Judgment — ECLI:EU:C:2006:673
Date: 2006-10-26
Language of the case: Greek
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Free movement of goods;Measures having equivalent effect;Approximation of laws;Quantitative restrictions;Freedom to provide services
Concepts: The various activities;The various services;Import or export licences and declarations, standards certificates, etc.;Information society
Procedure: Action for failure to fulfil obligations - successful
Origin: Greece

summary of the grounds for Law No 3037/2002, the general prohibition on the installation of all electric, electromechanical and electronic games, including all computer games, was necessary for the purpose of protecting public morality, policy and security. It maintains specifically that, because of technological developments, the games concerned by Law No 3037/2002 are easily convertible into games of chance and that the situation has become impossible to police, leading to serious social problems such as those listed in paragraph 20 of this judgment. 33 According to the Court’s case-law, these considerations, which must be taken together, concern the protection of the recipients of the service and, more generally, of consumers, as well as the maintenance of order in society, and those objectives are amongst those which may be regarded as overriding reasons relating to the public interest (see, to that effect, Case C‑275/92 Schindler [1994] ECR I-1039, paragraph 58, and the case-law cited, and Case C‑124/97 Läärä and Others [1999] ECR I‑6067, paragraph 33). 34 The Court has also held that those grounds are capable of justifying, in the light of Article 28 EC and taking account of the specific social and cultural features, restrictions which may go so far as to prohibit lotteries and other forms of gambling in a Member State (see, to that effect, Schindler, paragraph 59). 35 It is true that, in the judgments in Schindler and Läärä, the Court drew attention to the fact that the moral, religious and cultural considerations which attach to lotteries, like other forms of gambling, in all the Member States may allow national legislation to restrict, or even prohibit, the practice of gambling and to prevent it from being a source of private profit. The Court also held that lotteries involve a high risk of crime or fraud, given the potentially high stakes and winnings, particularly when they are operated on a large scale. Furthermore, they are an incitement to spend which may have damaging individual and social consequences (Schindler, paragraph 60, and Läärä, paragraph 13). 36 However, these proceedings can be distinguished from the two cases which led to the judgments in Schindler and Läärä in so far as it is common ground that the present case concerns electrical, electromechanical and electronic games which do not have any characteristics comparable to those of the games at issue in those cases. In fact, the games which are the subject of the prohibition laid down by Article 2(1) of Law No 3037/2002 are not by nature games of chance, because they are not played for the prospect of winning a sum of money (see, in contrast, Läärä, paragraph 17). 37 It follows that, since the electrical, electromechanical and electronic games cannot be considered to be games of chance, it cannot be accepted, in contrast to the contention of the Hellenic Republic, that the findings regarding games of chance upheld by the Court in Schindler and Läärä may be applied to electric, electromechanic and electronic games. 38 Even if that case-law may not be applied in the present case, the overriding public interest reasons put forward by the Hellenic Republic may justify the barrier to the free movement of goods. However, it is also necessary for the national legislation at issue to be proportionate to the objectives being pursued. 39 In that regard, the Hellenic Republic has not established that it implemented all the technical and organisational measures likely to have achieved the objective pursued by that Member State using measures which were less restrictive of intra-Community trade. 40 The Greek authorities not only could have had recourse to other measures which were more appropriate and less restrictive of the free movement of goods, as the Commission suggested during the pre-litigation procedure, but also could have ensured that they were correctly and effectively applied and/or executed in order to achieve the objective pursued. 41 It follows that the prohibition laid down by Article 2(1) of Law No 3037/2002 on the installation in Greece of all electrical, electromechanical and electronic games, including all computer games, on all public and private premises apart from casinos, constitutes a measure which is disproportionate in view of the objectives pursued. 42 As a result, Law No 3037/2002 is incompatible with Article 28 EC. 43 In the light of the foregoing, the first head of claim advanced by the Commission in support of its action must be considered to be well founded. The second head of claim, alleging infringement of Articles 43 EC and 49 EC Arguments of the parties 44 The Commission maintains that Articles 2(1) and 3 of Law No 3037/2002 prohibit traders established in other Member States from providing their services in order to make available or supply games machines on the Greek market, or merely to provide their services there from the Member State in which they are established. It is submitted that, since such national provisions are not sufficiently justified on grounds of necessity or proportionality, they infringe Articles 43 EC and 49 EC. 45 In that context, the Commission submits that the Greek authorities should have given priority to more specific tangible measures which restricted or aimed to prevent the conversion of recreational games into games of chance. In its opinion, such measures could have, for example, taken the form of more specific prohibitions, stricter and more precise controls and/or stricter and more effective sanctions. It adds that such measures did not have to consist in a general prohibition with an adverse impact on other economic activities not linked to games of chance. 46 The Hellenic Republic claims that the measures thus proposed are insufficient and it submits that the more radical measures which were applied were a response to overriding reasons relating to the public interest in order to achieve the objective pursued and that they were the only effective means of addressing the serious social problem created. To rebut that second head of claim, it essentially puts forward arguments identical to those it relies on to dispute the Commission’s head of claim concerning the restriction on the free movement of goods. Findings of the Court 47 As a preliminary point, it should be noted that although, in the absence of harmonised rules at Community level in the games sector, Member States remain, in principle, competent to define the conditions for the pursuit of the activities in that sector, they must, when exercising their powers in this area, respect the basic freedoms guaranteed by the Treaty (see, to that effect, Case C‑58/98 Corsten [2000] ECR I-7919, paragraph 31, and Case C‑514/03 Commission v Spain [2006] ECR I-963, paragraph 23). 48 According to the Court’s case-law, Articles 43 EC and 49 EC require the elimination of restrictions on the freedom of establishment and the freedom to provide services and that all measures which prohibit, impede or render less attractive the exercise of such freedoms must be regarded as constituting such restrictions (see Case C‑439/99 Commission v Italy [2002] ECR I-305, paragraph 22, and Case C‑451/03 Servizi Ausiliari Dottori Commercialisti [2006] ECR I‑2941, paragraph 31). 49 The Court has also held that national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty can be justified only if they fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by overriding reasons based on the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain that objective (see Case C-424/97 Haim [2000] ECR I-5123, paragraph 57, and the case-law cited). 50 In that regard, it is apparent from Article 2(1) of Law No 3037/2002 that it is prohibited in Greece, subject to the criminal or administrative sanctions provided for in Articles 4 and 5 of that law, to operate electric, electromechanical and electronic games on all public or private premises apart from casinos. The provisions of Article 2(1) of Law No 3037/2002 are not applicable so far as computers in undertakings providing internet services are concerned and, under Article 3 of that law, operating games on those computers is prohibited. 51 As regards the freedom of establishment, such national legislation is liable to make more difficult, or even completely prevent, the exercise by traders from other Member States of their right to establish themselves in Greece with the aim of providing the services in question. 52 In those circumstances, such a prohibition constitutes a barrier to the freedom of establishment. 53 As regards the freedom to provide services, it is settled case-law that, first, the activity of operating gaming machines must, irrespective of whether or not it is separable from activities relating to the manufacture, importation and distribution of such machines, be considered a service within the meaning of the Treaty provisions and, secondly, national legislation which only authorises the operation and playing of games in casinos constitutes a barrier to the freedom to provide services (see, to that effect, Case C-6/01 Anomar and Others [2003] ECR I-8621, paragraphs 56 and 75). 54 The Court has also held, concerning Information Society services specifically, that Article 49 EC relates to the services which a provider established in a Member State offers via the internet – and so without moving – to recipients in another Member State, with the result that any restriction of those activities constitutes a restriction on the freedom to provide services (Case C‑243/01 Gambelli and Others [2003] ECR I‑13031, paragraph 54). 55 However, on the same grounds as those upheld in paragraphs 36 to 41 of this judgment, the arguments put forward by the Hellenic Republic in order to justify the barrier to the freedom of establishment and to the freedom to provide services cannot be accepted. 56 It follows from this that Law No 3037/2002 is also contrary to Articles 43 EC and 49 EC. 57 In those circumstances, the second head of claim advanced by the Commission in support of its action must be considered to be well founded. The third head of claim, alleging infringement of Directive 98/34 Arguments of the parties 58 The Commission criticises the Hellenic Republic for not having communicated to it, when it was being drawn up, Law No 3037/2002 which contains, in Articles 2(1) and 3 thereof, technical regulations on products within the meaning of Article 1(11) of Directive 98/34, which is contrary to the requirements of the first subparagraph of Article 8(1) of that directive, which provides for a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services. 59 That Member State concedes, in its defence, that the Greek authorities appear not to have observed the procedure for the provision of information during the preparation of the draft for Law No 3037/2002 and states that that failure to fulfil obligations was committed in error and not intentionally. In its opinion, that infringement was due to the urgent need to deal rapidly and directly with the social problem and to safeguard public policy. Findings of the Court 60 The Court has already held that provisions such as Article 8(1) of Directive 98/34 impose on Member States the duty to notify the Commission immediately of any draft technical regulation (judgment of 8 September 2005 in Case C-500/03 Commission v Portugal, not published in the ECR, paragraph 39 and, as regards provisions similar to those of that directive, Case C‑139/92 Commission v Italy [1993] ECR I-4707, paragraph 3, and Case C‑273/94 Commission v Netherlands [1996] ECR I-31, paragraph 15). 61 However, measures such as those provided for in Articles 2(1) and 3 of Law No 3037/2002, in so far as they prohibit the installation in Greece of all electrical, electromechanical and electronic games, including all computer games, on all public and private premises apart from casinos, and the use of games on computers in undertakings providing internet services, and make the operation of such undertakings subject to the issue of a special authorisation, must be considered to be technical regulations within the meaning of Article 1(11) of Directive 98/34 (see, to that effect, Case C‑267/03 Lindberg [2005] ECR I‑3247). 62 In those circumstances, the Hellenic Republic was required to notify such technical regulations in draft form under the first subparagraph of Article 8(1) of Directive 98/34 (see, inter alia, Commission v Portugal, paragraph 40). 63 However, in the present case, it is common ground that there was no such notification. 64 That obligation cannot be called into question by the need to adopt Law No 3037/2002 urgently in order to deal rapidly and directly with the social problem created by the operation of electric, electromechanic and electronic games and to thus safeguard public policy. 65 In fact, the Hellenic Republic cannot rely on the exception provided for in the first indent of Article 9(7) of Directive 98/34 because it is common ground that none of the situations referred to in that provision existed in Greece at the date when that law was adopted. 66 As a result, it must be found that, by having adopted Law No 3037/2002 without having notified it to the Commission at the draft stage, the Hellenic Republic has failed to fulfil its obligations under the first subparagraph of Article 8(1) of Directive 98/34. 67 Therefore, the third head of claim advanced by the Commission in support of its action is also well founded. 68 It follows from all of the foregoing that, by inserting into Articles 2(1) and 3 of Law No 3037/2002 the prohibition, subject to the criminal and administrative penalties set out in Articles 4 and 5 of the same law, on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public or private premises apart from casinos, the Hellenic Republic has failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34. Costs 69 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Hellenic Republic has been unsuccessful, the latter must be ordered to pay the costs. On those grounds, the Court (Second Chamber) hereby: 1. Declares that, by inserting into Articles 2(1) and 3 of Law No 3037/2002 the prohibition, subject to the criminal and administrative penalties set out in Articles 4 and 5 of the same law, on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public or private premises apart from casinos, the Hellenic Republic has failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/CE of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998; 2. Orders the Hellenic Republic to pay the costs. [Signatures] * Language of the case: Greek.