European Commission v Hungary.
Date: 2016-02-23
43


It should be borne in mind in that regard that Article 14 of Directive 2006/123 prohibits Member States from making access to, or the exercise of, a service activity in their territory subject to compliance with any of the requirements listed in points 1 to 8 of that provision, obliging them to ensure that those requirements be removed, systematically and as a matter of priority (judgment in Rina Services and Others, C‑593/13, EU:C:2015:399, paragraph 26).
45


As regards the grounds put forward as justification by the Hungarian Government, the Court has already held that it follows both from the wording of Article 14 of Directive 2006/123 and from the general scheme of the directive that no justification can be given for the requirements listed in that article (judgment in Rina Services and Others, C‑593/13, EU:C:2015:399, paragraphs 28 to 35).
46


The Court has stressed in that regard that such a prohibition, with no possibility of justification, seeks to ensure the systematic and swift removal of certain restrictions on the freedom of establishment, which are regarded by the EU legislature and the case-law of the Court as adversely affecting the proper functioning of the internal market, and thus pursues an aim which is consistent with the FEU Treaty (judgment in Rina Services and Others, C‑593/13, EU:C:2015:399, paragraph 39).
47


Accordingly, even though Article 52(1) TFEU allows the Member States to justify, on any of the grounds listed in that provision, national measures constituting a restriction on the freedom of establishment, that does not prevent the EU legislature, when adopting secondary legislation, such as Directive 2006/213, giving effect to a fundamental freedom enshrined in the Treaty, from restricting certain derogations, especially when, as in the present case, the relevant provision of secondary law merely reiterates settled case-law of the Court to the effect that a requirement such as that at issue is incompatible with the fundamental freedoms on which economic operators can rely (see, to that effect, judgment in Rina Services and Others, C‑593/13, EU:C:2015:399, paragraph 40).
60


In order to determine the full significance of Article 15(2)(b), reference should be made not only to its wording, but also to its purpose and broad logic, in the context of the scheme laid down by Directive 2006/123 (see, by analogy, judgment in Femarbel, C‑57/12, EU:C:2013:517, paragraph 34).
61


Article 15(2)(b) of Directive 2006/123 concerns, according to the terms in which it is cast, situations in which the ‘provider’ is required to ‘take a specific legal form’.
62


In that regard it is clear from recital 73 of Directive 2006/123 that that is the case where, for example, there is an obligation to have legal personality, to establish a single-member company or to take the form of a non-profit making organisation or a company owned exclusively by natural persons. As is suggested both by the non-exhaustive nature of that list and by its content, the concept of ‘specific legal form’ used in Article 15(2)(b) of Directive 2006/123 must be understood in a broad sense.
63


A broad interpretation of that kind is, moreover, in keeping with the objective of Directive 2006/123 which, as is clear from recitals 2 and 5 thereof, is intended to remove restrictions on the freedom of establishment for providers in the Member States and on the free movement of services between Member States, in order to contribute to the completion of a free and competitive internal market (see, inter alia, judgment in Société fiduciaire nationale d’expertise comptable, C‑119/09, EU:C:2011:208, paragraph 26). Indeed, legislation of a Member State which requires a provider to have a particular legal form or status constitutes a significant restriction on the freedom of establishment of providers and on the freedom to provide services (see to that effect, inter alia, judgments in Commission v Italy, C‑439/99, EU:C:2002:14, paragraph 32, and Commission v Portugal, C‑171/02, EU:C:2004:270, paragraphs 41 and 42).
69


Whilst such a conclusion is sufficient for a finding of non-compliance with the conditions set out in Article 15(3) of Directive 2006/123, given that those conditions are cumulative, it should also be stated that the Hungarian Government — by merely asserting, in order to justify the requirements concerning the legal form of a SZÉP card issuer and of that issuer’s parent company, that it is essential for the issuer and its parent company to be integrated into Hungarian economic life and for the issuer to have the requisite experience and infrastructure — has not put forward any specific matters or arguments capable of demonstrating in what respect such requirements are necessary and proportionate for the purpose of ensuring that SZÉP card issuers offer the guarantees of solvency, professionalism and accessibility that appear necessary in order to achieve that Government’s stated objectives of protecting the users of such cards and creditors.
90


Since, as has been recalled in paragraph 69 of this judgment, the conditions in Article 15(3) of Directive 2006/123 are cumulative, that finding is sufficient to establish non-compliance with that provision.
94


As the Commission has argued, that would seem to be the case of measures which — provided that they comply with the requirements of EU law — are aimed, for example, at ensuring that SZÉP card issuers are subject to a system of supervision or a mechanism entailing a bank guarantee or insurance (see, by analogy, judgment in Commission v Portugal, C‑171/02, EU:C:2004:270, paragraph 43) and make provision for the use by issuers of telephone services or commercial agents.
111


In that regard, it should be borne in mind, first, that Directive 2006/123, as is clear from Article 1 in conjunction with recitals 2 and 5, lays down general provisions, intended to remove restrictions on the freedom of establishment for service providers in Member States and on the free movement of services between Member States, in order to contribute to the completion of a free and competitive internal market (see judgment in Femarbel, C‑57/12, EU:C:2013:517, paragraph 31 and the case-law cited).
113


Next, it follows from Articles 2(1) and 4 of Directive 2006/123 that the latter applies to any self-employed economic activity, normally provided for remuneration, by a provider established in a Member State, whether or not the provider is established in a stable and continuous manner in the Member State in which the services are provided, with the exception of the activities expressly excluded (see, to that effect, judgment in Femarbel, C‑57/12, EU:C:2013:517, paragraph 32).
118


Since the Commission’s principal complaints, which concern Articles 14 to 16 of Directive 2006/123 have been upheld, there is no need to consider the complaints concerning infringement of Articles 49 TFEU and 56 TFEU, which the Commission has put forward in the alternative.
141


Under Article 120(c) of the Court’s Rules of Procedure and the case-law relating thereto, an application initiating proceedings must state the subject-matter of the proceedings, the pleas in law and arguments relied on and a summary of those pleas in law. That statement must be sufficiently clear and precise to enable the defendant to prepare his defence and the Court to rule on the application. It is therefore necessary for the essential points of fact and of law on which a case is based to be indicated coherently and intelligibly in the application itself and for the form of order to be set out unambiguously so that the Court does not rule ultra petita or fail to rule on a complaint (see, inter alia, judgment in Parliament v Council, C‑317/13 and C‑679/13, EU:C:2015:223, paragraph 17 and the case-law cited).
148


It must be borne in mind that the objective of the freedom of establishment guaranteed by Article 49 TFEU is to allow a national of a Member State to set up a secondary establishment in another Member State to carry on his activities there and thus assist economic and social interpenetration within the European Union in the sphere of activities as self-employed persons. To that end, freedom of establishment is intended to allow a national of a Member State to participate, on a stable and continuing basis, in the economic life of a Member State other than his State of origin and to profit therefrom by actually pursuing in the host Member State an economic activity through a fixed establishment for an indefinite period (see to that effect, inter alia, judgment in Cadbury Schweppes and Cadbury Schweppes Overseas, C‑196/04, EU:C:2006:544, paragraphs 53 and 54 and the case-law cited).
149


As is clear from the case-law, an economic activity may consist in offering goods and services (see to that effect, inter alia, judgment in Pavlov and Others, C‑180/98 to C‑184/98, EU:C:2000:428, paragraph 75 and the case-law cited).
150


As to the freedom to provide services laid down in Article 56 TFEU, it covers all services that are not offered on a stable and continuing basis from an established professional base in the Member State of destination (see, inter alia, judgments in Gebhard, C‑55/94, EU:C:1995:411, paragraph 22, and Commission v Portugal, C‑171/02, EU:C:2004:270, paragraph 25).
152


As the Court has recalled on a number of occasions, the concept of services may not be interpreted restrictively (see to that effect, inter alia, judgment in Deliège, C‑51/96 and C‑191/97, EU:C:2000:199, paragraph 52 and the case-law cited).
153


According to settled case-law of the Court, that concept means ‘services ... normally provided for remuneration’, the essential characteristic of remuneration lying in the fact that it constitutes consideration for the service in question (see, inter alia, judgment in Jundt, C‑281/06, EU:C:2007:816, paragraphs 28 and 29 and the case-law cited).
154


The decisive factor which brings an activity within the ambit of the FEU Treaty provisions on the freedom to provide services and, accordingly, of those relating to the freedom of establishment, is its economic character, that is to say, the activity must not be provided for nothing. By contrast, contrary to what is maintained by the Hungarian Government, there is no need in that regard for the person providing the service to be seeking to make a profit (see, to that effect, judgment in Jundt, C‑281/06, EU:C:2007:816, paragraphs 32 and 33 and the case-law cited).
155


Moreover, it is immaterial who pays the provider for the service. Article 57 TFEU does not require that the service provided be paid for by those who benefit from it (see, inter alia, judgment in OSA, C‑351/12, EU:C:2014:110, paragraph 62 and the case-law cited).
156


As regards the activity of issuing and managing Erzsébet vouchers which is at issue in the present case, it is undisputed that the service provided by the HNRF for the combined benefit of employers, their employees and the suppliers who accept those vouchers gives rise to the payment of consideration to the HNRF which represents remuneration for the latter (see, by analogy, judgment in Danner, C‑136/00, EU:C:2002:558, paragraph 27).
157


The fact that the national legislation provides that the profits made by the HNRF from that activity must be used exclusively for certain public interest objectives is not sufficient to alter the nature of the activity in question or to deprive it of its economic character (see to that effect, inter alia, judgment in Schindler, C‑275/92, EU:C:1994:119, paragraph 35).
161


So far as the tax aspect is concerned, the fact that the recipients of the service concerned obtain a tax advantage does not affect the fact that the service is provided by the issuer for remuneration, so that the activity concerned, which thus corresponds to the definition of a service contained in the provisions of the Treaty relating to the freedom to provide services, comes within the scope of those provisions (see, to that effect, judgments in Skandia and Ramstedt, C‑422/01, EU:C:2003:380, paragraphs 22 to 28, and Commission v Germany, C‑318/05, EU:C:2007:495, paragraphs 65 to 82).
163


In the second place, as regards the Hungarian Government’s argument that the issuing of vouchers giving rise to a benefit in kind solely under the tax legislation of the host Member State is not comparable to the activity which is carried on in other Member States by issuers established there and that those issuers thus cannot rely on the freedom to provide services, it is sufficient to recall that the right of an economic operator, established in a Member State, to provide services in another Member State, which Article 56 TFEU lays down, is not subject to the condition that the operator concerned also provides such services in the Member State in which he is established. In that regard, Article 56 TFEU requires only that the provider be established in a Member State other than that of the recipient (see, inter alia, judgment in Carmen Media Group, C‑46/08, EU:C:2010:505, paragraph 43 and the case-law cited).
164


In the third place, it is accepted that national legislation such as that at issue, under which exclusive rights to carry on an economic activity are conferred on a single, private or public, operator, constitutes a restriction both of the freedom of establishment and of the freedom to provide services (see to that effect, inter alia, judgments in Läärä and Others, C‑124/97, EU:C:1999:435, paragraph 29; Servizi Ausiliari Dottori CommercialistiC‑451/03, EU:C:2006:208, paragraphs 33 and 34; and Stoß and Others, C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07, EU:C:2010:504, paragraphs 68 and 107).
165


In the fourth place, it nonetheless remains necessary to determine whether, as the Hungarian Government maintains, that obstacle to the freedom of establishment and the freedom to provide services, may, in the circumstances of this case, be justified, in accordance with the case-law of the Court, by overriding reasons relating to the public interest (see to that effect, inter alia, judgment in Stoß and Others, C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07, EU:C:2010:504, paragraph 69 and the case-law cited).
166


The Court has consistently held that such restrictions cannot be justified unless they serve overriding reasons relating to the public interest, are suitable for securing the attainment of the public interest objective which they pursue and do not go beyond what is necessary in order to attain it (see, inter alia, judgments in Läärä and Others, C‑124/97, EU:C:1999:435, paragraph 31, and OSA, C‑351/12, EU:C:2014:110, paragraph 70).
167


As regards the justification based on grounds of social policy which the Hungarian Government advances, it should be recalled, first, that, according to settled case-law of the Court, developed in relation to the betting and gaming sector, the mere fact that the profits which arise from an economic activity carried out in the context of special or exclusive rights are used for financing social actions or welfare is not a ground that may be regarded as an objective justification for restrictions of the freedom to provide services (see to that effect, see, inter alia, judgments in Läärä and Others, C‑124/97, EU:C:1999:435, paragraph 13 and the case-law cited; Zenatti, C‑67/98, EU:C:1999:514, paragraph 36; and Stoß and Others, C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07, EU:C:2010:504, paragraph 104).
168


Thus, although the Court has accepted, in the context particular to betting and gaming, that there may be justification for a restriction such as the granting of a monopoly to a public body entrusted, inter alia, with the task of financing social actions or welfare, it is apparent from the Court’s decisions that that has been the case only with regard to a certain number of overriding reasons relating to the public interest, such as, for example, the objectives of consumer protection and the prevention of both fraud and incitement to squander money on gambling as well as the general need to preserve public order, and in the light of certain moral, religious or cultural factors associated with betting and gaming (see to that effect, inter alia, judgments in Läärä and Others, C‑124/97, EU:C:1999:435, paragraphs 41 and 42; Liga Portuguesa de Futebol Profissional and Bwin International, C‑42/07, EU:C:2009:519, paragraphs 66, 67 and 72; and Stoß and Others, C‑316/07, C‑358/07 to C‑360/07, C‑409/07 and C‑410/07, EU:C:2010:504, paragraphs 79 and 81 to 83).
171


Moreover, as regards the Hungarian Government’s assertion that a Member State is free to establish a monopoly such as that at issue in the context of its tax and wages policies, it should first of all be recalled that the Member States must exercise their competence in the area of direct taxation consistently with EU law and, in particular, with the fundamental freedoms guaranteed by the Treaty (see to that effect, inter alia, judgments in Skandia and Ramstedt, C‑422/01, EU:C:2003:380, paragraph 25 and the case-law cited, and Berlington Hungary and Others, C‑98/14, EU:C:2015:386, paragraph 34 and the case-law cited). The same is true with regard to the employment policies of the Member States, in particular in the sphere of wages (see, to that effect, judgments in Portugaia Construções, C‑164/99, EU:C:2002:40, paragraph 24; Commission v Germany, C‑341/02, EU:C:2005:220, paragraph 24; and ITC, C‑208/05, EU:C:2007:16, paragraphs 39 to 41).