Commission of the European Communities v Italian Republic.
Date: 2007-12-13
16. As a preliminary point, it should be borne in mind that, although it is true that, in sectors which have not yet been fully harmonised at Community level (as is the case with the private security sector, a fact acknowledged at the hearing by both the Italian Republic and the Commission), the Member States remain competent, in principle, to define the conditions for the pursuit of activities in that sector, the fact remains that, when exercising that competence, they must respect the basic freedoms guaranteed by the EC Treaty (see, inter alia, Case C-514/03 Commission v Spain [2006] ECR I-963, paragraph 23).
17. In that regard, according to the case-law of the Court, Articles 43 EC and 49 EC require the elimination of restrictions on the freedom of establishment and the freedom to provide services. All measures which prohibit, impede or render less attractive the exercise of those freedoms must be regarded as constituting such restrictions (see Case C-439/99 Commission v Italy [2002] ECR I-305, paragraph 22; Case C-442/02 CaixaBank France [2004] ECR I-8961, paragraph 11; Case C-451/03 Servizi Ausiliari Dottori Commercialisti  [2006] ECR I-2941, paragraph 31; and Case C-65/05 Commission v Greece [2006] ECR I-10341, paragraph 48).
18. The Court has also held that national measures which restrict the exercise of the fundamental freedoms guaranteed by the Treaty can be justified only if they satisfy four conditions: they must apply in a non-discriminatory manner; they must be justified by overriding reasons relating to the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain that objective (see Case C-424/97 Haim [2000] ECR I-5123, paragraph 57 and the case-law cited, and Commission v Greece , paragraph 49).
31. In view of the consequences arising from the application of Articles 45 EC and 55 EC, it is necessary to determine at the outset whether those provisions apply in the present case.
32. It is clear from the case-law of the Court that the derogation provided for in the first paragraph of Article 45 EC and in Article 55 EC must be restricted to activities which in themselves are directly and specifically connected with the exercise of official authority (see Case C-114/97 Commission v Spain [1998] ECR I-6717, paragraph 35; Case C-355/98 Commission v Belgium [2000] ECR I-1221, paragraph 25; and Case C-283/99 Commission v Italy [2001] ECR I-4363, paragraph 20).
33. The Court has also held that the activities of undertakings providing surveillance and protection services are not normally directly and specifically connected with the exercise of official authority (see Commission v Belgium , paragraph 26, and Case C‑283/99 Commission v Italy , paragraph 20).
38. For the rest, the Court has already held that merely making a contribution to the maintenance of public security, which any individual may be called upon to do, does not constitute exercise of official authority (see Case C‑114/97 Commission v Spain , paragraph 37).
39. In addition, Article 134 of the Consolidated Law sets out strict limits for the performance of surveillance activities, that is to say, it provides that those activities may never involve the exercise of powers vested in the State or the restriction of individual liberty. Accordingly, private security undertakings are granted no powers of coercion.
49. As regards the subsidiary ground relied upon by the Italian Government to justify that obstacle to the freedoms guaranteed by Articles 43 EC and 49 EC and relating to the maintenance of public order, it should be borne in mind that the concept of ‘public order’ comes into play where a genuine and sufficiently serious threat affects one of the fundamental interests of society. Like all derogations from a fundamental principle of the Treaty, the exception relating to public order must be narrowly construed (see Commission v Belgium , paragraph 28 and the case-law cited).
58. According to settled case-law, national legislation which makes the provision of certain services on national territory, by an undertaking established in another Member State, subject to the issue of an administrative authorisation constitutes a restriction on the freedom to provide services within the meaning of Article 49 EC (see, inter alia, Case C-43/93 Vander Elst [1994] ECR I-3803, paragraph 15; Commission v Belgium , paragraph 35; Case C-189/03 Commission v Netherlands  [2004] ECR I‑9289, paragraph 17; and Case C-134/05 Commission v Italy [2007] ECR I-0000, paragraph 23).
59. In addition, the limitation of the territorial scope of the authorisation, which obliges the service provider, under Article 136 of the Consolidated Law, to request authorisation in each of the provinces where it intends to operate (bearing in mind that Italy is divided into 103 provinces) further complicates the exercise of the freedom to provide services (see, to that effect, Case C-298/99 Commission v Italy [2002] ECR I-3129, paragraph 64).
60. It follows that legislation such as that at issue in the present case is in principle contrary to Article 49 EC, and as such prohibited thereunder unless it can be justified by overriding reasons relating to the public interest and on condition, moreover, that it is proportionate to the objective pursued (see, to that effect, Case C‑134/05 Commission v Italy , paragraph 24).
62. However, it is established case-law that such an obstacle may be justified only in so far as the public interest relied on is not already safeguarded by the rules to which the service provider is subject in the Member State in which it is established (Case C‑514/03 Commission v Spain , paragraph 43).
64. In the present case, by not providing for account to be taken in the licensing procedure of obligations to which the cross-border service provider is already subject in the Member State of establishment, the Italian legislation goes beyond what is necessary to attain the objective sought by the national legislature, which is to ensure close supervision of the activities in question (see, to that effect, Commission v Belgium , paragraph 38; Case C-171/02 Commission v Portugal [2004] ECR I-5645, paragraph 60; Commission  v Netherlands , paragraph 18; and Case C‑134/05 Commission v Italy , paragraph 25).
65. As regards the Italian Republic’s argument that there is an administrative practice under which, for the purposes of deciding on applications for authorisation, the competent authority takes into account the obligations laid down in the Member State of origin, it must be observed that no proof of such a practice has been produced. In any case, it is settled case-law that mere administrative practices, which by their nature are alterable at will by the authorities and are not given the appropriate publicity, cannot be regarded as constituting valid fulfilment of obligations under the Treaty (see, inter alia, Commission v Netherlands , paragraph 19).
84. It must be observed, at the outset, that it is settled case-law that the requirement that a private security undertaking have its place of business in the Member State in which the service is provided runs directly counter to the freedom to provide services in so far as it makes it impossible for service providers established in other Member States to provide services in that State (see, inter alia, Commission v Belgium , paragraph 27, and Case C‑134/05 Commission v Italy , paragraph 43 and the case-law cited).
87. The supervision of private security activities is in no way dependent upon the existence of a place of business in each of the provinces of the State within whose jurisdiction the undertakings intend to carry out their activities in exercise of the freedom to provide services. As has been stated at paragraph 62 of this judgment, provided that the conditions to be satisfied in order to obtain an authorisation do not duplicate the equivalent conditions which have already been satisfied by the provider of cross-border services in the Member State of establishment, an authorisation system with concomitant obligations is sufficient, in that context, to attain the objective of supervision of private security activities (see, to that effect, Case C-496/01 Commission v France [2004] ECR I-2351, paragraph 71).
93. The Court has already held that the requirement that members of the staff of a private security undertaking must obtain a fresh specific authorisation in the host Member State constitutes an unjustified restriction on that undertaking’s freedom to provide services within the meaning of Article 49 EC, in so far as it does not take account of the controls and verifications already carried out in the Member State of origin ( Commission v Portugal , paragraph 66; Commission v Netherlands , paragraph 30; and Case C‑514/03 Commission v Spain , paragraph 55).
103. As regards the grounds relied upon by the Italian Republic in justification of that impediment to the freedoms guaranteed by Articles 43 EC and 49 EC, it must be stated that the obligation for each change in the functioning of the undertaking to be subject to prefectorial authorisation cannot be regarded as prima facie inappropriate for attaining the objective entrusted to the Prefetto of effective supervision of the activities concerned (see, to that effect, Case C‑134/05 Commission v Italy , paragraph 59).
109. The Court has already ruled that, in the private security sector, the obligation to lodge a guarantee with a deposits and loans office is likely to hinder or make less attractive the exercise of freedom of establishment and freedom to provide services within the meaning of Articles 43 EC and 49 EC, in so far as it makes the provision of services or the formation of a subsidiary or secondary establishment more onerous for private security undertakings established in ot her Member States than for those established in the Member State of destination (see Case C‑514/03 Commission v Spain , paragraph 41).
122. According to settled case-law, Article 49 EC precludes the application of any national rules which have the effect of making the provision of services between Member States more difficult than the provision of services purely within a Member State (see Case C‑134/05 Commission v Italy , paragraph 70).
123. As regards compulsory minimum fees, the Court has already held that legislation which unconditionally prohibits derogation, by agreement, from the minimum fees set by a scale for legal services consisting in court services, on the one hand, and services reserved to lawyers, on the other, constitutes a restriction on the freedom to provide services laid down in Article 49 EC (see Joined Cases C-94/04 and C-202/04 Cipolla and Others  [2006] ECR I-11421, paragraph 70, and Case C‑134/05 Commission v Italy , paragraph 71).
125. The limitation thus imposed on the freedom to set fees is likely to restrict access to the Italian private security services market for operators, established in other Member States, wishing to offer their services in Italy. In the first place, the effect of that limitation is to deprive economic operators established in other Member States of the opportunity to compete more effectively – by quoting fees lower than those fixed by the imposed scale – with the economic operators traditionally established in Italy, which have greater opportunities than economic operators established abroad to build up their clientele (see, to that effect, Case C‑134/05 Commission v Italy , paragraph 72 and the case-law cited). Secondly, that limitation is likely to prevent operators established in other Member States from incorporating in the fees for their services certain costs that operators established in Italy do not have to bear.