BONVER WIN (Freedom to provide services - National legislation prohibiting the operation of gambling in certain places - Opinion) [2020] EUECJ C-311/19

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(Request for a preliminary ruling from the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic))

(Reference for a preliminary ruling — Freedom to provide services — Restrictions — National legislation prohibiting the operation of gambling in certain places — Applicability of Article 56 TFEU — Cross-border element)

1. The present request for a preliminary ruling from the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic) bears testimony to the fact that the specific legal question of a case addressed to the Court often lurks beneath an apparently innocuous — if not mundane — factual background in the main proceedings: a provider of betting services being required to stop trading due to a municipal decree forbidding the supply of such services within a certain part of the town in which the provider of betting services is located. That trader claims to have customers coming from another Member State. Is this fact sufficient to trigger the application of the freedom to provide services under Article 56 TFEU?

2. This case therefore goes straight to the heart of the material scope of a fundamental freedom of the internal market.

3. Delimiting such scope is a question of the utmost importance; it is one of the oldest questions of EU law, and one which continuously sprouts new shoots. Varied as the facts underlying such cases may be, (2) what they all have in common is that they go to the very nature of the internal market and the economic constitution of the Union. Economic operators and their clients rely on the outcome of such questions, just as much as Member States. The scope of the fundamental freedoms determines the extent to which Member States are bound in their (national) policy objectives by the EU law of the internal market and, correspondingly, the freedom which economic operators enjoy: if a Member State is not constrained by, say, the freedom to provide services, in a given situation its scope of potential action is tremendously larger than if it were constrained. Conversely, if a Member State is constrained, the scope of potential action of service providers and their recipients is tremendously larger.

4. The corresponding procedural side of this material coin is that cases from national courts where all the facts in the main proceedings are confined to a single Member State are inadmissible as far as concerns the interpretation of the fundamental freedoms.

5. In the present case, the Nejvyšší správní soud (Supreme Administrative Court) enquires about the scope of the freedom to provide services under Article 56 TFEU in a situation in which the cross-border element is that of customers crossing the border to benefit (if that is the correct term as regards gambling) from the services in question in the Czech Republic.

6. I shall argue in this Opinion that this question is in substance covered by the freedom to provide services under Article 56 TFEU. In doing so, I shall propose to the Court a classic reading of the freedom to provide services and of the corresponding case-law. More specifically, I shall submit to the Court that there is at present no need to curb the scope of this fundamental freedom in situations where the measures in question are indistinctly applicable in law and in fact. I shall thus propose to the Court to resist the possible temptation to interpret the scope ratione materiae of Article 56 TFEU in a narrower sense than before. In my contention, there is no room for a ‘Keck for services’: the Court should not draw any analogies from that case.(3)

7. Under Article 50(4) of the zákon č. 202/1990 Sb., o loteriích a jiných podobných hrách (Law No 202/1990 on lotteries and other similar games; ‘the Law on Lotteries’), applicable in 2013, a municipality may adopt a binding measure of general application in the form of a decree stipulating that betting games, lotteries and similar games may be operated only in places and at times provided for in the decree, or it may specify in what places in the municipality and at what times the operation of those lotteries and other similar games is prohibited, or it may entirely prohibit the operation of lotteries and other similar games throughout the municipality.

8. The Law on Lotteries also defines betting games, lotteries and other similar games.

9. Pursuant to Article 50(4) of the Law on Lotteries, the town of Děčín (Czech Republic) issued the obecně závazná vyhláška č. 3/2013, o regulaci provozování sázkových her, loterií a jiných podobných her (Municipal Decree No 3/2013 on the regulation of the operation of betting games, lotteries and other similar games). That decree banned the operation of betting games, lotteries and other similar games throughout the town as a whole in accordance with the law. At the same time, Annex I to that decree listed the precise addresses in Děčín where the operation of casinos would be permitted.

10. BONVER WIN, a.s., (‘BONVER WIN’) is a Czech commercial company which operated games of chance in Děčín under a licence granted by the Ministerstvo financí ČR (Ministry of Finance, Czech Republic).

11. With the entry into force of Municipal Decree No 3/2013, BONVER WIN’s activity became in breach of that decree, as its premises were not located at one of the addresses listed in the Annex thereto.

12. By a decision of 22 October 2013, the Ministry of Finance withdrew BONVER WIN’s licence to operate games of chance on the ground that it did not comply with Municipal Decree No 3/2013.

13. BONVER WIN challenged that decision by way of an administrative appeal, which was dismissed by a decision of the Minister of Finance of 22 July 2014.

14. BONVER WIN subsequently brought an action against that decision before the Městský soud v Praze (Prague City Court, Czech Republic), which was then dismissed. In the grounds for its judgment, the court inter alia rejected the argument that the national rules were contrary to EU law, holding that EU law did not apply to this situation, as the applicant was not exercising the freedom to provide services.

15. Unsatisfied by this line of argumentation, BONVER WIN brought an appeal on a point of law against that judgment before the referring court, that is, the Nejvyšší správní soud (Supreme Administrative Court), alleging that the Městský soud v Praze (Prague City Court) had erred in failing to apply EU law. The provisions of Municipal Decree No 3/2013, read in conjunction with the provisions of the Law on Lotteries, are, in BONVER WIN’s opinion, contrary to EU law.

16. Pursuant to national procedural law, the case at issue in the main proceedings was initially attributed to the Fifth Chamber of the Nejvyšší správní soud (Supreme Administrative Court), which considered that the freedom to provide services under EU law is applicable to the case since some of BONVER WIN’s customers come from other Member States. Consequently, that chamber does not, in principle, see a need to refer the case to the Court.

17. Yet, against the background that, in comparable cases, other chambers of the Nejvyšší správní soud (Supreme Administrative Court) have come to the conclusion that EU law in general — and the freedom to provide services in particular — did not apply, (4) the Fifth Chamber decided to refer the matter, under national procedural law, to the Extended Chamber of the Nejvyšší správní soud (Supreme Administrative Court), with a view to altering the — in the view of the Fifth Chamber, erroneous — case-law of the other chambers.

19. The Extended Chamber proceeds on the assumption that, in the present case, what is at issue is a possible restriction of the freedom of customers to obtain services and not a possible restriction of the freedom to provide services in respect of their supplier, which is a Czech company having its seat in that Member State. The referring court observes that it follows from the case-law of the Court that services which a provider established in a Member State provides, without travelling, to a recipient established in another Member State constitute a cross-border provision of services and that such recipients also include tourists or persons travelling for the purposes of study. Moreover, that court considers that national legislation, such as the Czech legislation in the present case, which is indiscriminately applicable to nationals of that Member State and those of other Member States, is, as a general rule, capable of falling within the scope of the provisions relating to the fundamental freedoms guaranteed by the FEU Treaty only in so far as it applies to situations connected with trade between Member States.

20. Furthermore, the referring court considers that, while the Court has clarified the applicability of Article 56 TFEU to situations in which a provider offers its services by telephone or Internet and to situations relating to groups of tourists who are recipients of services, it has not as yet clearly established whether that article is applicable merely because a group of nationals of another Member State may or do obtain, in a given Member State, a service which is provided mainly to nationals. In this regard, the referring court points out that it does not share the conclusion that the occasional visit, even by a single national of another Member State, to an establishment providing certain services would automatically trigger the applicability of Article 56 TFEU to any national legislation governing in general that national service sector.

21. Moreover, the referring court asks whether it would not be appropriate to establish, in the area of the freedom to provide services, a de minimis rule, based on the existence of a sufficient link between the legislation at issue and the freedom to provide services. It takes the view that non-discriminatory legislation applicable at municipal level does not fall within the scope of Article 56 TFEU.

22. It is against that background that, by order of 21 March 2019, received at the Court on 16 April 2019, the Nejvyšší správní soud (Supreme Administrative Court) referred the following questions for a preliminary ruling:

‘(1) Does Article 56 TFEU et seq. apply to national legislation (a binding measure of general application in the form of a municipal decree) prohibiting a certain service in part of one municipality simply because some of the customers of a service provider affected by that legislation may come or do come from another Member State?

If so, is a mere assertion of the possible presence of customers from another Member State sufficient to trigger the applicability of Article 56 TFEU, or is the service provider obliged to prove the actual provision of services to customers who come from other Member States?

(a) the potential restriction on the freedom to provide services is significantly limited in both geographical and substantive terms (potential applicability of a de minimis exception);

(b) it does not appear that the national legislation regulates in a different manner, in law or in fact, the position of entities providing services primarily to citizens of other Member States, on the one hand, and that of entities focusing on a domestic clientele, on the other?’

23. Written observations were submitted by the Czech Republic, Hungary and the European Commission. BONVER WIN, the Czech Republic, the Kingdom of the Netherlands and the European Commission took part at the hearing, which was held on 12 March 2020.

24. By its two questions which merit a single answer, the referring court, in essence, seeks to ascertain whether the freedom to provide services under Article 56 TFEU applies to a situation in which a company established in a Member State loses, following the entry into force of local legislation determining the places in which it is permitted to carry out its activity, the authorisation to operate that activity on the ground that some of its customers come from a Member State other than that in which that company is established. In this connection, the referring court would like to know whether the non-discriminatory nature of those rules and the existence of a de minimis rule in the area of the freedom to provide services are relevant to that answer.

25. It is moreover clear from the wording of the questions that the referring court is well aware that, should the present case fall under Article 56 TFEU, there is no doubt as to the existence of a restriction and that it would be for the Czech Republic to justify this restriction.

26. Contrary to first possible appearances, the admissibility of the present case is beyond doubt.

27. In order to demonstrate this and to reach the core of the question asked by the referring court, I deem it necessary to examine briefly the history of the phenomenon of what is today known as a ‘purely internal situation’.

28. It is well known and settled case-law that the provisions of the FEU Treaty on the freedom to provide services do not apply to a situation which is confined in all respects within a single Member State. (5) Yet, in the voluminous case-law of the Court on purely internal situations, the two layers of substance and admissibility must be distinguished.

29. The jurisprudential genesis (6) of the purely internal rule is to be found in a number of judgments handed down by the Court from the end of the 1970s, all around the time of Rewe-Zentral (7) (‘Cassis de Dijon’): Koestler, (8)Knoors, (9)Auer, (10)Debauve and Others (11) and Saunders. (12) While, in Knoors, (13) a ‘dictum was uttered in a very narrow context’ (14) concerning the freedom of establishment and the freedom to provide services, and Koestler (15) and Auer (16) involved a cross-border situation, the Court applied the purely internal rule in Saunders. (17)

30. The last aforementioned judgment concerned the free movement of workers under what is now Article 45 TFEU. A British national, having pleaded guilty to a criminal offence, had been sentenced to move from England to Northern Ireland and not to return to England or Wales. All the facts were therefore confined to the United Kingdom. In such a situation it was fairly straightforward for the Court to rule that Article 45 TFEU (18) ‘does not … aim to restrict the power of the Member States to lay down restrictions, within their own territory, on the freedom of movement of all persons subject to their jurisdiction in implementation of domestic criminal law’ (19) and that ‘the provisions of the Treaty on freedom of movement for workers cannot therefore be applied to situations which are wholly internal to a Member State, in other words, where there is no factor connecting them to any of the situations envisaged by [EU] law’. (20)

31. This newly discovered (21) finding then cross-fertilised with the other fundamental freedoms. Shortly after Saunders, (22) the Court held in Debauve and Others (23) that ‘the provisions of the Treaty on freedom to provide services cannot apply to activities whose relevant elements are confined within a single Member State’. Yet, the Court found the facts of the case at issue to involve a cross-border situation.

32. It was always clear and beyond any doubt that these early cases dealt with a question of substance: in order to be materially applicable, the fundamental freedoms of the Treaty require what is known as a cross-border element. Purely internal situations are outside the scope ratione materiae of the fundamental freedoms, as the aim of these freedoms is to liberalise exchanges between the Member States.

33. The logical procedural consequence of purely internal situations not falling within the scope of the fundamental freedoms is that the Court has no jurisdiction to answer such questions, making preliminary references stemming from cases of purely internal situations inadmissible. (24) EU law simply does not apply to such a situation.

34. And yet, over the years, numerous instances emerged in which the Court replied to questions emanating from national proceedings in which all the facts were confined within a single Member State.

35. There is no longer a need to synthesise and summarise this case-law, for it has not too long ago been summarised and classified in the judgment in Ullens de Schooten: (25) cases arising from purely internal situations are nevertheless admissible (26) for a preliminary ruling in four specific situations. These situations are: (1) it was not inconceivable that nationals established in other Member States had been or were interested in making use of those freedoms for carrying on activities in the territory of the Member State that had enacted the national legislation in question and, consequently, that the legislation, applicable without distinction to nationals of that Member State and those of other Member States, was capable of producing effects which were not confined to that Member State; (27) (2) where the referring court makes a request for a preliminary ruling in proceedings for the annulment of provisions which apply not only to its own nationals but also to those of other Member States, the decision of the referring court that will be adopted following the Court’s preliminary ruling will also have effects on the nationals of other Member States; (28) (3) when the interpretation of the fundamental freedoms proves to be relevant where national law requires the referring court to grant the same rights to a national of its own Member State as those which a national of another Member State in the same situation would derive from EU law; (29) and (4) when the provisions of EU law have been made applicable by national legislation, which, in dealing with situations confined in all respects within a single Member State, follows the same approach as that provided for by EU law. (30)

36. Turning to the case at issue, it is painfully tempting to reply, as the Commission proposes, that it is for the referring court to establish whether there is a cross-border element in the case at issue.

38. The referring court in its questions goes further. It does not seek to establish whether the Court should answer the question (which would, in any event, be an odd question to pose to the Court), but whether the freedom to provide services under Article 56 TFEU should not apply in situations which clearly have a cross-border element. Put differently, the referring court seeks guidance on the scope of Article 56 TFEU. It wants to get to the root of the matter of ‘purely internal situations’ and, as it appears to me, enquires whether purely internal situations should be conceived more broadly than hitherto.

40. I should finally like to stress that the admissibility of the present case already results from the Court’s judgment in Trijber and Harmsen. (31) In that case, Mr Trijber sought an authorisation for organising boat trips in Amsterdam (Netherlands). For the Court it was enough for the case to be admissible that ‘that service may also be enjoyed by nationals of other Member States and that the scheme at issue could impede access to the market for all service providers, including those from other Member States who wish to establish themselves in the Netherlands in order to provide such a service’. (32)

41. The Court in other words based the admissibility of the case inter alia on the fact that the service recipients came from other Member States. (33) The reason why the case was admissible is the fact that the recipients of the services in question did not come from the Member State in which the services were offered. The case at issue presents a similar situation.

42. To sum up the admissibility of the present case, the Court cannot — and should not — resort to the judgment in Ullens de Schooten (34) to reply to the referring court, as the case is clearly admissible.

43. Let us therefore turn to the substance of the case at issue and to the scope of Article 56 TFEU. (35)

44. As a preliminary point, it should be stressed that this case concerns only the scope ratione materiae of the freedom to provide services under the FEU Treaty. It does not concern the general compatibility of the national measure with the freedom to provide services. In other words, the only issue which the referring court seeks to determine with the help of the Court is whether there is a restriction under Article 56 TFEU (which would be the case if the situation fell within the scope of that provision) and not whether, in addition, a restriction would be justified by an overriding reason relating to the public interest.

45. Pursuant to Article 56 TFEU, within the framework of the provisions of the chapter on services in the FEU Treaty, restrictions on the freedom to provide services within the Union are prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the service is intended.

46. This provision, which constitutes the fundamental rule, or Grundnorm, (36) of the freedom to provide services within the internal market and has been supplemented by an array of secondary law, notably the Services Directive, has come a long way in the case-law of the Court. Though conceived by the Treaty as a residual fundamental freedom, (37) the Court has from an early stage termed it as ‘one of the fundamental principles of the Treaty’. (38) It has moreover found this fundamental freedom to have direct effect (39) and also to cover indistinctly applicable measures. (40) Article 56 TFEU, as with Articles 34, 45 and 49 TFEU, is intended therefore to remove obstacles to trade rather than mere discrimination between domestic and foreign market operators. Concomitantly, the Court has allowed Member States to resort to non-written grounds of justification in restricting the freedom to provide services, in the form of overriding reasons relating to the public interest. Moreover, crucially for the present case, the Court has ruled that the freedom to provide services is for the benefit of both providers and recipients of services. (41) This evolution of the freedom to provide services went hand in hand with the transition of the Member States’ economies and societies from manufacturing to services.

47. It is more difficult to determine whether a cross-border situation exists in the case of the freedom to provide services than in the case of the free movement of workers or the freedom of establishment (42) and it has taken some time for there to be four commonly accepted possible cross-border situations (43) in which the freedom to provide services applies. First, the situation where the service provider crosses the border in order to offer the services. (44) This is undoubtedly the paradigm (45) of Article 56 TFEU and is clearly reflected in its wording. Secondly, the situation where the service recipient crosses the border in order to receive the services. (46) Thirdly, situations where both service provider and recipient cross a border and the service is subsequently provided. (47) And fourthly, situations where the service itself crosses the border. (48)

48. Moreover, contrary to other fundamental freedoms such as the free movement of workers or indeed the rules on Union citizenship, it is not the nationality but the establishment (49) of the persons concerned which determines the cross-border element. (50)

49. Regarding more specifically the second situation where the service recipient crosses the border in order to benefit from the service, both restrictions on the service provider or the service recipients fall within the scope of Article 56 TFEU. Regarding restrictions on the service provider, the rationale for these being governed by Article 56 TFEU is that they inevitably entail restrictions for service recipients.

50. A restriction can therefore originate either in the Member State of the service provider or in the Member State of the service recipient. The Treaty treats both restrictions in the same manner. This is only logical. While for, say, the free movement of goods the Treaty rightfully operates a distinction between imports (51) and exports (52) and is, in the case-law of the Court (quite rightly) stricter on imports, (53) such a distinction does not exist for the freedom to provide services for the simple reason that it is more difficult to distinguish conceptually ‘imports’ from ‘exports’. As shall be seen below, the present reference is a case in point in this respect.

51. In this connection, the Court has held that ‘the freedom to provide maritime transport services between Member States … may be relied on by an undertaking as against the State in which it is established, if the services are provided for persons established in another Member State’. (54)

52. Furthermore, the Court has held with respect to the practice of what is commonly referred to as ‘cold-calling’, that is, contacting individuals by telephone without their prior consent in order to offer them financial services, that ‘the prior existence of an identifiable recipient [is not] a condition for application of the provisions on the freedom to provide services’. (55) The Court also indicated its motivation for ruling in this way: ‘the freedom to provide services would become illusory if national rules were at liberty to restrict offers of services’. (56) Thus, already the preparation of the provision of a service falls within the scope of Article 56 TFEU. (57)

53. The Court has also held that a potential restriction is enough for the matter to fall within the scope of Article 56 TFEU.

54. To sum up, I should like to refer to Advocate General Bobek’s Opinion in TÜV Rheinland LGA Products and Allianz IARD (58) where he stated fittingly: ‘cross-border potentiality remains at the level of a reasonably conceivable hypothesis: thus, in the context of services, the fact that, for example, some recipients of a service are likely to come from another Member State is enough to engage the rules of the Treaty on services’.

55. This leads us to the case at issue and the issues raised by the referring court.

56. On the basis of the preceding analysis, it would appear that the present case falls squarely within the ambit of Article 56 TFEU: there is a service provider established in the Czech Republic that provides its services inter alia to customers normally established in Germany who cross the Czech-German border in order to benefit from those services.

57. Moreover, there is a restriction to BONVER WIN’s activity: that it can no longer carry out its activities at the same place as before undoubtedly fulfils the terms of the relevant case-law of the Court in this respect. As a consequence, BONVER WIN’s customers are also restricted in their ability to benefit from the services. If BONVER WIN must stop trading in the part of the town in which it was established, customers can no longer gamble their money there.

58. The fact that the restriction is imposed by the Member State of origin (59) from the perspective of the service provider, BONVER WIN, is immaterial in this respect. Here the Court can rely on its ruling in Alpine Investments, (60) where it held that the freedom to provide services under the Treaty ‘prohibits restrictions on freedom to provide services within the [Union] in general’ and that, consequently, that freedom ‘covers not only restrictions laid down by the State of destination but also those laid down by the State of origin’.

60. However, the present case is compounded by two further factors: first, the fact that the addressee of the restriction is not the service recipient whose crossing the border triggers the applicability of Article 56 TFEU but the service provider and, secondly, the preoccupation of the national court as to the mere potential possibility of German customers and the related question of a de minimis rule.

(a) A service recipient who triggers Article 56 TFEU for the service provider

61. I do not see how the fact that it is the service recipient who crosses the border should alter my finding in any way. The question of the scope of Article 56 TFEU is an objective one in the sense that it is either fulfilled — if certain conditions are fulfilled — or not.

62. This question must be distinguished from the issue whether in such a situation the service provider can rely on Article 56 TFEU against its own Member State, that is to say, whether it can derive a right akin to an economic fundamental right.

64. As has been demonstrated earlier, the freedom to receive services by the service recipient is merely the other side of the coin of the freedom to provide services by the service provider. In such a situation it would be odd if only the, say, Polish or German customers of BONVER WIN could rely on Article 56 TFEU in proceedings before the Czech courts while BONVER WIN itself could not. In this respect, an analogy should be drawn from the Court’s ruling in the field of the free movement of workers under Article 45 TFEU in the case Clean Car Autoservice, (61) where the Court held that the free movement of workers under Article 45 TFEU may also be relied upon by an employer in order to employ, in the Member State in which it is established, workers who are nationals of another Member State.

65. Clearly, such a finding implies that under the law as it currently stands the scope ratione materiae is very large, raising the question whether the Court should consider introducing a limitation such as it has done in Keck and Mithouard (62) in 1993 regarding the free movement of goods. The line of argumentation for such a limitation would be the following: as in Keck and Mithouard, (63) we are here in the presence of an indistinctly applicable measure, in law and in fact, to the freedom to provide services and the corresponding freedom to receive such services. There is therefore no discriminatory element involved: from the perspective of the service provider, any foreign firm wishing to establish itself in Děčín with a view to offering gambling activities finds itself in exactly the same situation as BONVER WIN and could not carry out its activity in the specified part of town. Conversely, as regards the service recipient, no recipient — be he or she a Czech or foreign recipient — can receive gambling services in the specified part of the town. On the assumption that the concept of a ‘certain selling arrangement’, as developed in Keck and Mithouard, (64) is in reality to mean the market access of a firm intending to sell goods or, in the present case, to offer its services, why not exclude from the scope of Article 56 TFEU those measures indistinctly applicable in law and in fact which do not impede the market access of service providers from other Member States?

66. This question goes to the heart of the economic constitution of the Union and to the concept of what does and what should constitute a restriction to cross-border trade.

67. I should like to answer any considerations of the very idea of introducing such a rule in the freedom to provide services under Article 56 TFEU with a resounding ‘no’.

68. First of all, I do not see any indication in the present state of the Court’s case-law of such considerations. (65)

69. The Court consistently follows an obstacle-based (as opposed to a discrimination-based) approach when it comes to determining the scope of Article 56 TFEU. This is explicit in cases (66) such as Gebhard (67) and Alpine Investments, (68) both cases to which I have already referred.

70. Admittedly, one could now raise the question whether a limitation to Article 56 TFEU along the lines of Keck and Mithouard (69) is ‘perhaps still outstanding’. (70) I would submit that there is no reason for such a jurisprudential move for the reasons which I shall now set out.

71. First, it is doubtful whether Keck and Mithouard (71) is still good law as concerns the free movement of goods. Gone are the occasions where the Court explicitly refers to the case and rare are the occasions where the Court resorts to its underlying idea. I am aware that I have concluded previously that ‘Keck is still alive’, (72) but I now tend to wonder whether this should be supplemented with the terms ‘nominally, in stand-by mode’. Or rather, Keck has transformed from a lion into a domestic cat: perhaps domesticated, but still impossible to grasp.

72. Secondly, the reasoning in Keck and Mithouard (73) was difficult to comprehend at the time and the Court has rightly been criticised that the expression ‘certain selling arrangements’ is not capable of being readily applied in practice for want of clear criteria under which to evaluate a specific case. (74) It later emerged that Keck and Mithouard (75) was not really about ‘certain selling arrangements’, but about whether market access was being rendered more difficult, if not impeded. And even then, defining what exactly market access is, is a difficult task and is problematic from the perspective of legal certainty.

73. Thirdly, although a parallel interpretation of the fundamental freedoms should in principle be favoured, it is difficult to draw comparisons between the free movement of goods and the freedom to provide services when it comes to the doctrine of selling arrangements and market access. It is easier to develop such a doctrine in the context of (mainly) (76) tangible goods. With services, matters are different: because of the non-tangible nature of service, it is more difficult to determine what constitutes the service itself and what is not directly related to the service.

74. Fourthly, if one accepts that the Keck and Mithouard judgment (77) was (also) about docket-control in cases which had less to do with the goods themselves than with the commercial freedoms of traders, which is something the Court readily admitted — and which might explain one of the big ironies of Keck and Mithouard, (78) namely that the facts were confined to one single Member State, (79) the consequence being that the free movement of goods in that case did not apply anyway and the case could, as a consequence, not have been regarded as admissible — then there is in my contention no need for extending Keck and Mithouard (80) to other fundamental freedoms. As regards the freedom to provide services, I detect no ‘increasing tendency’ (81) of service providers to invoke their rights under Article 56 TFEU and I am not aware of others who see such a tendency. Quite to the contrary. In fact, the EU legislature has over the last two decades concentrated some of its efforts on fostering the freedom to provide services throughout the Union, notably with the adoption of the Services Directive. Here, it was felt that the freedom to provide services should be rendered more accessible for economic operators. Introducing a limiting rule in primary law would stand in stark contradiction to this development and thus constitute an unfortunate step backwards in this respect.

75. In a similar vein, fifthly and crucially, the Court has (quite rightly) not resorted to Keck and Mithouard (82) when it could have done so in interpreting the freedom of establishment of a service provider in the context of the Services Directive. In X and Visser, (83) it found that a measure which would undoubtedly have constituted a ‘selling arrangement’ in the sense of Keck and Mithouard (84) nevertheless falls within the scope of the freedom of establishment under the Services Directive, thereby ‘representing a move away from the ideas that led to the decision in Keck’. (85)

76. There is therefore no ground for transposing the rationale of one of the most contested judgments in the field of the free movement of goods (86) beyond that particular fundamental freedom.

77. There is no indication in the case-law of the Court to date that Article 56 TFEU — or any other fundamental freedom for that matter — is subject to a de minimis rule in the sense that the freedom to provide services is only triggered if a certain number of service recipients benefit from a service.

78. Although the Court has found the freedom to provide services not to be applicable to a particular set of facts as described by the referring court, that was rather in situations where the link between the national measure in question and the fundamental freedom was too tenuous.

79. There is a good reason for this case-law and the fact that the Court does not resort to de minimis considerations: the scope of the freedom to provide services must be determined by qualitative criteria, which can be readily applied throughout the Union. Conversely, quantitative criteria cannot and should not determine its scope. Quite apart from this, it would be impossible to set or justify a quantitative threshold. In BONVER WIN’s case, for instance, what would be the yardstick? Ten customers? One hundred? One thousand? A certain percentage of the customers as part of the ‘overall pie’ of customers? Fifteen percent, for instance? Or depending on the money the customers gamble? Does a customer betting EUR 1 000 equate to 10 customers betting EUR 100? If these examples appear simple-minded, I would submit that they perfectly illustrate that it is the concept of de minimis in the context of the fundamental freedoms that would be a future root of problems.

80. The fact that the quantitative concept of de minimis relates more to the concrete facts of a case than its legal aspects would lead to a more fundamental problem. It is far from inconceivable that the same measure could be considered as de minimis in one Member State of the Union, but not in another. This would jeopardise the level playing field of market operators which the provisions on the internal market seek to establish. Or should de minimis be defined in abstract terms? If so, how and by whom? We should not forget that we are here in a non-harmonised area where the measures of the Member States are to be measured against a Treaty freedom and that the internal market remains an area of shared EU competence. This situation cannot be compared to that of EU competition law where the EU legislation itself sets certain thresholds.

81. To sum up the reasoning against the introduction of a de minimis rule in the context of the freedom to provide services under Article 56 TFEU, or indeed under any other freedom, it should be stressed that this is a factual question and not a legal one. In the context of the preliminary reference procedure, it is up to the national court to rule on the facts. Allowing national courts to introduce such a rule would lead to a fragmentation of the internal market and jeopardise the objective of a level playing field of market operators.

82. It follows that a de minimis rule in the context of Article 56 TFEU should be rejected as a matter of principle.

83. In the light of all the foregoing considerations, I propose that the Court should answer the questions referred by the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic) as follows:

The freedom to provide services under Article 56 TFEU — which does not contain a de minimis rule — applies to a situation in which a company established in a Member State loses, pursuant to a public measure determining the modalities of providing services, such as a precise location, the authorisation to operate its activity, when some of its customers come from a Member State other than that in which that company is established, regardless of whether the national measure in question is indistinctly applicable (in law and in fact).

2 For instance: discrimination or obstacle, selling arrangement and/or market access, purely internal situations.

3 Judgment of 24 November 1993, Keck and Mithouard (C‑267/91 and C‑268/91, EU:C:1993:905).

5 See judgment of 15 November 2016, Ullens de Schooten (C‑268/15, EU:C:2016:874, paragraph 47).

6 I borrow this term from Arena, A., ‘The Wall Around EU Fundamental Freedoms: the Purely Internal Rule at the Forty-Year Mark’, Yearbook of European Law, 2019, vol. 38, pp. 153-219, at p. 163.

13 Judgment of 7 February 1979 (115/78, EU:C:1979:31, paragraph 24): ‘the provisions of the Treaty relating to establishment and the provision of services cannot be applied to situations which are purely internal to a Member State’.

14 In the words of the Opinion of Advocate General Warner in Saunders (175/78, not published, EU:C:1979:63, p. 1141).

19 See judgment of 28 March 1979, Saunders (175/78, EU:C:1979:88, paragraph 10).

20 See judgment of 28 March 1979, Saunders (175/78, EU:C:1979:88, paragraph 11). It is nevertheless interesting to note that the Advocate General in this case addressed the question of wholly domestic situations in his Opinion but reached another conclusion than the Court, leading him to analyse the national acts in question under the free movement of workers; see Opinion of Advocate General Warner in Saunders (175/78, not published, EU:C:1979:63).

21 In previous cases such as the seminal judgment of 15 July 1964, Costa (6/64, EU:C:1964:66), for instance, the Court does not seem to have seen a need to analyse the question of a purely internal situation.

24 Even at the risk of being accused of heresy, for ease of reference I refer to the terms ‘competence’ and ‘admissibility’ interchangeably. This is not to say that I am not aware of the legal difference of these terms: competence is objective and refers to the Court’s legal ability to pass judgment whereas admissibility has a subjective element to it in that it can be in part determined by the referring court. In fact, a case is only admissible if the national court has observed the relevant procedural rules in referring a case to the Court and has duly motivated why the reference is necessary. In this respect I moreover fully concur with the Opinion of Advocate General Wahl in Gullotta and Farmacia di Gullotta Davide & C. (C‑497/12, EU:C:2015:168, points 21 and 25), in which a similar point is made while it is stressed that the difference between the two terms should not be overemphasised.

25 See judgment of 15 November 2016 (C‑268/15, EU:C:2016:874, paragraphs 50 to 53). For a comprehensive summary of the Court’s case-law in the matter before that judgement, see Opinion of Advocate General Wahl in Joined Cases Venturini and Others (C‑159/12 to C‑161/12, EU:C:2013:529).

26 See, in this sense, also, my Opinion in Joined Cases X and Visser (C‑360/15 and C‑31/16, EU:C:2017:397, point 115).

27 See judgment of 15 November 2016, Ullens de Schooten (C‑268/15, EU:C:2016:874, paragraph 50).

28 See judgment of 15 November 2016, Ullens de Schooten (C‑268/15, EU:C:2016:874, paragraph 51).

29 See judgment of 15 November 2016, Ullens de Schooten (C‑268/15, EU:C:2016:874, paragraph 52).

30 See judgment of 15 November 2016, Ullens de Schooten (C‑268/15, EU:C:2016:874, paragraph 53).

32 See judgment of 1 October 2015, Trijber and Harmsen (C‑340/14 and C‑341/14, EU:C:2015:641, paragraph 41). My emphasis.

33 The judgment of 1 October 2015, Trijber and Harmsen (C‑340/14 and C‑341/14, EU:C:2015:641), therefore constitutes a case with an interesting twist: having established that certain situations were not purely internal in nature, the Court declined to answer the material questions of the referring court which precisely sought to ascertain whether the provisions of the Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36) (‘the Services Directive’) relating to the freedom of establishment of service providers applied to purely internal situations. It was only later, in the judgment of 30 January 2018, X and Visser (C‑360/15 and C‑31/16, EU:C:2018:44), that the Court answered this question — in the affirmative.

35 The case at issue is to be examined with respect to the Treaty provisions. The Services Directive does not apply to gambling activities; see Article 2(2)(h) of that directive. If gambling activities had been covered by that directive, then the question of the referring court would not have presented itself, as the chapter on the establishment of service providers applies ratione materiae to purely internal situations; see judgment of 30 January 2018, X and Visser (C‑360/15 and C‑31/16, EU:C:2018:44).

36 In the terminology of Müller-Graff, P.‑Chr., in Streinz, R. (ed.), EUV/AEUV Kommentar, C.H.Beck, Munich, 3rd edition, 2018, Artikel 56 AEUV, point 1.

37 See Article 57 TFEU, according to which services are to be considered as services within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. The Court has ruled in this respect that the concept of ‘services’ covers services which are not governed by other freedoms, in order to ensure that all economic activity falls within the scope of the fundamental freedoms, from which I infer that this is not a subsidiary, but a residual fundamental freedom. See my Opinion in Joined Cases X and Visser (C‑360/15 and C‑31/16, EU:C:2017:397, point 88).

38 See judgment of 17 December 1981, Webb (279/80, EU:C:1981:314, paragraph 17).

39 See judgment of 3 December 1974, van Binsbergen (33/74, EU:C:1974:131, paragraph 27).

40 The freedom to provide services under Article 56 TFEU requires thus not only the elimination of all discrimination against service providers established in other Member States on grounds of nationality, but also the abolition of any restriction, even if it applies without distinction to national service providers and service providers from other Member States. This constitutes consistent case-law since the judgment of 25 July 1991, Säger (C‑76/90, EU:C:1991:331, paragraph 12). See, moreover, judgments of 18 July 2013, Citroën Belux (C‑265/12, EU:C:2013:498, paragraph 35), and of 8 September 2009, Liga Portuguesa de Futebol Profissional and Bwin International (C‑42/07, EU:C:2009:519, paragraph 51). In the judgment of 30 November 1995, Gebhard(C‑55/94, EU:C:1995:411, paragraph 37), though that was a case on the freedom of establishment, the Court referred not only to that specific freedom: ‘national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty’. My emphasis.

41 See judgments of 31 January 1984, Luisi and Carbone (286/82 and 26/83, EU:C:1984:35, paragraph 16), and of 8 September 2009, Liga Portuguesa de Futebol Profissional and Bwin International (C‑42/07, EU:C:2009:519, paragraph 51).

42 This view is also shared by Randelzhofer, A. and Forsthoff, U., in Grabitz, E., Hilf, M. and Nettesheim, M., Das Recht der Europäischen Union, 57. updated February 2020, C.H.Beck, Munich, Art. 56, Art. 57 AEUV, point 3.

43 These are basically analogous to the definition of ‘trade in services’ under the General Agreement on Trade in Services annexed to the Agreement establishing the WTO (‘the GATS’). Under Article 1(2) of the GATS, trade in services is defined as comprising four modes of supply of services: (1) cross-frontier supplies not involving any movement of persons; (2) consumption abroad, which entails the movement of the consumer into the territory of the WTO member country in which the supplier is established; (3) commercial presence, that is, the presence of a subsidiary or branch in the territory of the WTO member country in which the service is to be rendered; (4) the presence of natural persons from a WTO member country, enabling a supplier from one member country to supply services within the territory of any other member country.

45 See Opinion of Advocate General Lenz in Cowan (186/87, not published, EU:C:1988:526, point 14).

46 This is often termed ‘passive’ free movement of services. On this concept, see Völker, St., Passive Dienstleistungsfreiheit im Europäischen Gemeinschaftsrecht, Duncker & Humblot, Berlin, 1990, p. 61 et seq.

47 Typical examples include tourist groups which cross a border together with a guide.

50 In contrast to the freedom of movement of workers and the freedom of establishment, the freedom to provide services does not determine the necessary cross-border element by reference to the holder of the freedom, but to the service relationship. The freedom to provide services is in particular not precluded because the recipients or providers of services have the same nationality. See, in more detail, Randelzhofer, A. and Forsthoff, U., op. cit.

53 Incidentally, the Keck case-law, to which we will come back in detail below, only applies to imports. It was handed down under what is now Article 34 TFEU and it applies only in the context of indistinctly applicable measures in law and in fact. By contrast, Article 35 TFEU only applies to discriminatory measures.

54 See judgment of 17 May 1994, Corsica Ferries (C‑18/93, EU:C:1994:195, paragraph 30).

55 See judgment of 10 May 1995, Alpine Investments (C‑384/93, EU:C:1995:126, paragraph 19).

57 See, in this sense, also Müller-Graff, P.‑Chr., op. cit., and Holoubek, M., in Schwarze, J., Becker, U., Hatje, A. and Schoo, J. (eds), EU-Kommentar, 4th ed., Nomos, Baden-Baden, 2019, Art. 57 AEUV, point 42.

65 I deliberately exclude in my analysis the case-law on the specific issue of taxes. Here, it is well known that the Court follows, quite rightly, an approach which is closer to that of discrimination-based restrictions. Even if the cases are complex. The reason is simple: taxes tend to be by their very nature indistinctly applicable in law and in fact. It would be difficult to justify that they automatically come within the ambit of the fundamental freedoms and that, as a default position, Member States must justify them. It is for this reason that I fully agree with the Court if it rules in this specific domain that if the only effect of taxes is to create additional costs in respect of the service in question and if they affect in the same way the provision of services between Member States and that within one Member State, then they do not fall within the scope of Article 56 TFEU. See, by way of example, judgments of 8 September 2005, Mobistar and Belgacom Mobile (C‑544/03 and C‑545/03, EU:C:2005:518, paragraph 31), and of 17 February 2005, Viacom Outdoor (C‑134/03, EU:C:2005:94, paragraph 38).

66 Incidentally, not long after the judgment of 24 November 1993, Keck and Mithouard(C‑267/91 and C‑268/91, EU:C:1993:905). This is an indication that at least at the time the Court saw no need to introduce a limitation to the scope of the freedom to provide services.

70 See Opinion of Advocate General Bobek in TÜV Rheinland LGA Products and Allianz IARD (C‑581/18, EU:C:2020:77, point 31).

72 See my Opinion in Deutsche Parkinson Vereinigung (C‑148/15, EU:C:2016:394, point 23).

74 See, in this sense, for instance, Müller-Graff, P.‑Chr., in von der Groeben, H., Schwarze, J. and Hatje, A. (eds), Europäisches Unionsrecht (Kommentar), 7th ed., Nomos, Baden-Baden, Artikel 34 AEUV, point 247.

76 Electricity, for instance, being a notable exception as to the requirement of tangibility.

77 Judgment of 24 November 1993 (C‑267/91 and C‑268/91, EU:C:1993:905, paragraph 14).

79 French economic operators wanted to sell, in France, at a loss, picon bière, a product originating in France, and were impeded from doing so on the basis of a French law.

83 See judgment of 30 January 2018 (C‑360/15 and C‑31/16, EU:C:2018:44, paragraph 97). See, also, my Opinion in Joined Cases X and Visser (C‑360/15 and C‑31/16, EU:C:2017:397, points 87 to 104).

85 See Snell, J., ‘Independence day for the Services Directive: Visser’, Common Market Law Review, 2019, vol. 56, pp. 1119-1136, at p. 1129.

86 See, among many, Mattera, A., ‘De l’arrêt “Dassonville” à l’arrêt “Keck”: l’obscure clarté d’une jurisprudence riche en principes novateurs et en contradictions’, Revue du marché unique européen, 1994, No 1 pp. 117-160; Gormley, L., ‘Reasoning Renounced? The Remarkable Judgment in Keck & Mithouard’, European Business Law Review, 1994, pp. 63-67; Steindorff, E., ‘Unvollkommener Binnenmarkt’, Zeitschrift für das gesamte Handelsrecht und Wirtschaftsrecht, 1994, pp. 149-169; Lenz, C.O., ‘Ein undeutlicher Ton’, Neue juristische Wochenschrift, 1994, pp. 1633-1634. For a defence of the judgment of 24 November 1993, Keck and Mithouard (C‑267/91 and C‑268/91, EU:C:1993:905), see Joliet, R. (one of the judges in that judgment), ‘Der freie Warenverkehr: Das Urteil Keck und Mithouard und die Neuorientierung der Rechtsprechung’, Gewerblicher Rechtsschutz und Urheberrecht, internationaler Teil, 1994, pp. 979-987. See, also, my Opinion in Deutsche Parkinson Vereinigung (C‑148/15, EU:C:2016:394, point 21 et seq.).

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> BONVER WIN (Freedom to provide services - National legislation prohibiting the operation of gambling in certain places - Opinion) [2020] EUECJ C-311/19_O (03 September 2020) URL: http://www.bailii.org/eu/cases/EUECJ/2020/C31119_O.html Cite as: EU:C:2020:640, [2020] EUECJ C-311/19_O, ECLI:EU:C:2020:640

Court of Justice of the European Communities (including Court of First Instance Decisions)