Judgment — ECLI:EU:C:1997:301
Date: 1997-06-17
Language of the case: Italian
Court formation: Full Court
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Right of establishment;Freedom to provide services
Concepts: Statement of reasons;General;Binding nature of the competition rules and measures taken by Member States, direct effect
Procedure: Reference for a preliminary ruling
Origin: Italy

Summary of the Judgment 
1. Member States — Obligations — Obligation to state reasons for national rules of general 
scope falling within the sphere of Community law — None 
(EC Treaty, Art. 190) 
2. Freedom of movement for persons — Freedom of establishment — National rules reserving 
participation in a social welfare system to non-profit-making economic operators — Permis­
sible 
(EC Treaty, Arts 52 and 58) 
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SUMMARY — CASE C-70/95 
3. Freedom to provide services — Treaty provisions — Scope — Company established in a Mem­
ber State as a provider of services to pensioners residing permanently or for an indefinite 
period in old people's homes — Excluded 
(EC Treaty, Art. 59) 
4. Competition — Community rules — Obligations of the Member States — National rules 
reserving participation in a social welfare system to non-profit-making economic operators — 
Whether compatible — Conditions 
(EC Treaty, Arts 3(g), 5, 85, 86 and 90) 
1. Community law, and Article 190 of the 
Treaty in particular, does not lay down 
conditions concerning the statement of 
reasons for national rules of general scope 
which fall within the sphere of Commu­
nity law. 
Apart from the fact that the obligation to 
state reasons laid down in Article 190 of 
the Treaty concerns only acts of the insti­
tutions, the obligation to state reasons for 
national decisions affecting the exercise of 
a fundamental right conferred on indi­
viduals by the Treaty concerns, in view of 
its purpose, only individual decisions 
adversely affecting individuals against 
which the latter must have some remedy 
of a judicial nature, and not national mea­
sures of general scope. 
2. Articles 52 and 58 of the Treaty do not 
preclude a Member State from allowing 
only non-profit-making private operators 
to participate in the running of its social 
•welfare system by concluding contracts 
which entitle them to be reimbursed by 
the public authorities for the costs of pro­
viding social welfare services of a health­
care nature. 
As Community law stands at present, a 
Member State may, in the exercise of the 
powers it retains to organize its social 
security system, consider that attainment 
of the objectives pursued by a social wel­
fare system which, being based on the 
principle of solidarity, is designed as a 
matter of priority to assist those in need, 
necessarily implies that the admission of 
private operators to that system as pro­
viders of social welfare services is to be 
made subject to the condition that they 
are non-profit-making. 
Moreover, that condition is not liable to 
place profit-making companies from 
other Member States in a less favourable 
factual or legal situation than profit-
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SODEMARE AND OTHERS v REGIONE LOMBARDIA 
making companies from the Member 
State in which they are established. 
3. Article 59 of the Treaty does not cover 
the situation of a company which, having 
established itself in a Member State in 
order to run old people's homes there, 
provides services to residents who, for 
that purpose, reside in those homes per­
manently or for an indefinite period. 
Although the right freely to provide ser­
vices may be relied on by an undertaking 
as against the State in which it is estab­
lished if the services are provided for per­
sons established in another Member State, 
Article 59 does not cover the situation 
where a national of one Member State 
goes to the territory of another and estab­
lishes his principal residence there in 
order to receive services there for an 
indefinite period. 
4. Articles 85 and 86, read in conjunction 
with Articles 3(g), 5 and 90 of the Treaty, 
do not apply to national rules which 
allow only non-profit-making private 
operators to participate in the running of 
a social welfare system by concluding 
contracts which entitle them to be reim­
bursed by the public authorities for the 
costs of providing social welfare services 
of a health-care nature. 
Such rules do not require or favour the 
adoption, or reinforce the effects, of 
agreements, decisions or concerted prac­
tices by the undertakings permitted to 
enter into contractual arrangements with 
the social security system and do not del­
egate to private operators responsibility 
for decisions affecting the economic 
sphere. Nor do they place individual 
undertakings permitted to enter into con­
tractual arrangements of that kind in a 
dominant position or lead to the creation 
of sufficiently strong economic links 
between them as to give rise to a collec­
tive dominant position. 
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