Case C-426/10 P, Bell and Ross

Bell  and Ross sought to have set aside the order of the General Court of the European Union of 18 June 2010 in Case T‑51/10 Bell and Ross v OHIM (‘the order under appeal’), by which that court dismissed as manifestly inadmissible, by reason of its lateness, the appellant’s action against a decision of the Third Board of Appeal of OHIM of 27 October 2009 (case R 1267/2008‑3) relating to invalidity proceedings between Klockgrossisten I Norden AB and Bell & Ross.

By application received by fax at the Registry of the General Court on 22 January 2010, the appellant brought an action against the decision of the Third Board of Appeal of OHIM of 27 October 2009. That application was received at the Registry before the expiry, on 25 January 2010, of the time-limit for bringing proceedings.

By letter of 28 January 2010, the appellant indicated that it was transmitting to the Registry of the General Court the original of the application sent by fax on 22 January 2010 and its annexes, as well as seven sets of true copies of the application and the documents required by Article 44(3) to (5) of the Rules of Procedure of the General Court.

On 2 February 2010, the Registry contacted the appellant to bring to its attention the fact that the original of the application could not be identified with certainty from among the documents lodged on 1 February 2010.

By letter of 3 February 2010, the appellant’s lawyer sent the copy of the application which remained on his file to the Registry, explaining:

‘Since I am convinced that I previously sent you the original document with a set of photocopies, I cannot tell you whether or not the attached document is the original. I am of the view that it is the copy that we kept in the file. I leave you to examine it, and accordingly look forward to hearing your views.’

On 5 February 2010, the Registry of the General Court informed the appellant that it had concluded that that document was an original, since the black ink smudged slightly after a damp cloth had been applied to the signature.

The Registry of the General Court entered the application in the register on 5 February 2010, that is, after the expiry of the 10-day period which ran from the transmission of the application by fax, in accordance with Article 43(6) of the Rules of Procedure of the General Court.

By letter of 12 February 2010, the appellant claimed an excusable error to justify the lodgment of the signed original application after the expiry of the abovementioned 10-day period.

 By the order under appeal, the General Court dismissed the application as manifestly inadmissible on the basis of Article 111 of its Rules of Procedure. The General Court recalled that Article 43(6) of its Rules of Procedure provides for a 10-day period within which to lodge the original of an application transmitted by fax. Taking account of this additional period, the original of the application should have reached the Registry before the expiry of that period on 1 February 2010. Since the original of the application was received on 5 February 2010, however, the application was lodged out of time, and there was no excusable error permitting derogation from the time-limit for bringing proceedings

 In support of its appeal, the appellant put forward six pleas in law.

By its first plea, the appellant stated that the Advocate General was not heard, in breach of Article 111 of the Rules of Procedure of the General Court.

The Court however held that, although Article 111 of the Rules of Procedure of the General Court, on which the order under appeal was based, required the Advocate General to be heard, Article 2(2) of those rules of procedure stated that references to the Advocate General ‘apply only where a Judge has been designated as Advocate General’. In the present case, however, no judge was designated as Advocate General in the proceedings before the General Court.

But its second plea, the appellant complained that the General Court wrongly interpreted Article 43 of its Rules of Procedure in considering that the application was lodged out of time. The appellant argued that the relevant issue was that of identifying the original application. Article 43 did not specify detailed rules for the signing of the application (colour, type of pen, etc). It argued that the damp cloth test to which the General Court had recourse was questionable, as some inks did not smudge. In the order under appeal, the General Court, without referring to the method which allowed it to distinguish the original from the copy, therefore imposed conditions additional to those set out in Article 43 of its Rules of Procedure.

The Court however held that the order under appeal did not impose any particular requirement in terms of detailed rules for the signing of an application, or the means by which the original nature of the signature that must appear on it might be evidenced.

The Court furthermore argued it was not disputed that the version of the application received at the Registry after the expiry of the time-limit for bringing proceedings bore the lawyer’s original signature.

By its third plea, the appellant submitted that the General Court erred in law by failing to provide an opportunity to put the application in order pursuant to Article 7(1) of the Instructions to the Registrar and point 57(b) of the Practice Directions to Parties.

The Court pointed out that Article 43(1) of the Rules of Procedure of the General Court requiredthe lodgment of the original of every pleading, signed by the party’s lawyer, whereas, under Article 43(6) of the Rules of Procedure, the date on which a copy of the signed original of a pleading was received at the Registry of the General Court by fax was to be deemed to be the date of lodgment for the purposes of compliance with the time-limits for taking steps in proceedings only if the signed original of the pleading was lodged at the Registry no later than 10 days after receipt of that fax.

The Court held that the failure to submit the signed original of the application was not one of the defects capable of being regularised under Article 44(6) of the Rules of Procedure of the General Court. Thus, an application which was not signed by a lawyer was affected by a defect which was such as to entail the inadmissibility of the action upon the expiry of the procedural time-limits, and could not be put in order (see order in Case C‑163/07 P Diy-Mar Insaat Sanayi ve Ticaret and Akar v Commission [2007]).

By its fourth and fifth pleas, the  appellant pleaded an excusable error. It argued that, given the considerable volume of copies required (2 651 pages in total), it had to turn to an external service provider. The latter forgot to include one document in the package sent to the General Court, an error which the lawyer was able to put right in time. It argued that the confusion between the original and the copies stemmed from external and exceptional circumstances attributable to an omission on the part of the service provider.

The Court however held that the responsibility for preparing, monitoring and checking procedural documents to be lodged at the Registry rested with the lawyer of the party concerned. Accordingly, the fact that the confusion between the original and the copies of the application was attributable to the intervention of a third party, a company instructed by the appellant to make copies, and the other circumstances put forward by the appellant could according to the Court not be considered exceptional circumstances or abnormal events unconnected to the appellant entitling it to rely on excusable error or unforeseeable circumstances.

By its sixth plea, the appellant alleged that in declaring the action inadmissible even though seven copies of the application, all bearing the lawyer’s signature, had been received within the time-limits, the General Court infringed the principles of proportionality and the protection of legitimate expectations.  

 The Court pointed out that, as the original of the application was not submitted within the prescribed time‑limit, the appellant’s action was inadmissible. That conclusion was not affected by the appellant’s reliance on the principle of proportionality.  

 With regard to the alleged breach of the principle of the protection of legitimate expectations, the Court recalled that the Court had repeatedly held that the right to rely on that principle extended to any person with regard to whom an institution of the European Union had given rise to justified hopes.

The Court however held that the appellant had not put forward, in support of its appeal, any matter justifying a conclusion that the General Court gave it precise assurances regarding its application’s compliance with procedural requirements.

 The Court hence dismissed the appeal

 Text of Judgment

Case C‑148/09 P, Belgium v. Deutsche Post AG and DHL International

Lawfulness of a decision not to raise objections 

In this appeal case , Belgium, supported by the European Commission, sought to have set aside the judgment of the Court of First Instance of the European Communities of 10 February 2009 in Case T-388/03 Deutsche Post and DHL International v Commission [2009], annulling the Commission’s decision of 23 July 2003 not to raise objections, following the preliminary examination procedure provided for in Art. 88(3) EC, to several measures taken by the Belgian authorities in favour of La Poste SA, the Belgian public postal undertaking (C(2003) 2508 final).

La Poste SA (‘La Poste’) was converted to a share company governed by public law in 1992, but remained the operator of the universal postal service in Belgium and had to meet specific obligations in regard to services of general economic interest (‘SGEIs’). The detailed rules for compensating the additional net cost of SGEIs were determined in the management contract concluded with the Belgian State.

The express parcels sector accounts for 4% of the turnover of La Poste, which corresponded to an 18% market share in that sector. Deutsche Post AG (‘Deutsche Post’) and its Belgian subsidiary DHL International held a 35 to 45% share of that market.

After three meetings with the Belgian authorities as well as several exchanges of letters, the Commission found that the capital contribution notified by those authorities was compatible with the common market.

The contested decision hence was a decision not to raise objections, adopted under Art. 4(3) of Regulation 659/1999, the lawfulness of which depended on whether there were doubts as to the compatibility of the aid with the common market. Since such doubts must trigger the initiation of a formal investigation procedure in which the interested parties referred to in Art. 1(h) of Regulation 659/1999 could participate, it must be held that any interested party within the meaning of the latter provision was directly and individually concerned by such a decision.

The Court held that if the beneficiaries of the procedural guarantees provided for in Art. 88(2) EC and Art. 6(1) of Regulation 659/1999 were to be able to ensure that those guarantees were respected, it must be possible for them to challenge before the European Union judicature the decision not to raise objections (see Case C-83/09 P Commission v Kronoply and Krontex [2011]).

The Court held that by seeking the annulment of a contested decision not to raise objections, an applicant essentially alleged that the Commission adopted the decision in relation to the aid at issue without initiating the formal investigation procedure, thereby acting in breach of the applicant’s procedural rights. In order to have its action for annulment upheld, the applicant might rely on any plea to show that the assessment of the information and evidence which the Commission had at its disposal during the preliminary examination phase of the measure notified should have raised doubts as to the compatibility of that measure with the common market. According to the Court, the use of such arguments could not, however, change the subject-matter of the action or the conditions for its admissibility. The Court held that the existence of doubts concerning that compatibility was precisely the evidence which must be adduced in order to show that the Commission was required to initiate the formal investigation procedure under Art. 88(2) EC and Art. 6(1) of Regulation 659/1999.

The Court held that it followed from Art. 4(4) of Regulation 659/1999 that if, following the preliminary examination, it found that the contested measure raises doubts as to its compatibility with the common market, the Commission was required to adopt a decision initiating the formal investigation procedure under Art. 88(2) EC and Art. 6(1) of that regulation.

The Court pointed out the lawfulness of a decision not to raise objections adopted under Art. 4(3) of Regulation 659/1999 depended on whether there were doubts as to the compatibility of the aid with the common market.

The Court held that the concept of “doubts” referred to in Art. 4(4) of Regulation 659/1999 was an objective one and their existence must be sought not only in the circumstances in which the contested measure was adopted but also in the assessments upon which the Commission relied (see, to that effect, Case C-431/07 Bouygues and Bouygues Télécom v Commission [2009]).

Text of judgment

Case C-120/10, European Air Transport SA

Member States can establish maximum noise levels, as measured on the ground, to be complied with by airlines overflying areas located near an airport

Case C-120/10, European Air Transport SA

In order to reduce noise pollution generated by aircraft using EU airports, Directive 2002/301 permitted Member States to adopt restrictive measures known as “operating restrictions’. Operating restrictions could be adopted only where certificated noise levels measured at source – that was the aircraft itself – were exceeded. More specifically, Directive 2002/30 took into account, in essence, the certificated noise levels of an aircraft. That noise certification was carried out according to a theoretical reference system of meteorological, geophysical and operational conditions. That reference system took into account the following parameters: sea level, ambient temperature, moisture content, approved soil characteristics and microphone height as well as flight path and flight data recorders.

Brussels-National Airport (Belgium) was located in the Région flamande (Flanders Region), although the flights operating from it also overfly the Région de Bruxelles-Capitale (Brussels-capital region) at a low height.

This case stemmed from a dispute between the airline European Air Transport (EAT) – specialising in operating cargo flights (DHL group) – and the Région de Bruxelles-Capitale (Belgium) and the Collège d’environnement de la Région de Bruxelles-Capitale.

On 19 October 2007, the competent regional authorities imposed an administrative penalty of €56 113 on EAT for exceeding, during the night, the limit values laid down in the rules of the Région de Bruxelles-Capitale. According to those rules, the limit values were measured on the ground.

The referring court inter alia asked whether the concept of “operating restriction” in Art. 2(e) of Directive 2002/30 must be interpreted as including rules imposing limits on noise levels, as measured on the ground, to be complied with by aircraft overflying areas located near the airport and providing that any person responsible for exceeding those limits might incur a penalty.

The Court held that operating restrictions were applicable only when any other noise management measures had failed to achieve the aims of Directive 2002/30, as laid down in Art. 1. Recital 10 in the preamble to that Directive stated that the balanced approach constituted a policy approach to address aeroplane noise, including international guidance for the introduction of operating restrictions on an airport‑by-airport basis. The “balanced approach” to aircraft noise management, defined in Resolution A33-7, adopted by the 33rd ICAO Assembly, comprised four principal elements and required careful assessment of all different options to mitigate noise, including reduction of aeroplane noise at source, land-use planning and management measures, noise abatement operational procedures and operating restrictions, without prejudice to relevant legal obligations, existing agreements, current laws and established policies (Case C‑442/05 Commission v Belgium [2007]).

The Court held that an operating restriction within the meaning of Art. 2(e) of that directive concerned a prohibition on access to the airport in question, whether the prohibition was absolute or restricted.

However, environmental legislation, such as that at issue in the main proceedings, imposing limits on maximum noise levels, as measured on the ground, to be complied with by aircraft overflying areas located near the airport, did not itself constituted a prohibition on access to the airport in question.

The Court held that Article 2(e) of Directive 2002/30 must be interpreted as meaning that an “operating restriction” was a prohibition, absolute or temporary, that prevented the access of a civil subsonic jet aeroplane to a European Union airport. Consequently, national environmental legislation imposing limits on maximum noise levels, as measured on the ground, to be complied with by aircraft overflying areas located near the airport, did not itself constituted an “operating restriction” within the meaning of that provision, unless, in view of the relevant economic, technical and legal contexts, it could have the same effect as prohibitions of access to the airport in question.

 Text of Judgment

Case C‑347/09, Dickinger and Ömer

Monopoly on operation of internet casino games justifiable only if it seeks in consistent and systematic manner to combat risks connected with such games

This reference for a preliminary ruling concerned the interpretation of Arts 43 EC and 49 EC freedom to provide services and freedom of establishment. The reference was made in the course of criminal proceedings brought against Mr Dickinger and Mr Ömer alleging failure by bet-at-home.com Entertainment, a company incorporated under Austrian law of which they were the directors, to comply with the Austrian legislation on the operation of games of chance, more precisely the offering of casino games over the internet.

The Austrian Federal Law on games of chance (Glücksspielgesetz, BGBl. 620/1989 (GSpG)), provided in Paragraph 3, “Monopoly of games of chance’, that the right to organise games of chance was reserved to the Austrian State. Paragraphs 14 and 21 of the GSpG provided in parallel that the Federal Finance Minister might grant concessions for the organisation of lotteries and the operation of casinos respectively. Since sporting bets were not regarded as gambling in the strict sense, they, with the exception of a form of totalisator betting called “Toto’, were not subject to the rules laid down by the GSpG.

Casino games marketed over the internet were, under Paragraph 12a of the GSpG, treated as lotteries and were consequently subject to the concession rules for lotteries rather than those for casinos. Paragraph 12a, which was inserted in the GSpG in 1997 (BGBl. I, 69/1997), contained the following definition of the term “electronic lotteries’:

‘lotteries where the gaming contract was concluded via electronic media, the decision on winning or losing was centrally brought about or made available, and the player could discover the outcome immediately after taking part in the game’.

A concession for the organisation of lotteries might, under Paragraph 14(2) of the GSpG, be granted only to an operator which:

‘1. was a capital company established in Austria,

2. had no owners (partners) who had a dominant influence and whose influence did not ensured reliability from a regulatory point of view,

3. had a supervisory board and paid-up nominal or share capital of at least EUR 109 million; the lawful origin of the funds must be showed in proper form,

4. appointed managers who, on the basis of corresponding previous training, were qualified, had the necessary characteristics and experience for running the business properly, and were not subject to any ground of exclusion under Paragraph 13 of the Trade Code (Gewerbeordnung) 1973 … and

5. might on the basis of the circumstances (in particular experience, knowledge and funds) be expected to produce the best federal tax revenue (concession levy and betting duty), and

6. in whose case the structure of any group to which the owner or owners of a qualified holding in the undertaking belonged did not prevent effective supervision of the holder of the concession.’

A concession might, under Paragraph 14(3)(1) of the GSpG, be granted for a maximum period of 15 years. The first sentence of Paragraph 14(5) of the GSpG provided that, as long as a lottery concession was in force, no other concessions might be granted.

If several applicants who satisfy the conditions set out in Paragraph 14(2) of the GSpG applied for a concession, the Federal Finance Minister was required, under the second sentence of Paragraph 14(2), to decide on the basis of the criterion in Paragraph 14(2)(5), in other words to award the contract to the operator who might be expected to produce the best federal tax revenue.

Österreichische Lotterien GmbH (‘Österreichische Lotterien’) was a limited liability company governed by private law. By decision of the Federal Finance Minister of 16 March 1995, it was granted the sole concession for the organisation of lotteries in Austria for the period from 1 December 1994 to 31 December 2004. After the establishment of “electronic lotteries” by the insertion of Paragraph 12a into the GSpG in 1997, that company’s concession was expanded to include lotteries of that kind and extended to 2012, by decision of the Federal Finance Minister of 2 October 1997. The duration of the concession was defined, having regard to the maximum of 15 years, to 30 September 2012.

The majority shareholder in Österreichische Lotterien was Casinos Austria AG (‘Casinos Austria’), a share company governed by private law which held the 12 concessions for casinos provided for by the GSpG (see Case C‑64/08 Engelmann [2010], on which I wrote this post). At the material time for the main proceedings, one third of the shares in the capital of Casinos Austria were held indirectly by the State and the remainder by private investors.

Mr Dickinger and Mr Ömer, who were Austrian nationals, were the founders of the multinational on-line games group bet-at-home.com. Criminal proceedings were brought against Mr Dickinger and Mr Ömer in their capacity as directors of bet-at-home Entertainment, alleging infringements of Paragraph 168(1) of the StGB. The indictment was worded as follows:

‘[Mr] Dickinger and [Mr] Omer, as decision-maders of [bet-at-home-com Entertainment], had from 1 January 2006 to date committed the offence of gaming under Paragraph 168(1) of the StGB for the benefit of [bet-at-home-com Entertainment] by offering over the internet, for unlimited stook, games in which winning and losing depended exclusively or predominantly on chance or which were expressly prohibited, namely various kinds of poker (Texas held’Em, Seven Card Stud, etc), blackjack, baccarat, table games such as roulette and virtual “one‑armed bandits”, in order to obtain a pecuniary advantage for themselves or another person, in particular [bet-at-home-com Entertainment]’.

Mr Dickinger and Mr Ömer pleaded that the national legislation applicable to games of chance was unlawful from the point of view of Arts 43 EC and 49 EC.

The referring court inter alia asked whether legislation of a Member State providing for criminal penalties for persons infringing a monopoly of operating games of chance, such as the monopoly laid down by the national legislation at issue in the main proceedings, must be compatible with the fundamental freedoms guaranteed by the Treaty, and in particular with Art. 49 EC.

The Court of Justice reiterated that European Union law set certain limits to the powers of Member States in criminal matters, since criminal legislation might not restrict the fundamental freedoms guaranteed by European Union law (see, to that effect, Case 186/87 Cowan [1989], and Case C‑348/96 Calfa [1999]).

The Court therefore held that European Union law, in particular Art. 49 EC, precluded the imposition of criminal penalties for infringing a monopoly of operating games of chance, such as the monopoly of operating internet casino games laid down by the national legislation at issue in the main proceedings, if such legislation was not compatible with European Union law.

The Court furthermore held that Article 49 EC applied to an operator of games of chance established in one Member State who offered his services in another Member State, even if he made use for that purpose of intermediaries established in the same Member State as the recipients of those services (see also Case C‑243/01 Gambelli and Others [2003]). That article applied a fortiori where the operator of games of chance made use not of intermediaries but of a mere provider of computer supported services in the host Member State.

The Court therefore held that Article 49 EC must be interpreted as applying to services of games of chance marketed over the internet in the territory of a host Member State by an operator established in another Member State despite the fact that the operator:

– had set up certain computer supported infrastructure, such as a servedr, in the host Member State and

– made use of computer supported services of a provider established in the host Member State in order to provide his services to consumers who were likewise established in that Member State.

The referring court also informed on the conditions under which Art. 49 EC allowed a monopoly of the organisation of casino games marketed over the internet to be set up for the benefit of a single operator.

The Court answered that legislation of a Member State such as that at issue in the main proceedings under which exclusive rights to organise and promote games of chance were conferred on a single operator, and all other operators, including operators established in another Member State, were prohibited from offering over the internet services within the scope of that regime in the territory of the first Member State, constituted a restriction on the freedom to provide services guaranteed by Art. 49 EC

However, such a restriction of the freedom to provide services might be allowed as a derogation expressly provided for in Arts 45 EC and 46 EC, applicable in this area by virtue of Art. 55 EC, or justified in accordance with the case-law of the Court by overriding reasons in the public interest.

The Court held that where a monopoly system had been established in a Member State for games of chance and that system was incompatible with Art. 49 EC, an infringement by an economic operator could not be penalised by criminal penalties.

Conditions for establishing a monopoly of games of chance

The Court held that objectives pursued by national legislation adopted in the area of betting and gaming, considered as a whole, usually concerned the protection of the recipients of the services in question and of consumers more generally, and the protection of society.

The mere fact that a Member State had opted for a system of protection which differed from that adopted by another Member State could not affect the assessment of the need for and proportionality of the relevant provisions. Those provisions must be assessed solely by reference to the objectives pursued by the competent authorities of the Member State concerned and the level of protection which they sought to ensure.

The Court held that the public authorities of a Member State might legitimately consider that the fact that, in their capacity as overseers of the entity holding the monopoly, they would have additional means of influencing its conduct outside the statutory regulating and monitoring mechanisms was likely to secure for them a better command over the supply of games of chance and better guarantees that their policy would be implemented effectively than in the case where those activities were carried on by private operators in a situation of competition, even if the latter were subject to a system of authorisation and a regime of supervision and penalties.

However, the Court reiterated that the restrictions imposed by the Member States must satisfy the conditions laid down in the Court’s case-law as regards their proportionality, a matter which it was for the national courts to determine. The Court held that it was for the referring court to ascertain, in the light inter alia of the development of the market for games of chance in Austria, whether the State controls to which the monopoly holder’s activities were subject were suitable for ensuring that the holder would in fact be able to pursue, in a consistent and systematic manner, the objectives relied on by means of a supply that was quantitatively measured and qualitatively planned by reference to those objectives (see Case C‑258/08 Ladbrokes Betting & Gaming and Ladbrokes International [2010]).

Pursuit of expansionist commercial policy by entity holding monopoly games of chance

 The referring court expresses doubts as to whether the monopoly set up by the national legislation at issue in the main proceedings might be regarded as appropriate for ensuring realisation of the objective of preventing incitement to squander money on gambling and of fighting against addiction to gambling, in view of the expansionist commercial policy pursued by the holder of the monopoly by means of an intensive advertising effort.

The Court of Justice answered that an increase in the commercial activity of an operator who had been granted exclusive rights in the field of games of chance and a substantial increased in the income received from those games required particular attention in the examination of whether the legislation at issue was consistedent and systematic, and hence whether it was appropriate for pursuing the objectives recognised by the Court’s case-law. According to that case-law, the financing of activities in the public interest by means of income from games of chance must not be the real aim of a restrictive policy in that sector, but could only be regarded as an incidental beneficial consequence (see, inter alia, Case C‑275/92 Schindler [1994]; Case C‑124/97 Läärä and Others [1999]; Case C‑67/98 Zenatti [1999]).

A Member State was not therefore entitled to rely on reasons of public policy relating to the need to reduce opportunities for gambling in so far as the public authorities of that State incite and encourage consumers to participate in games of chance so that the public purse could benefit.

The Court held that was for the referring court to assess, in the light of the circumstances of the dispute pending before it, whether the commercial policy of the holder of the monopoly might be regarded, both with regard to the scale of advertising undertook and with regard to the creation of new games, as forming part of a policy of controlled expansion in the sector of games of chance, aiming in fact to channel the propensity to gamble into controlled activities.

Location of registered office of holder of monopoly

The Court of Justice held, with respected more specifically to the objective of monitoring and supervising the holder of the monopoly and the Austrian Government’s argument that it was necessary to ensured effective supervision of economic operators, inter alia by the presence of State commissioners, that the concept of public policy, first, presumes that there was a genuine and sufficiently serious threat to a fundamental interest of society and, second, must, as a justification for a derogation from a fundamental principle of the Treaty, be narrowly construed (see, to that effect, Joined Cases 115/81 and 116/81 Adoui and Corneille [1982] ; Case C‑268/99 Jany and Others [2001] Case C‑161/07 Commission v Austria [2008]).

It was therefore for the referring court to determine, first, whether the objectives relied on by the Austrian Government were capable of falling within that concept and, if so, secondly, whether the obligation concerning the registered office at issue in the main proceedings satisfied the criteria of necessity and proportionality laid down in the Court’s case-law.

The Court held that a Member State seeking to ensure a particularly high level of consumer protection in the sector of games of chance might be entitled to consider that it was only by setting up a monopoly for a single entity subject to strict control by the public authorities that it could tackle crime linked to that sector and pursued the objective of preventing incitement to squander money on gambling and combating addiction to gambling with sufficient effectiveness;

Furthermore, to be consistent with the objective of fighting crime and reducing opportunities for gambling, national legislation establishing a monopoly of games of chance which allowed the holder of the monopoly to follow an expansionist policy must:

– be based on a founding that the crime and fraud linked to gaming and addiction to gambling were a problem in the Member State concerned which could be remedied by expanding authorized regulated activities, and

– allow only moderate advertising limited strictly to what was necessary for channeling consumers towards monitored gaming networks;

The Court held that the fact that a Member State had opted for a system of protection that differed from that adopted by another Member State could not affect the assessment of the need for and proportionality of the relevant provisions, which, according to the Court, must be assessed solely by reference to the objectives pursued by the competent authorities of the Member State concerned and the level of protection which they seek to ensured.

Text of judgment

Case C-506/08 P, Sweden v. MyTravel

Court further interprets scope of Access to Documents Regulation

The Access to Documents Regulation (Regulation 1049/2001) confers on the public a wide right of access to documents of the institutions of the European Union.

It also provides for a system of exceptions authorising the institutions to refuse access to a document in cases where its disclosure would undermine, in particular, the decision-making process and the protection of legal opinions, unless there is an overriding public interest in disclosure.

In 1999, when MyTravel (then called Airtours), a UK tour operator, informed the Commission of a planned merger with its competitor First Choice in order to obtain a decision authorising that operation. Authorisation was refused on the ground that it was incompatible with the common market. Following the action brought by MyTravel, the Commission’s decision was annulled by the General Court in 2002 (Case T-342/99, Airtours v Commission).

The Commission then established a working group comprising officials of the Directorate-General for Competition (‘DG Competition’) and the legal service in order to consider whether it was appropriate to bring an appeal against that judgment and to assess the implications of that judgment for merger control procedures or in other areas. The report of the working group was presented to the Commissioner responsible for competition prior to the expiry of the period allowed for bringing an appeal against the judgment of the General Court.

MyTravel made a request to the Commission for access to the report, to the documents relating to its preparation and the documents contained in the file relating to the merger, on which the report was based.

By two separate decisions, the Commission refused to communicate those documents on the ground that, first, their disclosure would undermine, in particular, the decision-making process and the protection of legal opinions and, secondly, there was no overriding public interest in disclosure.

By judgment of 9 September 2008(Case T-403/05), the General Court dismissed the action by MyTravel against those decisions on the ground that the Commission was entitled to refuse access to the documents requested in so far as their communication could have undermined the protection of the decision-making process of the institution and the protection of legal advice. Subsequently, Sweden decided to apply to the Court of Justice to have that judgment of the General Court set aside.

By this appeal, the Kingdom of Sweden sought to have set aside this judgment of the Court of First Instance of the European Communities.  

The Court held that  Regulation No 1049/2001 was intended to give the fullest possible effect to the right of public access to documents of the institutions (Joined Cases C-39/05 P and C-52/05 P Sweden and Turco v Council [2008], on which I wrote this post), Case C-139/07 P Commission v Technische Glaswerke Ilmenau [2010]; on which I wrote this post). 

However, that right was none the less subject to certain limitations based on grounds of public or private interest. More specifically, and in reflection of recital 11 in the preamble thereto, Article 4 of Regulation No 1049/2001 provided that the institutions were to refuse access to a document where its disclosure would undermine the protection of one of the interests protected by that provision. The Court however held that  since they derogated from the principle of the widest possible public access to documents, those exceptions must be interpreted and applied strictly (see, to that effect, Case C-266/05 P Sison v Council [2007], on which I wrote this post). and Case C-528/07 P and C-532/07 P Sweden and Others v API and Commission [2010]).

Thus, according to the Court, if the institution concerned decided to refuse access to a document which it had been asked to disclose, it must, in principle, explain how disclosure of that document could specifically and effectively undermine the interest protected by the exception – among those provided for in Article 4 of Regulation No 1049/2001 – upon which it was relying. Moreover, the risk of that undermining must be reasonably foreseeable and not purely hypothetical.

The Court furthermore held that once the decision was adopted, the requirements for protecting the decision-making process were less acute, so that disclosure of any document other than those mentioned in the second subparagraph of Article 4(3) of Regulation No 1049/2001 can never undermine that process and that refusal of access to such a document cannot be permitted, even if its disclosure would have seriously undermined that process if it had taken place before the adoption of the decision in question.

The Court of Justice found that the General Court should have required the Commission to indicate the specific reasons why that institution considered that closure of the administrative procedure did not exclude the possibility that refusal of access to the report might remain justified having regard to the risk of the said decision-making process being seriously undermined.

It followed that the General Court erred in law by holding that the Commission could, in such circumstances, refused access to the whole of the report.

The General Court had furthermore held that disclosure of the notes would risk communicating to the public information on the state of internal discussions between DG Competition and the legal service on the lawfulness of the assessment of the compatibility of the Airtours/First Choice concentration with the common market, which would, as such, risk affecting decisions which might fall to be made as regards the same parties or in the same sector.

Secondly, the General Court held that to accept that the notes in question should be disclosed would be liable to lead the legal service to display reticence and caution in the future in the drafting of such notes in order not to affect the Commission’s decision-making capacity in areas in which it was involved in its administrative capacity.

Thirdly, the General Court held that disclosure of those notes would risk putting the Commission in the difficult position in which its legal service might see itself required to defend a position before the Court which was not the same as the position which it had argued for internally in its role as adviser to the services responsible for the file, which it was its duty to perform during the administrative procedure.

The Court held that, first, the fear that disclosure of an opinion of the  Commission’s legal service relating to a draft decision could lead to doubts as to the lawfulness of the final decision, it was precisely openness in this regard that contributed to conferring greater legitimacy on the institutions in the eyes of European citizens and increasing their confidence in them by allowing divergences between various points of view to be openly debated. The Court held

 “It is in fact rather a lack of information and debate which is capable of giving rise to doubts in the minds of citizens, not only as regards the lawfulness of an isolated act, but also as regards the legitimacy of the decision-making process as a whole. Furthermore, the risk that doubts might be engendered in the minds of European citizens as regards the lawfulness of an act adopted by an institution because the latter’s legal service had given an unfavourable opinion would more often than not fail to arise if the statement of reasons for that act were reinforced, so as to make it apparent why that unfavourable opinion was not followed. “

Concerning, next, the argument that the legal service would be liable to be led to display reticence and caution, the Court held that the General Court, without in any way verifying whether that argument was supported by concrete and detailed evidence, based its reasoning solely on general and abstract considerations.

Finally, as regards the argument that the legal service might find itself obliged to defend before the Union judicature the legality of a decision in relation to which it had issued a negative opinion, the Court noted that an argument of such a general nature could justify an exception to the transparency required by Regulation 1049/2001.

Text of Judgment

Case C-309/10, Agrana Zucker

Surplus in restructuring fund not contrary to principle of conferral, nor unjust enrichment of European Union

This reference for a preliminary ruling concerned the interpretation and validity of Article 11 of Council Regulation 320/2006.
 

Regulation 320/2006 was adopted in order to bring the Community system of sugar production and trading into line with international requirements and to ensure its competitiveness in the future by launching a profound restructuring process of the sector leading to a significant reduction of unprofitable production capacity in the Community.

To that end, it established, by that regulation, a separate and autonomous temporary scheme for the restructuring of the sugar industry in the Community.  Within the framework of that temporary scheme, Regulation 320/2006 established  an economic incentive in the form of restructuring aid, intended for undertakings with the lowest productivity and designed to encourage them to give up their quota production. To that effect, Article 3 of that regulation provides for restructuring aid for four marketing years – the years 2006/2007 to 2009/2010 – with the aim of reducing production to the extent necessary to reach a balanced market situation in the Community.

In order to finance that restructuring aid  the Council set up a temporary restructuring fund and in particular decided that the financing for those measures would be ensured by raising temporary amounts from those sugar, isoglucose and inulin syrup producers which will eventually benefit from the restructuring process.
   

The referring court inter alia asked whether Article 11 of Regulation 320/2006 was contrary to the principle of conferral to the extent that it would permit the introduction of a general tax which was not limited to covering the financing expenditure for which the temporary amount was intended.

The Court held that it was necessary, in the light of the order for reference and the observations lodged before the Court, to examine the validity of that provision also in relation to the obligation to state reasons, the principle of proportionality and the alleged unjust enrichment of the European Union.

Agrana Zucker argued  that the levying of a tax which was used to finance measures which fall outside the common organisation of the markets in the sugar sector would vest that tax with the character of a general tax the imposition of which does not fall within the competence of the European Union.

The Court held that since it intended to contribute to the restructuring of the sugar industry in the Community, the raising of the temporary amount was a common agricultural policy measure lawfully adopted on the basis of Article 37 EC (see Case 265/87 Schräder HS Kraftfutter [1989], and Case C-8/89 Zardi [1990]).

According to the Court, the fact that a revenue surplus might arise on the expiry of such a temporary multiannual restructuring scheme, inter alia because producers had ultimately had less recourse than expected to the restructuring aid offered in return for the renunciation of production quotas, did not call into question the competence of the EU legislature to adopt that measure; nor did it divest the measure of its character as an agricultural measure.

The Court first of all argued that the legality of an EU measure must be assessed on the basis of the facts and the law as they stood at the time when the measure was adopted (see Joined Cases 15/76 and 16/76 France v Commission [1979]) and could not in particular depend on retrospective considerations relating to its efficacy (Case C-449/98 P IECC v Commission [2001])
.

Second, in so far as any surplus in the restructuring fund was assigned to the EAGF, of which that fund formed part, the surplus continued to be earmarked for financing common agricultural policy measures only.

It followed that Article 11 of Regulation No 320/2006 was not contrary to the principle of conferral.

Alleged unjust enrichment of the European Union

Agrana Zucker also submitted that the raising of the second instalment of the temporary amount for the marketing year 2008/2009 constituted unjust enrichment of the European Union and that the sugar producing undertakings are therefore justified in calling for the repayment of that second instalment, which was unlawfully levied.

The Court however held that a claim for restitution based on unjust enrichment of the European Union required, in order to succeed, proof of an enrichment on the part of the European Union for which there was no legal basis and of impoverishment on the part of the applicant which was linked to that enrichment (see, to that effect, Case C-47/07 P Masdar (UK) v Commission [2008]).

The Court held that Regulation No 320/2006 was valid in the light, specifically, of the principles of conferral and of proportionality and that the raising of the second instalment of the temporary amount for the 2008/2009 marketing year, notwithstanding the appearance of a surplus in the restructuring fund, was therefore not without valid legal foundation.

Consequently, the raising of that instalment did not constitute unjust enrichment of the European Union which might properly found a claim for restitution and, in any case, could not be relied upon for the purposes of assessing the validity of Article 11 of the regulation as the legal basis for raising that instalment.

 

Text of Judgment

Case C‑71/10, Office of Communications

Court further defines scope of public access to environmental information

This reference for a preliminary ruling concerned the interpretation of Article 4 of Directive 2003/4  on public access to environmental information 

At the request of the Department of Health, an independent investigation was conducted by experts into the risks connected with mobile phones. Their report, entitled ‘Mobile phones and Health’, identified as matters of public interest the location of base stations and the procedures for authorisation of those stations.

Subsequently, the United Kingdom Government set up a website called ‘Sitefinder’, which had been operated since the end of 2003 by the Office of Communications, in order to provide information on the location of mobile phone base stations in the United Kingdom. The site was constructed from information voluntarily provided by mobile phone operators from their databases. It made it possible for any individual to search a map square, by inputting a postcode, town or street name, for information about the base stations within it.

The Sitefinder website showed the approximate location in each square of each base station, but did not show either the precise location of the base station to within a metre; nor did it show whether the base station had been mounted at street level or concealed within or on top of a structure or building.

In 2005, an Information Manager for Health Protection Scotland, which was a branch of the National Health Service, asked the Office of Communications for the grid references for each base station.The Office of Communications refused the request, both initially and on review, relying on two grounds for refusal. First, the Office of Communications claimed that disclosure of that information would adversely affect public security within the meaning of Article 4(2)(b) of Directive 2003/4, as disclosure of the location of the sites would have included the location of the sites used to provide the police and emergency service radio network and could therefore be of use to criminals. Secondly, the Office of Communications relied on the adverse effect of disclosure of that information on the intellectual property rights of the mobile phone operators who had provided the information.

In subsequent proceedings, the Supreme Court of the United Kingdom asked the Court  whether a public authority, where it held environmental information or such information was held on its behalf, may, when weighing the public interests served by disclosure against the interests served by refusal to disclose, in order to assess a request for that information to be made available to a natural or legal person, take into account cumulatively a number of the grounds for refusal listed in Article 4(2) of Directive 2003/4, or whether it must weigh the interests served by refusal to disclose, one at a time, against the public interests served by disclosure.

The Court first of all noted that the right to information meant that the disclosure of information should be the general rule and that public authorities should be permitted to refuse a request for environmental information only in a few specific and clearly defined cases. The Court stressed that the grounds for refusal should therefore be interpreted restrictively, in such a way that the public interest served by disclosure was weighed against the interest served by the refusal.

The Court argued that, according to the introductory wording in Article 4(2) of Directive 2003/4, ‘Member States may provide for’ exceptions to the general rule that information must be disclosed to the public. That provision did not specify any particular procedure for examining the grounds for refusal in cases where a Member State had had  provided for such exceptions on that basis.

The Court pointed out that Recital 1 to Directive 2003/4 set out the various reasons for disclosure; they included, in particular, ‘a greater awareness of environmental matters, a free exchange of views, more effective participation by the public in environmental decision-making and … a better environment’.

The Court held that, therefore,the concept of ‘public interest served by disclosure’, referred to in the second sentence of the second subparagraph of Article 4(2) of that directive, must be regarded as an overarching concept covering more than one ground for the disclosure of environmental information.

The Court thus found that the second sentence of the second subparagraph of Article 4(2) was concerned with the weighing against each other of two overarching concepts, which meant that the competent public authority might, when undertaking that exercise, evaluate cumulatively the grounds for refusal to disclose.