GESTEVISION TELECINCO v COMMISSION-

ORDER OF THE PRESIDENT OF THE COURT OF FIRST INSTANCE 14 December 1993 *

In Case T-543/93 R,

Gestevisión Telecinco SA, a company governed by Spanish law, established in Madrid, represented by Santiago Muñoz Machado, assisted by Maria López- Contreras, both of the Madrid Bar, with an address for service in Luxembourg at the Chambers of Carlos Amo Quiñones, 2 Rue Gabriel Lippmann,

applicant,

v

Commission of the European Communities, represented by Francisco Enrique González-Díaz and Berend Jan Drijber, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office on Nicola Annecchino, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for suspension of operation of Commission Decision 93/403/EEC of 11 June 1993 relating to a proceeding pursuant to Article 85 of the EEC Treaty (IV/32.150 — EBU/Eurovision System, OJ 1993 L 179, p. 23) and for the adoption of interim measures to suspend the Eurovision system until the Court has given judgment in the main action,

THE PRESIDENT OF THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES makes the following

* Language of the case: Spanish.

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Order

Facts and procedure

1 By an application lodged at the Court Registry on 18 October 1993, Gestevisión Telecinco SA ('Telecinco') brought an action under the second paragraph of Article 173 of the EEC Treaty for annulment of Commission Decision 93/403/EEC of 11 June 1993 relating to a proceeding pursuant to Article 85 of the EEC Treaty (TV/32.150 — EBU/Eurovision System, OJ 1993 L 179, p. 23).

2 By a separate document lodged at the Court Registry on the same day, Telecinco also made an application pursuant to Article 185 of the EEC Treaty and Article 104 of the Rules of Procedure of the Court of First Instance for suspension of opera­ tion of the contested decision and the adoption of protective measures to suspend the Eurovision system, until the Court has given judgment in the main action.

3 On 12 November 1993, the Commission submitted its written observations on the application for interim measures made by Telecinco.

4 The parties presented oral argument on 16 November 1993. On 24 November 1993, Telecinco lodged observations on that hearing. By a decision of the President of the Court of the same day, those observations were placed on the file. By a let­ ter of 30 November 1993, the Commission submitted observations upon it.

5 Before considering whether the application made to the Court is well founded, it is appropriate to outline briefly the context and histoiy of this case, as evidenced by the documents lodged by the parties and their oral statements at the hearing on 16 November 1993.

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6 Telecinco's application for interim measures relates to a decision taken by the Com­ mission under Article 85(3) of the EEC Treaty declaring the provisions of Article 85(1) inapplicable, for the period 26 February 1993 to 25 February 1998, to the internal provisions ('statutes') and other regulations of the European Broadcasting Union ('the EBU') concerning the acquisition of television rights to sports events, the exchange of sports programmes within the framework of Eurovision and con­ tractual access to such programmes for third parties. That declaration of exemption is subject to two obligations: first, an obligation on the EBU and its members to acquire television rights to sports events collectively only under agreements which either allow the EBU and its members to grant access, or allow the owners of the rights to grant access, to third parties in conformity with the access scheme or, subject to the approval of the EBU, on conditions more favourable to the non- member; secondly, an obligation to inform the Commission of any amendments and additions to the rules notified, of all arbitration procedures concerning disputes under the access scheme and of all decisions regarding applications for membership by third parties.

7 Telecinco was formed in March 1989 and has been authorized by the competent Spanish authorities to operate a private television service in Spain for an extendable 10-year period.

8 The EBU is a professional association of broadcasting organizations which has no commercial aim, set up in 1950 with headquarters in Geneva. Under Article 2 of its statutes, its objects are to promote cooperation between its members and with the broadcasting organizations of the entire world, and to represent the interests of its members as regards programmes and in legal, technical and other fields. Since merging with its Eastern European counterpart, it has 77 active members in 47 countries situated in the European Broadcasting Area, most of which are public- sector organizations or responsible for a public service. During the second half of the 1980s — which were marked by the development of broadcasting and televi­ sion undertakings of a predominantly commercial character — che EBU did, how­ ever, admit or retain a number of private television organizations as active mem­ bers, such as the French companies Canal Plus and TF1, the latter having been privatized in 1986.

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9 In 1988 the statutes of the EBU were amended in order, according to the EBU itself, to emphasize 'the obligation of the members to carry out a special task relat­ ing to the public interest, which is imposed upon them by their legislation and/or by national practice and by virtue of which they constitute a special group of broadcasting organizations with common obligations and common interests'. In order to take account of the rights acquired by existing members, Article 21 of the amended statutes provides that Article 3(2) in its new form is not to affect the sta­ tus of organizations which, on the date on which it entered into force — 1 March 1988 — were already active members, but no longer met all the requirements laid down by it. Under the new version of Article 3(2), EBU members are divided into two classes: active members and associate members. Active membership is open to broadcasting organizations or groups of such organizations from a country situ­ ated in the European Broadcasting Area, which provide in that country, with the authorization of the competent authorities, a broadcasting service of national char­ acter and importance, and which furthermore prove that they fulfil three condi­ tions: coverage of the entire national population or actual coverage of a substantial part thereof; varied and balanced programming for all sections of the population; and production under their own editorial control of a substantial proportion of the programmes broadcast.

10 Eurovision constitutes the main framework within which the active members of the EBU exchange programmes. It has been in existence since 1954 and meets an essen­ tial part of the EBU's objectives. Article 3(5) of the statutes provides: 'Eurovision is based on the understanding that members offer to the other members, on a basis of reciprocity, their news coverage of important events and their coverage of cur­ rent affairs and of sports and cultural events taking place in their countries and of potential interest to other members'. In addition, all the active members of the EBU are eligible to participate in a system for acquiring jointly and sharing the televi­ sion rights (and the related fee) for international sports events, the so-called 'Euro- vision rights'. Article 3(6), which was added when the statutes were revised in 1988, provided for contractual access to Eurovision for associate members (currently 54 in number) and non-members of the EBU.

11 On 3 April 1989, the EBU notified to the Commission the rules governing the acquisition of television rights to sports events, the exchange of sports programmes

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within the framework of Eurovision and contractual access to such programmes for third parties and simultaneously applied for negative clearance or, if that were not granted, exemption under Article 85(3) of the Treaty. Under those rules, contrac­ tual access for third parties to television rights acquired by EBU members under Eurovision sports agreements and to coverage of such sports events takes place under a scheme whereby the EBU or its members grant sub-licences entitling non- members to supplement their own sports programmes where they have not them­ selves acquired the transmission rights on the market. Under the 'embargo' prin­ ciple, non-members generally obtain the right to deferred transmission only.

12 By a notice of 5 October 1990 under Article 19(3) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-62, p. 87), the Commission published a summary of that notification in OJ 1990 C 251, p. 2 and indicated that it intended to grant an exemption. Following critical observations sent to it by third parties, the Com­ mission organized an oral hearing with all interested parties on 18 and 19 Decem­ ber 1990. It is apparent from the documents before the Court that Telecinco sub­ mitted written observations to the Commission and took part in that hearing.

3 On 24 June 1991, the Commission sent to the EBU a statement of objections indi­ cating that the sub-licensing scheme 'was not acceptable'.

4 The Commission adopted the contested decision after the EBU had submitted, with its agreement, a second revised version of the rules relating to the sub­ licensing scheme.

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Law

15 Under Articles 185 and 186 of the EEC Treaty, in conjunction with Article 4 of the Council Decision of 24 October 1988 establishing a Court of First Instance of the European Communities, the Court may, if it considers that circumstances so require, order that operation of contested acts be suspended or prescribe any nec­ essary interim measures.

16 Article 104(2) of the Rules of Procedure of the Court of First Instance provides that applications for interim measures as envisaged under Articles 185 and 186 of the Treaty must state the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for. Such measures must be provisional in the sense that they do not prejudge the decision on the substance of the case (see the order of the President of the Court of First Instance in Case T-24/93 R CMBT v Commission [1993] ECR II-543).

Arguments of the parties

17 In support of its application for interim measures, Telecinco contends that in this case, in order to prevent serious and irreparable damage to it before judgment is given in the main proceedings, it is not sufficient to suspend operation of the con­ tested decision adopted by the Commission. It is necessary in addition to suspend, as a protective measure, the Eurovision system exempted by that decision, in par­ ticular the agreement concerning joint acquisition of television rights to interna­ tional sports events.

18 Telecinco alleges that the economic harm caused to it by the Eurovision system and the contested decision is manifest, serious and irreparable. First, that system pre­ vents it from acquiring and, hence, including in its schedules broadcasts of sports

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events, resulting in a poor brand image that is practically impossible to remedy with the viewers. That is particularly serious because Telecinco, being a private operator wholly dependent on advertising revenues, needs a given audience rating in order to survive. Secondly, Telecinco's inability to compete with the EBU and its members is further exacerbated by the privileged status enjoyed by the public television undertakings in Spain, in particular in that they are financed by both advertising and numerous State aids. Instead of remedying that situation, the Com­ mission has adopted a decision providing the national authorities and courts with a basis for maintaining that privileged status in breach of the Treaty. According to Telecinco, if those conditions persist, it will be obliged to withdraw from the mar­ ket, lacking sufficient financial resources to remain in it.

19 Telecinco contends that the main action is prima facie well founded. First, the con­ tested decision is defective due to breach of a substantial procedural requirement, in that the Commission infringed Article 19 of Regulation No 17 by not notifying Telecinco of the real reasons for granting the exemption and not giving it a hearing after the EBU had amended its sub-licensing scheme. Secondly, the disputed decision breaches, to the detriment of private operators, the principle of equality between undertakings, by permitting competition rules not to apply to members of the EBU, which the Commission wrongly considered to be undertakings entrusted with the operation of services of general economic interest and therefore to fall within Article 90(2) of the EEC Treaty, whereas they are merely undertak­ ings falling within Articles 85 and 86 and two of them — TF1 and Canal Plus — are private undertakings. Thirdly, the contested decision amounts at the same time to a Commission measure giving preference to public undertakings, contrary to Article 90(1) of the Treaty. Fourthly, since the sub-licensing scheme amended at the Commission's request is, according to Telccinco, totally ineffective in practice, it cannot be concluded that the Eurovision system meets the conditions set out in Article 85(3) of the Treaty. Fifthly, the Eurovision system clearly strengthens the dominant position held by the EBU and certain of its members in the market for live sports transmission rights and therefore constitutes an abuse within the mean­ ing of Article 86 of the Treaty. Finally, the purpose and effect of the disputed decision is not to apply competition rules but instead to regulate relations between the public and private operators in the television rights market and to permit the authorities and public undertakings to maintain all the measures conferring privi­ leges upon those undertakings, which goes beyond the Commission's power in a competition proceeding.

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20 The Commission considers first of all that Telecinco's application does not consti­ tute grounds for finding that there is a risk of serious and irreparable damage. In the Commission's view, Telecinco has adduced no tangible evidence, for example figures showing audience loss or a reduction in advertising revenue. On the con­ trary, the figures in the Commission's possession show that Telecinco has managed not only to establish itself in the market but also to improve its market position. Moreover, it broadcasts sports programmes just as any other television channel and even holds certain exclusive rights for live transmission in Spain of international sports events. The Commission points out that, according to the information pro­ vided by RTVE (a Spanish public television channel), Telecinco has never made a single offer to acquire rights in a number of sporting sectors and has never con­ tacted RTVE to obtain a sub-licence to transmit live sports events for which RTVE had acquired the rights whether under the Eurovision system or otherwise. In any event, Telecinco has not established that it could have obtained a greater number of live transmission rights had the Eurovision system not existed. Finally, the con­ tested decision does not legitimize at all any distortions of competition which may be created by the State aids to public television undertakings of which Telecinco complains.

21 The Commission considers that the request for suspension of the agreement between EBU members concerning joint acquisition of television rights for sports events, and of the Eurovision system generally, is inadmissible on the ground that the Court has no jurisdiction under Articles 185 and 186 of the Treaty either to make an order suspending an agreement between third parties or to exercise in the Commission's stead the powers conferred on it by Article 3 of Regulation No 17. In the Commission's view, that request must in any event also be dismissed for the same reasons as the other request for interim measures.

22 Moreover, in the Commission's view none of the pleas of fact and law relied on by Telecinco to contest the legality of the decision establish a prima facie case for granting interim relief. As regards, first, the plea that substantial procedural requirements were breached, the Commission considers that Article 19 of Regu­ lation No 17 does not require it either to publish in advance the grounds leading it to adopt a decision of exemption or to hear Telecinco for a second time, since it is not in the same situation procedurally as the undertakings directly concerned by the procedure initiated by the Commission. As regards, secondly, the plea that competition rules laid down by the Treaty were infringed, the Commission admits

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that those rules must be applied on equal terms to public and private undertakings but nevertheless considers that, in the context of an exemption procedure, it may take account of the specific features of the economic sector in which the undertak­ ings, whether public or private, operate or of the responsibilities and obligations to which they are subject, without prejudice to the specific provisions in Article 90 of the Treaty, in particular Article 90(2). In the Commission's opinion, the fact that the conditions for that provision to apply arc not satisfied in a specific context docs not mean that the particular situation of a group of undertakings cannot be taken into consideration when applying Article 85(3) of the Treaty to an agreement between members of that group. In any event, the Commission did not grant the contested exemption primarily on the basis of the 'special public mission'. It sim­ ply assessed the benefits of the agreements at issue, and took account of the obli­ gations governing EBU membership as a secondary issue when considering whether those agreements were indispensable. As to the claim that the contested agreements constitute an abuse of a dominant position, the Commission refers to the contested decision, where it concludes that the EBU does not even hold a dom­ inant position. Finally, as to the plea that it lacked power, the Commission submits that its decision of exemption relates to a notified agreement and that its legal anal­ ysis of the exemption is based on the particular characteristics of the specific case.

Findings of the President

23 In its application for interim relief, Telecinco asks the Court to adopt two interim measures: first, suspension of the Eurovision system for joint acquisition of tele­ vision rights to international sports events exempted by the contested decision under Article 85(3) of the Treaty and, secondly, suspension of operation of that decision.

24 As regards the first claim, under the scheme of distribution of powers laid down by the Treaty, it is for the Commission, exercising the supervisory powers in com­ petition matters conferred on it by, in particular, Article 85 of the Treaty in con­ junction with Article 3(1) of Regulation No 17, to adopt, if it considers it

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necessary, an interim measure such as that sought here. The Court's role is to carry out a legal review of the Commission's action in those matters and not to act in the place of the Commission in the exercise of its powers under the abovementioned provisions (see the order of the Court of Justice in Case 792/79 R Camera Care v Commission [1980] ECR 119, paragraph 20, and the order of the President of the Court of First Instance in Case T-131/89 R Cosimex v Commission [1990] ECR II-1, paragraph 12).

25 Furthermore, these proceedings for interim relief are in an action brought under Article 173 of the Treaty for annulment of the contested decision adopted by the Commission. In those circumstances, the interim measures that the judge hearing the interlocutory application considers should be adopted must, as a rule, both fall within the scope of the final decision which the Court can make under Articles 173 and 176 of the Treaty and concern the relations between the parties, in this case Telecinco and the Commission. The Court's decision on the substance of the case cannot in any event annul the agreement on joint acquisition of television rights entered into within the EBU by undertakings which, moreover, are not parties to this case.

26 It follows from the foregoing that the first claim is for an interim measure that does not fall within the jurisdiction of the Court in interlocutory proceedings and must therefore be dismissed as inadmissible.

27 As regards the second claim, under Article 104(2) of the Rules of Procedure the urgency of interim measures applied for must be assessed in relation to the need to prevent, by such measures, grave and irreparable harm being suffered, before judg­ ment is given on the substance of the case, by the party seeking them. It is for the latter to prove that he cannot await the outcome of the main proceedings without suffering harm which would involve serious and irreparable consequences (see, m particular, the order in CMBT v Commission, cited above, paragraph 31).

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28 In substance, Telecinco alleges simply that 'economic harm' is caused to it by the contested decision and the Eurovision system, but it has not adduced tangible evi­ dence in this connection such as figures concerning any audience loss or a reduc­ tion in advertising revenue. The Commission, however, has put forward figures indicating that Telecinco has even succeeded in improving its market position (from an audience share of 13.8% in 1991 to 20.7% in May 1993). In addition, as the Commission has claimed without being contradicted, Telecinco has not yet used the contractual access system referred to above in order to include in its schedules sports events to which rights have been acquired under the Eurovision system.

29 The new evidence put forward by Telecinco in its observations on the hearing in the interlocutory proceedings, showing an unusual audience rating for RTVE due to transmission of a particularly important international football match, concerns merely an isolated instance, which therefore cannot be regarded as decisive proof of the urgency of the interim measures applied for. In any event, Telecinco itself acknowledges that the television rights for that sports event were not acquired under the Eurovision system.

30 It follows from the foregoing that Telecinco has not established at this stage that, in the specific circumstances of this case, if the interim measures sought are not granted, the contested decision might cause it harm that could not be made good by enforcement of any judgment made by the Court in the main proceedings annulling that decision.

31 Consequently, without it being necessary to consider the prima facie merits of the main action brought by Telecinco, it must be held that the legal conditions for the grant of the interim measures requested arc not satisfied and that the application must therefore be dismissed.

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On those grounds,

THE PRESIDENT OF THE COURT OF FIRST INSTANCE

hereby orders:

1. The application for interim measures is dismissed.

2. Costs are reserved.

Luxembourg, 14 December 1993.

H. Jung J. L. Cruz Vilaça

Registrar President

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