Case C-600/12, Commission v Greece

Greece infringing EU law by not prohibiting uncontrolled management of landfill site at Natura 2000 site

>> The Waste Framework Directive (Directive 2008/98, herinafter: „ WFD”) requires Member States to take the necessary measures to ensure that waste management is carried out without endangering human health and without harming the environment. Member States are also required to prohibit the abandonment, dumping or uncontrolled management of waste. In addition, all grants of landfill permits are subject to certain condition (on the basis of the landfll Directve (Directive 1999/31)) while the Habitats Directive requires that the effects of projects likely to affect a site significantly must be appropriately assessed by reference to objectives relating to the conservation of habitats and of wild fauna and flora.

National Marine Park of Zakinthos was part of the Natura 2000 network on account of the sea turtles there (Caretta caretta). However, environmental problems caused, since 1999, by landfill operations within the park had had a serious impact on the habitat of those turtles.The waste management plan for the region of the Ionian Islands had, since 2005 (the planned end- of-life date for the landfill site), in fact provided for the construction of a new landfill site in a different location on Zakinthos. In 2005, the Zakinthos Association for the Management of Solid Waste proposed five possible new landfill sites (two of those sites, which were located in a mountainous area, received positive feedback in 2008). However, the Association failed to submit an environmental impact assessment for the construction of the new landfill site. The existing landfill site was still operating in the marine park even though the permits and environmental conditions relating thereto expired in 2006. It was decided that, at the same time that rehabilitation and improvement works were being carried out on the site, the existing landfill would continue to receive waste generated on Zakinthos until the new landfill site begins operating (or until 31 December 2015 when the environmental conditions renewed in 2011 by Ministerial Decree expire). 

Taking the view that Greece was in breach of EU environmental legislation, the Commission had brought infringement proceedings before the Court of Justice. Greece had in fact already been found to have infringed EU law by the Court in a case relating to the same species in the same region (see Case C-103/00 Commission v Greece).

The Court held that Member State may not plead practical difficulties, administrative or financial to justify failure to observe obligations and time limits laid down by a directive (see, to that effect, Commission / United Kingdom C -301/10, EU: C: 2012:633). 

The Court reiterated  that the existence of an infringement must be assessed according to the situation of the Member State as it stood at the end of the deadline set in the reasoned opinion (see Commission / France, C-193/12, EU: C: 2013:394; and Commission / Spain, C-67/12, EU: C: 2014:5). The Court noted that  Greece had not taken any steps to meet its obligations under Articles 13 and 36, paragraph 1 of Directive 2008/98, ), 12 and 14 of Directive 1999/31 and 6, paragraph 3, of the Habitats  Directive. 

The Court reiterated that according to its case-law on the burden of proof in the context of infringement proceedings under Article 258 TFEU, it was for the Commission to establish the existence of alleged breach. So she must provide the Court with the information necessary to verify by it of the existence of such breach (see, to that effect, Commission / Finland, C-335/07, EU: C: 2009:612 and Commission / United Kingdom, EU: C: 2012:633). 
The Cour held that where the Commission had provided sufficient evidence, it was for the Member State concerned to challenge in substance and in detail the information produced and the consequences (see stops Commission / Finland, EU: C: 2009:612, and Commission / United Kingdom, EU: C: 2012:633). 

The Court held that although Article of the WFD left a certain margin of discretion to the Member States, the discretion had clearly been exceeded  considering that the persistence of de facto situation leading to a significant degradation of the environment  (see, to that effect, Commission / Italy, EU: C: 2010:115, and Commission / Portugal, EU: C: 2010:331). The Court thus found that Greece had  failed to fulfill its obligations under Article 13 of Directive 2008/98. 

The Court added that  by keeping in operation, on the Island of Zakinthos, an overfull landfill site which was not functioning properly and which did not comply with EU environmental legislation, Greece had also failed to fulfil its obligations under the Land fill Directive. The Court added that by renewing the landfill permit for the site in question without complying with the procedure referred to in Article 6, paragraph 3, of the Habitats Directive, Greece also infringed that Directive. 

Text of Judgment

Case C‑338/13, Noorzia

Requiring minimum age 21 by date of application reunification of spouses not infringing Directive on right to family reunification

>> The Directive on the right to family reunification (Directive 2003/86/EC) lays down the conditions under which third country nationals who reside legally in the territory of a Member State may apply for, among others, their spouse  and their children who are minors to join them. Article 4(5) of the  Directive permits Member States to fix a minimum age for the purposes of the reunification of spouses, which may not be higher than 21, an age that must be attained by the sponsor and his or her spouse prior to the latter being permitted to join the sponsor for reunification. The Directive does not, however, define the date by reference to which the national authorities must determine whether the minimum age condition is satisfied.

Austrian legislation provided that spouses and registered partners must have reached the age of 21 by the date of lodging an application to be considered eligible for family reunification. The Verwaltungsgerichtshof asks the Court of Justice whether the Directive precludes such a rule. That court was hearing a case brought by an Afghan national whose application to join her Afghan spouse residing in Austria had been refused on the ground that the latter had not yet reached the age of 21 when the application was lodged, albeit that he had reached that age when the refusal decision was taken.

The Court noted by not specifying whether national authorities must, in order to determine whether the minimum age condition was satisfied, consider the matter by reference to the date when the application seeking family reunification was lodged or the date when the application was ruled upon, the EU legislature intended to leave to the Member States a margin of discretion, subject to the requirement not to impair the effectiveness of EU law.

The Court noted that the minimum age fixed by the Member States by virtue of Article 4(5) of Directive 2003/86 ultimately corresponded with the age at which, according to the Member State concerned, a person was presumed to have acquired sufficient maturity not only to refuse to enter into a forced marriage but also to choose voluntarily to move to a different country with his or her spouse, in order to lead a family life with him or her there and to become integrated there.

The Court held that a measure requiring the sponsor and his or her spouse to have attained the prescribed minimum age by the date when the application was lodged did not prevent the exercise of the right to family reunification nor rendered it excessively difficult. The Court furthermore found that such a measure did not undermine the purpose of preventing forced marriages since it permitted the presumption that, due to greater maturity, it would be more difficult to influence the persons concerned to contract a forced marriage and accepted family reunification if they must have reached the age of 21 by the date when the application was lodged than it would be if they were under 21 at that date.

The Court moreover found that taking the date when the application for family reunification was lodged as the point by reference to which it must be determined whether the minimum age condition was satisfied was consistent with the principles of equal treatment and legal certainty.

The Court held that the condition relating to the date of lodging the application made it possible to guarantee that all applicants who were in the same situation chronologically were treated identically, by ensuring that the success of the application depended principally on circumstances attributable to the applicant and not to the administration, such as the length of time taken considering the application.

The Court thus found Article 4(5) of Directive 2003/86 must be interpreted as meaning that that provision did not preclude a rule of national law requiring that spouses and registered partners must have reached the age of 21 by the date when the application seeking to be considered family members entitled to reunification was lodged.

Text of Judgment

Case C-573/12, Ålands Vindkraft

Swedish support scheme promoting green energy production in national territory compatible with EU law

>> The Renewable Energy Directive (Directive 2009/28) allows Member States to support the production of green energy. Member States which grant benefits to producers are not required to support the use of green energy produced in another Member State.

Swedish legislation provides that green electricity production installations located on the national territory may be awarded electricity certificates. Those certificates may then be sold to electricity suppliers or to certain users, who are under an obligation to hold a certain number (quota) of certificates, corresponding to a proportion of the total quantity of electricity supplied or consumed, failing which they must pay a fee.  

Ålands Vindkraft applied  for electricity certificates in respect of its wind farm in the Åland archipelago, in Finland. The application was refused on the grounds that only green electricity production installations located in Sweden may be awarded such electricity certificates. Ålands Vindkraft challenged that administrative decision before the Swedish courts, arguing that the principle of the free movement of goods precluded the Swedish electricity certificates scheme.

Whether support system within meaning Directive 2009/28.

The referring court asks whether point (k) of the second paragraph of Article 2 and Article 3(3) of Directive 2009/28 must be interpreted as allowing a Member State to establish a support scheme which provides for the award of tradable certificates to producers of green electricity solely in respect of green electricity produced in the territory of that State and which places suppliers and certain electricity users under an obligation to deliver annually to the competent authority a certain number of those certificates, corresponding to a proportion of the total volume of electricity that they had  supplied or consumed.

The Court first of ll assessed whether a green electricity support system such as that at issue in the main proceedings constituted a ‘support scheme’ within the meaning of point (k) of the second paragraph of Article 2 and Article 3(3) of Directive 2009/28.

The Court found that  a support scheme for green electricity production using green certificates, such as that at issue in the main proceedings, had the necessary characteristics to be categorised as a ‘support scheme’ within the meaning of point (k) of the second paragraph of Article 2 and Article 3(3) of Directive 2009/28.

The referring court expressed doubts concerning the fact that the support scheme at issue in the main proceedings provided for the award of electricity certificates solely in respect of green electricity produced in the national territory. The Court however held that it was clear that, in adopting Directive 2009/28, the EU legislature left open the possibility of such a territorial limitation.

The Court found that the EU legislature did not intend to require Member States who opted for a support scheme using green certificates to extend that scheme to cover green electricity produced on the territory of another Member State. The Court thus concluded that Directive 2009/28 must be interpreted as allowing a Member State to establish a support scheme, such as that at issue in the main proceedings.

Whether legislation caught by  Article 34 TFEU

The referring court also asked whether Article 34 TFEU must be interpreted as meaning that national legislation such as that at issue in the main proceedings constituted a measure having equivalent effect to a quantitative restriction on imports for the purposes of that provision. If so, the referring court asked whether such legislation might nevertheless be justified in the light of its objective of promoting the production of green electricity.

The Court reiterated that, where a matter had been the subject of exhaustive harmonisation at EU level, any national measure relating thereto must be assessed in the light of the provisions of that harmonising measure and not in the light of primary law (see, inter alia, Radlberger Getränkegesellschaft and S. Spitz, C‑309/02, EU:C:2004:799).

The Court thus found that it was necessary to determine whether the harmonisation brought about by Directive 2009/28 ought to be regarded as being of such a kind as to preclude an examination of whether legislation such as that at issue was compatible with Article 34 TFEU. In that regard, it should be noted at the outset that, far from seeking to bring about exhaustive harmonisation of national support schemes for green energy production, the EU legislature — as is apparent, inter alia, from recital 25 to Directive 2009/28 — based its approach on the finding that Member States apply different support schemes and on the principle that it is important to ensure the proper functioning of those schemes in order to maintain investor confidence and to enable those States to define effective national measures in order to achieve their mandatory national overall targets under the directive. The Court that it could not be considered that, in covering that aspect of the territorial scope of national support schemes, the harmonisation brought about by Directive 2009/28 in the field of support schemes was of such a kind as to preclude an examination of their compatibility with Article 34 TFEU. 

Whether existence of barrier to trade

The Court stressed that the free movement of goods between Member States was a fundamental principle of the Treaty which found its expression in the prohibition set out in Article 34 TFEU (see, inter alia, Commission v Denmark, C‑192/01, EU:C:2003:492).

Reiterating its famous Dasonville case law, the Court held that in prohibiting between Member States measures having equivalent effect to quantitative restrictions on imports, Article 34 covered any national measure capable of hindering, directly or indirectly, actually or potentially, intra-Community trade (see, inter alia, Dassonville, 8/74, EU:C:1974:82, and PreussenElektra, EU:C:2001:160).

As it is, it must be noted in that regard that the legislation at issue is capable, in various ways, of hindering — at least indirectly and potentially — imports of electricity, especially green electricity, from other Member States.

In the first place, it follows from that legislation that suppliers and certain consumers are required to hold on the annual due date a certain number of electricity certificates for the purposes of meeting their quota obligation, which depends on the total volume of electricity that they supply or consume. However, in the absence, inter alia, of an international agreement to that effect, only certificates awarded under the national scheme could be used to meet that obligation. Accordingly, those suppliers and consumers were as a rule required, on the basis of the electricity that they import, to purchase such certificates, failing which they had to pay a specific fee.Such measures were thus capable of impeding electricity imports from other Member States (see, inter alia, by analogy, Ligur Carni and Others, C‑277/91, C‑318/91 and C‑319/91, EU:C:1993:927).

In the second place, the referring court noted both in its order and in its questions that, although green electricity producers might, in the context of the support scheme established by the legislation at issue in the main proceedings, trade their electricity certificates on an open, competitive market that was dedicated to that trade, there was nothing in that legislation to stop the producers from selling those certificates together with the electricity that they produced, as a package.The existence of such a possibility seemed capable in practice of facilitating the opening of negotiations and the establishment of contractual relationships — in some cases, on a long-term basis — concerning the supply of national electricity by those producers to suppliers or electricity users, the latter being able to obtain, in that way, both the electricity and the green certificates that they needed in order to meet their quota obligation. The Court thus found that, to that extent also, the effect of the support scheme at issue in the main proceedings was, at least potentially, to curb electricity imports from other Member States (see, to that effect, Commission v Ireland, 249/81, EU:C:1982:402).

In that context, the Court noted that failure by a Member State to adopt adequate measures to prevent barriers to the free movement of goods that had been created, in particular, through the actions of traders but made possible by specific legislation that that State had introduced, is just as likely to obstruct intra-Community trade as is a positive act (see Commission v France, C‑265/95, EU:C:1997:595, and Schmidberger, C‑112/00, EU:C:2003:333, paragraph 58).

The Court thus concluded that t legislation such as that at issue in the main proceedings was capable of impeding imports of electricity, especially green electricity, from other Member States and that, in consequence, it constituted a measure having equivalent effect to quantitative restrictions on imports, in principle incompatible with the obligations under EU law resulting from Article 34 TFEU, unless that legislation could be objectively justified (see, to that effect, inter alia, Commission v Austria, C‑320/03, EU:C:2005:684).

Whether a possible justification
The Court stressed that national legislation or a national practice that constituted a measure having equivalent effect to quantitative restrictions might be justified on one of the public interest grounds listed in Article 36 TFEU or by overriding requirements. In either case, the national provision must, in accordance with the principle of proportionality, be appropriate for ensuring attainment of the objective pursued and must not go beyond what is necessary in order to attain that objective (see, inter alia, Commission v Austria, C‑524/07, EU:C:2008:717).


1. The objective of promoting the use of renewable energy sources

 According to settled case-law, national measures that are capable of hindering intra-Community trade may inter alia be justified by overriding requirements relating to protection of the environment (see, to that effect, Commission v Austria, EU:C:2008:717, paragraph 57 and the case-law cited).

In the present case,   the Court noted that the use of renewable energy sources for the production of electricity, which legislation such as that at issue in the main proceedings sought to promote, was useful for the protection of the environment inasmuch as it contributed to the reduction in greenhouse gas emissions. The Court stressed that the the increase in the use of renewable energy sources constituted one of the important components of the package of measures needed to reduce greenhouse gas emissions and to comply with the Kyoto Protocol to the United Nations Framework Convention on Climate Change, and with other Community and international greenhouse gas emission reduction commitments beyond the year 2012.

The Court found that the objective of promoting the use of renewable energy sources for the production of electricity, such as the objective pursued by the legislation at issue in the main proceedings, was in principle capable of justifying barriers to the free movement of goods.

2. Proportionality 

The Court held the by its very nature, a scheme such as in the present case required for its proper functioning market mechanisms that were capable of enabling traders — who were subject to the quota obligation and who did not yet possess the certificates required to discharge that obligation — to obtain certificates effectively and under fair terms. The Court stressed that it was therefore important that mechanisms be established which ensured the creation of a genuine market for certificates in which supply could match demand, reaching some kind of balance, so that it was actually possible for the relevant suppliers and users to obtain certificates under fair terms.

According to the findings of the referring court, the green certificates were actually sold, in the Member State concerned, on a market that was open to competition and, accordingly, the price of those certificates was determined by the interplay of supply and demand.

The Court held that provided that there was a market for green certificates which actually met the conditions set out above and on which traders who had imported electricity from other Member States were genuinely able to obtain certificates under fair terms, the fact that the national legislation at issue in the main proceedings did not prohibit producers of green electricity from selling to traders under the quota obligation both the electricity and the certificates did not mean that the legislation went beyond what was necessary to attain the objective of increasing the production of green electricity. The fact that such a possibility remains open appeared to be an additional incentive for producers to increase their production of green electricity.

The Court thus concluded that Article 34 TFEU must be interpreted as not precluding national legislation which provided for the award of tradable certificates to green electricity producers solely in respect of green electricity produced in the territory of the Member State concerned and which places suppliers and certain electricity users under an obligation to surrender annually to the competent authority a certain number of those certificates, corresponding to a proportion of the total volume of electricity that they had  supplied or used, failing which they must pay a specific fee.


Text of Judgment 

Joined Cases C-362, 363 and 407/13

Italian seafarers legislation complying with principles of EU law


>> The Italian Navigation Code of Italy set the maximum duration of fixed-term contracts  of seafarers ar at one year. The code also required the start date and the duration of the contract to be specified, that every contract concluded for a period exceeding one year was converted into a contract of indefinite duration, and that, if several contracts were concluded for a fixed term or for specified voyages, the employment was considered to be continuous where no more than 60 days elapsed between two contracts. 
The EU Framework Agreement (Directive 1999/70) lays down the general principles and minimum requirements relating to fixed-term work.  Last year, the Court held in the Della Rocca case that the Framework Agreement did not apply to temporary workers (see, EU:C:2013:235).
In the present case, the referring court asked whether the Framework Agreement must be interpreted as meaning that it applied to workers, such as the appellants in the main proceedings, who were employed as seafarers under fixed-term employment contracts on ferries making sea crossings between two ports situated in the same Member State. If that was indeed the case, the referring Court asked whether the provisions of the Framework Agreement, in particular Clause 3(1) thereof, must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which provided that fixed-term employment contracts had to indicate their duration, but not their termination date.
The Court of Justice first of all recalled that the Framework Agreement covers generally ‘fixed-term workers who had an employment contract or employment relationship as defined in law, collective agreements or practice in each Member State’ (Article 2 of the Framework Agreement, see also:  Adeneler and Others, C-212/04, EU:C:2006:443; Della Rocca, C-290/12, EU:C:2013:235,; and Márquez Samohano, C-190/13, EU:C:2014:146). The Court held that e Framework Agreement applied to all workers providing remunerated services in the context of a fixed-term employment relationship linking them with their employer  (Del Cerro Alonso, C-307/05, EU:C:2007:509; Gavieiro Gavieiro and Iglesias Torres, C‑444/09 and C‑456/09, EU:C:2010:819; and the order in Montoya Medina, C‑273/10, EU:C:2011:167).
The Court however added that the scope of the Framework Agreement was not unlimited, as   the definition of the contracts and employment relationships to which it applied were not determined by that agreement or by EU law, but by national law and/or practice, so long as those concepts were not defined in a manner that resulted in the arbitrary exclusion of a category of persons from the benefit of the protection provided by the Framework Agreement (see Sibilio, C‑157/11, EU:C:2012:148). The Court reiterated that the agreement did not apply to temporary workers. 
Nevertheless, the Court in the present case held that  seafarers employed under fixed-term employment contracts on ferries making crossings between two ports within the same Member State, fell within the scope of the Framework Agreement. The Court pointed out that Framework Agreement made it possible for Member States, when implementing the agreement, to take account of the needs of specific sectors and/or categories of workers involved, provided that that was justified on objective grounds (Marrosu and Sardino, C-53/04, EU:C:2006:517, and Kücük, C‑586/10, EU:C:2012:39).
The Court reiterated that the  Framework Agreement was not intended to harmonise all national rules relating to fixed-term employment contracts but simply aimed, by determining general principles and minimum requirements, to establish a general framework for ensuring equal treatment for fixed-term workers by protecting them against discrimination and to prevent abuse arising from the use of successive fixed-term work agreements or contracts (see: Impact, C‑268/06, EU:C:2008:223, on which I write this post;  Huet, C‑251/11, EU:C:2012:133,; and the order in Vino, C‑20/10, EU:C:2010:677).
The Court held that Clause 3(1) of the Framework Agreement defined the concept of ‘fixed-term worker’ and, in that context, set out the central characteristic of a fixed-term contract, namely the fact that the end of such a contract was determined ‘by objective conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event’. However, that clause did not impose any obligation on Member States in respect of the rules of national law applicable to the conclusion of fixed-term employment contracts.
The Court held that the Framework Agreement did not lay down a general obligation on the Member States to provide for the conversion of fixed-term employment contracts into contracts of indefinite duration. Indeed, Clause 5(2) of the Framework Agreement in principle left it to the Member States to determine the conditions under which fixed-term employment contracts or relationships were to be regarded as contracts or relationships of indefinite duration. It followed that the Framework Agreement did not specify the conditions under which contracts of indefinite duration might be used.
The Court concluded that Clause 5 of the Framework Agreement must be interpreted as meaning that it did not preclude, in principle, national legislation, such as that at issue in the main proceedings, which provided for the conversion of fixed-term employment contracts into employment contracts of indefinite duration only in circumstances where the worker concerned had been employed continuously under such contracts by the same employer for a period longer than one year, the employment relationship being considered to be continuous where the fixed-term employment contracts were separated by time lapses of less than or equal to 60 days. It was, however, for the referring court to satisfy itself that the conditions of application and the effective implementation of that legislation resulted in a measure that was adequate to prevent and punish the misuse of successive fixed-term employment contracts or relationships.


Case C-76/13, Commission v. Portugal

Court taking into account financial crisis when setting amount penalty payment Portugal

>> Portugal Telecom (PTC, HQ pictured) is the largest telecommunications operator in Portugal and
also operates in numerous other countries such as  Brazil. In 1995 the Portuguese Government granted it the exclusive right to operate the public telecommunications service. In principle, it was granted that right until that activity was liberalised in accordance with EU law.

The Universal Service Directive (Directive 2002/22) adopted in 2002, provides that every Member State is to designate the undertakings that are to provide the universal service while observing the principles of objectivity, transparency, non-discrimination and proportionality. That directive was to be transposed by the Member States by 24 July 2003. However, after 2003 PTC continued to be the exclusive provider, reason for which the European Commission in  2005 initiated the pre-litigation procedure and in 2009, brought infringement proceedings against Portugal before the Court of Justice. In 2010, the Court held that Portugal had failed to transpose correctly the provisions of the Universal Service Directive and to ensure that those provisions were in practice applied.

In 2013, the Commission decided to  bring new infringement proceedings, since the concession contract concluded with PTC was still in force. In fact, it was not until October 2012 that Portugal had launched the tendering procedure for the selection of the universal service providers. Furthermore, the new legislation to repeal the legislation incompatible with EU law would not enter into force until 1 June 2014. Moreoever, termination of the contract concluded with PTC was not provided for before 2025.

The Commission argued that Portugal should be ordered to make a penalty payment of €43 500 for every day of delay in complying with the judgment of 2010 and to pay a fixed-rate sum of €5 000 for every day from the date of delivery of the judgment of 2010 until the date of Portugal’s compliance with that judgment or the date on which the Court delivers judgment in the new infringement proceedings.

The Court agreed that it was appropriate to order Portugal to pay a lump sum and to make a penalty payment. The Court also found that the duration of the infringement, which was nearly three and a half years, including 28 months’ delay in complying with the 2010 judgment, was excessive.The Court stressed the seriousness of the infringement, emphasising not only that the failure to transpose  a Directive was an obstacle to the proper functioning of the internal market, but also that  the failure to comply with the judgment of 2010 had adverse consequences for both private interests - the competitors of PTC -  and public interests - those of  the end-users.

With regard to the lump sum, the Court observed that the failure to comply with the judgment of 2010 has prejudiced private and public interests. In addition, it emphasised that the concession contract under which PTC was to be the provider of the universal service until 2025 was approved on 17 February 2003, after the directive had entered into force, and that the Member States were required to transpose that directive into national law by 24 July 2003 at the latest. The Court has found that these matters make it necessary to adopt a deterrent measure, such as an order to pay a lump sum.

Nevertheless, the Court also found that - next to the fact that  tendering procedures were launched in October 2012  - Portugal’s ability to pay  had been reduced in the context of the economic crisis.  The Court stressed that  a penalty payment had to be an appropriate financial means of ensuring full compliance with the judgment concerned. However,  it found that the sum proposed by the Commission would not be proportionate.

The Court found that it was proportionate to order Portugal to pay a lump sum of €3 million and also to make a penalty payment of €10 000 for every day of delay in implementing the measures necessary in order to comply with the 2010 judgment.

Text of Judgment

Case C‑156/13, Digibet and Albers v Westdeutsche Lotterie

Schleswig - Holstein could tempo temporarily allow games of chance without infringing EU law.

>> German legislation prohibitted the organisation and facilitation of games of chance on the Internet and the advertising of games of chance on television, the Internet and via telecommunications networks. However, the use of the Internet for those purposes may be authorized in exceptional circumstances for lotteries and sporting bets, the aim of which is to combat the development and spread of illegal gaming. For this reason, Schleswig - Holstein authorized the organisation and facilitation of games on chance on the Internet from 1 January 2012 until 8 February 2013. That authorisation was granted to any person who, in the EU, was able to demonstrate that it complied with certain conditions. Even though this legislative exception had now been repealed, authorisations issued to operators of games of chance on the Internet remained valid for a transitional period of several years.


Digibet is authorised to organise games of chance under a licence issued by the authorities in Gibraltar. Thus, it offers games of chance and sports betting in German via its Internet site ‘digibet.com’. Following an action brought by the Westdeutsche Lotterie (a public lottery company
in North Rhine - Westphalia) a German court ordered Digibet and its managing director Mr Albers to cease to offer the possibility of playing games of chance via the Internet to persons in Germany. Digibet and Mr Albers challenged that judgment before the referring Court, which asked whether  Article 56 TFEU must be interpreted as meaning that it precluded legislation common to the majority of federal entities of a Member State having a federal structure which prohibited, in principle, the organisation and facilitation of games of chance via the internet, where, for a limited period, a single federal entity maintained in force more liberal legislation coexisting with the restrictive legislation of the other federal entities and that that entity issued authorisations to operators in order to supply games on the internet which remained valid for a transitional period after the repeal of that more liberal legislation.

Interestingly, Digibet and  Mr Albers inter alia  relied on the famous Winner Wetten  case (Case C-409/06 Winner Wetten (EU:C:2010:503), according to which rules of national law, even of a constitutional order, cannot be allowed to undermine the unity and effectiveness of EU law.

The Court first of all reiterated that it was not disputed that legislation of a Member State such as that at issue in the main proceedings constituted a restriction on the freedom to provide services guaranteed by Article 56 TFEU (see Joined Cases C316/07, C358/07 to C360/07, C409/07 and C410/07 Stoß and Others EU:C:2010:504).

The Court held that it was necessary, however, to determine whether such a restriction might be allowed as a derogation, on grounds of public policy, public security or public health, as expressly provided for under Articles 51 TFEU and Article 52 TFEU, which were applicable in the area of freedom to provide services by virtue of Article 62 TFEU, or justified, in accordance with the case-law of the Court, by overriding reasons in the public interest. The Court has consistently held that restrictions on betting and gaming might be justified by overriding requirements in the public interest, such as consumer protection and the prevention of both fraud and incitement to squander money on gambling (see Joined Cases C186/11 and C209/11 Stanleybet International and Others EU:C:2013:33, on which I wrote this post).

In that context, the Court has repeatedly stated that the legislation on games of chance is one of the areas in which there are significant moral, religious and cultural differences between the Member States. In the absence of harmonisation in the field at EU level, it is for each Member State to determine in those areas, in accordance with its own scale of values, what is required in order to ensure that the interests in question are protected  the identification of the objectives which are in fact pursued by the national legislation falls, in the context of a case referred to the Court under Article 267 TFEU, within the jurisdiction of the national court (see e.g., Case C-347/09 Dickinger and Ömer EU:C:2011:582, on which I wrote this post).

The referring court asked however about the requirement that restrictions imposed by the Member States must satisfy the conditions of proportionality and non-discrimination which applied to them, as laid down in the case-law of the Court of Justice and, in particular, the condition according to which national legislation is appropriate for ensuring attainment of the objective pursued only if it genuinely reflected a concern to attain it in a consistent and systematic manner. The referring court therefore wishes to know whether the proportionality and consistency of the restrictive legislation at issue in the main proceedings, seen as a whole, is called into question given the existence, for a limited period, of more liberal legislation only in the Land Schleswig-Holstein.

The Court of Justice in that regard stressed the particular nature of the gambling, where, unlike the establishment of free, undistorted competition in a traditional market, the presence of that kind of competition in the very specific market of games of chance was liable to have a detrimental effect owing to the fact that those operators would be led to compete with each other in inventiveness in making what they offered more attractive than their competitors and, in that way, increasing consumers’ expenditure on gaming and the risks of their addiction.

Therefore, national authorities enjoyed a wide measure of discretion which enabled them to determine what was required in order to ensure consumer protection and the preservation of order in society and — provided that the conditions laid down in the Court’s case-law are in fact met — it was for each Member State to assess whether, in the context of the legitimate aims which it pursued, it was necessary to prohibit, wholly or in part, betting and gaming or only to restrict them and, to that end, to lay down more or less strict supervisory rules.

Next, it should be recalled that, when provisions of the Treaties or of regulations conferred powers or impose obligations upon the Member States for the purposes of the implementation of EU law, the question of how the exercise of such powers and the fulfilment of such obligations might be entrusted by Member States to specific national bodies was solely a matter for the constitutional system of each State (Case C-428/07 Horvath, EU:C:2009:458, paragraph 49).  

The Court added that in the present case, the division of competences between the Länder could not be called into question, since it benefitted from the protection conferred by Article 4(2) TEU, according to which the Union must respect national identities, inherent in their fundamental structures, political and constitutional, including regional and local self-government. The Court added that  even assuming that the existence of legislation of one Land, which was more liberal than that in force in the other Länder, might damage the consistency of the legislation at issue as a whole, it must be observed that, in the circumstances of the case in the main proceedings, such damage to consistency was limited ratione temporis and ratione loci to a single Land. Therefore, it could according to the Court not be argued that the derogating legal situation in one Land seriously affected the appropriateness of the restrictions on games of chance applicable in all the other Länder to achieve the legitimate public interest objectives that they pursued.

The Court also took into account that the more liberal legislation on games of chance adopted by the Land Schleswig-Holstein was in force from 1 January 2012 until 8 February 2013. After that date, that Land applied the more restrictive rules already in force in the other Länder.

In those circumstances, the Court found that the restriction on the freedom to provide services constituted by the legislation on games of chance at issue in the main proceedings was capable of satisfying the requirements of proportionality as laid down in the case-law of the Court.



Case C‑184/11, Commission v Spain

Spain ordered to pay a lump sum of €30 million for having failed to adopt all the measures necessary to recover unlawful State aid granted by provinces of Basque Country.

>> In the 1990’s, Álava, Vizcaya and Guipúzcoa (the three provinces of the Basque Country) granted State aid to certain undertakings in the form of a reduction in the tax base and a 45% tax credit for investments. In 2001, the Commission found that aid to be incompatible with the internal market and ordered Spain to take all necessary measures to recover the aid from the recipients. Finding that not all the aid had been recovered, in 2003 the Commission brought actions for failure to fulfil obligations before the Court of Justice. By judgment of 14 December 2006, the Court held that Spain had failed to fulfil its obligation to adopt all the measures necessary to comply with the Commission decisions (C-485/03, Commission v Spain). 

Since it considered that Spain had not fully complied with the 2006 judgment, in 2011 the Commission decided to bring a new action for failure to fulfil obligations. The Commission was of the view that the amounts not yet recovered when the action was brought represented approximately 87% of the total of the unlawful aid to be recovered. Subsequently, the Commission found that Spain had fully complied with the 2006 judgment during the proceedings before the Court, so it withdrew its application for an order for a periodic penalty payment while maintaining its application for an order for payment of a lump sum.

The Court first of all held that in order to determine whether Spain adopted all the necessary measures to comply with the judgment in Commission v Spain EU:C:2006:777, it must be ascertained whether the amounts of the unlawful aid at issue were repaid by the recipient undertakings.The Court reiterated that the reference date for the assessment of whether there had been a failure to fulfil obligations was the date of expiry of the period prescribed in the reasoned opinion issued under Article 228(2) EC (see Case C‑304/02 Commission v France).

Since the FEU Treaty abolished the reasoned opinion stage in infringement proceedings under Article 260(2) TFEU, the reference date for assessing whether there had been an infringement for the purpose of Article 260 TFEU was the date of expiry of the period prescribed in the letter of formal notice issued in accordance with the first subparagraph of Article 260(2) (Case C‑610/10 Commission v Spain and Case C‑576/11 Commission v Luxembourg).The Court however held that where the proceedings for failure to fulfil obligations had been brought on the basis of Article 228(2) EC and a reasoned opinion had been issued before the date of entry into force of the Treaty of Lisbon, namely 1 December 2009, the reference date was the date of expiry of the period prescribed in the reasoned opinion (see Case C‑533/11 Commission v Belgium).

It followed that, given that, in the present case, the Commission issued the reasoned opinion on 26 June 2008, the reference date for the assessment of whether there had been a failure to fulfil obligations was the date of expiry of the period prescribed in that reasoned opinion, namely 27 August 2008.

The Court held that although Spain had put forward various arguments in connection with the amount of the unlawful aid at issue to be recovered or which had actually been recovered, it was clear from the written statements given in response to the questions put by the Court and the details given at the hearing that Spain accepted that, although all those arguments were admissible and well founded, a substantial part of the aid to be recovered in order to comply with the judgment in Commission v Spain had not been recovered at the expiry of the period prescribed by the Commission in the reasoned opinion.

According to the Court, Spain could not therefore reasonably argue that, within that period, it took all the measures necessary in order successfully to recover the unlawful aid at issue. The Court thus found that, by failing to take, by the date on which the period prescribed in the reasoned opinion issued by the Commission on 26 June 2008 expired, all the measures necessary to comply with the judgment in Commission v Spain, Spain had failed to fulfil its obligations under Article 260(1) TFEU.

The Court found that it was for the Court, in each case, in the light of the circumstances of the case before it and the degree of persuasion and deterrence which appeared to it to be required, to determine the financial penalties appropriate, such as an order for payment of a lump sum, in particular for preventing similar infringements of EU law from recurring (see: Case C‑121/07 Commission v France, and Case C‑279/11 Commission v Ireland).

The Court reiterated that an order to pay a lump sum was based essentially on the assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach had  persisted for a long period after the judgment initially establishing it was delivered (Case C‑241/11 Commission v Czech Republic).

The Court held that the imposition of a lump sum payment must depend in each individual case on all the relevant factors relating both to the characteristics of the infringement established and to the conduct of the Member State involved in the procedure initiated under Article 260 TFEU. The Court added that that provision conferred a wide discretion on the Court in deciding whether or not to impose such a penalty.

The Court reiterated that the Member State concerned must actually recover the sums owed, belated recovery after the prescribed time-limits have expired not satisfying the requirements of the EC Treaty (see Case C‑496/09 Commission v Italy). The Court held that if a Member State encountered unforeseen or unforeseeable difficulties or perceives consequences overlooked by the Commission, it must submit those problems for consideration by the Commission together with proposals for suitable amendments to the decision in question (Case C‑354/10 Commission v Greece EU and Case C‑411/12 Commission v Italy), which had not occurred in the present case. The Court find that the infringement of which Spain was accused lasted for a considerable period which in any event had no relation to the difficulties in recovering the aid paid under schemes that had been declared unlawful and incompatible with the internal market.

The Court added that in the present case, the unlawful aid in question was particularly harmful to competition because of its large amount and the unusually large number of recipients regardless of the economic sector of the recipients.  The Court held that where a Member State repeatedly engaged in unlawful conduct in such a manner in a specific sector governed by EU rules, this might be an indication that effective prevention of future repetition of similar infringements of EU law might require the adoption of a dissuasive measure, such as a lump sum payment  The Court therefore considered that it was justifiable in the present case to order Spain to pay a lump sum.


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Case C‑43/12, Commission v. Parliament and Council

Court annuls directive on exchange of information on eight road safety related traffic offenses

>> In 2008, the European Commission submitted to the Parliament and the Council a proposal for a directive seeking, in essence, to facilitate the exchange of information concerning certain road traffic offences and the cross-border enforcement of the sanctions attached to them. That proposal was based on Article 71(1) EC, now Article 91(1)(c) TFEU, which regulates the powers of the European in relation to transport safety. On 25 October 2011, the Parliament and the Council adopted Directive 2011/822, using however as a legal basis Article 87(2) TFEU, the EU’s competence in the field of police cooperation. Taking the view that the directive had been adopted on the incorrect legal basis, the Commission brought annulment proceedings before the Court of Justice.

In short, Directive 2011/822 sets up a procedure for the exchange of information between Member States in relation to eight road traffic offences (speeding, non-use of a seat-belt, failing to stop at a red traffic light, drink-driving, driving under the influence of drugs, failing to wear a crash helmet, use of a forbidden lane and illegally using a mobile telephone). The Member States may thus access each other's national data concerning vehicle registration in order to determine the person liable for the offence.

The Court first of all reiterated that, the choice of legal basis for a European Union measure must rest on objective factors that were amenable to judicial review; these included the aim and content of that measure (see e.g. Case C‑411/06 Commission v Parliament and Council EU, and Case C‑130/10 Parliament v Council).

The Court added that if examination of the measure concerned revealed that it pursued a twofold purpose or that it had a twofold component and if one of those was identifiable as the main or predominant purpose or component, whereas the other was merely incidental, that measure must be based on a single legal basis, namely that required by the main or predominant purpose or component (see e.g. Case C‑137/12 Commission v Council).

The Court thus found that in order to assess whether the present action was well founded, both the aim and the content of Directive 2011/82 must therefore be examined, in order to determine whether that directive could have been validly adopted — as contended by the Council and the Parliament — on the basis of Article 87(2) TFEU rather than on the basis of Article 91(1)(c) TFEU, which was relied on by the Commission as the appropriate legal basis.

The Court found that the  system of information exchange as laid down in the Directive might  increase deterrence in relation to road traffic offences and induce more cautious behaviour by the driver of a vehicle that was registered in a Member State other than the Member State of the offence, thereby helping to reduce the number of casualties due to road traffic accidents.

The Court thus held that the main aim of Directive 2011/82 was to improve road safety which, as stated in recital 1 in the preamble to that directive, was a prime objective of the European Union’s transport policy.

With regard to the content of Directive 2011/82, the Court found that the system for the exchange of information between the competent authorities of the Member States set up by the directive provided the means of pursuing the objective of improving road safety and enabled the European Union to attain that aim.
The Court thus concluded that since, both in respect of its aims and its content, Directive 2011/82 was  a measure to improve transport safety within the meaning of Article 91(1)(c) TFEU, it should have been adopted on the basis of that provision.  Thus, since the action was well founded, Directive 2011/82 was annulled.

The Court however found that there were important grounds of legal certainty why the Court should maintain the effects of that directive until the entry into force, within a reasonable period of time — which might not exceed twelve months as from the date of delivery of the present judgment — of a new directive based on the correct legal basis -  Article 91(1)(c) of the TFEU.

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