‘(1)

Where the Commission, upon application or upon its own initiative, finds that there is infringement of Article 85 or Article 86 of the Treaty, it may by decision require the undertakings or associations of undertakings concerned to bring such infringement to an end.

(2)

Those entitled to make application are:

(3)

Without prejudice to the other provisions of this regulation, the Commission may, before taking a decision under paragraph 1, address to the undertakings or associations of undertakings concerned recommendations for termination of the infringement.’

1.

No doubt has been cast on the admissibility of the application itself and indeed no reservations should arise in that regard.

The Court has already declared (in the judgment in Case 26/76 ( 1 )) that persons who are entitled to make applications pursuant to Article 3 of Regulation No 17 may institute proceedings if their application is turned down (and see the judgment in Case 210/81 ( 2 ), where it was held in connection with the final communication of the result of a complaint that an action would lie where a request pursuant to Article 3 of Regulation No 17 was refused either wholly or in part). It is also evident that the CICCE whose members' sales opportunities are likely to be impaired by the French television companies' alleged conduct in restraint of competition, must be deemed to have a ‘legitimate interest’ within the meaning of Article 3 of Regulation No 17 (cf. Steindorf, Das Antragsrecht im EWG-Kartellverfahren und seine prozessuale Durchsetzung, in Außenwirtschaftsdienst des Betriebsberaters 1963, p. 353 et seq.; Deringer, Das Wettbewerbsrecht der Europäischen Wirtschaftsgemeinschaft, commentary on Article 3 of Regulation No 17).

By the same token there is no cause for concern in the fact that the contested decisions were taken by the Commission's Director- General for Competition or that the complaint refers, inter alia, to the letter of 12 July 1983 (calculated from the delivery of the latter, the filing of the application in December 1983 would have to be held to be out of time). Evidently — nothing to the contrary has been claimed in the proceedings — the Director-General for Competition has the power to take such decisions (and that is entirely reasonable), which must therefore be attributed without question to the Commission. Furthermore, there is no objection to the inclusion of the aforementioned letter of July 1983 in these proceeedings (not being a final act, it cannot itself be challenged; cf. von der Groeben, von Boeckh, Thiesing, Kommentar zum EWG-Vertrag, commentary on Article 3 of Regulation No 17), since its function, as the Commission itself has conceded, consists partly in supplying some of the reasons underlying the final decision suspending the procedure.

2.

In contrast, two other serious objections as to admissibility have been raised.

In that connection it refers to Article 6 of Regulation No 99/63 (quoted above). It argues that that provision determines the scope of the protection afforded to an applicant by court action: the only arguments that can be held to be admissible in the action before the Court are, the Commission contends, those embodied in the comments made pursuant to Article 6 of Regulation No 99/63, and reference to arguments that have played no rôle in those proceedings must be deemed to be precluded.

In my view, however, it is extremely doubtful whether that argument can be correct. There is certainly nothing to support it in the previous decisions of the Court. All that has been said (in the judgment in Case 125/78, ( 3 ) paragraph 17) is that Article 6 seeks to ensure that the applicant is informed of the reasons for refusing the application; it has also been stated that the Commission is not precluded from reopening the proceedings where the applicant puts forward fresh elements of law or of fact within the period granted to it for that purpose. The important point appears to be that the Commission's argument would result in a reduction of the legal protection which is evidently intended to be afforded to applicants by the Treaty in conjunction with Article 3 of Regulation No 17. Such a restriction would have to be clearly stated, however, (in the third paragraph of Article 38 of the ECSC Treaty or in Article 42 (2) of the Rules of Procedure, perhaps); a provision contained in a Commission regulation intended only to secure a final hearing for the applicant is scarcely sufficient for that purpose.

Unlike the Commission, I consider that in proceedings before the Court reviewing a decision to discontinue a Commission procedure, all the reasons stated by the Commission are, in principle, open to challenge and therefore it is appropriate when considering whether the Commission procedure should not in fact have been discontinued to take account of all the arguments advanced by the applicant. It is therefore unnecessary to decide whether the same conclusion could be drawn from the fact that in its first response (29 August 1983) the applicant described all the Commission's arguments as unsound or from the fact that the applicant referred in its concluding remarks to the aforementioned Opinion of the Commission de la Concurrence (in which, in its view, the arguments which the Commission deems to be inadmissible are expressed sufficiently plainly).

(a)

In the Commission's letter of 12 July 1983 it is stated (in paragraph 2) that the economic value of films is very variable (according to previous decisions of the Court, economic value is the criterion for assessing abusive price-fixing — see the judgments in Case 26/75 ( 4 ) and Case 27/76 ( 5 )) and depends in particular on a number of factors, which are listed as points (a) to (f).

It can readily be shown, however, that those criticisms are unconvincing.

As far as point (aa) is concerned, it is sufficient to point out that the Commission's letter includes among the factors determining value the size of the potential television audience, whether the film has already been shown on television and the time for which broadcasting rights are granted: none of those factors refers to the intrinsic value of the film (that is, its production costs, which is what the applicant obviously has in mind).

As regards the argument set out in point (bb) it is clear that the Commission certainly did not mean that the value of a given film depends on all the criteria listed, on the basis of which a points table, so to speak, might be drawn up. To me it is clear that the Commission intended only to point to criteria that might possibly be thought relevant in evaluating the value of a film.

As far as the criticism set out in point (cc) is concerned, the Commission argues cogently that what is meant is whether a film is shown for the first time on television; it cannot be otherwise under French law, with which the Commission is familiar, for in France films are only permitted to be shown on television when they have been shown for a certain time (three years) in the cinemas.

Finally, as regards the complaint set out in point (dd), the use of the word ‘notamment’ in the Commission's letter clearly shows that the list is not exhaustive. As the Commission has plainly stated, the price of a film is influenced by its drawing power (admittedly though, it is not stated exactly how that aspect is to be assessed when evaluating the licence fee). As regards the applicant's reference to the fact that advertisements which are shown immediately before films (Sunday evenings on TF 1) attract the highest rate, in the first place conclusions about the value of a film-broadcasting right cannot be derived directly from the price paid for a minute's advertising time, since the products concerned are entirely different from one another. Secondly, as the Commission points out, advertising rates on TF 1 during the week are the same regardless of whether the advertisement is shown before a film (as is frequently, but not invariably, the case on Mondays) or not (as on other weekdays).

(b)

In the Commission procedure (and, moreover, in the Court proceedings) the applicant has only dealt with aggregate figures — such as the amount allocated for film licence fees as a proportion of the television companies' total receipts, and a comparison of the average film licence fee with the average production costs of a television film. Consequently it is contended in paragraphs 3 and 4 of the Commission's letter of 12 July 1983 (and this appears to be the main thrust of the Commission's argument) that it is not possible to apply Article 86 of the EEC Treaty to a proportion of the television companies' budget: rather, any abuse must be determined with reference to specific films and to the fees paid for them.

The applicant does not accept that. It considers that if a general abuse can be determined from aggregate figures abuses can be presumed to have taken place in a series of individual cases. At least, it maintains, that state of affairs creates a presumption warranting further investigation of the facts, and the Commission was in breach of its duty in failing to make such an investigation.

In my opinion the Commission's view is correct on that point, too.

That presumption is certainly not justified on the basis of the information relating to the average film licence fees paid in other Member States, which the applicant supplied to the Commission in answer to question 11 of its request for information. From that it appears (the figures are for 1977) that in no country did the fees significantly exceed those reported for France (average fee FF 213000, highest fee FF 1 million); on the contrary, all the other countries recorded lower fees, with the sole exception of the Federal Republic of Germany, where the average fee — FF 223000 at the 1977 exchange rate — was somewhat higher than the average for France. Nor is it justified in my view in the light of the disclosure of the individual fees paid by the French television companies, because the differences may be attributable to the different values of the films concerned.

The applicant should have shown by means of individual examples — (being a European group, it should have had no difficuly in so doing) — that serious grounds for suspecting abuse existed, for instance by showing that in another Member State (particularly one where private television companies are in competition with one another) higher fees were obtained for a particular film or that powerful suppliers (of which there are some even in France) obtained higher fees for comparable films.

Since that was not done, the Commission's failure to undertake difficult, timeconsuming inquiries which would have kept its staff from other work can scarcely be termed an abuse of discretion.

(c)

Finally, reference must be made to the applicant's letter of 13 September 1983 in which it adverts to the aforementioned Opinion of the Commission de la Concurrence. (By contrast, the statements of the present President of the Republic, which are also mentioned there, are obviously of a political nature and do not constiture a legal assessment of the facts of this case, and therefore they cannot be cited directly in the present legal proceedings).

In the applicant's view the Opinion of the Commission de la Concurrence, at least, ought to have led, if not to a corresponding decision on the part of the Commission of the European Communities, to a continuation of the Commission procedure.

Here too, I am unable to agree with the applicant.

Admittedly the basic import of the two relevant provisions (Article 50 of the Ordonnance of 30 June 1945 and Article 86 of the EEC Treaty) is the same. However, the French system as a whole exhibits considerable differences as regards the (advisory) powers of the Commission de la Concurrence and the legal consequences of its findings and especially as regards Article 51 of the Ordonnance, which has no equivalent in Community law (see also Behrens and Korb-Schikaneder, Europäisches Wettbewerbsrecht vor französischen Gerichten, Rabeis Zeitschrift, Vol. 48, Issue 48, p. 457 et seq., especially pp. 464 to 466). The chief feature appears to be a marked tendency to generalize, as is apparent in the Opinion before the Court, (Steindorf, loc. cit., also refers to this tendency).

The conclusion must be — and this view is supported by the findings contained in the Opinion of the Commission de la Concurrence concerning Article 51 of the Ordonnance and by its aforementioned Report for 1979 — that it is not the purpose or object of the Commission's Opinion to make findings on the basis of Article 86 of the Treaty. As a result, its conclusions certainly cannot simply be taken over into Community law. For instance, they could not serve as a basis for the adoption of actual measures. The relationship between the amortization of the production costs of a film through cinema receipts on the one hand and television broadcasts on the other forms the cornerstone of the deliberations of the Commission de la Concurrence. But it is hard to find anything of relevance for assessing the fairness of film licence fees.

(d)

In sum, it may be said that in the light of what has emerged in these proceedings there are no grounds for criticizing the Commission for having adopted the contested decision on the basis of inaccurate information, or for having abused its discretion in regard to the procedure initiated at the applicant's request.