Summary
1. A Member State cannot be denied the right to take measures to prevent a person
whose activity is entirely or principally directed towards its territory from exercising the
freedom guaranteed by Article 59 of the Treaty in order to evade the rules of conduct
which would be applicable to him if he were established within that State.
In particular, where a cultural policy seeks to establish a pluralistic and non-commercial
radio and television broadcasting system, legislation which has the effect, with a view
to safeguarding the exercise of the freedoms guaranteed by Articles 59 and 67 of the
Treaty, of ensuring that national broadcasting organizations cannot improperly evade
their obligations concerning programme content cannot be regarded as incompatible
with those articles.
2. The provisions of the Treaty on the free movement of capital and the freedom to
provide services must be interpreted as not precluding legislation of a Member State
which prohibits a broadcasting organization established in that State from investing in
a broadcasting company established or to be established in another Member State and
from providing that company with a bank guarantee or drawing up a business plan and
giving legal advice to a television company to be set up in another Member State,
where those activities are directed towards the establishment of a commercial
television station whose broadcasts are intended to be received, in particular, in the
territory of the first Member State and where those prohibitions are necessary in order
to ensure the pluralistic and non-commercial character of the audio-visual system
introduced by that legislation.
Parties
In Case C-148/91,
REFERENCE to the Court under Article 177 of the EC Treaty by the Nederlandse Raad
van State (Council of State of the Netherlands) for a preliminary ruling in the
proceedings pending before that court between
Vereniging Veronica Omroep Organisatie
and
Commissariaat voor de Media
on the interpretation of Articles 59 and 67 of the EEC Treaty and of the First Directive
of the Council of 11 May 1960 for the implementation of Article 67 of the Treaty (OJ
English Special Edition 1959-1962, p. 49) and Council Directive 88/361/EEC of 24 June
1988 for the implementation of Article 67 of the EEC Treaty (OJ 1988 L 178, p. 5),
THE COURT,
composed of: O. Due, President, C.N. Kakouris, G.C. Rodríguez Iglesias, M. Zuleeg and
J.L. Murray (Presidents of Chambers), G.F. Mancini, R. Joliet, F.A. Schockweiler, J.C.
Moitinho de Almeida, F. Grévisse, and D.A.O. Edward, Judges,
Advocate General: G. Tesauro,
Registrar: H. von Holstein, Deputy Registrar,
after considering the written observations submitted on behalf of:
° Vereniging Veronica Omroep Organisatie, by R.A.A. Duk, of the Hague Bar,
° the Commissariaat voor de Media, by G.H.L. Weesing, of the Amsterdam Bar,
° the Netherlands Government, by T.P. Hofstee, acting Secretary General, Ministry of
Foreign Affairs, acting as Agent,
° the Commission of the European Communities, by B. Smulders and P. van Nuffel, of
its Legal Service, acting as Agents,
having regard to the Report for the Hearing,
after hearing the oral observations of Vereniging Veronica Omroep Organisatie, the
Netherlands Government, represented by J.W. De Zwaan, Legal Adviser in the Ministry
of Foreign Affairs, acting as Agent, and the Commission, at the hearing on 6 October
1992,
after hearing the Opinion of the Advocate General at the sitting on 18 November 1992,
gives the following
Judgment
Grounds
1 By order of 27 May 1991, received at the Court Registry on 3 June 1991, the judicial
division of the Netherlands Raad van State referred to the Court for a preliminary ruling
under Article 177 of the EEC Treaty five questions on the interpretation of the
provisions of the Treaty concerning the freedom to provide services and the free
movement of capital with a view to deciding whether national rules imposing
restrictions on the activities of broadcasting organizations were compatible with
Community law.
2 Those questions were raised in proceedings between Vereniging Veronica Omroep
Organisatie, a non-commercial broadcasting organization established in the
Netherlands and governed by Dutch law (hereinafter "Veronica"), and the body
responsible for overseeing broadcasting, the Commissariaat voor de Media, concerning
restrictions contained in Article 57(1) of the Mediawet (the Dutch Law of 21 April 1987
laying down rules on the broadcasting of radio and television programmes, royalties
from broadcasting and measures for support of the press, published in Staatsblad No
249 of 4 June 1987). Veronica considers those restrictions to be contrary to Articles 59
and 67 of the Treaty and to the First Directive of the Council of 11 May 1960 for the
implementation of Article 67 of the Treaty (OJ, English Special Edition 1959-1962, p.
49) and Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article
67 of the EEC Treaty (OJ 1988 L 178, p. 5).
3 Under Article 31 of the Mediawet, radio and television broadcasting time on the
national Dutch network is allocated by the Commissariaat voor de Media to
broadcasting organizations. According to Article 14 of that Law, those organizations are
associations of listeners or viewers set up in order to represent a given social, cultural,
religious or spiritual trend indicated in their statutes; they have legal personality. They
must have as their sole, or at least main, object the production of programmes for
broadcasting and thereby to seek to satisfy the social, cultural, religious and spiritual
needs of the Dutch people. Article 57(1) of the Law, the provision at issue in these
proceedings, provides: "Apart from producing their programmes, the organizations
which have obtained broadcasting time may not pursue any activities other than those
provided for or authorized by the Commissariaat voor de Media". According to Article
57(4), the income from such activities must be used for the production of the
organization' s programmes. Finally, under Article 101, the broadcasting organizations
are financed for the most part by means of grants which are shared out by the
Commissariaat voor de Media. The grants are themselves built up from royalties levied
on listeners and viewers and by receipts from commercial advertising.
4 In the present case, the Commissariaat voor de Media claims essentially that
Veronica infringed Article 57(1) of the Mediawet by contributing to the setting up in the
Grand Duchy of Luxembourg of a commercial station broadcasting to the Netherlands
and by providing material support for it. Its allegation is based on three facts. First, the
chairman and the secretary of the governing board of Veronica respectively drew up a
business plan and gave legal advice with a view to the incorporation of a Luxembourg
limited company, RTL-Véronique, to operate a commercial television station in
Luxembourg and broadcast programmes which could be relayed by cable to the
Netherlands. The costs of those services were borne by Veronica. Veronica then agreed
to provide a guarantee for a current-account credit facility granted to RTL-Véronique by
a banking establishment. Finally, Veronica agreed to provide financing to another
company for the purpose of setting up a new company which would acquire a minority
holding in the capital of RTL-Véronique.
5 The national court considered that those activities were prohibited by Article 57(1) of
the Mediawet. However, it entertained doubts as to whether those prohibitions were
compatible with Community law.
6 It therefore considered that a preliminary ruling should be obtained on the following
five questions:
"1. Must the provisions on the free movement of capital, in particular Article 67 of the
EEC Treaty, as implemented by the directive of the Council of 10 May 1960, including
the amendments thereto, and Council Directive 88/361/EEC of 24 June 1988, be
interpreted as meaning that there is a prohibited restriction on capital movements
where the effect of a national rule, such as Article 57(1) of the Mediawet, is that
participation by a broadcasting organization authorized under national legislation in the
capital of a broadcasting organization established or to be established in another
Member State and the provision by the authorized broadcasting organization of
guarantees in favour of a broadcasting organization established in another Member
State are made subject to restrictive provisions?
2. Must the provisions on the freedom to provide services, in particular Article 59 of the
EEC Treaty, be interpreted as meaning that there is a prohibited restriction on the
freedom to provide services where the effect of a national rule, such as Article 57(1) of
the Mediawet, is that participation by a broadcasting organization authorized under
national legislation in the capital of a broadcasting organization established or to be
established in another Member State and the provision by that broadcasting
organization of guarantees in favour of a broadcasting organization established in
another Member State are made subject to restrictive provisions, if such transactions
are not to be regarded as capital movements, as described in Question 1?
3. Must the provisions on the freedom to provide services, in particular Article 59 of the
EEC Treaty, be interpreted as meaning that there is a prohibited restriction on the
freedom to provide services where the effect of a national rule, such as Article 57(1) of
the Mediawet, is that the carrying out by a broadcasting organization established or to
be established under national legislation of transactions and dealings which serve in
part to establish and to promote a broadcasting organization to be established in
another Member State, inter alia by the drawing-up of a 'business plan' and the
performance of legal work, are made subject to restrictive provisions?
4. In the application of the Treaty provisions on the free movement of capital and
freedom to provide services, must national rules containing a restriction on capital
movements or on the provision of services, in order to be valid, comply not only with
the requirement of non-discrimination but also with the requirement that the rules are
justified on grounds of the general interest and are not disproportionate in relation to
the objective pursued?
5. If the answer to Question 4 is affirmative, may objectives based on the maintenance
of a pluralist and non-commercial broadcasting system constitute such justification?"
7 Reference is made to the Report for the Hearing for a fuller account of the facts, the
procedure and the written observations submitted to the Court, which are mentioned
or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
8 In its first three questions, the Nederlandse Raad van State essentially seeks to
ascertain whether the Treaty provisions on the free movement of goods and the
freedom to provide services must be interpreted as precluding legislation of a Member
State which prohibits a broadcasting organization established in that State from
investing in a broadcasting company established or to be established in another
Member State and providing a bank guarantee or drawing up a business plan and
giving legal advice to a television company to be set up in another Member State.
9 It must first be borne in mind that, as the Court held in its judgments in Case
C-353/89 Commission v Netherlands [1991] ECR I-4069, paragraphs 3, 29 and 30, and
Case C-288/89 Stichting Collectieve Antennevoorziening Gouda v Commissariaat voor
de Media [1991] ECR I-4007, paragraphs 22 and 23, the Mediawet is designed to
establish a pluralistic and non-commercial broadcasting system and thus forms part of
a cultural policy intended to safeguard, in the audio-visual sector, the freedom of
expression of the various (in particular social, cultural, religious and philosophical)
components existing in the Netherlands.
10 It also follows from those two judgments (see respectively paragraphs 41 and 42
and 23 and 24) that those cultural-policy objectives are objectives relating to the public
interest which a Member State may legitimately pursue by formulating the statutes of
its own broadcasting organizations in an appropriate manner.
11 Article 57(1) of the Mediawet contributes to the attainment of those objectives. It
seeks to prohibit national broadcasting organizations from engaging in activities which
are alien to the tasks assigned to them by the Law or undermine the aims thereof, in
the view of the Commissariaat voor de Media. Thus, in particular, it provides that the
financial resources available to the national broadcasting organizations to enable them
to ensure pluralism in the audio-visual sector must not be diverted from that purpose
and used for purely commercial ends.
12 Finally, the Court has held in relation to Article 59 of the Treaty that a Member State
cannot be denied the right to take measures to prevent the exercise by a person
whose activity is entirely or principally directed towards its territory of the freedoms
guaranteed by the Treaty for the purpose of avoiding the professional rules of conduct
which would be applicable to him if he were established within that State (judgment in
Case 33/74 Van Binsbergen v Bedrijfsvereniging Metaalnijverheid [1974] ECR 1299,
paragraph 13).
13 By prohibiting national broadcasting organizations from helping to set up
commercial radio and television companies abroad for the purpose of providing
services there directed towards the Netherlands, the Netherlands legislation at issue
has the specific effect, with a view to safeguarding the exercise of the freedoms
guaranteed by the Treaty, of ensuring that those organizations cannot improperly
evade the obligations deriving from the national legislation concerning the pluralistic
and non-commercial content of programmes.
14 In those circumstances, the requirement that national broadcasting organizations
do not engage in activities other than those provided for by the Law or authorized by
the Commissariaat voor de Media cannot be regarded as incompatible with Articles 59
and 67 of the Treaty.
15 It must therefore be stated in reply to the national court that the provisions of the
Treaty on the free movement of capital and the freedom to provide services must be
interpreted as not precluding legislation of a Member State which prohibits a
broadcasting organization established in that State from investing in a broadcasting
company established or to be established in another Member State and from providing
that company with a bank guarantee or drawing up a business plan and giving legal
advice to a television company to be set up in another Member State, where those
activities are directed towards the establishment of a commercial television station
whose broadcasts are intended to be received, in particular, in the territory of the first
Member State and those prohibitions are necessary in order to ensure the pluralistic
and non-commercial character of the audio-visual system introduced by that
legislation.
16 In view of the answer given to the first three questions, the fourth and fifth
questions, concerning the justification for certain restrictions on the free movement of
capital and the freedom to provide services, do not call for an answer.
Decision on costs
Costs
17 The costs incurred by the Netherlands Government and the Commission of the
European Communities, which have submitted observations to the Court, are not
recoverable. Since these proceedings are, for the parties to the main proceedings, a
step in the action pending before the national court, the decision on costs is a matter
for that court.
Operative part
On those grounds,
THE COURT
in answer to the questions referred to it by the judicial division of the Nederlandse
Raad van State, by order of 27 May 1991, hereby rules:
The provisions of the Treaty on the free movement of capital and the freedom to
provide services must be interpreted as not precluding legislation of a Member State
which prohibits a broadcasting organization established in that State from investing in
a broadcasting company established or to be established in another Member State and
from providing that company with a bank guarantee or drawing up a business plan and
giving legal advice to a television company to be set up in another Member State,
where those activities are directed towards the establishment of a commercial
television station whose broadcasts are intended to be received, in particular, in the
territory of the first Member State and those prohibitions are necessary in order to
ensure the pluralistic and non-commercial character of the audio-visual system
introduced by that legislation.