Case C-49/07, MOTOE

>> Court of Justice holds that public body can infringe competition law

MOTOE, a non‑profit‑making association governed by private law whose object was the organisation of motorcycling competitions in Greece, submitted to the competent minister an application for authorisation to organise such competitions.

That request was “forwarded” to the Greek Automobile and Touring Club, a legal person and a non‑profit‑making association which represented the International Motorcycling Federation in Greece, for it to consent for the purposes of granting the authorisation applied for as was required under Art. 49 of the Greek Road Traffic Code.

When the application was refused, MOTOE appealed, arguing that this provision was contrary, first, to the constitutional principle that administrative organs must be impartial and, second, to Articles 82 EC and 86(1) EC, on the ground that the national provision at issue enabled the Greek Automobile and Touring Club, which itself organised motorcycling competitions, to impose a monopoly in that field and to abuse that position.

The referring Court asked whether a legal person such as the Greek Automobile and Touring Club fell within the scope of Articles 82 and 86 EC, given that its activities consisted not only in taking part in administrative decisions authorising the organisation of motorcycling events, but also in organising such events itself and in entering, in that connection, into sponsorship, advertising and insurance contracts and, second, whether those Treaty provisions precluded a rule, such as that laid down in Art. 49 of the Greek Road Traffic Code, in so far as it conferred on such an association the power to give its consent to applications for authorisation to organise those events, without that power being made subject to restrictions, obligations or review.

The Court of Justice first of all held that Greek Automobile and Touring Club was an undertaking despite not making profit.The fact that, for the exercise of part of its activities, an entity was vested with public powers did not, in itself, prevent it from being classified as an undertaking for the purposes of Community competition law in respect of the remainder of its economic activities. The classification as an activity falling within the exercise of public powers or as an economic activity must be carried out separately for each activity exercised by a given entity.

The power of a legal person such as the Greek Automobile and Touring Club to give its consent to applications for authorisation to organise those events did not prevent its being considered an undertaking for the purposes of Community competition law so far as concerned its economic activities referred to above.

For the purposes of applying Art. 82 EC, the relevant product or service market included products or services which were substitutable or sufficiently interchangeable with the product or service in question, not only in terms of their objective characteristics, by virtue of which they were particularly suitable for satisfying the constant needs of consumers, but also in terms of the conditions of competition and the structure of supply and demand on the market in question.

The activities in which the Greek Automobile and Touring Club was engaged consisted, first, in the organisation of motorcycling events and, second, in their commercial exploitation by means of sponsorship, advertising and insurance contracts. Those two types of activities were not interchangeable but were rather functionally complementary.


The Court of Justice admitted that the activities in which the Greek Automobile and Touring Club engaged were confined to the territory of Greece. It held, however, that the territory of one Member State might still constitute a substantial part of the common market. (see also
Case C‑260/89 ERT [1991]).

The Court of Justice furthermore reiterated that Article 82 EC could not be infringed by a rule such as that laid down in Art. 49 of the Greek Road Traffic Code unless trade between Member States was affected by it.

Such an effect on trade between Member States could be assumed only if it was possible to foresee with a sufficient degree of probability, on the basis of a set of objective legal and factual elements, that the behaviour in question might have an influence, direct or indirect, actual or potential, on trade between Member States in such a way as might hinder the attainment of a single market between Member States. Purely hypothetical or speculative effects that the conduct of an undertaking in a dominant position might have did not satisfy that criterion. Similarly, the impact on intra-community trade must not be insignificant. (see
Case C‑475/99 Ambulanz Gl√∂ckner [2001] and Joined Cases C‑215/96 and C‑216/96 Bagnasco and Others [1999]).

According to the Court of Justice, the power to give consent to applications for authorisation to organise motorcycling events stemmed from an act of public authority, namely Art. 49 of the Greek Road Traffic Code, but it could not be classified as an economic activity. A legal person such as the Greek Automobile and Touring Club could not therefore be considered an undertaking entrusted with a service of general economic interest within the meaning of Art. 86(2) EC.

Nevertheless, the Court found that to entrust a legal person such as the Greek Automobile and Touring Club, which itself organised and commercially exploited motorcycling events, the task of giving the competent administration its consent to applications for authorisation to organise such events, was tantamount de facto to conferring upon it the power to designate the persons authorised to organise those events and to set the conditions in which those events were organised, thereby placing that entity at an obvious advantage over its competitors. Such a right might therefore lead the undertaking which possessed it to deny other operators access to the relevant market.

According to the Court, that situation of unequal conditions of competition was also highlighted by the fact that, when the Greek Automobile and Touring Club itself organised or participated in the organisation of motorcycling events, it was not required to obtain any consent in order that the competent administration granted it the required authorisation.

Furthermore, such a rule, which gave a legal person such as the Greek Automobile and Touring Club the power to give consent to applications for authorisation to organise motorcycling events without that power being made subject by that rule to restrictions, obligations and review, could lead the legal person entrusted with giving that consent to distort competition by favouring events which it organised or those in whose organisation it participated.

Text of Judgment