Commission of the European Communities v Italian Republic.
Date: 1997-10-23
15 The Italian Government has also contended that, even if electricity does constitute goods within the meaning of the Treaty, it is clear from the judgments in Case C-275/92 H.M. Customs and Excise v Schindler [1994] ECR I-1039 and Case C-260/89 ERT v DEP [1991] ECR I-2925 that the import and export of goods for the sole purpose of providing services form part of the services themselves and accordingly escape the rules governing the free movement of goods.
16 In those judgments, the Court held that the import of lottery advertisements and tickets into a Member State with a view to the participation by residents of that Member State in a lottery conducted in another Member State relates to a `service' within the meaning of Article 60 of the EC Treaty and accordingly falls within the scope of Article 59 of the EC Treaty (paragraph 1 of the operative part of Schindler, cited above). It also held that the grant to a single undertaking of exclusive rights in relation to television broadcasting and the grant for that purpose of an exclusive right to import, hire or distribute material and products necessary for that broadcasting does not as such constitute a measure having an effect equivalent to a quantitative restriction within the meaning of Article 30 of the Treaty (paragraph 15 of ERT, cited above).
17 It must be remembered, however, that in its judgment in Case C-393/92 Almelo and Others v Energiebedrijf IJsselmij [1994] ECR I-1477, paragraph 28, the Court noted that it is accepted in Community law, and indeed in the national laws of the Member States, that electricity constitutes a good within the meaning of Article 30 of the Treaty.  It noted in particular that electricity is regarded as a good under the Community's tariff nomenclature (Code CN 27.16) and that it had already been accepted, in Case 6/64 Costa v ENEL [1964] ECR 585, that electricity may fall within the scope of Article 37 of the Treaty.
18 In paragraph 22 of Schindler, cited above, the Court expressly stated that the import and distribution of the documents and tickets needed for the organization of a lottery are not ends in themselves, their sole purpose being to enable residents of the Member States where those objects are imported and distributed to participate in the lottery.  The Schindler judgment cannot therefore be transposed to a situation such as the present where the services needed for the import or export of electricity and its transmission and distribution merely constitute the means for supplying users with goods within the meaning of the Treaty.
19 The Court also held in ERT, cited above (paragraph 18), that the granting, to an undertaking with a monopoly over television-related services, of the exclusive right to import, hire or distribute materials and products necessary for television broadcasting does not constitute a measure having an effect equivalent to a quantitative restriction within the meaning of Article 30 of the Treaty, provided that no discrimination is thereby created between domestic products and imported products to the detriment of the latter.  Accordingly, it cannot in any way be inferred from that judgment that the import and export of the material in question fall outside the scope of the rules of the Treaty relating to the free movement of goods.
20 It is therefore necessary to consider whether the exclusive rights to import and export electricity at issue in this case are compatible with those rules, including Article 37.
Article 37 of the Treaty
22 Accordingly, without requiring the abolition of those monopolies, that provision prescribes in mandatory terms that they must be adjusted in such a way as to ensure that when the transitional period has ended the discrimination referred to has ceased to exist (Case 59/75 Pubblico Ministero v Manghera [1976] ECR 91, paragraph 5). Moreover, even before the expiry of the transitional period, it prohibited the Member States from introducing further discrimination of the kind referred to in Article 37(1).
23 As the Court held in Manghera, cited above (paragraph 12), and Case C-347/88 Commission v Greece [1990] ECR I-4747 (paragraph 44), exclusive import rights give rise to discrimination prohibited by Article 37(1) against exporters established in other Member States.  Such rights directly affect the conditions under which goods are marketed only as regards operators or sellers in other Member States.
25 Moreover, it must be pointed out - as has been done by the Commission - that ENEL, which has the statutory responsibility of providing within Italy not only the generation, import and export, transmission and transformation but also the distribution and sale of electricity, reserves available national production as a matter of priority to users in Italy.  Accordingly, it must be concluded that ENEL's exclusive export rights have, if not the object, at least the effect of specifically restricting patterns of exports and thereby establishing a difference in treatment between domestic trade and export trade, in such a way as to provide a special advantage for the Italian domestic market (on that point, see in particular, with regard to Article 34 of the Treaty, Case C-47/90 Delhaize v Promalvin [1992] ECR I-3669, paragraph 12).
26 The Italian Government has contended, however, that is clear from ERT, cited above, that where trade in goods is closely linked with the provision of a service, as in the case of electricity, it is not sufficient, in order to establish an infringement of the Treaty rules on the free movement of goods in general and Article 37 in particular, to refer to indirect or potential obstacles to Community trade; evidence must be provided of the existence of an actual obstacle and therefore of real discrimination suffered by the imported product as compared with the domestic product.
28 The Italian Government has also pointed out that, in its judgment in Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097, paragraph 16, the Court held that the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment (Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837), so long, in particular, as those provisions affect in the same manner, in law and in fact, the marketing of domestic products and those from other Member States.  Thus, according to the Italian Government, the Court generalized the principle established by ERT, cited above. Consequently, ENEL's exclusive import and export rights could be contrary to the Treaty provisions on free movement of goods only if they were intended to enable ENEL freely to practice discrimination, in exercising them, between electricity produced in Italy and that produced in the remainder of the European Union, to the advantage of the former.
29 It is true that, in ERT, cited above, the Court held that the articles of the Treaty relating to the free movement of goods do not preclude the granting to a single undertaking of exclusive rights relating to television broadcasting and the granting for that purpose of exclusive authority to import, hire or distribute material and products necessary for that broadcasting, provided that no discrimination is thereby created between domestic products and imported products to the detriment of the latter.
30 However, as the Advocate General has observed at point 65 of his Opinion, the imports of the goods at issue in ERT were intended solely for the holder of a service monopoly which, in itself, was not contrary to Community law, whereas in this case the electricity imported by the holder of the exclusive rights is intended not for its exclusive consumption but for consumption by all undertakings and consumers in the Member State concerned.
31 It must also be noted that Keck and Mithouard, cited above, is concerned only with domestic provisions which limit or prohibit certain selling arrangements and not national legislation designed to regulate trade in goods between Member States (paragraph 12 of the judgment) or which relate to the requirements to be met by the goods in question (paragraph 15 of the judgment).
32 Finally, the fact that the volume of trade has constantly increased over recent years is not such as to detract from the findings in paragraphs 23 to 25 of this judgment, that the existence of exclusive import and export rights in a Member State gives rise to discrimination against exporters and importers established in other Member States, since that trade is carried on exclusively by the holder of those rights and all the economic operators in the other Member States are automatically excluded from direct imports and exports and deprived of the freedom to choose their customers or suppliers in the Member State in which the holder of those rights is established.
Articles 30, 34 and 36 of the Treaty
36 As a subsidiary argument, it has maintained that, by virtue of the case-law of the Court, in order to qualify for the derogation provided for in Article 90(2), it is not sufficient for a Member State to have entrusted to an undertaking the operation of a service of general economic interest but it is also necessary for the application of the rules of the Treaty to obstruct the performance of the particular tasks assigned to the undertaking and for the interests of the Community not to be affected (Case C-179/90 Merci Convenzionali Porto di Genova v Siderurgica Gabrielli [1991] ECR I-5889, paragraph 26).  The Commission adds that it is clear from the judgments in Case C-320/91 Corbeau [1993] ECR I-2533, paragraphs 14 and 16, and Case C-393/92 Almelo, cited above, paragraph 49, that, for restrictions on competition involving the granting of exclusive rights to undertakings entrusted with tasks of general economic interest to be justified under Article 90(2) of the Treaty, they must be necessary to ensure performance of the specific tasks assigned to those undertakings and in particular to enable them to operate under economically acceptable conditions.
40 As the Court held in Joined Cases 188/80, 189/80 and 190/80 France, Italy and United Kingdom v Commission [1982] ECR 2545, paragraph 12, Article 90 concerns only undertakings for whose actions States must take special responsibility by reason of the influence which they may exert over such actions.  It emphasizes that such undertakings, subject to the provisions contained in paragraph 2, are subject to all the rules laid down in the Treaty and, further, requires the Member States to respect those rules in their relations with those undertakings.
43 Having regard to the scope just attributed to paragraphs 1 and 2 of Article 90, and to their combined effect, paragraph 2 may be relied upon to justify the grant by a Member State, to an undertaking entrusted with the operation of services of general economic interest, of exclusive rights which are contrary to, in particular, Article 37 of the Treaty, to the extent to which performance of the particular tasks assigned to it can be achieved only through the grant of such rights and provided that the development of trade is not affected to such an extent as would be contrary to the interests of the Community.
55 In proceedings under Article 169 of the Treaty for failure to fulfil an obligation, it is incumbent upon the Commission to prove the allegation that the obligation has not been fulfilled and to place before the Court the information needed to enable it to determine whether the obligation has not been fulfilled (see Case 96/81 Commission v Netherlands [1982] ECR 1791, paragraph 6).
56 In that regard, it must be borne in mind that the purpose of the prelitigation procedure provided for by Article 169 of the Treaty is to enable the Member State to comply of its own accord with the requirements of the Treaty or, if appropriate, to justify its position (see, to that effect, Case 85/85 Commission v Belgium [1986] ECR 1149, paragraph 11).  That is precisely what the Italian Government did by putting forward, in its reply to the Commission's letter of formal notice, a number of arguments to justify maintenance of the exclusive rights at issue under, in particular, Article 90(2) of the Treaty.
57 The reasoned opinion must contain a coherent and detailed statement of the reasons which led the Commission to conclude that the State in question failed to fulfil one of its obligations under the Treaty (see in particular Case C-289/94 Commission v Italy [1996] ECR I-4405, paragraph 16).  In this case, the reasons given by the Commission on that point were essentially legal considerations in relation to which the explanations given by the Italian Government were not relevant.
58 The purpose of the application, if the Commission brings proceedings before the Court, is to specify, by reference to the prelitigation procedure, the complaints on which the Court is called upon to rule and, at the very least in summary form, the legal and factual particulars on which those complaints are based (see in particular Commission v Greece, cited above, paragraph 28).  In this case, the Commission confined itself essentially to purely legal arguments.