Opinion of Mr Advocate General Reischl

Mr. President,

Members of the Court,

The case in which I now have to deliver an opinion also concerns a selective distribution system in the perfume industry of the type which was involved in Joined Cases 253/78 and 1 to 3/79.

That system is operated by the French company Estée Lauder, which was founded in 1967 and is a subsidiary of the Canadian company Estée Lauder Cosmetics Limited. The former obtains beauty aids and perfumes manufactured in Belgium and in Great Britain and distributes them through a network of authorized dealers in the common market. For details, reference should be made to the order for reference from the Tribunal de Commerce, Paris in particular to page 7 et seq. and 10 of the English version of that judgment.

The Commission learned of the distribution organization when Estée Lauder notified it on 11 January 1977 of the standard-form contract and general conditions of sale applicable to dealers in France. A letter of 23 March 1977 signed by a director in the Directorate-General for Competition stated that it might be assumed that those texts might be considered, taking account of the economic context in which they operate, as not capable of being affected by the rules of the competition contained in the EEC Treaty. After Estée Lauder had stated at the request of the Commission that in the other eight Member States distribution took place through branch offices which entered into corresponding agreements with dealers, a letter of 8 June 1978, signed in the same way, explained that this case has been filed and that no further action is being taken.

That distribution system and the attitude taken by the Commission on the question are important for the main action for the following reasons.

The plaintiff in the main action is the proprietor of a shop in Paris in which perfume is also sold. It requested Estée Lauder in April 1978 to open an account for it and to supply it in the future, its first order being attached at the same time to that request. As Estée Lauder did not comply, the plaintiff commenced proceedings in the Tribunal de Commerce, Paris, claiming that the conduct of Estée Lauder constituted an infringement of the French Regulation of 30 June 1945, with which we are familiar as a result of the other abovementioned cases. The plaintiff sought a declaration that the defendant was obliged to supply it and that it must pay damages for a wrongful refusal to sell.

In its defence the defendant pleaded that in Community law a distribution system based on qualitative and quantitative selection criteria is permissible. It had notified the contracts for the sales outlets in France to the Commission in order to obtain exemption under Article 85 (3) of the EEC Treaty; the Commission had decided thereupon to tolerate that distribution system. As the system had thus been recognized as permissible by the Commission, it must also be valid in national law. In the alternative the defendant claims that the contracts contained only provisions which complied with the requirements of a circulaire Fontanet [Fontanet Circular] of 30 March 1960 issued pursuant to the Regulation of 30 June 1945. Therefore, they cannot be impeached under French law either: Estée Lauder can rely thereon as against the plaintiff mainly because the latter is not concerned principally with the sale of perfume, but deals mainly in clothing. On consideration of these facts the court before which the proceedings were trought came to the view that Article 85 of the EEC Treaty was applicable to the contracts concluded by Estée Lauder. As for the letter from the Commission of 23 July 1977 (obviously the letter of 23 March 1977 is meant) the court considered that it seemed to amount to negative clearance and not to an exemption under Article 85 (3) of the EEC. However, negative clearances are decisions of the Commission of which the courts of Member States must take note because of the primacy of Community law over internal legislation.

However, in order to clarify that matter and also having regard to the initiation of a procedure under Article 9 of Regulation No 17 and the course and termination thereof, the court stayed proceedings by a judgment of 28 February 1979 and referred to the Court of Justice the following questions for a preliminary ruling pursuant to Article 177 of the EEC Treaty:

My opinion on these questions is as follows.

1. In my view it is necessary to begin by examining the question whether the said letter constitutes a decision of the Commission at all.

2. After answering the first question in this way it is not really necessary to go into the second question, as it was asked only in the event of its being necessary to regard the said letter as a decision. However, I shall at least make two brief observations on that matter.

3. The third question awaiting consideration does not require lengthy comments either.

4. The questions referred by the Tribunal de Commerce, Paris, may therefore be answered as follows:

1 Translated from the German.