Provisional text

OPINION OF ADVOCATE GENERAL

CAMPOS SÁNCHEZ-BORDONA

delivered on 12 March 2026 (1)

Case C‑11/25

Jelgavas valstspilsētas pašvaldība

v

Konkurences padome

(Request for a preliminary ruling from the Augstākā tiesa (Senāts) (Supreme Court (Senate), Latvia))

( Reference for a preliminary ruling – Competition – Article 102 TFEU – Abuse of dominant position – Concepts of economic activity and of undertaking – Organisation of the waste management service in the municipality and power to choose the system for selecting the contractor – Decisions forming part of the exercise of public authority prerogatives – Procedure for the selection of the contractor providing the municipal waste management service – Direct award – Service provider partly owned by the municipality )

1.        In 2004, the Jelgavas valstspilsētas pašvaldība (Jelgava City Council, Latvia) entered into a service contract with an undertaking in which it is the majority shareholder for the collection and treatment of waste in the municipality.

2.        The contractor was selected without any tendering procedure. The contract was to run until 2029.

3.        In 2021, the Konkurences padome (Competition Council, Latvia) declared that, by directly selecting the contractor, the City Council had infringed the prohibition on abuse of a dominant position and imposed a fine.

4.        The referring court is asking for an interpretation of Article 102 TFEU in order to determine, essentially, whether a city council is acting as an ‘undertaking’ in taking a decision on the way in which it organises the provision of waste management services within its territory.

I.      Legal framework

A.      European Union law

1.      Directive 75/442/EEC (2)

5.        Article 5 states:

‘Member States shall establish or designate the competent authority or authorities to be responsible, in a given zone, for the planning, organization, authorization and supervision of waste disposal operations.’

2.      Directive 2008/98/EC (3)

6.        Under Article 13 (‘Protection of human health and the environment’):

‘Member States shall take the necessary measures to ensure that waste management is carried out without endangering human health, without harming the environment and, in particular:

(a)      without risk to water, air, soil, plants or animals;

(b)      without causing a nuisance through noise or odours; and

(c)      without adversely affecting the countryside or places of special interest.’

B.      Latvian law

1.      Competition Law (4)

7.        Article 1(1) defines ‘dominant position’ as an economic position held by one or more economic operators on a given market, where they are capable of significantly preventing, restricting or distorting competition on that market for a sufficiently long period of time, acting wholly or partly independently of competitors, customers, suppliers or consumers.

8.        Article 1(9) classifies as an ‘economic operator’ any person, including foreign persons, who carries out or intends to carry out an economic activity in the territory of Latvia or whose activity affects or could affect competition in Latvian territory.

9.        Article 13 has the same wording as Article 102 TFEU. (5)

2.      Law on the Structure of State Administration (6)

10.      According to Article 1(2), ‘subsidiary legal person under public law’ means a municipality or other public legal person created by or under the law.

11.      Article 87 establishes that a public legal person operates under private law when it (i) carries out operations necessary for its functioning; (ii) provides services; or (iii) establishes a capital company or acquires a shareholding in an existing capital company. A public legal person acting in the field of private law is subject to the laws governing private law transactions in general, in so far as such action is not limited by other rules.

3.      Law on Local Government (7)

12.      According to Article 15, one of the autonomous functions of municipalities is to organise public utility services for the population, including municipal waste management.

4.      Law on Waste Management (8)

13.      According to Article 9, municipalities organise, within their administrative territory, the management of municipal waste, including hazardous waste, in accordance with waste management plans.

14.      Article 15 regulates the competence of the local authority to select the operator that will carry out the collection, transport, handling and storage of municipal waste in the respective management area, in accordance with the procedure laid down in public procurement rules, by organising a public procurement procedure for the management of municipal waste in a given area. (9)

5.      Law on Public Procurement for State or Municipal Requirements (10)

15.      According to Article 1(3)(a), ‘contracting authority’ means a public administration, another public authority, a subsidiary legal person under public law, or a private-law entity that simultaneously meets the following criteria:

–        it was created to meet a public need or has the function of meeting such a need, and is not of a commercial nature,

–        it is under the authority or controlling influence of a public administration, another public authority, a subsidiary legal person under public law or a private-law entity meeting these criteria (in which it holds the majority of voting rights in the election of members of supervisory or management bodies or in the appointment of directors), or that has activities financed more than 50% by the State, a subsidiary legal person under public law or a private-law entity meeting these criteria.

16.      Article 4 lays down exceptions to the application of the Law and empowers the contracting authority to decide not to apply that Law in the case of the award of a contract that has as its object, inter alia, a service provided by a body set up for the purpose of performing the functions of the contracting authority, which is under the total control of or is dependent upon the contracting authority and which mainly provides its services (for more than 80% of their value) to the contracting authority, and fully complies with the requirements of the Law in its relations with third parties.

II.    Facts, proceedings and question referred for a preliminary ruling

17.      The sequence of facts detailed in the order for reference is as follows:

–        On 27 September 2004, the company SIA Jelgavas komunālie pakalpojumi (‘SIA JKP’) was registered in the commercial register of the Republic of Latvia, with 51% of its company capital owned by the Jelgava City Council and 49% by a legal person under private law.

–        On 1 November 2004, the Jelgava City Council entered into a contract for the provision of services with SIA JKP, the subject matter of which was waste management and the development and promotion of the waste management system in the city of Jelgava until 31 December 2029 (‘the service contract’).

–        The Jelgava City Council entered into that service contract without organising a tendering procedure, on the grounds of an exception laid down in the Law on Public Procurement in force at that time, namely the in-house procedure.

–        On 25 May 2020, the Competition Council received a claim from an individual in which it was alleged that the selection of the waste management service provider in the municipality of Jelgava was unlawful and that, as such, the service contract should be terminated and a new selection process for the contractor organised.

–        By decision of the Competition Council dated 22 July 2021, it was declared that the Jelgava City Council’s conduct constituted an infringement of Article 13(1) of the Competition Law (prohibiting abuse of a dominant position) and a fine was imposed.

18.      The Jelgava City Council brought an appeal against that decision before the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia). It argued, essentially, that its decision to award the provision of waste collection services through an in-house procedure does not constitute a decision of a market operator. In taking the decision on the municipal waste manager selection process, the City Council was exercising public powers (subject to public law) that are not subject to review by the competition authority.

19.      The appeal was dismissed by the court of first instance, which upheld the findings of the Competition Council, finding that the Jelgava City Council was a market operator and had abused its dominant position.

20.      The Jelgava City Council has appealed the judgment at first instance to the Augstākā tiesa (Senāts) (Supreme Court (Senate), Latvia).

21.      In this context, the Augstākā tiesa (Senāts) (Supreme Court (Senate)) referred the following question to the Court of Justice for a preliminary ruling:

‘Must Article 102 [TFEU] be interpreted as meaning that, in view of the circumstances of the case, the scope of that provision includes a decision made by a subsidiary legal person under public law about how waste management in a municipal area is organised, which, in the present case, consisted of the decision to organise the provision of services through an in-house procedure, awarding the right to provide those services to a company partially owned by a city council?

In particular, can a city council be considered as acting as a market operator or undertaking within the meaning of Article 102 [TFEU] when it takes a decision to organise the provision of municipal waste management services by awarding, through an in-house procedure, the right to provide those services to a company that is partially owned by that city council?’

III. Procedure before the Court

22.      The request for a preliminary ruling was received at the Court on 9 January 2025.

23.      Written comments have been submitted by the Jelgava City Council, the Competition Council, the Latvian Government and the European Commission. All those parties took part in the hearing held on 10 December 2025.

IV.    Assessment

A.      Admissibility of the request for a preliminary ruling

24.      The referring court sets out in detail (11) the reasons that, in its view, justify the admissibility of the reference for a preliminary ruling:

–        It recognises that, in the present case, the abuse of a dominant position cannot affect trade between Member States, given that the facts refer to a purely internal situation. In principle, only national legislation is applicable, in this case the Competition Law.

–        It explains that Latvian competition law is drafted so as to ensure it is harmonised with EU law. The Competition Law adopted in 2001 essentially corresponds to Articles 81 and 82 of the EC Treaty (subsequently Articles 101 and 102 TFEU).

–        With regard to the prohibition of abuse of a dominant position, the referring court stresses that Article 13(2) of the Competition Law is analogous to Article 102 TFEU, except as regards the effect on trade between Member States. The interpretation of national law on that provision should therefore not depart from the way in which EU law is applied.

–        The court states that the Court of Justice has held that it has jurisdiction to respond to requests for preliminary rulings on questions concerning EU law ‘in situations in which the facts in the main proceedings fell outside the direct scope [of that law], provided always that those provisions had been rendered applicable by the national [legislation], which adopted, for solutions applied to purely internal situations, the same approach as that for solutions provided for under EU law’. (12)

25.      I agree with the approach adopted by the referring court. Without further consideration, it is sufficient to refer to the judgment of 5 December 2024 in a similar reference for a preliminary ruling by the Administratīvā apgabaltiesa (Regional Administrative Court) (13) to confirm the admissibility of the reference for a preliminary ruling.

26.      In Case C‑606/23:

–        An interpretation of Article 101(1) TFEU was sought in relation to facts that, although outside the direct scope of EU law, were governed by national provisions which, in turn, were in line – in resolving a purely internal situation – with EU law.

–        The Latvian referring court considered the interpretation of EU law necessary to decide on the application of Article 11(1) of the Competition Law. That court believed that the interpretation of that provision should not be different from that of Article 101(1) TFEU, since the two provisions establish an essentially analogous legal framework.

27.      The Court of Justice, in response to that request:

–        Accepted that it had jurisdiction to rule because it was apparent from the order for reference in that case that ‘… Article 11(1) of the Law on Competition lays down a legal framework identical to that established by Article 101(1) TFEU and that, in Latvian law, Article 11(1) of the Law on Competition is to be given the same interpretation as that of Article 101(1) TFEU’. (14)

–        It recalled that it had already declared itself competent to rule on questions referred for preliminary rulings concerning the interpretation of Article 101(1) TFEU by Latvian courts in similar situations. (15)

28.      Those considerations are applicable, mutatis mutandis, to a case such as the present one, in which the interpretation of Article 102 TFEU is at issue.

B.      Analysis of the question referred

29.      The Competition Council’s decision rests on the twofold premiss that Jelgava City Council, in awarding the contract at issue, acted as an undertaking and abused its dominant position on the market for the provision of the municipal waste collection service in its territory. (16)

30.      It is not clear, however, whether the Competition Council’s decision covered only the point in time (1 November 2004) (17) when the service contract was awarded or, conversely, extended to the point (25 May 2020) when the complaint triggering the Competition Council’s action was lodged.

31.      Determination of the point in time to be taken into account for assessing abuse of a dominant position could have consequences in terms of the applicable EU law. (18)

32.      In particular, Article 102 TFEU was not in force in 2004. Conversely, Article 82 of the EC Treaty was in force. Since the content of the two articles overlaps in substance, I have no objection to focusing on the provision of primary EU law to which the referring court’s question refers (Article 102 TFEU).

1.      Nature of the contract

33.      A debate arose at the hearing as to whether the operation at issue could be classed as a service contract or a concession contract.

34.      Resolving that question could be useful in terms of clarifying whether, from the point of view of EU law governing public procurement, that operation is subject to the application of Directive 2014/24/EU (19) or Directive 2014/23/EU. (20)

35.      It is for the referring court to determine the nature of the contract, in the light of the exact content of that contract, on which that court has all the evidence available to it. (21)

36.      The choice of one solution or the other does not influence the answer to the question of the interpretation of Article 102 TFEU. If the Jelgava City Council acted as an undertaking and engaged in abuse of a dominant position, the fact that this (hypothetical) abuse derived from a service contract or a concession does not seem to me to be decisive.

37.      Nor do I believe that the distinction is relevant in addressing, in this case, the legal regime of in-house awards, to which I will refer later. Whether by application of Article 12 of Directive 2014/24 (for service contracts) or Article 17 of Directive 2014/23 (for concessions), (22) the legal regime is similar.

38.      In any event, to follow the terminology used by the referring court, in this Opinion I will refer to the ‘service contract’.

2.      Terms of the dispute and position of the referring court

39.      The referring court gives a series of reasons for referring the case to the Court of Justice, which I will summarise below:

–        In order for the City Council to be bound by the obligation set out in Article 13(1) of the Competition Law, it must be considered an undertaking and must also occupy a dominant position on the market in question.

–        A legal person governed by public law may act within the scope of private law. If it does so as an undertaking, it must comply with competition rules.

–        In the context of Article 102 TFEU, whether an entity qualifies as an undertaking depends on whether its activities can be classified as economic activity or – conversely – an activity related to the exercise of public authority.

–        The provision of waste management services is, in itself, an economic activity. A city council, by creating a legal person under private law or acquiring a shareholding in an existing capital company, is acting within the scope of private law.

–        However, there are doubts over whether, in deciding how to organise waste management in the municipal area, a city council is acting within the scope of private law.

–        According to Latvian law, the organisation of waste management is an autonomous function and a public law obligation of the City Council. It corresponds to the exercise of public authority prerogatives, as defined by national legislation. (23)

–        The City Council, as a legal person under public law legally obliged to organise the management of waste, is required to select the waste management operator in accordance with the procedure established by law, which refers to those procedures laid down in the public procurement rules. (24)

–        When the service contract was awarded (2004), the national law did not contain any provision on the procedure to be used by a municipal authority to select the operator to manage the service. The Latvijas Republikas Satversmes tiesa (Constitutional Court, Latvia) has, however, declared that public procurement legislation was applicable to the selection of waste collection service providers from 2002 onwards.

–        Under the Public Procurement Law, city councils need not apply the rules governing public procurement if they are entering into a contract with an entity that is wholly controlled by them. If the prerequisites for the implementation of an in-house procedure are not met, a public procurement process must be used.

40.      On this basis, the referring court has stated that the ‘city council is not acting under competition conditions but exercising public authority prerogatives’ (25) when it decides (26) on the manner in which waste management services are to be provided.

41.      In the same vein, the referring court adds that the question of whether the City Council exercised that public law authority correctly could be examined within the framework of infringements of the rules on public procurement. Implicitly, therefore, it seems to rule out the possibility that this verification must be carried out in the light of national competition rules that integrate the content of Article 102 TFEU.

3.      Effect of Article 102 TFEU

(a)    Notion of undertaking and public entities carrying out activities linked to the exercise of public authority prerogatives.

42.      The Court of Justice initially started from an integrated approach to the term ‘undertaking’ as a single organisation of personal tangible and intangible elements, united in an autonomous legal entity pursuing a given long-term economic aim. (27)

43.      Later, the focus shifted to the functional perspective. The centre of gravity shifted from the entity to the economic activity it carries out: ‘… the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed …’. (28)

44.      According to the Court of Justice, ‘… it is the activity consisting in offering goods and services on a given market that is the characteristic feature of an economic activity …’. (29) These will usually be services provided in return for remuneration, which ‘constitutes consideration for the service in question’. (30)

45.      On that basis, it is possible for a public entity to act as an undertaking within the meaning of Article 102 TFEU. (31) However, ‘activities which fall within the exercise of public powers are not of an economic nature justifying the application of the … Treaty rules of competition …’. (32)

46.      The performance of activities linked to the exercise of public authority prerogatives does not preclude a public person from carrying out, at the same time, private economic activities for which it is considered an undertaking. (33)

47.      Therefore, a case-by-case analysis will be necessary to determine whether, in a given situation, a public entity is acting as an undertaking.

(b)    Organisation of municipal waste management

48.      In terms of the organisation of waste management, the relevant piece of EU law at the time when the Jelgava City Council awarded the contract for the management of the municipal waste service in 2004 was Directive 75/442.

49.      Article 4 of Directive 75/442 required Member States to implement the necessary measures to ensure that waste was managed without endangering human health and without harming the environment. Article 5 required them to establish or designate the competent authority or authorities to be responsible, inter alia, for organising waste disposal operations in a given zone. (34)

50.      Directive 75/442 did not impose a specific public or private system of municipal waste management, and neither did the subsequent Directive 2008/98. Within the European Union, disparate models coexist under the umbrella of these directives – depending on the preferences of each Member State – to regulate these management operations.

51.      In Member States that opt for a non-outsourced model, and thus a system managed by their public authorities (usually local authorities), the latter can either assume responsibility for providing the service themselves, using their own staff and material resources, or entrust the management to a proxy entity under their control, under the conditions admissible for in-house allocation. (35)

52.      In relation to the principles of self-sufficiency and proximity in treatment of waste and, in accordance with the ‘principles that preventive action should be taken, [and] that environmental damage should as a priority be rectified at source’, the Court of Justice has underlined the role of local authorities with powers in this area. (36)

53.      There is therefore nothing to prevent national legislation from conferring on a local authority, as a person exercising public authority prerogatives, the organisation of the collection, transport, treatment and disposal of municipal waste, as a matter of EU law.

54.      To the same extent, the local authority concerned cannot be considered an ‘undertaking’ subject to the application of the competition rules of the FEU Treaty (in particular Article 102 TFEU).

55.      While such a local authority could be classified as an undertaking in relation to other economic activities, this will not be the case, I should repeat, when it organises the management of municipal waste within the framework of a legal regime that links such management to the exercise of public authority prerogatives.

56.      The information provided to the Court of Justice in the reference for a preliminary ruling indicates that, in the Republic of Latvia, the municipal authorities have functional autonomy to organise waste management services. (37)

57.      Subject to the referring court’s assessment of national law, it is for the City Council to decide how municipal waste is managed in its territory, including the selection of the operator that will collect, transport, maintain and store such waste. (38)

58.      Naturally, in assessing the actions of the Jelgava City Council, it will be for the referring court to determine whether the organisation of municipal waste management is part of the exercise of public authority prerogatives and, if so, whether the City Council has complied with the legal provisions governing this matter.

59.      If the referring court finds (as it itself implies in the reference for a preliminary ruling) that the City Council is not acting under competition conditions but exercising public authority prerogatives in deciding how to organise the management of municipal waste, the application of Article 102 TFEU will simply be precluded: the City Council will not have acted as an undertaking.

60.      A fortiori, as the referring court rightly points out, it would not be appropriate in such a situation to assess whether there exists ‘a dominant position on the market given that, by its very nature, the ability to take such a decision (or the capacity to influence the market) does not result from its economic position on the market in question but from the fact that it is subject, by law, to the public law obligation to organise waste management within its territory’. (39)

61.      It follows from the foregoing that, in order to answer the question referred for a preliminary ruling, it is sufficient to state that a local authority that, in the exercise of its public authority prerogatives, takes the decision to organise the provision of a waste collection and treatment service within its municipal territory, cannot be classified as an undertaking within the meaning of Article 102 TFEU. This is, in fact, the essential question in the reference for a preliminary ruling.

62.      However, for the sake of completeness, this response should also address the issues raised by the content of the contract concluded between the Jelgava City Council and SIA JKP, in the context of an in-house procedure. These issues are the subject of the second part of the reference for a preliminary ruling.

4.      Application of the public procurement rules

63.      According to the information provided to the Court of Justice, national law gives local authorities a certain margin of discretion in choosing how to organise the provision of waste management services.

64.      This margin of discretion allowed the Jelgava City Council to award a service contract following a competitive tendering procedure (outsourcing of the service) or to provide the waste collection service itself (in-house provision of the service). (40)

65.      If the Jelgava City Council were to opt for in-house provision of the service, it could provide that service through its own proxy entities, either directly or within the framework of an internal procedure commonly known as an in-house procedure.

66.      The Jelgava City Council states that it decided, in 2004, to provide municipal waste management services using an undertaking in which it had a majority shareholding, by means of an in-house procedure.

67.      There is substantial case-law on the feasibility of this type of in-house award. (41) As the Court of Justice has repeatedly held, the in-house exception ‘… is justified by the consideration that a public authority which is a contracting authority has the possibility of performing its public-interest tasks by using its own administrative, technical and other resources, without being obliged to call on outside entities not forming part of its own departments …’ (42)

68.      This exception, adds the Court of Justice, ‘… may be extended to situations in which the other contracting party is an entity legally distinct from the contracting authority, where the latter exercises control over the contractor similar to that which it exercises over its own departments and that contractor carries out the essential part of its activities with the contracting authority or authorities which own it …’. In such a situation, ‘the contracting authority can be regarded as employing its own resources’. (43)

69.      In the judgment in Undis Servizi, the effect of which was discussed at the hearing, the Court of Justice reiterated those same considerations and added that recognition of the exception for in-house awards is justified ‘… by the existence, in such a case, of a specific internal link between the contracting authority and the contractor, even if the latter is an entirely separate legal entity …. In such cases, it may be considered that the contracting authority, in actual fact, uses its own resources … and that the contractor is almost part of its internal departments’. (44)

70.      The referring court has not requested an interpretation of the rules of EU law relating to in-house awards, which are excluded from public procurement law. (45) It has not asked the Court of Justice for assistance in determining whether the internal operator to which the Jelgava City Council directly awarded the management of waste collection service fulfilled the specific conditions for the use of an in-house award procedure.

71.      The Competition Council and the Latvian Government argue, however, that the application of public procurement rules does not preclude competition authorities from assessing whether certain behaviours, covered by that legislation, comply with competition law (of which Article 102 TFEU forms a part).

72.      Such an assessment, they add, would make it possible to assess whether the prohibition of abuse of a dominant position laid down in Article 102 TFEU has been infringed, irrespective of whether the activity in question falls within the scope of the sectoral rules (in this case, the rules on public procurement). (46)

73.      At the hearing, the Competition Council and the Latvian Government acknowledged that the Competition Council itself has no power to assess the unlawfulness of a decision by a city council to entrust the management of the service to its internal operator under a contract. That decision is subject to review by the Iepirkumu uzraudzības birojs (Public Procurement Supervisory Authority, Latvia) and subsequent judicial review. (47)

74.      At this point, and having established the premiss that the Competition Council has no power to judge whether there has been an unlawful in-house award (and thus a procedure that does not comply with Article 12 of Directive 2014/24 or Article 17 of Directive 2014/23), the debate focuses on whether such an (alleged) unlawful award would be sufficient to constitute an abuse of a dominant position.

75.      In my opinion, the ‘two-level check’ advocated by the Competition Council and the Latvian Government could not result in a declaration that the procedure of in-house awarding of public contracts in itself entails the abuse of a dominant position.

76.      If the position of the Competition Council and the Latvian Government were to be interpreted generally, the in-house procedure would be classified as an abuse of a dominant position, as the local authority is reserving an economic activity on a certain market and is foreclosing competitors from the same market for a more or less extended period of time.

77.      The Latvian Government argues, in this vein, that the use of the in-house procedure resulted in the exclusion of competitors and had a negative effect on competition in the market concerned. (48)

78.      The purpose of the in-house award procedures that EU law allows and regulates (Article 12 of Directive 2014/24 and Article 17 of Directive 2014/23) is to encourage, under strict conditions, the choice of a proxy entity of the public authorities themselves, as a means of providing a service. By the same token, the choice of one (internal) contractor to carry out the task of providing the service implies, eo ipso, the exclusion of all other hypothetical competitors.

79.      I am well aware of the fact that the competition authorities in some Member States are reluctant to use in-house contract award procedures. It is logical to question the negative effects that the proliferation of these procedures could have on markets (especially services markets). (49)

80.      However, the acceptance of in-house award procedures has been a conscious decision by the European legislature, which has assessed, in accordance with its own policy choices, the appropriateness of exempting the public authorities of the Member States, in certain cases, from the obligation to use competitive procurement procedures.

81.      That decision, I should repeat, makes it lawful for the public authorities of the Member States to entrust certain tasks to their proxy entities (where they exercise the same control over them as they do over their own departments), without having to go to the market for the relevant works, services or supplies. (50)

82.      It is a different matter if the individual decisions of a public authority that entrusts the provision of the service to its own proxy entity do not comply with Directives 2014/24 or 2014/23.

83.      That could be the situation in the present case if the in-house procedure had not been applied under the conditions laid down by the law, in particular as regards ‘full control of the capital company by the City Council. Clearly, such full control is not possible when another person, in this case a private undertaking, has a shareholding in the capital company’. (51) The Competition Council would therefore find that there had been ‘unlawful application of the in-house principle’. (52)

84.      On this point, the position of the referring court seems to me to be correct: the question of whether the City Council exercised its public law authority correctly, in deciding to award the contract to an in-house operator, could be examined within the framework of a procedure relating to an infringement of the rules on public procurement. (53)

85.      The decision of the Jelgava City Council, which has been found to be unlawful, could be challenged before the bodies responsible for reviewing the acts of public administrations in the field of procurement. (54) Such a challenge could, in turn, allege that the measure is unlawful, unnecessary or disproportionate, which will ultimately be decided by the competent courts.

86.      In any event, all of that is, in itself, outside the scope of Article 102 TFEU. On the one hand, because, as I have already stated, this provision does not apply to a city council that adopts a decision on waste management in the exercise of public authority prerogatives. On the other hand, because the (possible) infringement of public procurement rules does not necessarily result in the abuse of a dominant position in the internal market or in a substantial part of that market.

V.      Conclusion

87.      In the light of the foregoing, I propose that the Court of Justice reply to the Augstākā tiesa (Senāts) (Supreme Court (Senate), Latvia) as follows:

‘A city council that, in the exercise of its public authority prerogatives, takes the decision to organise the provision of the waste collection and treatment service in its municipal area, awarding it by means of an internal procedure (in-house procedure) to an entity subject to control similar to that which the city council exercises over its own departments, cannot be classified as an ‘undertaking’ within the meaning of Article 102 TFEU’.

1      Original language: Spanish.

2      Council Directive of 15 July 1975 on waste (OJ 1975 L 194, p. 39; EE 15/01, p. 129).

3      Directive of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ 2008 L 312, p. 3). The repealed directives include Directive 2006/12/EC of the European Parliament and of the Council of 5 April 2006 on waste (OJ 2006 L 114, p. 9).

4      Konkurences likums (Competition Law) of 4 October 2001 (Latvijas Vēstnesis (Latvian Gazette), 2001, No 151). Accessible at https://likumi.lv/ta/id/54890-konkurences-likums.

5      See, to that effect, judgment of 14 September 2017, Autortiesību un komunicēšanās konsultāciju aģentūra – Latvijas Autoru apvienība (C‑177/16, EU:C:2017:689, paragraph 6).

6      Valsts pārvaldes iekārtas likums (Law on the Structure of State Administration) of 6 August 2002 (Latvijas Vēstnesis, 2002, No 94). Accessible at https://likumi.lv/ta/id/63545-valsts-parvaldes-iekartas-likums.

7      Likums ‘Par pašvaldībām’ (Law on Local Government) of 19 May 1994 (Latvijas Vēstnesis, 1994, No 61). Accessible at https://likumi.lv/ta/id/57255-par-pasvaldibam. This law ceased to be in force on 1 January 2023.

8      Atkritumu apsaimniekošanas likums (Law on Waste Management) of 14 December 2000 (Latvijas Vēstnesis, 2000, No 473/476). Accessible at https://likumi.lv/ta/id/14012-atkritumu-apsaimniekosanas-likums. This law ceased to be in force on 18 November 2010.

9      Version adopted on 22 June 2005, which entered into force on 26 July 2005.

10      Likums ‘Par iepirkumu valsts vai pašvaldību vajadzībām’ (Law on Public Procurement for State or Municipal Requirements) of 5 July 2001 (Latvijas Vēstnesis, 2001, No 110). Available at https://likumi.lv/ta/id/26309-par-iepirkumu-valsts-vai-pasvaldibu-vajadzibam. This was subsequently replaced by the Publisko iepirkumu likums (Public Procurement Law) of 2006 (Latvijas Vēstnesis, 2006, No 65) and the Publisko iepirkumu likums (Public Procurement Law) of 2016 (Latvijas Vēstnesis, 2016, No 254).

11      Paragraph 8 of the order for reference.

12      The referring court relies, for this purpose, on the judgment of 26 November 2015, Maxima Latvija (C‑345/14, EU:C:2015:784, paragraph 12 and the case-law cited).

13      Tallinna Kaubamaja Grupp and KIA Auto (C‑606/23, EU:C:2024:1004).

14      Judgment of 5 December 2024, Tallinna Kaubamaja Grupp and KIA Auto (C‑606/23, EU:C:2024:1004, paragraph 20).

15      Judgment of 18 November 2021, Visma Enterprise (C‑306/20, EU:C:2021:935, paragraph 47 and the case-law cited).

16      According to the Competition Council (footnote 27 in its written observations), the relevant market in this case is the market for the collection and transport of municipal waste in the administrative territory of the city of Jelgava.

17      As at that date, Latvia had already joined the European Union. The Acts concerning the accession of the Republic of Latvia were published in the Official Journal of the European Union on 23 September 2003 (OJ 2003 L 236, p. 33).

18      This could also have consequences, potentially, with regard to the application of national law. In paragraph 16 of the order for reference, the referring court refers to the effect that one date or the other might have from the perspective of national law: according to the Jelgava City Council, as there were no rules in 2004 on the procedure to be adopted for the selection of the contractor, it was not subject to application of the public procurement rules.

19      Directive of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (JO 2014 L 94, p. 65).

20      Directive of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (JO 2014 L 94, p. 1).

21      Judgment of 29 April 2025, Fastned Deutschland (C‑452/23, EU:C:2025:284, paragraph 41): ‘… the question whether such an operation is to be classed as a “public contract”, within the meaning of Directive 2014/24 or a “concession”, within the meaning of Directive 2014/23, must be considered exclusively in the light of EU law …’.

22      Judgment of 29 April 2025, Fastned Deutschland (C‑452/23, EU:C:2025:284, paragraph 48): ‘… the application of the rules under EU law in the field of concessions is precluded if the control exercised over the concessionaire by the contracting authority was comparable to that which the authority exercises over its own departments and if, at the same time, that concessionaire carries out the essential part of its activities with the contracting authority which is its owner …. In the case of an in-house award of that kind, the contracting authority was deemed to use its own resources since, even if the concessionaire was legally distinct from the contracting authority, it could, in practice, be treated in the same way as the internal departments of the contracting authority, with the result that a competitive call for tenders was not compulsory …. Those principles are now laid down and clarified in Article 17 of Directive 2014/23, which sets out the conditions under which a concession between entities within the public sector does not come within the scope of that directive.’

23      The referring court states that that obligation also complies with the public law obligations laid down in Article 8 of Directive 75/442 (and in Articles 8 and 15(1) of Directives 2006/12 and 2008/98, respectively).

24      Article 15(1) of the Latvian Waste Management Law of 14 December 2000 establishes that city councils must select the undertaking charged with managing waste in accordance with the procedures laid down in the rules governing public procurement. A similar provision exists in the Waste Management Law of 28 October 2010.

25      Paragraph 18 of the order for reference.

26      According to the Latvian Government and the Competition Council, which stated this in several passages of their written observations and repeated it at the hearing, the act by which the Jelgava City Council agreed to use the in-house procedure before the contract was concluded does not appear in the file. However, the order for reference presupposes that there was such an act, to which it refers in its paragraphs 13 and 18. In any event, the signing of the contract between Jelgava City Council and SIA JKP alone reveals – without the need for any other documentary evidence – that the City Council has opted for this system of service allocation. The contract is merely the embodiment of the decision made by the City Council in this respect.

27      Judgment of 13 July 1962, Mannesmann v High Authority (19/61, EU:C:1962:31, pp. 705 and 706).

28      Judgment of 23 April 1991, Höfner and Elser (C‑41/90, EU:C:1991:161, paragraph 21).

29      Judgment of 11 July 2006, FENIN v Commission (C‑205/03 P, EU:C:2006:453, paragraph 25).

30      Judgment of 10 July 2025, INTERZERO and Others (C‑254/23, EU:C:2025:569, paragraph 48).

31      Judgment of 12 July 2012, Compass-Datenbank, (C‑138/11, EU:C:2012:449, paragraph 35).

32      Judgments of 12 July 2012, Compass-Datenbank (C‑138/11, EU:C:2012:449, paragraph 36); of 19 January 1994, SAT Fluggesellschaft (C‑364/92, EU:C:1994:7, paragraphs 30 and 31); and of 10 July 2025, INTERZERO and Others (C‑254/23, EU:C:2025:569, paragraph 49).

33      Judgment of 1 July 2008, MOTOE (C‑49/07, EU:C:2008:376, paragraph 25): ‘… the fact that, for the exercise of part of its activities, an entity is vested with public powers does not, in itself, prevent it from being classified as an undertaking for the purposes of Community competition law in respect of the remainder of its economic activities …. The classification as an activity falling within the exercise of public powers or as an economic activity must be carried out separately for each activity exercised by a given entity.’

34      See Article 13 of Directive 2008/98, transcribed in point 6 of this Opinion. Article 16 of that Directive requires Member States to establish an integrated and adequate network of installations for the treatment of waste destined for disposal and ‘mixed municipal waste collected from private households, including where such collection also concerns such waste from other producers’.

35      See Legal Assistance on the Application of Public Procurement Rules in the Waste Sector Final Report, published by the Commission in August 2016. To sum up the situation in the Member States, it states: ‘Local authorities have the possibility to perform the provision of services themselves (direct public management) or to delegate it to other public or private entities (delegated public or private management). Delegated public management is mainly organised through direct contract awards to a separate public entity under the control of the authority (under the exclusions provided by the EU Public Procurement Directive for in-house provision or public-public cooperation). Delegated private management is organised by outsourcing the public task to a private operator through public contracts and concession contracts, whereby the contract is awarded as a result of public procurement procedures’ (p. 1).

36      Judgment of 11 November 2021, Regione Veneto (Shipment of mixed municipal waste) (C‑315/20, EU:C:2021:912, paragraph 25): ‘… the Member States have some discretion as to the choice of territorial basis they deem appropriate for achieving national self-sufficiency for the treatment of waste. However, … one of the most important measures that Member States must adopt, inter alia through local authorities having the relevant powers in the matter, is to seek to have the waste treated in the facility which is situated as close as possible to the place where the waste is produced …’. Emphasis added.

37      Article 15 of the Municipal Law of 19 May 1994.

38      Articles 9 and 15 of the Waste Management Law of 14 December 2000.

39      Paragraph 18 of the order for reference.

40      In its written observations (paragraph 17), the Competition Council acknowledges that, under national law, city councils can organise waste management themselves, either by entrusting it to their own operator or by contracting it out to private operators. The order for reference refers to management carried out by the local authority as ‘in-house provision’ of the service.

41      Based, in particular, on the judgments of 18 November 1999, Teckal (C‑107/98, EU:C:1999:562), and of 11 January 2005, Stadt Halle and RPL Lochau (C‑26/03, EU:C:2005:5).

42      Judgment of 8 May 2014, Datenlotsen Informationssysteme (C‑15/13, EU:C:2014:303, paragraph 25 and the case-law cited). More recently, judgment of 8 December 2016, Undis Servizi (C‑553/15, EU:C:2016:935; ‘the judgment in Undis Servizi’, paragraph 30).

43      Judgment of 8 May 2014, Datenlotsen Informationssysteme (C‑15/13, EU:C:2014:303, paragraph 25 and the case-law cited).

44      Judgment in Undis Servizi, paragraph 30.

45      Article 12 of Directive 2014/24 specifies the conditions under which a contract awarded by a contracting authority to another legal person governed by public or private law is excluded from the scope of that directive. Article 17 of Directive 2014/23 has a similar content.

46      In support of its arguments, the Competition Council cites the judgment of 27 February 2025, Aeroportul Internaţional ‘Avram Iancu’ Cluj (C‑220/24, EU:C:2025:124, paragraphs 30 and 31). In that case, the sectoral legislation applied was Council Directive 96/67/EC of 15 October 1996 on access to the groundhandling market at Community airports (OJ 1996 L 272, p. 36). The Court of Justice declared that Articles 1 and 6 of Directive 96/67 ‘must be interpreted as not precluding the application of Article 102 TFEU in circumstances where a supplier of groundhandling services has been refused access to the airport infrastructure, which is necessary for the provision of such services, of an EU airport whose annual traffic, on the date of that refusal, was less than two million passenger movements’ (operative part).

47      Paragraph 28 of the written observations from the Competition Council.

48      Paragraph 12 of the written observations from the Latvian Government: ‘The abuse of a dominant position exercised by the [Jelgava] City Council manifested itself in the form of foreclosure and had a negative effect on competition in the market concerned. Indeed, the action of the City Council in reserving, without objective necessity (justification), economic activities on the relevant market for itself and shielding its subsidiary from competition led to the foreclosure of competitors on that market for a prolonged period of time’.

49      See, for example, the report of 19 June 2013 from the Comisión Nacional de los Mercados y de la Competencia (National Commission for Markets and Competition (Spain)) entitled ‘Medios propios y las encomiendas de gestión: implicaciones de su uso desde la óptica de la promoción de la competencia’ (Own resources and management entrustment: implications of their use from the point of view of promoting competition). It reads: ‘The restriction of competition closes off access to the service in question for all suppliers other than the own resources, limiting their ability to offer their products to the Government, which can often be a major demander of such goods and services’ (paragraph VI, second conclusion, p. 94). ‘The use of this instrument, which is inherently restrictive of competition, must be based on justification both that the status of own resource has been correctly granted to a public entity and that management entrustment is being used in each specific procurement process’ (paragraph VII, p. 97). Emphasis added. The report is available at https://pmt-eu.hosted.exlibrisgroup.com/primo-explore/fulldisplay?docid=34CNMC_BKM000007612_3&context=L&vid=34CNMC_V1&lang=es_ES&search_scope=LOCAL_full&adaptor=Local%20Search%20Engine&tab=default_tab&query=any,contains,informe%20%22medios%20propios%22&offset=0.

50      I return here to the statements I made in my Opinion in the LitSpecMet case (C‑567/15, EU:C:2017:319, point 69).

51      Paragraph 7 of the order for reference.

52      Paragraph 7 of the order for reference.

53      Paragraph 18 of the order for reference. At the end of that paragraph, the referring court emphasises that ‘questions referred for a preliminary ruling relating to the validity of the application of an in-house procedure are usually raised within the framework of proceedings challenging the decision taken by an institution to proceed with a direct award within the context of a public procurement procedure’. With regard to in-house awards that have resulted in references for preliminary rulings in the waste sector, see, among others, the judgments of 10 September 2009, Sea (C‑573/07, EU:C:2009:532); of 29 November 2012, Econord (C‑182/11 and C‑183/11, EU:C:2012:758); and of 12 May 2022, Comune di Lerici (C‑719/20, EU:C:2022:372).

54      In paragraph 28 of its written observations, the Competition Council acknowledges that ‘the justification and implementation of the choice of each form of service provision is subject to legal criteria and therefore to review by the supervisory authorities (and, subsequently, by the courts). For example, in the context of the market for the collection and transport of municipal waste, the relevance of the application of Article 3(1)(7) of the Public Procurement Law by the city council providing the service independently is subject to judicial review’.