JUDGMENT OF THE COURT (Sixth Chamber)

28 October 1999 (1)

(Television broadcasting — Limitation on transmission time allocated toadvertising)

In Case C-6/98,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article234 EC) by the Oberlandesgericht Stuttgart, Germany, for a preliminary ruling inthe proceedings pending before that court between

Arbeitsgemeinschaft Deutscher Rundfunkanstalten (ARD)

and

PRO Sieben Media AG,

supported by

SAT 1 Satellitenfernsehen GmbH,

Kabel 1, K 1 Fernsehen GmbH,

on the interpretation of Article 11(3) of Council Directive 89/552/EEC of3 October 1989 on the coordination of certain provisions laid down by law,

regulation or administrative action in Member States concerning the pursuit oftelevision broadcasting activities (OJ 1989 L 298, p. 23), as amended by Directive97/36/EC of the European Parliament and of the Council of 30 June 1997 (OJ 1997L 202, p. 60),

THE COURT (Sixth Chamber),

composed of: R. Schintgen, President of the Second Chamber, acting as Presidentof the Sixth Chamber, P.J.G. Kapteyn (Rapporteur) and H. Ragnemalm, Judges,

Advocate General: F.G. Jacobs,

Registrar: H. von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

—    Arbeitsgemeinschaft Deutscher Rundfunkanstalten (ARD), by W. Keßler,Rechtsanwalt, Stuttgart,

—    PRO Sieben Media AG, by H.-J. Rabe, of the Brussels Bar,

—    Kabel 1, K 1 Fernsehen GmbH, by T. Jestaedt, of the Brussels Bar,

—    the Luxembourg Government, by N. Schmit, Director of InternationalEconomic Relations and Cooperation at the Ministry of Foreign Affairs,acting as Agent,

—    the Netherlands Government, by J.G. Lammers, Deputy Legal Adviser inthe Ministry of Foreign Affairs, acting as Agent,

—    the Portuguese Government, by L. Fernandes, Director of the Legal Serviceof the Directorate General for the European Communities in the Ministryof Foreign Affairs, and P. Borges, a lawyer in the Directorate General forthe European Communities in that Ministry, acting as Agents,

—    the Swedish Government, by E. Brattgård, Departementsråd in the Ministryof Foreign Affairs, acting as Agent,

—    the United Kingdom Government, by D. Cooper, of the Treasury Solicitor'sDepartment, acting as Agent, and R. Thompson, Barrister,

—    the Commission of the European Communities, by J. Sack, Legal Adviser,acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of Arbeitsgemeinschaft DeutscherRundfunkanstalten (ARD), represented by W. Keßler; PRO Sieben Media AG,represented by H.-J. Rabe; Kabel 1, K 1 Fernsehen GmbH, represented by T. Jestaedt; the French Government, represented by A. Maitrepierre, Chargé deMission in the Legal Affairs Directorate of the Ministry of Foreign Affairs, actingas Agent; the Italian Government, represented by F. Quadri, Avvocato dello Stato;the United Kingdom Government, represented by J. Eadie, Barrister; and theCommission, represented by J. Sack, at the hearing on 22 April 1999,

after hearing the Opinion of the Advocate General at the sitting on 24 June 1999,

gives the following

Judgment

1.

    By order of 17 December 1997, received at the Court on 12 January 1998, theOberlandesgericht Stuttgart (Higher Regional Court, Stuttgart) referred for apreliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) twoquestions on the interpretation of Article 11(3) of Council Directive 89/552/EECof 3 October 1989 on the coordination of certain provisions laid down by law,regulation or administrative action in Member States concerning the pursuit oftelevision broadcasting activities (OJ 1989 L 298, p. 23), as amended by Directive97/36/EC of the European Parliament and of the Council of 30 June 1997 (OJ 1997L 202, p. 60).

2.

    Those questions have arisen in legal proceedings between ArbeitsgemeinschaftDeutscher Rundfunkanstalten (hereinafter 'ARD‘) and PRO Sieben Media AG(hereinafter 'PRO Sieben‘), supported by SAT 1 Satellitenfernsehen GmbH andKabel 1, K 1 Fernsehen GmbH (hereinafter 'SAT 1 and Kabel 1‘).

3.

    ARD consists of 11 public-law broadcasting organisations of the German Länderwhich are jointly responsible for the television programming of ARD. PRO Siebenis a private television broadcasting company, as are SAT 1 and Kabel 1.

Legal framework

Directive 89/552, as amended by Directive 97/36

4.

    Article 3(1) of Directive 89/552 provides as follows:

'Member States shall remain free to require television broadcasters under theirjurisdiction to comply with more detailed or stricter rules in the areas covered bythis Directive.‘

5.

    Under Article 11(1) of Directive 89/552, advertisements must as a rule be insertedbetween programmes; however, they may also be inserted during programmes insuch a way 'that the integrity and value of the programme, taking into accountnatural breaks in and the duration and nature of the programme, and the rights ofthe rights holders are not prejudiced.‘

6.

    Article 11(2) of the Directive provides that, in programmes consisting ofautonomous parts, such as the televised retransmission of sporting events,advertisements may be inserted only between the parts or in the intervals.

7.

    Article 11(3) of the Directive provides as follows:

'The transmission of audiovisual works such as feature films and films made fortelevision (excluding series, serials, light entertainment programmes anddocumentaries), provided their scheduled duration is more than 45 minutes, maybe interrupted once for each period of 45 minutes. A further interruption shall beallowed if their scheduled duration is at least 20 minutes longer than two or morecomplete periods of 45 minutes.‘

8.

    Article 20 of Directive 89/552 provides:

'Without prejudice to Article 3, Member States may, with due regard forCommunity law, lay down conditions other than those laid down in Article 11(2)to (5) and Articles 18 and 18a in respect of broadcasts intended solely for thenational territory which cannot be received, directly or indirectly, by the public inone or more other Member States.‘

The European Convention on Television

9.

    Article 14(3) of the European Convention on Transfrontier Television of 5 May1989 (hereinafter 'the Convention‘) is worded as follows in the French and Englishversions, which are the authentic texts:

English version

'The transmission of audiovisual works such as feature films and films made fortelevision (excluding series, serials, light entertainment programmes anddocumentaries), provided their duration is more than 45 minutes, may beinterrupted once for each complete period of 45 minutes. A further interruption

is allowed if their duration is at least 20 minutes longer than two or more completeperiods of 45 minutes.‘

French version

'La transmission d'oeuvres audiovisuelles, telles que les longs métragescinématographiques et les films conçus pour la télévision (à l'exclusion des séries,des feuilletons, des émissions de divertissement et des documentaires), à conditionque leur durée soit supérieure à quarante-cinq minutes, peut être interrompue unefois par tranche de quarante-cinq minutes. Une autre interruption est autorisée sileur durée est supérieure d'au moins vingt minutes à deux ou plusieurs tranchescomplètes de quarante-cinq minutes.‘

German law

10.

    The German Grundgesetz (Basic Law) confers on the Länder legislative competencein the matter of radio and television broadcasting. Under the terms of theStaatsvertrag über den Rundfunk im vereinigten Deutschland (Treaty on Broadcastingin the United Germany) (hereinafter 'the Rundfunkstaatsvertrag‘) of 31 August1991, public-law broadcasting organisations may only broadcast a maximum of 20minutes advertising in their televised programmes during any working day. Privatetelevision broadcasting companies may allocate a maximum of 20% of dailybroadcasting time to advertising, including 15% for spot advertisements.

11.

    Article 26(4) of the Rundfunkstaatsvertrag provides as follows:

'In derogation from the second sentence of paragraph (3), works such as featurefilms and television films, with the exception of series, serials, light entertainmentprogrammes and documentaries, where they last for longer than 45 minutes, maybe interrupted once for each complete period of 45 minutes. A further interruptionis allowed if those programmes last for at least 20 minutes longer than two or morecomplete periods of 45 minutes.‘

12.

    This provision was reproduced in Article 44(4) of the Dritter Staatsvertrag zurÄnderung rundfunkrechtlicher Staatsverträge (Third Treaty amending the Treaties onBroadcasting Law), which entered into force on 1 January 1997.

13.

    By letter of 7 April 1992, the German Government informed the Commission thatDirective 89/552 had been transposed and forwarded to it the 1991Rundfunkstaatsvertrag.

Facts and questions submitted for a preliminary ruling

14.

    According to the case-file, the matter at issue in the main proceedings is thecalculation of the number of advertising interruptions authorised under Article26(4) of the Rundfunkstaatsvertrag in feature films broadcast by private broadcastingcompanies. Two interpretations are put forward, commonly called 'the grossprinciple‘ and 'the net principle‘.

15.

    According to the gross principle, which is supported by PRO Sieben, SAT 1 andKabel 1, the duration of advertisements must be included in the period of time inrelation to which the permissible number of interruptions is calculated. Accordingto the net principle, which is supported by ARD, only the duration of the filmsthemselves is to be included. It is common ground that in certain circumstancesapplication of the gross principle will permit a greater number of interruptions thanwould be allowed under the net principle.

16.

    By judgment of 10 October 1996, the Landesgericht Stuttgart (Regional Court,Stuttgart) ordered PRO Sieben to desist from interrupting by advertisements thebroadcasting of audiovisual works such as feature films and television films whoseduration, excluding interpolated advertising time (the net principle), does notexceed 45 minutes or interrupting by advertisements, more often than once percomplete period of 45 minutes, longer television works, calculated according to thenet principle. A further interruption, the Landesgericht ruled, would be permissibleif the programme, calculated according to the net principle, lasted at least 20minutes longer than two or more complete periods of 45 minutes.

17.

    On appeal against that decision to the Oberlandesgericht, PRO Sieben argued that,even though the net principle had to be applied under German legislation, this wascontrary to Directive 89/552 and to primary Community law.

18.

    While it agreed with the interpretation of national law given by the LandesgerichtStuttgart, the Oberlandesgericht Stuttgart none the less considered that theresolution of the dispute depended on the interpretation of Directive 89/552.

19.

    In those circumstances, the Oberlandesgericht Stuttgart decided to stay proceedingsand to refer the following questions to the Court for a preliminary ruling:

'(1)    Does Article 11(3) of Directive 97/36/EC of the European Parliament andof the Council of 30 June 1997 amending Council Directive 89/552/EEC(”the Television Amending Directive”) or the identical Article 11(3) ofCouncil Directive 89/552/EEC of 3 October 1989 on the coordination ofcertain provisions laid down by law, regulation or administrative action inMember States concerning the pursuit of television broadcasting activities(”the Television Directive”) prescribe the gross principle or the netprinciple?

(2)    On the assumption that Article 44(4) of the Dritter Staatsvertrag zurÄnderung rundfunkrechtlicher Staatsverträge (Third Treaty amending

Treaties on Broadcasting Law, Annex B 33, p. 437 of the case-file)prescribes the net principle, is that then compatible with Article 11(3) inconjunction with Article 3(1) of the Television Directive or with primaryCommunity law (Articles 5, 6, 30 et seq., 59 et seq. and 85 et seq. of the ECTreaty and the general principle of equality)?‘

The first question

20.

    By its first question, the national court is asking essentially whether Article 11(3)of Directive 89/552, as amended by Directive 97/36, prescribes the gross principleor the net principle.

21.

    In the view of ARD and the French, Netherlands and Portuguese Governments,Article 11(3) of Directive 89/552, as amended, refers to the net principle. On theother hand, PRO Sieben, supported by SAT 1 and Kabel 1 and by the Italian,Luxembourg and United Kingdom Governments and by the Commission take theview that this provision refers to the gross principle.

22.

    In support of their respective interpretations, the parties to the main proceedings,the Governments which have submitted observations to the Court, and theCommission have relied on arguments based on the wording of Article 11(3) ofDirective 89/552 in its German, English and French versions, on Article 14(3) ofthe Convention, on the scheme and purpose of Directive 89/552, and on the historyof that directive and of Directive 97/36.

23.

    First of all, as the Advocate General points out in points 18 to 25 of his Opinion,the arguments based on the wording of Article 11(3) of Directive 89/552, asamended, do not provide any clear indication as to whether that provisionprescribes the gross principle or the net principle.

24.

    With regard, next, to Article 14(3) of the Convention, the wording of which isidentical to that of Article 11(3) of Directive 89/552, as amended, except that thefirst provision refers to 'duration‘, whereas the second provision refers to'scheduled duration‘, it is sufficient for the Court to observe, as the AdvocateGeneral observes in point 29 of his Opinion, that this difference may be open tocontradictory interpretations.

25.

    For the reasons mentioned in points 31 to 36 of the Advocate General's Opinion,neither the declaration by the Council and the Commission contained in theminutes of the Council of 3 October 1989 nor the proposal by the EuropeanParliament of 14 February 1996 concerning Directive 97/36 allow any conclusivearguments to be drawn in answer to the question whether Article 11(3) of Directive89/552, as amended, prescribes the gross principle or the net principle.

26.

    The conclusion must therefore be that the wording of Article 11(3) of Directive89/552, as amended, is ambiguous.

27.

    The Court has held that, when the text of a Community provision contains, in itsdifferent language versions, considered in the light of the history of the provisionand the preparatory documents, on which the parties have based their argumentsin their observations submitted to the Court, too many contradictory and ambiguouselements to provide the answer, it is necessary, in order to interpret that provision,to consider its context and the objective of the rules in question (Case 11/76Netherlands v Commission [1979] ECR 245, paragraph 6).

28.

    As the Court found in Case C-412/93 Leclerc-Siplec v TF1 Publicité and M6Publicité [1995] ECR I-179, paragraph 28, and in Joined Cases C-34/95, C-35/95and C-36/95 KO v De Agostini and TV-Shop [1997] ECR I-3843, paragraph 3, themain purpose of Directive 89/552, which was adopted on the basis of Article 57(2)(now, after amendment, Article 47(2) EC) and Article 66 (now Article 55 EC) ofthe EEC Treaty, is to ensure freedom to provide television broadcasting services.

29.

    A provision which imposes a restriction, in the matter of the provision of services,on an activity involving the exercise of a fundamental freedom such as the freedomto provide television broadcasting services must express that restriction in clearterms.

30.

    It follows that, when a provision of Directive 89/552 imposes a restriction onbroadcasting and on the distribution of television broadcasting services, and theCommunity legislature has not drafted that provision in clear and unequivocalterms, it must be given a restrictive interpretation.

31.

    Since Article 11(3) of Directive 89/552, as amended, imposes a restriction asregards the possibility of interrupting the transmission of audiovisual works byadvertising, that restriction must be interpreted in the strictest possible sense.

32.

    It is common ground that the gross principle allows a greater number ofinterruptions for advertising than the net principle.

33.

    The answer to be given to the first question must therefore be that Article 11(3)of Directive 89/552, as amended by Directive 97/36, is to be construed asprescribing the gross principle, so that, in order to calculate the 45-minute periodfor the purpose of determining the number of advertising interruptions allowed inthe broadcasting of audiovisual works such as feature films and films made fortelevision, the duration of the advertisements must be included in that period.

The second question

The first part of the second question

34.

    By the first part of its second question, the national court is asking essentiallywhether Article 11(3), in conjunction with Article 3(1), of Directive 89/552, asamended by Directive 97/36, authorises Member States to prescribe the netprinciple.

35.

    PRO Sieben argues that it follows from both the purpose and scheme of Directive89/552 that Article 3(1) thereof must be interpreted restrictively. It submits inparticular that the right which Member States have under that provision to setmore detailed or stricter rules cannot relate to Article 11 of Directive 89/552.

36.

    It states in this regard that, so far as concerns television advertising which, underArticle 11(1), may be inserted during programmes on the conditions set out inArticle 11(2) to (5), Member States cannot impose conditions other than thosementioned in Article 20 of Directive 89/552, as amended. However, according toPRO Sieben, the derogation provided for by the latter provision cannot justifyapplication of the net principle in view of the fact that Article 20 concerns onlybroadcasts solely intended for the national territory which cannot be received,directly or indirectly, in one or more other Member States.

37.

    The Court observes first of all that it is clear from the wording of Article 20 ofDirective 89/552 that it applies 'without prejudice to Article 3‘ of that directive.

38.

    Next, the Court observes that the interpretation advocated by PRO Sieben wouldrender Article 3(1) nugatory as a general provision in an essential area covered byDirective 89/552, as amended.

39.

    Neither the recitals in its preamble nor the objective of Directive 89/552 suggestthat Article 20 must be construed as depriving Member States of the right whichArticle 3(1) of that directive allows them.

40.

    The 27th recital in the preamble to Directive 89/552 refers in general terms, andwithout limiting it to the circumstances defined in Article 20, to the right whichMember States have to set more detailed or stricter rules than the minimum rulesand standards to which advertising is subject under that directive.

41.

    In contrast, the right which Member States have under Article 20 of Directive89/552 is referred to in the 28th recital in its preamble, where reference is madeto the right which Member States have to lay down different conditions for theinsertion of advertising and different limits for the volume of advertising in orderto facilitate those particular broadcasts, on condition that those broadcasts areintended solely for the national territory and may not be received, directly orindirectly, in one or more other Member States.

42.

    Finally, the attainment of the objective of Directive 89/552, which is to ensurefreedom to provide television broadcasting services in accordance with the

minimum rules which it lays down, is not affected in any way if Member Statesimpose stricter rules on advertising.

43.

    The answer must therefore be that Article 11(3), in conjunction with Article 3(1),of Directive 89/552, as amended, authorises Member States to prescribe, fortelevision broadcasters under their jurisdiction, the net principle for advertisementswhich may be inserted during programmes, and thus to provide that, in order tocalculate that period, the duration of the advertisements must be excluded, oncondition, however, that those rules are compatible with other relevant provisionsof Community law.

The second part of the second question

44.

    By the second part of its second question, the national court asks whether Article 5of the EC Treaty (now Article 10 EC), Articles 6, 30, 59 of the EC Treaty (now,after amendment, Articles 12 EC, 28 EC and 49 EC), Article 85 of the EC Treaty(now Article 81 EC) and the general principle of equality preclude a Member Statefrom prescribing, under Article 3(1) of Directive 89/552, application of the netprinciple.

Article 30 of the Treaty

45.

    The Court has already held that legislation which prohibits televised advertisingwithin a certain sector concerns selling arrangements since it prohibits a particularform of promotion of a particular method of marketing products (Leclerc-Siplec,cited above, paragraph 22).

46.

    Since the restriction on advertising in question in the main proceedings is of asimilar, but less extensive, kind, it also concerns selling arrangements.

47.

    In paragraph 16 of its judgment in Joined Cases C-267/91 and C-268/91 Keck andMithouard [1993] ECR I-6097, the Court held that national provisions restrictingor prohibiting certain selling arrangements are not caught by Article 30 of theTreaty so long as they apply to all relevant traders operating within the nationalterritory and so long as they affect in the same manner, in law and in fact, themarketing of domestic products and of those from other Member States.

48.

    Those two conditions are clearly satisfied by rules on television advertising such asthose at issue in the main proceedings.

Article 59 of the Treaty

49.

    As regards the compatibility with Article 59 of the Treaty of national rules imposingthe net principle, which a Member State may prescribe by exercising its right under

Article 3(1) of Directive 89/552, as amended, it must be observed that, since suchrules limit the possibility for television broadcasters established in the State oftransmission to broadcast advertisements for the benefit of advertisers establishedin other Member States, they involve a restriction on the freedom to provideservices.

50.

    It must, however, be pointed out that the protection of consumers against abusesof advertising or, as an aim of cultural policy, the maintenance of a certain level ofprogramme quality constitute overriding reasons relating to the general interestwhich may justify restrictions on freedom to provide services (see, in particular,Case C-288/89 Collectieve Antennevoorziening Gouda and Others v Commissariaatvoor de Media [1991] ECR I-4007, paragraph 27).

51.

    As regards the proportionality of the restriction at issue, it is settled case-law thatrequirements imposed on the providers of services must be appropriate to ensureachievement of the intended aim and must not go beyond what is necessary inorder to achieve that aim (see, in particular, Collectieve Antennevoorziening Gouda,cited above, paragraph 15, and Case C-384/93 Alpine Investments v Minister vanFinanciën [1995] ECR I-1141, paragraph 45).

52.

    There is nothing in the case-file to warrant the conclusion that those conditions arenot satisfied in the case before the national court.

Articles 5, 6 and 85 of the Treaty and the principle of equal treatment

53.

    As the Advocate General observes in paragraphs 83 to 85 of his Opinion, Articles5, 6 and 85 of the Treaty, as well as the principle of equal treatment, are notrelevant to the situation described by the national court.

54.

    It follows from all of the foregoing that Articles 5, 6, 30 and 85 of the Treaty andthe general principle of equal treatment do not apply to national rules whichprescribe the application of the net principle for television broadcasters under theirjurisdiction. Article 59 of the Treaty does not preclude a Member State fromprescribing, under Article 3(1) of Directive 89/552, the application of the netprinciple.

Costs

55.

    The costs incurred by the French, Italian, Luxembourg, Netherlands, Portuguese,Swedish and United Kingdom Governments and by the Commission, which havesubmitted observations to the Court, are not recoverable. Since these proceedings

are, for the parties to the main proceedings, a step in the proceedings pendingbefore the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Oberlandesgericht Stuttgart byorder of 17 December 1997, hereby rules:

1.    Article 11(3) of Council Directive 89/552/EEC of 3 October 1989 on thecoordination of certain provisions laid down by law, regulation oradministrative action in Member States concerning the pursuit of televisionbroadcasting activities, as amended by Directive 97/36/EC of the EuropeanParliament and of the Council of 30 June 1997, is to be construed asprescribing the gross principle, so that, in order to calculate the 45-minuteperiod for the purpose of determining the number of advertisinginterruptions allowed in the broadcasting of audiovisual works such asfeature films and films made for television, the duration of theadvertisements must be included in that period.

2.    Article 11(3), in conjunction with Article 3(1), of Directive 89/552, asamended, authorises Member States to prescribe, for televisionbroadcasters under their jurisdiction, the net principle for advertisementswhich may be inserted during programmes, and thus to provide that, inorder to calculate that period, the duration of the advertisements must beexcluded, on condition, however, that those rules are compatible with otherrelevant provisions of Community law.

    Article 5 of the EC Treaty (now Article 10 EC), Articles 6 and 30 of the ECTreaty (now, after amendment, Articles 12 EC and 28 EC), Article 85 of theEC Treaty (now Article 81 EC) and the general principle of equal treatmentdo not apply to national rules which prescribe the application of the netprinciple for television broadcasters under their jurisdiction.

    Article 59 of the EC Treaty (now, after amendment, Article 49 EC) does notpreclude a Member State from prescribing, under Article 3(1) of Directive89/552, the application of the net principle.

SchintgenKapteyn Ragnemalm

Delivered in open court in Luxembourg on 28 October 1999.

R. Grass

J.C. Moitinho de Almeida

Registrar

President of the Sixth Chamber

1: Language of the case: German.