EU public procurement law applies, in general, to “contracting authorities” within the meaning of Directive 2014/24/EU, which includes the so-called “bodies governed by public law”, i.e. the bodies that have all of the following characteristics listed in Article 2(4) of this directive:
(a) they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) they have legal personality; and
(c) they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law; or are subject to management supervision by those authorities or bodies; or have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
In cases C-155/19 and C-156/19, the Italian Council of State sought to know whether the Italian Football Federation (FIGC) was a body governed by public law and, as such, had to comply with the EU public procurement rules.
Under Italian law, national sports federations such as the FIGC take the form of private law associations. They carry out the sports-related activities considered to have a public dimension pursuant to Italian legislation, in addition to other activities. The national sports federations are subject to oversight by the National Council and the National Board of the Italian National Olympic Committee (CONI) which is responsible to the competent Italian Ministry. However, representatives of the national sports federations sit within these bodies of the CONI, and even must represent the majority of voters within the CONI National Council.
In its judgment of 3 February 2021, the Court of Justice provided, firstly, clarification on the question whether an entity such as the FIGC may be regarded as having been “established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character” within the meaning of Article 2(4)(a) of Directive 2014/24.
In this respect, the Court of Justice observed that, in Italy, “the activity of general interest comprised by sport” is pursued by each of the national sports federations within the framework of tasks of a public nature expressly assigned to those federations and exhaustively listed in the CONI Statute. In addition, several of the tasks assigned to national sports federations seem not to be of an industrial or commercial nature (such as the supervision of the proper running of competitions and championships, the prevention and punishment of doping, and Olympic and high-level preparation). Therefore, the Court ruled that the FIGC appeared to satisfy the condition of Article 2(4)(a) of Directive 2014/24, subject to verification by the Council of State. In the Court’s view, that conclusion cannot be called into question by the fact that the FIGC has the legal form of an association governed by private law and that it was not, therefore, established by a formal act instituting a public administration. It is also irrelevant that the FIGC pursues, alongside the activities of general interest exhaustively listed in the CONI Statute, other activities which constitute a large part of its overall activities and are self-financed.
Secondly, the Court of Justice provided clarification on the question whether the FIGC must be regarded as “being subject to management supervision by a public authority” (i.e. the CONI), within the meaning of the second alternative of Article 2(4)(c) of Directive 2014/24.
In this respect, the Court considered that national sports federations enjoy “management autonomy” pursuant to Italian law, which seemed, a priori, to militate against active control on the part of the CONI to the extent that it would be in a position to influence the management of a national sports federation such as the FIGC, particularly in relation to the award of public contracts.
Nevertheless, the Court added that “such a presumption may be rebutted” if it is established that, in practice, the various powers conferred on the CONI in relation to the FIGC have the effect of making the FIGC dependent on the CONI to such an extent that the CONI may influence its decisions with regard to public contracts. The analysis of the CONI’s various powers must be the subject of an “overall assessment”, bearing in mind that, as a general rule, the existence of such control will likely be revealed by a “body of evidence”. While, according to the Court of Justice, that verification is solely a matter for the referring court, it nevertheless provided some clarification to guide the Italian Council of State in its decision.
Finally, the Court ruled that, assuming the CONI to be found as exercising supervision over the management of the national sports federations by the Council of State, the majority participation of the national sports federations in the CONI’s main deliberative and collegiate bodies “would be relevant only if it could be established that each national sport federation, considered individually, is in a position to exert a significant influence over the management supervision exercised by the CONI over it with the result that that supervision would be offset and such a national sports federation would thus regain control over its management, notwithstanding the influence of the other national sports federations in a similar situation”.
Please contact Peter Teerlinck or Raluca Gherghinaru for more information about this case and/or for general legal advice relating to public procurement.