In its ruling of 20 April 2023 in Case C-348/22, the Court of Justice of the EU provided further clarification on the scope and the effects of Directive 2006/123/EC, and more specifically of its Article 12. This ruling confirms and complements the Promoimpresa judgment of 14 July 2016 on the qualification and the legal framework applicable to State concessions.
Background to the dispute
In the case at hand, the Italian Competition and Markets Authority (“AGCM”) brought a claim before the Regional Administrative Court of Puglia (Italy) (the “referring court”) against the Municipality of Ginosa to seek annulment of its decision of 24 December 2020 (the “Extension Decision”). By this decision, the Municipality of Ginosa, extended the concessions for the occupation of the State-owned maritime property until 31 December 2033, in accordance with a national law of 2018. This law was adopted despite the fact that Directive 2006/123/EC (the ”Services Directive”), transposed into the Italian legal order, required that, in order to grant concessions for the occupation of the public maritime domain, a Member State must apply a selection procedure between potential candidates when the number of authorisations for the occupation of the State-owned maritime property is limited. This authorisation must be granted for a limited period of time and may not be subject to an automatic renewal procedure.
Following the adoption of the Extension Decision, the AGCM, which considered that it was contrary to the principles of competition and freedom of establishment, issued a reasoned opinion to the Municipality of Ginosa in which it recalled the requirement for a prior public procurement procedure and stressed that the national provisions automatically extending concessions should be left unapplied.
Given the refusal of the Municipality of Ginosa to comply with this opinion, the AGCM referred the matter to the referring court, who subsequently referred several questions to the Court of justice of the EU (“the Court”) regarding the scope, the validity, the nature and the effects of the Services Directive.
The Court’s findings
Article 12(1) and (2) of the Services Directive does not apply only to concessions for the occupation of State-owned maritime property which are of a certain cross-border interest. On the applicability of the Services Directive, the Court started by recalling that the provisions on Chapter III thereof relating to the freedom of establishment, which include Article 12, have to be interpreted as meaning that they also apply to a situation where all the relevant elements are confined to a single Member State. Accordingly, the Court concluded that Article 12(1) and (2) of the Services Directive does apply to all concessions for the occupation of State-owned maritime property, irrespective of whether they are of a certain cross-border interest.
The assessment of the scarcity of natural resources and available concessions can be made by combining an abstract and general approach at national level and a case-by-case approach. According to the Court, the assessment of the scarcity of natural resources and available concessions, provided for in Article 12(1) of Services Directive, may be carried out by an abstract and general approach that is valid for the entire national territory, but also by a case-by-case approach that focuses on the situation existing in the coastal territory of a municipality or of the competition administrative authority. The Court further clarifies that a combination of these approaches can also be used. What matters is that, when assessing the scarcity of available natural resources, a Member State uses criteria based on objective, non-discriminatory, transparent and proportionate factors.
Article 12(1) and (2) of the Services Directive has a direct effect. The Court ruled on the interpretation of Article 12(1) and (2) by stating that this provision has direct effect. Regarding Article 12(1), the Court considered that by requiring the organisation of an impartial and transparent selection procedure, this provision prescribes, in unconditional and sufficiently precise terms, content comprising minimum protection in favour of potential candidates. The Court further stated that the obligation contained in Article 12(2) prohibiting Member States from providing automatic and general renewal of concessions, must also be considered as defined unconditionally and sufficiently precisely.
The Court found that the direct effect of these rules implies that they must be applied by national courts and the administrative authorities. This clarifies the findings of the Promoimpresa judgment in which the Court stated that it is the responsibility of the national courts to verify whether the condition relating to the scarcity of natural resources laid down in Article 12 was met. The Court thus stressed in the present judgment that this obligation of interpretation is not only incumbent on national courts but also on any administrative authorities. Consequently, national courts and the administrative authorities are required to organise a selection procedure for potential candidates and ensure that all conditions laid down in Article 12 are satisfied. If necessary, they have to leave unapplied national rules which conflict with it.
For further information about this case and/or for general legal advice relating to public procurement law, please contact Peter Teerlinck and Raluca Gherghinaru.