Commission of the European Communities v Republic of Austria.
Date: 2007-11-29
29. Whilst it is true that, in a sector which has not been subject to full harmonisation at Community level, Member States remain, in principle, competent to define the conditions for the pursuit of the activities in that sector, they must, when exercising their powers, respect the basic freedoms guaranteed by the EC Treaty (see Case C‑514/03 Commission  v Spain  [2006] ECR I‑963, paragraph 23, and Case C‑257/05 Commission  v Austria [2006] ECR I‑134, paragraph 18).
31. It is settled case-law that all measures which prohibit, impede or render less attractive the exercise of the freedom to provide services must be regarded as restrictions of that freedom (see Case C‑452/04 Fidium Finanz  [2006] ECR I‑9521, paragraph 46 and the case-law cited).
32. Therefore, the establishment requirement under the contested administrative practice runs directly contrary to the freedom to provide services, since it renders impossible, in Austria, the provision of the services in question by private bodies established only in other Member States (see, by analogy, Case C‑355/98 Commission  v Belgium  [2000] ECR I‑1221, paragraph 27 and the case-law cited).
35. As regards the primary argument, it must be remembered that, as a derogation from the fundamental rule of freedom to provide services, Article 55 EC, read in conjunction with the first paragraph of Article 45 EC, must be interpreted in a manner which limits its scope to what is strictly necessary to safeguard the interests which it allows the Member States to protect (see, to that effect, Case C‑451/03 Servizi Ausiliari Dottori Commercialisti  [2006] ECR I‑2941, paragraph 45 and the case-law cited).
36. Thus, according to settled case-law, derogation under those articles must be restricted to activities which, in themselves, are directly and specifically connected with the exercise of official authority (see Servizi Ausiliari Dottori Commercialisti , cited above, paragraph 46 and the case-law cited), which excludes from being regarded as connected with the exercise of official authority, within the meaning of that derogation, functions that are merely auxiliary and preparatory vis-à-vis an entity which effectively exercises official authority by taking the final decision (Case C‑42/92 Thijssen [1993] ECR I‑4047, paragraph 22).
41. Whilst it follows that the activities of private bodies are not limited to the organisation of mere inspections of the conformity of organically-farmed products, but also include the exercise of powers as to the consequences to be drawn from those inspections, it must none the less be pointed out that Regulation No 2092/91 provides for the oversight of those bodies by the competent public authority. Thus, Article 9(4) thereof subjects those bodies to the supervision of that authority. Among other provisions, Article 9(6) sets out the detailed rules and procedures for the exercise of that supervision, providing, in particular, that the authority, apart from its powers of issue and withdrawal of approval, is to ensure the objectivity and verify the effectiveness of the inspections carried out by private bodies. In addition, Article 9(8)(a) requires those bodies to give the competent authority access, for inspection purposes, to their offices and facilities.
42. It is therefore apparent that private bodies carry out their activities under the active supervision of the competent public authority which, in the final analysis, is responsible for the inspections and decisions of those bodies, as is demonstrated by that authority’s obligations noted in the preceding paragraph of the present judgment. That conclusion is also supported by the system of supervision of private bodies put in place by the Law of 1975 on Foodstuffs, which provides that it is the Landeshauptmänner, as the supervisory authorities, who adopt the measures referred to in Article 9(9)(b) of Regulation No 2092/91, since private bodies have, in that field, only the power to propose such measures. It follows that the auxiliary and preparatory role devolved on private bodies by that regulation vis-à-vis the supervisory authority cannot be regarded as being directly and specifically connected with the exercise of official authority, within the meaning of Article 55 EC, read in conjunction with the first paragraph of Article 45 EC.
45. Secondly, while Regulation No 2092/91 does not preclude the Member States from conferring on private bodies rights and powers of public authority to carry out their inspection activities, or even from entrusting to them other activities which, taken in themselves, are directly and specifically connected with the exercise of official authority, it is however clear from the Court’s case-law that the extension of the exception allowed by Articles 45 EC and 55 EC to an entire profession is not possible when the activities connected with the exercise of official authority are separable from the professional activity in question taken as a whole (see, as regards Article 45 EC, Reyners , cited above, paragraph 47).
52. In that regard, is it is to be noted that, in accordance with settled case-law, consumer protection can justify interference with the freedom to provide services (see, to that effect, Joined Cases C‑34/95 to C‑36/95 De Agostini and TV-Shop  [1997] ECR I‑3843, paragraph 53; Case C‑243/01 Gambelli and Others  [2003] ECR I‑13031, paragraph 67; and Joined Cases C‑338/04, C‑359/04 and C‑360/04 Placanica and Others  [2007] ECR I‑0000, paragraph 46).
53. However, it is important to check that the measures taken for that purpose do not exceed what is objectively necessary (see, to that effect, Case C‑496/01 Commission  v France  [2004] ECR I‑2351, paragraph 68).