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DIP SpA v.

Commune di Bassano del Grappa


October 1995 Court of Justice of the European Communities (2nd Chamber)

BACKGROUND AND FACTS


Italian law prohibits the opening of certain retail stores without rst obtaining a license from the local authorities. The law requires each municipality to draw up a plan for the development of new businesses in its area.

The stated purposes of the licensing scheme are to protect consumers, to achieve a balance between supply and demand, to ensure free competition, and to obtain a balance between different forms of distribution. A license to open a new retail store can be denied if it is believed that the market is adequately served already.

Where the municipality is the administrative centre of a province or has more than 50 000 inhabitants, the committee consists of 14 members as follows: the mayor or his delegate acting as chairman, an urban planning expert and a traffic expert, both appointed by the town council, the director of UPICA (public provincial office representing industry, commerce and artisans), a representative of the provincial tourist office, five experts on distribution problems, of whom three are appointed by unions of shopkeepers with fixed premises, one by the consumers' cooperative organizations and one by the union of stallholders, four representatives nominated by the national workers' confederation.

Where the municipality has fewer than 50 000 inhabitants, the committees consist of 10 members: the mayor or his delegate, an urban planning expert and a traffic expert, both appointed by the town council, three experts on distribution problems, appointed by the town council on the advice of traders' organizations and consumers' cooperative organizations, three workers' representatives, a representative of the social security office.

The license is granted by the local mayor on the advice of a local committee. This action was brought before the European Court of Justice by three applicants whose licenses to open new retail stores in Italy had been denied. The three applicants wanted to open stores that sold jewelry, hardware, and foodstuffs.

The applicants maintain that the Italian retail licensing laws exclude new business, restrict competition, discriminate against non-Italian companies and imported goods, and lead to higher consumer prices. They argued that the Italian law was invalid under the laws of the European Union and the Treaty of Rome.

HIRSCH P.C., PRESIDING


While the applicants have forcefully stressed what they perceive to be the self-evidently concerted nature of the activities and common purpose of the distributor and retail representatives on these advisory committees which operate across Italy, they have not referred to any evidence which would be sufcient to justify a conclusion that, as a result of the application of the Act, such a network of collusion either subsists or has been encouraged in Italy

The Italian Act provides that licenses are to be issued by the mayor of the municipality concerned, taking into account the criteria laid down in the municipal commercial development plan. The purpose of that plan is to provide the best possible service for consumers and the best possible balance between permanent trading establishments and foreseeable demand from the population.

Such national laws cannot be considered to put individual traders in dominant positions or all the traders established in a municipality in a collective dominant position. On this point, it is sufcient to observe that rules such as those contained in the Italian Act are too uncertain and indirect for the obligation which they impose to be regarded as being capable of hindering trade between Member States.

DECISION
The Italian law requiring the licensing of new retail stores by local committees is not invalid under the laws of the European Union and the Treaty of Rome.

SOURCES
International Business Law and Its Environment, 7th Edition http://www.iusinfo.hr/LegisRegistry/Content.aspx?SOPI=619 94CJ0140&Datum=1995-1017%2000:0000&Doc=EUCaseLaw_HR http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61994C J0140:EN:PDF http://ec.europa.eu/competition/court/antitrust/iju51990.html http://eur-law.eu/FR/index/2814 http://eur-lex.europa.eu/legalcontent/EN/ALL/?uri=CELEX:61994CJ0140