Order of the Court (First Chamber) of 16 September 1997. – Casper Koelman v Commission of the European Communities.

‘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 B EMIM 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 and Others, 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 Bräu [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.’

‘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 différent 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 Büanzbuchh alter 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 BiUnzbuchhalter 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.’

‘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 (...).’

‘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.’