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The plaintiffs claiming damages in the first case, which led to the reference for a preliminary ruling in Case 253/78, own three perfumeries in Aix-en-Provence. They have long been attempting to obtain Guerlain's products for sale. The sales director of Guerlain S.A., the accused in the main action, refused this and in particular refused to fill an order of June 1975, pointing out that a distributorship agreement already existed with another perfumer in Aix-en-Provence. Since this may constitute a refusal to sell (refus de vente) which is a criminal offence under Article 37 of the French Order No 1483 cf 30 June 1945 in the version of the Decree of 24 June 1958 and according to the provisions of Order No 1484 of 30 June 1945, criminal proceedings were brought against the abovementioned sales director at the request of the persons who had placed the orders. In an action claiming damages in criminal proceedings in connexion with this it was claimed in addition that the court should order Guerlain S.A. and its sales director, jointly liable, to pay damages.

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One of the plaintiffs claiming damages in the two connected cases which gave rise to the reference for a preliminary ruling in Case 1/79 is the proprietor of a perfumery in Strasbourg, She attempted without success to obtain authorization to distribute Rochas products. Since that company refused in the period between March 1973 and February 1976 to fill orders, pointing out that distribution agreements existed with six other perfumeries in Strasbourg, she laid an information against the sales director of Rochas and in the criminal proceedings brought as a result she claimed in addition that the court should order him and Parfums Rochas, jointly liable, to pay damages.

The plaintiff claiming damages in the other case of interest in this connexion is the proprietor of a perfumery in Toulon. Her orders were also refused, pointing out distributorship agreements entered into by Rochas with five other dealers in Toulon. In this case however criminal proceedings were not brought in the end; the claim for damages put forward at first in the action claiming damages in criminal proceedings was later withdrawn.

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In two further cases pending before the Tribunal de Grande Instance, Paris, the abovementioned proprietor of a perfumery in Strasbourg is once again the plaintiff claiming damages. In the first case the essential point is that the managing director of Lanvin refused in the period from November 1972 to June 1975 to fill orders from the plaintiff claiming damages on the ground that distributorship agreements had already been entered into with eleven other perfumeries in Strasbourg. In the second case the matter at issue is that in the period from February 1973 to June 1975 the sales director of Nina Ricci rejected orders on the ground that distributorship agreements already existed with eleven other perfumeries in Strasbourg, some of whose shops were in the vicinity of the plaintiff claiming damages. In these two cases also criminal proceedings were brought and claims for damages lodged along the lines of the other cases.

1.

Since according to the operative parts of the references to the Court of Justice for preliminary rulings the exclusive dealing agreements entered into by the various perfume manufacturers involved must be submitted to the Court and since it is afterwards asked whether these undertakings benefit from Article 85 (3) of the EEC Treaty, it is appropriate to point out at the beginning the fact that in procedures under Article 177 of the EEC Treaty the Court of Justice may not apply Community law to an individual case, as it seems to be requested to do. If the validity of measures of Community law is not involved, it has power only to interpret Community law, in other words to construe the contents of that law; naturally, in order to give assistance in reaching a decision which is appropriate and restricted to the essentials, the special features of the main action must be taken into consideration in so doing. Accordingly the questions which have been raised should be reformulated, as the Court of Justice may do and has already done on many occasions. They might accordingly read as follows, as suggested by the Commission:

Must Article 85 (3) of the EEC Treaty be interpreted as meaning that agreements which are the outcome of a sales organization based not only on qualitative but also on quantitative criteria of selection in the sector of certain luxury products whose brand image is important may benefit from a decision of exemption?

2.

In addition it is necessary to point out that there is no objection to referring such a question to the Court for a preliminary ruling even if it may be deduced from Article 9 of Regulation No 17 that national courts and national authorities have no jurisdiction to apply Article 85 (3) and that the court making the reference therefore could not reach the finding that the conditions for the application of Article 85 (3) were fulfilled in the cases brought before it.

In this connexion reference may in fact be made to the judgment in Case 48/72 (SA Brasserie de Haecht v Oscar and Marie Wilkin, judgment of 6 February 1973 [1973] ECR 77). It was stated in that judgment on the one hand that a national court is not released from the duty, when, in proceedings pending before that court, a party relies upon Article 85 (1), which is directly applicable, to declare an agreement to be void in consequence thereof. On the other hand the court before which such proceedings are brought must decide whether there is cause to stay the proceedings in order to allow the parties to obtain the Commission's standpoint on Article 85 (3). There is however no cause for this if an agreement does not have any appreciable effect on competition or if there is no doubt that the agreement is incompatible with Article 85. In the latter case however a reference to the Court for the interpretation of Article 85 (3) may in fact be relevant. Accordingly this may result in the finding that this provision is not applicable to certain cases, which enables the Court to give a clear judgment on Article 85 (1) and provides the opportunity to declare that an agreement is void under Article 85 (2).

Therefore in spite of Article 9 of Regulation No 17 it is necessary to consider that a national court is also justified in raising questions of the interpretation of Article 85 (3).

3.

In raising such a question, the Tribunal de Grande Instance, Paris, assumes, and this is a logical condition for the application of Article 85 (3), that Article 85 (1) applies to the case before it. It is necessary however to examine this assumption. In the procedure for obtaining a clear that the Commission takes the view that, after the deletion of several clauses which were initially applicable to the distribution systems, in other words according to the version of the relevant agreements now in force, the prohibition laid down in Article 85 (1) no longer applies. It is necessary to point this out clearly to the court making the reference and in this connexion it is no doubt appropriate also to say a few words in clarification of Article 85 (1). As the Commission has suggested, the following question might be formulated which may be regarded as contained by implication in the request for interpretation: “Must article 85 (1) of the EEC Treaty be interpreted as meaning that agreements which are the outcome of a sales organization based not only on qualitative but also on quantitative criteria of selection in the sector of certain luxury products whose brand image is important are incompatible with the common market and therefore prohibited pursuant to that provision?”

4.

Finally, I still have the impression that the main problem in the main action is the question whether after the Commission's appraisal of the distribution systems it is still possible to apply the abovementioned stricter French provisions on refusal to sell, according to which it is evidently impossible to rely upon such selective distribution systems.

In this connexion it is necessary to examine whether in fact under Community law (Article 85 (3)) there was actually an exemption which, as a positive measure of Community law, may not be deprived of its effects by national law derogating from it. In addition, it is necessary to consider whether even if such an exemption was not granted considerations of Community law tell against the application of national law. It is probably, but not only, necessary in this connexion to consider the application of Regulation No 67/67/EEC (Official Journal, English Special Edition 1967, p. 10), the regulation on block exemption, or the legal effects of agreements duly notified to the Commission.

1.

The problem whether Article 85 (1) is applicable to distribution systems according to which not every interested retailer is supplied but a selection is made according to qualitative and quantitative criteria logically takes first place.

In this respect reference my be made to the judgment in Case 26/76 (Metro SBGroßmärkte GmbH & Co. KG v Commission, judgment of 25 October 1977 [1977] ECR 1875) so far as qualitative selection criteria are concerned. In that judgment it was emphasized in general that it is necessary to take into consideration as regards the application of Article 85 (1) the fact that the nature and intensity of competition may vary according to the products in question and the structure of the relevant market sector. Selective distribution systems might therefore be compatible with Article 85 (1) — which then also applies to the measures of control connected therewith — if the resellers are selected on the basis of objective criteria of a qualitative nature. It is certainly readily conceivable that this may also be correct as regards the perfume sector, a field in which the producers are indeed at liberty to define their clientele and in which well-known brands to which the image of exclusivity is linked play a part. If in this connexion a certain standard of reseller is regarded as important this should, according to the nature of the products, whose value and freshness must be guaranteed and with regard to which specialist advice must be provided, be just as justified as in the case of the superior technical products which were at issue in the Metro case and with regard to which the reputation of the brand was also a decisive factor.

If in addition to qualitative criteria of selection quantitative criteria are also added — the admission of a limited number of resellers in a certain area according to purchasing power, so that each reseller is guaranteed a certain earning power — it certainly cannot be contested that this leads, within the category of dealers who fulfil the qualitative conditions, to a restriction on competition. It is also possible to speak of a restriction on competition under Article 85 (1) (b) because the sales outlets of the authorized retailers are restricted by the prohibition on supplying dealers outside the distribution network.

This still does not however necessarily give rise to the finding that Article 85 (1) actually applies. According to the case-law (judgments in Case 56/65, Société Technique Minière v Maschinenbau Ulm GmbH, judgment of 30 June 1966 [1966] ECR 281 and in Case 22/71, Béguelin Import Co and Others v S.A. G.L. Import Export and Others, judgment of 25 November 1971 [1971] ECR 949) the important factor is in fact whether trade between the Member States and competition is appreciably affected. For the purpose of this decision the economic and legal context of an agreement is important (Case 23/67, S.A. Brasserie de Haecht v Oscar and Marie Wilkin, judgment of 12 December 1967 [1967] ECR 407 and Case 22/71 — Bégulin). In so doing it is necessary to take into consideration all the objective factors of law or of fact and the accompanying economic circumstances surrounding the performance of an agreement (Case 56/65, quoted above, and Case 1/71 S.A. Cadillon v Firma Höss Maschinenbau KG, judgment of 6 May 1971 [1971] ECR 351). In this connexion the existence of similar agreements between the same manufacturer and concessionnaires in other Member States is relevant (Cases 23/67 and 22/71). A decisive factor is also the fact that other competing manufacturers have a similar practice. In addition the position of those concerned on the market must be taken into consideration (Case 5/69, Franz Völk v Etablissements J. Vervaecke S.p.r.l, judgment of 9 July 1969 [1969] ECR 295 and Case 1/71, quoted above). Finally it is also of importance whether obstacles to trade are set up for the products in question (Case 56/65).

As a result of what has become known in the proceedings in particular through the Commission's statements as regards the small size of the market shares held by individual perfume manufacturers, the size of the network of each authorized retailer, the considerable number of competing manufacturers, and also the fact that authorized dealers may deliver supplies across the frontiers of the Member States and may determine the selling prices freely, it is totally conceivable that the distribution systems of interest in the main actions have no appreciable effects within the meaning of the abovementioned case-law. In any case this is the decision reached, as was expressly stated, by the departments of the Commission. Nevertheless this decision is not binding on the court making the reference. In this respect it must rather, because Article 85 (1) of the EEC Treaty is directly applicable and no exclusive power in this connexion has been laid down for the Community institutions in this respect, form its own decision and in so doing it is naturally possible, although unlikely, that having examined in detail all the facts which have perhaps changed in the meantime, for it to reach a different evaluation.

2.

If the court making the reference should reach the view with the help of such considerations that the distribution systems are covered by Article 85 (1), then the questions further arise whether for example the regulation on block exemption, Regulation No 67/67/EEC, is applicable, whether it is not necessary in fact to assume that the Commission took ą decision of exemption under Article 85 (3), and finally whether the application of Article 85 (3) comes into consideration at all or whether it may no doubt be excluded in such cases.

3.

Following this I now reach a final series of questions in the request for a preliminary ruling, those which are surely the most important from the point of view of the court making the reference. According to that court what is involved is the applicability of the Fench provisions on “refus de vente” (refusal to sell) which, together with the penalties laid down by the provisions, is under consideration, although the selective distribution systems which are supposed to justify the refusal to sell are appraised by the Commission from the point of view of Community law.

Following all the preceding statements, the main question is whether the application of the stricter national law may be envisaged if Community law does not apply in the absence of the conditions laid down in Article 85 (1). Secondly, I should still in addition deal with the problem of what happens if Article 85 (1) is after all applicable. In this connexion it is necessary to consider not only the results in Community law of invalidity under Article 85 (2) but also the legal effects of old agreements duly notified and any need which might exist to stay national proceedings if it can be seen that there is an opportunity for the Commission to adopt a decision of exemption.

1.

The letters sent to the perfume manufacturers involved in the criminal proceedings before the Tribunal de Grande Instance, Paris, dated 28 October 1975, 26 March 1976, 22 September 1976 and 20 January 1978 and signed by the Director-General for Competition or a Director in that Directorate-General do not contain any decisions of exemption under Article 85 (3) of the EEC Treaty but only express the view that on the basis of the factors known at that time there was no reason to take action under Article 85 (1) of the EEC Treaty.

2.

It is necessary to appraise the question whether Article 85 (1) must be applied to a sales organization based not only on qualitative but also on quantitative criteria of selection according to all the accompanying legal and economic circumstances (type of product, market share of the manufacturer, number and market position of competitors, existence of similar distributorship agreements and the existence of clauses which affect trade between Member States and exclude the free fixing of prices); it is necessary to ascertain accordingly whether it is possible to speak of an appreciable effect on competition and an appreciable effect on trade between Member States.

3.

If the conditions for the application of Article 85 (1) are fulfilled, such a sales organization may only be treated by national courts as invalid on the basis of Community law if Regulation No 67/67/EEC of 22 March 1967 is not applicable, if they are old agreements which are provisionally valid and if there is no doubt that Article 85 (3) cannot be applied, in other words there is no reasonable cause to request the Commission to give an opinion.

4.

If the conditions for the application of Article 85 (1) to a selective sales organization are not fulfilled in that case there is nothing to prevent the application of national law.

If the conditions for the application of Article 85 (1) are fulfilled, national law may only be applied to such agreements on the condition that and the extent to which it does not result in any jeopardization of the uniform application of Community law and the effectiveness of any measures issued in implementation thereof are not endangered.