Criminal proceedings against Ernst Engelmann.
Date: 2010-09-09
28. The condition that persons wishing to operate gaming establishments must adopt the legal form of a public limited company is a restriction on freedom of establishment within the meaning of Article 43 EC. Such a condition prevents, inter alia, operators who are natural persons and undertakings which, in the country in which they are established, have chosen another corporate form from setting up a secondary establishment in Austria (see, to that effect, Case 107/83 Klopp  [1984] ECR 2971, paragraph 19; Case 143/87 Stanton and L’Étoile 1905  [1988] ECR 3877, paragraph 11; and Case C‑171/02 Commission  v Portugal  [2004] ECR I‑5645, paragraph 42).
30. As the European Commission has pointed out in its observations, and the Advocate General has stated in point 68 of his Opinion, certain objectives might justify requiring operators to adopt a particular legal form. The obligations binding public limited companies in regard, in particular, to their internal organisation, the keeping of the ir accounts, the scrutiny to which they may be subject and relations with third parties could justify such a requirement, having regard to the specific characteristics of the gaming sector and the dangers connected with it.
34. It is apparent from the Court’s case-law that, to the extent that a restriction, such as that which has been found to exist in the present case, is discriminatory, it is compatible with European Union law only if it is covered by an express derogating provision, such as Article 46 EC, namely public policy, public security or public health (Case C‑388/01 Commission  v Italy  [2003] ECR I‑721, paragraph 19, and Case C‑153/08 Commission  v Spain  [2009] ECR I‑9735, paragraph 37).
35. Moreover, such a restriction must satisfy the conditions which flow from the Court’s case-law in regard to proportionality and may be regarded as appropriate for ensuring attainment of the objective relied upon only if it genuinely reflects a concern to attain it in a consistent and systematic manner (see, to that effect, Case C‑42/07 Liga Portuguesa de Futebol Profissional and Bwin International  [2009] ECR I‑7633, paragraphs 59 to 61).
37. Without it being necessary to determine whether that objective can fall within the definition of public policy, it need merely be pointed out in this respect that the categorical exclusion of operators whose seat is in another Member State appears disproportionate, as it goes beyond what is necessary to combat crime. There are indeed various measures available to monitor the activities and accounts of such operators (see, to that effect, Case C‑243/01 Gambelli and Others  [2003] ECR I‑13031, paragraph 74; Joined Cases C‑338/04, C‑359/04 and C‑360/04 Placanica and Others  [2007] ECR I‑1891, paragraph 62; and Commission  v Spain , paragraph 39).
43. Three distinct restrictions can be identified in this context, namely, first, the limitation of the number of concessions to operate gaming establishments, secondly, the grant of those concessions for 15 years and, thirdly, the fact that they have been granted in the absence of any transparency. Those restrictions must be examined in turn in order to determine in each case in particular whether the restriction is suitable for achieving the objective or objectives invoked by the Member State concerned and whether it goes beyond what is necessary in order to achieve those objectives ( Placanica and Others , paragraph 49, and Case C‑46/08 Carmen Media Group  [2010] ECR I‑0000, paragraph 60).
44. With regard, first, to the fact that the number of concessions to operate gaming establishments is limited, it is clear that such a limitation involves obstacles to the freedom of establishment and the freedom to provide services ( Placanica and Others , paragraphs 50 and 51).
45. It none the less appears, subject to verification by the national court, that, in the sector concerned, a limit of 12 on the number of concessions and, therefore, of gaming establishments, which, according to information provided by the Austrian Government, represents one establishment for 750 000 inhabitants, of its very nature makes it possible to limit opportunities for gambling and thus to attain an objective in the public interest recognised by European Union law (see, to that effect, Gambelli and Others , paragraphs 62 and 67; Placanica and Others , paragraph 53; and Carmen Media Group , paragraph 84). Since consumers must travel to the premises of an establishment in order to be able to take part in the games of chance in question, the consequence of a limitation on the number of such establishments is to reinforce the barriers to taking part in such games.
46. With regard, secondly, to the duration of the concessions, it is clear from the Court’s case-law that the grant of concessions for a duration of up to 15 years is liable to impede or even prohibit the exercise of the freedoms guaranteed by Articles 43 EC and 49 EC by operators in other Member States and therefore constitutes a restriction on the exercise of those freedoms (see, to that effect, Case C‑323/03 Commission  v Spain  [2006] ECR I‑2161, paragraph 44).
47. As regards the determination of whether that restriction is compatible with European Union law, it must be pointed out that freedom of establishment and the freedom to provide services, as fundamental principles of the Treaty, may be restricted only by rules which are justified by overriding reasons in the public interest and are applicable to all persons and undertakings pursuing an activity in the territory of the host Member State. Furthermore, in order to be so justified, the national legislation in question must be suitable for securing the attainment of the objective which it pursues and must not go beyond what is necessary in order to attain it (Case C‑323/03 Commission  v Spain , paragraph 45 and the case-law cited).
49. With regard, thirdly, to the procedure for the grant of the concessions at issue in the main proceedings, it must first be recalled that although, as European Union law now stands, service concessions are not governed by any of the directives by which the European Union legislature has regulated public procurement, the public authorities which grant such concessions are none the less bound to comply with the fundamental rules of the Treaties, in particular Articles 43 EC and 49 EC, and with the consequent obligation of transparency (see, to that effect, Case C‑324/98 Telaustria and Telefonadress  [2000] ECR I‑10745, paragraphs 60 and 61; Case C‑231/03 Coname  [2005] ECR I‑7287, paragraphs 16 to 19; Case C‑458/03 Parking Brixen  [2005] ECR I‑8585, paragraphs 46 to 48; Case C‑91/08 Wall  [2010] ECR I‑0000, paragraph 33; and Case C‑203/08 Sporting Exchange  [2010] ECR I‑0000, paragraph 39).
50. Without necessarily implying an obligation to call for tenders, that obligation of transparency, which applies when the service concession in question may be of interest to an undertaking located in a Member State other than that in which the concession is granted, requires the concession-granting authority to ensure, for the benefit of any potential tenderer, a degree of publicity sufficient to enable the service concession to be opened up to competition and the impartiality of the award procedures to be reviewed ( Sporting Exchange , paragraphs 40 and 41 and the case-law cited).
51. The grant of a concession, in the absence of any transparency, to an operator located in the Member State of the awarding authority constitutes a difference in treatment to the detriment of operators located in other Member States, who have no real possibility of manifesting their interest in obtaining the concession in question. Such a difference in treatment is contrary to the principle of equal treatment and the prohibition of discrimination on grounds of nationality, and constitutes indirect discrimination on grounds of nationality prohibited by Articles 43 EC and 49 EC, unless it is justified by objective circumstances (see, to that effect, Coname , paragraph 19; Parking Brixen , paragraph 50; and Case C‑347/06 ASM Brescia  [2008] ECR I‑5641, paragraphs 59 and 60).
52. The fact that the issue of licences to operate gaming establishments may not be the same as a service concession contract does not, in itself, justify any failure to have regard to the requirements arising from Article 49 EC, in particular the principle of equal treatment and the obligation of transparency (see, to that effect, Sporting Exchange , paragraph 46).
54. Furthermore, it must be recalled that, when a licensing system pursuing legitimate objectives recognised by the case-law is introduced in a Member State, such a licensing system cannot render legitimate discretionary conduct on the part of the national authorities which is liable to negate the effectiveness of provisions of European Union law, in particular those relating to the fundamental freedoms such as those at issue in the main proceedings (see, in particular, Sporting Exchange , paragraph 49, and Carmen Media Group , paragraph 86).
55. It has consistently been held that if a prior administrative authorisation scheme is to be justified even though it derogates from such fundamental freedoms, it must be based on objective, non-discriminatory criteria known in advance, in such a way as to circumscribe the exercise of the national authorities’ discretion so that it is not used arbitrarily. Furthermore, any person affected by a restrictive measure based on such a derogation must have an effective judicial remedy available to him (see Sporting Exchange , paragraph 50, and Carmen Media Group , paragraph 87).