Opinion of Mr Advocate General

Mr President,

Members of the Court,

1. Introduction

1.1. Summary of the problems involved

This case shows once again that the point of contact between cartel agreements, divergent legislation of the various Member Sutes on marketing and Community law is an area in which pitfalls, obstacles, snares and traps abound. In view of certain of those complications, it is not easy to answer the question referred to the Court by the Gerechtshof [Regional Court of Appeal], Amsterdam, in such a way as to avoid any consequences which conflict with the purport of the extensive case-law of the Court which is relevant to this case. I shall begin by giving a brief summary of those complications.

1.2 Course of the procedure

It is clear from the facts established by the Politierechter [magistrate dealing with commercial offences] as described in the judgment making the reference that the only factor which is significant for the purpose of gaining an understanding of the actual circumstances which led to the submission of the question to the Court is the offering of a world atlas as a free gift to subscribers to the Grote Nederlandse Larousse Encyclopedic. That encyclopaedia is imported into the Netherlands from Belgium and, as is apparent from the answer to a written question put by the Court, the extent of such imports is considerable. The other gift schemes whose existence has been established involve the sale in the Netherlands of encyclopaedias produced in that country. The court making the reference does not therefore need to consider the application of the prohibitions contained in the Law in question to those free gift schemes in the light of Articles 30 and 34 of the EEC Treaty, in view of the fact that, as a result of the Court's decided cases which I have cited and of the limited territorial scope of the Law at issue, it is not possible to speak of a prohibited indirect restriction on exports either.

For a summary of the arguments put forward in the numerous written observations and other relevant factors, I would refer the Court to the Repon for the Hearing. During the oral procedure, however, Oosthoek, the Netherlands Government, the Government of the Federal Republic of Germany and the Commission further clarified and supplemented several points in their written observations. I shall refer to those observations in the course of my Opinion, in so far as is necessary.

1.3. Arrangement of the remainder of the Opinion

In paragraphs 2 and 3 of my Opinion I shall, as I have already stated, examine the relevant provisions of the Netherlands Law in the light of the basic rule and of the mitigating rule laid down by the Court in paragraphs 5 and 6 of the decision in the Dassonville case, as subsequently clarified by the Court in its later decisions, in so far as they are relevant to this case. In paragraph 4 of my Opinion I shall summarize my views, make a number of additional observations and then give a comprehensive answer to the question submitted to the Court.

2. Restrictive effects on imports of the statutory restrictions imposed on the free gift scheme

As is also apparent from the Report for the Hearing, the Governments of the Netherlands, the Federal Republic of Germany and Denmark deny that laws such as that at issue have a restrictive effect on imports. The main argument put forward by all three governments is that the measures involved affect domestic and imported products without distinction. According to the Netherlands Government, their effect, if any, on trade between Member Sutes is the result of disparities between national laws. Furthermore, according to the Governments of Denmark and the Federal Republic of Germany, it is not the importation of, but only the manner of trading in, the goods which is subject to restrictions.

Those arguments must be rejected in the light of, inter aita, the following: paragraph 5 of the Court's decision in the Dassonvilie case; the Court's numerous judgments concerning legislation on prices which is applied to domestic and imported products without distinction; paragraph 8 of the Court's decision in Case 120/78 RE WE [1979] ECR 649 (the Cassis de Dijon case); the Court's judgment in Case 152/78 Commission v France [1980] ECR 2299; paragraph 10 of the Court's decision in Case 113/80 Commission v Ireland [1981] ECR 1625, summarizing its previous decisions; and the Court's recent judgments in Case 6/81 Seele and Case 220/81 Robertson. Case 152/78 is of particular significance in these proceedings only in so far as, in that instance too, a restriction on certain forms of advertising and not a restriction on trade in the goods concerned was at issue.

In the Court's recent judgment in Case 75/81 Blesgen, reference was again made to the judgment in Case 152/78 in order to demonstrate that legislation on the sale of certain products, even though it does not directly concern the regulation of imports may, according to the circumstances, adversely affect the possibility of importing those products from other Member States. The Court took the view, in paragraph 9 of its decision in that case, that ultimately the decisive factor precluding the application of Anide 30 of the EEC Treaty was that a legislative provision was involved concerning only the sale of strong spirits for consumption on the premises in all places open to the public and not concerning other forms of marketing the same drinks. Such a measure which, moreover, is applicable to domestic and imported products without distinction, has, according to the same paragraph of that decision, no connection with the importation of the products and for that reason is not of such a nature as to impede trade between Member States.

In paragraph 10 of its decision in Case 113/80 Commission v Ireland, which has already been referred to several times, the Court summarized the relevant case-law in these terms: In the absence of common rules relating to the production and marketing of the product in question it is for Member States to regulate all matters relating to its production, distribution and consumption on their own territory subject, however, to the condition that those rules do not present an obstacle, directly or indirectly, actually or potentially, to intra-Commttnity trade and that it is only where national rules, which apply without discrimination to both domestic and imported products, may be justified as being necessary in order to satisfy imperative requirements relating in particular to ... the fairness of commercial transactions and the defence of the consumer that they may constitute an exception to the requirements arising under Article 30.

For the examination of this case in the light of the parts of that summary of the Court's case-law which I have stressed, it is necessary to consider whether, regard being had to the circumstances, it is possible to speak of an indirect restriction on intra-Community. trade. I agree with both Oosthoek and the Commission that such a restriction does indeed exist. By expressly laying down the condition of related consumption or use, the Wet Beperking Cadeaustelsel restricts the possibility of conducting uniform advertising campaigns, authorized in various Member States, by means of free gifts, as in this case, in connection with the sale of products imported from those other Member States. Since, from a commercial point of view, it is obviously in the interests of the undertakings concerned that such an advertising campaign, authorized in various other Member States and, in particular, also in Belgium, should be conducted in a uniform manner, it follows that the importation into the Netherlands of the goods offered for sale is at the same time perceptibly, albeit indirectly, restricted. A crucial difference between this case and the position in the Blesgen case is, in my opinion, in particular, that in this instance not one specific channel of retail trade but all such channels are affected by the rules in question. In cases other than that here under consideration, a statutory curtailment of the free gift scheme would perhaps restrict the import of products most where a gift voucher is included in the packing of the products, which is identical for every country in which they are sold, but where the vouchers do not at the same time comply with the divergent requirements of all those countries.

For the sake of completeness, I should like to add that in a case such as this, paragraphs 5 and 6 of the decision in Case 8/74 Dassonville, paragraph 8 of the decision in Case 120/78 Rewe and paragraph 10 of the decision in Case 113/80 Commission v Ireland would also appear to rule out a contrary conclusion on the basis of Commission Directive 70/50/EEC of 22 December 1969 (Official Journal, English Special Edition 1970 (I), p. 17). During the oral procedure, the Agent for the Commission also came to the conclusion that Directive 70/50/EEC could not lead to any other outcome in this case.

3. Grounds justifying statutory restrictions imposed on the free gift scheme

On the assumption that rules of national law are involved which are applicable to domestic and imported products without distinction, most of the national rules concerning the gift scheme may, in line with the conclusion drawn by the Court in paragraph 10 of its decision in the Commission v Ireland case, in principle be justified only by imperative requirements relating in particular to ... the fairness of commercial transactions and the defence of the consumer.

However, as I have already stated in detail in the introduction to my Opinion, and as is also apparent from the Explanatory Memorandum to the Law in question and from the written observations submitted by the Netherlands Government and by the Commission, the difficulty in this case is that the relevant Netherlands legislation is not based on the additional objective of the protection of fair trading but, first and foremost, on that of the protection of undertakings which usually offer the gifts as pan of their normal range of products. The requirement of related consumption or use referred to in the question submitted by the national court cannot be justified, at least by this first express objective of the Law, if products are involved which, as in this case, happen to form part of the undertaking's own normal range of products. As I argued in the introductory considerations to my Opinion, the reason for the special requirement concerning related consumption or use appears to be none the less in this fint express objective of the Law and not in the second objective which is to protect consumers. If, therefore, that view is correct — which ultimately only the national court can decide — the question referred to the Court of Justice should be answered in the negative, if the Court considers the manner in which the objectives justifying the restriction are classified under national law to be decisive.

It would be impossible to escape that conclusion even if the Court were prepared in this connection to add considerations of orderly economic activity, as in this case, to the accepted grounds on which restrictive effects on trade may be justified. Quite apan from the fact that the latter concept would, in the event of the application of the Court's judgment in Case 7/61, provide an unacceptable ground for justification of economic policy, that it exists moreover only in the Netherlands and, finally, that in view of its vagueness there is a risk that it may be extended without limitation to other measures of economic policy restricting imports, with unforeseeable consequences in the context of these proceedings, that path cannot in my opinion lead to any conclusion other than that which has been reached. Even if such an extension of the grounds justifying the restriction is accepted in principle, the fact none the less remains that the condition of related consumption or use, in respect of products belonging to an undertaking's own range, cannot be based on it, for the reasons which I have just given. Accordingly, the Court need not consider diat alternative in its judgment.

Another possible solution may lie in the fact that the grounds justifying the restriction are classified primarily not under national law but under Community law. In order to prevent any abuse of the grounds of justification recognized by the Court in its case-law, that solution in my opinion is in general to be preferred. Since the legislation on free gift schemes is regarded as forming part of the law on unfair competition, inter alia according to the detailed study of comparative law carried out by Ulmer and others in 1968 (Het Recht inzake Oneerlijke Mededinging in de Lid-Staten der Europese Gemeenschappen, Part I, Netherlands Edition, p. 196 et seq.), such legislation should, regardless of the conflicting national descriptions of its objectives, be regarded as being governed in principle by Community law on and justified on grounds of the protection of fair trading and consumer protection, which have already been recognized by the Court in its previous decisions. However, as far as the specific question submitted to the Court is concerned, that solution in itself does not resolve the problem that, according to the requirement of reasonableness specified in paragraph 6 of the Court's decision in the Dassonville case, as amplified by the Court in subsequent decisions, an objective justification as in this present case is not by itself enough. The specific measure restricting trade must, in addition, be reasonable or, according to the wording of paragraph 8 of the Court's decision in the Rewe case, it must be necessary for the attainment of the objective of die measure, which is in principle justified. It is apparent from the Court's later decisions that, amongst other things, a requirement of proportionality is involved, in other words the requirement that the restrictive effect on trade should go no further than what is stricdy required by the objective which is acceptable in principle, and the concomitant duty also to recognize compliance with the measures of the exporting country as sufficient if those measures are to be regarded as equivalent in the light of the objectives concerned. In the present case, it seems to me, in particular, that compliance with the requirement of proportionality may on the grounds referred to earlier constitute an obstacle even if this solution is adopted; however, the question of the application in concreto of the Court's judgment must be left to the national court.

Therefore, in my opinion, the question referred to the Court cannot, without qualification, be answered in the affirmative on the basis of any of the alternative solutions which have been considered and, furthermore, some allowance must be made in every solution for consideration of the specific statutory provision in the light both of the objectives of legislation on free gift schemes which are regarded by the Court as acceptable and of the other criteria established by the Court in its case-law. Moreover, I am of the opinion that in its answer the Court will in principle have to proceed on the basis of the third solution which I have described.

4. Final observations and conclusion

In my examination, I came to the conclusion in the first place that legislation on free gift schemes, such as that at issue in this case, may indeed result in indirect restrictions on imports and that those restrictions, according to the case-law of the Court, entail in principle the application of Article 30 of the Treaty.

Secondly, I concluded that the requirement ot related consumption or use, which is of crucial significance in the question referred to the Court, may not without qualification be regarded as justified either on grounds of the protection of fair trading and of consumer protection, which have been recognized by the Court in its case-law, or by the express objectives of the Wet Beperking Cadeaustelsel; hence there is no need to consider whether orderly economic activity — the other basic objective of that Law — should also be added to the list of grounds justifying such legislation which has so far been elaborated by the Court.

I would only add to this summary of my observations that, in its answer to the question raised, the Court should obviously not focus its attention in particular on the Netherlands Law, still less on the specific circumstances of the case which led to the submission of this question. The answer to the question should be worded in more abstract terms and the references in the question to certain Member States and to their legislation should be disregarded. That is an additional argument in favour of the classification of the grounds justifying the legislation in question on the bas;s of Community law rather than national law. Furthermore, the abstract formulation required reinforces the need to allow the national court a measure of discretion in applying the Court's answer to the case at issue.

On the basis of the foregoing considerations, I am of the opinion that the question referred to the Court should be answered as follows:

As long as there are no rules of Community law in the matter, Article 30 of the EEC Treaty does not prohibit the statutory restriction by a Member State of free gift schemes which is applicable to domestic and imported products alike and which makes the offering of free gifts as a means of sales promotion, in the event of the inapplicability of other exceptions to the prohibition on principle laid down by such legislation, subject to the condition that a relationship must exist between the consumption or use of the gift and the product which constitutes the basis for offering it, provided that the application of that condition does not have the effect of restricting imports any móre than is strictly required either by the objective of the protection of fair trading or by that of consumer protection. Any other objectives of such a condition may, without prejudice to the question whether they may be justified under Community law, in no circumstances lead to restrictions on imports, which are not essential to those objectives.

1 Translated from the Dutch.

2 Now that in particular the second expression seems to have gained currency in academic discussions as well as in these proceedings, the following clarification of both expressions may be of some use. The first expression (the reasonableness rule) is connected with the decisive criterion established in paragraph 6 of the decision in the Dassonville case, to the enea that in order to prevent unfair competition which was there under consideration a State must ensure that the measures which it adopts should be reasonable. The second expression is connected with the case-law of the United States on the Sherman Act, according to which the strict prohibition of cartel agreements is mitigated by s rule of reason established by legal precedent. According to, inter alia, L H. Tribe in his American Constituţional Law, 197B pp. 340-342, the same kind of approach, involving the application of fairly iar reaching criteria, comparable to the Court'i case-law on Article 30 of the EEC Treaty, has also been adopted by the Supreme Court in relation to the inter-State commerce clause, which Ís itself comparable to Article 30. Thus the principle laid down by the Court in its judgment in Case 7/61 to the effect that Economically based State regulations have almost invariably been struck down (op. ch. p. 340) is also valid for American case-law. By adopting an approach which is in my opinion wholly analogous — albeit naturally involving the use of entena adapted to different circumstances — the Court has, in its decisions concerning in particular Articles 30 and 59 et seq., also mitigated the stria prohibitions contained in those articles by applying a rule of reason, as formulated for the first time in the Dassonville judgment. It is dear from inter alia the judgments of the Court in the Dassonville cue and in Rem (the Cassis de Dijon case), [1974] ECR 649, that the more detailed explanations concerning the rule of reason given by the Court in its case-law are to a large extent derived from Artide 36 of the EEC Treaty by analogy, with the extremely important difference that, in the event of nutigation of the basic rule contained in the Dmttomviik judgment where Article 36 is not applicable, the measures involved must apply to domestic and imported products without distinction. Moreover, on the basis oi the Court's case-law relating to Article 59 et seq. — where Artide 36 docs not apply but strictly comparable criteria are none the less used — there can of course be no question of the direct application of the rules of interprétation developed by the Court in relation to Artide 36. Rather, it seems to me that a general principle of interpretation is involved in relation to strict prohibitions laid down by provisions of the EEC Treaty. Thus, inter lia, grounds of overriding public interen justifying a prohibition, other than grounds dictated by economic objectives, may be reconciled with the requirements of the free movement of goods and services presented by the EEC Treaty. The use of the expression rule of reason to describe that principle of interpretation strikes me as preferable to the use of expressions exception or constitute an exception — which were adopted in this connection in my Opinion in Case 6/81 and in paragraph 10 of the Court's decision in the Commission v Ireland case, respectively, —inasmuch as, in practice, that principle forms a single entity with the prohibition which it mitigates and which is laid down by the Court in paragraph 5 of the decision in the Dassonville case. The principle must form a single entity with that prohibition also because, according to the Court's case-law concerning Article 36, the EEC Treaty leaves no room for any real exceptions to prohibitions other than those expressly provided for therein, although there is scope for a reasonable interpretation of those prohibitions. In my opinion, the unity of the basic rule and the mitigating rule laid down by the Dassonville judgment also emerges dearly in some of the Court's recent judgments, inducing those in Case 6/81 Beele and in Case 220/81 Robertson.

3 See, in particular, in this connection the Rapport Tan de Commissie Ordelijk Economisch Verkeer, The Hapje 1967, p. 19 et seq. which throws some tight on this mailer; the Schuurmans and Jordens Edition of the Law in question (1979), p. 9; and Mulder-Duk, Scheu van ha Sociaal-Economisch Recht in Nederland, Second Edition, Zwolle 1980, pp. MS, 146 and ISO.

4 Although in iu judgment in Cale 7/61 Commission v Italy [1961] ECR 671 the Court merely established in, unlike Anide 226, Article 36 cover (eidusively) casei o( a non-economic nature, the rationale of that decision leads in my opinion to the consequence that in connection with the rule of reason in relation to Arude 30 only imperative requirements of general interest and non-economic in nature can have a funcuon. The Court's eatensive case-law concerning the rule ot reason in my view confirms the truth of that assumption.