Judgment — ECLI:EU:C:2008:426
Date: 2008-07-17
Language of the case: German
Court formation: Grand Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices;Telecommunications
Concepts: Telecommunications;Direct effect;General
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment 1. Approximation of laws – Telecommunications – Directives 90/388 and 97/33 (European Parliament and Council Directive 97/33, Art. 12(7); Commission Directives 90/388, Art. 4c, and 96/19, recitals 5 and 20 in the preamble) 2. Approximation of laws – Telecommunications – Directives 90/388 and 97/33 (European Parliament and Council Directive 97/33, Art. 12(7); Commission Directive 90/388, Art. 4c) 3. Acts of the institutions – Directives – Direct effect (Art. 249 EC) 1. Article 12(7) of Directive 97/33 on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of open network provision, as amended by Directive 98/61, and Article 4c of Directive 90/388 on competition in the markets for telecommunications services, as amended by Directive 96/19, the latter article read in conjunction with recitals 5 and 20 in the preamble to Directive 96/19, must be interpreted as precluding a national regulatory authority from requiring an operator of a network interconnected with a public network to pay to the market-dominant subscriber network operator a connection charge which is additional to an interconnection charge and is intended to compensate the latter operator for the deficit incurred as a result of providing the local loop for the year 2003. First, such a connection charge is within the scope of Article 12(7) of Directive 97/33 and must therefore be subject to the same pricing conditions as the interconnection charge stricto sensu, namely with due regard to the principle of the cost orientation of tariffs. That principle, laid down in Article 7(2) of Directive 97/33, requires that the charge be derived from actual costs. Consequently, Article 12(7) of Directive 97/33 does not allow a national regulatory authority to approve a connection charge the rate of which is not cost-oriented, when it has the same characteristics as an interconnection charge and is levied as a supplement to such a charge. Secondly, the effect of such a charge is only to protect the market-dominant subscriber network operator by enabling it to maintain a cost for the calls of its own subscribers which is below the actual cost and, accordingly, to fund its own deficit from the subscribers of the other operators of interconnected networks. Such funding, which is separate from any funding of universal service obligations, is contrary to the principle of free competition. Thirdly, the establishment of such a charge is not permissible when it comes after 1 January 2000, the final date for completion of tariff rebalancing by the Member States, as is clear from recital 5 in the preamble to Directive 96/19 read in conjunction with recital 20 therein and from Article 4c of Directive 90/388. (see paras 22-24, 28-33, operative part 1) 2. Article 4c of Directive 90/388, as amended by Directive 96/19, and Article 12(7) of Directive 97/33 on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of open network provision, as amended by Directive 98/61, produce direct effect and can be relied on directly before a national court by individuals to challenge a decision of the national regulatory authority. That applies to actions brought by private persons against a Member State, represented by the national regulatory authority, which has sole competence to set the rates of both the connection charge and the interconnection charge to which the former is added. That possibility is not affected by the fact that the market-dominant subscriber network operator, a third party in relation to the dispute between the public telecommunications network operators and the regulatory authority, is capable of suffering adverse repercussions because it levied the connection charge and because, if that charge were removed, it would have to increase its own subscribers’ rates. (see paras 37-38, operative part 2) 3. A directive cannot of itself impose obligations on an individual, but can only confer rights. Consequently, an individual may not rely on a directive against a Member State where it is a matter of a State obligation directly linked to the performance of another obligation falling, pursuant to that directive, on a third party. On the other hand, mere adverse repercussions on the rights of third parties, even if the repercussions are certain, do not justify preventing an individual from relying on the provisions of a directive against the Member State concerned. (see paras 35-36, 40)