Case C-324/07, Coditel Brabant

Following a call for tenders, Coditel applied for a concession to operate the cable television network of the Municipality of Uccle. However, the Uccle municipal council (town hall pictured above) subsequently decided to sell the network rather than grant a concession, after which Coditel submitted a purchase bid under the terms of the relevant tender.

The only offer which was in conformity with the tender and permissible, namely the Coditel bid, was the lowest. Brutélé, an inter-municipal cooperative society whose members were municipalities and an inter-municipal association whose members in turn were solely municipalities, also responded to the call for tenders but not with a purchase bid but with an offer of affiliation.

In November 2000, the Municipality of Uccle decided not to sell the municipal cable television network. It furthermore decided that the municipality should become a member of Brutélé. Coditel appealed against these decisions.

The Belgian Conseil d’État asked whether Arts 43 and 49 EC, the principles of equal treatment and of non-discrimination on grounds of nationality and the concomitant obligation of transparency precluded a public authority from awarding, without calling for competition, a public service concession to an inter-municipal cooperative society of which all the members were public authorities, where those public authorities exercised over that cooperative society control similar to that exercised over their own departments and where that society carried out the essential part of its activities with those public authorities.

Furthermore, the referring Court asked whether, subject to verification of the facts by the referring court as regards the degree of independence enjoyed by the inter-municipal cooperative society in question, the control exercised by the public authorities might be regarded as enabling those authorities to exercise over the cooperative society control similar to that exercised over their own departments.

Thirdly, it asked whether, where a public authority joined an inter-communal cooperative of which all the members were public authorities in order to transfer to that cooperative society the management of a public service, it was possible, in order for the control which those member authorities exercised over the cooperative to be regarded as similar to that which they exercised over their own departments, for it to be exercised jointly by those authorities, decisions being taken by a majority, as the case might be.

The Court of Justice first of all held that, by becoming a member of Brutélé, the Municipality of Uccle entrusted it with the management of its cable television network. Brutélé’s remuneration came not from the municipality but from payments made by the users of that network. That method of remuneration was characteristic of a public service concession. The Court reiterated that the application of Articles 12, 43 and 49 EC, as well as of the general principles of which they were the specific expression, was precluded if the control exercised over the concessionaire by the concession-granting public authority was similar to that which the authority exercised over its own departments and if, at the same time, that entity carried out the essential part of its activities with the controlling authority or authorities (see
Case C‑107/98 Teckal [1999] and Case C-458/03 Parking Brixen [2005]).

The Court stressed that in order to determine whether a concession-granting public authority exercised a control similar to that which it exercised over its own departments, it was necessary to take account of all the legislative provisions and relevant circumstances. It must follow from that examination that the concessionaire in question was subject to a control which enabled the concession-granting public authority to influence that entity’s decisions. It must be a case of a power of decisive influence over both strategic objectives and significant decisions of that entity (see
Case C-340/04, Carbotermo & Consorzio v. Comune di Busto Arsizio [2006], on which I wrote this post).

The fact that the concession-granting public authority held, alone or together with other public authorities, all of the share capital in a concessionaire, tended to indicate – generally, but not conclusively – that that contracting authority exercised over that company a control similar to that which it exercised over its own departments.

The Court held that subject to verification of the facts by the referring court as regards the degree of independence enjoyed by the inter-municipal cooperative society in question, in circumstances such as those of the case before the referring court, where decisions regarding the activities of an inter-municipal cooperative society owned exclusively by public authorities were taken by bodies, created under the statutes of that society, which were composed of representatives of the affiliated public authorities, the control exercised over those decisions by the public authorities might be regarded as enabling those authorities to exercise over the cooperative society control similar to that exercised over their own departments.

The Court furthermore reiterated that where several public authorities controlled a concessionaire, the condition relating to the essential part of that entity’s activities might be met if account was taken of the activities which that entity carried out with all those authorities. The control exercised over the concessionaire by a concession-granting public authority must be similar to that which the authority exercised over its own departments, but not identical in every respect. The control exercised over the concessionaire must be effective, but it was not essential that it be exercised individually. (see
Case C-340/04, Carbotermo & Consorzio v. Comune di Busto Arsizio [2006] and Case C-458/03 Parking Brixen [2005]).

The Court concluded that where a public authority joined an inter-communal cooperative of which all the members were public authorities in order to transfer to that cooperative society the management of a public service, it was possible, in order for the control which those member authorities exercised over the cooperative to be regarded as similar to that which they exercised over their own departments, for it to be exercised jointly by those authorities.

Text of judgment