# C_2014202EN.01001002.xml

| 30.6.2014 | EN | Official Journal of the European Union | C 202/10 |
| --------- | -- | -------------------------------------- | -------- |

---

Action brought on 10 April 2014 — European Commission v Hungary

(Case C-179/14)

2014/C 202/12

Language of the case: Hungarian

Parties

Applicant: European Commission (represented by: A. Tokár and E. Montaguti, agents)

Defendant: Hungary

Form of order sought

The Commission claims that the Court should

| 1. | Declare that Hungary has infringed Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market( 1 ) by adopting and maintaining in force the SZÉP card system governed by Government decree 55/2011 (IV. 12.), amended by Law CLVI of 2011, in so far as:
—
Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraph 2(2)(d) of Law XCVI of 1993, Paragraph 2(b) of Law CXXXII of 1997 and Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, precludes branches of companies from issuing SZÉP cards and thereby infringes Article 14(3) and Article 15(2)(b) of Directive 2006/123; —
Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, Paragraph 2(2)(d) of Law XCVI of 1993 and Paragraph 2(b) of Law CXXXII of 1997, does not recognise, for the purposes of the fulfilment of the conditions contained in Paragraph 13(a), (b) and (c) of the decree on the SZÉP card, the activity of groups of companies whose parent company is not a company incorporated under Hungarian law and whose constituent companies do not operate as companies under Hungarian law, and thereby infringes Article 15(1), (2)(b) and (3) of Directive 2006/123; —
Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, Paragraph 2(2)(d) of Law XCVI of 1993 and Paragraph 2(b) of Law CXXXII of 1997, retains the option for banks and other finance institutions to issue the SZÉP card since only those institutions are able to meet the conditions laid down by Paragraph 13 of the decree and thereby infringes Article 15(1), (2)(d) and (3) of Directive 2006/123; —
Paragraph 13 of the decree on the SZÉP card breaches Article 16 of Directive 2006/123 in that it makes the issue of the SZÉP card dependent on the existence of an establishment in Hungary. | — | Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraph 2(2)(d) of Law XCVI of 1993, Paragraph 2(b) of Law CXXXII of 1997 and Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, precludes branches of companies from issuing SZÉP cards and thereby infringes Article 14(3) and Article 15(2)(b) of Directive 2006/123; | — | Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, Paragraph 2(2)(d) of Law XCVI of 1993 and Paragraph 2(b) of Law CXXXII of 1997, does not recognise, for the purposes of the fulfilment of the conditions contained in Paragraph 13(a), (b) and (c) of the decree on the SZÉP card, the activity of groups of companies whose parent company is not a company incorporated under Hungarian law and whose constituent companies do not operate as companies under Hungarian law, and thereby infringes Article 15(1), (2)(b) and (3) of Directive 2006/123; | — | Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, Paragraph 2(2)(d) of Law XCVI of 1993 and Paragraph 2(b) of Law CXXXII of 1997, retains the option for banks and other finance institutions to issue the SZÉP card since only those institutions are able to meet the conditions laid down by Paragraph 13 of the decree and thereby infringes Article 15(1), (2)(d) and (3) of Directive 2006/123; | — | Paragraph 13 of the decree on the SZÉP card breaches Article 16 of Directive 2006/123 in that it makes the issue of the SZÉP card dependent on the existence of an establishment in Hungary. |
| -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| — | Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraph 2(2)(d) of Law XCVI of 1993, Paragraph 2(b) of Law CXXXII of 1997 and Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, precludes branches of companies from issuing SZÉP cards and thereby infringes Article 14(3) and Article 15(2)(b) of Directive 2006/123; | | | | | | | | |
| — | Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, Paragraph 2(2)(d) of Law XCVI of 1993 and Paragraph 2(b) of Law CXXXII of 1997, does not recognise, for the purposes of the fulfilment of the conditions contained in Paragraph 13(a), (b) and (c) of the decree on the SZÉP card, the activity of groups of companies whose parent company is not a company incorporated under Hungarian law and whose constituent companies do not operate as companies under Hungarian law, and thereby infringes Article 15(1), (2)(b) and (3) of Directive 2006/123; | | | | | | | | |
| — | Paragraph 13 of the decree on the SZÉP card, read in conjunction with Paragraphs 1, 2(1) and (2), 55(1) and (3) and 64(1) of Law IV of 2006, Paragraph 2(2)(d) of Law XCVI of 1993 and Paragraph 2(b) of Law CXXXII of 1997, retains the option for banks and other finance institutions to issue the SZÉP card since only those institutions are able to meet the conditions laid down by Paragraph 13 of the decree and thereby infringes Article 15(1), (2)(d) and (3) of Directive 2006/123; | | | | | | | | |
| — | Paragraph 13 of the decree on the SZÉP card breaches Article 16 of Directive 2006/123 in that it makes the issue of the SZÉP card dependent on the existence of an establishment in Hungary. | | | | | | | | |

| 2. | In the alternative, declare that the SZÉP card system set up by Decree 55/2011 of 12 April 2011 breaches Articles 49 TFEU and 56 TFEU in so far as the terms of Directive 2006/123 mentioned in point 1 are not applicable to the provisions mentioned in that point. |
| -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

| 3. | Declare that the Erzsébet voucher system provided for by Law CLVI of 2011 and Law CIII of 2012 which establishes a monopoly in favour of public bodies for the issue of vouchers for cold meals which entered into force without any appropriate prior transition period or the necessary transitional measures, breaches Articles 49 and 56 TFEU in so far as Paragraphs 1, 5 and 477 of Law CLVI of 2011 and Paragraphs 2(1) and (2), 6 and 7 of Law CIII of 2012 lay down disproportionate restrictions. |
| -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

| 4. | Order Hungary to pay the costs. |
| -- | ------------------------------- |

Pleas in law and main arguments

In 2011 Hungary amended the legislation on the issue of vouchers for hot and cold meals, holidays and leisure granted by undertakings to workers, which are deemed to be non-salary allowances and therefore fall within a more advantageous tax and social security regime. That legislation entered into force on 1 January 2012 without an appropriate transitional period. Before those amendments the national legislation laid down no specific or special conditions as regards the issue of such meal vouchers or their form. Following the introduction of those amendments, however, a public body, the Magyar Nemzeti Üdülési Alapítvány (Hungarian National Leisure Foundation), acquired a monopoly position as regards the issue of paper vouchers for hot meals and paper or electronic vouchers for cold meals. Further, the legislation imposes especially strict conditions on the issue of vouchers for hot meals, holidays and leisure which can now only be issued electronically. The contested measures have led to the exclusion from the market of several traders who had operated on this market for many years, constitute a restriction on the entry into the market of new traders and prevent the free movement of services. Moreover, the SZÉP card system reserves the market de facto for three large banking groups set up under Hungarian law, while the issue of Erzsébet vouchers is only possible in the framework of a State monopoly. The fact that the income of the public body which enjoys that monopoly is intended to meet social expenditure is not sufficient justification for the restrictions introduced. Under the relevant provisions of the FEU Treaty and Directive 2006/123, it is only possible to introduce restrictions on freedom of establishment and the freedom to provide services if such restrictions are not discriminatory and are in the public interest, and provided that they meet the requirements of necessity and proportionality.

---

( 1 )  Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36)

---