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Document 62017CC0171

Opinion of Advocate General Bot delivered on 14 June 2018.
European Commission v Hungary.
Failure of a Member State to fulfil obligations — Directive 2006/123/EC — Articles 15 to 17 — Article 49 TFEU — Freedom of establishment — Article 56 TFEU — Freedom to provide services — National mobile payment system — Monopoly).
Case C-171/17.

Digital reports (Court Reports - general)

ECLI identifier: ECLI:EU:C:2018:439

OPINION OF ADVOCATE GENERAL

BOT

delivered on 14 June 2018 ( 1 )

Case C‑171/17

European Commission

v

Hungary

(Failure of a Member State to fulfil obligations — Article 49 TFEU — Freedom of establishment — Article 56 TFEU — Freedom to provide services — Directive 2006/123/EC — Articles 15 and 16 — Restrictions — Justification — Necessity — Proportionality — National mobile payment system — Exclusive rights — Monopoly — Service of general economic interest)

1. 

By the present action, the European Commission asks the Court to find that, by introducing and maintaining in force the national mobile payment system, governed by a nemzeti mobil fizetési rendszerről szóló 2011. évi CC. törvény (Law CC of 2011 on the national mobile payment system) ( 2 ) and by 356/2012. (XII. 13.) Korm. rendelet a nemzeti mobil fizetési rendszerről szóló törvény végrehajtásáról (Governmental Decree No 356/2012 implementing the mobile payment system law), ( 3 ) of 13 December 2012, Hungary has failed to fulfil its obligations, principally, under Article 15(2)(d) and Article 16(1) of Directive 2006/123/EC of the European Parliament and the Council of 12 December 2006 on services in the internal market ( 4 ) and, in the alternative, under Articles 49 and 56 TFEU.

2. 

In this Opinion, I shall set out the reasons why I believe that this action for failure to fulfil obligations should be upheld.

I. Legal context

A.   European Union law

1. Primary law

3.

The first paragraph of Article 49 TFEU provides as follows:

‘Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.’

4.

The first paragraph of Article 56 TFEU provides:

‘Within the framework of the provisions set out below, restrictions on freedom to provide services within the [European] Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended.’

2. The Services Directive

5.

Recitals 8, 17 and 70 of the Services Directive state:

‘(8)

It is appropriate that the provisions of this Directive concerning the freedom of establishment and the free movement of services should apply only to the extent that the activities in question are open to competition, so that they do not oblige Member States either to liberalise services of general economic interest [(“SGEIs”)] or to privatise public entities which provide such services or to abolish existing monopolies for other activities or certain distribution services.

(17)

This Directive covers only services which are performed for an economic consideration. Services of general interest are not covered by the definition in Article 50 [EC (now Article 57 TFEU)] and therefore do not fall within the scope of this Directive. [SGEIs] are services that are performed for an economic consideration and therefore do fall within the scope of this Directive. However, certain [SGEIs], such as those that may exist in the field of transport, are excluded from the scope of this Directive and certain other [SGEIs], for example, those that may exist in the area of postal services, are the subject of a derogation from the provision on the freedom to provide services set out in this Directive. This Directive does not deal with the funding of [SGEIs] and does not apply to systems of aids granted by Member States, in particular in the social field, in accordance with Community rules on competition. This Directive does not deal with the follow-up to the Commission White Paper on Services of General Interest.

(70)

For the purposes of this Directive, and without prejudice to Article 16 [EC (now Article 14 TFEU)], services may be considered to be SGEIs only if they are provided in application of a special task in the public interest entrusted to the provider by the Member State concerned. This assignment should be made by way of one or more acts, the form of which is determined by the Member State concerned, and should specify the precise nature of the special task.’

6.

Article 1(2) and (3) of that directive provides:

‘2.   This Directive does not deal with the liberalisation of [SGEIs], reserved to public or private entities, nor with the privatisation of public entities providing services.

3.   This Directive does not deal with the abolition of monopolies providing services nor with aids granted by Member States which are covered by Community rules on competition.

This Directive does not affect the freedom of Member States to define, in conformity with Community law, what they consider to be [SGEIs], how those services should be organised and financed, in compliance with the State aid rules, and what specific obligations they should be subject to.’

7.

Section 2, entitled ‘Requirements prohibited or subject to evaluation’, of Chapter III of the Services Directive, which relates to ‘freedom of establishment for providers’, consists of Articles 14 and 15. Article 14 of the directive, relates to ‘prohibited requirements’, whereas Article 15 of the directive, on ‘requirements to be evaluated’ provides as follows:

‘1.   Member States shall examine whether, under their legal system, any of the requirements listed in paragraph 2 are imposed and shall ensure that any such requirements are compatible with the conditions laid down in paragraph 3. Member States shall adapt their laws, regulations or administrative provisions so as to make them compatible with those conditions.

2.   Member States shall examine whether their legal system makes access to a service activity or the exercise of it subject to compliance with any of the following non-discriminatory requirements:

(d)

requirements, other than those concerning matters covered by Directive 2005/36/EC[ ( 5 )] or provided for in other Community instruments, which reserve access to the service activity in question to particular providers by virtue of the specific nature of the activity;

3.   Member States shall verify that the requirements referred to in paragraph 2 satisfy the following conditions:

(a)

non-discrimination: requirements must be neither directly nor indirectly discriminatory according to nationality nor, with regard to companies, according to the location of the registered office;

(b)

necessity: requirements must be justified by an overriding reason relating to the public interest;

(c)

proportionality: requirements must be suitable for securing the attainment of the objective pursued; they must not go beyond what is necessary to attain that objective and it must not be possible to replace those requirements with other, less restrictive measures which attain the same result.

…’

8.

Chapter IV of the Services Directive, entitled ‘Free movement of services’, includes Article 16 on ‘Freedom to provide services’. Paragraph 1 states:

‘Member States shall respect the right of providers to provide services in a Member State other than that in which they are established.

The Member State in which the service is provided shall ensure free access to and free exercise of a service activity within its territory.

Member States shall not make access to or exercise of a service activity in their territory subject to compliance with any requirements which do not respect the following principles:

(a)

non-discrimination: the requirement may be neither directly nor indirectly discriminatory with regard to nationality or, in the case of legal persons, with regard to the Member State in which they are established;

(b)

necessity: the requirement must be justified for reasons of public policy, public security, public health or the protection of the environment;

(c)

proportionality: the requirement must be suitable for attaining the objective pursued, and must not go beyond what is necessary to attain that objective.

…’

B.   Hungarian law

1. The mobile payment system law

9.

The mobile payment system law changed the legal framework for mobile payment services with effect from 1 April 2013, although it only became binding as of 2 July 2014.

10.

Article 1(d) of that law provides:

‘For the purposes of this Law, the following definitions apply:

(d)

mobile payment system: any system with which the customer purchases the service through an electronic payments system that is accessible without attachment to a fixed point, by means of telecommunications, a digital device or other IT tool.’

11.

Article 2 of that law provides:

‘Services subject to centralised mobile commerce are as follows:

(a)

the public parking service (car parks) in accordance with a közúti közlekedésről szóló 1988. évi I. törvény (Law No I of 1988 on road traffic; “the Road Traffic Law”);

(b)

access to the road network for transport purposes in exchange for a user charge or toll;

(c)

the passenger transport service supplied as a public service by a service provider in which the State or a local authority has a majority holding;

(d)

any service not falling within the categories listed in points (a) to (c) above, supplied as a public service by a body in which the State or a local authority has a majority holding.’

12.

Article 3 of that law provides:

‘(1)   The service provider is required to employ a mobile payment system to supply a service subject to centralised mobile commerce — with the exception of the service referred to in Article 2(d).

(2)   The service provider shall fulfil its obligation under paragraph 1 where it is:

(a)

wholly owned by the State, or

(b)

wholly owned by a body which is itself wholly owned by the State, using the uniform national system (“national mobile payment system”) operated by the government-appointed body (“national mobile payment body”).

3.   If the service provider offers the service referred to in Article 2(d) via a mobile payments system, it may offer the service using only the national mobile payment system.

4.   Operation of the national mobile payment system is a public service in respect of which the Minister for Information Technology and the national mobile payment body shall enter into a public service agreement.

5.   The operation of the national mobile payment system is an exclusive economic activity exclusive to the State, which the national mobile payment body shall carry out without a concession contract being concluded.’

2. The Governmental Decree

13.

Article 8 of the Governmental Decree, which entered into force on 1 April 2013, provides:

‘(1)   Unless otherwise stipulated, the fee to be paid by the customer for the mobile payment product is the fee that the customer would be required to pay if he had purchased the service through channels other than the national mobile payment system. The service provider may encourage purchase of the service as a mobile payment product through rebates.

(2)   In addition to the fee for the mobile payment product under paragraph 1, the customer pays the national mobile payment body a convenience fee for the specified services in the amount indicated below:

(a)

50 [Hungarian] forints [(HUF) (approximately EUR 0.16)] per transaction for the provision of parking, as a public service,

(b)

[HUF] 50 [(approximately EUR 0.16)] per transaction for the user charge referred to in Article 33/A of the Road Traffic Law,

(3)   If the sale of the service is completed using the centralised mobile payment system, the national mobile payment body charges the customer the convenience fee at the same time as the fee for the service subject to centralised mobile commerce.

…’

14.

Article 24/A(1) of the Decree provides:

‘In addition to the fee for the mobile payment product under Article 8(1), the reseller pays the national mobile payment body a convenience fee in the amount indicated below, for the specified services:

(a)

[HUF] 40 [(approximately EUR 0.13)] per transaction for provision of parking, as a public service,

(b)

[HUF] 0 per transaction for the sale of road usage rights in accordance with Article 33/A of the Road Traffic Law,

(c)

[HUF] 0 per transaction for the sale of road usage rights in accordance with the law on tolls,

(d)

[HUF] 0 per transaction for the sale of a public transport ticket,

(e)

[HUF] 75 [(approximately EUR 0.24)] per transaction in the context of services referred to in Article 2(d), of [the mobile payment system law].’

15.

Article 31 of that decree deals with the resale fee. Paragraph 1 of that article is worded as follows:

‘The resale fee is calculated on the basis of the fee (excluding [value added tax]) paid by the customer in accordance with Article 8(1), set at:

(a)

10% for provision of parking, as a public service,

(b)

5% for the sale of road usage rights in accordance with Article 33/A of the Road Traffic Law,

(c)

5% for the sale of a transport ticket,

(d)

5% for the sale of road usage rights in accordance with the Law on tolls.’

II. Pre-litigation procedure

16.

Following a complaint, the Commission launched an EU Pilot ( 6 ) procedure on 14 December 2012 on the establishment of the national mobile payment system in Hungary. In that context, it addressed a request for information to that Member State.

17.

The Hungarian authorities replied to that request on 22 February 2013.

18.

Regarding the response as unsatisfactory and taking the view that, by adopting Article 3(2) to (5) of the mobile payment system law, Hungary had failed in its obligations under Articles 15 and 16 of the Services Directive and Articles 49 and 56 TFEU, on 21 November 2013 the Commission addressed a letter of formal notice to that Member State.

19.

Hungary responded by letter dated 22 January 2014. Hungary argued, in essence, that the Member States have broad discretion to define SGEIs, which the Commission may call into question only in the event of manifest error. The national mobile payment system is an SGEI because it has specific characteristics that distinguish it from ordinary economic activities, is accessible to all and market forces alone were insufficient to ensure the provision of a satisfactory service. Hungary further argued that, by establishing a standardised system, enabling uniform implementation, individualisation and interoperability, it satisfied the requirements for mobile payment systems as defined in particular by the Commission in its Green Paper ‘Towards an integrated European market for card, internet and mobile payments’. ( 7 ) In addition, Hungary submitted that it had withdrawn from competition the services offered via the platform for reasons relating to the public interest, not on economic grounds. According to Hungary, mobile payment for parking spaces is the only payment method through which a fee based on actual parking time can be calculated. Hungary added that private service providers who previously offered the service did not suffer any loss that that Member State should be required to compensate as they can use, as resellers, the platform and infrastructure put into place. Moreover, a central, national platform based on an exclusive right is the only means to supply a uniform and guaranteed service to customers. Hungary concludes with the argument that the national mobile payment system operates as a monopoly on services that fall outside the scope of the Services Directive, in accordance with Article 1(3) thereof.

20.

On 11 July 2014 the Commission issued a reasoned opinion in which it restated the position set out in the letter of formal notice. Hungary responded to the reasoned opinion by letter dated 19 September 2014, in essence reiterating the observations in its letter of 22 January 2014.

21.

The Commission, finding Hungary’s replies to be unsatisfactory, brought the present action on 5 April 2017.

III. Forms of order sought by the parties

22.

The Commission claims that the Court should:

principally, find that the national mobile payment system established and maintained in force by Hungary, governed by the mobile payment system law and the Governmental Decree, which creates a monopoly by granting exclusive rights to Nemzeti Mobilfizetési Zrt. and impedes entry to the wholesale mobile payment market that was previously open to competition, is in breach of Article 15(2)(d) and Article 16(1) of the Services Directive;

in the alternative, find that the national mobile payment system established and maintained in force by Hungary, governed by the mobile payment system law and the Governmental Decree, which creates a monopoly by granting exclusive rights to Nemzeti Mobilfizetési Zrt. and impedes entry to the wholesale mobile payment market that was previously open to competition, is in breach of Articles 49 and 56 TFEU;

order Hungary to pay the costs.

23.

Hungary contends that the Court should:

dismiss the action as unfounded;

order the Commission to pay the costs.

IV. Proceedings

A.   The main arguments of the parties

1. The Commission

24.

By way of introduction, the Commission describes the changes to the mobile payment service following the introduction of the mobile payment system law.

25.

Thus, first, the Commission specifies that, since 1 July 2014, Nemzeti Mobilfizetési Zrt. — which is wholly owned by Magyar Fejlesztési Bank and through it, by the Hungarian State — operates the national mobile payment system, the use of which is compulsory for public parking, traffic access to the road network, the transport of persons by State undertakings and other services offered by State undertakings. In that regard, the Commission states that, although mobile payment is possible only in the first two sectors, the proceedings concern all four sectors.

26.

Secondly, with respect to public parking, the Commission indicates that, prior to 1 July 2014, car park users could purchase the service directly from the mobile payment service provider or its reseller, which then forwarded the payment to the car park operator with which it had entered into a contract. As a result of the entry into force of the mobile payment system law and the Governmental Decree, car park operators are required to enter into a contract with Nemzeti Mobilfizetési Zrt., which sells mobile parking services either directly to end users or through resellers in exchange for the fees specified in the decree. In that regard, the Commission notes that active mobile payment service providers have had to modify their systems in order to become resellers for Nemzeti Mobilfizetési Zrt. With regard to the provision of traffic access to the road network, the Commission notes that, in Hungary, some roads may be used only if the user has paid a toll, either via the HU-GO system or via the electronic toll sticker known as the ‘e-matrica’ and that, since 1 July 2014, road usage rights may be obtained only from Nemzeti Mobilfizetési Zrt. or its resellers.

27.

According to the Commission, the mobile payment system law has created a national monopoly of mobile payment services, since Nemzeti Mobilfizetési Zrt. holds an exclusive right to enter into contracts with car park operators and sell road usage rights.

28.

With regard to the complaints put forward in support of its case, the Commission submits, principally, that the Services Directive is applicable and that the Hungarian legislation is in breach of Article 15(2)(d) and Article 16(1) of that directive. In the alternative, should the services at issue be found to fall outside the scope of that directive, the Commission argues that the Hungarian legislation is in breach of the requirements of Articles 49 and 56 TFEU.

29.

In particular, with regard to Hungary’s argument that the national mobile payment system is an SGEI and falls outside the scope of the Services Directive, the Commission states first that Article 1(2) and (3) of that directive, read in conjunction with recital 8 thereof, restricts application of the directive to existing SGEIs and monopolies, whereas the mobile payment system law granted Nemzeti Mobilfizetési Zrt. an exclusive right after the Services Directive came into force.

30.

The Commission then points out that the services at issue cannot be classified as SGEIs. With reference to its Communication on the application of the European Union State aid rules to compensation granted for the provision of [SGEIs], ( 8 ) the Commission recalls that it would not be appropriate conveniently to attach specific public service obligations to an activity which is already provided or which can be provided satisfactorily by undertakings operating under normal market conditions. The mobile payment services at issue had indeed been provided satisfactorily by undertakings operating under normal market conditions. Furthermore, the Commission states that the services at issue are not essential to citizens. In that regard, the Commission nevertheless adds that, even if the services were deemed to be SGEIs, the Services Directive would still apply, as confirmed by the many safeguards and exceptions in the directive in favour of SGEIs.

31.

Finally, with regard to the applicability of the rules of the FEU Treaty, the Commission notes that the services at issue are offered in exchange for consideration and that, in Hungary, commercial undertakings previously carried out the activity to which they relate. As a result, that activity constitutes an economic activity that is subject to the rules of that Treaty.

32.

With regard to the restrictive nature of the Hungarian regulation of the national mobile payment system, the Commission is of the opinion that the mobile payment system law and the Governmental Decree have a restrictive effect, since operation of the national mobile payment system has become a State monopoly under which mobile payment and mobile telephone service providers may now act only as resellers. According to the Commission, those provisions impede access to the wholesale mobile payment market, irrespective of the manner in which the services are supplied.

33.

Consequently, on the one hand, the Commission submits, with regard to freedom of establishment, that the national mobile payment system constitutes a requirement within the meaning of Article 15(2)(d) of the Services Directive and a restriction under Article 49 TFEU, as the exclusive rights granted to Nemzeti Mobilfizetési Zrt. impede the entry of undertakings, both Hungarian and foreign, to the wholesale mobile payment market, which was previously open to competition.

34.

On the other, with regard to the freedom to provide services, the Commission is of the view that the national mobile payment system is in breach of Article 16 of the Services Directive and Article 56 TFEU, since the exclusive rights granted to Nemzeti Mobilfizetési Zrt. restrict the provision of cross-border services.

35.

With regard to the justifications put forward by Hungary, particularly the protection of consumers and end users, fairness of trade transactions and combating fraud, the Commission does not dispute that they may constitute overriding reasons relating to the public interest within the meaning of the case-law of the Court and of Article 4(8) of the Services Directive. Nonetheless, those overriding reasons relating to the public interest are not capable of justifying the restrictions introduced in the mobile payment system law and the Governmental Decree, since they are neither necessary nor proportionate.

36.

Thus, first, the Commission argues that it has not been established that the public parking and road network traffic access markets were previously operated in an unsatisfactory manner and therefore the State’s intervention cannot be considered necessary. In that regard, while acknowledging that standardisation may present certain advantages for the development of mobile payment services, the Commission argues that the creation of a State monopoly was neither the sole nor the best way to attain that objective.

37.

Secondly, the Commission points out that the difficulties claimed by Hungary in the functioning of the market could have been resolved through other, less restrictive measures, so that the intervention on the market was disproportionate. In particular, the Commission argues that standardisation and interoperability could have been achieved through legislation, while preserving the existing market structure, and that it was not necessary to grant exclusive rights to the new State-owned body. The Commission adds that it would have been possible to create a temporary monopoly or to put in place a concession system for the operation of the national mobile payment system platform.

38.

The Commission further states that Hungary has made a manifest error of assessment in classifying the service at issue as an SGEI. The definition of SGEIs and the specific rights related to them cannot go beyond what is necessary to satisfy society’s need to remedy actual deficiencies resulting from normal market conditions. The task assigned to Nemzeti Mobilfizetési Zrt. cannot be described as a ‘particular task’ which the undertakings present on the market did not undertake since, before the introduction of the national mobile payment system, a system covering most of the country was already in place and would undoubtedly have continued to develop.

39.

Finally, the Commission submits that the restrictive effect and disproportionate nature of the introduction of the new mobile payment system are illustrated by the fact that no compensation was paid to previous operators and, in particular, by the extent of the irrecoverable investments made in the platform and loss of previous contractual relationships, particularly with car park operators.

2. Hungary

40.

As a preliminary argument, Hungary points out that the purpose of competition policy is to maximise the well-being of consumers and that the establishment and maintenance of a national mobile payment system contributes to their well-being because the public parking service is less costly and is available throughout the national territory. Hungary adds, next, that competition has shifted from the wholesale market to the retail market, where it has intensified considerably. Finally, Hungary states that the market structure in place before 1 July 2014 did not enable competition to develop because EME Zrt., the largest operator at that time, held a monopoly on the market. It was in the interest of that operator on the upstream market to make contact only with local authorities from which it could draw a profit. On the downstream market, Hungary submits that, owing to the vertical integration structure of EME, its interests would not have been served by developing a network of resellers, as they would have been likely to compete with it.

41.

Hungary argues that neither the Services Directive nor Articles 49 and 56 TFEU are applicable in this case.

42.

Firstly, after recalling that, under the terms of Article 106(2) TFEU, Article 1 of Protocol (No 26) on services of general interest, ( 9 ) annexed to the Treaties, and Article 1(3) of the Services Directive, the definition of activities that constitute ‘SGEIs’ is a matter for Member States, Hungary argues that the operation of the national mobile payment system is an SGEI. In that regard, Hungary states that, in the Communication from the Commission on the ‘European Union framework for State aid in the form of public service compensation’, ( 10 ) classification as an ‘SGEI’ is subject to fulfilment of a number of conditions, namely that the service must have specific characteristics in comparison with other economic activities, be accessible to all, and that the service cannot be provided satisfactorily under normal market conditions.

43.

According to Hungary, the Commission has not disputed that the second condition has been met. With regard to the first condition, mobile payment services are linked to the use of public services to which the State is required to ensure uniform, convenient, immediate and affordable access for users, regardless of their place of use. Accordingly, the national mobile payment system was established for reasons relating to the public interest and not on economic grounds and it is not a ‘convenience’ service, but rather the only option taking account of the users’ interests, since that payment method enables a fee based on actual parking time to be calculated.

44.

Finally, Hungary states that the previous system failed to ensure satisfactory operation of the market, so the third condition is satisfied. Thus, since the operators present on the market were unable to put in place a mobile payment platform and nor was it in their interest to do so, the aim of the national mobile payment system is to remedy the deficiencies in the previous operation of the market by establishing nationwide coverage and a State-managed technical platform as cost-effectively and as uniformly as possible.

45.

Secondly, Hungary argues that the Services Directive does not apply in the present case, since it merely specifies that Member States are not required to liberalise SGEIs. Furthermore, the directive does not oblige Member States to liberalise ‘existing’ SGEIs and Article 1(3) does not cover abolition of monopolies on services.

46.

Hungary therefore maintains its position that, in accordance with Article 1(2) of the Services Directive, the services at issue do not fall within the scope of the directive.

47.

In any case, even if the Services Directive were to apply, Hungary argues that, in accordance with Article 15(4) of the directive, Article 15(2)(d) of that directive should not apply to the national mobile payment system since it is an SGEI, because it would obstruct performance of the task assigned to that system.

48.

Thirdly, regarding the infringement of Articles 49 and 56 TFEU, Hungary argues that those provisions do not apply to the services at issue because, on the one hand, Article 106(2) TFEU excludes the application of Treaty provisions, whether competition rules or internal market rules, to SGEIs where application of such rules obstructs the performance, in law or in fact, of the particular task assigned to the undertakings concerned, and, on the other, since the mobile payment system is a State monopoly, it should be dealt with under Article 37 TFEU, rather than under other provisions of the Treaty.

49.

Nonetheless, if Articles 49 and 56 TFEU are found to apply to the services at issue, Hungary argues that these provisions have not been infringed.

50.

First, Hungary argues that the rules on the national mobile payment system are not discriminatory, as the mobile payment system law and the Governmental Decree apply to all service providers which are in comparable situations.

51.

Next, Hungary points out that the grounds which it has put forward as justification for the national mobile payment system, particularly consumer protection, fairness of commercial transactions and combating fraud, are regarded by the Court as overriding reasons relating to the public interest.

52.

Finally, Hungary argues that the establishment and maintenance of the national mobile payment system is necessary and proportionate. In that regard, Hungary states that, prior to the reforms, the market was not functioning in a satisfactory manner due to a lack of comprehensive nationwide coverage, a lack of interoperability and the absence of operation on the basis of a platform. According to Hungary, under the previous system, it was not in the interest of EME to develop the resale market, due to its vertical integration structure, or to expand the circle of contracts entered into with local authorities. Hungary argues that the national mobile payment system ensures full coverage and interoperability, stimulates competition and enables a satisfactory provision of services owing to its operation as an open platform, accessible to mobile payment service providers through a uniform, standardised interface. In particular, Hungary states that users may now freely choose the best offer among the parking mobile payment service providers and enjoy mobile parking throughout the national territory, via their usual service provider. Hungary further notes that the national mobile payment system offers mobile payment service providers and local authorities full coverage for services. Finally, the system has enabled the removal of barriers to entry for all operators and the reduction of their back-office and development costs.

53.

With regard to the Commission’s argument that the fragmented systems in place before establishment of the national mobile payment system could have been integrated through regulatory obligations, cooperation or competition on the market, Hungary states that no specific example is given to support that argument. Furthermore, since the service at issue falls within the remit of the local authorities, it would have been necessary to organise public procurement procedures. On that basis, the national mobile payment system for parking would only have been set up in locations where the service provider could hope for a high level of revenue, the entire national territory would not have been covered and different service providers would have won contracts with different local authorities, resulting in a total lack of interoperability.

54.

Hungary does not regard the Commission’s argument that integration could have been established through cooperation between operators and compulsory access to the existing EME system as a realistic prospect, since compulsory access would have been possible if that company had operated as a platform.

B.   My assessment

1. Classification as an SGEI

55.

To facilitate analysis of the pleas raised by the Commission, it would appear necessary first to determine whether or not the mobile payment services at issue constitute an SGEI.

56.

Although classification of a service as an SGEI does not exclude application of the Services Directive, since the Court has held that a service activity, even an SGEI, falls within the scope of that directive, ( 11 ) classification as an SGEI is crucial because, if the services at issue were classified as SGEIs, certain specific derogations provided for in the Services Directive would apply. Thus, with regard to the freedom of establishment, Article 15(4) of the directive provides that paragraphs 1, 2 and 3 of that provision apply only to the extent that their application does not obstruct, in law or in fact, the performance of a particular task assigned to the SGEI. With regard to the freedom to provide services, Article 17, point 1, of the directive provides that Article 16 does not apply to SGEIs which are supplied in another Member State.

57.

To that end, with regard to the criteria used to determine whether or not the mobile payment services at issue constitute an SGEI, my view is that the criteria developed in the case-law on State aid should be applied, even though classification as an SGEI arises in the context of freedom of movement and, particularly, of the Services Directive. ( 12 )

58.

Although, in the context of that directive, there is not yet a great quantity of case-law, the criteria applied are no different from those applied by the Court in relation to State aid. ( 13 )

59.

Furthermore, there is no justifiable reason for applying different criteria.

60.

The classification of SGEIs should not be assessed differently according to whether the rules on State aid, the rules on freedom of movement or those of the Services Directive apply, because, ultimately, SGEI is a single concept.

61.

That analysis is also supported by the fact that the wording used in Article 15(4) of the Services Directive, in accordance with which paragraphs 1, 2 and 3 of that provision apply only to legislation on SGEIs to the extent that their application does not obstruct the performance, in law or in fact, of the particular task assigned to them, is identical to the wording of Article 106(2) TFEU.

62.

In order to determine whether, as argued by Hungary, the services at issue can be classified as SGEIs, it should be noted that Member States enjoy broad discretion to define what they regard as SGEIs and the Court’s role therein is limited to ascertaining that they have not made a manifest error in classifying the service as an SGEI. ( 14 ) Nonetheless, Member States must ensure that the task of SGEIs satisfies certain minimum criteria common to every task of that nature and must demonstrate that the criteria have been met in the case at hand. ( 15 )

63.

Those criteria include the requirement for an act of a public authority entrusting the operators in question with an SGEI task and defining in a clear and transparent manner the precise nature of the public service obligation assigned and the universal and compulsory nature of the task ( 16 ) and, in particular, the requirement that SGEIs be provided in the interest of society as a whole and for the benefit of all users. ( 17 )

64.

Member States must also specify the reasons for their view that the service at issue, because of its special characteristics, should be classified as an SGEI and distinguished from other economic activities. ( 18 )

65.

Finally, it is clear from the case-law that Member States may entrust an operator with an SGEI on grounds of market failure. However, such decisions are regulated where, as noted repeatedly by the Commission, ‘it would not be appropriate to attach specific public service obligations to an activity which is already provided or can be provided satisfactorily and under conditions, such as price, objective quality characteristics, continuity and access to the service, consistent with the public interest, as defined by the State, by undertakings operating under normal market conditions’. ( 19 )

66.

In the present case, Hungary argues that the services at issue have specific characteristics that distinguish them from other economic activities. In particular, Hungary states that the mobile payment services which are the object of the present proceedings are linked to the use of public services to which the State must ensure uniform, convenient, immediate and affordable access, regardless of the place of use. Hungary adds that market conditions alone did not offer a satisfactory provision of those services and that the national mobile payment system is designed to remedy the deficiencies in the previous operation of the market.

67.

That argument does not persuade me.

68.

With regard to the public interest of the services at issue, I understand the concept of SGEIs not to be static but to be based on a number of variables, such as the needs of citizens, which are specific to each Member State, or technological and commercial developments. The Court has thus recognised as SGEIs services as diverse as the supply of water, ( 20 ) gas ( 21 ) and electricity, ( 22 ) transport by ambulance, ( 23 ) the collection and distribution of post throughout the national territory ( 24 ) and the management of unprofitable air routes. ( 25 )

69.

Consequently, having regard to the broad discretion enjoyed by Member States in the definition of what they consider to be SGEIs, the mere fact that the services at issue are linked to new technologies does not, in my opinion, prevent them from being classified as SGEIs. While it is clear that certain sectors, such as the services previously supplied by an undertaking holding exclusive rights, lend themselves more readily to classification as SGEIs, that does not mean, however, that, on the contrary, the nature of certain services precludes them from being classified as SGEIs. Furthermore, although the mobile payment service market is closely linked to new technologies, there is no reason to believe that it does not seek to satisfy a need in society or constitute a public interest which the State should safeguard, since those needs are not only varied, but also changing.

70.

However, the nature of mobile payment services aside, it is my view that the services in the present case cannot be classified as SGEIs.

71.

Thus, Hungary’s argument that the mobile payment services at issue are inextricably linked with the public service of parking indicates, in my opinion, that it is not clear whether mobile payment services themselves involve a general interest dimension or whether it is only through the public parking service that they fall within the scope of the concept of SGEIs. In other words, it is my view that it is not sufficient for a service activity to be linked with a public service in order to be classified as an SGEI.

72.

That analysis is unaffected by Hungary’s arguments seeking to establish that mobile payment services are not convenience services, contrary to the Commission’s submissions. While I agree with Hungary that the fact that the Hungarian legislation itself defines the service at issue as a ‘convenience service’ does not enable a conclusion to be drawn as to whether or not the service constitutes an SGEI, I also agree with the Commission that the service is not essential for citizens, but is merely an alternative to payment in cash. In that regard, contrary to Hungary’s submissions, mobile payment of parking fees is not necessarily the only payment method enabling calculation of the amount of the fee for the actual parking time. While it is certainly true that an ex ante meter payment system cannot be used to calculate actual parking time, calculation is possible with an ex post system of tickets.

73.

In addition, Hungary argues that it withdrew the services supplied from the scope of the regulatory provisions governing them up to that point for reasons relating to the public interest and not on economic grounds. In that regard, I am of that view that, with regard to the services at issue, the new mobile payment system and the powers of Nemzeti Mobilfizetési Zrt. are such as to give rise to doubt regarding the motivation of the Hungarian authorities.

74.

On the one hand, it must be emphasised that the concepts of ‘exclusive rights’ and ‘SGEI’ are not to be conflated, particularly in that the grant of a special or exclusive right to an operator is merely the instrument allowing the operator to perform an SGEI task, since the attribution of the task may also consist in an obligation imposed on a large number of, or indeed all operators active on a given market. ( 26 ) Thus, the fact that an exclusive right is granted to an operator does not necessarily mean that that operator has been assigned an SGEI task. On the other, the new mobile payment system results in the creation of a monopoly on the wholesale market, namely the market for services provided to other mobile payment service provider resellers through contracts entered into with car park service providers or other public services, in favour of a State-controlled entity, while allowing that entity to sell mobile parking services either directly to end users or through resellers, in exchange for the fees set out in the Governmental Decree.

75.

That doubt is corroborated by the fact that the mobile payment service had, as Hungary admits, previously been provided on the basis of market forces.

76.

I would note that, as regards SGEIs, State intervention is normally motivated by market failure and that, accordingly, a service may not be classified as an SGEI if the activity is or can be satisfactorily provided by undertakings operating under normal market conditions.

77.

In the present case, it is clear that the market was not failing, since the mobile payment service was offered. Nonetheless, according to Hungary, the market was not operating in a satisfactory manner and the national mobile payment system was set up to put in place nationwide coverage and to ensure proper operation of a uniform, interoperable system.

78.

The Commission contests that view, arguing that the market previously operated in a satisfactory manner, while acknowledging that there were shortcomings with regard to the absence of a standardised uniform platform and of interoperability.

79.

In that regard and in that context, I am of the view that, in order to demonstrate that there is a real need for a public service and public service obligations, it is not sufficient for the Member State to claim that the market is not operating in a satisfactory manner, but it must also show that the service cannot be provided satisfactorily by the market.

80.

Yet without it being necessary to determine whether, in consideration of their own business interests, the actors previously active on the market, particularly the former market leader, EME, would have provided the services at issue under the same conditions as those defined by Hungary, my opinion is that Hungary has failed to demonstrate that the service could not have been provided in a satisfactory manner by the market.

81.

Thus, first, as stressed by the Commission and in line with development on other markets, the possibility cannot be excluded that development of competition between platforms would lead to the emergence of uniform standardised services. Secondly, I am of the view that the Hungarian authorities could have encouraged standardisation and interoperability through legislation or regulations, while retaining the competitive structure of the market and therefore without granting exclusive rights to a State-controlled operator. Accordingly, although I acknowledge that the grant of an exclusive right to Nemzeti Mobilfizetési Zrt. enabled interoperability and the standardisation of the market, since each mobile payment service provider previously used its own system, which was not connected to the other systems, I am of the view that Hungary could have achieved the same result by, for example, promoting competitors’ access to each other’s systems.

82.

In the light of the foregoing, I propose that the Court should find that the services at issue do not constitute an SGEI.

2. The pleas alleging infringement of Articles 15 and 16 of the Services Directive

83.

In order to rule on the Commission’s principal pleas, it must first be determined whether the national mobile payment system constitutes a ‘requirement’ within the meaning of Article 15(2)(d) and Article 16(1) of that directive.

84.

By way of reminder, the mobile payment system law and the Governmental Decree created a national monopoly for mobile payment services by granting Nemzeti Mobilfizetési Zrt. exclusive rights to offer mobile payment services.

85.

It is therefore my view that the national mobile payment system constitutes a ‘requirement’ within the meaning of Article 15(2)(d) of the Services Directive, as the exclusive rights granted to Nemzeti Mobilfizetési Zrt. have the effect of reserving access to the service activity concerned to particular service providers.

86.

Second, the national mobile payment system constitutes a requirement within the meaning of Article 16(1) of the directive in that the exclusive rights and operation of the national mobile payment system as a State monopoly necessarily affect access to the wholesale mobile payment market and the provision of cross-border services.

87.

However, those requirements are not necessarily contrary to Articles 15 and 16 of the Services Directive.

88.

It follows from Article 15(2)(d) and (3) of the directive that, when national law reserves access to the service activity concerned to particular providers due to the specific nature of the activity, that restriction must be non-discriminatory, necessary and proportional. It is appropriate, therefore, to ascertain whether the Hungarian rules are justified by overriding reasons relating to the public interest that are suitable for attaining the public interest objective pursued and do not go beyond what is necessary to attain that objective.

89.

Article 16(1) of the directive also prohibits Member States from making access to a service activity or the exercise of a service activity on their territory subject to discriminatory, unnecessary requirements which are not justified on grounds of public policy, public security, public health or the protection of the environment and are not proportionate.

90.

Hungary puts forward consumer protection, the fairness of trade transactions, combating fraud and the black economy as justification for the mobile payment system law and the Governmental Decree.

91.

While those grounds may be considered to be overriding reasons relating to the public interest within the meaning of Article 15(3) of the Services Directive, it must be noted that the grounds are not included among those listed under Article 16(1) of that directive.

92.

In that regard, as previously pointed out, ( 27 ) I am of the view that Article 16 of the Services Directive on the freedom to provide services fully harmonises the services that fall within its scope. It follows that the compliance of the Hungarian legislation with Article 16(1) of the Services Directive must be assessed in the light of that directive and not of primary law and that Hungary cannot therefore rely on grounds developed in case-law, such as certain overriding interests relating to the public interest, that are not listed in Article 16 of that directive.

93.

However, in the present case, it is not necessary to determine whether Hungary may rely on grounds which are not among those listed in Article 16(1) of the Services Directive.

94.

In my view, it is sufficient to hold that, even having regard to those objectives, the requirements in question do not satisfy the condition of proportionality set out in Article 15(3) and Article 16(1)(c) of that directive.

95.

Thus, Hungary could have achieved its objectives through measures that have a less stringent and restrictive impact on the freedom of establishment and the freedom to provide services than that resulting from those requirements, assuming that they comply with EU law.

96.

It is apparent from the file before the Court and, in particular, from Hungary’s observations that, during the pre-litigation phase, Hungary indicated to the Commission that, although it did not consider the functioning of the national mobile payment system to be in breach of either the Services Directive or the FEU Treaty, it was prepared to modify the system by putting in place a concessions system. It is clear that such a concessions system for the operation of the national mobile payment system platform would enable the market to function correctly, while preserving competition and having less impact on the freedom to provide services and the freedom of establishment. Accordingly, I am of the view that there were other, less restrictive measures enabling the same result to be achieved and that the requirements introduced by the Hungarian legislation go beyond what is necessary to attain the objectives relied upon by that Member State.

97.

Therefore, in my view, the Court should find that, by instituting and maintaining in force the national mobile payment system governed by the mobile payment system law and the Governmental Decree, creating a monopoly by granting exclusive rights to Nemzeti Mobilfizetési Zrt. and obstructing entry to the wholesale mobile payment market, Hungary has failed to fulfil its obligations under Articles 15 and 16 of the Services Directive.

98.

Since I propose to uphold the Commission’s principal pleas, which allege infringement of Articles 15 to 16 of the Services Directive, there is no need, in my view, to examine the pleas alleging infringement of Articles 49 and 56 TFEU, which the Commission has raised in the alternative.

V. Costs

99.

Under Article 138(1) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has requested that Hungary be ordered to pay the costs and the latter has been unsuccessful, Hungary must be ordered to pay the costs.

VI. Conclusion

100.

In the light of the foregoing considerations, I propose that the Court should:

(1)

Declare that, by instituting and maintaining in force the national mobile payment system, governed by a nemzeti mobil fizetési rendszerről szóló 2011. évi CC. törvény (Law CC of 2011 on the national mobile payment system) and by 356/2012. (XII. 13.) Korm. rendelet a nemzeti mobil fizetési rendszerről szóló törvény végrehajtásáról (Governmental Decree No 356/2012 implementing Law CC of 2011), of 13 December 2012, Hungary has failed to fulfil its obligations under Article 15(2)(d) and Article 16(1) of Directive 2006/123/EC of the European Parliament and the Council of 12 December 2006 on services in the internal market;

(2)

Order Hungary to pay the costs.


( 1 ) Original language: French.

( 2 ) Magyar Közlöny 2011/164 (‘the mobile payment system law’).

( 3 ) (‘The Governmental Decree.’)

( 4 ) OJ 2006 L 376, p. 36 (‘the Services Directive’).

( 5 ) Directive of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22).

( 6 ) EU Pilot File No 4372/12/MARK.

( 7 ) COM(2011) 941 final.

( 8 ) OJ 2012 C 8, p. 4.

( 9 ) OJ 2016 C 202, p. 307.

( 10 ) OJ 2012 C 8, p. 15.

( 11 ) See judgment of 23 December 2015, Hiebler (C‑293/14, EU:C:2015:843, paragraph 43).

( 12 ) In that regard, I would point out that both the Commission and Hungary referred, on this point, to case-law on State aid as well as to Commission communications in that field.

( 13 ) The criteria applied by the Court, particularly at paragraphs 41 and 42 of the judgment of 23 December 2015, Hiebler (C‑293/14, EU:C:2015:843), are well known and form part of a previous line of case-law on State aid.

( 14 ) See judgment of 12 February 2008, BUPA and Others v Commission (T‑289/03, EU:T:2008:29, paragraphs 166 to 169).

( 15 ) See judgment of 12 February 2008, BUPA and Others v Commission (T‑289/03, EU:T:2008:29, paragraph 172), and Opinion of Advocate General Szpunar in Hiebler (C‑293/14, EU:C:2015:472, point 61).

( 16 ) See judgment of 23 December 2015, Hiebler (C‑293/14, EU:C:2015:843, paragraphs 41 and 42).

( 17 ) See, to that effect, Opinion of Advocate General Szpunar in Hiebler (C‑293/14, EU:C:2015:472, point 62).

( 18 ) See judgments of 10 December 1991, Merci convenzionali porto di Genova (C‑179/90, EU:C:1991:464, paragraph 27), and of 18 June 1998, Corsica Ferries France (C‑266/96, EU:C:1998:306, paragraph 45).

( 19 ) Commission Communication referred to at point 30 of this Opinion (paragraph 48). See also the Communication from the Commission on ‘EU Guidelines for the application of State aid rules in relation to the rapid deployment of broadband networks’ (OJ 2013 C 25, p. 1, paragraph 19).

( 20 ) Judgment of 8 November 1983, IAZ International Belgium and Others v Commission (96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82, EU:C:1983:310).

( 21 ) Judgment of 23 October 1997, Commission v France (C‑159/94, EU:C:1997:501).

( 22 ) Judgment of 27 April 1994, Almedo (C‑393/92, EU:C:1994:171).

( 23 ) Judgment of 25 October 2001, Ambulanz Glöckner (C‑475/99, EU:C:2001:577).

( 24 ) Judgment of 19 May 1993, Corbeau (C‑320/91, EU:C:1993:198).

( 25 ) Judgment of 11 April 1989, Saeed Flugreisen and Silver Line Reisebüro (66/86, EU:C:1989:140).

( 26 ) See judgment of 12 February 2008, BUPA and Others v Commission (T-289/03, EU:T:2008:29, paragraph 179).

( 27 ) See my Opinion in Commission v Hungary (C-179/14, EU:C:2015:619, points 69 to 74).

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