view”. It was therefore not simply an administrative letter from a directorate general as was the case in Joined Cases 235/78 and 1 to 3/79 Giry and Guerlain ( 5 ) Thus, with regard to the question of admissiblity it is not essential to know whether the Commission had power to adopt such a measure, which is not expressly provided for by Regulation No 17, or whether, as in the GEMA case, ( 6 ) an application under Article 3 (2) of Regulation No 17 founds a right to require from the Commission a decision in respect of which proceedings may be instituted.

(c)

Finally, contrary to the point of view expressed by both the Commission and the intervener, the notice rejecting the application does affect the applicant adversely and it would seem to be justified to declare his action admissible. The Commission has a wide discretion in deciding whether or not to commence procedures under Regulation No 17 but, as I emphasized in my opinion in the FEDIOL case, ( 7 ) a completely discretionary power of assessment on the part of the administration is incompatible with the concept of law on which the Community legal order is based. The exercise of a discretion necessarily implies compliance with its purpose. Individuals therefore have the right to expect the discretion to be exercised properly since the provision conferring that power was also adopted in their interest. In this case Article 3 (2) (b) of Regulation No 17, which confers on natural or legal persons who claim a legitimate interest a right to submit an application, is itself sufficient to indicate that certain individual interests must be respected in exercising the power and that it is necessary, should an application be rejected, to allow the Court to verify that the said discretion has been properly exercised.

(d)

The fact that, as in emphasized in the penultimate recital in the preamble to Regulation No 17, “all decisions taken by the Commission under this regulation are subject to review by the Court of Justice under the conditions specified in the Treaty” also militates in favour of the admissibility of the present action.

(e)

The above considerations were clearly the basis of the Court's judgment in the Metro case ( 8 ) when it stated that it is in the interests of a satisfactory administration of justice and of the proper application of Articles 85 and 86 that natural or legal persons who are entitled, pursuant to Article 3 (2) (b) of Regulation No 17, to submit an application should be able, if their application is not met either wholly or in part, to institute proceedings in order to protect their legitimate interests. The Court concluded from that that decisions addressed to another person may be of direct and individual concern to an applicant, within the meaning of the second paragraph of Article 173. The need for appropriate legal protection must in any case be recognized all the more when the applicant is himself the person to whom the decision rejecting the application is addressed.

Consequently it is necessary to consider the action brought in respect of the Commission's letter of 11 May 1981 to be admissible.

(a)

The applicant maintains that the fact that he was not approved as a specialist dealer or was not supplied on account of the selective distribution system operated by Revox constitutes an infringement of Article 85 (1) of the Treaty. He does not dispute the basic validity of such a distribution system which allows manufacturers to select on the basis of specific criteria those dealers who are to distribute their goods but he does reject the criterion based on the opening hours of a shop. It is necessary therefore first to decide whether the selective distribution system operated by Revox is, in that respect, compatible with Article 85 (1) of the Treaty.

As the Court held in its judgment in the Metro case, cited above, it is particularly true in the sector covering the production of high quality and technically advanced consumer durables, such as electronic equipment for the leisure market, that selective distribution systems constitute, together with other distribution channels, an aspect of competition which accords with Article 85 (1) “provided that resellers are chosen on the basis of objective criteria of a qualitative nature relating to the technical qualifications of the reseller and his staff and the suitability of his trading premises and that such conditions are laid down uniformly for all potential resellers and are not applied in a discriminatory fashion”.

All the criteria relating to the selective distribution agreements in question are, as the Commission correctly states, objective criteria of a/qualitative and not a quantitative nature and therefore do not have a restrictive effect on the conditions of competition. That applies in particular to the criterion relating to the accessibility of the business premises during normal opening hours, which is essential for a retail shop. It is precisely in the case of expensive goods which involve giving advice to customers and an after-sales service, such as those which are the subject of the distribution agreements in question, that customers expect opening times covering the whole day, and that requirement does not unduly restrict access to the distribution system.

In any case, as the Commission states, even if a different view is taken, trade between Member States is not capable of being affected appreciably by such a clause since it involves the exclusion of only a small number of skilled retailers.

By opening his shop for only some two hours each day and on Saturday mornings Mr Schmidt does not comply completely with the objective and qualitative selection criteria and it cannot be argued that Revox has put its distribution system into effect in a discriminatory manner. It is irrelevant that the applicant, as he has stated, took steps in October 1977 to open his shop for the whole of the day or was ready to open it during the usual hours in the future. The only relevant factor is that he did not at any time actually comply with the criteria expected of specialist traders. A manufacturer does not have to supply his goods before the retailer complies with one of those criteria. If it were otherwise the risk of noncompliance would be borne by the manufacturer alone which is contrary to the spirit and purpose of a selective distribution contract.

If approval were given to persons not satisfying the selection criteria or not yet satisfying them, this might lead to discrimination against specialized dealers who generally have higher expenses and it would therefore be necessary to consider whether such application of a selective distribution contract was contrary to the prohibition contained in Article 85 (1) of the Treaty.

Contrary to the applicant's opinion, it is not possible to infer from the fact that he was approved as a specialist dealer in Sony products by the representative of Revox in the name of the Sony company that the criteria in question were applied in an inconsistent or discriminatory manner. Quite apart from the fact that the criterion relating to opening hours is not contained expressly in the distribution system operated by Sony, discrimination arises when one and the same person deals with comparable situations in a different manner without any objective justification, which is clearly not the case here.

Furthermore, the discriminatory operation of a selective distribution system also assumes that the manufacturer fails to apply the selection criteria uniformly to distributors or fails to withdraw approval from distributors who no longer satisfy those criteria. Consequently the fact that another company which has not been approved as a specialist dealer by Revox allegedly distributes Revox goods does not lead to the conclusion that Article 85 (1) of the Treaty has been infringed.

Even if it is admitted that an infringement of that provision existed at the time when the contested decision was adopted, the applicant cannot rely on that to claim a right to be approved as a specialist dealer or even to be supplied by the intervener. In fact the applicant fails to appreciate that the prohibition of agreements which restrict competition provides, as such, no legal basis for intervening in the contractual freedom of traders. Thus the fact that a selective distribution system is incompatible with Article 85 or that it is operated in a discriminatory manner does not entail an obligation on the part of Revox to approve the applicant as a specialized dealer, as he asks.

For all those reasons it is not possible to criticize the Commission for taking no steps in respect of the prohibition contained in Article 85 (1) or to allege that it has therefore misused its power.

(b)

Article 86 of the Treaty allows the Commission to act in respect of an abuse of a dominant position. According to the application itself which, taking the figures from a simple notice in a private information broadsheet, estimates that approximately 13% of the market in specialist trade in radio and television sets in Germany, Austria and Switzerland belongs to Revox, it is not possible to regard that company and its products as having such a position on the market in question. According to information provided by the Commission and Revox the company's share of the market in question is only roughly 1% in respect of record-players, amplifiers, radios and loudspeakers.

Moreover, as is also emphasized by Revox, even if it is accepted that there is a dominant position, it cannot be said that the position has been abused if the company in question operates, without discrimination, a distribution system which is justified from a technical point of view.

Consequently the contested decision cannot be challenged even on the basis of Article 86 of the Treaty.

(a)

Since the application for a declaration of the nullity of the Commission's decision of 11 May 1981 is unfounded the claim that the Commission should be ordered to take a fresh decision taking into account such a declaration is devoid of purpose and is in need of no further comment.

(b)

If, however, the Court were nevertheless to allow the first head of claim and declare the contested decision void, it would be necessary, in the alternative, to agree with the Commission and the intervener that such an action of restraint or establishing an obligation is not provided for by the EEC Treaty; thus it is inadmissible. In that respect it is sufficient to point cut that a judgment given under Article 173 is limited to declaring the contested measure void; according to Article 176 an institution whose act has been declared void is therefore required to take the necessary measures to comply with the judgment. The spirit and purpose of these provisions is therefore opposed to an interpretation of the second paragraph of Article 173 in the sense desired by the applicant.