Opinion of Advocate General Tesauro
Mr President,
Members of the Court,
1. Having been the subject of several judgments in recent years, all in preliminaryruling proceedings, the question of the compatibility with Article 3(f), the second paragraph of Article 5 and Article 85(1) of the EEC Treaty of State rules affecting the economic activity of private undertakings continues, in view of the principles involved, to arouse enormous interest.
2. I shall first recall the national legislation involved in Case C-2/91, drawing attention to the fact that, although the prohibition of transferring commission at present applies to all branches of insurance, the question referred by the national Court relates only to health insurance and legal expenses insurance.
3. It is noteworthy that agreements with the same subject-matter as the State measures at issue had been concluded, prior to the adoption of those measures, between the insurance undertakings operating in the life assurance sector. In particular, there was the Heidelberg agreement of 1900, entered into by the four largest undertakings in the sector; the anti-discount agreement of 1911, to which most insurance undertakings were parties (again in the life assurance sector); and, finally, the so-called directives of 1919, on the basis of which the undertakings in question submitted to the government what constituted a veritable draft law, which then led to the abovementioned amendment of the VAG of July 1923 and the subsequent adoption of the order of 10 August of the same year.
4. I now turn to Case C-245/91, which is concerned with Netherlands legislation having substantially the same content as the German measures described above. Article 16(1) of the Wet Assurantiebemiddelingsbedrijf of 7 February 1991 (Law on the activities of insurance agencies, hereinafter the WABB), which essentially reproduced the content of Article 16 of the Wet Assurantiebemiddeling (Law on Insurance Agencies, hereinafter the WAB), provides that it shall be prohibited to allow, grant or promise, directly or indirectly, in connection with an insurance policy, a commission, refund of commission or any other financially quantifiable advantage to persons other than the intermediary to whom the insurance portfolio belongs. Any infringement of that provision is punishable, under the Wet op de Economische Delicten (Law on Economic Offences) by imprisonment and fines.
5. The facts of the main proceedings are straightforward and undisputed. Mr Meng (Case C-2/91), an independent financial adviser, is accused of infringing the legislation in question by paying to his clients the commission received from the insurance companies in respect of six policies, three for health insurance and three for legal expenses insurance. The company Ohra (Case C-245/91) is the subject of criminal proceedings for having promised and/or offered credit cards to clients who had subscribed insurance contracts.
6. The questions submitted thus have a direct bearing on the problem of the relationship between Community competition rules and national legislation governing undertakings exercise of economic activities, that is to say legislation adopted — in principle — in pursuit of the public interest but nevertheless having an anticompetitive effect: can the former stand in the way of the application of the latter? And if so, under what conditions?
7. Although that principle is, according to its terms, absolutely clear, the same cannot be said of the scope of the obligation or the criteria to be used in deciding in which cases it has been breached. In other words, what are the measures liable to negate the effectiveness of Article 85? What is the precise scope of the criterion of effectiveness?
The case-law
8. It will be remembered that the Court's first decision on this matter was in INNO v ATAB, concerning a Belgian provision which required retailers selling manufactured tobacco to observe the price indicated on the tax seal, which was fixed by the producer or the importer.
9. In that judgment, the Court thus identified the criterion of effectiveness with the obligation of the Member States not to adopt measures allowing undertakings to escape the constraints of Articles 85 and 86. The statement of that principle cannot disregard the facts of the case to which it relates, in which it is clear that the adoption of the contested measure had been preceded by arrangements contrary to Article 85 and was attributable to an initiative by a member of parliament who at the same time served as secretary of one of the associations which were parties to the agreement. The need not to undermine the effectiveness of the competition provisions by adopting rules which allow undertakings to escape the prohibitions imposed by Articles 85 and 86 must therefore be seen in that context.
10. The case-law immediately following the INNO v ATAB judgment seems to me to favour the first hypothesis. And indeed, having been called on several times to give a ruling on national rules relating, in particular, to prices and tariffs, the Court took the view that they did not raise any problem of compatibility with Articles 5 and 85 of the Treaty but should instead be examined in the light of Article 30.
11. The decisions which followed appear, at least at first sight, to go in two different directions.
12. In BNIC v Clair, in relation to national legislation which extended an agreement concluded within an inter-professional organization to the other economic agents in the sector, the Court took the view that the agreement constituted an agreement between undertakings or associations of undertakings and that the adoption of a measure by the public authorities, intended to make that agreement binding on third parties, cannot remove the agreement from the scope of Article 85(1) (paragraph 23).
13. The fate of a State measure which extends the effects of an agreement to third parties was considered in greater detail in Nouvelles Frontières, in which the Court stated that the Member States' obligation to refrain from adopting or keeping in force measures which might in practice render the competition provisions ineffective would be infringed, in particular, if a Member State were to require or favour the adoption of agreements, decisions or concerted practices contrary to Article 85 or to reinforce the effects thereof (paragraph 72).
14. Vlaamse Reisbureaus, which concerned national provisions prohibiting travel agents from transferring to their customers any of the commission due to them, is of particular interest. The Court, having ascertained the existence of a system of agreements whose provisions had been incorporated in the contested legislation, held that the conversion of a purely contractual obligation into a statutory obligation constituted reinforcement of the existing agreements.
15. The last statement leads on to the second, divergent, line of development in the Court's case-law, which refers back to INNO v ATAB and, according to some commentators, disregards any anticompetitive conduct on the part of undertakings.
16. A first answer to that question is already to be found in the Leclerc petrol judgment of 29 January 1985. In that judgment, the Court stated that the rules in question were not intended to compel suppliers and retailers to conclude agreements or take any other action of the kind referred to in Article 85(1) of the Treaty and then emphasized that on the contrary, they entrust responsibility for fixing prices to the public authorities, which for that purpose consider various factors of a different kind; and finally it added that the fact that the factors taken into account included the ex-refinery price fixed by the supplier ... does not prevent rules such as those provided for here from being State rules and is not capable of depriving the rules on competition applicable to undertakings of their effectiveness (paragraph 17).
17. The case-law so far outlined is completed by the Van Eycke judgment, in which the Court codified the two lines of development discussed above, stating that the effectiveness of the competition rules is undermined, in particular, if a Member State were to require or favour the adoption of agreements, decisions or concerted practices contrary to Article 85 or to reinforce their effects, or to deprive its own legislation of its official character by delegating to private traders responsibility for taking decisions affecting the economic sphere (paragraph 16).
General observations on the case-law
18. Although from the examination of the case-law so far carried out the possibility cannot be excluded that the theory of effectiveness may apply in cases falling outside the circumstances described in Van Eycke, it is nevertheless clear — in my opinion extremely clear — that State measures producing an objective anticompetitive effect cannot, for that reason alone, be appraised in relation to Articles 3(f), 5 and 85.
The contested measures viewed against the background of the case-law
19. Since the circumstances codified in the abovementioned case-law, although helping to provide a fairly clear frame of reference, cannot be regarded as exhaustive, I think it is appropriate to verify first of all whether the measures challenged by Mr Meng and Ohra fall within any of them.
(a) Case C-2/91
Let me say straight away that, in the Meng case, there is no question of any circumstances such as to deprive the measures concerned of their status as State rules. Indeed, the prohibition of transferring commission was adopted by the Bundesaufsichtsamt, an administrative authority operating under the auspices of the Ministry of Finance which is empowered to adopt measures intended, in particular, to prohibit conduct liable to prejudice the interests of consumers. Furthermore, it should be emphasized here that the representatives of the insurance companies are merely invited to take part in the preparation of that body's decisions, but they do not actually determine the content thereof.
20. Let us now examine the present case in relation to the other hypothesis found in the case-law, which presupposes the existence of a significant link between the contested measure and anticompetitive conduct on the part of private undertakings.
21. In short, it must be recognized that there is no substantial link between the measures in question and the agreements concluded between the life assurance companies. What can be stated, on the other hand, is that those agreements arc at the root of the prohibition of transferring commission which, although initially adopted only in respect of life assurance, ultimately came to affect, albeit in successive stages, all branches of insurance.
(b) Case C-245/91
22. As regards the Ohra case, let me say immediately that neither the order for reference nor the observations of Ohra itself mention the existence of any agreement of the kind required by the case-law.
The illegality of State measures in the absence of any link with anticompetitive conduct on the part of undertakings
23. That said, the fact that the measures in question do not fall within either of the hypotheses expounded by the Court and, more generally, do not display any link with anticompetitive conduct by the undertakings in the sector, clearly does not provide a basis for a conclusive answer to the problem at issue.
24. Let me say immediately that a close examination, as required in the present case, discloses no legal basis for that view.
25. In short, having regard to the fact that, in the absence of a specific provision, the Member States' general obligation ... laid down in Article 5 of the EEC Treaty cannot be relied on and Article 3(f) merely sets out an objective and a principle which are then expounded in Articles 85 to 94, any anticompetitive effects of State measures addressed to private undertakings can be criticized as undermining the effectiveness of Article 85 only if they breach the prohibitions imposed on undertakings by Article 85(1) itself.
26. On the basis of the case-law on Article 90 and in particular the dictum in the RTT judgment to the effect that a national measure cannot place a public undertaking, or one enjoying exclusive or special rights, in a position which, if achieved by the undertaking's own efforts, would constitute an infringement of Article 86 of the Treaty, it has also been contended in the course of these proceedings, by the Spanish Government for example, that the same should apply to private undertakings as well: there is no justification for them to be subject to different conditions from those applied to the undertakings referred to in Article 90(1).
27. That said in regard to matters of principle, I cannot but emphasize that the opposite solution advocated in the course of the proceedings, although attractive, remains, in the absence of any legal basis, purely academic.
28. Admittedly, a solution based exclusively on the existence of a link between the State legislation and anticompetitive conduct on the part of individuals may appear unsatisfactory, since it is quite possible that in certain cases an agreement between undertakings may prove to be of only formal significance.
29. Conversely, there may be cases in which it would be more correct to decide that the State measure was not unlawful notwithstanding the existence of a link with the conduct of undertakings, since, as emphasized by the French Government, that link is necessary in order to conclude that the measure is in breach of Article 85, but is not always sufficient.
30. In any event, it does not seem to me that the approach so far taken by the Court is such as to afford immunity for measures whose sole aim is to evade the competition rules.
31. The measures contested by Mr Meng and Ohra, for example, could well be referred to the Court under Article 59 where the requisite conditions are fulfilled: that is to say, where there is a cross-frontier clement — which is lacking in the case before us. The possibility cannot be excluded that the contested national rules may so affect the structure of the German and Netherlands markets that it will be more difficult for intermediaries and insurance companies established in other Member States to gain access to them.
32. It has nevertheless been emphasized that State measures which do not create an obstacle to trade within the meaning of Article 30 (or Article 59) but are liable to affect trade between the Member States fall outside the scope of the Treaty. Such a case might arise above all where tariff and price rules which merely freeze the retail sale price nevertheless place no restriction on determination of the import price.
33. In conclusion, I am of the opinion that the second paragraph of Article 5, in conjunction with Articles 3(f) and 85(1), may not be used as a basis for reviewing the legality of a State measure in the absence of any link with anticompetitive conduct by individuals, even though, objectively, that measure has an effect equivalent to that of an agreement prohibited by Article 85.
34. In view of the foregoing considerations, I suggest that the Court give the following answers to the questions referred to it by the Kammergericht Berlin, and the Arrondissementsrechtbank Arnhem:
(a) In Case C-2/91:
Article 3(f), the second paragraph of Article 5 and Article 85 of the Treaty must be interpreted as not precluding, in the absence of any link with conduct by undertakings prohibited by Article 85(1), the application of State legislation which, as in the present case, prohibits insurance intermediaries in the health and legal expenses sectors from transferring all or part of the commission payable to them.
(b) In Case C-245/91:
Article 3(f), the second paragraph of Article 5 and Article 85 of the Treaty must be interpreted as not precluding, in the absence of any link with conduct by undertakings prohibited by Article 85(1), the application of State legislation which prohibits the grant or promise, in respect of an insurance contract, of any commission, rebate or any other financial advantage to persons other than the intermediary to whom the insurance portfolio belongs.
1 Original language: Italian.
2 Three measures are in force: the order of 8 March 1934, con cerning life assurance, which repealed and replaced an order of 10 August 1923; the order of 5 June 1934 on health insur ance; and finally the regulation of 17 August 1982 which concerns all indemnity insurance and therefore repealed and replaced all the previous orders covering specific branches of insurance: accident and civil liability (order of 14 May 1924), property insurance (order of 8 March 1934) and legal expenses insurance (order of 24 January 1967).
3 Sec, most recently. Case C 332/89 Marchandise [1991] ECR I - 1027, paragraph 22.
4 It goes without saying that any conflicts between Community and national competition law will be resolved by applying the principle of the primacy of Community law (sec the well-known judgment in Case 14/68 Wilhelm [1969] ECR I and Joined Cases 253/78 and I-3/79 Giry and Guerlain [1980] ECR 2327, in which the Court restated that the parallel application of national competition law can only be permitted in so far as it docs not prejudice the uniform application, throughout the common market, of the Community rules or the full effects of the measures adopted in implementation of those rules (paragraph 16).
5 It is clear that such a wide definition will cover every type of State rule: it will thus extend to all measures, legislative or otherwise, within the sphere of administrative law, which, in the public interest, regulate the activities of undertakings, and in particular measures regulating markets, including rules on prices and tariffs, environmental measures, economic and monetary policy measures and so forth, and those in the fields of taxation, employment, social security and so on.
6 Case 13/77 [1977] ECR 2115. It should be borne in mind, however, that the Court was confronted with a problem of that kind in Case 78/70 Deutsche Grammophon [1971] ECR 487. It was asked to rule on the compatibility of a provision of national copyright law with the second paragraph of Article 5 and Article 85(1). However, on that occasion the Court confined itself to saying that where the exercise of the exclusive right in question docs not exhibit the elements of contract or concerted practice referred to in Article 85(1) it is necessary ... to consider whether the exercise of the right in question is compatible with other provisions of the Treaty, in particular those relating to the free movement of goods (paragraph 7).
7 In that case the company INNO, which claimed that it should not be bound, for the purpose of retail sales, by a price fixed by tobacco manufacturers and importers, contended that the national legislation on prices was only in appearance part of tax law but in reality should be seen as national competition legislation providing legal cover for a restrictive agreement. It claimed, therefore, that it should be held to be unlawful for a Member States to require private undertakings to engage in conduct which, in the absence of a State provision, would be contrary to Article 85 or 86.
8 Sec in llut connection Case 82/77 Van Tlggelc [1978] ECR 25 (minimum price rules); Case 5/79 Buys [1979] ECR 3203 (rules freezing prices); Case 181/82 Roussel [1983] ECR 3849 (system of imposed prices); Case 238/82 Duphar [1984] ECR 523 (scheme for reimbursements in respect of medicinal preparations by socia! security bodies).
9 Joined Cases 177 and 178/82 [1984] ECR 1797. To the same clfcct, sec Case 188/86 Letivrc [1987] ECR 2963 (system of controlled prices for wholesale trade in beef and veal)
10 Case 123/83 [1985] ECR 391.
11 Case 136/86 [1987] ECR 4789.
12 Joined Cases 209-213/84 Asjes and Others [1986] ECR 1425.
13 Case 66/86 [1989] ECR 803.
14 Case 311/85 [1987] ECR 3801.
15 In the later judgment of 3 December 1987 in BNIC v Allbert — concerning circumstances wholly analogous to those in BNĪC v Clair — the Court, having reaffirmed that the agreement between undertakings was still subject to the prohibitions laid down by Article 85(1), made it clear that a State measure which makes the agreement binding on third parties as well is in turn incompatible with Articles 5 and 85.
16 The Court gave judgment on the same subject in Ahmed Saced, cited above, in which it confirmed that the approval by the aeronautical authorities of tariff agreements contrary to Article 85(1) is not compatible with Community law and in particular with Article 5 of the Treaty. It also follows that the aeronautical authorities must refrain from taking any measure which might be construed as encouraging airlines to conclude tariff agreements contrary to the Treaty. (paragraph 49).
17 Case 229/83 [1985] ECR 1.
18 Case 231/83 [1985] ECR 305.
19 The same view underlies the case-law of the Supreme Court of the United States, which raises no objections to measures which provide for active control by the State (see for example Bates v State Bar of Arizona 97 US 2691, 1977), whilst it regards as unconstitutional those measures which entrust entirely to economic agents the responsibility of regulating the market (see for example Goldfarb v Virginia State Bar 421 U. S., 1975, in which legislation allowing a bar association to fix minimum fees was held to be unlawful).
20 Case 267/86 [1988] ECR 4769. That case concerned a State measure on tax exemption for income from savings deposits adopted in a sector in which inter-bank agreements existed for the specific purpose of limiting income from savings deposits. The Court nevertheless considered that it had not been proved that the contested legislation was intended to require or facilitate the conclusion of new agreements or the implementation of new practices or that it had incorporated wholly or in part the elements of agreements entered into between economic agents requiring or encouraging compliance on the part of those undertakings (paragraph 18); it also held that the fact that the legislation had been adopted after consultation with representatives from the sector in question did not deprive it of its official character.
21 flic same tticlitm was repeated in later judgments in which the examination undertaken by the Court snowed that none of those conditions was satisfied and that the legislation in question was therefore not open to criticism from that standpoint (sec Case C-339/89 Ahlbom Atlantique [1991] ECR 1 107, paragraph 11 and Case C-332/89 Marchandise [1991] LCR I-1027, paragraph 22). Sec also Case C-60/91 Aloran [1992] ECR I 2085, paragraphs 11 and 12, in which the Court did not even enquire whether the con tested measure came within the scope of cither of the cases mentioned because it was not liable to undermine trade between Member States and therefore was not, in any event, likely to produce effects comparable to those of an agreement incompatible with Article 85(1).
22 Opinion of 13 December 1977 in Case 82/77 [1978] ECR 42, in particular at p. 48.
23 I refer to the Nouvelles Fronttères. BNIC v Aubert, Ahmed Saeed and Vlaamse Reisbureaus judgments, in which the Court concluded that the contested national measures were illegal.
24 Of particular importance in that connection arc the ŕ/e Haar and Leclerc petrol judgments.
25 This applies not only to the Van Tiggele judgment but also to those in Leclerc books and Van Eycke. The facts were similar in INNO v ÄTAB.
26 It will be remembered that in Van Eycke, cited above, the Court stated that the official character of legislation cannot be put in doubt by the mere fact that it was adopted after consultation with representatives of the associations in the sector concerned (paragraph 19).
27 Cilcd above.
28 That applies to agreements which, as pointed out by the Commission, fall within the scope of block exemption regulations.
29 Deutsche Grammophon, cited above, paragraph 5.
30 Sec, inter alia, INNO v ATAB, cited above, paragraph 29.
31 Order in Case 229/86 Brother [1987] ECR 3757, in particular at p. 3763.
32 See the judgment in Joined Cases C-89, 104, 114, 116, 117 and 125-129/85 Ahlströhm and Others v Commission [1993] ECR I-1307.
33 Case C-18/88 [1991] ECR I-5941, paragraph 20.
34 Since the verv fact of regulating the market involves, by dclinition, a limitation of competition, it is rare for Stale measures on the exercise of economic activities not to have anti competitive effects.
35 INNO v ATAB, cited above, paragraph 35.
36 Sec for example the judgments, cited above, in Van Tiggele, Buys, Roussel and Duphar, as well as in INNO itself and, to some extent, the Leclerc books' judgment.
37 Sec for example Ulrich, State intervention and EEC com petition law. World Comperinoti, 199C, p. 79 et seq