Judgment — ECLI:EU:C:1998:525
Date: 1998-11-10
Language of the case: Dutch
Court formation: Full Court
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Concepts: Concept of contracting authority;'In house' exemption
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the Judgmen t 
1. Approximation of laws — Procedures for concluding public service contracts — Directive 92/50 
— Contracting authorities — Body governed by public law — Needs in the general interest, 
not having an industrial or commercial character — Meaning — Existence of private under­
takings capable of satisfying such needs — Not relevant 
(Council Directive 92/50, Art. 1(b), second subpara.) 
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SUMMARY — CASE C-360/96 
2. Approximation of laws — Procedures for concluding public service contracts — Directive 92/50 
— Exception provided for by Article 6 of the directive — Condition — Observance of Treaty 
provisions 
(EC Treaty, Art. 85 et seq.; Council Directive 92/50, Art. 6) 
3. Approximation of laws — Procedures for concluding public service contracts — Directive 92/50 
— Contracting authorities — Body governed by public law — Status not dependent on the 
relative importance of activities designed to satisfy needs in the general interest and of the way 
they are carried out 
(Council Directive 92/50, Art. 1(b), second subpara.) 
4. Approximation of laws — Procedures for concluding public service contracts — Directive 92/50 
— Contracting authorities — Body governed by public law — Needs in the general interest, 
not having an industrial or commercial character — Legal form of provisions defining such 
needs — Not relevant 
(Council Directive 92/50, Art. 1(b), second subpara.) 
1. The second subparagraph of Article 1(b) 
of Directive 92/50 relating to the coordi­
nation of procedures for the award of 
public service contracts, which provides 
that '[b]ody governed by public law means 
any body ... established for the specific 
purpose of meeting needs in the general 
interest, not having an industrial or com­
mercial character', must be interpreted as 
meaning that the Community legislature 
drew a distinction between needs in the 
general interest not having an industrial or 
commercial character and needs in the 
general interest having an industrial or 
commercial character. 
The term 'needs in the general interest not 
having an industrial or commercial char­
acter' does not exclude needs which are or 
can be satisfied by private undertakings as 
well. The fact that there is competition is 
not sufficient to exclude the possibility 
that a body financed or controlled by the 
State, territorial authorities or other bodies 
governed by public law may choose to be 
guided by other than economic consider­
ations. 
However, the existence of competition is 
not entirely irrelevant to the question 
whether a need in the general interest is 
other than industrial or commercial. The 
latter needs are as a general rule met oth­
erwise than by the availability of goods or 
services in the marketplace. In general, 
needs of that kind are those for which, for 
reasons associated with the general interest, 
the State itself chooses to provide or over 
which it wishes to retain a decisive influ­
ence. 
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ARNHEM AND RHEDEN v BH HOLDING 
The removal and treatment of household 
refuse may be regarded as constituting a 
need in the general interest. Since the 
degree of satisfaction of that need consid­
ered necessary for reasons of public health 
and environmental protection cannot be 
achieved by using disposal services wholly 
or partly available to private individuals 
from private economic operators, that 
activity is one of those which the State 
may require to be carried out by public 
authorities or over which it wishes to 
retain a decisive influence. 
2. Recourse to Article 6 of Directive 92/50 
relating to the coordination of procedures 
for the award of public service contracts, 
which provides that '[t]his directive shall 
not apply to public service contracts 
awarded to an entity which is itself a con­
tracting authority within the meaning of 
Article 1(b)', is subject to the condition 
that the laws, regulations or administrative 
provisions on which the exclusive right of 
a body governed by public law is based 
must be compatible with the Treaty. The 
protection of competitors of bodies gov­
erned by public law is thus assured by 
Article 85 et seq. of the Treaty. 
3. The status of a body governed by public 
law referred to in the second subparagraph 
of Article 1(b) of Directive 92/50 relating 
to the coordination of public service con­
tracts is not dependent on the relative 
importance, within its business as a whole, 
of the meeting of needs in the general 
interest not having an industrial or com­
mercial character. It is likewise immaterial 
that commercial activities may be carried 
out by a separate legal person forming part 
of the same group or concern as it. 
4. The second subparagraph of Article 1(b) 
of Directive 92/50 relating to coordination 
of public service contracts must be inter­
preted as meaning that the existence or 
absence of needs in the general interest 
not having an industrial or commercial 
character must be appraised objectively, 
the legal forms of the provisions in which 
those needs are mentioned being immate­
rial in that respect. 
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