Judgment;Abstract — ECLI:EU:C:2024:831
Date: 2024-10-04
Language of the case: Italian
Court formation: First Chamber
Subject matter: Right of establishment;Provisions governing the Institutions;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Italy

Summary C-242/23 – 1 
Case C-242/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
18 April 2023 
Referring court: 
Consiglio di Stato, Italy 
Date of the decision to refer: 
11 April 2023 
Appellant: 
Tecno*37 
Respondents: 
Ministero dello Sviluppo Economico 
Camera di Commercio Industria Artigianato e Agricoltura di 
Bologna 
  
Subject matter of the main proceedings 
Appeal brought by a company that had already brought an action at first instance 
against the judgment of the Tribunale Amministrativo Regionale (Regional 
Administrative Court; ‘TAR’) for Emilia Romagna, Italy, which had dismissed its 
action for annulment of a series of administrative decisions that, on the basis of 
the Italian legislation in force, had proscribed it from pursuing its property 
brokerage activity on the ground that it was incompatible with its property 
management activity. 
Subject matter and legal basis of the request 
Assessment of the conformity of Article 5(3) of Law 39/1989, establishing the 
incompatibility between property brokerage activity and property management 
activity, with Article 49 TFEU, Article 59(3) of Directive 2005/36/EC, and 
Articles 4(8) and 25(1) of Directive 2006/123/EC. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-242/23 
 
2  
More specifically, on the basis of Article 267 TFEU, the referring court asks (i) 
whether the current version of the national legislation at issue in the main 
proceedings, under which the incompatibility between property agency activity 
and property management activity is to be understood as relating and limited to 
business activities, is compatible with EU law; (ii) whether Article 59 of Directive 
2005/36/EC, Article 25(1) of Directive 2006/123/EC and, more generally, 
Article 49 TFEU preclude legislation such as that contained in Article 5(3) of Law 
No 39/1989, which establishes, as a preventive and general provision, 
incompatibility between property brokerage activity and property management 
activity, without this being justified by an overriding reason in the public interest 
or without a demonstration of the proportionality of such general incompatibility 
with regard to the objective pursued; (iii) whether a property agent may, in any 
event, also carry on the activity of property manager, except where this activity 
relates to the property he or she manages since, in such a case, there would be a 
conflict of interest. 
Questions referred for a preliminary ruling 
(1) Must Article 5(3) of Law 39/1989 as reworded following infringement 
proceeding No 2018/2175 now be regarded as fully consistent with [EU] law, in 
particular in the light of the closure of the infringement proceeding itself? 
(2) Do the principles and objectives of Article 59(3) of Directive 2005/36/EC (as 
amended by Directive 2013/55/[EU]) and Article 25(1) of Directive 2006/123/EC 
and, more generally, of Article 49 TFEU preclude rules such as the Italian rule 
contained in Article 5(3) of Law No 39/1989, which establishes, as a preventive 
and general provision, incompatibility between property brokerage activity and 
property management activity due to the mere fact that the two activities are 
carried out jointly and, therefore, without there being any need for chambers of 
commerce to subsequently ascertain on a case-by-case basis the nature of the 
brokerage carried out, without this being based on a specifically identified and 
proved ‘overriding reason in the public interest’ or, in any event, on a 
demonstration of the proportionality of the general incompatibility provided for 
with regard to the objective pursued? 
(3) Can a property agent in any case also act as a property manager, provided he 
or she does not seek to sell or purchase the property he or she manages since a 
conflict of interest would arise in this case? 
Provisions of European Union law relied on 
TFEU: Article 49 
Directive 2005/36/EC of the European Parliament and of the Council of 
7 September 2005 on the recognition of professional qualifications: Article 59(3). 
TECNO*37 
 
3 
Directive 2006/123/EC of the European Parliament and of the Council of 
12 December 2006 on services in the internal market – Article 25(1) and 
Article 4(8). 
Communication from the Commission to the European Parliament, the Council, 
the European Economic and Social Committee and the Committee of the Regions 
on reform recommendations for regulation in professional services, [Brussels 
10.1.2017 COM(2016)820 final; (SWD(2016) 436 final)] 
Case-law of the Court of Justice 
Judgments of the Court of Justice of 27 February 2020, Commission v Belgium, 
[C-384/18], EU:C:2020:124, paragraphs 48, 52, 55, and 57; of 4 July 2019, 
Commission v Germany, C-377/17, EU:C:2019:562, paragraph 74; of 28 January 
2016, Commission v Portugal, C-398/14, EU:C:2016:61, paragraph 48; of 
24 January 2018, Commission v Italy, C-433/15, EU:C:2018:31, paragraph 44. 
Provisions of national law relied on 
Law No 39/1989: Article 5(3). 
Initial wording of the provision: 
‘3. The pursuit of the activity of property brokerage shall be incompatible with: 
a) any public or private employment, with the exception of employment with 
undertakings or companies whose purpose is to carry on property brokerage; 
b) with membership of other professional associations, orders, rolls or registers 
and the like; 
c) engaging in independent business operations related to the specific type of 
brokerage activity to be pursued’. 
The wording resulting from an amendment introduced following infringement 
proceedings initiated by the European Commission against Italy on 19 July 2018 
(2018/2175), by Law 37/2019, Disposizioni per l’adempimento degli obblighi 
derivanti dall’appartenenza dell’Italia all’Unione europea – Legge europea 2018 
(Law No 37/2019, Provisions for the fulfilment of obligations arising from Italy’s 
membership of the European Union – European Law 2018): 
Article 2. Regulations concerning the profession of property broker: 
‘3. The pursuit of the activity of property brokerage is incompatible with the 
pursuit of business activities involving the production, sale, representation, or 
promotion of goods in the same commercial sector in which brokerage activity is 
carried on, and with activity carried on as an employee of a public or private body, 
or as an employee of a banking, financial, or insurance institution other than 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-242/23 
 
4  
brokerage undertakings, or with the pursuit of intellectual professions in the same 
commercial sector in the context of which the activity of brokerage is carried on 
and, in any case, in the event of a conflict of interest. 
Wording following a new amendment introduced, following the same infringement 
proceedings, by Law 238/2021, Disposizioni per l’adempimento degli obblighi 
derivanti dall’appartenenza dell’Italia all’Unione europea – Legge europea 2019-
2020 (Law No 238/2021, Provisions for the fulfilment of obligations arising from 
Italy's membership of the European Union – European Law 2019-2020): 
Article 4. Provisions on cooperation with assistance centres for the recognition of 
professional qualifications: 
‘3. The pursuit of the activity of property brokerage is incompatible with the 
pursuit of business activities involving the production, sale, representation, or 
promotion of goods in the same commercial sector in which brokerage activity is 
carried on, or with the status of employee of an entrepreneur, and with activity 
carried on as an employee of a public body or as an employee or collaborator in 
undertakings providing financial services as laid down in Article 4 of Legislative 
Decree No 59 of 26 March 2010, or with the pursuit of intellectual professions in 
the same commercial sector in the context of which the activity of brokerage is 
carried on and, in any case, in the event of a conflict of interest.’ 
The text currently in force results from the adoption of Law 118/2022, which 
added paragraph 3-bis: 
‘3. The pursuit of the activity of property brokerage is incompatible with the 
pursuit of business activities involving the production, sale, representation, or 
promotion of goods in the same commercial sector in which brokerage activity is 
carried on, or with the status of employee of an entrepreneur, and with activity 
carried on as an employee of a public body or as an employee or collaborator in 
undertakings providing financial services as laid down in Article 4 of Legislative 
Decree No 59 of 26 March 2010, or with the pursuit of intellectual professions in 
the same commercial sector in the context of which the activity of brokerage is 
carried on and, in any case, in the event of a conflict of interest. 
3-bis. By way of derogation from paragraph 3, pursuit of the activity of property 
agent shall be compatible with that of employee or collaborator in undertakings 
carrying on the activity of credit brokerage governed by Articles 128-sexies et 
seq. of the Consolidated Law on Banking and Credit, referred to in Legislative 
Decree No 385 of 1 September 1993. The pursuit of the activity of credit 
brokerage shall remain subject to the relevant sector-specific rules and related 
control’. 
TECNO*37 
 
5 
Succinct presentation of the facts and procedure in the main proceedings 
1 After receiving an alert, on 17 March 2020, the Director of the General 
Competition Division of the Ministero per lo sviluppo economico  (Ministry of 
Economic Development; ‘MISE’) invited the Camera di commercio, industria, 
artigianato e agricoltura (Chamber of Commerce, Industry, Crafts and 
Agriculture; ‘CCIAA’) of Bologna, Italy to submit observations on the possible 
incompatibility and/or conflict of interests of the appellant company, Tecno*37, 
arising from its combining the activities of property brokerage and property 
management. The competent authority initiated an investigation under Article 5(3) 
of Law No 39/89, as amended by Law No 37/2019. Tecno*37 was asked, in 
particular, to specify whether the property management activity it carried on was 
of a business or non-business nature. 
2 The relevant administrative decisions showed that Tecno*37 managed 39 
condominiums and that the income generated was significantly higher than that 
resulting from the activity of property brokerage. The simultaneous exercise of the 
two occupations and the existence of a situation of incompatibility under 
Article 5(3) of Law No 39/89 in its current wording were established. The 
property management activity pursued was found to be of a professional rather 
than a sporadic or occasional nature, meaning that it was typically entrepreneurial 
(due to the requirements of cost-effectiveness, organisation, and continuity), as the 
individual company was operating with three employees plus an additional unit. 
Consequently, the CCIAA registered the individual property management 
company in the registro economico amministrativo (Economic and Administrative 
Register; ‘REA’) and prohibited any further property brokerage activity, 
annotating the cessation in the REA. 
3 Tecno*37 challenged the relevant measures before the TAR, which dismissed the 
action by judgment No 7/2022. 
4 Specifically, that court held that: (i), it was apparent from the findings provided by 
the Italian Revenue Agency that the management activity carried on by Tecno*37 
was entrepreneurial, generating a much greater income than its property brokerage 
activity; (ii) Article 5 of Law No 39/89 must be interpreted as meaning that a true 
conflict of interests must be avoided by means of a case-by-case examination of 
the situations concerned, since it is not acceptable to identify abstract and absolute 
incompatibilities; (iii) from this point of view, the action taken by the CCIAA in 
the examination procedure is correct, and the conclusions are persuasive. The 
incompatibility arises primarily from the amount of revenue generated by the 
property management activity, which is carried on predominantly as a business 
using dedicated structures and human resources. Consequently, there is a risk that 
the property units managed may be unduly favoured compared with other 
available properties, resulting in a breach of the requirements of neutrality and 
impartiality specific to brokers, whose task it is to promote the conclusion of the 
transaction. The large number of buildings – each consisting of numerous 
apartments – where the applicant holds the position of property manager may in 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-242/23 
 
6  
fact hinder, if the brokerage activity is carried on at the same time, unbiased and 
impartial selection of appropriate proposals for clients. 
5 Tecno*37a brought an appeal against the judgment of the TAR before the 
referring court, the Consiglio di Stato (Council of State). 
The essential arguments of the parties in the main proceedings 
6 In support of the action at first instance, the following pleas in law were raised, in 
particular and as far as is relevant here: 
infringement of Articles 3, 41, 97 and 117 of the Italian Constitution, Article 5(3) 
of Law No 39/89, Articles 1, 3, and 6 of Law No 241/90, Articles 4(3) and 47 
TFEU, breach of the principles of non-discrimination, proportionality, and 
appropriateness of the conditions of access to professions and services resulting 
from Directives 2005/36 and 2006/123, misuse of powers arising from a failure to 
investigate and state reasons for the alleged conflict of interest constituting an 
overriding reason in the public interest, and lack of proportionality. 
7 More specifically, according to the appellant, Article 5(3) of Law No 39/89 was 
interpreted as establishing an abstract and absolute incompatibility between the 
two activities, contrary to a proper approach that complies with the principles of 
EU law, according to which case-by-case investigations are necessary to 
determine the actual existence of a conflict of interest. 
8 Tecno*37 appealed against the TAR judgment on the following grounds. 
9 In its first ground of appeal, the appellant again relies on the pleas relied on at first 
instance. More specifically, the applicant alleges infringement of Articles 4(3) and 
47 TFEU and breach of the EU law principles of non-discrimination, 
proportionality, and appropriateness of the conditions of access to professions and 
services resulting from Directives 2005/36 and 2006/123. The appellant further 
alleges misuse of powers due to failure to investigate and failure to state reasons 
regarding the alleged existence of a conflict of interest capable of constituting, 
according to the European directives, an overriding reason in the public interest 
sufficient to make the alleged incompatibility between property agent and 
property manager proportionate. 
10 In the first ground of appeal, more specifically, the appellant submits that the TAR 
applied Article 5(3) of Law No 39/89 as a ‘risk prevention’ measure containing a 
provision of abstract and general incompatibility and considering solely the 
extreme hypothesis in which the broker merges the functions of property manager 
and broker in relation to the same property, which is not relevant in this case. 
However, that court should have recognised the fundamental unlawfulness of the 
challenged measures, as they were based on the assumption that the provision 
must be applied in such a way as to extend incompatibility in a general and 
TECNO*37 
 
7 
indistinct manner to all cases when the two activities are carried on jointly without 
there being any need to verify the specifics of the brokerage services provided. 
11 In addition, the TAR put forward an interpretation of Article 5 of Law No 39/89 to 
the effect that the incompatibility between the two activities of estate agent and 
property manager arises from the mere fact that they are carried out jointly as an 
undertaking, since the high number of property units managed constitutes a 
potential risk of conflict of interest to the detriment of one of the property brokers’ 
clients. However, this interpretation is in open conflict with the principles laid 
down by the Court of Justice in its judgment No 384 of 27 February 2020. What 
counts for the purposes of compliance with Article 5(3) of Law No 39/89, in an 
interpretation consistent with EU law, is not ascertaining the number of properties 
brokered or the number of properties managed (as, on the contrary, the CCIAA of 
Bologna mistakenly did, in compliance with the interpretation of the MISE and 
with the aim of qualifying the activity as entrepreneurial), but rather the 
determination in specific terms of whether the two activities overlap in relation to 
the same property. 
12 The supposed business or non-business nature of the applicant’s brokerage 
activity, as determined by the CCIAA from income data obtained from the 
Revenue Agency and also described by the court of first instance as an appropriate 
indicator of an actual conflict of interest, is neither relevant nor pertinent to the 
decision. The business or non-business nature of property brokerage does, in 
itself, have any qualified legal relevance. It is irrelevant for the purposes of 
determining a public interest constituting an overriding reason in the public 
interest (see paragraph 48 of judgment No 384 of the Court of Justice of 27 
February 2020) capable of justifying the introduction of a general prohibition on 
engaging in multidisciplinary activity. 
13 Moreover, the second ground of appeal also alleges, inter alia, infringement of the 
European principles of non-discrimination, proportionality, progressivity, and 
appropriateness of penalties. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
14 Where a property agent simultaneously performs the role of both property agent 
and property manager, there is a potential risk of bias in favour of the properties 
he or she manages, which may result in the loss of impartiality inherent to a 
broker. A property manager who manages multiple condominiums may tend to 
steer potential buyers towards the units located within the properties he or she 
manages, consequently neglecting other equally appealing housing opportunities. 
15 On the other hand, from the consumer’s point of view, it could be more 
advantageous to have a single professional figure assisting the buyer both at the 
time of purchase and in the subsequent property management phase, since there 
are, in fact, multiple ways to circumvent incompatibilities (family relationships, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-242/23 
 
8  
etc.), resulting in doubling the number of professional figures involved and, 
therefore, the costs for the end user. 
16 The new rules contained in Article 5(3) of Law No 39/1989 guarantee consumer 
protection via a clause which prevents any real conflict of interest between the 
broker and the object of the brokerage itself. The incompatibility becomes relative 
and proscribes simultaneously acting as a broker (which figure, according to the 
Civil Code, stands at an equal distance between the parties) and a party (in a 
substantial sense, as producer or dealer in the goods or services to be brokered or, 
in a formal sense, as an agent or representative of such goods). In any case, the 
incompatibility is limited to business activities and no longer, as in the provision 
at issue in the infringement proceeding, to every kind of activity carried on, 
including on a professional or even salaried basis. 
17 The requested interpretation is necessary for the following reasons: 
- the appellant relied on the protection of individual rights recognised by EU law 
and claimed that there has been a breach of the principles and rights of the 
European Union; 
- the Court has a monopoly on the interpretation of EU law and, consequently, the 
compatibility of the internal rules of individual Member States with EU law; 
- the referring court, while ruling out the presence of conditions for proceeding 
with the direct disapplication of the challenged national legislation, considers that 
there is an issue of interpretation relating to the exact scope of interpretation to be 
accorded to legislative acts of the European Union and, consequently, to the 
compatibility of a national legislative measure with those acts; 
- the question is relevant and decisive for the resolution of the dispute and does 
not appear to have been interpreted directly by the Court; 
- the referring court is the court of last instance, and the appellant has made a 
specific request for a reference to be made.