(a)

Let us then look first at those questions by which the court making the reference, and referring in particular to Articles 2, 3 (f) and 5 of the EEC Treaty, seeks to know whether the principle of free movement of goods in the Common Market gives rise to subjective rights in favour of individuals which must be respected by the national courts.

In so far as these provisions are concerned the answer to the questions put is not difficult, since as regards Article 5, decided cases have already made it clear that on account of its general wording it is not directly applicable in the sense of giving rise to subjective rights in favour of individuals. The judgment in Case 78/70 (Deutsche Grammophon Gesellschaft v Metro, Rec. 1971, p. 498) stresses that Article 5 gives rise only to a general obligation on Member States, the substance of which depends in the individual case on the provisions of the Treaty or the rules which arise from the general system of the Treaty. Further, there is for me no doubt that the two other provisions mentioned must, in view of their wording — it is noteworthy that Article 3 (f) clearly refers to other provisions of the Treaty — be regarded in the same way. One should not be led astray by certain observations in the judgment in Case 6/72 (Europembatlage and Continental Can v Commission, [1973] ECR (215)). They only stress the great significance of Articles 2 and 3 with regard to the interpretation of another principle of the Treaty (Article 86), which is in fact directly applicable. In no way can the conclusion be drawn from this judgment that the introductory articles of the Treaty contain in themselves sufficiently specific legal principles to give rise on their own to subjective rights in favour of individuals.

In the absence of establishment of clear principles and in the absence of the statement of clear legal consequences it must therefore be maintained that it appears out of the question that Article 2, 3 (f) and 5 of the Treaty, either alone or jointly, can have a legal character which is of significance in dealing with proceedings in national courts.

As regards the principle of the free movement of goods, which is at the centre of the first question, it may certainly be said that it has basic significance for the Common Market and that it expresses a fundamental concern of the Community. This already follows from Article 3 (a), according to which the activities of the Community include ‘the elimination, as between Member States, of customs duties and of quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect’. Support is also provided for this by the fact that Title I of Part Two of the Treaty, ‘Foundations of the Community’, has the heading ‘Free Movement of Goods’.

Nevertheless, the observation which the Italian and German Governments and likewise the Commission make, that the said principle is not so clearly expressed and defined that it can be treated as a legal rule to which specific legal consequences attach, must be regarded as correct. The expression of what, as Mr Sacchi significantly says, has to be established under the Treaty is terms of ‘relationships similar to those of a domestic market’ must rather be derived in detail from the specific provisions of the Treaty.

It is therefore significant that Article 9 provides that the Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect. Further, Articles 12 et seq., which regulate in detail the abolition of customs duties between Member States, are also significant, and so too are Articles 30 et seq., which deal in detail with the abolition of quantitative restrictions between Member States. These detailed provisions can, at least since the end of the transitional period, be described as directly applicable rules, giving rise to subjective rights in favour of individuals. Reference must therefore be made to them if it has to be determined what obstacles to free movement of goods are inadmissible under the Treaty. Moreover, Articles 85 et seq., which likewise mention affecting trade between States, come into consideration, as does Article 92 (but it must not be overlooked that the latter is not appropriate for direct application within the meaning of the relevant case law).

Accordingly, to summarize in respect of the first question, it must be stated that the principles of free movement of goods is not rooted in the Treaty in such a way that subjective rights in favour of individuals which could over-rise national rules could be derived from it alone.

There is, moreover — it may be said for the sake of completeness — nothing decisive against this view even in the judgment in Case 78/70. It is true it is stated in it (Rec. 1971, p. 499) that the exercise of industrial property rights may not infringe the rules on free movement of goods in the Common Market. But it should not be forgotton that the only function of the principle of free movement of goods in this connexion is to assist in determining the limits of a definite exempting provision, namely Article 36. Regarded strictly, the same attitude was adopted here as in Case 6/72, in which the principles of Articles 2 and 3 were referred to for the interpretation of Article 86. In no way can it be said against this that Judgment 78/70 affords an independent significance to the principle referred to, and this is a manner which would allow subjective rights in favour of individuals.

(b)

In view of the above conclusion it is not necessary to go into the second question, since it arises only in the event of the first question being answered in the affirmative.

On the other hand, a few remarks seem to be appropriate in this connexion with regard to the point referred to under (b) of the second question, i.e. with regard to the mention of the ‘ban on television advertisements (treated as necessary instruments for the promotion of trade) being broadcast for the purpose of advertising given products at regional or local centres within the territory concerned …’.

This obviously means the effects of the television monopoly on the movement of goods in the true sense, (i.e. leaving aside the problem of whether television programmes as such represent ‘goods’ within the meaning of the Treaty, which is still to be dealt with in a later connexion). This part of the question is to be seen in the light of the view voiced by Mr Sacchi according to which foreign products are particularly affected by the television monopoly, in particular the monopoly of television advertising, for which only a limited time is available. Their sales opportunities are on a par with those of domestic products only if additional advertising possibilities, such as those afforded by private cable television, are made available, either by direct advertising by this means or by the transmission of foreign television advertising by means of the so-called Rediffusion.

Accordingly, there must be an examination of whether there is an infringement of the prohibition on the maintenance of measures having equivalent effect to quantitative restrictions on imports within the meaning of Article 30 et seq. In particular it must be considered whether the Commission Directive of 22 December 1969 on the abolition of measures having equivalent effect to quantitative restrictions on imports is significant in this respect, since publicity is specifically mentioned in Article 2 (3) (m) thereof.

It is apparent however that there is nothing relevant to the present case in the said Article 2, according to which certain measures have to be abolished.

As appears from paragraph 1, Article 2 covers only measures which are not applicable equally to domestic or imported products, ‘including measures which make importation more difficult or costly than the disposal of domestic production’.

In this connexion it must be stated that the restriction on television advertising arising as a result of RAI's television monopoly applies equally to domestic and to foreign products. Further, if it is said that foreign products are handicapped and therefore particularly need additional publicity in the interests of equal treatment, it must not be overlooked that substantial improvement, so far as the requirement of equal treatment is concerned, could not be achieved by private cable television. This too would have to be open to domestic products in the same way, that is, the situation would not be different from the present system. Article 2 of the Commission Directive can therefore certainly be disregarded in the present proceedings.

In so far as Mr Sacchi goes beyond this and refers to Article 3 of the Commission Directive, which states that the Directive also covers ‘measures governing the marketing of products which deal, in particular, with shape, size, weights, composition, presentation, identification or putting up and which are equally applicable to domestic and imported products, where the restrictive effect of such measures on the free movement of goods exceeds the effects intrinsic to trade rules’, the following may be said.

The very wording of this article makes it highly dubious whether it includes measures which limit publicity in general.

Apart from this and assuming Article 3 applies to the present facts, it is nevertheless difficult to follow Mr Sacchi when he says that the exclusion of private commercial television is not indispensable, as is required by the second paragraph of Article 3 of the Commission Directive; the Italian legislator is essentially concerned only with the control of information and this objective can be obtained by other means which are of a hindrance to trade. The most important point here is that purely commercial television does not seem conceivable; an entertaining or instructive accompanying programme is indispensable. However, the general structure of television programmes, i.e. the selection of what will be transmitted over this effective means of mass-communication, can, according to the proper view, not be left to private groups. Rather, it is a public task, which in the interests of the maintenance of the freedom of radio reporting can be dealt with only in a way which ensures the appropriate participation of all social groups. Looked at in this light, the exclusion of purely private groups, even in the context of commercial television, does not indeed go beyond what is indispensable for the purpose of properly providing for the matter, and to bring into play Article 3 of the Commission Directive, and the principle of proportionality enshrined in it, in connexion with RAI's monopoly of commercial television, is for this reason unthinkable.

If it is at all necessary, then, this is the attitude that should be adopted to the consequence referred to in Question 2 (b).

(c)

Departing from the order of questions adopted by the court making the reference, it appears to me right, in view of the connexion with the principle of free movement of goods, to deal immediately with those questions which relate to Article 37 (the provisions on State monopolies of a commercial character). On this topic, in connexion with the point just dealt with, it remains to observe that the Commission Directive, according to Article 5 thereof, does not apply to measures which fall under Article 37 (1) of the EEC Treaty.

We must first examine — Questions 6 to 10 are to be understood thus — whether Article 37 applies in the case of a company on which the exclusive right to transmit televisions broadcasts has been conferred, whether such a monopoly had to be so adjusted by the end of the transitional period that the exclusive right (in relation to all broadcasts) vis-à-vis other Member States lapsed by 1 January 1970 at the latest, and whether an extensive widening of an exclusive right to broadcast can be regarded as a new measure within the meaning of Article 37 (2).

(a)

First of all it can be recognized that it is probably not possible completely to exclude the application of the competition rules to television. In this connexion it must remain an open question whether it is possible to go as far as the Commission seeks to go when it says that radio and television bodies are to be regarded as undertakings within the meaning of Article 85 in respect of their whole activity. In this respect it relies on the fact that the receipt of transmissions must be paid for, that broadcasting leads to the establishment of an important branch of the economy and that private broadcasting companies exist in a number of countries, which companies are conducted in a commercial manner. Television advertising at least must be regarded as an economic activity, for advertising is certainly a branch of commerce with commercial services and it is closely associated with the sale of products.

To this extent at least it is scarcely possible to deny the application of the rules of competition.

(b)

It is therefore not possible to say, as the Italian Government has done, that television represents a natural monopoly and is not affected by Article 86.

Such a limitation cannot be derived from Article 86. In the present case it is moreover important that it is a question of cable television. The limited number of channels plays no part here and therefore there can be no question of a natural monopoly.

(c)

Moreover, as far as the interpretation of Article 86 is concerned, it must also be immediately recognized that dominant positions are not per se prohibited by it. The dissolution of every kind of monopolistic structure cannot therefore be required by reliance on Article 86.

Rather, certain types of behaviour in connexion with dominant positions are prohibited, types of behaviour such as are mentioned by way of illustration in Article 86 (2). Seen in this light Article 86 can indeed be of importance in connexion with the facts referred to in Question 4 (i.e. in respect of the imposition of inordinate prices on television commercials, the arbitrary restriction of television commercials for certain products, preferential treatment for certain groups of undertakings in the broadcasting of television commercials, certain package deals in connexion with the production of commercials or the arbitrary and discriminatory allocation of broadcasting times). The national court has to investigate whether these facts obtain and to draw the appropriate conclusions. As already stated, however this can in no way lie in the elimination of the dominant position as such, that is — as regards the present case — in the abolition of the excluisve right of RAI. The facts mentioned are therefore of little consequence for the purpose of deciding the main action.

The questions arising in the main action bring to mind the principles developed in Judgment 6/72, that is the considerations according to which in certain circumstances it is possible to influence the structure of a dominant undertaking by means of Article 86. According to the said judgment even strengthening of a dominant position is to be regarded as abuse within the meaning of Article 86. In the light of the said judgment the extension of RAI's television monopoly to cable television, i.e. the exclusion of any competition in this field, could be significant and it could be thought that for this reason the exclusive right should be declared partially invalid and that its abolititon should be required.

Whether this is possible depends on two things.

First, an objection which the Italian Government has made is important. According to this in Italy the services of all television communications have been for a long time reserved to the State, that is well before the EEC Treaty came into force. RAI has been granted a concession for television only over the air. There has so far been no question of the extension of this concession to cable television. In this respect there has so far been only an agreement with the telephone company SIP on the laying of cables. It is at present quite open who will later be granted a concession in respect of cable television. If this is indeed so, and the court making the reference must inquire into it, there can doubtless be no question of strengthening RAI's dominant position, and the application in the case of RAI of the principles developed in connexion with Article 86 can be ruled out.

If, however, it is assumed that RAI has seen granted exclusive rights in respect of cable television, that is that there has seen a strengthening of its position, then it is important as regards Article 86 — at east the concept of abuse within the meaning of the judgment in the Continental Can case so requires — that behaviour on the part of the dominant undertaking was the cause of it. In the present case this is certainly wanting. For if there has been a strengthening of RAI's position then this has not been of RAI's doing, but results from an extension of the exclusive rights by State measures (the grant of a more extensive Concession).

Article 86 on its own, therefore, even having regard to the judgment in the Continental Can case, does not enable the conclusion to be drawn that any exclusive rights to transmit television broadcasts by cable in possession of RAI are invalid and therefore to be disregarded.

(d)

It still remains to be investigated in the present connexion whether reference to Article 90 is of use in judging the main action.

First, it cannot be ruled out that RAI, too, comes under Article 90 (1), because it has been granted rights by the State, because it is dependent on the State (indeed the State is able to determine the economic direction of the undertaking) and because it is at least partially engaged in commerce.

Before conclusions may be drawn, however, as to the validity of the extension of RAI's television rights to cable television or the validity of the grant of certain rights of cable television to another company likewise dependent on the State (the telephone company SIP), several observations must be made, in part independant of Article 86 of the Treaty.

First, doubts may be entertained whether Article 90 (1) is directly applicable so that a national court may rely on it against national measures. It is true that the duty to refrain on the part of the Member States, contained in this paragraph, so far as it concerns Article 86, is as clear as the latter and therefore capable of being directly applicable. It must not however be overlooked that Article 90 (3) contains a duty of surveillance on the part of the Commission and the power to address decisions to Member States. It is of importance in respect of Article 90 (2), which is scarcely appropriate for direct application; it may however also be assumed that it is likewise provided in respect of the considerable difficulties which are conceivable in drawing the line between paragraphs 1 and 2. If this explanation is correct, Article 90 (1) cannot be taken to be directly applicable, since its execution is dependent on the issue of a Community act.

It is also significant that Article 90 obviously presupposes the possibility of conferring exclusive rights on certain undertakings, that is, where appropriate, creating complete monopolies. If the matter is seen in this light it is possible to hold the opinion, particularly in view of the principle of Article 222, that a Member State is allowed under Article 90 to strengthen the market position of such an undertaking, something which is not permitted to dominant undertakings themselves. This would however mean that no argument can be derived from Article 90 against the validity of extending RAI's monopoly to cable television.

Finally, Article 90 (2) is of interest. This provides that the rules of the Treaty, including the rules on competition, shall have only limited application in respect of undertakings entrusted with the operation of services of general economic interest.

In respect of Article 90 (2) the submissions of the German and Italian Governments on the characteristics of television, in which they cite judgments of their highest constitutional courts, are important, and this brings me back to a previous observation.

Television is without doubt a means of mass-communication of great cultural and educational significance, an instrument which, on account of the intensity of its effect, is particularly capable of influencing public opinion. In the Federal Republic of Germany, therefore, television is regarded as a matter of general interest and as a task for the Public Administration. Having regard to the freedom of radio reporting enshrined in the Basic Law, television is organized under public law within the framework of monopolies with respect to each Land in such a way that all social groups have a voice. The compositions of the control bodies of the institutions of public law, and the terms of the binding principles to be observed in selecting programmes, seek to ensure that no one-sided influence, either by the Government or by private groups, is possible in respect of television.

Similar necessities are recognized in most other Member States and have led to similar basic attitudes, even if institutional freedom in relation to the organs of Government has perhaps not been secured everywhere with equal success. On this I shall disregard what is known from the proceedings as to the legal position in Italy and refer to the detailed statements of the Commission on the organization of television in Belgium, France, the United Kingdom and Denmark (where State monopolies and public bodies are the order of the day). It is interesting that even where experiments are allowed on a regional level, as in Denmark, they are not governed purely by private law.

The observations made are likewise not without significance for commercial television, the sphere with which we are particularly concerned. Even in this connexion there exists the possibility of influencing public opinion and therefore the necessity for a control from various points of view (health policy, ethical and similar). Moreover it must not be forgotten that it is not possible to have advertisements on their own but that a surrounding programme is needed. Because of this association advertising is drawn into the sphere of television as a public task, and purely private establishments of this kind are not regarded as tolerable in the Member States referred to.

It is not possible to escape this fact in judging RAI in the light of Article 90.

In my opinion it is not strictly necessary to decide whether television bodies are to be regarded as undertakings within the meaning of Article 90 (2) or whether this, that is the recognition of a general economic interest in their activity, applies only to commercial television. I regard it as decisive that the basic concept of Article 90 (2), a concept which is found on other forms (reservations in favour of the public administration) in other Articles in the Treaty (Articles 48, 55 and 56), is the only one appropriate for dealing with the matter of ‘television’.

From this it necessarily follows that even if one proceeds from the basis that Article 86 and the prohibition to be derived from it against eliminating all competition also applies to public undertakings, on which the State has conferred exclusive rights, the application of such a rule to public undertakings of the nature of telvision establishments is excluded by reason of Article 90 (2), at least in so far as it is a question, as in the main action, of whether private forms of competition (relay television and the broadcasting of private television programmes) are permissible.

It will be possible moreover to agree to this all the more readily since trade between Member States is not affected by television communications in a manner which conflicts with the interests of the Community. This may be said, since, even without private television, sufficiently effective advertising can be carried on either over the State television or by other means and since, last but not least, private television undertakings such as TELEBIELLA obviously have only a limited regional significance.

To sum up, therefore, I can conclude that with regard to the series of questions which I have just dealt with, it does not seem possible to me to undermine the exclusive television rights granted to RAI, and their possible extension to the sphere of cable television, by means of the Treaty provisions on competition such as may be derived from Article 86 and 90.