CJEC, October 1, 1975, No 25-75

THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES,

1. By judgment of 18 February 1975 which reached the Court registry on 7 March 1975, the Gerechtshof (Court of Appeal), Arnhem, referred to the Court two questions concerning the interpretation of article 85 of the EEC treaty and of Article 3 of Regulation No 67-67 of the Commission of 22 march, 1967 (OJ 1967, No 57).

2. These questions are concerned with the compatibility with Community law in the field of competition of exclusive sales agreements between a manufacturer and a dealer, established in different Member States under the provisions of which the manufacturer undertakes to prohibit intermediaries and consumers established in his State from selling the products to which the contract relates into the territory covered by the contract.

3. The first question asks whether such contracts fall within the provisions of Article 3 of Regulation No 67-67 and are therefore excluded from the declaration of inapplicability under Article 85 (1) of the treaty from which certain categories of contract benefit by virtue of Article 1 of Regulation No 67-67.

4. The second question asks whether the reply to the first question may differ according to whether the intermediaries and consumers established in the territory covered by the contract do or do not have a real possibility of acquiring the products in question elsewhere in the common market, outside the Member State where the manufacturer is established and according to whether they do or do not make use of such a possibility.

5. By reason of the connexion between these two questions they ought to be considered together.

6. Article 1 of Regulation No 67-67 of the Commission of 22 March 1967 on the application of Article 85 (3) of the treaty to certain categories of exclusive dealing agreements, stipulates the agreements to which the provisions of Article 85 (1) of the treaty apply.

7. As is shown by the sixth and seventh recitals to the Regulation, the inapplicability of Article 85 (1) of the treaty to exclusive dealing agreements falling within the category thus laid down finds its justification in the advantages which in the present state of trade such agreements afford for the improvement and the continuity of supplies as well as the continuance of the competition system to the benefit of particular small and medium-size undertakings.

8. Nevertheless the ninth and tenth recitals to that Regulation state that 'any exemption must be subject to certain conditions' with a view to ensuring that consumers shall obtain the advantages which result from exclusive dealing and with a view to ensuring competition at the distribution stage.

9. To this end, Article 3 of the Regulation provides that the provisions of Article 1 (1) shall not apply where

'......

(B) The contracting parties make it difficult for intermediaries or consumers to obtain the goods to which the contract relates from other dealers within the common market, in particular where the contracting parties

1. ......

2. ... Take other measures to prevent dealers or consumers from obtaining from elsewhere goods to which the contract relates or from selling them in the territory covered by the contract '.

10. It follows from this provision that Regulation No 67-67, whilst admitting that Article 85 (1) of the treaty does not apply to certain categories of exclusive dealing agreements relating to trade between Member States, nevertheless requires that such agreements shall not have the effect of making it difficult to obtain supplies of the goods in question within the Community and shall not result in the partitioning of markets contrary to the fundamental principles of the common market.

11. Under the abovementioned provision the conditions which justify the inapplicability of Article 85 (1) are only present where the exclusive dealing agreement does not obstruct the possibility of parallel imports.

12. It is apparent from the decision referring the matter that the exclusive sales agreement in question imposes upon the manufacturer an obligation to prohibit dealers and consumers established in his State from exporting or causing to be exported the products in question to the territory covered by the contract.

13. This contract, stipulating as it does that one of the parties must take measures with a view to preventing the sale of the products in question in the territory covered by the contract by dealers and consumers established in the Member State of the manufacturer, falls under one of the cases mentioned in the second subparagraph of Article 3 (b) of Regulation No 67-67.

14. Such a stipulation, which entails an encroachment on the freedom of action of third parties, goes beyond the restrictions which may be imposed within the framework of an exclusive dealing agreement capable of escaping the prohibition contained in Article 85 (1) of the treaty.

15. By excluding the possibility of parallel imports, this obligation has the effect of preventing intermediaries and consumers established in the territory covered by the contract from obtaining supplies.

16. Even assuming that the intermediaries and consumers established in the territory covered by the contract have real possibilities - whether or not they take advantage thereof - of obtaining the products in question within the common market outside the manufacturer's State, the absence, by reason of the said restriction, of parallel imports in respect of a considerable quantity of such products brings the exclusive dealing agreement within the provisions of Article 3 of the before mentioned Regulation.

17. Consequently an exclusive sales agreement made between the manufacturer established in a Member State and a dealer established elsewhere in the common market falls within Article 3 of Regulation No 67-67 of the Commission where it prescribes an obligation on the part of the manufacturer to prohibit intermediaries and consumers established in his State from exporting or causing to be exported the goods in question to the territory covered by the contract and where it has the effect of rendering it impossible for intermediaries and consumers established in that territory to acquire directly from the manufacturer's State an appreciable quantity of the said goods.

18. Such an agreement falls within the provisions of Article 3 of Regulation No 67-67 even if the intermediaries and the consumers established in the territory covered by the contract enjoy real possibilities - whether or not they take advantage thereof - of acquiring the products to which the contract relates in the common market outside the manufacturer's State.

19. The costs incurred by the Commission of the European Communities which submitted observation to the Court are not recoverable and since these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision on costs is a matter for that court.

THE COURT

In answer to the questions referred to it by the Gerechtshof, Arnhem, by judgment dated 18 February 1975, hereby rules :

1. An exclusive sales agreement between a manufacturer in one of the Member States and a dealer established elsewhere in the common market falls within Article 3 of Regulation No 67-67 of the Commission where it prescribes an obligation on the part of the manufacturer to prohibit intermediaries and consumers established in his State from exporting or causing to be exported the goods in question to the territory covered by the contract and where it has the effect of rendering it impossible for intermediaries and consumers established in that territory to acquire directly from the manufacturer's state an appreciable quantity of the said goods.

2. Such an agreement falls within the provisions of Article 3 of Regulation No 67-67 even if the intermediaries and consumers established in the territory covered by the contract enjoy real possibilities - whether or not they take advantage thereof - of acquiring the products to which the contract relates in the common market outside the manufacturer's State.