Judgment — ECLI:EU:C:2007:781
Date: 2007-12-13
Language of the case: Italian
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Freedom to provide services
Concepts: The various activities;The various services
Procedure: Action for failure to fulfil obligations - successful
Origin: Italy

Summary of the Judgment 1. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Exceptions – Activities connected with the exercise of official authority (Arts 43 EC, 45 EC, 49 EC and 55 EC) 2. Freedom to provide services – Restrictions – Private security undertakings (Art. 49 EC) 3. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Restrictions – Private security undertakings (Arts 43 EC and 49 EC) 4. Freedom to provide services – Restrictions – Private security undertakings (Art. 49 EC) 5. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Restrictions – Private security undertakings (Arts 43 EC and 49 EC) 6. Freedom to provide services – Restrictions – Price control – Private security undertakings (Art. 49 EC) 1. A Member State whose legislation makes it obligatory to swear an oath of allegiance to that Member State and its Head of State in order to work as a private security guard fails to fulfil its obligations under Articles 43 EC and 49 EC. As the applicable legislation currently stands, private security undertakings do not share directly and specifically, in that Member State, in the exercise of official authority, their private security activities being incapable of assimilation to the duties falling within the remit of the public forces of law and order, with the result that the derogations laid down in Articles 45 EC and 55 EC do not apply in such a case. Moreover, on account of its symbolic significance, such a solemn promise of allegiance to a Member State and its Head of State is likely to be more acceptable to citizens of that Member State or to persons who are already established there. As a result, foreign operators are placed at a disadvantage as compared with operators who are nationals of the Member State concerned who are established in that State. As regards possible justification of such an obstacle to freedom of establishment and the freedom to provide services based on the maintenance of public order, that latter concept comes into play where a genuine and sufficiently serious threat affects one of the fundamental interests of society. It cannot be held that private security undertakings, established in Member States other than the one requiring the oath, could create a genuine and serious threat affecting one of the fundamental interests of society by exercising their right to freedom of establishment and freedom to provide services and by using staff who have not sworn allegiance to the said Member State and its Head of State. (see paras 43-44, 47-50, 130, operative part) 2. A Member State which provides in its legislation that private security activities may be pursued by service providers established in other Member States only after authorisation of limited territorial validity has been granted by the competent authority, without requiring account to be taken of the obligations to which those service providers are already subject in the Member States of origin, fails to fulfil its obligations under Article 49 EC. A measure introduced by a Member State, which in effect duplicates supervision which has already been carried out in the Member State where the service provider is established, cannot be considered necessary to attain the objective of ensuring close supervision of the activities in question. (see paras 63-64, 67, 130, operative part) 3. A Member State which provides in its legislation that private security activities may be pursued by service providers established in other Member States only after the issuing of an authorisation of the competent authority having limited territorial validity and that the granting of such authorisation is to be subject to consideration of the number and size of security undertakings already operating in the territory in question fails to fulfil its obligations under Articles 43 EC and 49 EC. (see paras 68, 79-80, 130, operative part) 4. A Member State which provides in its legislation: – that private security undertakings must have a place of business in each province in which they operate; – that the staff of those undertakings must be individually authorised to undertake private security work, without requiring account to be taken of the controls and verifications already carried out in the Member State of origin fails to fulfil its obligations under Article 49 EC. (see paras 88, 93-94, 130, operative part) 5. A Member State which provides in its legislation: – that private security undertakings must have a minimum and/or a maximum number of employees in order to obtain authorisation to carry on their activity; – that those undertakings must lodge a guarantee with a national body fails to fulfil its obligations under Articles 43 EC and 49 EC. (see paras 105, 115, 130, operative part) 6. A Member State which provides in its legislation that prices for private security services are to be fixed, in the authorisation issued by the competent authority, within the limits of a predetermined margin for variation fails to fulfil its obligations under Article 49 EC. The limitation thus imposed on the freedom to set fees is likely to restrict access to that Member State’s private security services market for operators, established in other Member States, wishing to offer their services in that Member State. In the first place, the effect of that limitation is to deprive economic operators established in other Member States of the opportunity to compete more effectively – by quoting fees lower than those fixed by the imposed scale – with the economic operators traditionally established in the Member State concerned, which have greater opportunities than economic operators established abroad to build up their clientele. Secondly, that limitation is likely to prevent operators established in other Member States from incorporating in the fees for their services certain costs that operators established in the Member State in which the services are performed do not have to bear. Lastly, the margin for variation is unlikely to offset the effects of the limitation thus placed on the freedom to set fees. (see paras 125-126, 129-130, operative part)