Opinion of Mr Advocate General Tesauro
Mr President,
Members of the Court,
1. This Opinion relates to two separate cases: an action brought by the Commission against the Kingdom of the Netherlands (Case C-353/89) and a request for a preliminary ruling made by the Raad van State, The Hague (Case C-288/89).
2. With regard to Case C-353/89, the Commission asks the Court for a declaration that by reserving, entirely or partly, the production of programmes for the Dutch radio broadcasting bodies to a Dutch undertaking and by imposing certain conditions on foreign broadcasters regarding the retransmission of programmes containing advertising specifically intended for the Dutch public, the Kingdom of the Netherlands has failed to fulfil its obligations under Article 59 of the Treaty.
3. As I have said, the two provisions challenged are contained in the Mediawet, which came into force on 1 January 1988. Like its predecessor, that law is intended to safeguard a pluralistic, noncommercial broadcasting system, and it is precisely in relation to that objective that the main provisions embodying the system are formulated, in particular those concerning the right to broadcast and advertising.
4. Broadcasting bodies are also prohibited from inserting into their programmes advertisements coming from third parties. In fact, a monopoly over the broadcasting of such advertisements is attributed to the Stichting Etherreclame (STER), a public body independent of the bodies which have the right to broadcast. Essentially, the STER simply sells advertising time. The resulting revenue is received by the State and used to subsidize the broadcasting bodies themselves and (to a lesser extent) the press.
A — The monopoly granted to the NOPB (Article 61 of the Mediawet)
5. The Commission claims that Article 61 of the Mediawet is incompatible with Article 59 of the Treaty on the ground that that provision prevents undertakings in other Member States from providing services relating to the production of radio programmes and restricts considerably (namely to 25%) the possibility of providing services for the production of television programmes.
6. Consequently, the compatibility of Article 61 of the Mediawet with Article 59 of the Treaty must be considered without taking account of the temporary nature of the situation.
7. These considerations lead me to conclude that the Dutch provision in question is discriminatory and therefore reasons based on public interest cannot be invoked in order to justify it. As the Court has consistently held, national rules which are not applicable to services without distinction as regards their origin and which are therefore discriminatory are compatible with Community law only if they can be brought within the scope of an express derogation.
8. Moreover, even if it were to be considered that the Dutch provision is not based on aspects of formal discrimination on grounds of nationality and that the resulting restrictions are therefore, in principle, justifiable on grounds of the general interest, the result would still be the same.
9. The Dutch Government maintains in the alternative that the system instituted by Article 61 of the Mediawet is permitted by Article 90(1) of the Treaty, which is based precisely on the assumption that the existence of undertakings with special or exclusive rights is lawful.
B — The conditions laid down in Article 66
10. Article 66 of the Mediawet permits the retransmission of foreign programmes containing advertising specifically intended for the Dutch public if a number of conditions (which are also imposed on the Dutch broadcasting bodies) are fulfilled. If all of these conditions are not fulfilled, the foreign programmes may be retransmitted only if they do not contain advertising specifically intended for the Dutch public.
11. Firstly, the first paragraph of Article 59 does not prohibit only restrictions based on nationality, but more generally restrictions on freedom to provide services within the Community... in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended. Moreover, provisions containing special arrangements for foreign nationals are applicable solely if they are justified on grounds of public policy, public security or public health (Article 56, to which reference is made by Article 66).
12. As I have already shown, as a result of the terminology employed and its substance, this system corresponds to a large extent to that of the free movement of goods in view of its prohibition of all restrictions (Articles 30 to 34) and the derogations permitted by Article 36. Consequently, in my view, as in the case of the free movement of goods, any restrictions on the freedom to provide services (even if they are not discriminatory) are in principle incompatible with Article 59.
13. The scope of the freedom to provide services is therefore defined in very wide terms, at least in principle. In particular, it is evident, from the statements that I have quoted, that the prohibition of discrimination on grounds of nationality does not play an absolute and conclusive role as it does in the case of freedom of establishment. Indeed, since the crossing of frontiers is not coupled, in the case of the provision of services, with the creation of a permanent establishment, the principle of national treatment might be liable to give rise to spontaneous restrictions with regard to that aspect of the supply of services. By imposing on foreigners, despite what has been said above, the same conditions as those imposed on nationals, which presuppose a permanent connection with the State, the State would end up by substantially nullifying the freedom to provide services and its special features as compared with the freedom of establishment.
14. However, the Court has stressed the exceptional nature of the possibility of derogation and stated that since the freedom to provide services is a fundamental principle of the Treaty it may be restricted solely:
— Conditions relating to the broadcasting bodies
15. The Commission maintains that, by extending to foreign broadcasters the system applicable to Dutch broadcasters, the Mediawet makes the retransmission of their programmes in the Netherlands impossible de facto if they contain advertising intended specifically for the Dutch public, essentially since in order to fulfil the relevant conditions the foreign bodies would have to be established in a State whose legislation was modelled on that applicable in the Netherlands.
16. In this respect, it should be observed that, according to the Court's case-law, not only overt discrimination based on the nationality of the person providing a service but also all forms of covert discrimination which, although based on criteria which appear to be neutral, in practice lead to the same result, are prohibited.
17. Indeed, requirements that foreign broadcasters should not enable a third party to make a profit in order (as the Netherlands Government maintains) to prevent funds that would otherwise be used to finance broadcasting from being diverted and that such broadcasters should not have a profit-making object and that therefore advertising revenue should be used solely to finance broadcasting in order to provide foreign broadcasters with opportunities at least similar to those existing in the Dutch system(page 24 of the defence) do not make any sense in relation to the objective pursued. It is obvious that the observance (or nonobservance) of those conditions has no effects on the Dutch broadcasting system as such.
18. In the final analysis, the conditions imposed on foreign broadcasters by the Mediawet cannot quality for any derogation from the freedom to provide services. They are therefore incompatible with Article 59 of the Treaty.
— Conditions relating to advertisements
19. With regard to the conditions laid down in the Mediawet relating to advertising, it should be observed first that they are applicable without distinction, both on the formal and (in principle) substantive levels. They are therefore nondiscriminatory restrictions.
20. In the final analysis, it appears from the relevant case-law of the Court that as long as national legislation on broadcasting has not been harmonized, the freedom to provide services, which is directly guaranteed by the Treaty, consists solely of the prohibition on restricting television advertising to a greater extent than domestic television advertising.
21. The Commission maintains that the fact that those conditions do not have to — or, in any event, may not — be complied with in the case of advertising not specifically intended for the Dutch public means that they were not adopted in the general interest, for instance to protect viewers or listeners from excessive advertising.
22. In this respect I would observe that legislation such as that at issue may, in any event, make it more expensive and more difficult for foreign broadcasters to transmit programmes containing advertising specifically intended for the Dutch public, if only because they will have to adapt their programmes in order to fulfil the conditions in question. In other words, conditions such as the 5% limit and the prohibition on advertising on Sundays amount to special rules applicable to broadcasters in the other Member States, since they alone have to cut out parts of their programmes.
23. However, it cannot be denied that such a restriction is justifiable on the grounds of requirements connected with the general interest, such as consumer protection, which the Court has accepted on several occasions as a requirement worthy of protection in the services sector.
24. In the final analysis, although the conditions laid down in Article 66 of the Mediawet relating to advertisements constitute a de facto restriction on the free movement of services, they are compatible with Article 59 in so far as they are justified by the pursuit of a general interest worthy of protection, namely consumer protection.
25. In the light of the foregoing I would therefore propose that the Court:
26. With regard to Case C-288/89, I propose that the Court give the following answers to the questions submitted by the Raad van State, The Hague:
1 Original language: Italian.
2 The Law of 21 April 1987 regarding the financing of radio and television programmes, tne radio and television licence fee and press subsidies (Staatiblad No 249 of 4. 6. 1987).
3 The Dutch Government has, in fact, presented a draft law to the Dutch parliament amending the Mediawet, whereby the obligation laid down in Article 61 would be abolished from I January 1991 with regard to television and from 1 January 1992 with regard to radio. This amendment has not yet been adopted. However, as far as television programmes are concerned, it is already in operation de facto, since the obligation in question has been set at 0%.
4 In this respect I would refer lo the judgment in Case 72/83 Campus Oil [1984] ECR 2727, in which the Court stated, with regard to a national measure obliging all importers to purchase a certain percentage of their requirements for petroleum products from a national refinery, that such an obligation limits to that extent the possibility of importing the same product. It thus has a protective effect by favouring national production and, by the same token, works to the detriment of producers in other Member States (paragraph 16). The Court held that the measure was therefore incompatible with Article 30.
5 Case C-21/88 Du Pom de Nemours [1990] ECR I-889, paragraphs 11 to 14.
6 Case 202/88 France v Commission [1991] ECR I-1223, paragraph 51.
7 Case 352/85 Bond van Adverteerders [1988] ECR 2085, paragraph 32.
8 The Court has held on several occasions that since Article 56 contains a derogation from a fundamental principle of the Treaty (Article 3(c)), it must be interpreted rcstrictively and therefore does not apply unless there is a genuine and sufficiently serious threat to the requirements of public policy affecting one of the fundamental interests of society (Case 30/77 Bouchereau [1977] ECR 1999, paragraph 35) and the measures adopted must be proportionate and strictly necessary with regard to the interests which it is sought to safeguard (Joined Cases 115 and 116/81 Adorn and Comimille [1982] ECR 1665, paragraph 9).
9 In this respect I would observe that, in any event, the noncommercial nature of a broadcasting system cannot be regarded per se as an overriding requirement capable of justifying a restriction on the freedom to provide services; it is merely a means of guaranteeing pluralism. Consequently, the noncommercial nature of a broadcasting system may justify restrictions solely in so far as they are essential in order to pursue an objective that is worthy of protection at the Community level, such as an objective of cultural policy designed to ensure pluralism.
10 See, for example, Case 180/89 Commission v Italy [1991] ECR I-709, where the Court held that the general interest... in the conservation of the national historical and_ artistic heritage can constitute an overriding reason justifying a restriction on the freedom to provide services (paragraph 20).
11 Case C-202/88 France v Commission, cited above, paragraph 22.
12 Sec to this effect the Opinion of Mr Advocate General Jacobs in Case C-76/90 Säger, delivered on 21 February 1991 and the Opinion of Mr Advocate General Lenz in the tourist guide cases (Case 154/89 Commission v France; Case 180/89 Commission v Italy; Case 198/89 Commission v Greece [1991] ECR I-727). The Opinion of Mr Advocate General Van Gerven in Case C-340/89 Vlassopoulou, delivered on 28 November 1990, also contains interesting observations on this point, although that case concerns the right of establishment.
13 Judgment in Case 33/74 Van Binsbergen v Bedrijfsvereniging Metaalnijverheid [1974] ECR 1299.
14 See, most recently, Case 205/84 Commission v Germany [1986] ECR 3755, paragraph 25.
15 Judgments in Case 205/84 Commission v Germany, cited above, paragraph 25, and in Case 180/89 Commission v Italy [1991] ECR I-709, paragraph 15.
16 Commission y Italy, cited above, paragraph 15.
17 Tizzano, La libera circolazione dei servizi nella CEE. Profili generali Professioni e servizi nella CEE (ed. Tizzano), Padua, 1985, p. 20 et seq.
18 With regard to the three conditions mentioned see Joined Cases 110 and 111/78 Van Wesemael [19791 ECR 35; Case 279/80 Webb [1981] ECR 3305; Case 205/84 Commission v Germany, cited above, paragraphs 27 and 29; and most recently, Case 180/89 Commission v Italy, cited above, paragraphs 17 and 18.
19 Joined Cases 62 and 63/81 Seco v Evi [1982] ECR 223, paragraph 8.
20 Case 52/79 Procureur äu Äo/v Debauve [1980] ECR 833.
21 In that case the Court ruled on the interpretation of the compatibility of Article 59 of the Treaty with Article 4 of the Kabelregeling, which was replaced by Article 66 of the Mediawet with regard to the aspects in issue here.
22 Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (OJ 1989 L 298, p. 23) comes into force on 3 October 1991.
23 Paragraph 17.
24 Sec, most recently, the judgments in Case 205/84 Commission v Germany, cited above, paragraph 33, and Case 180/89 Commission v Italy, citea above, paragraph 20.