CFI, 4th chamber, extended composition, January 9, 1996, No T-575/93

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber, Extended Composition),

Facts

1 According to a judgment of the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), the retransmission by cable of television and radio programmes constitutes "publication" within the meaning of Article 1 of the Auteurswet (Copyright Law), rendering that Law applicable to cable retransmission services so that persons owning or holding rights ° within the meaning of the Auteurswet ° in television and radio programmes have the right to give or refuse their consent to retransmission and the right to receive a royalty in the event of retransmission.

2 On 29 May 1985 representatives of cable operators concluded a framework agreement with the holders of rights in television and radio programmes allowing contracts, based on two standard forms, to be entered into on an individual basis between right holders and each cable operator, one for television programmes and the other for radio programmes, in which the application of the Auteurswet to the retransmission of those programmes is regulated in more detail. Those agreements have been extended several times since that date.

3 As regards the retransmission by cable of television programmes, the holders of rights listed in the standard agreement at that time were: the broadcasting organizations NOS, BRT, RTBF, ARD, ZDF, BBC, TF1, A2 and France 3, the Sekam foundation, and the associations Agicoa and Buma. When the standard agreements were extended, the television stations Nederland 3, RAI Uno and RTL+ were added to the list. As regards the retransmission by cable of radio programmes, the only right holder mentioned in the standard agreement is Buma.

4 Buma was a party to those agreements in two separate capacities: first, as agent for all holders of Netherlands copyrights ° musical copyrights, copyrights in the performance of musical works accompanied by a scenic representation, literary rights, rights in the plastic arts and photographs, rights in cinematographic works and rights owned by the broadcasting organizations themselves; secondly, as representative of the organizations affiliated to the Confédération Internationale des Sociétés d' Auteurs et de Compositeurs (CISAC) (the international organization to which the various national organizations representing owners of the copyrights listed above belong). In those two capacities Buma receives, in the name of all right holders, the royalties payable by the cable operators.

5 Furthermore, Buma enjoys a legal monopoly as the Netherlands organization for owners of musical copyrights. It is the only organization to have been authorized by a decree of the Ministry of Justice of 24 March 1933, under Article 30A of the 1912 Copyright Law, to engage in the business of acting as intermediary in the field of musical copyright. In that capacity, Buma concludes contracts with the authors of musical works for the exploitation of those works. That is the reason for which Buma alone is treated as the right holder in the standard agreement concerning retransmission by cable of radio programmes.

6 The standard agreements provide that right holders are to grant to the cable operator a non-exclusive licence to retransmit programmes. The agreements also contain an indemnity clause whereby the right holders to the agreements are to assume all financial liability of the cable operator arising from claims brought within a period of six months following the end of the calendar year during which the retransmission of a broadcast took place by a copyright owner or holder who was not represented by a party to the standard agreements and cannot therefore be deemed to have given his consent to the retransmission. At the time when Buma' s statement in intervention was lodged, that indemnity clause had never been invoked.

7 Those standard agreements were notified to the Commission on 18 December 1985 for the purpose of obtaining negative clearance or an exemption.

8 In a letter of 16 June 1986, Mr A.C. Overbury, a director at the Commission, replied that the Directorate-General for Competition did not intend to investigate the notified agreements with reference to the competition rules and that the matter was therefore closed.

9 From 8 August 1985 the applicant, a composer and manager of a photographic agency, regularly began to send letters to the Commission in which he drew its attention to the de facto monopolies which the copyright societies enjoyed in the various Member States and in which he objected to the conclusion of the abovementioned standard agreements. On 26 October 1990 that correspondence led to the lodging of a complaint concerning those agreements. On 6 March 1992 the original complaint was supplemented by a request that the Commission declare incompatible with Community law Articles 2, 3, 5, 6, 8 and 9 of the standard exploitation agreement of 23 December 1986 concluded between Buma and the authors of musical works.

10 The applicant considers that his affiliation to Buma as a composer and his other occupation as intermediary for copyrights in photographic works gave him a sufficient interest to submit that complaint to the Commission.

11 On 6 August 1992 the applicant brought an action for a declaration that the Commission had failed to act (Case T-56-92), after previously having requested it to act by letter of 8 April 1992 . On 8 October 1992 the Commission sent a letter, signed by Mr C.D. Ehlermann, Director-General of the Commission's Directorate-General for Competition, pursuant to Article 6 of Regulation No 99-63-EEC of the Commission of 25 July 1963 on the hearings provided for in Article 19 (1) and (2) of Council Regulation No 17 (OJ, English Special Edition (1963-1964), p. 47), indicating that it intended to reject the applicant's complaint and inviting him to submit his observations in that regard.

12 The applicant submitted his observations in a letter of 8 November 1992.

13 By letter of 14 October 1993, signed by the Member of the Commission responsible for matters of competition, the Commission definitively rejected the applicant's complaint.

14 By order of 29 November 1993 in Case T-56-92 Koelman v Commission [1993] ECR II-1267 the Court of First Instance held that it was therefore no longer necessary to rule on the action for a declaration of a failure to act (see paragraph 11 above).

15 On 14 December 1993 the applicant brought an action under Article 173 of the Treaty for annulment of the Commission's decision rejecting his complaint and, under Articles 178 and the second paragraph of Article 215 of the Treaty, for compensation for the damage which he considered he had suffered.

16 By order of the President of the First Chamber of the Court of First Instance of 7 June 1994 Buma was given leave to intervene in support of the form of order sought by the Commission.

17 Upon hearing the report of the Judge-Rapporteur the Court of First Instance (Fourth Chamber, Extended Composition) decided to open the oral procedure without any preliminary measures of inquiry.

18 At the hearing the applicant's lawyer stated that he did not wish to present oral argument or reply to the questions which the Court wished to put to him in the language of the case, because he had an insufficient command of that language. In those circumstances, the Commission also waived its right to present oral argument. In agreement with the Commission, the Court suggested that the applicant's lawyer should reply in French to certain questions which it wished to put to him. Even though arrangements had been made for the translation of the questions into French during the hearing, the applicant's lawyer stated that he would prefer that the Court did not put any further questions to him in view of the comprehensive nature of the arguments submitted in support of the applicant's claim during the written procedure. The Court then merely put questions to the Commission which replied in the language of the case. The intervener was not represented at the hearing.

Forms of order sought

19 The applicant claims that the Court should:

1. declare void, on the basis of Articles 173 and 174 of the Treaty, the Commission's decision not to initiate the procedure provided for in Article 3 of Regulation No 17 following the complaint which he had lodged on 26 October 1990 concerning the two cable distribution agreements of 29 May 1985 and all agreements deriving therefrom, the participation in those and other agreements by organizations managing copyrights in musical works which hold a dominant position, the standard exploitation agreements used by Buma and the role played by the Netherlands State in the establishment of the abovementioned cable distribution agreements;

ensure that authors are free to choose the organization which they wish to appoint to manage their works;

ensure that undertakings which act as intermediaries for such rights enjoy fair access to the market, and protect them against abuses of dominant positions by monopolies in the field of copyright in musical works;

2. declare:

(a) the two cable radio and television agreements of 29 May 1985 and all the agreements deriving therefrom to be incompatible with Article 85 (1) of the Treaty;

(b) the standard cable television agreement of 29 May 1985 and all agreements deriving therefrom to be incompatible with Article 7 of the Treaty;

(c) the participation of Buma in the cable distribution agreements, in the form adopted, to be incompatible with Article 86 of the Treaty;

(d) the role played by the Netherlands State in the establishment of the standard cable distribution agreements and their practical implementation by means of increases in invoices issued by public utility companies to be incompatible with its obligations under Article 90;

(e) Articles 2, 3, 5, 6, 8 and 9 of Buma's standard exploitation agreements to be in breach of the Commission's Decision 71-224-EEC of 2 June 1971 relating to a proceeding under Article 86 of the EEC Treaty (IV/26.760 ° GEMA; OJ 1971 L 134, p. 15) and to be incompatible with Article 86 of the Treaty since they constitute an abuse of Buma's dominant position in relation to copyright owners;

3. rule on other matters which the Court considers to be relevant;

4. order the Commission to pay compensation for the damage suffered by him, which he estimates to be no less than HFL 1 500 000, or for at least the part of the injury which the Court imputes to the Commission's conduct;

5. order the Commission to pay the costs.

20 The Commission contends that the Court should:

° declare the applicant's claim set out under point 1 to be inadmissible in so far as it goes beyond a claim for annulment, as also the claims set out in points 2, 3 and 4, and dismiss the remainder of the action;

° in the alternative, dismiss the application in its entirety;

° in either case, order the applicant to pay the costs.

21 The intervener contends that the Court should:

° declare the application brought by Mr Koelman to be inadmissible in all respects or to dismiss it;

° order Mr Koelman to pay the costs, including those of the intervener.

Admissibility

Arguments of the parties

22 The Commission takes the view that only part of the applicant's claim set out in point 1 of the form of order sought by him is admissible, the other claims falling manifestly outside the jurisdiction of the Community judicature or not being sufficiently detailed and precise.

23 The Commission contends that, since the Court of First Instance only has jurisdiction to annul acts of a Community institution in an action brought under Article 173 of the Treaty, it has no jurisdiction to order the specific measures requested in point 1 of the form of order sought by the applicant. Under Article 176 of the Treaty it is for the institution whose act has been declared void to take the necessary measures to comply with the judgment in question. Nor is it for the Court to rule on the compatibility with Community law of agreements concluded between natural or legal persons, as is requested in point 2 of the form of order sought by the applicant. That is a matter falling within the Commission's powers and the Court may not take its place in that respect (order of the President of the Court of First Instance in Case T-131-89 R Cosimex v Commission [1990] ECR II-1, paragraph 12; order in Case T-543-93 R Gestevisión Telecinco v Commission [1993] ECR II-1409, paragraphs 24 and 25).

24 The Commission then submits that the claim in point 3 of the form of order sought by the applicant, namely that the Court should "rule on the other matters which the Court considers to be relevant", is not sufficiently precise to be declared admissible.

25 Finally, the Commission considers that the claim for compensation is inadmissible because the application does not unambiguously indicate either the fault for which the Commission is said to be responsible or the injury allegedly suffered by the applicant, or a fortiori the causal link between the alleged fault and the damage allegedly suffered. As regards the calculation of damages, the Commission observes that the applicant is claiming a round sum without providing any evidence in support and without indicating how that figure is arrived at. Furthermore, the Commission states that where alleged fault consists of a failure to act the injury suffered must relate to the period subsequent to the point in time at which the failure to act can be identified as having occurred.

26 As regards the objection of inadmissibility in general, the applicant replies that the form of order which he seeks falls fully within the jurisdiction of the Court of First Instance.

27 As regards, more particularly, his claim for compensation, the applicant states that he has clearly shown that the lack of diligence and slowness with which the Commission dealt with his complaints constitute fault. More particularly, the Commission's failure to inform him of the fact that it had granted a negative clearance with regard to the notified standard agreements rendered the Commission's conduct unlawful.

Findings of the Court

28 The Court will examine the admissibility of the applicant's claims in the order in which they are set out in the application.

29 Firstly, with regard to the part of point 1 of the form of order sought by the applicant, in which he claims that the Court should "ensure that authors are free to choose the organization which they wish to appoint to manage their works" and to "ensure that undertakings which act as intermediaries for such rights enjoy fair access to the market, and protect them against abuses of dominant positions by monopolies in the field of copyrights in musical works", the Court observes that it is settled case-law that it has no jurisdiction to issue directions to the Community institutions, to the Member States or to natural or legal persons (see the order of the Court of First Instance in Case T-56-92 Koelman v Commission, cited above, paragraph 18, and the judgment of the Court of First Instance in Case T-102-92 Viho v Commission [1995] ECR II-17, paragraph 28). It follows that the applicant's claims in that part of point 1 of the form of order sought are inadmissible.

30 Secondly, as regards the claims set out under point 2, the Court considers that they are manifestly outside the scope of its jurisdiction and, consequently, must be declared inadmissible. The Community courts have no jurisdiction to give a ruling, at the initiative of a natural or legal person, on the compatibility of a Member State' s or a natural or legal person' s conduct with the provisions of the Treaty or to annul, in whole or in part, agreements concluded by natural or legal persons (see the order of the Court of First Instance of 29 November 1993 in Case T-56-92 Koelman v Commission, cited above, paragraph 18).

31 Thirdly, as regards point 3 of the applicant's claims, in which he asks the Court to "rule on the other matters which the Court considers relevant", such a claim does not indicate its subject-matter and does not therefore satisfy the degree of precision required by Article 19 of the Statute of the Court of Justice of the EC and Article 44 (1) (c) of the Rules of Procedure of the Court of First Instance for it to be admissible.

32 It follows from the foregoing that all the applicant's claims other than his claim for annulment of the Commission decision to reject his complaint, referred to in the first part of point 1 of the form of order sought, and his claim for compensation for the damage which he alleges to have suffered, referred to in point 4 of the form of order sought, must be declared inadmissible.

33 Finally, the Court observes that the application is ill-structured and drafted in a rather confusing manner and that the pleas in law on which the applicant relies in support of his claims for annulment and for compensation are not identified as such. However, despite those formal defects, the Court considers that the application contained sufficient information for the Commission to adopt a position on the substance and for the Court to exercise its power of review (judgment of the Court of Justice in Case 281-82 Unifrex v Commission and Council [1984] ECR 1969, paragraph 15), so that in that regard the requirements of Article 19 of the Statute of the Court of Justice of the EC and Article 44 (1) (c) of the Rules of Procedure of the Court of First Instance are satisfied.

34 Consequently, the claims for annulment and for compensation are admissible.

Substance

35 Bearing in mind the observations made in the preceding paragraphs, the Court considers that the claim for annulment is in fact based on four pleas in law. The first plea alleges infringement of Article 85 (3) of the Treaty in that the Commission referred to the conditions for granting an exemption set out in that provision when rejecting the applicant's complaint regarding the standard agreements, without having first adopted a decision exempting those agreements. The second plea is in two parts. The first part alleges a manifest error of appraisal in that the Commission wrongly based its rejection of the applicant's complaint on the finding that the standard agreements satisfied all the conditions of Article 85 (3) of the Treaty. The second part of the plea alleges that the Commission failed to find that Buma infringed Article 86 of the Treaty by concluding the standard agreements and that it did not consider it necessary to investigate the compatibility of the acts of the Netherlands State with Article 90 (1) of the Treaty in the light of Article 86 of the Treaty. The third plea alleges infringement of Article 155 of the Treaty and Article 3 of Regulation No 17 in that the Commission failed to investigate the compatibility with Community law of the exploitation agreement concluded by Buma with the authors of musical works because the Commission considered that the applicant's complaint did not present sufficient Community interest. The fourth plea alleges infringement of the obligation to state the reasons upon which a decision is based, since the Commission rejected the complaint without stating the reasons for which Buma' s conduct in relation to its members did not justify an investigation of a possible infringement of Article 86 of the Treaty. The claim for compensation is based on the Commission's alleged infringement of the principle of sound administration, which is said to have caused the applicant's photographic agency in which he acted as intermediary for copyrights in photographic works to go out of business.

The claim for annulment

First plea: infringement of Article 85 (3) of the Treaty

° Arguments of the parties

36 The applicant alleges that the Commission infringed Article 85 (3) of the Treaty by rejecting his complaint on the ground that the standard agreements satisfied the conditions for exemption referred to in that provision, but without adopting a decision to exempt them in that regard. The applicant considers that, for reasons of legal certainty, the Commission can rely on those conditions only after it has adopted a decision to exempt the agreement. Consequently, in the present case, the Commission was unable to reject the complaint by referring to the applicability of Article 85 (3) of the Treaty.

37 In reply, the Commission states that it is entitled to reject a complaint without being obliged previously to adopt a decision to exempt agreements challenged by the complainant which have been notified to it by the parties to those agreements.

° Findings of the Court

38 By this plea the Court is asked to decide whether or not the Commission may reject a complaint under Article 3 of Regulation No 17 on the ground that the agreements complained of satisfy in any event the requirements laid down in Article 85 (3) of the Treaty for grant of an exemption from the prohibition in Article 85 (1) of the Treaty, even though it has not issued a decision on the matter to the parties to those agreements, who in fact also notified them to it, and even though it has not given a definitive decision on the issue whether or not those agreements infringe Article 85 (1) of the Treaty.

39 Where a complaint has been submitted to the Commission under Article 3 of Regulation No 17, it is required to examine carefully the facts and points of law brought to its notice by the complainant in order to decide whether they disclose conduct liable to distort competition in the common market and affect trade between Member States (judgment of the Court of First Instance in Case T-24-90 Automec II v Commission [1992] ECR II-2223, paragraph 79). Nevertheless, it also follows from the settled case-law of the Court of Justice and of the Court of First Instance that Article 3 of Regulation No 17 does not confer upon a person who lodges an application under that article the right to obtain from the Commission a decision within the meaning of Article 189 of the Treaty regarding the existence or otherwise of an infringement of Article 85 of the Treaty (judgment of the Court of Justice in Case 125-78 GEMA v Commission [1979] ECR 3173, paragraph 17; judgment of the Court of First Instance in Case T-114-92 BEMIM v Commission [1995] ECR II-147, paragraph 62).

40 It follows from that case-law that, when rejecting a complaint, the Commission must indicate the reasons for which careful examination of the facts and points of law brought to its notice by the complainant do not prompt it to initiate a procedure to establish whether Article 85 of the Treaty has been infringed. In so doing, the Commission may investigate the agreements and practices called into question in the light of Article 85 as a whole and set out the reasons for which it considers that ° assuming that those agreements and practices constitute an infringement of Article 85 (1) ° this provision could in any event be declared "inapplicable" to those agreements and practices under Article 85 (3), so that it does not appear to the Commission that careful examination of the complaint must lead it to take the action requested by the complainant. It follows that, in the present case, the Commission was entitled to explain the reasons for its decision to reject the complaint by giving the reasons for which it considered, on the basis of the facts and points of law brought to its notice by the complainant, that the standard agreements satisfied the conditions of Article 85 (3) without previously adopting a decision exempting those agreements which had been addressed to the contracting parties, or having definitely ruled on the compatibility of those agreements with Article 85 (1).

41 Nevertheless, such a decision to reject a complaint, which does not definitively rule on the question whether or not there is an infringement of Article 85 (1) and does not grant an exemption under Article 85 (3), is merely an assessment by the Commission of the agreements and practices in question. Accordingly, as the Commission accepted at the hearing, it has the same legal status as a "comfort letter" (judgments of the Court of Justice in Joined Cases 253-78 and 1-79 to 3-79 Giry and Guerlain and Others [1980] ECR 2327, paragraph 13, Case 37-79 Marty v Lauder [1980] ECR 2481, paragraph 10, and Case 99-79 Lancôme and Cosparfrance v ETOS [1980] ECR 2511, paragraph 11).

42 It follows that the assessments made by the Commission in a decision rejecting a complaint of the kind involved in the present case do not prevent a national court which has to rule upon the compatibility with Article 85 (1) of the agreements and practices criticized by the complainant from declaring those agreements and practices to be automatically void under Article 85 (2) of the Treaty, having regard to the evidence before it. The fact that, unlike in the case of comfort letters, the Commission's assessments are contained in a challengeable measure does not affect that conclusion, since such assessments entail no definitive decision on the issue whether or not Article 85 (1) has been infringed or an exemption is to be granted under Article 85 (3) on the conditions laid down in Regulation No 17.

43 Moreover, the assessments made by the Commission constitute facts which national courts may take into account in examining whether the agreements or conduct in question are in accord with the abovementioned provisions (see the judgment in Giry and Guerlain, cited above, paragraph 13) and in this regard they can, if necessary, contact the Commission (judgment of the Court of Justice in Case C-234-89 Delimitis v Henninger Braeu [1991] ECR I-935, paragraphs 43 to 55). In the present case, such facts include, precisely, the Commission's assessment to the effect that "it cannot be excluded in advance that the purpose or effect of the cable distribution agreements is to restrict competition within the meaning of Article 85 (1)" (see the contested decision, paragraphs 10 to 12), although the Commission has not yet used its exclusive powers under Regulation No 17 to grant an exemption under Article 85 (3), so that the national court' s power to annul such an agreement is unaffected.

44 It follows from the foregoing that the plea must be rejected.

Second plea: manifest error of appraisal

° Arguments of the parties

45 In the first part of this plea the applicant claims that the Commission committed a manifest error of appraisal by partly basing its rejection of the complaint on the fact that the standard cable distribution agreements satisfy in any event the conditions laid down in Article 85 (3) of the Treaty, so that even if those agreements were contrary to Article 85 (1) of the Treaty, that article could be declared to be inapplicable. The applicant claims that the conditions laid down in Article 85 (3) are not satisfied in the present case.

46 In that regard, the applicant considers, first, that the standard agreements do not contribute to improving the production or distribution of radio or television programmes. He claims that the Commission has failed to show that the conclusion of such general agreements, including all the interested parties, promotes the production of radio and television programmes and increases the number of programmes retransmitted by cable. On the contrary, the countries in which such agreements have not been concluded have a supply in programmes retransmitted by cable which is at least as large.

47 Secondly, the applicant also doubts the correctness of the Commission's assertion ° which he claims it has not proved ° that such agreements lead to a wider supply of programmes and a reduced risk of disturbances to broadcasts caused by the owner or holder of the copyright in a programme refusing to authorize its transmission. He therefore raises the question how such agreements can allow television viewers or radio listeners a fair share of their benefits, when those benefits do not exist.

48 Thirdly, the applicant considers that the Commission has not shown that it is necessary to conclude such standard agreements in order to ensure that retransmission by cable of television and radio programmes observes all the copyrights in question. In his opinion, two alternatives less restrictive of competition are conceivable: settlement at source between the author and the first broadcaster, the latter paying the author a supplement in respect of the authorized retransmission by cable of the programme concerned; or payment of royalties under a system whereby all retransmitted broadcasts are "tracked" with electronically coded signals.

49 Finally, the applicant claims that the exclusivity clauses in the standard agreements eliminate competition because their effect is that only copyright holders who are parties to those agreements can authorize the cable operators to retransmit television or radio programmes containing matters protected by copyright. Those standard agreements provide a blanket licence to retransmit by cable programmes of the radio and television stations represented, covering both the copyrights of the persons entitled who are parties to the standard agreements and the copyrights of owners and holders who are not parties to the standard agreements. That creates an anti-competitive effect, in that other intermediaries wishing to become involved in the settlement of royalties payable to non-represented copyright owners or holders in respect of programmes retransmitted by cable are precluded from entering that market. That anti-competitive effect is reinforced still further by the fact that a television or radio station which is a party to a standard agreement can no longer conclude a cable retransmission agreement with a cable operator other than in the form of the standard agreement. Furthermore, the legal monopoly of Buma, as intermediary ensuring that the rules on copyright in musical works are applied, also contributes to the elimination of competition by the agreements in question with regard to works other than musical works, since its monopoly always ensures that Buma is involved whenever a broadcast retransmitted by cable contains a musical work and thus prevents a radio or television station and a cable distribution company from entering into negotiations independently of Buma' s involvement.

50 In the second part of this plea the applicant claims that the contested decision is also vitiated by a manifest error of appraisal on the Commission's part in so far as the decision concerns the infringement of Article 86 of the Treaty by Buma by reason of the conclusion of the standard agreements and the infringement by the Netherlands State of Article 90 (1) of the Treaty, read in the light of Article 86 of the Treaty. It follows from the contested decision, which states that the Commission sees no reason to investigate such complaints on its own initiative, that the Commission failed to find, first, that Buma had abused its dominant position as intermediary on the market for royalties for musical works in order to gain the same position on related markets and, secondly, that the Netherlands State adopted measures which are incompatible with Article 90 (1) of the Treaty. So, where standard agreements for the retransmission by cable of television and radio programmes were concluded at the same time, Buma promoted the former, which, in terms of royalties, are more lucrative for it, because it receives royalties for all categories of copyright and not merely for the musical works, and it waived its rights to royalties payable on retransmission of radio programmes, which, because of Buma' s legal monopoly, can only be the subject-matter of a cable retransmission agreement concluded by Buma.

51 As regards the first part of this plea, the Commission denies that the conditions laid down in Article 85 (3) of the Treaty are not satisfied in the present case. It contends that the reasoning in the contested decision can only be upheld. It does not see how it could be disputed that a collective cable television or radio agreement contributes to an increase in the number of programmes retransmitted or ensures retransmission without interruption or disturbance caused by refusal of a copyright owner or holder to give consent.

52 The Commission observes that the two other methods proposed by the applicant do not diminish the need to conclude a collective cable television or radio agreement because they do not amount to complete alternatives. "Settlement at source" does not take account of the problems which often arise between copyright owners or holders and cable operators. As the intervener also states, a system for spotting retransmissions only solves the problem of establishing the royalties due upon retransmission but does not resolve the problem of prior consent. Furthermore, the latter alternative is useful only where musical works are retransmitted; it is not feasible where ° for example ° photographic works are retransmitted by cable.

53 As regards the applicant's claim that the standard agreements eliminate competition because of the predominant intermediary role played by Buma, the Commission states that the alleged anti-competitive effects are primarily the result of the legal monopoly which Buma holds, which is not the subject-matter of the complaint or of the standard agreements themselves. It also observes that Buma' s legal monopoly exists only in the broadcasting of musical works and that Buma does not enjoy a similar competitive position in respect of other types of broadcast. As regards the applicant's objection that the exclusive nature of the consent to cable retransmission given by all the copyright holders reinforces the agreement' s anti-competitive effect, the Commission observes that the fact that a body has obtained all rights or represents all copyright owners does not mean that it cannot conclude a separate agreement with a cable operator.

54 As regards the second part of this plea, in the absence of convincing evidence, the Commission does not see how Buma can abuse its legal monopoly as intermediary on the market for copyrights in musical works in order to extend its dominant position to the market for copyrights in photographic works. Buma receives the royalties payable on the retransmission by cable of photographic works in the name of Burapo, an organization with its own administration, which then shares out the sums received between the various photographers.

55 As regards the complaint concerning the action of the Netherlands State, the Commission observes that it was submitted on the basis of Regulation No 17 against Buma and the other parties to the standard agreements and not against the Netherlands State on the basis of Article 169 or Article 90 (3) of the Treaty. If the Court were nevertheless to consider that a complaint has in fact been made against the Netherlands State, the Commission contends, in the alternative, that it has not adopted any decision in that regard, so that that question cannot be considered in the course of the present proceedings.

° Findings of the Court

56 It is settled case-law that when the Commission has decided to reject a complaint submitted under Article 3 (2) of Regulation No 17 without holding an investigation, the purpose of judicial review by the Court of First Instance is to ensure that the challenged decision is based on a correct assessment of the facts and that it is not vitiated by any error of law, manifest error of assessment or abuse of power (Case T-37-92 BEUC and NCC v Commission [1994] ECR II-285, paragraph 45).

57 As regards the first part of this plea, the Court observes, first, that the Commission stated at point 14 of the contested decision that "a collective and uniform agreement authorizing the transmission of radio and television programmes constitutes the most effective and efficient method of ensuring the lawful transmission of those programmes by cable in a situation in which a large number of copyright holders and cable operators are concerned by the grant of a licence and by the ensuing transmission. Since both many national and foreign broadcasters are concerned by that collective agreement, it must be found that it improves the distribution of radio and television programmes in the common market." The applicant challenges that argument. He says that the retransmission by cable of television and radio programmes is no less significant in countries which do not have a "collective and uniform agreement authorizing the transmission of radio and television programmes" yet he does not adduce the slightest evidence to establish the facts upon which he relies, even though the Commission invited him to do so in the letter of 8 October 1992 sent to him in accordance with Article 6 of Regulation No 99-63.

58 The Court therefore considers that the applicant has not shown that the Commission's view that such a collective and uniform agreement is the most effective and efficient means of ensuring the lawful retransmission by cable of television and radio programmes was vitiated by a manifest error of appraisal. It follows that the applicant's argument cannot be accepted by the Court.

59 Secondly, the Court finds that neither in his observations of 8 November 1992 in reply to the Commission's letter of 8 October 1992, nor in his application or reply, has the applicant submitted any evidence in support of his claim that users do not receive a fair share of the benefit resulting from an improvement in the retransmission of radio and television programmes which would undermine the plausibility of the Commission's view, set out in the contested decision, that the cable transmission agreements at issue provide consumers with a wider range of radio and television programmes and reduce to a minimum the risks of disturbance or interruption of retransmissions as a result of disputes over copyright. It follows that this argument of the applicant cannot be accepted by the Court either.

60 Thirdly, as regards the condition laid down in Article 85 (3) of the Treaty whereby standard agreements may not impose on the undertakings concerned restrictions which are not indispensable to the attainment of the objectives referred to in that provision, it must be held that the applicant has not suggested any reasonable alternative to the Commission's view that the conclusion between copyright holders and each cable operator of a collective agreement for the diffusion by cable of television and radio programmes is indispensable in order to improve the effective and lawful retransmission of such programmes. In the first place, as regards the applicant's first suggested alternative, whereby royalties on retransmissions by cable of radio and television programmes would be settled at source, that is to say between the first broadcaster and the copyright owner, the Court observes that, even assuming that such a settlement system were conceivable, as the applicant claims, its implementation could not prevent obstacles from arising when negotiations take place concerning the conclusion, between the first broadcaster and a cable operator, of an agreement on the retransmission of a broadcast programme. Furthermore, under such a system individual agreements must be concluded between each cable operator and the first broadcaster of each work protected by copyright. Since there may be several first broadcasters for parts of the same radio or television programme, it is clear that the conclusion of such individual agreements does not enable the programmes in question to be retransmitted by cable effectively and efficiently in the way in which the conclusion of a collective agreement does.

61 Secondly, in support of the second method, whereby retransmitted programmes are automatically "tracked", the applicant submitted as an annex to his letter to the Commission of 6 March 1992 an advertisement by the company Broadcast Data Systems offering a "Record Track, AD Track, Radiotrack and Royalty Track" system, which states as follows:

"A method for instantaneously gathering and reporting data about songs and commercials being broadcast. Broadcast Data Systems offers four airplay monitoring information services for different segments of the music, advertising and radio industries";

"RECORD TRACK lets record companies and associated businesses quickly, easily track songs being played on radio, music TV and cable stations nationwide";

"ROYALTY TRACK allows performing rights societies to expand substantially their ability to monitor the on-air use of copyrighted music".

62 It would appear from that advertisement on its own that the system proposed by the applicant is only of use in tracking the transmission of audio signals. However, such a system does not appear to be capable of tracking the transmission of visual signals, such as images or, what is of particular interest to the applicant, photographic works. Consequently, that system cannot be presented as a feasible alternative to the conclusion of a collective agreement.

63 It follows that the applicant has not shown that the Commission's reasoning in that regard is vitiated by a manifest error of appraisal.

64 Fourthly, as regards the last condition laid down by Article 85 (3), namely that the agreements in question must not eliminate competition in respect of a substantial part of the market, the Court observes that in the contested decision the Commission states that the standard agreements "give cable operators the opportunity to obtain, on the basis of a single contract, a licence covering all copyrights of the owners and third parties represented by them". The Commission goes on to state that "those standard agreements do not preclude cable operators from concluding individual agreements with the owners if they wish, for example, to transmit a more selective range of stations" (point 17 of the contested decision).

65 In that regard, it must be observed first of all that the Commission did not state that the consent of the right holders who are parties to the standard agreements also included that of the owners or holders of rights who were not parties to, or not represented in, the standard agreement to retransmit their works by cable.

66 The Court therefore considers that the Commission's assessment does not imply that copyright intermediaries other than those who are parties to, or represented in, the standard agreements have no right to conclude with the cable operators individual agreements governing the settlement of royalties payable on retransmission of the works for which they act as intermediaries. It follows that the applicant's argument is misdirected on this point because it is based on an incorrect analysis of the Commission's appraisal in the contested decision.

67 The provision in the preamble to the standard agreement for television programmes, which the applicant calls an "exclusivity clause", is in fact referring to the exclusive right possessed by the copyright holders to consent to the retransmission by cable of protected works. The applicant is mistaken about the meaning and nature of that provision and attributes to it a right-creating character which it does not possess. In that provision, the holders of rights who are parties to the standard agreement simply give a warranty to the other parties to the standard agreement that they have an exclusive right under the law applicable so that those other parties to the agreement will then enter into obligations towards them. Indeed, the obligation entered into by the right holders in Article 6 of the standard agreement, by which they assume all financial responsibility which may arise from claims by copyright owners or holders who are not represented in the standard agreement in the event of retransmission of their protected works, is entered into precisely and solely because of what the right holders who are parties to the standard agreement warrant in the recital in question. Consequently, the exclusivity referred to in that recital does not, at least in principle, prohibit those right holders from concluding agreements other than the standard agreements which still deal with the retransmission by cable of their programmes, sometimes with the involvement of other intermediaries on the market and, possibly, at the same time ° because of its legal monopoly ° with the involvement of Buma where musical works are to be retransmitted. Neither the existence of that recital in the standard agreement nor that legal monopoly can therefore affect the Commission's assessment that the standard agreement in question complied with the last condition laid down by Article 85 (3) of the Treaty. In that regard too, the applicant has not therefore shown that the Commission committed a manifest error of appraisal in the contested decision.

68 It follows from the foregoing that, since the applicant has not shown that the Commission's assessments relating to the conditions laid down in Article 85 (3) of the Treaty were manifestly wrong, the first part of the second plea must be rejected.

69 As regards the second part of that plea, to the effect that Buma abused its dominant position on the market for copyrights in musical works in order to gain a similar position on related markets, it is clear from the contested decision that the Commission refused to investigate on its own initiative whether Article 86 of the Treaty had been infringed by Buma without precise and specific evidence from the applicant (points 20 and 21 of the contested decision). The Court considers that, having regard to the content of the applicant's complaint (point 46 of the complaint), the supplement to it of 6 March 1992 and the observations which he made on 8 November 1992 (point 11 of those observations) in reply to the Commission's letter of 8 October 1992 (point 19 of that letter), that assessment by the Commission is not the result of a manifest error of appraisal. The only evidence submitted by the applicant is his rather vague argument that a cable operator which concluded a standard agreement for the retransmission of radio programmes is not obliged to pay royalties to Buma in respect of the retransmission of those programmes if it concludes a parallel standard contract for the retransmission of television programmes. Such an argument cannot, however, be accepted. On reading Article 8(3) of the standard agreement for the retransmission of radio programmes (which provides that where a cable operator concludes both an agreement on the retransmission of radio programmes and an agreement on the retransmission of television programmes, the royalty which it is to pay under the latter agreement is to include the royalty which is due under the former agreement) and Article 9 of the standard agreement for the retransmission of television programmes (which defines the method of calculating the royalty payable by the cable operator as consideration for the licence granted to it to retransmit television programmes), the Court finds, first, that, as the intervener observes in its statement in intervention (point 39), where a cable operator has concluded both an agreement on the retransmission of radio programmes and one on the retransmission of television programmes, the royalty which is paid under Article 9 of the latter agreement includes not only the royalty payable on the retransmission of television programmes but also the royalty payable on the retransmission of radio programmes. Secondly, under Article 10 (7) of the standard agreement for the retransmission of television programmes, right holders have the "exclusive right" to allocate the royalties thus received by their agent, which in this case is Buma. It follows that the part of those royalties which relate to the retransmission of radio programmes may, when allocated, be accorded to the persons holding the rights in those radio programmes. Consequently, the applicant's assertion that radio programmes are offered for free where an agreement on the retransmission of television programmes has also been concluded does not appear to be well founded. The unreliable calculations made by the applicant in his observations on the statement in intervention cannot weaken that conclusion. Furthermore, the Court could not obtain any further details on this point at the hearing from the applicant's lawyer (see paragraph 18 above).

70 Finally, in so far as this part of the complaint refers to acts of the Netherlands State, namely the grant to Buma of the legal monopoly to represent authors of musical works, it is not necessary to determine whether the complaint submitted to the Commission was based exclusively on Article 3 of Regulation No 17, or whether it also contained complaints about the Netherlands State, thus requesting the Commission to initiate proceedings under Article 169 of the Treaty or to use the powers conferred on it by Article 90 (3) of the Treaty.

71 It is settled case-law that the Commission is not bound to commence proceedings under Article 169 of the Treaty but enjoys a discretion which precludes any right of individuals to require it to take a specific position. Accordingly, as far as proceedings under Article 169 of the Treaty are concerned, persons who have lodged a complaint do not have the possibility of bringing an action before the Community judicature against a decision of the Commission not to take action on their complaint (see the judgment of the Court of Justice in Case 247-87 Star Fruit v Commission [1989] ECR 291, paragraphs 10 to 14; and the order of the Court of First Instance in Case T-84-94 Bilanzbuchhalter v Commission [1995] ECR II-101, paragraph 23). Secondly, it is settled that the exercise of the power conferred by Article 90 (3) of the Treaty to assess the compatibility of State measures with the Treaty rules is not coupled to an obligation on the part of the Commission to take action (judgment of the Court of First Instance in Case T-32-93 Ladbroke Racing v Commission [1994] ECR II-1015, paragraphs 36 to 38, and also the order of the Court of First Instance in Case T-84-94 Bilanzbuchhalter v Commission, cited above, paragraph 31). Consequently, legal and natural persons who request the Commission to take action under Article 90 (3) do not have the right to bring an action against a Commission decision not to use the powers which it has in this regard.

72 The Court therefore finds that the applicant is not in any event entitled to contest the Commission's refusal to initiate proceedings under Article 169 or to issue a directive or a decision under Article 90 (3) of the Treaty. It follows that the question whether the complaint fell outside the scope of Regulation No 17 and, if so, whether the Commission correctly refused to investigate the role of the Netherlands State in this case is not relevant.

73 Consequently, the second part of the second plea must also be rejected.

74 It follows from the whole of the foregoing that the second plea must be rejected.

Third plea: infringement of Article 155 of the Treaty and Article 3 of Regulation No 17

° Arguments of the parties

75 In so far as the rejection of the complaint concerns the standard exploitation contract which Buma concludes with its members, the applicant argues that the Commission was not entitled to refrain from investigating the complaint on the ground that action in this sphere was not a matter of priority in its competition policy or to refer the applicant to the national courts, unless it had adopted that decision within a period of three months from the submission of the complaint. In that way, the complainant could still have taken effective action in the national courts before the expiry of the relevant period. He also maintains that the extremely high costs of proceedings before a national court prevent him from bringing an action there.

76 In reply the Commission states that it follows from the judgment in Automec II, cited above, that it may give different priority to the pursuit of cases which are brought to its attention, by using the Community interest as a test of priority, provided that any decision taken sets out the reasons for which a complaint does not have the necessary degree of priority. Since this part of the complaint was rejected on the grounds that it lacked Community interest, which was explained clearly and precisely in the decision at issue, the Commission considers that the plea is therefore wholly irrelevant.

77 Nor does the Commission accept that financial difficulties can justify the applicant's failure to use the possibility of bringing an action before the national courts. If he has no resources, he might be entitled to legal aid or he could share the legal costs by forming an association of persons who are in the same situation, which could then bring proceedings.

° Findings of the Court

78 By this plea the applicant merely contests the Commission's right to decide the priority to be given to a complaint. He does not call into question the grounds on which the Commission rejected the complaint on this point, save in so far as the Commission justified its decision by pointing out the possibility of bringing proceedings before a national court in order to enforce his rights in this regard.

79 It is settled case-law that the Commission is entitled to give different degrees of priority to the investigation of complaints submitted to it (judgment in Automec II, cited above, paragraph 83). Moreover, the applicant has not shown that it would actually be impossible for him to bring an action before the national court in order to challenge the alleged abuse of a dominant position by Buma. Furthermore, the Court has no more detailed information on this point which it wished to obtain from the applicant's lawyer at the hearing (see paragraph 18 above).

80 It follows that this plea must be rejected.

Fourth plea: infringement of the obligation to state reasons

° Arguments of the parties

81 The applicant considers that the Commission infringed its obligation to state the reasons upon which its decision was based when it rejected his complaint without indicating why it took the view that there was no abuse by Buma of its dominant position in relation to its members. That abuse by Buma is said to consist of the fact that where it concluded simultaneously a cable television agreement and a cable radio agreement with a cable distribution company, it waived the royalties payable in respect of retransmissions of radio programmes so that it could conclude cable television agreements (see Article 8(3) of the standard agreement concerning radio programmes) which were more lucrative for Buma as an undertaking but were not so for its composer members.

82 The Commission states that this objection was not raised in the complaint.

° Findings of the Court

83 In accordance with settled case-law, according to which the duty of the Community authority which adopted the measure in question is to disclose in a clear and unequivocal fashion the reasoning it followed so as to make the persons concerned aware of the reasons for the measure and thus enable them to defend their rights and the Community judicature to exercise its review (judgment of the Court of Justice in Case C-350-88 Delacre and Others v Commission [1990] ECR I-395, paragraph 15), the Court of First Instance considers that the reasoning set out in that regard by the Commission is appropriate, since, as is shown by the Court' s reasoning concerning the second part of the second plea (see paragraphs 69 to 73 above) and the third plea (see paragraphs 78 to 80 above), the Court has been able to review the legality of the Commission's reply to the applicant's complaint in so far as it related to the alleged abuse of a dominant position by Buma.

84 It follows that this plea must be rejected.

The claim for compensation

Arguments of the parties

° Fault

85 The applicant claims that the fault giving rise to the liability of the Community is the breach by the Commission of the principle of sound administration. The Commission failed to adopt a decision publicly and clearly indicating to the undertakings concerned that it wished for intermediaries other than the rights management societies formed around the monopolies of copyrights in musical works to disappear. Furthermore, over a number of years, the Commission had concealed from the applicant that it had no intention of prosecuting the cable distribution cartels and at the same time it had induced him to refrain from submitting a complaint, thereby avoiding having to initiate an administrative investigation at the earliest possible moment, which would have resulted in a positive decision, thereby harming his interests.

86 The Commission considers that it has not breached the principle of sound administration, in so far as such a principle exists. Even though the Commission's final decision was taken eight years after the applicant's first letter, the Commission observes that it was taken only three years after the submission of the complaint, which, in the present case, must be regarded as a reasonable period. That delay in the applicant's submission of his complaint is attributable solely to him, as is shown by a letter sent by his lawyer on 19 September 1990 to Mr A.C. Overbury, a director at the Commission.

° Damage and causation

87 The applicant estimates that the loss he has suffered amounts to HFL 1 500 000, which is five times his annual estimated income. That loss, he claims, was caused by the combined effect of numerous ruinous and arduous procedures which he has had to initiate and the actual deterioration in his copyrights. Furthermore, that situation brought about the winding-up of his photographic agency.

88 The Commission observes that the applicant has not submitted any evidence to support the estimated figure for the loss allegedly suffered. Furthermore, it adds that the loss cannot have been caused by the Commission, since the applicant has not been able to establish the existence of any causal link between the closing of his business and the implementation of the agreements in question.

Findings of the Court

89 It is settled case-law that the Community cannot be liable under the second paragraph of Article 215 of the Treaty unless a set of conditions, relating to the existence of actual damage, a causal link between the damage claimed and the conduct alleged against the institutions, and the illegality of such conduct (see the judgment of the Court of Justice in Case 4-69 Luetticke v Commission [1971] ECR 325, paragraph 10), is satisfied.

90 In the present case, it must be examined first of all whether the applicant's claims that the Commission breached the principle of sound administration have been proved.

91 In that regard, the Court observes that the applicant alleges, first, that the Commission omitted clearly to notify the interested undertakings of its wish to see undertakings operating as copyright intermediaries disappear so as to benefit rights societies formed around monopolies in copyrights in musical works and, secondly, that the Commission concealed its intention not to prosecute the cable distribution cartels, while inducing the applicant not to submit a complaint in order to avoid having to carry out an administrative investigation and, eventually, a positive decision, all of which was contrary to the applicant's interests.

92 The Court finds, first, that the applicant has not adduced the slightest evidence or matter to demonstrate that the Commission intended, as alleged, to put undertakings acting as copyright intermediaries out of business.

93 Secondly, the applicant's second complaint against the Commission is unfounded. It follows, first of all, from the correspondence between the applicant and the Commission, as set out in part D of the supplementary appendices lodged by the applicant at the request of the Court, that prior to lodging his complaint on 26 October 1990 the applicant had been aware that the Commission had issued a comfort letter to the parties which had notified the standard agreements.

94 Thus, the applicant put the matter before the Commission for the first time in a letter of 8 August 1985, in which he complained of the "de facto monopoly" of "the copyright societies". It was only in his second letter to the Commission, dated 25 August 1985, that the applicant referred to the standard agreements, but without indicating the reason for which he was referring to them. Finally, on 2 June 1989, that is to say after a period of approximately four years, the applicant referred once again to the standard agreements and informed the Commission that he had brought an action in the Netherlands courts in order to have those agreements annulled. On 21 November 1989 the Commission replied that on 16 June 1986 a comfort letter had been sent to the parties to the notified standard agreements and it also informed him that Mr Bloemendaal, a Commission official, would contact him in order to obtain additional information in order to check the current compatibility of the standard agreements with Community competition law. It follows from the foregoing that the Commission informed the applicant of the notification of the standard agreements and the dispatch of a comfort letter six months after receipt of the letter from the applicant which for the first time specifically related to the standard agreements. It should be noted that, at that stage, the applicant had not yet stated that he wished to submit a complaint to the Commission under Article 3 of Regulation No 17 and that the Commission expressly had in mind a supplementary investigation of the agreements in question and had notified the applicant of its intention. The Court therefore considers that the evidence submitted to it by the parties does not establish that the Commission deliberately concealed from the applicant that it had sent a comfort letter to the parties to the standard agreements which had notified them to it.

95 Secondly, a letter from the Commission of 22 May 1992, which refers to a letter from the applicant's lawyer of 19 September 1990 which has not been produced by the parties, shows that the applicant had not yet submitted a complaint at that time because he "eerst door middel van informele contacten de materie dusdanig wenste te bewerken en rangschikken, dat in een klacht geen onnodige ballast zou behoeven te worden meegevoerd" ("first of all wished to prepare and arrange the matter by means of informal contacts so as not to clutter up a complaint with unnecessary details"). It follows that the period which elapsed between the first letter sent by the applicant to the Commission on 8 August 1985 and the letter addressed by the applicant's lawyer to the Commission on 19 September 1990 must be attributed, according to the documents at the Court' s disposal, to the applicant's own decision and that it is, therefore, not the result of the Commission's attitude during that period. Furthermore, the Court observes that, as regards the period after 19 September 1990, even if it were proved to be correct that the Commission attempted in some way to convince the applicant that he should not submit a complaint under Article 3 of Regulation No 17, which the applicant has not proved, the Commission's efforts clearly did not put off the applicant, since he submitted such a complaint on 26 October 1990, that is to say, hardly more than one month later.

96 The applicant has not therefore proved the existence of the facts which he alleges. Consequently, the Court considers that it is not possible to find any fault of such a nature as to render the Community liable under the second paragraph of Article 215.

97 Moreover, as regards the alleged damage, it is for the applicant to produce to the Court the evidence to establish the fact and the extent of the loss which he claims to have suffered (see, to that effect, the judgment of the Court of Justice in Case 26-74 Roquette Frères v Commission [1976] ECR 677, paragraphs 22 to 24). In that regard, the Court observes that the applicant has merely estimated the alleged damage at HFL 1 500 000, a sum corresponding to five times his annual estimated income, but has not adduced any evidence in support of that claim. It cannot be disputed that such an assessment proves neither the fact nor the extent of the loss for which he is claiming compensation. Consequently, the Court considers that the applicant has not proved the existence of the loss nor, therefore, its extent.

98 It follows from the foregoing that, since neither fault nor damage has been established in the present case, the action for compensation must be rejected.

Costs

99 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful and the defendant and the intervener have applied for costs, the applicant must be ordered to pay the costs, including those of the intervener.

On those grounds,

THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended Composition)

hereby:

1. Dismisses the applicant's claims as inadmissible in so far as they are not for annulment of the Commission's decision of 14 October 1993 rejecting the applicant's complaint or for compensation;

2. Dismisses the remainder of the claims for annulment and for compensation as unfounded;

3. Orders the applicant to pay the costs, including those of the intervener.