61979J0037

1 . COMPETITION - AGREEMENTS - NOTIFICATION - DECISION BY THE COMMISSION TO CLOSE THE FILE ON THE CASE - LEGAL NATURE - EFFECT ON THE FINDING OF NATIONAL COURTS AS REGARDS THE AGREEMENT IN QUESTION

( EEC TREATY , ART . 85 )

2 . COMPETITION - COMMUNITY RULES - PROHIBITIONS LAID DOWN IN ARTICLES 85 AND 86 OF THE EEC TREATY - DIRECT EFFECT - JURISDICTION OF NATIONAL COURTS - INITIATION BY THE COMMISSION OF A PROCEDURE UNDER ARTICLES 2 , 3 OR 6 OF REGULATION NO 17 - EFFECTS

( EEC TREATY , ARTS 85 AND 86 ; REGULATION NO 17 OF THE COUNCIL , ART . 9 ( 3 ))

3 . COMPETITION - INITIATION OF A PROCEDURE UNDER ARTICLES 2 , 3 OR 6 OF REGULATION NO 17 - CONCEPT - NOT A DECISION TO CLOSE THE FILE ON THE CASE

( REGULATION NO 17 OF THE COUNCIL , ART . 9 ( 3 ))

1 . AN ADMINISTRATIVE LETTER DESPATCHED WITHOUT PUBLICATION AS LAID DOWN IN REGULATION NO 17 INFORMING THE UNDERTAKING CONCERNED OF THE COMMISSION ' S OPINION THAT THERE IS NO NEED FOR IT TO TAKE ACTION IN RESPECT OF THE AGREEMENTS IN QUESTION AND THAT THE FILE ON THE CASE MAY THEREFORE BE CLOSED CONSTITUTES NEITHER A DECISION GRANTING NEGATIVE CLEARANCE NOR A DECISION APPLYING ARTICLE 85 ( 3 ) OF THE EEC TREATY WITHIN THE MEANING OF ARTICLE 2 AND 6 OF REGULATION NO 17 .

SUCH A LETTER DOES NOT HAVE THE RESULT OF PREVENTING NATIONAL COURTS BEFORE WHICH THE AGREEMENTS IN QUESTION ARE ALLEGED TO BE INCOMPATIBLE WITH ARTICLE 85 OF THE TREATY FROM REACHING A DIFFERENT FINDING AS REGARDS THE AGREEMENTS IN QUESTION ON THE BASIS OF THE INFORMATION AVAILABLE TO THEM . WHILST IT DOES NOT BIND THE NATIONAL COURTS , THE OPINION TRANSMITTED IN SUCH A LETTER NEVERTHELESS CONSTITUTES A FACTOR WHICH THE NATIONAL COURTS MAY TAKE INTO ACCOUNT IN EXAMINING WHETHER THE AGREEMENTS OR CONDUCT IN QUESTION ARE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 85 .

2 . SINCE THE PROHIBITIONS CONTAINED IN ARTICLES 85 ( 1 ) AND 86 OF THE EEC TREATY TEND BY THEIR VERY NATURE TO PRODUCE DIRECT EFFECTS IN RELATIONS BETWEEN INDIVIDUALS , THOSE ARTICLES CREATE DIRECT RIGHTS IN RESPECT OF THE INDIVIDUALS CONCERNED WHICH THE NATIONAL COURTS MUST SAFEGUARD . TO DENY , BY VIRTUE OF ARTICLE 9 OF REGULATION NO 17 , THE NATIONAL COURTS JURISDICTION TO AFFORD THAT SAFEGUARD WOULD MEAN DEPRIVING THE INDIVIDUALS OF RIGHTS WHICH THEY HOLD UNDER THE TREATY ITSELF . IT FOLLOWS THAT THE INITIATION BY THE COMMISSION OF A PROCEDURE UNDER ARTICLES 2 , 3 OR 6 OF THAT REGULATION CANNOT EXEMPT A NATIONAL COURT BEFORE WHICH THE DIRECT EFFECT OF ARTICLE 85 ( 1 ) IS PLEADED FROM GIVING JUDGMENT .

NEVERTHELESS , IN SUCH A CASE IT IS OPEN TO THE NATIONAL COURT , IF IT CONSIDERS IT NECESSARY FOR REASONS OF LEGAL CERTAINTY , TO STAY THE PROCEEDINGS BEFORE IT WHILE AWAITING THE OUTCOME OF THE COMMISSION ' S ACTION .

3 . ARTICLE 9 OF REGULATION NO 17 , WHEN REFERRING TO THE INITIATION OF A PROCEDURE UNDER ARTICLES 2 , 3 OR 6 OF THAT REGULATION , CONCERNS AN AUTHORITATIVE ACT OF THE COMMISSION , EVIDENCING ITS INTENTION OF TAKING A DECISION UNDER THE SAID ARTICLES . THEREFORE AN ADMINISTRATIVE LETTER INFORMING THE UNDERTAKING CONCERNED THAT THE FILE ON ITS CASE HAS BEEN CLOSED DOES NOT AMOUNT TO THE INITIATION OF A PROCEDURE PURSUANT TO ARTICLES 2 , 3 OR 6 OF REGULATION NO 17 .

IN CASE 37/79

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNAL DE COMMERCE ( COMMERCIAL COURT ), PARIS , THIRD CHAMBER , FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

ANNE MARTY S.A ., PARIS ,

AND

ESTEE LAUDER S.A ., PARIS

ON THE INTERPRETATION OF ARTICLE 85 OF THE EEC TREATY AND OF CERTAIN MEASURES IMPLEMENTING THAT PROVISION ,

1 BY JUDGMENT OF 28 FEBRUARY 1979 , WHICH WAS RECEIVED AT THE REGISTRY OF THE COURT ON 2 MARCH 1979 , THE TRIBUNAL DE COMMERCE , PARIS , ( THIRD CHAMBER ), SUBMITTED TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE TREATY QUESTIONS ON THE INTERPRETATION OF ARTICLE 85 OF THE TREATY AND OF CERTAIN PROVISIONS OF REGULATION NO 17 OF THE COUNCIL OF 6 FEBRUARY 1962 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1959-1962 , P . 87 ).

2 THOSE QUESTIONS ARE PUT IN THE CONTEXT OF A DISPUTE BETWEEN ESTEE LAUDER S.A . AND A PERFUMERY RETAILER WHICH DOES NOT FORM PART OF THE SELECTIVE DISTRIBUTION NETWORK SET UP BY ESTEE LAUDER . AFTER ESTEE LAUDER REFUSED TO FULFIL AN ORDER PLACED BY THAT RETAILER THE LATTER , ON 5 MAY 1978 , BROUGHT PROCEEDINGS AGAINST ESTEE LAUDER BEFORE THE TRIBUNAL DE COMMERCE , PARIS , CLAIMING THAT ESTEE LAUDER SHOULD BE ORDERED TO DELIVER THE GOODS REQUESTED AND TO PAY DAMAGES . THAT ACTION IS BASED UPON THE INFRINGEMENT OF ARTICLE 37 ( 1 ) ( A ) OF THE FRENCH ORDER NO 45-1483 OF 30 JUNE 1945 ON PRICES WHICH PROHIBITS A REFUSAL TO SELL . THE PLAINTIFF IN THE MAIN ACTION ALSO SUBMITS THAT THE SELECTIVE DISTRIBUTION SYSTEM RELIED UPON BY ESTEE LAUDER IN ORDER TO JUSTIFY THE CONTESTED REFUSAL TO SELL IS CONTRARY TO ARTICLE 85 ( 1 ) OF THE TREATY .

3 IN ITS DEFENCE ESTEE LAUDER ARGUED THAT THE AGREEMENTS SETTING UP ITS DISTRIBUTION SYSTEM , WHICH IS BASED UPON BOTH QUANTITATIVE AND QUALITATIVE CRITERIA OF SELECTION , HAVE BEEN ACKNOWLEDGED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES TO CONFORM WITH COMMUNITY COMPETITION RULES AND THAT THAT APPROVAL BY THE COMMISSION PREVENTED THE APPLICATION OF THE PROHIBITIONS PROVIDED FOR BY NATIONAL COMPETITION LAW . IN THAT REGARD ESTEE LAUDER MADE REFERENCE TO A LETTER OF 23 MARCH 1977 FROM THE COMMISSION ' S DIRECTORATE-GENERAL FOR COMPETITION INFORMING IT THAT ' ' THE AUTHORIZED DISTRIBUTORSHIP AGREEMENT AND THE CONDITIONS OF SALE APPLIED BY YOUR COMPANY IN FRANCE MAY BE CONSIDERED , TAKING ACCOUNT OF THE ECONOMIC CONTEXT IN WHICH THEY OPERATE , AS NOT CAPABLE OF BEING AFFECTED BY THE RULES ON COMPETITION CONTAINED IN THE EEC TREATY ' ' .

4 THE TRIBUNAL DE COMMERCE , PARIS , DECIDED TO STAY THE PROCEEDINGS AND SUBMITTED TO THE COURT OF JUSTICE THE FOLLOWING QUESTIONS FOR A PRELIMINARY RULING :

' ' ( 1 ) DOES THE LETTER OF 23 MARCH 1977 OF THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH DOES NOT CONTAIN THE WORDS ' NEGATIVE CLEARANCE ' AND SEEMS TO HAVE BEEN ISSUED WITHOUT BEING PUBLISHED AS LAID DOWN IN REGULATION NO 17 , CONSTITUTE A NEGATIVE CLEARANCE?

( 2 ) IF THE ANSWER IS IN THE AFFIRMATIVE , DOES THE LETTER OF 23 MARCH 1977 CONSTITUTE A COMMISSION DECISION WHICH MAY BE INVOKED IN RELATION TO THIRD PARTIES AND IS BINDING UPON THE COURTS OF THE MEMBER STATES OF THE COMMUNITY?

( 3)IF THE ANSWER TO THE FIRST OR THE SECOND QUESTION IS IN THE NEGATIVE , HAS A PROCEDURE BEEN INITIATED WITHIN THE MEANING OF ARTICLE 9 ( 3 ) OF REGULATION NO 17 AND WHICH AUTHORITIES ARE AT PRESENT COMPETENT TO ENFORCE ARTICLE 85 ( 1 ) OF THE TREATY?

' '

THE FIRST AND SECOND QUESTIONS

5 IN THE FIRST QUESTION THE COURT IS ASKED TO SPECIFY THE LEGAL NATURE OF LETTERS SUCH AS THAT WHICH WAS SENT TO THE DEFENDANT IN THE MAIN ACTION BY THE COMMISSION ' S DIRECTORATE-GENERAL FOR COMPETITION . THE SECOND QUESTION SEEKS TO ASCERTAIN THE EFFECTS WHICH SUCH LETTERS MAY PRODUCE AS REGARDS NATIONAL COURTS . THESE TWO QUESTIONS SHOULD BE CONSIDERED TOGETHER .

6 ARTICLE 87 ( 1 ) OF THE TREATY AUTHORIZED THE COUNCIL TO ADOPT ANY APPROPRIATE REGULATIONS OR DIRECTIVES TO GIVE EFFECT TO THE PRINCIPLES SET OUT IN ARTICLES 85 AND 86 . IN ACCORDANCE WITH THAT AUTHORIZATION THE COUNCIL HAS ADOPTED REGULATIONS , IN PARTICULAR REGULATION NO 17 OF 6 FEBRUARY 1962 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1959-1962 , P . 87 ), WHICH GAVE THE COMMISSION POWER TO ADOPT VARIOUS CATEGORIES OF REGULATION , DECISION AND RECOMMENDATION .

7 THE INSTRUMENTS THUS PLACED AT THE COMMISSION ' S DISPOSAL FOR THE ACCOMPLISHMENT OF ITS TASK INCLUDE DECISIONS GRANTING NEGATIVE CLEARANCE AND DECISIONS APPLYING ARTICLE 85 ( 3 ). SO FAR AS DECISIONS GRANTING NEGATIVE CLEARANCE ARE CONCERNED , ARTICLE 2 OF REGULATION NO 17 OF THE COUNCIL PROVIDES THAT , UPON APPLICATION BY THE UNDERTAKINGS CONCERNED , THE COMMISSION MAY CERTIFY THAT , ON THE BASIS OF THE FACTS IN ITS POSSESSION , THERE ARE NO GROUNDS UNDER ARTICLE 85 ( 1 ) OR ARTICLE 86 OF THE TREATY FOR ACTION ON ITS PART IN RESPECT OF AN AGREEMENT , DECISION OR PRACTICE . SO FAR AS DECISIONS APPLYING ARTICLE 85 ( 3 ) ARE CONCERNED , ARTICLE 6 ET SEQ . OF REGULATION NO 17 PROVIDE THAT THE COMMISSION MAY ADOPT DECISIONS DECLARING THE PROVISIONS OF ARTICLE 85 ( 1 ) TO BE INAPPLICABLE TO A GIVEN AGREEMENT PROVIDED THAT THE LATTER HAS BEEN NOTIFIED TO IT OR NOTIFICATION HAS BEEN DISPENSED WITH BY VIRTUE OF ARTICLE 4 ( 2 ) OF THE REGULATION .

8 REGULATION NO 17 AND THE REGULATIONS ISSUED IN IMPLEMENTATION THEREOF LAY DOWN THE RULES WHICH MUST BE FOLLOWED BY THE COMMISSION IN ADOPTING THE AFOREMENTIONED DECISIONS . WHERE THE COMMISSION INTENDS TO GIVE NEGATIVE CLEARANCE PURSUANT TO ARTICLE 2 OR TAKE A DECISION IN APPLICATION OF ARTICLE 85 ( 3 ) OF THE TREATY , IT IS BOUND , IN PARTICULAR , BY VIRTUE OF ARTICLE 19 ( 3 ) OF REGULATION NO 17 TO PUBLISH A SUMMARY OF THE RELEVANT APPLICATION OR NOTIFICATION AND INVITE ALL INTERESTED THIRD PARTIES TO SUBMIT THEIR OBSERVATIONS WITHIN A TIME-LIMIT WHICH IT SHALL FIX . DECISIONS GRANTING NEGATIVE CLEARANCE AND EXEMPTIONS MUST BE PUBLISHED , AS PROVIDED FOR BY ARTICLE 21 ( 1 ) OF THAT REGULATION .

9 IT IS PLAIN THAT A LETTER SUCH AS THAT SENT TO THE DEFENDANT IN THE MAIN ACTION BY THE DIRECTORATE-GENERAL FOR COMPETITION , WHICH WAS DESPATCHED WITHOUT PUBLICATION AS LAID DOWN IN ARTICLE 19 ( 3 ) OF REGULATION NO 17 AND WHICH WAS NOT PUBLISHED PURSUANT TO ARTICLE 21 ( 1 ) OF THAT REGULATION , CONSTITUTES NEITHER A DECISION GRANTING NEGATIVE CLEARANCE NOR A DECISION APPLYING ARTICLE 85 ( 3 ) WITHIN THE MEANING OF ARTICLES 2 AND 6 OF REGULATION NO 17 . AS IS STRESSED BY THE COMMISSION ITSELF , IT IS MERELY AN ADMINISTRATIVE LETTER INFORMING THE UNDERTAKING CONCERNED OF THE COMMISSION ' S OPINION THAT THERE IS NO NEED FOR IT TO TAKE ACTION IN RESPECT OF THE CONTRACTS IN QUESTION UNDER THE PROVISIONS OF ARTICLE 85 ( 1 ) OF THE TREATY AND THAT THE FILE ON THE CASE MAY THEREFORE BE CLOSED .

10 SUCH A LETTER , WHICH IS BASED ONLY UPON THE FACTS IN THE COMMISSION ' S POSSESSION , AND WHICH REFLECTS THE COMMISSION ' S ASSESSMENT AND BRINGS TO AN END THE PROCEDURE OF EXAMINATION BY THE DEPARTMENT OF THE COMMISSION RESPONSIBLE FOR THIS , DOES NOT HAVE THE RESULT OF PREVENTING NATIONAL COURTS BEFORE WHICH THE AGREEMENTS IN QUESTION ARE ALLEGED TO BE INCOMPATIBLE WITH ARTICLE 85 FROM REACHING A DIFFERENT FINDING AS REGARDS THE AGREEMENTS IN QUESTION ON THE BASIS OF THE INFORMATION AVAILABLE TO THEM . WHILST IT DOES NOT BIND THE NATIONAL COURTS , THE OPINION TRANSMITTED IN SUCH LETTERS NEVERTHELESS CONSTITUTES A FACTOR WHICH THE NATIONAL COURTS MAY TAKE INTO ACCOUNT IN EXAMINING WHETHER THE AGREEMENTS OR CONDUCT IN QUESTION ARE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 85 .

11 THE FIRST TWO QUESTIONS PUT BY THE NATIONAL COURT SHOULD THEREFORE BE ANSWERED IN THE MANNER INDICATED ABOVE .

THE THIRD QUESTION

12 THE THIRD QUESTION SEEKS TO ASCERTAIN THE POWERS OF NATIONAL COURTS TO APPLY ARTICLE 85 ( 1 ), REGARD BEING HAD TO THE PROVISIONS OF ARTICLE 9 ( 3 ) OF REGULATION NO 17 WHICH IS WORDED AS FOLLOWS :

' ' AS LONG AS THE COMMISSION HAS NOT INITIATED ANY PROCEDURE UNDER ARTICLES 2 , 3 OR 6 , THE AUTHORITIES OF THE MEMBER STATES SHALL REMAIN COMPETENT TO APPLY ARTICLE 85 ( 1 ) AND ARICLE 86 IN ACCORDANCE WITH ARTICLE 88 OF THE TREATY . . . ' '

13 AS THE COURT HELD IN ITS JUDGMENT OF 30 JANUARY 1974 IN CASE 127/73 , BRT V SABAM ( 1974 ) ECR 51 , SINCE THE PROHIBITIONS CONTAINED IN ARTICLES 85 ( 1 ) AND 86 TEND BY THEIR VERY NATURE TO PRODUCE DIRECT EFFECTS IN RELATIONS BETWEEN INDIVIDUALS , THOSE ARTICLES CREATE DIRECT RIGHTS IN RESPECT OF THE INDIVIDUALS CONCERNED WHICH THE NATIONAL COURTS MUST SAFEGUARD . TO DENY , BY VIRTUE OF ARTICLE 9 OF REGULATION NO 17 , THE NATIONAL COURTS ' JURISDICTION TO AFFORD THAT SAFEGUARD WOULD MEAN DEPRIVING THE INDIVIDUALS OF RIGHTS WHICH THEY HOLD UNDER THE TREATY ITSELF . IT FOLLOWS THAT THE INITIATION BY THE COMMISSION OF A PROCEDURE UNDER ARTICLES 2 , 3 OR 6 OF THAT REGULATION CANNOT EXEMPT A NATIONAL COURT BEFORE WHICH THE DIRECT EFFECT OF ARTICLE 85 ( 1 ) IS PLEADED FROM GIVING JUDGMENT .

14 NEVERTHELESS , IN SUCH A CASE IT IS OPEN TO THE NATIONAL COURT , IF IT CONSIDERS IT NECESSARY FOR REASONS OF LEGAL CERTAINTY , TO STAY THE PROCEEDINGS BEFORE IT WHILE AWAITING THE OUTCOME OF THE COMMISSION ' S ACTION . ON THAT MATTER , HOWEVER , IT SHOULD BE NOTED THAT , AS THE COURT HAS ALREADY HELD IN ITS JUDGMENT OF 6 FEBRUARY 1973 IN CASE 48/72 , BRASSERIE DE HAECHT II ( 1973 ) ECR 77 , ' ' ARTICLE 9 , WHEN REFERRING TO THE INITIATION OF A PROCEDURE UNDER ARTICLES 2 , 3 OR 6 , OBVIOUSLY CONCERNS AN AUTHORITATIVE ACT OF THE COMMISSION , EVIDENCING ITS INTENTION OF TAKING A DECISION UNDER THE SAID ARTICLES ' ' .

15 AN ADMINISTRATIVE LETTER SUCH AS THAT SENT TO THE DEFENDANT IN THE MAIN ACTION , FAR FROM EVIDENCING SUCH AN INTENTION , INDICATES , ON THE CONTRARY , THAT THE FILE ON THE MATTER HAS BEEN CLOSED AND THAT THE ADOPTION OF A DECISION IS NOT CONTEMPLATED .

16 ACCORDINGLY , THE ANSWER TO THE THIRD QUESTION SHOULD BE THAT THE JURDISDICTION OF NATIONAL COURTS BEFORE WHICH THE DIRECT EFFECT OF ARTICLE 85 ( 1 ) IS RELIED UPON IS NOT RESTRICTED BY ARTICLE 9 ( 3 ) OF REGULATION NO 17 . IN ANY CASE AN ADMINISTRATIVE LETTER INFORMING THE UNDERTAKING CONCERNED THAT THE FILE ON ITS CASE HAS BEEN CLOSED DOES NOT AMOUNT TO THE INITIATION OF A PROCEDURE PURSUANT TO ARTICLES 2 , 3 OR 6 OF REGULATION NO 17 .

17 THE COSTS INCURRED BY THE BELGIAN GOVERNMENT , THE DANISH GOVERNMENT , THE NETHERLANDS GOVERNMENT , THE FRENCH GOVERNMENT , THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY , THE GOVERNMENT OF THE UNITED KINGDOM AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,

THE COURT ,

IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE TRIBUNAL DE COMMERCE , PARIS , BY ORDER OF 28 FEBRUARY 1979 , HEREBY RULES :

1 . AN ADMINISTRATIVE LETTER INFORMING THE UNDERTAKING CONCERNED OF THE COMMISSION ' S OPINION THAT THERE IS NO NEED FOR IT TO TAKE ANY ACTION IN RESPECT OF CERTAIN AGREEMENTS UNDER THE PROVISIONS OF ARTICLE 85 ( 1 ) DOES NOT HAVE THE EFFECT OF PREVENTING NATIONAL COURTS , BEFORE WHICH THE AGREEMENTS IN QUESTION ARE ALLEGED TO BE INCOMPATIBLE WITH ARTICLE 85 , FROM REACHING A DIFFERENT FINDING AS REGARDS THE AGREEMENTS IN QUESTION ON THE BASIS OF INFORMATION AVAILABLE TO THEM . WHILST IT DOES NOT BIND THE NATIONAL COURTS , THE OPINION TRANSMITTED IN SUCH LETTERS NEVERTHELESS CONSTITUTES A FACTOR WHICH THE NATIONAL COURTS MAY TAKE INTO ACCOUNT IN EXAMINING WHETHER THE AGREEMENTS OR CONDUCT IN QUESTION ARE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 85 .

2 . THE JURISDICTION OF NATIONAL COURTS BEFORE WHICH THE DIRECT EFFECT OF ARTICLE 85 ( 1 ) IS RELIED UPON IS NOT RESTRICTED BY ARTICLE 9 ( 3 ) OF REGULATION NO 17 . IN ANY CASE AN ADMINISTRATIVE LETTER INFORMING THE UNDERTAKING CONCERNED THAT THE FILE ON ITS CASE HAS BEEN CLOSED DOES NOT AMOUNT TO THE INITIATION OF A PROCEDURE PURSUANT TO ARTICLES 2 , 3 OR 6 OF REGULATION NO 17 .