Avis juridique important

Judgment of the Court of 25 July 1991. - Commission of the European Communities v Kingdom of the Netherlands. - Failure to fulfil obligations - Freedom to provide services - Obligation to use the services of a national undertaking for the production of radio and television programmes - Conditions imposed on the re-transmission of advertising contained in radio or television programmes broadcast from other Member States. - Case C-353/89. European Court reports 1991 Page I-04069 Swedish special edition Page I-00353 Finnish special edition Page I-00367

Summary Parties Grounds Decision on costs Operative part

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1. Freedom to provide services - Provisions of the Treaty - Scope - Limits

(EEC Treaty, Arts 56 and 59)

2. Freedom to provide services - Restrictions - Justified by reasons relating to the general interest - Cultural policy - Permissibility - Conditions

(EEC Treaty, Art. 59)

(EEC Treaty, Art. 59)

4. Freedom to provide services - Restrictions - Conditions affecting the structure of foreign broadcasting organizations operating in the audio-visual sector - Justification based on reasons relating to the general interest - None

(EEC Treaty, Art. 59)

5. Freedom to provide services - Restrictions - Limitation of the re-transmission of advertising contained in radio or television programmes broadcast from other Member States - Justified on grounds relating to the general interest - Conditions

(EEC Treaty, Art. 59)

6. Freedom to provide services - Restrictions - Limitation of the re-transmission of advertising contained in radio or television programmes broadcast from other Member States

(EEC Treaty, Art. 59)

1. The abolition of restrictions on freedom to provide services within the Community referred to in the first paragraph of Article 59 of the Treaty entails, in the first place, the abolition of any discrimination against a person providing services on account of his nationality or the fact that he is established in a Member State other than that in which the service is to be provided.

National rules which are not applicable to services without discrimination as regards their origin are compatible with Community law only if they can be brought within an express derogation, such as that contained in Article 56 of the Treaty, which may not be invoked in order to pursue objectives of an economic nature.

In the absence of harmonization of the rules applicable to services, or even a system of equivalence, restrictions on the freedom to provide services may arise in the second place as a result of the application of national provisions which affect any person established in the national territory to persons providing services established in the territory of another Member State who already have to satisfy the requirements of that State' s legislation. Such restrictions come within the scope of Article 59 if the application of the national legislation to foreign persons providing services is not justified by overriding reasons relating to the general interest or if the requirements embodied in that legislation are already satisfied by the rules imposed on those persons in the Member State in which they are established.

Lastly, the application of national provisions to providers of services established in other Member States must be such as to guarantee the achievement of the intended aim and not go beyond that which is necessary in order to achieve it. Therefore it must not be possible to achieve the same result by less restrictive rules.

2. A cultural policy with the aim of safeguarding the freedom of expression of the various (in particular, social, cultural, religious and philosophical) components of a Member State may constitute an overriding requirement relating to the general interest which justifies a restriction on freedom to provide services.

3. By obliging bodies which have obtained air time on the national broadcasting network to spend with a particular national undertaking all of the amounts made available to them for the production of radio programmes and a percentage determined by decree for the production of television programmes, a Member State fails to fulfil its obligations under Article 59 of the Treaty.

Even if such a restriction forms part of a cultural policy intended to safeguard the freedom of expression of the various social, cultural, religious and philosophical components of society by ensuring the survival of an undertaking which provides them with technical resources, it goes beyond the objective pursued, since pluralism in the audio-visual sector of a Member State cannot be affected in any way by allowing the national bodies operating in that sector to make use of providers of services established in other Member States.

4. Conditions affecting the structure of foreign organizations operating in the audio-visual sector cannot be regarded as being objectively necessarily in order to safeguard the general interest in maintaining a national radio and television system which secures pluralism.

5. Restrictions on the broadcasting of advertisements may be imposed for an aim relating to the general interest, namely protection of consumers from excessive advertising or, in the context of a cultural policy, maintaining a certain level of programme quality. However, if such restrictions affect only advertising intended specifically for the public in the Member State in question, they are not justified by overriding reasons relating to the general interest, since they are designed to restrict the competition to which a national body with a monopoly over the broadcasting of such advertising may be exposed from foreign operators.

6. By prohibiting operators of cable networks established in its territory from transmitting radio or television programmes containing advertising intended specifically for the public in the Member State in question which is broadcast by broadcasting bodies established in the territory of another Member State if certain conditions relating to the structure of such bodies or to advertising contained in their programmes which is intended for the public in the Member State in question are not fulfilled, a Member State fails to fulfil its obligations under Article 59 of the Treaty.

In Case C-353/89,

Commission of the European Communities, represented by Giuliano Marenco and René Barents, members of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Guido Berardis, also a member of its Legal Service, Wagner Centre, Kirchberg,

applicant,

v

Kingdom of the Netherlands, represented by A. Bos, Legal Adviser, and J.W. De Zwaan, Assistant Legal Adviser, both in the Ministry of Foreign Affairs, acting as Agents, with an address for service in Luxembourg at the Netherlands Embassy, 5 Rue C.M. Spoo,

defendant,

APPLICATION for a declaration that, by reserving to a Dutch undertaking all or some of the orders from Dutch national broadcasting bodies and by restricting the re-transmission in the Netherlands of programmes from other Member States containing advertising specifically intended for the Dutch public, the Kingdom of the Netherlands has failed to fulfil its obligations under Article 59 of the EEC Treaty,

THE COURT,

composed of: G.F. Mancini, President of Chamber, acting as President of the Court, T.F. O' Higgins, J.C. Moitinho de Almeida, G.C. Rodríguez Iglesias, M. Díez de Velasco (Presidents of Chambers), Sir Gordon Slynn, C.N. Kakouris, R. Joliet, F.A. Schockweiler, F. Grévisse and M. Zuleeg, Judges,

Advocate General: G. Tesauro,

Registrar: J.-G. Giraud,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 21 February 1991, at which the Netherlands Government was represented by J.W. De Zwaan and T. Heukels, acting as Agents,

after hearing the Opinion of the Advocate General delivered at the sitting on 18 April 1991,

gives the following

Judgment

1 By application lodged at the Court Registry on 17 November 1989, the Commission of the European Communities brought an action before the Court under Article 169 of the EEC Treaty for a declaration that, by reserving to a Dutch undertaking all or some of the orders from Dutch national broadcasting bodies and by restricting the re-transmission in the Netherlands of programmes from other Member States containing advertising specifically intended for the Dutch public, the Kingdom of the Netherlands has failed to fulfil its obligations under Article 59 of the EEC Treaty.

2 The Commission challenges two mutually independent provisions: the first relates to the obligation imposed on national broadcasting bodies established in the Netherlands to have all or some of their programmes made by a Dutch undertaking; the second relates to the conditions imposed on the transmission by cable of programmes broadcast from other Member States where they contain advertising specifically intended for the Dutch public. Those two provisions are contained in the Dutch Law of 21 April 1987 governing the supply of radio and television programmes, radio and television licence fees and press subsidies (Staatsblad No 249 of 4 June 1987, hereinafter referred to as "the Mediawet").

3 The Mediawet is intended to establish a pluralist and non-commercial radio and television broadcasting system. Under Articles 31 and 34 of that law, the air time available for programmes broadcast on the national radio and television network is allocated by the body responsible for supervising the implementation of the Mediawet, the Commissariaat voor de Media, in particular to broadcasting associations, associations of listeners or viewers which have legal personality and represent the main schools of thought in Dutch society.

4 In principle, those bodies have complete freedom to produce programmes themselves. However, they are under an obligation, which is less severe in the case of television than in the case of radio, to use the technical resources (recording studios, set workshops, technicians, etc.) of the Nederlandse Omroepproduktie Bedrijf ("the NOPB"), a public limited company incorporated under Dutch law.

5 This obligation is set out in Article 61 of the Mediawet, which provides as follows:

"In order to ensure that the means of production are maintained, bodies which have obtained air time on the national network must spend with the NOPB each year all the amounts allocated to them under Articles 101 and 102 with regard to the production of radio programmes and a percentage determined by decree with regard to the production of television programmes."

6 Articles 101 and 102 of the Mediawet, which are cited in Article 61, deal essentially with the radio and television licence fees paid by listeners and viewers, which the Commissariaat voor de Media passes on to the broadcasting bodies.

7 In addition, Article 154 of the Mediawet provides that, as far as television is concerned, the percentage mentioned in Article 61 is to be 75%.

8 The second of the measures challenged by the Commission is contained in Article 66 of the Mediawet. That article relates to the transmission by cable in the Netherlands of radio and television programmes broadcast abroad. It provides as follows:

"(1) The operator of a cable network may:

(a) transmit programmes which are broadcast by a foreign broadcasting body by means of a broadcasting transmitter and which may, most of the time, be received directly in the area served by the cable network by means of a normal individual aerial with a reasonable standard of quality;

(b) transmit programmes other than those mentioned in (a) which are broadcast by a foreign broadcasting body or a group of such bodies as broadcasting programmes, in accordance with the legislation in force in the broadcasting country. If such programmes contain advertisements, they may be transmitted solely provided that the advertisements are produced by a separate legal person, that they are clearly identifiable as such and clearly separated from other parts and are not broadcast on Sundays, that the duration of such advertisements does not exceed 5% of the total air time utilized, that the broadcasting body fulfils the conditions laid down in Article 55(1) and that the entire revenue is used for the production of programmes. Nevertheless, if those conditions are not fulfilled, such a programme may also be transmitted provided that the advertisements contained therein are not specifically intended for the Dutch public;

...

(2) For the purposes of the application of paragraph 1(b), advertisements shall, in any event, be deemed to be intended specifically for the Dutch public if they are broadcast during or immediately after a portion of a programme or a coherent group of programmes containing Dutch sub-titles or a portion of a programme in Dutch.

(3) Our Minister may grant an exemption from the prohibition contained in paragraph 1(b) in respect of programmes broadcast in Belgium intended for the Dutch-speaking public in that country."

9 Article 55(1), which is mentioned in that provision, provides that in principle "bodies which have obtained air time may not be used to enable a third party to make a profit ...".

10 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the pleas in law and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

The field of application of Article 59 of the Treaty

11 The Commission maintains that the two measures implemented by the Kingdom of the Netherlands infringe the principle of the freedom to provide services laid down in Article 59 of the Treaty. For its part, the Netherlands Government claims that the measures are entirely justified.

13 The first paragraph of Article 59 provides that restrictions on freedom to provide services within the Community are to be progressively abolished during the transitional period in respect of nationals of Member States who are established in a Member State of the Community other than that of the person for whom the services are intended.

20 It is in the light of those principles that first the obligation imposed on national broadcasting bodies by Article 61 of the Mediawet to use the technical resources of the NOPB for the production of their radio and television programmes and secondly the conditions laid down in Article 66 of the Mediawet regarding the transmission in the Netherlands of advertisements contained in radio or television programmes broadcast from other Member States must be examined.

The absolute or partial obligation to use the technical resources of the NOPB for the production of radio or television programmes

26 The Netherlands Government also argues that it is necessary to ensure a smooth transition between the previous broadcasting system, in which the technical resources required for the production of programmes belonged to the public sector, and the introduction of a system of competition. It maintains that it was necessary, first, to preserve the cultural attainments of the previous period and, secondly, to avoid the collapse of the NOPB and mass redundancies. However, at the hearing it stated that the obligation in question had been abolished with effect from 1 January 1991 with regard to the production of television programmes and would be abolished with effect from 1 January 1992 with regard to the production of radio programmes.

27 As regards the argument based on the need to bring in a system of competition only gradually, it should be observed that the transitional period provided for in the Treaty expired on 31 December 1969 and that the requirements laid down in Article 59 of the Treaty became directly and unconditionally applicable on the expiry of that period (see the judgment in Van Wesemael, cited above, paragraph 26). Consequently, a national legislature cannot be authorized to introduce new time limits.

32 Moreover, as the Netherlands Government itself admits, the cultural tasks performed by the NOPB are financed entirely by the State. They are therefore extraneous to the obligation imposed on the broadcasting bodies to spend all or a proportion of their funds with the NOPB and hence cannot be capable of justifying that obligation.

The conditions imposed with regard to the transmission in the Netherlands of advertising contained in radio and television programmes broadcast from other Member States

38 As regards the conditions laid down in the second sentence of Article 66(1)(b) of the Mediawet concerning the transmission in the Netherlands of advertising contained in radio and television programmes broadcast from abroad, it must be observed from the outset that those conditions entail a two-fold restriction on the freedom to provide services. First, they prevent the operators of cable networks established in a Member State from transmitting radio or television programmes made available by broadcasters established in other Member States which do not satisfy those conditions. Secondly, they restrict the possibilities available to such broadcasters to include in their programmes advertisements intended specifically for the Dutch public for the benefit of advertisers established in particular in the State in which the programmes are to be received.

39 As the Commission rightly pointed out, the conditions laid down in Article 66 of the Mediawet fall into two different categories. First, there are those relating to the structure of the broadcasters: they must entrust advertising to a legal person independent of the suppliers of programmes; they must use all their advertising revenue for the production of programmes; and they may not permit third parties to make a profit. Secondly, there are conditions relating to the advertisements themselves: they must be clearly recognizable as such and separated from the other parts of the programme; they may not exceed 5% of air time; and they must not be broadcast on Sundays. Those conditions must therefore be considered separately.

A - The conditions relating to the structure of broadcasting bodies established in other Member States

41 The Netherlands Government justifies those restrictions on the ground that their aim is to prevent advertisers' having an excessive influence over the preparation of programmes, which might jeopardize the cultural policy that it has established in the audio-visual sector.

43 Conditions affecting the structure of foreign broadcasting bodies cannot therefore be regarded as being objectively necessary in order to safeguard the general interest in maintaining a national radio and television system which secures pluralism.

B - The conditions relating to advertising

44 Contrary to the view advanced by the Commission, the Netherlands Government maintains that neither the prohibition on the broadcasting of advertisements on certain days, the limitation of their duration or the obligation to identify them as such and to separate them from other parts of programmes is discriminatory. The services provided by the STER are subject to the same restrictions. In this connection, the Netherlands Government referred to Article 39 of the Mediawet. It appears from that provision that the Commissariaat voor de Media allocates to the STER air time available on the national network, which must be allocated in such a manner that the programmes of the national broadcasting bodies are not interrupted. Moreover, under the same provision, no air time is to be allocated on Sundays.

Costs

49 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the defendant has been unsuccessful, it must be ordered to pay the costs.

On those grounds,

THE COURT

hereby:

1. Declares that, by obliging bodies which have obtained air time on the national broadcasting network to spend with the NOPB all the amounts made available for the production of radio programmes and a percentage determined by decree for the production of television programmes and by prohibiting operators of cable networks established in its territory from transmitting radio or television programmes containing advertisements intended specifically for the Dutch public which are broadcast by broadcasting bodies established in the territory of another Member State if certain conditions relating to the structure of those bodies or advertising contained in their programmes which is intended for the Dutch public are not fulfilled, the Kingdom of the Netherlands has failed to fulfil its obligations under Article 59 of the EEC Treaty;

2. Orders the Kingdom of the Netherlands to pay the costs.