Opinion of the Advocate General — ECLI:EU:C:2026:195
Date: 2026-03-12
Language of the case: Latvian

Summary C-11/25 – 1 
Case C-11/25 
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: 
9 January 2025 
Referring court: 
Augstākā tiesa (Senāts) (Latvia) 
Date of the decision to refer: 
8 January 2025 
Appellant on a point of law and applicant at first instance: 
Jelgavas valstspilsētas pašvaldība 
Other party in the appeal on a point of law and defendant at first instance: 
Konkurences padome 
  
Subject matter of the main proceedings 
Appeal on a point of law against the judgment of the Administratīvā apgabaltiesa 
(Regional Administrative Court, Latvia), dismissing the application submitted by 
Jelgavas valstspilsētas pašvaldība (Jelgava City Council, Latvia) (‘the applicant’), 
to set aside the decision of the Konkurences padome (Competition Council, 
Latvia) in which the latter stated that that city council had infringed Article 13(1) 
of the Konkurences likums (Competition Law), prohibiting abuse of a dominant 
position, and imposed a fine on that city council. 
Subject matter and legal basis of the request 
The referring court requests, on the basis of Article 267 TFEU, an interpretation 
of Article 102 TFEU for the purposes of ascertaining: (i) whether that provision is 
applicable to a decision whereby a city council organises the provision of 
municipal waste management services by awarding, through an in-house 
procedure, the right to provide those services to a capital company that is partially 
EN 
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owned by that city council; and (ii), whether, by taking that decision, the city 
council acted as an ‘undertaking’ within the meaning of Article 102 TFEU. 
Question referred for a preliminary ruling 
Must Article 102 of the Treaty on the Functioning of the European Union be 
interpreted as meaning that, in view of the circumstances of the case, the scope of 
that provision includes a decision made by a subsidiary legal person under public 
law about how waste management in a municipal area is organised, which, in the 
present case, consisted of the decision to organise the provision of services 
through an in-house procedure, awarding the right to provide those services to a 
company partially owned by a city council? 
In particular, can a city council be considered as acting as a market operator or 
undertaking within the meaning of Article 102 of the Treaty on the Functioning of 
the European Union when it takes a decision to organise the provision of 
municipal waste management services by awarding, through an in-house 
procedure, the right to provide those services to a company that is partially owned 
by that city council? 
Provisions of EU law relied on 
Article 102 of the Treaty on the Functioning of the European Union 
Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of 
procedures for the award of public service contracts 
Council Directive 75/442/EEC of 15 July 1975 on waste 
Case-law of the Court of Justice 
Judgment of 20 September 2018, Rudigier, C-518/17, EU:C:2018:757 
Judgment of 26 November 2015, Maxima Latvija, C-345/14, EU:C:2015:784, 
paragraph 12 and the case-law cited 
Judgment of 12 July 2012, Compass-Datenbank, C-138/11, EU:C:2012:449 
Judgment of 10 September 2009, Sea, C-573/07, EU:C:2009:532 
Judgment of 1 July 2008, MOTOE, C-49/07, EU:C:2008:376 
Judgment of 18 November 1999, Teckal, C-107/98, EU:C:1999:562 
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Provisions of national law relied on 
Article 1(1) and (9) and Article 13 of the Konkurences likums (Competition Law) 
(Latvijas Vēstnesis, 151, 23.10.2001) 
Article 1(1) and (2) and Article 87 of the Valsts pārvaldes iekārtas likums (Law on 
the Structure of State Administration) (Latvijas Vēstnesis, 94, 21.06.2002) 
Article 15(1) of the Likums ‘Par pašvaldībām’ (Law on Local Governments) 
(Latvijas Vēstnesis, 61, 24.05.1994; which ceased to be in force on 1 January 
2023) 
Article 15(1) of the Atkritumu apsaimniekošanas likums (Law on Waste 
Management) (Latvijas Vēstnesis, 473/476, 29.12.2000; which ceased to be in 
force on 18 November 2010) 
Article 1(3)(a) and (b) and Article 4(1)(6) of the Likums ‘Par iepirkumu valsts vai 
pašvaldību vajadzībām’ (Law on Public Procurement for State or Municipal 
Requirements) (Latvijas Vēstnesis, 110, 20.07.2001; which ceased to be in force 
on 1 May 2006) 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 27 September 2004, the company SIA ‘Jelgavas komunālie pakalpojumi’ was 
registered in the commercial register of the Republic of Latvia, with 51% of its 
company capital owned by the applicant and 49% by a legal person under private 
law. 
2 On 1 November 2004, the applicant entered into a contract for the provision of 
services with SIA ‘Jelgavas komunālie pakalpojumi’, the subject matter of which 
was cooperating, until 31 December 2029, on waste management and the 
development and promotion of the waste management system in the 
administrative territory of the city of Jelgava (‘the service contract’). 
3 The applicant entered into that service contract without organising a tendering 
procedure, on the grounds of an exception set out in the Law on Public 
Procurement for State or Municipal Requirements in force at that time, namely the 
in-house procedure. Consequently, it selected SIA ‘Jelgavas komunālie 
pakalpojumi’ as service provider in the relevant market without conducting a 
tendering procedure. 
4 On 25 May 2020, the Competition Council received a claim from an individual in 
which it was alleged that the process for selecting the waste management service 
provider in the municipality of Jelgava was unlawful and that, as such, the service 
contract should be terminated and a new selection process for waste management 
organised. 
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5 By decision of the Competition Council dated 22 July 2021, it was declared that 
the applicant’s conduct constituted an infringement of Article 13(1) of the 
Competition Law (prohibiting abuse of a dominant position) and imposed a fine 
on the applicant. 
6 The applicant lodged an appeal against that decision before the Regional 
Administrative Court. That court dismissed the appeal, supporting the 
Competition Council’s view that the applicant should be considered a market 
operator and that it abused its dominant position on the market. Those 
considerations can be summarised as follows. 
7 The applicant has the administrative authority to control and influence, on its own, 
waste management processes within its municipality. In order to determine 
whether the applicant’s conduct with respect to the provision of services, in its 
capacity as city council, falls within the scope of public or private law, the two-
level theory needs to be applied. City councils, in accordance with their 
autonomous role in organising the management of municipal waste for residents, 
are responsible for ensuring residents have access to such services (first level, 
under public law); however, in determining how the services in question are 
provided (second level), city councils may act under both public law and private 
law. 
8 City councils have, then, discretion in choosing how waste is managed: they can 
organise the management of waste using their own resources, entrust it to a 
municipally owned economic operator, or enter into a contract with other privately 
owned economic operators. However, the validity and implementation of that 
choice are subject to the requirements deriving from the objective set out in the 
Competition Law to protect, preserve and promote free, fair and equitable 
competition in all sectors of the economy, in the public interest, and to limit 
concentration in the market. 
9 The Competition Council did not question the applicant’s discretion and did not 
assess how the applicant acted in its capacity as a public entity, but rather assessed 
its conduct within the framework of the second level (private law activity) to 
demonstrate that it acted as a market operator. The service contract was agreed by 
applying the in-house principle, according to which the city council does not have 
to organise a public procurement process if it provides the service itself, that is to 
say, if it conducts its own economic activity. 
10 That in-house procedure was not applied in accordance with the law because the 
applicant (51% shareholder) did not wholly control SIA ‘Jelgavas komunālie 
pakalpojumi’ and, therefore, the prerequisites established by law for the 
implementation of that procedure were not met. Consequently, the applicant 
unjustifiably awarded exclusive rights, in the market concerned, to one market 
operator and excluded other potential service providers from that market. As such, 
the applicant and SIA ‘Jelgavas komunālie pakalpojumi’ occupied a dominant 
position on the market in question. Hence the market in question was closed to 
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competition and the capital company partially owned by the applicant was able to 
provide services without competitive pressure. 
11 In order to show that the applicant abused its dominant position, it is sufficient to 
point out that, by unjustifiably awarding exclusive rights to one market operator, 
the applicant excluded other service providers. To declare the existence of an 
infringement of the law, it is sufficient that a market operator in a dominant 
position uses its position by employing methods that it would not have used under 
conditions of free competition, and that it was able to objectively influence the 
market and undermine economic competition. 
12 The applicant brought an appeal on a point of law against the judgment of the 
[Regional Administrative] Court. 
The essential arguments of the parties in the main proceedings 
13 According to the applicant, its decision to award the right to provide services 
through an in-house procedure and to enter into a service contract does not 
constitute a decision of a market operator. The City Council’s conduct in taking 
the decision on the municipal waste manager selection process is part of that 
council’s autonomous function and there is no reason to consider that that function 
is performed within the scope of private law. The choice of procedure and its 
implementation constitute a decision taken by a public entity within the scope of 
public law and not subject to the control relating to competition rules. On the 
assumption that a city council has infringed the rules on public procurement and 
that, consequently, an individual has observed a violation of his or her rights, that 
individual is entitled to submit a claim against the entity that took that decision. 
The applicant argues that the rules on public procurement are a lex specialis with 
respect to competition rules. It therefore maintains that there is no reason to 
consider that, in addition to an infringement of the rules on public procurement, 
any infringement of competition rules could be declared. 
14 In its judgment, the Regional Administrative Court assessed whether the market 
operator abused its position by using methods that it would not have used under 
conditions of free competition. However, no market operator can award the right 
to provide services; this is something that a city council, in its capacity as an entity 
governed by public law, can do. Therefore, it is not the dominant position that 
creates the possibility of awarding a right to provide services contrary to market 
conditions, but the special rules that oblige the public entity to take such a 
decision. 
15 For its part, the Competition Council considers that the [Regional 
Administrative] Court’s judgment is lawful for the following reasons. 
16 Neither in the Competition Council’s decision nor in the Regional Administrative 
Court’s judgment was it stated that the Jelgava City Council’s decision to apply 
the in-house procedure clearly indicated that that council had acted as a market 
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operator. In order to differentiate the City Council’s conduct under public law 
(which is not assessed by the Competition Council) from its conduct under private 
law, the Competition Council applied the two-level theory, which is a concept 
ingrained in the Latvian legal system. The City Council’s right to decide to award 
the services via one of the methods set out by law is not at question, but if it 
decides to complete the procurement by applying the in-house principle, it must 
do this in accordance with the law. That is to say, to apply the in-house procedure, 
certain prerequisites must be met, including full control of the capital company by 
the City Council. Clearly, such full control is not possible when another person, in 
this case a private undertaking, has a shareholding in the capital company. 
17 After establishing that the City Council was conducting an economic activity, 
namely the provision of services in the market in question, through its subsidiary 
SIA ‘Jelgavas komunālie pakalpojumi’, which is co-owned by a private company, 
the Competition Council concluded that the applicant was acting as a market 
operator and, consequently, confirmed its dominant position and the abuse of that 
position, which resulted in the unlawful application of the in-house principle and 
the unlawful closure of the market in question. 
18 The fact that the City Council is also subject to other regulations does not affect 
the application of the Competition Law and does not limit the Competition 
Council’s ability to take action against conduct undertaken by a market operator 
that infringes competition rules. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
19 The referring court maintains that, in the present case, the alleged abuse by the 
applicant of its dominant position does not affect trade between Member States, 
given that the facts refer to a purely internal situation and that only national 
regulations are therefore applicable, in this case the Competition Law. 
20 At the same time, it maintains that Article 13 of the Competition Law is 
essentially analogous with the provisions of Article 102 TFEU and therefore 
considers that the Court of Justice is competent to answer the question referred in 
accordance with the case-law of the Court of Justice, according to which, in order 
to ensure consistent interpretation, it has been attributed that competence in 
situations in which the facts in the main proceedings fall outside the direct scope 
of EU law, provided always that those provisions of EU law have been rendered 
applicable by national law, which adopted, for solutions applied to purely internal 
situations, the same approach as that for solutions provided for under EU law (see, 
for example, judgment of 26 November 2015, Maxima Latvija, C-345/14, 
EU:C:2015:784, paragraph 12 and the case-law cited). 
21 As regards the merits of the case, the referring court submits the following 
considerations. 
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22 The applicant is considered responsible for the abuse of a dominant position. In 
order for the applicant to be bound by the obligation set out in Article 13(1) of the 
Competition Law, it must be considered a market operator or undertaking and 
must also occupy a dominant position on the market in question. Therefore, it is 
essential to clarify how the concepts of ‘market operator’, ‘undertaking’ and 
‘dominant position’ should be interpreted in the circumstances of this case. 
23 There is no doubt that a legal person under public law may act within the scope of 
private law. This is evident both from Latvian regulations and from the case-law 
of the Court of Justice of the European Union (for example, judgment of the Court 
of Justice of 12 July 2012, Compass-Datenbank, C-138/11, EU:C:2012:449). As 
such, a legal person under public law may, as a general rule, be a market operator 
or an undertaking and must respect competition rules. 
24 At the same time, the case-law of the Court of Justice of the European Union 
shows that whether or not an entity should be considered an undertaking in the 
context of Article 102 TFEU is determined by the nature of the activities 
undertaken by that entity, namely, whether they can be qualified as economic 
activity or an activity related to the exercise of public authority. 
25 For example, in its judgment of 1 July 2008, MOTOE (C-49/07, EU:C:2008:376), 
the Court of Justice noted that Community Competition Law refers to the 
activities of undertakings and that any entity engaged in an economic activity, 
irrespective of its legal form and the way in which it is financed, must be 
categorised as an undertaking (paragraphs 20 and 21 of the judgment). The 
judgment also states that any activity consisting in offering goods or services on a 
given market is an economic activity, while activities which fall within the 
exercise of public powers are not of an economic nature justifying the application 
of the Treaty rules of competition (paragraphs 22 and 24 of the judgment). 
Likewise, that judgment maintains that the fact that, for the exercise of part of its 
activities, an entity is vested with public powers does not, in itself, prevent it from 
being classified as an undertaking for the purposes of Community competition law 
in respect of the remainder of its economic activities. The classification as an 
activity falling within the exercise of public powers or as an economic activity 
must be carried out separately for each activity exercised by a given entity 
(paragraph 25 of the judgment). 
26 The referring court does not doubt that the provision of waste management 
services is, in itself, an economic activity. Similarly, a city council, by creating a 
legal person under private law or acquiring a shareholding in an existing capital 
company, is acting within the scope of private law. However, there are doubts 
over whether, in deciding how to organise waste management in the municipal 
area, a city council is acting within the scope of private law or if such a decision is 
taken within the framework of an economic activity. 
27 Latvian national legislation makes it clear that organising the management of 
waste is an autonomous function and public law obligation of a city council; this 
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is likewise consistent with the public law obligations set out in Article 8 of 
Directive 75/442/EEC (and respectively Articles 8 and 15(1) of Directives 
2006/12/EC and 2008/98/EC subsequently adopted). 
28 Article 15(1) of the Waste Management Law of 14 December 2000 establishes the 
procedure by which a city council selects the undertaking charged with managing 
waste (a similar provision likewise exists in the Waste Management Law of 
28 October 2010), namely, in accordance with the procedures set out in the rules 
governing public procurement. Accordingly, a city council, as a legal person 
under public law and as a person legally obliged to organise the management of 
waste, is also legally obliged to select the waste management company in 
accordance with the procedure set out by law. 
29 Article 4(1)(6) of the Law on Public Procurement for State or Municipal 
Requirements of 5 July 2001, established that city councils need not apply the 
rules governing public procurement if they are entering into a contract with a an 
entity that is wholly controlled by the them. Consequently, that law afforded city 
councils discretion in terms of how waste management services are provided. At 
the same time, that option can only be exercised by a city council if the 
prerequisites established by law are met, namely, that it has full control. It must 
therefore be concluded that, if such prerequisites for the implementation of the in-
house procedure are not met, a public procurement process must be used. 
30 The fact that the organisation of waste management falls within the sphere of the 
exercise of public authority and is regulated by law, as well as the fact that the 
decision on how the waste management services are provided should be taken by 
a city council based on a procedure set out by law, suggest that, in taking such a 
decision, that city council is not acting under competition conditions but 
exercising prerogatives of public authority. While a city council does have 
discretion when choosing how the provision of waste management services will 
be organised, it exercises that discretion within the framework of the exercise of 
public authority and is bound by the prerequisites set out by law. 
31 Those considerations also raise doubts as to whether a city council, in deciding to 
provide waste management services through a company it owns, by an in-house 
procedure, is using a dominant position on the market given that, by its very 
nature, the ability to take such a decision (or the capacity to influence the market) 
does not result from its economic position on the market in question but from the 
fact that it is subject, by law, to the public law obligation to organise waste 
management within its territory. The question of whether the City Council 
exercised that public law authority correctly could be examined within the 
framework of an administrative procedure relating to an infringement of the rules 
on public procurement, given that by deciding to provide the waste management 
services through a company it owns, that city council is essentially deciding that it 
will not apply the legal rules on public procurement. The case-law of the Court of 
Justice shows that questions referred for a preliminary ruling relating to the 
validity of the application of an in-house procedure are usually raised within the 
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framework of proceedings challenging the decision taken by an institution to 
proceed with a direct award within the context of a public procurement procedure 
(for example, the judgments of the Court of Justice of 18 November 1999, Teckal, 
C-107/98, EU:C:1999:562; of 10 September 2009, Sea, C-573/07, 
EU:C:2009:532; and of 20 September 2018, Rudigier, C-518/17, 
EU:C:2018:757).