Case T-873/16
Groupe Canal + SA
v
European Commission
(Competition — Agreements, decisions and concerted practices — Television distribution — Decision making commitments binding — Territorial exclusivity — Preliminary evaluation — Effect on the contractual rights of third parties — Proportionality)
Summary – Judgment of the General Court (Fifth Chamber), 12 December 2018
Competition – Administrative procedure – Bringing infringements to an end – Commission’s powers – Corrective measures and undertakings – Limits
(Council Regulation No 1/2003, Art. 9)
Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Adverse effect on competition – Exclusive licence between a holder of intellectual property rights and a broadcaster – Prohibition on supplying devices for decoding the broadcasts outside the territory covered by the licence agreement – Not permissible
(Art. 101(1) TFEU)
Approximation of laws – Copyright and related rights – Directives 93/83, 2001/29 and 2006/115 – Rental and lending right in respect of copyright work – Broadcasting and communication to the public – Copyright holder’s right to remuneration – Scope – Limits – Requirement that such remuneration be reasonable in relation to parameters of the broadcasts concerned
(Directives of the European Parliament and of the Council 2001/29, recital 10, and 2006/115, recital 5; Council Directive 93/83, recital 17)
Competition – Administrative procedure – Bringing infringements to an end – Decision of the Commission making commitments entered into pursuant to Article 9 of Regulation No 1/2003 binding – No requirement that the conduct giving rise to the Commission’s concerns satisfy the cumulative conditions of the application of Article 101 (3) TFEU
(Art. 101(1) and (3) TFEU; Council Regulation No 1/2003, Art. 9(1))
Fundamental rights – Freedom of expression – Scope – Limits
(Charter of Fundamental Rights of the European Union, Arts. 16 and 52(1))
Competition – Administrative procedure – Bringing infringements to an end – Decision of the Commission making commitments entered into pursuant to Article 9 of Regulation No 1/2003 binding – Whether binding on national courts – Scope
(Arts. 101 and 102 TFEU; Council Regulation No 1/2003, Art. 9(1), (15) and (16))
Competition – Administrative procedure – Bringing infringements to an end – Commission’s powers – Undertakings – Observance of the principle of proportionality – Taking into account of the interests of third parties – Scope
(Council Regulation No 1/2003, Arts 7 and 9)
Action for annulment – Pleas in law – Misuse of powers – Definition
See the text of the decision.
(see paras 36, 37)
In a factual context characterised by significant barriers that seriously restrict the opportunities for cross-border television broadcasting, the fact that the owner of the copyright grants the exclusive right to broadcast the audiovisual content on the territory of a Member State, and therefore to prohibit, during a specific period, the broadcasting of that content by other operators who have not obtained authorisation from the holders of the rights in question or paid remuneration to them, is not sufficient to justify a finding that such an agreement must be considered to be the object, the means or the result of an arrangement prohibited by the Treaty.
Consequently, a copyright holder may in principle grant to a sole licensee the exclusive right to broadcast by satellite subject matter protected by such a right, during a specified period, from a single Member State of broadcast or from a number of Member States. On the other hand, when the agreements concluded by the copyright holder contain clauses under which the holder is thereafter required to prohibit all its contracting partners on the EEA market from making passive sales to geographic markets situated outside the Member State in respect of which it grants them an exclusive licence, those clauses confer a contractually specified absolute territorial exclusivity and thereby infringe Article 101 (1) TFEU.
In fact, an agreement which might tend to restore the partitions between national markets is liable to frustrate the Treaty’s objective of achieving the integration of those markets through the establishment of a single market. Thus, agreements which are aimed at partitioning national markets according to national borders or make the interpenetration of national markets more difficult must be regarded, in principle, as agreements whose object is to restrict competition within the meaning of Article 101 (1) TFEU. In that context, where a licence agreement is designed to prohibit or limit the cross-border provision of broadcasting services, it is deemed to have as its object the restriction of competition, unless other circumstances falling within its economic and legal context justify the finding that such an agreement is not liable to impair competition.
(see paras 43-46, 48)
While it is true that the specific subject matter of the intellectual property is intended in particular to ensure for the holders of the rights arising therefrom the opportunity to exploit those rights commercially, the fact nonetheless remains that that subject matter does not guarantee them the opportunity to demand the highest possible remuneration, but only appropriate remuneration. That conclusion is confirmed by recital 10 of Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society, and by recital 5 of Directive 2006/115 on rental right and lending right and on certain rights related to copyright in the field of intellectual property.
An appropriate remuneration of the holder of that right is remuneration that is reasonable in relation to the actual or potential number of persons who enjoy or wish to enjoy the service provided. Thus, with regard to television broadcasting, such remuneration must in particular be reasonable in relation to the parameters of the broadcasts concerned, such as their actual audience, their potential audience and the language version. That approach is confirmed by recital 17 of Directive 93/83 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable transmission.
In that regard, in the context of a system of licences without clauses intended to partition the markets according to national borders, there is nothing to prevent the holder of the rights from negotiating an amount that takes account of the potential audience both in the Member State for which the exclusive licence is granted and in any other Member State in which the broadcasts forming the subject matter of the distribution agreement are also received. In fact, the technology necessary to receive the works covered by the rights in question makes it possible to determine the actual and potential audience, by breaking down that audience by country of origin of the purchase request. The same technology also makes it possible to regulate active promotion activities in order to limit them to the territory for which an exclusive licence is granted.
In such a context, there is nothing to preclude the holder of the rights from demanding a premium in return for a licence taking account of the actual and potential audience throughout the EEA. Conversely, the reason for the necessarily higher premium paid for absolute territorial exclusivity is the artificial price differences between the partitioned national markets, which are irreconcilable with the fundamental aim of the Treaty, which is completion of an internal market. To that extent, that premium goes beyond what is necessary in order to ensure appropriate remuneration for those right holders.
(see paras 53-56)
The procedure giving rise to the acceptance of commitments offered is governed by the principle that the undertakings covered by the investigation are informed of the Commission’s concerns and assess whether it is appropriate to propose commitments for the future in return for the Commission’s not making a finding of infringement for the past. The Commission, for its part, assesses whether it is appropriate not to make a finding of infringement of Article 101 (1) TFEU and thus to save the resources which it would have had to devote to the case in question, in exchange for commitments relating by definition to the future and dispelling all its competition concerns.
In that context, the question whether the conduct that gave rise to the concerns in question satisfies the cumulative conditions of the application of Article 101 (3) TFEU has no bearing on the actual nature of a commitment decision concerning certain agreements between undertakings, adopted by the Commission under Article 9(1) of Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 101 TFEU. First, the application of that provision assumes a finding of infringement of Article 101 (1) TFEU. Second, the application of Article 101 (3) TFEU consists in determining the pro-competitive effects produced by the agreement that infringes Article 101 (1) TFEU and in seeing whether those pro-competitive effects outweigh the anticompetitive effects.
(see paras 61, 62)
The right of economic operators to configure their relationships according to their intention as expressed in the agreements which they enter into forms part of freedom of contract. That freedom, which includes the ability to choose with whom to do business and to determine the terms of an agreement, is guaranteed by Article 16 of the Charter of Fundamental Rights of the European Union, which enshrines the freedom to conduct a business.
While it is true that the freedom to conduct a business is not absolute, but must be viewed in relation to its social function, the fact nonetheless remains that any limitation of that right must, in accordance with Article 52(1) of the Charter of Fundamental Rights, be provided for by law and respect the essence of that right.
(see paras 86, 87)
When a commitment decision concerning certain agreements between undertakings, adopted by the Commission under Article 9(1) of Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 101 TFEU, requires that an undertaking no longer honour the relevant clauses in its relationships with its contracting partners, that obligation does not in any way prejudge the powers of the national courts to assess whether those clauses are in fact contrary to Article 101 (1) TFEU and, if appropriate, to draw the necessary conclusions under paragraph 2 of that article and under national law. In that context, the Commission’s decision can, at most, influence the findings of the national court only in so far as it contains a preliminary assessment which the national court must take into account solely as an indication of the anticompetitive nature of the agreement examined in the light of Article 101 (1) TFEU. Thus, having regard to its summary and provisional nature, the Commission’s assessment of conformity with competition law set out in a decision under Article 9(1) of Regulation No 1/2003 must not ultimately prevent the national court from reaching a conclusion which deviates in whole or in part in the same case following further investigations and a more thorough examination.
Consequently, the fact that the individual commitments offered by an undertaking have been made binding by the Commission does not mean that other undertakings are deprived of the possibility of protecting the rights they may have in connection with their relations with that undertaking.
In that context, if the national court considers, following its analysis and after examining the possibility of pursuing the routes provided for in Articles 15 and 16 of Regulation No 1/2003, that the relevant clauses infringe Article 101 (1) TFEU without satisfying the conditions in paragraph 3 of that article, it will be required to declare that they are void pursuant to Article 101 (2) TFEU. On the other hand, if it considers that the relevant clauses do not infringe Article 101 (1) TFEU or that they satisfy the conditions of paragraph 3 of that article, it will have to assess, where necessary, the merits of the claim before it, as Article 101 TFEU does not preclude the application of the relevant clauses.
In the latter situation, if the outcome of the proceedings before the national court leads the undertaking concerned to breach the commitment made binding under the Commission’s decision, it will be for the Commission, where appropriate, to reopen its investigation in accordance with Article 9(2)(b) of Regulation No 1/2003, in which case it will not be bound by the decision of the national court.
(see paras 100-103)
See the text of the decision.
(see paras 113-117)
See the text of the decision.
(see para. 128)