Case C-460/02: Action brought on 19 December 2002 by the Commission of the European Communities against the Italian Republic
Date: 2003-03-08
Institutions: Court of Justice
Subjects: European Commission, Italy, action for failure to fulfil an obligation, airport, ground handling, job preservation, labour law, market access, provision of services

8.3.2003

EN

Official Journal of the European Union

C 55/9

Since, under Article 10(2) of the directive, producers and
performers must be treated on an equal footing with authors,
the United Kingdom is not entitled to exclude the right to
claim equitable remuneration when a broadcast or cable
programme containing a recording is seen or heard by a non-
paying audience as set out in paragraph 18 of Schedule 2 of
the 1988 Copyright, Designs and Patents Act.

In the view of the Commission, the criterion of a non-paying
audience as defined in the aforementioned provision goes
much further than the exceptions to the right permitted under
Article 10 of the directive.

Therefore, the Commission submits that by providing for
exceptions from the right to equitable remuneration granted
to performers where a broadcast or communication to the
public of protected subject matter is seen or heard by a non-
paying audience, the United Kingdom has failed to fulfil the
requirements of Community law and in particular of
Article 8(2) of Directive 92/100/EEC.

( 1) OJ L 346, 27.11.1992, p. 61.

Action brought on 19 December 2002 by the Commission
of the European Communities against the Italian Republic

(Case C-460/02)

(2003/C 55/17)

An action against the Italian Republic was brought before the
Court of Justice of the European Communities on 19 December
2002 by the Commission of the European Communities,
represented by Mikko Huttunen and Antonio Aresu, acting as
Agents.

The applicant claims that the Court should :

(a) Declare that the Italian Republic has failed to fulfil
its obligations under Council Directive 96/67/EC (1) of
15 October 1996 on access to the groundhandling
market at Community airports inasmuch as Legislative
Decree No 18 of 13 January 1999

— fails to lay down a maximum period of 7 years
for the selection of suppliers of groundlhandling
services, in accordance with Article 11(1)(d), of the
directive in question;

— introduces, by Article 14, a social measure which is
not compatible with Article 18 of the directive;

— provides, at Article 20, transitional provisions not

permissible under the directive;

(b) order the Italian Republic to pay the costs.

Pleas in law and main arguments

Article 11 of Legislative Decree No 18 of 13 January 1999
does not lay down the maximum period for which suppliers
of services are selected at airports in which access to the
market is by means of a selection procedure. Article 11(1)(d)
of Directive 96/67/EC expressly provides that the maximum
period is fixed at 7 years. The Commission therefore takes
the view that the absence of a limit
to the duration of
groundhandling contracts at Italian airports is incompatible
with the requirements laid down by the directive.

Article 18 of Directive 96/67/EC allows Member States to take
the necessary measures to ensure protection of the rights of
workers. However, such measures must not affect the appli-
cation of the directive itself and must not obstruct other
provisions of Community law. In other words, the protection
of the rights of workers is indeed permissible under Article 18
of the directive provided that it does not run counter to the
effective application of
the directive so far as concerns
groundhandling services. Article 14(1) of Legislative Decree
No 18/99 lays down the objective of adopting measures to
protect the number of posts of staff working for the previous
service supplier and continuing employment. The second
paragraph of the article in question thus contains the obligation
to transfer staff any time there is a ‘transfer of business’
affecting one or more categories of groundhandling services
under Annex A and B. Such a provision manifestly exceeds the
protection already guaranteed by Council Directive 77/187/
EEC of 14 February 1977 (2) on the approximation of the laws
of the Member States relating to the safeguarding of employees’
rights in the event of transfers of undertakings, businesses or
parts of businesses, as amended by Council Directive 98/50/
EC (3) and codified by Council Directive 2001/23/EC (4) of
12 March 2001. Accordingly, the Commission takes the view
that Article 14 of Legislative Decree No 18/99 goes beyond
what may be considered to be permissible measures to
guarantee the protection of
the rights of workers under
Article 18 of Directive 96/67/EC.

C 55/10

EN

Official Journal of the European Union

8.3.2003

Article 20 of Legislative Decree No 18/99 relates to contracts
of employment under various organisational arrangements or
contractual conditions in force on 19 November 1998. Such
contracts concern staff working for users which carry out self-
handling services, which are different from those defined in
the directive. Those contracts remain in force and unchanged
until expiry; however, they may not be for longer than 6 years.
fact, undertakings with ‘various organisational
In actual
arrangements’ are in practice authorised to act as self-handling
operators alongside other self-handling operators and service
suppliers.

The directive provides a clear definition for groundhandling
services operators — groundhandling for third parties and
users which carry out self-handling operations. Entities which
do not fulfil the ‘self-handling’ criteria laid down in Article 2(f)
may only operate groundhandling services for third parties.
Furthermore, Article 7(2) and Article 11(2) of the directive lay
down the specific procedures to follow when appointing self-
handling operators and suppliers of groundhandling services
for third parties. In light of the foregoing considerations,
Article 20 appears to infringe those obligations.

( 1) OJ 1996 L 272, p. 36.
( 2) OJ 1977 L 61, p. 26.
( 3) OJ 1998 L 201, p. 88.
( 4) OJ 2001 L 82, p. 16.

Action brought on 23 December 2002 by Commission
of the European Communities against the Kingdom of
Sweden

(Case C-463/02)

(2003/C 55/18)

An action against the Kingdom of Sweden was brought
before the Court of Justice of the European Communities on
23 December 2002 by the Commission of the European
Communities, represented by E. Traversa and K. Simonsson,
acting as Agents, with an address for service in Luxembourg.

The Commission claims that the Court should:

1. Declare that, by failing to levy value added tax on the
amount of aid paid under Council Regulation (EC)
No 603/95 (1) of 21 February 1995 on the common
organisation of the market in dried fodder, Sweden has

failed to fulfil its obligations under Article 11 of the Sixth
Council Directive 77/388/EC (2) of 17 May 1977 on the
harmonisation of the laws of the Member States relating
to turnover taxes — Common system of value added tax:
uniform basis of assessment; and

2. Order Sweden to pay the costs.

Pleas in law and main arguments

The three conditions for inclusion of a subsidy in the taxable
amount are satisfied. It is clear from Regulation No 603/95
that only the undertaking which processes fresh fodder can be
granted aid and not producers of fresh fodder, and that the
processing undertaking both enters into a sales agreement
with undertakings which consume dried fodder (supply of
goods) and processing agreements with producers of fresh
fodder (supply of services). In the present case there is no
doubt that the intervention body which pays the aid in
accordance with Regulation No 603/95 is a third person in
relation to the processing undertaking and the buyer and that
this intervention takes place in accordance with a procedure
for the award of public subsidies.

Article 11 A point 1(a) of the Sixth Directive would be
interpreted excessively narrowly if only types of aid which are
calculated on the basis of the product price are included in the
taxable amount for VAT. By its general reference to ‘subsidies
directly linked to the price of [the taxable] supplies’, the
Community legislature actually intended to include in the
taxable amount for VAT all aid which is directly linked to the
price of the goods or services, ie the subsidies which directly
influence the size of
the supplier’s remuneration. Those
subsidies must, in turn, be directly linked to or have a causal
connection with precisely indicated or quantifiable supplies of
goods or services, ie the aid paid, if and to the extent that the
goods or services are actually sold on the market. That is why
the subsidy has a direct influence on the product’s sale price
and that clearly shows the underlying idea that subsidies
should be included in the taxable amount for VAT, on the
basis of a non-restrictive interpretation of Article 11 A
point 1(a) of the Sixth Directive and in accordance with the
general purpose of the article, namely taxation of all the
remuneration paid in whole or in part by a person, no matter
who, and which is actually received by the supplier as a
consequence of the sale of the goods or services.

(1) OJ L 63, 21.3.1995, p. 1.
(2) OJ L 145, 13.6.1977, p. 1.