Comisión de las Comunidades Europeas y República Francesa contra Ladbroke Racing Ltd.

• Jurisdiction: European Union
• Celex Number: 61995CC0359
• ECLI: ECLI:EU:C:1997:234
• Court: Court of Justice (European Union)
• Docket Number: C-359/95,C-379/95
• Procedure Type: Recurso de anulación
• Date: 13 May 1997

Important legal notice

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61995C0359

Opinion of Mr Advocate General Cosmas delivered on 13 May 1997. - Commission of the European Communities and French Republic v Ladbroke Racing Ltd. - Competition - Articles 85, 86 and 90 of the EC Treaty - Rejection of a complaint concerning the conduct of an undertaking without prior examination of the compatibility of national legislation affecting such conduct. Joined cases C-359/95 P and C-379/95 P.

European Court reports 1997 Page I-06265

Opinion of the Advocate-General

In this case the Court of Justice is called upon to deliver judgment on the appeals brought by the Commission and the French Republic, pursuant to Article 49 of the EEC Statute of the Court of Justice, against the decision of the Court of First Instance of the European Communities of 18 September 1995. (1) The judgment under appeal upheld the action brought by the English company Ladbroke Racing Limited pursuant to Article 173 of the EC Treaty (hereinafter `the Treaty') for the annulment of the Commission's decision of 29 July 1993. By that decision the Commission had rejected Ladbroke's complaint of 24 November 1989 (IV/33.374), concerning the way in which pari mutuel (totalizator) (2) horse-race betting was organized in France, and the exclusive rights given by the French legislation to Pari Mutuel Urbain (hereinafter the `PMU'), that is to say to a national (French) association of companies.

At the outset it is worth pointing out that in the judgment under appeal the Court of First Instance adopted an interpretative approach to Articles 85 and 86 with particularly interesting repercussions, the correctness of which the Court of Justice is called upon to determine.

I - Facts and procedure

1 The facts of the case to be examined are described at length in paragraphs 1 to 25 of the judgment under appeal, to which I would refer the Court. In this appeal it is sufficient to recall as follows:

2 On 24 November 1989 Ladbroke lodged a complaint (IV/33.374) with the Commission against, first, the French Republic; secondly, the ten main racing companies (`sociétés de courses') in France; (3) thirdly, the PMU. (4) In so far as its complaint was directed against the PMU and its member sociétés, Ladbroke requested the Commission on the basis of Article 3 of Regulation No 17 of the Council of 6 February 1962 (5) (hereinafter `Regulation No 17') as follows:

First, to find and order the termination of infringements of Article 85(1) of the Treaty arising from agreements or concerted practices on the part of the sociétés de courses authorized in France inter se and with the PMU. The alleged objective of those agreements or concerted practices was first to grant the PMU exclusive rights in the management and organization of off-course totalizator betting on races organized or controlled by those sociétés, secondly to support a request for State aid to the PMU, and thirdly to authorize the PMU to extend its activities to Member States other than the French Republic.

Secondly, to find and order the termination of infringements of Article 86 of the EEC Treaty arising from, first, the grant to the PMU of the exclusive rights to manage and organize off-course betting and, secondly, the securing by the PMU of illegal State aid. The applicant also requested the Commission to order the PMU to repay the illegal State aid which it had thus received together with interest at the market rate. Furthermore, Ladbroke notified the Commission of other abuses of its dominant position by the PMU. (6) Finally, Ladbroke alleged that competition was affected by reason of the close links between the PMU and its principal suppliers.

3 In so far as its complaint was directed against the French Republic, Ladbroke requested the Commission to take a decision pursuant to Article 90(3) of the Treaty with a view to bringing to an end the infringement by the French Republic of the following provisions:

first, Articles 3(f), 5, 52, 53, 85, 86 and 90(1) of the Treaty, as a result of the enactment and maintenance of the abovementioned French legislation giving statutory backing to the agreements between the sociétés de courses inter se and with the PMU. Ladbroke complains that that legislation grants the latter exclusive rights to take off-course bets and prohibits anybody from placing or accepting off-course bets on horse-races organized in France otherwise than through the PMU;

secondly, Articles 3(f), 52, 53, 59, 62, 85, 86 and 90(1) of the Treaty, as a result of the enactment and maintenance of the abovementioned legislation prohibiting the unfettered placing in France of bets on races organized abroad;

thirdly, Articles 90(1), 92 and 93 of the Treaty, as a result of the grant to the PMU of illegal aid.

4 By letter of 11 August 1992, Ladbroke formally requested the Commission, pursuant to Article 175 of the Treaty, to define its position within two months with regard to Ladbroke's complaint of 24 November 1989. By letter of 12 October 1992, the Commission informed Ladbroke that it was still considering the complaint but that that examination required considerable time. On 21 December 1992 Ladbroke brought an action under Article 175 of the Treaty for failure to act, seeking a declaration that the Commission had failed to take a decision on the aspects of its complaint concerning Article 90. That action was held inadmissible by the Court of First Instance in a judgment of 27 October 1994. (7)

5 With regard to the limbs of Ladbroke's complaint concerning the alleged infringements of Articles 85 and 86 of the Treaty by the French sociétés de courses and the PMU, by letter of 9 February 1993 the Commission informed Ladbroke in accordance with Article 6 of Regulation No 99/63 that it envisaged dismissing those limbs of the complaint. By decision contained in a letter of 29 July 1993, the Commission in fact rejected Ladbroke's complaint for reasons set out both in that letter and in the letter of 9 February 1993.

6 On 19 October 1993 Ladbroke brought an action challenging that decision before the Court of First Instance in which the French Government intervened. By its judgment of 18 September 1995 in Case T-548/93 the Court of First Instance upheld Ladbroke's claim, (8) annulling the Commission's decision of 29 July 1993. Appeals were lodged against that judgment successively, on 22 November 1995, by the Commission (Case C-359/95 P) and, on 27 November 1995, by the French Republic (Case C-379/95 P). By order of the President of the Court of Justice of 29 January 1996 those cases were joined for the purposes of the written and oral procedure and the judgment.

7 The Commission asks that the contested judgment be quashed in so far as it annuls the decision rejecting the complaint, that the application brought by Ladbroke before the Court of First Instance be dismissed as unfounded and that Ladbroke be ordered to pay all the costs.

The French Republic asks the Court to quash the contested judgment in so far as it annuls the decision rejecting the complaint; it also asks that the Commission's claims before the Court of First Instance be upheld.

Ladbroke asks the Court to dismiss the above appeals, to order the Commission and the French Republic to pay the costs and, alternatively, if the Court allows the appeals, to retain the case and give judgment on the outstanding issues in Ladbroke's action, or to remit the case back to the Court of First Instance for judgment on those issues.

II - The judgment under appeal

8 The relevant grounds supporting the operative part of the judgment of the Court of First Instance are contained in paragraphs 43 and 46 to 51 thereof, which read as follows:

`(Paragraph 43) It is appropriate first to examine the objection to the treatment of the two aspects of the complaint concerning the alleged infringements of Articles 85 and 86 and of Article 90 of the Treaty, since that issue calls in question the general way in which the Commission dealt with the complaint. In particular, the question whether the Commission was bound to assess the compatibility of the French legislation with the Treaty before adopting the contested decision under Articles 85 and 86 of the Treaty must be considered. (...)

(Paragraph 46) In this case, the Commission initiated the procedure for examining the applicant's complaint under Article 90 of the Treaty in order to assess the compatibility of the French legislation with the other Treaty provisions; that procedure is still in progress. Consequently, the question to be considered is whether the Commission could definitively reject the applicant's complaint under Articles 85 and 86 of the Treaty and Regulation No 17 without having previously completed its examination of the complaint under Article 90 of the Treaty.

(Paragraph 47) The Commission has submitted, both in its pleadings and at the hearing, that the competition issue raised by the applicant's complaint could be resolved only by examining the compatibility of the French legislation concerning the PMU's statutory monopoly with the Treaty rules and by taking action, if appropriate, under Article 90 of the Treaty and that, accordingly, that examination was a priority, since the result of it would hold good for any prior or future agreements between the sociétés de courses (defence, point 46). Consequently, the Court considers that the conduct of the sociétés de courses and the PMU, impugned by Ladbroke in its complaint, could not have been fully assessed under Articles 85 and 86 of the Treaty without a prior evaluation of the national legislation in the light of the provisions of the Treaty.

(Paragraph 48) If the Commission were to find that the relevant national legislation was consistent with the provisions of the Treaty, then the fact of the conduct of the sociétés de courses and the PMU being in compliance with that national legislation would mean that their...