OPINION OF MR WARNER — CASE 52/79

portionate measure in relation to the objective to be achieved, in that the prohibition in question is relatively ineffective in view of the existence of natural reception zones, or discrimination which is prohibited by the Treaty in regard to foreign broadcasters, in that their geographical location allows them to broadcast their signals only in the natural reception zone.

Kutscher O'Keeffe Touffait Mertens de Wilmars Pescatore

Mackenzie Stuart Bosco Koopmans Due

Delivered in open court in Luxembourg on 18 March 1980.

A. Van Houtte H. Kutscher Registrar President

OPINION OF MR ADVOCATE GENERAL WARNER DELIVERED ON 13 DECEMBER 1979

My Lords, Both raise questions of interpretation of Articles 59 to 66 of the EEC Treaty, relating to the free movement of services. Introduction Both have as their background the Of these two cases, one, Case 52/79, activities of undertakings providing comes to the Court by way of a television diffusion services in Belgium. reference for a preliminary ruling by the Essentially, such a service consists in Tribunal Correctionnel of Liège, the picking up by means of an aerial other, Case 62/79, by way of a reference television signals that have been for a preliminary ruling by the Cour broadcast over the air and distributing d'Appel of Brussels. the signals by cable to the television sets

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of subscribers to the service. We were Counsel for the German Government, told that, from a technical point of view, but he did not press the point, nor would it is only the scale and professionalism of the overall picture have been much the operation (in particular, the size and altered if he had been right. It was said, location of aerials and the standard of without contradiction, that the effect of maintenance) that distinguishes it from cable diffusion was to increase the that involved in the use of a common number of foreign programmes available aerial for television reception in, for to Belgian viewers from, in the most instance, a block of flats. favoured areas, two or three to eight or ten.

Cable diffusion of television was said to have four beneficial effects. First, it Case 52/79 arises from a prosecution for provides a means of overcoming infringement of a prohibition of the obstacles to the direct reception of diffusion of commercial advertisements broadcasts, such as hills, forests and tall contained in an Arrêté Royal to which I buildings. Secondly, it improves the shall refer in more detail in a moment. quality of both picture and sound. Case 62/79 arises from a civil action for Thirdly, it enables subscribers to receive breach of copyright. television programmes even though they live beyond the range of the broad­ casting stations emitting those programmes, i.e. outside what was called their "zone of natural reception". Finally, there is an evironmental The relevant Belgian law consideration: cable diffusion dispenses with the need for unsightly private aerials on the roofs of houses. It was stressed that, once a viewer has become a subscriber to a diffusion service, he receives all television programmes by Broadcasting is in Belgium a statutory cable, including those within whose zone monopoly, covering both radio and of natural reception he may be living. television. It is now governed by a statute of 18 May 1960, which (as amended by a decree of 12 December 1977) set up two broadcasting corporations ("instituts d'émission"), namely, "Radiodiffusion- télévision belge de la Communauté These cases are about problems arising culturelle française" (commonly known from the cable diffusion in Belgium of as "RTBF") and "Belgische radio en programmes broadcast by television televisie, Nederlandse uitzendingen" stations outside Belgium. The Court was (commonly known as "BRT"). The shown a map which made it clear that statute also established a joint body, the every part of Belgium lies within the "Radiodiffusion-télévision belge — zone of natural reception of one or more Institut des services communs", which is foreign stations (British, Dutch, German, responsible for common technical, Luxembourgish or French). The extent administrative, financial and cultural of penetration by foreign broadcasts services, for broadcasts in German, and shown on the map was questioned by for a world service.

861 OPINION OF MR WARNER — CASE 52/79

Among other restrictions, the statute, by Article 21. Article 28 (3), forbids any broadcast by RTBF or BRT (or, as I understand it, by Sous réserve des stipulations des the joint "Institut") of any material in conventions internationales, le distri­ the nature of a commercial advertisement buteur peut transmettre les émissions de ("revêtant un caractère de publicité toute autre station de radiodiffusion commerciale"). We were told that none télévisuelle autorisée par le pays où elle the less programme sponsorship by est établie. bodies of a public or quasi-public nature, Est toutefois interdite la transmission: such as SABENA, the Caisse de Crédit Communal and the Caisse d'Epargne, is Io des émissions revêtant un caractère permitted. de publicité commerciale; Cable diffusion of television is regulated by an Arrêté Royal of 24 December 1966. Article 22. Chapter II of that Arrêté Royal contains Il est interdit au distributeur de relier au provisions on the licensing of cable réseau de distribution d'émissions de diffusion networks. radiodiffusion télévisuelle des appareils Under Article 2 the establishment of such susceptibles de distribuer des images et a network without a licence from the sons autres que ceux des programmes competent Minister is prohibited. We autorisés. were told that an application for a licence must state the broadcasting stations whose programmes the applicant is proposing to relay, and that any Article 23. addition to or subtraction from the group of stations thus specified requires Il est interdit de distribuer des émissions: fresh authorization. a) attentatoires à la sûreté de l'État, à Article 7 provides that licences shall be l'ordre public ou aux lois belges; granted in respect of a defined territory b) contraires aux bonnes mœurs; constituting part of a commune, a single commune or a number of adjoining c) susceptibles de constituer un outrage communes. However, the competent aux convictions d'autrui ou une Minister may authorize the installation offense à l'égard d'un Etat étranger." outside that territory of aerials and of equipment connected thereto. Article 41 of the Arrêté Royal provides Chapter VI of the Arrêté Royal is that any infringement of its provisions headed "Programmes". Included among may result in the temporary or its provisions are Articles 20 to 23, which permanent withdrawal of a licence. That are, so far as material, in these terms : is expressed to be without prejudice to the provisions of a statute of 26 January "Article 20. 1960, under which fines may be imposed. Sauf en cas d'impossibilité reconnue par The relevant Belgian law of copyright is la Régie des Télégraphes et des stated in the Order for Reference made Téléphones, tout réseau de distribution by the Cour d'Appel of Brussels. The d'émissions de radiodiffusion télévisuelle Cour d'Appel there says that the position doit transmettre simultanément et dans of cable diffusion undertakings is leur intégralité toutes les émissions de la governed in Belgium by Article 11 bis of Radiodiffusion Télévision belge. the Berne Convention on the Protection

862 PROCUREUR DU ROI v DEBAUVE

of Literary and Artistic Works in its Also of some relevance in these cases are "Brussels version" of 26 June 1948, Anieles 1 and 6 (1) of the European which was ratified by a Belgian statute of Agreement on the Protection of 26 June 1951. Paragraph 1 of Article Television Broadcasts of 22 June 1960, 11 bis reads: made under the auspices of the Council of Europe (the "Strasbourg Agree­ ment"). So far as the Member States of "Authors of literary and artistic works the Community are concerned that shall have the exclusive right of auth­ Agreement is in force as between orizing: Belgium, Denmark, France, the Federal Republic of Germany and the United (i) the radiodiffusion of their works or Kingdom. The Agreement has not, so it the communication thereof to the seems, been ratified by Ireland, Italy, public by any other means of Luxembourg, or the Netherlands. wireless diffusion of signs, sounds or images; Article 1 is, so far as material, in these terms : (ii) any communication to the public, whether over wires or not, of the "Broadcasting organizations constituted radiodiffusion of the work, when in the territory and under the laws of a this communication is made by a Party to this Agreement or transmitting body other than the original one; from such territory shall enjoy, in respect of all their television broadcasts:

(iii) - - ·" 1. in the territory of all Parties to this Agreement, the right to authorize or prohibit: The Cour d'Appel says that subpara­ graph (ii) is in point inasmuch as a (a) . .. Belgian cable diffusion undertaking is a body other than the original broadcaster and inasmuch as the diffusion of a (b) the diffusion of such broadcasts broadcast by such an undertaking to its to the public by wire; subscribers is a "communication to the public . . . over wires". That being so the author of any literary or artistic work that is the subject-matter of a broadcast has the exclusive right of authorizing its Article 6(1) provides: diffusion by such an undertaking. As I understand it, the same principle holds "The protection provided for in Article 1 good, in the view of the Cour d'Appel, shall not affect any rights in respect of a whether the original broadcast was made television broadcast that may accrue to in Belgium or elsewhere. third parties, such as authors, per­ formers, film makers, manufacturers of In my opinion this Court cannot go phonographic records or organizers of behind the Cour d'Appel's ruling on that entertainments." because, on a reference under Article 177 of the Treaty, any question of I turn now to the facts of the cases interpretation of national law is a matter before the Court, and first to those of for the national Court. Case 52/79.

863 OPINION OF MR WARNER — CASE 52/79

The facts of Case 52/79 stadium. Should he or should he not at once switch the network off?

The effect of Article 21 of the Arrêté Royal of 24 December 1966, on the face of it, is that cable diffusion undertakings Thirdly, the effect of switching the in Belgium are required to blot out any network off was to produce an commercial advertisements in foreign unpleasant noise in subscribers' sets and television programmes that they relay. By what was described as "snow" on their virtue of Article 23 they are required to screens. This caused annoyance to sub­ blot out other categories of material too, scribers who ' were left wondering but Case 52/79 is only about whether the trouble lay in their sets, in advertisements. the diffusion network, or in the broadcast itself.

We were told of the difficulties that such blotting out would entail if the Nor, because of Article 22 of the Arrêté requirements of Articles 21 and 23 of the Royal, was the diffusion undertaking Arrêté Royal were enforced. They seem able to insert a signal of its own to be of three kinds. explaining the break in service.

Firstly it would mean that each diffusion network would have to employ a person It appears to be common ground that to watch each foreign programme that after an initial period of compliance, the was being relayed for the whole time cable diffusion undertakings, because of that that programme was being those difficulties and of the rapid growth broadcast, so that he could switch off of television advertising in the countries when forbidden material came on screen bordering on Belgium, came to ignore and switch on again when it had gone. Article 21 of the Arrêté Royal and to This would involve an enormous increase relay foreign television programmes in in staff, entailing a corresponding their entirety. To that general non­ increase in subscriptions to the service. compliance with the Article the auth­ We were told that, at present, once a orities adopted the policy of turning a network has been installed, all the blind eye. So much is clear from the equipment operates automatically, so Ministerial statements to which we were that staff are needed only for referred and from the fact that the pros­ management and for maintenance. ecution in Case 52/79 is the first ever to have been brought for infringement of Article 21. Secondly, staff recruited so to monitor and censor programmes would inevitably make errors of judgment. The borderline between material "revêtant un caractère The initiative in bringing that pros­ de publicité commerciale" and that ecution was taken by three associations which does not can be a hazy one. We which describe themselves as "consumer were told of difficulties that the RTBF associations", namely the ASBL and the BRT had had and still have in "Fédération Nationale du Mouvement drawing the distinction. The example Coopératif Féminin, Organisation de was given to us of a monitor watching a Consommateurs", the ASBL "Fédération football match and seeing on his screen Belge des Coopératives" and the ASBL an advertisement exhibited in the "Vie Féminine". Why women's organi-

864 PROCUREUR DU ROI v DEBAUVE

zations should be so involved was "sous réserve des conventions inter­ explained to us at the hearing by their nationales", it held it inapplicable for Counsel. They consist mostly of mothers two reasons. The first was that the and school teachers who are concerned Strasbourg Agreement gave foreign about the effect of television broadcasting stations a right to forbid advertisements on children. the cable diffusion of their broadcasts if their programmes were altered. (There was indeed placed before us a letter At all events those associations laid dated 8 October 1966 from the French complaints before the prosecuting auth­ Embassy in Belgium to what seems to be orities ("ministère public") at Brussels, the parent company of the Coditei group Antwerp and Liège. The only reaction authorizing the diffusion in Liège of the came from the authorities at Liège, ORTF's television broadcasts on terms where the prosecution was instituted inter alia that "la distribution devra être before the Tribunal de Police. effectuée sans coupures" — Annex I to the Observations of M. Debauve and others). The Tribunal's second reason was that, this Court having held in Case The undertakings at whose activities the 155/73 the Sacchi case [1974] 1 ECR prosecution is aimed are a company in 409, at p. 427, that the transmission of the well-known "Coditei" group and the television signals, including those in the "Association Liégeoise d'Électricité" (or nature of advertisements, came within "ALÉ"). Between them, the Coditei Articles 59 to 66 of the Treaty, the company and the ALÉ provide a cable excision of advertisements from diffusion service covering the city and broadcasts from other Member States province of Liège. The actual accused would be contrary to Community law, are three individuals (Messrs. Debauve, which took precedence over Article 21 of Denuit and Lohest) who are members of the Arrêté Royal to the extent of any the management staffs of the Coditei incompatibility between them. company and of the ALÉ. The Coditei company and the ALÉ themselves are cited in the proceedings as civilly liable ("civilement responsable"). At the instance of the "parties civiles" (or of a majority of them) an appeal against the acquittal was lodged with the The three associations who set the Tribunal Correctionnel of Liège. We are proceedings in motion have intervened in told that before that Court too the them as "civil parties" ("parties civiles") "ministère public" submitted that the as have done a large number of defendants were entitled to be acquitted, individuals and the RTBF. essentially on the ground that Article 21 of the Arrêté Royal contravened the provisions of the Belgian Constitution We were told that before the Tribunal de safeguarding freedom of opinion and Police the "ministère public" submitted forbidding censorship. that the defendants should be acquitted.

At all events the Tribunal de Police did By Order dated 23 February 1979, acquit them. In a judgment dated however, the Tribunal Correctionnel 14 December 1978, after recalling that referred to this Court two questions, in Anicie 21 was expressed as having effect the following terms:

865 OPINION OF MR WARNER — CASE 52/79

"(1) Having regard to the judgment of ground of his nationality or his the Court of Justice of 30 April place of residence (in the present 1974 in Case 155/73, Sacchi, should instance, the prohibition of Article 59 of the Treaty of Rome retransmitting advertisements)?" be interpreted as prohibiting all national rules which forbid the transmission of advertisements by cable television diffusion companies The facts of Case 62/79 even though it remains possible and lawful to pick up such advertisements naturally within the reception zones of foreign broad­ In Case 62/79 the facts are these. casting stations, having regard in particular to the circumstances that: By an agreement dated 8 July 1969 made between a French company, the SA "Les Films la Boétie" (which I shall call "La (a) such rules would introduce Boétie") and a Belgian company, the SA discrimination based on the "Ciné Vog Films" (which I shall call geographical location of the "Ciné Vog") La Boétie granted to Cine foreign broadcasting station Vog the exclusive right for a period of which could transmit advertise­ seven years to distribute in Belgium and ments only within its zone of Luxembourg a film called "Le Boucher" natural reception, such zones which had been produced by La Boétie. being susceptible, because of The agreement covered both cinema differences in density of popu­ showings and television broadcasts. It lation, of being of very provided however that the film was not different interest from an to be shown on television in Belgium advertising point of view, until the expiry of forty months after its first showing in a cinema there, nor was it to be shown on television in Luxem­ (b) such rules would introduce a bourg until the last year of the seven. restriction disproportionate to The first showing of the film in a cinema the purpose in view since that in Belgium took place on 15 May 1970, purpose — the prohibition of so that according to the agreement it television advertising — could should not have been shown on never be wholly attained television in Belgium until September because of the existence of the 1973. zones of natural reception;

The right to distribute "Le Boucher" in (2) Having regard to the judgment of Germany was granted by La Boétie to the Court of Justice of 3 December another French company called 1974 in Case 33/74, Van "Filmedis", or so we were told at the Binsbergen, should Articles 59 and hearing by Counsel for Ciné Vog. 60 of the Treaty of Rome be Filmedis, it seems, was allowed under its interpreted as having direct effect agreement with La Boétie to exploit the as against all national rules in so far German television rights in the film as such rules do not create any immediately, and it proceeded to do so. formal discrimination against a As a result the film was shown on person providing services on the German television on 5 January 1971.

866 PROCUREUR DU ROI v DEBAUVE

The broadcast was picked up in Belgium Coditei now appeals against that by Coditei and relayed to its subscribers, judgment to the Cour d'Appel of but only — so I understood it to be Brussels. alleged on behalf of Coditei — in the zone of natural reception of the German station. Coditel's subscribers in that zone thus saw the film (dubbed in German Interventions in the appeal by further and without subtitles) only seven months parties were allowed by the Cour after it had first been released to cinemas d'Appel. I mention them only because in Belgium. two of those interveners were independently represented before this Court, namely "Inter-Régies" and the "Union Professionnelle de Radio et Ciné Vog brought an action before the Télédistribution" which appear to be Tribunal de Première Instance of associations representing, respectively, Brussels, in which it was joined as co- the public and the private bodies plaintiff by the ASBL "Chambre providing cable diffusion services in Syndicale Belge de la Cinematographic", Belgium. against La Boétie and three companies in the Coditei group, including, as I understand it, the Liège company which is a defendant in Case 52/79. (I The Cour d'Appel held that, as a matter henceforth refer to those three of Belgian copyright law, Coditei was companies simply as "Coditei"). An not entitled to relay the broadcast of "Le intervention in support of La Boétie by Boucher" on 5 January 1971 without the the "Chambre Syndicale des Producteurs licence of Ciné Vog, whether within the et Exportateurs de Films Français" was zone of natural reception of the German allowed. broadcast or beyond it. It then considered whether Article 85 of the EEC Treaty affected the position, and held that that Article did not in the circumstances apply. Finally the Cour Ciné Vog's claim against La Boétie, d'Appel considered Article 59 of the which was based on breach of contract, Treaty in the light of Coditel's argument was held by the Tribunal de Première that Ciné Vog's action was incompatible Instance to be inadequately formulated, with that Article, in so far as it would and so to fail. restrict the possibility for a broadcasting station in a country bordering on Belgium freely to provide a service for Its claim against Coditei, however, based persons in Belgium. on breach of copyright, was upheld by the Tribunal. The Tribunal granted Ciné Vog an injunction restraining Coditei from showing "Le Boucher" in Belgium After observing that: without Ciné Vog's licence; declared unlawful Coditel's showing of the film on 5 January 1971; ordered Coditei to "In answer to the twofold objection that pay to Ciné Vog damages of 300 000 BF could be raised against their argument and to its co-plaintiff nominal damages that the restriction in question will affect of 1 BF; gave leave to the latter to not the person providing the service publish the judgment in two Belgian (namely the foreign broadcasting station) newspapers at Coditel's expense; and but intermediaries (the cable diffusion awarded costs against Coditei. companies) and that thus the restriction

867 OPINION OF MR WARNER — CASE 52/79 will operate only between nationals of consent of the original owner of the the same Member State (Belgium), the right?" appellants answer that Article 59 must be read as prohibiting restrictions on freedom to provide services and not only It transpired at the hearing, as the result on the free activity of persons providing of questions put by some of Your services, and that it encompasses all cases Lordships, that Belgian cable diffusion where the provision of a service entails undertakings have never so far paid a or has entailed at an earlier stage or will penny to the owners of the copyright in entail at a later stage the crossing of a films of which they have relayed frontier within the Community" broadcasts and that the present action has been brought for the specific purpose of establishing their liability to make such payments. This is, in other words, a the Court d'Appel ordered that there bé test action. referred to this Court the following questions:

"(1) Are the restrictions forbidden by Article 59 of the Treaty establishing Minor points of Community law the European Economic Com­ munity only those that hinder the provision of services between nationals established in different I think it convenient to deal first, in Member States, or do they include order to get them out of the way, with restrictions on the provision of three minor points of Community law, services between nationals two of which are raised by the Tribunal established in the same Member Correctionnel of Liege's first question State which however concern and one by the Cour d'Appel of services the substance of which Brussels's first question. originates in another Member State?

There is first the suggestion contained in paragraph (a) of the Tribunal (2) If the first limb of the foregoing Correctionnel's first question that the question is to be answered in the Belgian rule against the cable diffusion affirmative, is it in accordance with of advertisements (and the same would the provisions of the Treaty on logically apply to the relevant rule of freedom to provide services for the Belgian copyright law) might be assignee of the performing right in regarded as creating discrimination a cinematographic film in one between broadcasting stations in Member State to rely upon his right adjoining Member States because, owing in order to prevent the defendant to their different geographical locations, from showing that film in that State their zones of natural reception are by cable diffusion where the film different and not all equally densely thus shown is picked up by the populated. The underlying idea is, I defendant in that State after having apprehend, that such "discrimination" been broadcast in another Member can only be avoided by allowing the State by a third party with the entire programme of each of those

868 PROCUREUR DU ROI v DEBAUVE

broadcasting stations to be freely relayed should" be held incompatible with by cable throughout Belgium. Community law on the ground that it introduces a restriction disproportionate to its purpose, in that the total prohibition of the reception of forbidden material in Belgium can never be achieved because of the existence of the zones of natural reception of foreign The point only arises of course in so far broadcasting stations. as the broadcasting stations in adjoining Member States are to be regarded, for the purposes of Articles 59 to 66 of the Treaty, as providing a service for Belgian viewers outside their respective zones of natural reception. That is a more difficult question, with which I shall deal later. That suggestion seems to me to be based Assuming however that such stations are on a misconception. Belgian law, as it to be so regarded, it appears to me clear has been explained to us, acknowledges that the "discrimination" between them the existence of the zones of natural envisaged by the Tribunal Correctionnel reception of foreign broadcasting is not discrimination of a kind that the stations and does not seek to interfere Treaty forbids. As was forcefully pointed with the freedom of viewers living within out to us on behalf, in particular, of the those zones to receive directly the RTBF, of the French Government and of programmes broadcast by those stations. the Commission, the provisions of the What the Belgian rules here in question Treaty forbidding discrimination are forbid is the relaying by Belgian cable concerned with discrimination artificially diffusion undertakings of certain parts of brought about by measures taken by those programmes, i.e. the diffusion of Governments or other persons in what I have called "forbidden material". positions of power. Those provisions are Clearly the purpose of those rules is not, not designed to suppress competitive and it could not be, to exclude advantages enjoyed by particular under­ altogether the viewing of that material takings owing to their geographical on Belgian territory. Their purpose is location or other natural factors. On the only to exclude the active spreading of it contrary the Treaty, where it adverts at beyond, in the case of each programme, all to such factors, does so by auth­ the circle of those able to receive it orizing, exceptionally, aids to under­ directly. In my opinion, the fact that the takings that are handicapped by them: rules have only that limited purpose see for instance Article 42 and Article 92. cannot, in itself, invalidate them.

Thirdly there is the point raised in the The second point is that raised in Cour d'Appel's first question as to paragraph (b) of the Tribunal whether Article 59 forbids only Correctionnel's first question, as to restrictions on the provision of services whether the Belgian rule against the between persons established in different cable diffusion of advertisements (and Member States or forbids also again the same could apply to the restrictions on the provision between relevant rule of Belgian copyright law) persons established in the same Member

869 OPINION OF MR WARNER — CASE 52/79

State of services the "substance" of the provision of that service (wholly which "originates" in another Member within Belgium) indirectly restrict the State. provision of some other service by a person in one Member State to persons in another Member State.

In my opinion the answer to that question lies in the terms of Article 59 itself, according to which that Article applies to the provision of services by Before, however, I turn to that crucial "nationals of Member States who are question, I must deal with the more established in a State of the Community general questions of interpretation of other than that of the person for whom Articles 59 to 66 of the Treaty that were the services are intended". Of course the canvassed in argument and the answers word "established" there requires in­ to which must govern one's whole terpretation. In Case 33/74 the Van approach to these cases. Binsbergen case [1974] 2 ECR 1299, Article 59 was held to apply where a Dutchman resident in Belgium provided his services in the Netherlands, and in Case 39/75 the Coenen [1975] 2 ECR The scope of Articles 59 to 66 of 1547 it was held to apply where a the Treaty Dutchman resident in Belgium, and having an office in the Netherlands, provided his services in the Netherlands. To have interpreted Article 59 as inap­ plicable to such situations would Of those questions the first is whether, as manifestly have been wrong, particularly some of those who submitted obser­ in view of the reference in Article 65 to vations to the Court argued or assumed, the application of restrictions to persons the purpose of Articles 59 to 66 is only providing services "without distinction to abolish, as between providers of on grounds of nationality or residence". services, discrimination on grounds of But one hunts through Articles 59 to 66 nationality or residence, or whether, as of the Treaty in vain for any reference or others argued or assumed, those Articles allusion there to a situation in which the have the wider purpose of, as it was substance or subject-matter of a service expressed, creating "a common market provided within a Member State orig­ in the provision of services". inates in another Member State. Nor indeed is it surprising that the authors of the Treaty eschewed so imprecise a concept. There are judgments of this Court sup­ porting each of those views. But before I advert to them I must, I think, consider The answer to the question whether the relevant provisions of the Treaty Article 59 can apply in the present cases itself. does not therefore in my opinion depend on whether the "substance" of the service provided by Coditei for its sub­ scribers "originates" in other Member States. It depends upon whether the Articles 59 to 66 constitute Chapter 3 of restrictions imposed by Belgian law on Title III of Part Two of the Treaty.

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Part Two is headed "Foundations of the The first paragraph of Article 60 is so Community". worded as to confirm that freedom to provide services is to be regarded as Title III thereof is headed "Free distinct from "freedom of movement for movement of persons, services and goods, capital and persons". capital". That reflects the wording of Article 3 (c) of the Treaty which The second paragraph of Article 60 is provides for the inclusion among the neutral on the present question. activities of the Community of "the abolition, as between Member States, of obstacles to freedom of movement for One then comes to the third paragraph persons, services and capital". That of that Article, which is the first wording makes it clear that, contrary to provision of Chapter 3 to mention what is sometimes thought, the free discrimination. It provides: movement of services was, in the minds of the authors of the Treaty, something distinct from the free movement of "Without prejudice to the provisions of persons. Indeed, as the Commission is the Chapter relating to the right of wont to point out, the provision of a establishment, the person providing a service by a person in one Member State service may, in order to do so, to a person in another Member State temporarily pursue his activity in the does not necessarily require that either of State where the service is provided, them should move at all. under the same conditions as are imposed by that State on its own nationals." Title III has four chapters, namely, Chapter 1 "Workers", Chapter 2 "Right of Establishment" (those two being That seems to imply that, where the obviously concerned with freedom of person providing a service does not go to movement for persons), Chapter 3 the State where the service is provided, "Services" and Chapter 4 "Capital". the conditions imposed by that State on its own nationals are not in point, or at Article 59, with which Chapter 3 opens, least not a major consideration. says nothing about discrimination. Its first paragraph provides in general terms : No subsequent provision of Chapter 3 mentions discrimination until one gets to "Within the framework of the provisions Article 65, which reads: set out below, restrictions on freedom to provide services within the Community shall be progressively abolished during "As long as restrictions on freedom to the transitional period in respect of provide services have not been abolished, nationals of Member States who are each Member State shall apply such established in a State of the Community restrictions without distinction on other than that of the person for whom grounds of nationality or residence to all persons providing services within the the services are intended." meaning of the first paragraph of Article 59." The second paragraph of Article 59 merely empowers the Council to extend the provisions of Chapter 3 to "nationals Thus discrimination on grounds of of a third country who provide services nationality or residence was forbidden and who are established within the even before the abolition of any Community". restrictions pursuant to the first

871 OPINION OF MR WARNER — CASE 52/79 paragraph of Article 59. That makes it like provision in Article 59 or anywhere difficult to hold that Article 59 is else in Chapter 3. concerned only with the abolition of discrimination, for there would then be little, if anything, left to be abolished The other significant difference is that under its provisions that had not already Chapter 2 contains no provision been abolished by Article 65. resembling Article 65.

There remains Article 66 which renders the provisions of Articles 55 to 58 (in One reason for those differences may be Chapter 2) applicable to the matters that in certain Member States some covered by Chapter 3. There is nothing services are nationalized. Nationalization however in those provisions that points of a service in a State often has as its at all clearly to the conclusion that corollary that private persons may not Chapter 3 is concerned only with the establish themselves in that State to abolition of discrimination. provide the same service. It would be logical for the authors of the Treaty to take the view that such a prohibition should apply to the nationals of other There are two significant differences Member States as much as to the between the provisions of Chapter 3 and nationals of the nationalizing State itself, those of Chapter 2. but that it should not extend to the provision of the service by a person established in another Member State so The first is that Article 52 (the first long as the provision of that service by Article in Chapter 2) contains, in its him did not involve his actually going to second paragraph, a provision that is the nationalizing State. Otherwise the clearly concerned with discrimination. It nationalized undertaking would be able reads: freely to provide its services to residents of other Member States while under­ takings in those States were precluded "Freedom of establishment shall include from providing theirs to residents of the the right to take up and pursue activities nationalizing State. as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 58, Be that as it may, I would conclude, under the conditions laid down for its from a consideration of the relevant own nationals by the law of the country provisions of the Treaty that, whatever where such establishment is effected, may be the position under Chapter 2 as subject to the provisions of the Chapter regards the right of establishment, those relating to capital." who argued that Chapter 3 was designed to create a common market in the provision of services, and not merely to abolish discrimination between providers As long ago as Case 6/64 Costa v ENEL of services, were right. [1964] ECR 585, at pp. 596-597 (Rec. 1964 pp. 1162-1163) the Court interpreted that paragraph as defining freedom of establishment and deduced That appears to have been the view from it that Chapter 2 is concerned only taken by the Court in the Van Binsbergen with discrimination. There is however no and Coenen cases, where it said:

872 PROCUREUR DU ROI v DEBAUVE

"The restrictions to be abolished not define the scope of Article 59 and pursuant to this provision include all did not purport to do so. The General requirements imposed on the person Programme was not even essential for providing the service by reason in the implementation of Article 59 during particular of his nationality or of the fact the transitional period: see the opening that he does not habitually reside in the words of Article 63 (2). It seems to me State where the service is provided, moreover that, if the provisions of which do not apply to persons Article 56 relating to public policy have, established within the national territory in so far as they apply for the purposes or which may prevent or otherwise of Chapter 3 by virtue of Article 66, the obstruct the activities of the person effect that I think they have (a matter to providing the service." which I shall come in a moment) they would have afforded in the Koestler case an alternative ground for reaching the same actual result. In the upshot I am of (Paragraph 10 of the judgment in the the opinion that Your Lordships should Van Binsbergen case and paragraph 6 of adhere to the view expressed by the the judgment in the Coenen case — my Court in the Van Binsbergen and Coenen underlining). cases rather than to the view on which it proceeded in the Koestler case. Indeed I think that to do otherwise would be to contradict the express terms of the So far as I can see, all the other Treaty. judgments delivered by the Court on Articles 59 to 66 are consistent, or at least reconcilable, with that view, except one. That is the judgment in Case 15/78 Société Générale Alsacienne de Banque v The extent of the direct effect of Koestier [1978] ECR 1971, in which the Article 59 Court unquestionably proceeded upon the view that those Articles were concerned only with the abolition of discrimination. The point does not, The way in which the Tribunal however, appear to have been fully Correctionnel of Liege's second question argued in that case. In particular it does is framed, if nothing else, makes it not appear that the attention of the necessary to consider next the extent to Court was drawn to Article 65 or to its which Article 59 has direct effect. significance. The Court seems to have Happily, I can do that more shortly. based its conclusions on a consideration of the third paragraph of Article 60 (referred to in the judgment as the second), although that paragraph had no application in the case, since no servant Clearly the second paragraph of Article of the Société Générale went to 59 cannot have direct effect. So the Germany in connexion with the problem relates only to its first provision of the bank's services to Mr paragraph. Koestler; and on a consideration of the General Programme adopted by the Council under Article 63, although (as I ventured to point out in Case 36/74 The Court has held in at least three cases Walrave & Koch v Í/C/[1974] 2 ECR at that that paragraph has direct effect "at p. 1425) the General Programme could all events" in so far as it seeks to abolish

873 OPINION OF MR WARNER — CASE 52/79 any discrimination against a person The services in question providing a service by reason of his nationality or of his residence — a formula the use of which tends incidentally to confirm that Article 59 has also a wider purpose. I imagine that the Court used that formula in those So I turn to the question that I described cases in order to avoid having to go earlier as crucial. further than was necessary for their solution. The three cases are the Van Binsbergen case, the Walrave & Koch case and Case 13/76 Dona v Maniero [1976] 2 ECR 1333. There are also cases the judgments in which would be difficult to reconcile with the view that There can be no doubt that the the first paragraph of Article 59 had prohibition of the cable diffusion of direct effect only to that limited extent: advertisements contained in Article 21 of see in particular Cases 110 & 111/78 the Arrêté Royal on the one hand, and Ministère Public v Van Wesemael and the right of the owner of the copyright Others [1979] ECR 35. in a film to prevent its cable diffusion in Belgium on the other hand, would, in each case if enforced, constitute a restriction on Coditel's freedom to provide its service to its subscribers. Nor, I can see no ground upon which it could however, can there be any doubt that the be held that the direct effect of that service provided by Coditei to its sub­ paragraph was so limited, nor was any scribers is, in itself, a service provided such ground suggested by anyone who wholly within Belgium, so that it is not a submitted observations to the Court in service to which Article 59 can apply. It these cases. has been submitted by some (notably by the RTBF) that that is the end of the matter. I do not think however that it is simple as that, for the question remains I would therefore hold that the first whether the direct restrictions on paragraph of Article 59 had direct effect Coditel's service to its subscribers in all its aspects. operate indirectly as restrictions on some other service that is transnational.

In saying that I do not overlook that, as was pointed out to us, the Arrêté Royal that is in question in Case 52/79 was promulgated in 1966, i.e. after the entry I stan with this simple case. It is the into force of the Treaty, so that its function of the RTBF to provide a compatibility with Community law falls television service for French-speaking to be tested by reference to Article 62 people in Belgium. Its audience consists (the "standstill Article in Chapter 3) in part of those who receive its rather than by reference to Article 59 broadcasts directly and in part of those itself. In my opinion, however, the extent who receive them by cable diffusion. It of the direct effect of Article 62 and of would be artificial to hold, as we were in the first paragraph of Article 59 must be effect urged to hold, that the RTBF the same. provided its service only for those,

874 PROCUREUR DU ROI v DEBAUVE including the cable diffusion under­ referred earlier, outside the RTL's zone takings, able to receive its broadcasts of natural reception). directly. The Coditei subscriber, when he watches an RTBF programme on his set, is the recipient of two services, the service provided by the RTBF in broad­ How then are national courts before casting it and the service provided by whom cases like these come to determine Coditei in relaying it to him. The first whether a particular broadcast is or is does not end where the second starts. not intended for a particular audience? Clearly they cannot do so by receiving evidence from individual programme producers as to the audience they had in Is the position any different when the mind. Nor does it seem to me very Coditei subscriber is watching a foreign practicable for those courts to watch programme? There are two grounds on recordings of the programmes in an which it might be held to be so. endeavour to make an objective judgment from their content. For one thing recordings may not exist, and for another the content may be neutral as to The first was pressed upon us by the its intended audience. United Kingdom Government and even more strongly by the German Government. It rests on the use in Article The common sense answer seems to me 59 of the phrase "the person for whom to be that a television broadcast must be the services are intended". A distinction taken to be intended for all those who must be drawn, it was argued, between are able to receive it, whether directly or the audience at which a broadcast is by cable diffusion, whether or not those aimed and other people who are responsible for the broadcast had them fortuitously able to pick it up. German consciously in mind. television broadcasts are aimed, it was said, at the German public, and not at inhabitants of neighbouring countries. The fact some of the latter were able to I would add that, since, at all events in receive those broadcasts did not make States bound by the Strasbourg them persons for whom the broadcasts Agreement, a cable diffusion undertaking were intended and so did not render may not relay a broadcasting organiz­ Article 59 applicable. ation's programmes without that organi­ zation's consent, it seems reasonable to say that a broadcasting organization that has given its consent to one of its That would be an easy solution if one programmes being relayed by a could assert that, as a rule at least, a particular cable diffusion service must television broadcasting station broadcasts have the subscribers to that service in only for people in its own country. But contemplation as part of its audience for we know that that is not so. We were that programme. given examples such as that of the ORTF broadcasting programmes containing advertisements in which prices are given in Belgian francs, and of the RTL The other ground on which it might be broadcasting programmes containing held that a foreign broadcasting station advertisements for shops in Liège. (Liège does not provide for Coditei subscribers is, according to the map to which I a service to which Article 59 applies rests

875 OPINION OF MR WARNER — CASE 52/79

on the first paragraph of Article 60 in so the proceeds of licence fees paid by far as it provides that: viewers; others rely wholly on advertising revenue; and some look partly to the one and partly to the other. The question here is whether television broadcasting as such is a service of a kind to which the Treaty applies. The "Services shall be considered to be method of financing particular broad­ 'services' within the meaning of this casting organizations or particular Treaty where they are normally provided broadcasts cannot be relevant to the for remuneration .. ." answer to that question. The decisive fact is that television broadcasting is normally paid for, i.e. remunerated, in one way or another. The conclusion must therefore be that it is a service of a kind to which the Treaty applies, no matter from whom in any particular case payment may come Of course, if cable diffusion companies or may not come. I think indeed that to normally made payments to broadcasting hold otherwise might be to go back on organizations for the right to relay their what the Court said in the Sacchi case. programmes, that provision would present no problem. The cost of the payments would be reflected in the sub­ scriptions paid by their customers and it would then be manifest that the service in question was provided for remuner­ ation. But it appears that in practice such In the result I am of the opinion that payments are not made. Indeed we were broadcasting stations outside Belgium, in told that the reason why BBC so far as their programmes are capable of programmes are not relayed in Belgium being received by viewers in Belgium, is that the BBC will not give its consent whether directly or by cable diffusion, to their being relayed without payment. must be held to provide for those viewers a service to which Article 59 applies and that the restrictions here in question must be held to constitute restrictions on that service as much as on the service provided for their subscribers by Belgian I have however been persuaded by an cable diffusion undertakings. argument presented to us on behalf of the Commission that to regard the absence of any payment by cable diffusion undertakings to broadcasting organizations as relevant would be to misinterpret Article 60. The purpose of That being my view on this, as I have the definition of "services" in that Article ventured to describe it, crucial aspect of is to identify the kinds of services to these cases, I do not think that I need which the Treaty applies and in take up Your Lordships' time to discuss particular to exclude those that are the suggestions that were put forward in normally provided gratuitously. the course of argument as to the Television broadcasting is financed in existence of other transnational services different ways. Some broadcasting that might be affected by those organizations are financed wholly out of restrictions, such as the service provided

876 PROCUREUR DU ROI v DEBAUVE by broadcasting stations outside Belgium allowing Member States to take, on for Belgian advertisers or the service grounds of public policy, public security provided by those stations for non- or public health, measures providing for Belgian advertisers seeking to penetrate special treatment for foreign nationals, the Belgian market. must a fortiori allow Member States to take on those grounds measures applying indiscriminately to foreign nationals and The last question is whether those to their own nationals. (This is why I restrictions, although thus, if I am right, said earlier that I thought that Article 56 prima facie prohibited by Article 59, can would have afforded in the Koestler case escape that prohibition through the an alternative ground for reaching the "public policy" exception in Article 56 of same result). the Treaty or otherwise. I propose to consider that question separately, first in relation to the restriction on advertisements and secondly in relation In any case the enforcement of the to the restriction applicable under the prohibition of advertisements would in law of copyright. fact result in special treatment for foreign broadcasts in that only in their case would the blotting out of parts of the programmes be necessary. Moreover, The lawfulness of the restriction if Article 21 of the Arrêté Royal is to be on advertisements interpreted as requiring the blotting out from foreign programmes of advertising Article 56 (1) of the Treaty (rendered material of a kind that Belgian television applicable to services by Article 66) stations are allowed to broadcast — I provides, Your Lordships remember, have in mind the advertisements by the that: SABENA and others, of which we were told — that too would constitute special treatment. "The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation That the control of television advertising or administrative action providing for falls fairly and squarely within the scope special treatment for foreign nationals on of public policy I have no doubt. grounds of public policy, public security Belgium is not the only country where or public health." such control exists. We were told of the restrictions enacted in Germany, where, for instance, advertisements must be It was suggested that that provision clearly distinguishable from other could not apply here because foreign broadcast material, must not take up nationals were not subjected to "special more than 20 minutes a day, may not be treatment". The prohibition of the broadcast after 8 p.m., or at all on diffusion of advertisements broadcast by Sundays and public holidays, where the foreign stations was but an extention to advertising of cigarettes and of vacant them of the prohibition applicable to jobs is forbidden and that of medicines broadcasts by Belgian stations. restricted, and where neither advertisers nor advertising agencies are allowed any influence on other parts of the As was pointed out however by the programmes. We were told of German Government, Article 56, in restrictions in many respects similar in

877 OPINION OF MR WARNER — CASE 52/79

the United Kingdom, and of restrictions in that submission by others, including at least on the advertising of medicines in the Commission. Luxembourg.

In Cases 137 and 138/77 Frankfurt v It was argued on behalf of Coditei that Neumann and Ludwig v Hamburg [1978] the enforcement of Article 21 of the ECR at pp. 1641-1642 I considered with Arrêté Royal could not be public policy the authorities in this Court the in Belgium because successive application by analogy of provisions of Governments and the ministère public Community law and concluded that it had made it clear that it was not their was permitted where there was an policy to enforce it. To that it was obvious lacuna, which must needs be retorted on behalf of the complainant filled, due to something in the nature of associations that what was public policy an oversight on the part of the authors in a country must be ascertained from its of the relevant instrument and not to laws, not by reference to the views of its their deliberate intention. I think that the executive authorities. I do not think that omission from Articles 59 to 66 of the what is public policy in a Member State Treaty of any provision for the within the meaning of the Treaty is protection of industrial and commercial necessarily to be ascertained exclusively property is much more likely to have by reference to its laws (consider Case been due to an oversight than to 41/74 Van Duynv Home Office[1974] 2 deliberate intention. An alternative view ECR 1337). However, in my opinion, would be that the protection of such the ascertainment of what is public property was something that the authors policy in a Member State in that sense is of the Treaty intended should be dealt in the ultimate resort a matter for its with under Article 57 (2), but that does competent courts, not for this Court. not seem very probable. If I am right in the views that I expressed earlier about the scope of Articles 59 to 66, the Treaty's concept of the free movement of services is akin to its concept of the free movement of goods. The application by The lawfulness of the restriction analogy of Article 36 thus appears in copyright law appropriate.

No-one has suggested that the protection It seems from the observations of Coditei of copyright is within the scope of public and of the Commission that reference to policy. The German Government, but Article 36 gives rise at the outset to a no-one else, suggested that Article 56 verbal difficulty as regards the text of should be extended to it "by analogy". that Article in some languages. The phrase "industrial and commercial property", which is used in the English text, is not, so far as I know, a term of art in English law. It is an expression of In my opinion the German Government vague and general import, which takes was on better ground when it submitted its colour from the context in which it is that the provision to be applied by found. In a context such as that of analogy was Article 36. It was supported Article 36 I do not doubt that it is wide

878 PROCUREUR DU ROI c DEBAUVE enough to cover copyright. It seems that taken, when he authorizes it to be that is not so in the case of the broadcast, to authorize also the cable corresponding phrases in other diffusion of the broadcast. There appear languages. French-speaking lawyers, for to be Member States where the law to a instance, do not readily regard limited extent so provides. We were "propriété industrielle et commerciale" referred to section 40 (3) of the United as including copyright; they would more Kingdom Copyright Act 1956 which so readily place copyright in a different provides in the case of broadcasts by the category called "propriété littéraire et BBC and the IBA, to the Irish Copyright artistique". Coditei and the Commission Act 1963, which, by section 52 (3), so both say, however, that in the context of provides in the case of broadcasts by Article 36 "propriété industrielle et Radio Eireann, and to a decision of the commerciale" ought to be interpreted as Landgericht of Hamburg of 6 January including copyright. That seems to 1978, upheld by the Oberlandesgericht accord with the view of the great of Hamburg on 14 December 1978, to majority of academic writers, and I think the effect that German law so provides in it must be right. so far as diffusion in the zone of natural reception of the broadcast is concerned. In such cases the payment received by the owner of the performing right from the broadcasting organization takes into account the fact that the broadcast will The application by analogy of Article 36 be relayed by cable diffusion. raises, having regard to the decisions of the Court on the exercise of industrial and commercial property rights in relation to goods, the question of what is the specific subject-matter of the relevant right.

Those are however exceptional cases. Here the relevant right is an element of The comprehensive and very helpful copyright, namely performing right. analysis of the laws of the Member Everyone who has submitted obser­ States made for us by the Commission vations to the Court recognizes that one (as corrected in minor respects cannot apply in the domain of per­ concerning the law of the United forming right the doctrine of Kingdom by the United Kingdom "exhaustion" as it applies in the domain Government) shows that, in general, the of the marketing of goods. It is of the right to authorize a broadcast and the essence of a performing right that it right to authorize its cable diffusion are enables the owner of it to authorize or regarded as separate — as has been held forbid each and every performance of to be the case in Belgium by the Cour the work to which it relates. d'Appel of Brussels. That being so, I do not think that this Court can hold that Community law denies to the owner of the performing right relating to a work such as a film the power — as part of the specific subject-matter of that right — to It is tempting to say that the owner of authorize or forbid the cable diffusion of the performing right in a work must be a broadcast of the work.

879 OPINION OF MR WARNER — CASE 52/79

Conclusions

In the result, I am of the opinion that, in answer to the questions referred to the Court by the Tribunal Correctionnel of Liège in Case 52/79 Your Lordships should rule that:

(1) Article 59 of the EEC Treaty is to be interpreted as forbidding all national rules restricting the cable diffusion of advertisements broadcast in other Member States except in so far as such rules are justified on grounds of public policy.

(2) The provisions of Article 59 have direct effect and may therefore be relied on before national courts.

I am of the opinion that, in answer to the questions referred to the Court by the Cour d'Appel of Brussels in Case 62/79, Your Lordships should rule that:

(1) Article 59 of the EEC Treaty forbids only restrictions on the provision of services by persons established in one Member State for those of another Member State.

(2) Where a cinematographic film is broadcast by television in one Member State with the consent of the owner of the performing right in that State, the provisions of the Treaty on freedom to provide services do not preclude the assignee of the performing right in another Member State from relying upon his right in order to prevent the cable diffusion of the broadcast in the latter State.

880