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Social Services of General Interest in the EU pp 123–160Cite as

Free Movement of Services and the Right of Establishment: Does EU Internal Market Law Transform the Provision of SSGI?

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Part of the book series: Legal Issues of Services of General Interest ((LEGAL))

Abstract

This chapter explores the impact of EU internal market law on SSGI. Does this area of EU law lead to the transformation of the organisation and provision of SSGI? EU harmonisation measures, most notably the Services Directive, and the Treaty provisions on free movement are examined. It is argued that in the CJEU’s case law substantial State control is a strong argument for accepting the validity of national SSGI regulations. Furthermore, the CJEU assigns great value to principles of good governance. It has developed a flexible approach towards SSGI laws that are drafted in a consistent and systematic way. Nevertheless, the introduction of some competition in the provision of these services seems inevitable. However, the Member States can retain control of the organisation and the provision of SSGI, if they manage to make a clear distinction between essential and non-essential services. In this respect the key question is whether the Member States will be able to designate (specific) SSGI as SGEI.

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Notes

  1. 1.

    On this matter, see Sect. 6.2.1.

  2. 2.

    See Commission, Communication from the Commission, Implementing the Community Lisbon Programme: Social Services of General Interest in the European Union, COM(2006) 177 final, 26 April 2006, p. 4 and Commission, Commission Staff Working Document, Guide to the Application of the European Union Rules on State Aid, Public Procurement and the Internal Market to Services of General Economic Interest, and in Particular to Social Services of General Interest, SEC(2010) 1545 final, 7 December 2010, p. 16.

  3. 3.

    See e.g. CJEU, Case C-159/90 SPUC v. Grogan [1991] ECR I-4685.

  4. 4.

    See also Barnard 2010, p. 362.

  5. 5.

    CJEU, Case 263/86 Humbel [1988] ECR 5365.

  6. 6.

    CJEU, Case C-109/92 Wirth [1993] ECR I-6447.

  7. 7.

    CJEU, Case C-153/02 Valentina Neri v. European School of Economics (ESE Insight World Education System Ltd) [2003] ECR I-13555.

  8. 8.

    See e.g. CJEU, Case C-158/96 Raymond Kohll v. Union des caisses de maladie [1998] ECR I-1931 and CJEU, Case C-120/95 Nicolas Decker v. Caisse de maladie des employés privés [1998] ECR I-1831; CJEU, Case C-157/99 Smits and Peerbooms [2001] ECR I-5473; CJEU, Case C-385/99 Müller-Fauré [2003] ECR I-4509; CJEU, Case C-372/04 Watts [2006] ECR I-4325; and CJEU, Case C-345/09 Van Delft et al. [decided on 14 October 2010, nyr]. On this case law, see e.g. Baquero Cruz 2011, p. 79 et seq.; van de Gronden 2009A, p. 710 et seq.; Dawes 2006, p. 167 et seq. and Hatzopoulos 2002, p. 685 et seq.

  9. 9.

    CJEU, Case C-157/99 Smits and Peerbooms [2001] ECR I-5473.

  10. 10.

    The AG drew a cross-reference to the case law on the concept of undertaking, which embarks on the question whether a particular scheme is predominantly based on solidarity in order to establish whether Articles 101 and 102 TFEU apply to the bodies managing this scheme. As the AG was of the opinion that the Dutch healthcare system that was then in place was entirely based on this principle, he found that the Treaty provisions on the free movement of services were not applicable. In this regard it should be noted that in 2006 the Dutch government introduced a market oriented healthcare system, which assigns a significant role to private health insurers. On this system, see e.g. Hamilton 2005, p. 8 et seq. and Sauter 2011, p. 337 and seq.

  11. 11.

    See Gekiere et al. 2010, pp. 465 and 466.

  12. 12.

    See CJEU, Case C-157/99 Smits and Peerbooms [2001] ECR I-5473, para 58.

  13. 13.

    CJEU, Case C-355/00 Freskot [2003] ECR I-5263.

  14. 14.

    Ibid. para 63.

  15. 15.

    See de Vries 2006, p. 31.

  16. 16.

    CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513.

  17. 17.

    See Ibid. paras 80 and 82.

  18. 18.

    See van de Gronden 2011, pp. 126–129.

  19. 19.

    See Article 2(2) and recital 17 of Directive 2006/123/EC of the European Parliament and the Council of 12 December 2006 on Services in the Internal Market (Services Directive).

  20. 20.

    Cf. also SEC(2010) 1545 final, pp. 80–82.

  21. 21.

    See the Commission’s Handbook on Implementation of the Services Directive, Luxembourg: Office for Official Publication of the European Communities, 2007, p. 13.

  22. 22.

    SEC(2010) 1545 final, p. 83.

  23. 23.

    See Article 1(2) Services Directive.

  24. 24.

    Cf. Davies 2007, p. 233.

  25. 25.

    Reference is made to Regulation No. 1408/71 of 14 June 1971 of the Council on the Application of Social Security Schemes to Employed Persons and Their Families Moving Within the Community, OJ 1971 L 149/2. This Regulation has been repealed by Regulation No. 883/2004 of 29 April 2004 of the European Parliament and of the Council on the Coordination of Social Security Systems, OJ 2004 L166/1. But it should be noted that Regulation No. 1408/71 remains in force for a limited number of purposes related, for example, to agreements concluded with Switzerland.

  26. 26.

    See Barnard 2010, p. 408.

  27. 27.

    Barnard 2008, p. 362.

  28. 28.

    See Barnard 2008, p. 365 and van de Gronden and de Waele 2010, pp. 409 and 410.

  29. 29.

    See Neergaard 2008, p. 78.

  30. 30.

    See for example CJEU, Case C-159/9 EDF [1997] ECR I-5851.

  31. 31.

    See van de Gronden 2009b, p. 247–250.

  32. 32.

    See for example CJEU, Case C-159/94 Commission v. France (energy monopolies) [1997] ECR I-5815.

  33. 33.

    See e.g. GC, Case T-289/03 BUPA [2008] ECR II-81 and CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr].

  34. 34.

    Ibid.

  35. 35.

    See Commission, Draft Communication from the Commission on the Application of the European Union State Aid Rules to Compensation Granted for the Provision of Services of General Economic Interest, para 46. Available at: http://ec.europa.eu/competition/state_aid/legislation/forms_docs/sgei_draft_communication_en.pdf) and

    Commission, Draft Decision on the Application of Article 106(2) of the Treaty to State Aid in the Form of Public Service Compensation Granted to Certain Undertakings Entrusted With the Operation of Services of General Economic Interest, Article 3. Available at: http://ec.europa.eu/competition/state_aid/legislation/forms_docs/sgei_draft_decision_en.pdf). At the time of writing of this chapter, the Commission had not adopted the final versions of these measures yet.

  36. 36.

    Pursuant to Article 4(6) of the Services Directive, the term ‘authorisation scheme’ refers to any procedure under which a provider is required to obtain a formal decision or an implied decision from a national authority in order to get access to the service activity concerned.

  37. 37.

    According to Article 15(4) the obligation to evaluate national requirements with regard to their compatibility with the Services Directive does not apply in so far as such an operation would put the proper provision of SGEI under pressure. This Article only acknowledges that SGEI constitute an exception for an obligation of an institutional nature (carrying out evaluations). No reference is made to the substantive rules on the freedom of establishment, which are laid down in Article 9 of the Services Directive.

  38. 38.

    Directive 2011/24/EU of the European Parliament and the Council of 9 March 2011 on the Application of Patients’ Rights in Cross-Border Healthcare, OJ 2011 L 88/45.

  39. 39.

    On this Directive see also the contributions of Szyszczak 2011, p. 108 et seq.; Pennings 2011, p. 147 et seq.; Hervey 2011a, p. 163 et seq. and Davies 2011, p. 191 et seq.

  40. 40.

    Regulation No. 883/2004 of the European Parliament and of the Council of 29 April 2004 on the Coordination of Social Security Systems, OJ 2004 L 166/1.

  41. 41.

    See e.g. CJEU, Case C-56/01 Inizan [2003] ECR I-12403 and CJEU, Case C-372/04 Watts, ECR [2006] I-4325. On this case law on the Social Security Coordination Regulation and cross-border health care, see van de Gronden 2009a, pp. 728–731.

  42. 42.

    CJEU, Case C-345/09, Van Delft [decided on 14 October 2010, nyr].

  43. 43.

    CJEU, Case C-238/94 José García and Others J. García v. Mutuelle de Prévoyance Sociale d ' Aquitaine and Others [1996] ECR I-1673. A similar decison on the applicability of the Non-life Insurance Directives is taken by the CJEU in CJEU, Case C-355/00 Freskot [2003] ECR I-5263.

  44. 44.

    CJEU, Joined Cases C-159/91 and C-160/91, Poucet and Pistre [1993] ECR I-637.

  45. 45.

    See e.g. Ibid.; CJEU, Case C-244/94, Fédération Française des Sociétés d'Assurance et al. v. Ministère de l'Agriculture et de la Pêche (FFSA) [1995] ECR I-4015; CJEU, Case C-67/96, Albany [1999] ECR I-5751, CJEU, Joined Cases C-115/97, C-116/97 and C-117/97, Brentjens' Handelsonderneming BV v. Stichting Bedrijfspensioenfonds voor de Handel in Bouwmaterialen [1999] ECR I-6025 and CJEU, Case C-219/97 Maatschappij Drijvende Bokken BV v. Stichting Pensioenfonds voor de Vervoer- en Havenbedrijven [1999] ECR I-6121; CJEU, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband [2004] ECR I-2493 and CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr].

  46. 46.

    See, for example, van de Gronden and Sauter 2011, pp. 218–223 and Kersting 2011, pp. 474 and 475.

  47. 47.

    See CJEU, Case C-206/98, Commission v. Belgium [2000] ECR I-3509.

  48. 48.

    CJEU, Case C-41/10, Commission v. Belgium [decided on 28 October 2010, nyr].

  49. 49.

    CJEU, Case C-82/10, Commission v. Ireland [decided on 29 September 2011, nyr].

  50. 50.

    Third Council Directive 92/49/EEC of 18 June 1992 on the Coordination of Laws, Regulations and Administrative Provisions Relating to Direct Insurance Other than Life Assurance and Amending Directives 73/239/EEC and 88/357/EEC, OJ 1992 L 228/1.

  51. 51.

    Cf. Hervey 2011b, p. 186.

  52. 52.

    See CJEU, Case C-355/00 Freskot [2003] ECR I-5263, para 63.

  53. 53.

    See CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513, paras 83 and 84.

  54. 54.

    See for instance CJEU, Case C-76/90 Manfred Säger v. Dennemeyer & Co. Ltd [1991] ECR 4221 and CJEU, Case C-384/93 Alpine [1995] ECR 1141.

  55. 55.

    See e.g. Barnard 2010, pp. 377–380.

  56. 56.

    See CJEU, Case C-208/05 ITC Innovative Technology Center GmbH v. Bundesagentuur für Arbeit [2007] ECR I-181, para 55.

  57. 57.

    CJEU, Case C-355/00 Freskot [2003] ECR I-5263, para 66.

  58. 58.

    See CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513, para 85.

  59. 59.

    See ibid. para 87.

  60. 60.

    See ibid. para 87.

  61. 61.

    CJEU, Case C-320/91 Corbeau [1993] ECR I- 2533.

  62. 62.

    See Sauter and Schepel 2009, p. 179 et seq.

  63. 63.

    See Buendia Sierra 1999, pp. 319 and 320.

  64. 64.

    van de Gronden 2006, p. 125.

  65. 65.

    This approach does not come as a surprise as the interests protected by the ‘Rule of Reason’ overlap with those protected by Article 106(2) TFEU. See Buendia Sierra 2007, p. 644. Cf. also CJEU, Case C-266/96 Corsica Ferries [1998] ECR I-3949.

  66. 66.

    Cf. Baquero Cruz 2005, p. 193–198 and Cicoria 2006, p. 179 en 180.

  67. 67.

    CJEU, Case C-208/05 ITC Innovative Technology Center GmbH v. Bundesagentuur für Arbeit [2007] ECR I-181.

  68. 68.

    See ibid. para 43.

  69. 69.

    Ibid.

  70. 70.

    See Szyszczak 2009, p. 201.

  71. 71.

    Directive 2011/24/EU.

  72. 72.

    On this Directive, see Chap. 15 in this volume, by Baeten and Palm.

  73. 73.

    CJEU, Case C-70/95 Sodemare [1997] ECR I-3395.

  74. 74.

    Cf. also SEC(2010) 1545 final, p. 79.

  75. 75.

    Szyszczak 2009, p. 198.

  76. 76.

    On this case law see Hancher and Sauter 2010, p. 117 et seq. and Baeten and Palm 2011, p. 389 et seq.

  77. 77.

    CJEU, Joined Cases C-171/07 and C-172/07 Apothekerkammer des Saarlandes and Others [2009] ECR I-4171.

  78. 78.

    CJEU, Case C-169/07 Hartlauer [2009] ECR I-1721.

  79. 79.

    See ibid. paras 51–53.

  80. 80.

    Kadelbach 2002, pp. 181–186.

  81. 81.

    CJEU, Joined Cases 570/07 and C-571/07 José Manuel Blanco Pérez and María del Pilar Chao Gómez [2010] ECR I-4629.

  82. 82.

    Ibid. para 94.

  83. 83.

    CJEU, Case C-567/07 Sint Servatius [2009] ECR I-9021.

  84. 84.

    Cf. Krajewski 2009, p. 500.

  85. 85.

    The contribution from Manunza and Berends, Chap. 14 in this volume discusses the consequences of EU public procurement law in full extent. This section will mainly focus on the interplay between EU free movement law and the public procurement rules.

  86. 86.

    Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the Coordination of Procedures for the Award of Public Works Contracts, Public Supply Contracts and Public Service Contracts, OJ 2004 L134/114.

  87. 87.

    See Article 1(2) Directive 2004/18/EC.

  88. 88.

    See e.g. Commission, Commission Staff Working Document, Frequently Asked Questions Concerning the Application of Public Procurement Rules to Social Services of General Interest, Accompanying Document to the Communication on ‘Services of General Interest, Including Social Services of General Interest: a New European Commitment’ {COM(2007) 725 final}, SEC(2007) 1514, 20 November 2007, p. 7.

  89. 89.

    See Stergiou 2009, pp. 161 and 162.

  90. 90.

    See Articles 17 and 1(4) Directive 2004/18/EC.

  91. 91.

    See, for example, CJEU, Case C-260/04 Commission v. Italy [2007] ECR I-7083; CJEU, Case C-203/08 Sporting Exchange Ltd (trading as ‘Betfair’) v. Minister van Justitie [2010] ECR I-4695; CJEU, Case C-258/08 Ladbrokes Betting & Gaming Ltd, Ladbrokes International Ltd v. Stichting de Nationale Sporttotalisator [2010] ECR I-4757 and CJEU, Case C-64/08 Ernst Engelmann [decided on 9 September 2010, nyr].

  92. 92.

    CJEU, Case C-324/98 Telaustria Verlags GmbH, Telefonadress GmbH v. Telekom Austria AG [2000] ECR I-10745.

  93. 93.

    CJEU, Case C-231/03 Consorzio Aziende Metano (Coname) v. Comune di Cingia de’ Botti [2005] ECR I-7287.

  94. 94.

    CJEU, Case C-485/03 Parking Brixen GmbH v. Gemeinde Brixen and Stadtwerke Brixen [2005] ECR I-8612.

  95. 95.

    See Stergiou 2009, pp. 167 and 168.

  96. 96.

    On these cases see Drijber and Stergiou 2009, p. 805 et seq.

  97. 97.

    CJEU, Case C-203/08 Sporting Exchange Ltd (trading as ‘Betfair’) v. Minister van Justitie [2010] ECR I-4695.

  98. 98.

    See CJEU, Case C-231/03 Consorzio Aziende Metano (Coname) v. Comune di Cingia de’ Botti [2005] ECR I-7287, para 21.

  99. 99.

    See the Commission Interpretative Communication on the Community Law Applicable to Contract Awards Not or Not Fully Subject to the Provisions of the Public Procurement Directives, OJ 2006 C179/2. This communication was challenged by Germany but its appeal was rejected by the GC. See GC, Case T-258/06 Germany v. Commission [2010] ECR II-2027.

  100. 100.

    See e.g. CJEU, Case C-64/08 Ernst Engelmann [decided on 9 September 2010, nyr], para 50.

  101. 101.

    See CJEU, Case C-203/08 Sporting Exchange Ltd (trading as ‘Betfair’) v. Minister van Justitie [2010] ECR I-4695, para 58.

  102. 102.

    Ibid. para 59.

  103. 103.

    See Drijber and Stergiou 2009, p. 833.

  104. 104.

    Drijber and Stergiou 2009, pp. 811 and 812.

  105. 105.

    CJEU, Case C-507/03 An Post [2007] ECR I-9777.

  106. 106.

    See e.g. CJEU, Case C-231/03 Consorzio Aziende Metano (Coname) v. Comune di Cingia de’ Botti [2005] ECR I-7287, paras 17 and 20.

  107. 107.

    CJEU, Case C-271/08 Commission v. Germany [decided on 15 July 2010, nyr].

  108. 108.

    CJEU, Case C-160/08 Commission v. Germany [decided on 29 April 2010, nyr].

  109. 109.

    See Schweitzer 2011, pp. 36–38.

  110. 110.

    Cf. also Commission, Commission Staff Working Document, Second Biennal Report on Social Services of General Interest, SEC(2010) 1284 final, 22 October 2010, p. 72.

  111. 111.

    Protocol on Services of General Interest to be Annexed to the Treaty on the European Union, to the Treaty on the Functioning of the European Union and, Where Applicable, to the Treaty Establishing the European Atomic Energy Community, OJ 2007 C 306/158.

  112. 112.

    Article 14 TFEU provides that the EU and its Member States must ensure that SGEI ‘… operate on the basis of principles and conditions, particularly economic and financial conditions, which enable them to fulfill their missions.’ In Article 16 EC the reference to economic and financial conditions was absent. Furthermore, Article 14 TFEU explicitly provides for a legal basis for EU action on SGEI, whereas Article 16 EC was silent on this matter.

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    Johan W. van de Gronden

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Correspondence to Johan W. van de Gronden .

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Editors and Affiliations

  1. , Faculty of Law, University of Copenhagen, Studiestræde 6, Copenhagen K, 1455, Denmark

    Ulla Neergaard

  2. , School of Law, University of Leicester, University Road, Leicester, LE1 7RH, United Kingdom

    Erika Szyszczak

  3. , Faculty of Law, Radboud University, Comeniuslaan 4, Nijmegen, 6525 HP, Netherlands

    Johan Willem van de Gronden

  4. , Fachbereich Rechtswissenschaft, Universität Erlangen-Nürnberg, Schillerstraße 1, Erlangen, 91054, Germany

    Markus Krajewski

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© 2013 T.M.C. ASSER PRESS, The Hague, The Netherlands, and the editors

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van de Gronden, J.W. (2013). Free Movement of Services and the Right of Establishment: Does EU Internal Market Law Transform the Provision of SSGI?. In: Neergaard, U., Szyszczak, E., van de Gronden, J., Krajewski, M. (eds) Social Services of General Interest in the EU. Legal Issues of Services of General Interest. T.M.C. Asser Press, The Hague, The Netherlands. https://doi.org/10.1007/978-90-6704-876-7_6

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