JUDGMENT OF 20.3.1980 — CASE 106/79 VERENIGING TER BEVORDERING VAN DE BELANGEN DES BOEKHANDELS v ELDI RECORDS

In Case 106/79 REFERENCE to the Court under Article 177 of the EEC Treaty by the Vice-President of the Arrondissementsrechtbank [District Court], Amsterdam, for a preliminary ruling in the action pending before that court between

THE COURT (Second Chamber), composed of: A. Touffait, President of Chamber, P. Pescatore and O. Due, Judges, Advocate General: F. Capotorti Registrar: J. A. Pompe, Deputy Registrar

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Written observations

A — First question

B — Second question

C -— Third question

D — Fourth question

III — Oral procedure

Decision

Costs

I —. Facts and written procedure

1. Regulation No 17 of the Council of 6 February 1962: First Regulation implementing Articles 85 and 86 of the Treaty, provides in Article 5 (1) as amended by Regulation No 59 of the Council of 3 July 1962 (Official Journal, English Special Edition 1959—1962, p. 249) that:

2. The first plaintiff in the main action is a Netherlands association to promote the interests of the book trade (hereinafter referred to as the Association). The other plaintiffs in the main action are publishers and distributors of inter alia strip-cartoon books.

3. The Rules have been repeatedly amended. While retaining the main provisions the new versions which were sent to the Commission provide inter alia for different relationships between recognized and non-recognized booksellers, the right to reduce or to abolish the retail price in certain cases and to determine special lower prices parallel to the retail price; they also increase the number of cases in which discounts may be given.

4. The parties are in disagreement over the extent to which strip-cartoon books have been covered by the Rules as successively amended.

5. The version of the Rules sent to the Commission on 30 October 1962 was attached to Form B as annexed to Regulation No 27. Under the heading Information regarding contents of agreement, decision or concerted practice, the form was completed thus: Zie bijgaand [see attached]: Reglement voor het Handelsverkeer in de Nederlandse Uitgeverij en Boekhandel. Aru. 29 b en 30 a.

6. The defendant in the main action (hereinafter referred to as Eldi) is a company which is not a member of the Association and whose business consists inter alia of selling strip-cartoon books at reduced prices. The plaintiffs in the main action have sought a temporary injunction against Eldi before the President of the Arrondissementsrechtbank, Amsterdam, asking the court to forbid Eldi to sell or offer for sale to the public the books of recognized publishers at a price other than that fixed or to be fixed by the recognized publishers, and to award a penalty payment to the plaintiffs in the main action amounting to 50000 guilders for each breach of the injunction which they seek.

7. By judgment of 3 May 1979 the Vice-President of the Arrondissementsrechtbank, Amsterdam, stayed the proceedings and in accordance with Article 1 77 of the EEC Treaty asked the Court of Justice to give a preliminary ruling upon the following question:

8. The judgment containing the reference was received at the Court Registry on 2 July 1972.

II —. Written observations

A —. First question

1. The Association claims that an examination of Regulation No 27, of Form B, of the Practical Guide to Articles 85 and 86 of the Treaty establishing the EEC and to the regulations implementing them published in 1962 by the Press and Information Office of the Communities, as well as of the views of legal commentators, leads to the conclusion that notification is constituted by Form B, which may be completed in a summary fashion if a letter has been sent concerning the agreement in question and it is one of the annexes attached to the form. On this point the Association stresses that the space available on Form B is so limited that if the rules which are to be notified are fairly complicated there is no alternative but to refer to the annexes containing a detailed description or the complete text of the rules in question. Thus in filling in the form the Association wished to emphasize those matters which, at a time when neither the Commission nor the Court of Justice had made any decisions on the scope of Article 85 or of the regulation implementing it, were viewed as the greatest restriction on competition in the Rules, namely the rules relating to the importing of foreign books. As regards everything else, the Association sought to refer to the Rules themselves.

2. Eldi maintains that it is clear from Article 4 (2) of Regulation No 17, taken together with Section II of Form B, that there cannot be any question of provisional validity as regards those clauses of an agreement which were not notified as such, even if the Commission was able to take cognizance of those clauses by studying the annexes attached to the notification of the other articles of that agreement.

3. The Commission points out that the 1962 version of the Dutch Rules fulfils the three conditions for provisional validity which have been laid down by the Court, in particular in its judgment of 14 December 1977 in Case 59/77, Ets. A. de Bloos S.P.R.L. v S.C.PA. Bouyer [1977] ECR 2359.

B —. Second question

1. The Association thinks that the question must be read as follows: Does the fact that the Commission itself has confirmed that the rules on trade have been validly notified have any significance for the present proceedings?

2. Eldi is of the opinion that it appears from the letter of 18 March 1975 that it contains only a request for information. In its opinion the letter does not in fact constitute an acknowledgement of receipt of the notification, within the meaning of Article 5 (1) of Regulation No 17, of the other provisions of the Rules supplementing notification of Rules 29 (b) and 30 (a).

3. The Commission states that a distinction must be drawn between formal measures and preparatory acts. The Commission's opinion on this is that decisions which the Commission may take pursuant to Regulation No 17 are to be considered formal measures, in particular, the decisions having substantive legal effect upon the undertakings to which they are addressed and which are referred to in Article 19 of the regulation. These decisions may have an effect upon the provisional validity of former agreements, notified in good time, inasmuch as they may bring it to an end or convert it to permanent validity. According to the Commission it is proper to categorize decisions of a procedural nature taken pursuant to Regulation No 17 as preparatory acts, like, for example, the decisions taken by the Commission to request particular information. Preparatory acts have no effect on the provisional validity of an old agreement, notified in good time. The Commission maintains that it has not taken any decision on the Dutch Rules pursuant to Regulation No 17 and that the letter of 18 March 1975 quoted by the national court in its question constitutes a request for information pursuant to Article 11 of Regulation No 17.

C -—. Third question

1. The Association points out that even if only the rules relating to foreign books can be considered to be duly notified and therefore provisionally valid, the rest of the Rules are also provisionally valid because they are rules which according to Article 4 (2) of Regulation No 17 do not need to be notified.

2. Eldi states that if Rules 29 (b) and 30 (a) are considered as constituting a distinct agreement the question may be answered in the affirmative. In its opinion it is still possible to argue that the restrictions on competition contained in the Rules constitute a single entity. Owing to the fact that the notification relates only to Rules 29 (b) and 30 (a) it is not therefore valid because it covers only part of the agreement.

3. According to the Commission the question has lost its point owing to the answer in the affirmative given to the first question.

D —. Fourth question

1. While arguing that strip-cartoon books have never been exempted from the scope of the Rules — because the relevant amendment has not come into effect — the Association points out that a temporary exemption making the Rules less restrictive would not affect their provisional validity. The reapplication of the Rules to strip-cartoon books would not effect it either since they would again be identical to the rules notified.

2. Eldi thinks that the fact that the national court stated in its question that strip-cartoon books have been temporarily excluded from the scope of the Rules must lead to the conclusion that their reapplication to them must be considered as a new agreement for which the provisional validity of the Rules cannot be claimed.

3. The Commission asks whether it is correct, as the wording of the question seems to assume, that strip-cartoon books were covered by the Rules until 1 January 1978 or whether they were, on the contrary, covered by the express exemption for picture-books which is contained in all versions of the Rules from 1962 to 1977. The Commission thinks a good argument may be made in favour of the latter proposition.

III —. Oral procedure

1. By a judgment of 3 May 1979, received at the Court on 2 July 1979, the Vice President of the Arrondissementsrechtbank, Amsterdam, submitted four questions pursuant to Article 177 of the EEC Treaty on the interpretation of the provisions concerning the notification of agreements, decisions and concerted practices existing at the date of the entry into force of Regulation No 17 of the Council of 6 February 1962: First Regulation implementing Articles 85 and 86 of the EEC Treaty (Official Journal, English Special Edition 1959-1962, p. 87).

2. Those questions were raised during summary proceedings in which the Netherlands Association for the Promotion of the Interests of the Book Trade, together with three publishers recognized by the Association, sought an injunction restraining a Netherlands undertaking from selling to individuals books, and in particular strip-cartoons, published by recognized publishers, at a price other than that fixed by those publishers. The plaintiffs based their action on a set of rules for the book trade in the Netherlands (hereinafter referred to as the Rules) which was drawn up by the Association and which imposes inter alia a vertical system of prices. The defendant undertaking, for its part, pleads that the Rules are contrary to Article 85 (1) of the Treaty, that it has not benefited from exemption under Article 85 (3) of the Treaty and that it is not provisionally valid either, not having been properly notified under Article 5 (1) of Regulation No 17.

3. It emerges from the file in the case that the Rules existed at the time of the entry into force of Regulation No 17 and that the version in force at the time was sent to the Commission on 30 October 1962, that is to say before the expiry of the period laid down in Article 5 (1) of Regulation No 17. The Rules were attached to the notification form provided for in the Annex to Regulation No 27 of the Commission of 3 May 1962, the First Regulation implementing Council Regulation No 17 of 6 February 1962 (Form, content and other details concerning applications and notifications) (Official Journal, English Special Edition 1959-1962, p. 132). Whilst the Rules concerned books published in the Netherlands as well as foreign publications, the replies given by the Association to the question on the form referred, in general, only to provisions relating to foreign publications.

4. It is settled that the Commission has not yet taken a decision with regard to the Rules, but that there has been correspondence between the Association and the Commission, of which the Association cites in particular a letter from the Commission of 18 March 1975 concerning the notifications ...^of the rules of your Association ..., and asking for further information in order to put the Commission in a position to rule, with all the facts of the matter before it, upon the compatibility of the abovementioned rules and agreements with the competition law of the European Economic Community. The Association concludes from the wording of that letter that the Commission regarded the Rules as notified in their entirety.

5. After 30 October 1962 the Association amended its Rules on several occasions. The parties in the main action are not in agreement as regards the extent to which strip-cartoon books were covered by the Rules in their various versions, but the judge making the reference assumed that that was the case, except during a fairly short period.

6. Taking into account the circumstances and in order to give a ruling on the objection raised by the defendant in the main action, the judge making the reference asked the Court to rule on four questions which all concern the provisional validity of the Rules.

7. Article 177 of the Treaty does not allow the Court to give a ruling on a specific case when it is called upon to interpret Community law. Even though the questions raised in these proceedings seem to concern such a case, none the less they make it possible to identify easily and without ambiguity the general problems concerning the interpretation of Community law which are raised by the dispute.

8. In fact, by his first question, the judge making the reference asks whether an old agreement, the entire text of which was attached to the notification form, may be regarded as notified and hence provisionally valid in its entirety, even though only some of the clauses of that agreement are quoted on the notification form.

9. This question must be considered in the light of the aims of the Community provisions on notification as disclosed by the second and third recitals in the preamble to Regulation No 17, which state:

10. By means of notification the Commission must be supplied with the information necessary to enable it to take the decisions provided for in Regulation No 17. If the agreement has been reduced to writing and if a copy of its entire text is attached to the form, the information given on that form is intended solely to facilitate verification. If that information is correct, and above all if it relates fairly to the provisions which at the time were considered the most important, the objectives of the notification seem to be attained. In that case the agreement must be regarded as properly notified in its entirety, unless the intention to notify only a part of the agreement emerges clearly from the information supplied.

11. It is therefore necessary to reply to the first question that an agreement may be regarded as properly notified in its entirety and may therefore benefit from the effects of an agreement which has been notified, where its entire text has been attached to the notification form, even though only some of the clauses of the agreement are quoted on the form, provided that the description given there constitutes a fair and accurate record of the provisions which at the time were considered most important.

12. By the second question the judge making the reference asks whether a letter from the Commission requesting further information, whilst stating that the agreement notified would be examined in its entirety, is relevant as regards the extent of the effects of the notification.

13. As the letter referred to merely constitutes a request for information under Article 11 of Regulation No 17, and as such a letter cannot in any event — whatever wording is used — alter the effects of the notification, it is necessary to reply to that question that à letter from the Commission requesting, under Article 11 of Regulation No 17 further information about an agreement which has been notified does not in any way alter the effects of the notification.

14. As the reply to the first question is in the affirmative, the third question, which is asked solely in the event of the reply to the first question being negative, has become otiose.

15. By the fourth question, the judge making the reference, assuming that a particular category of goods fell within the scope of an agreement at the time of its notification, asks whether the fact that the goods were subsequently excluded from the scope of that agreement for a certain period can erase the effects of the notification as regards the category in question.

16. The effects of the notification extend to the scope of the agreement at the time of its notification. To restrict those effects in the case envisaged by the question would be tantamount to penalizing the parties to an agreement for having voluntarily limited its scope, which would be contrary to the spirit of competition law. It is therefore necessary to reply to the fourth question that the reintroduction of a category of goods which fell within the scope of an agreement at the time of its notification, but which was subsequently excluded voluntarily by the parties for a certain period, is covered by the effects of the original notification.

On those grounds, THE COURT (Second Chamber), in answer to the questions referred to it by the Vice President of the Arrondissementsrechtbank, Amsterdam, by a judgment of 31 May 1979, hereby rules:

1 An agreement may be regarded as properly notified in its entirety and may therefore benefit from the effects of an agreement which has been notified, where its entire text has been attached to the notification form, even though only some of the clauses of the agreement are quoted on the form, provided that the description given there constitutes a fair and accurate record of the provisions which at the time were considered the most important.

2 A letter from the Commission requesting, under Article 11 of Regulation No 17 of the Council of 6 February 1962, the First Regulation implementing Articles 85 and 86 of the EEC Treaty, further information about an agreement which has been notified does not in any way alter the effects of the notification.

3 The reintroduction of a category of goods which fell within the scope of an agreement at the time of its notification, but which was subsequently excluded voluntarily by the parties for a certain period, is covered by the effects of the original notification.