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Súdny dvor Európskej únie·28.11.1995

C-392/93

ECLI:EU:C:1995:408

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Súdny dvor Európskej únie
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61993CC0392

O P I N I O N O F MR TESAURO — CASE C-392/93

OPINION OF ADVOCATE GENERAL TESAURO delivered on 28 November 1995 "

1. The questions referred to the Court by apply 'to activities of those entities which the Queen's Bench Division concern the either fall outside the sectors of water, interpretation of Article 8(1) of Council energy and transport services or outside the Directive 90/531/EEC of 17 September telecommunications sector, or which fall 1990 on the procurement procedures of enti- within those sectors but nevertheless are ties operating in the water, energy, transport directly exposed to competitive forces in and telecommunications sectors 1 ('the markets to which entry is unrestricted'. directive').

In particular, the national court seeks to ascertain the proper interpretation of the provision in question and, in the event that The provision whose interpretation is the national legislature transposed the direc- sought, that is, Article 8(1), constitutes in tive incorrectly, whether the conditions are fact a derogation from the provisions of the fulfilled for the undertaking which suffered directive, exempting from its scope contracts injury to claim compensation from the State relating to purchases intended to enable tele- in respect of the damage and loss sustained. 2 communications services to be supplied, pro- vided there is competition in the sector in question. In particular, Article 8 provides:

Community and national legislation

2. According to the 13th recital in the pre- '1. This directive shall not apply to contracts amble to the directive, the latter does not which contracting entities exercising an activity described in Article 2(2)(d) award for purchases intended exclusively to enable * Original language: Italian. them to provide one or more telecommuni- 1 — OJ 1990 L 297, p. 1. cations services where other entities are free 2 — In the latter respect, the present case is linked therefore to to offer the same services in the same geo- Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame III, as well as to Joined Cases C-178/94, graphical area and under substantially the C-179/94, C-188/94, C-189/94 and C-190/94, in which I am also delivering my Opinion today. same conditions.

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2. The contracting entities shall notify the shall fulfil the criteria set out above'. Annex Commission at its request of any services X, on the 'Operation of telecommunications they regard as covered by the exclusion networks or provision of telecommunica­ referred to in paragraph 1. The Commission tions services' as regards the United King­ may periodically publish the list of services dom, mentions, among others, British Tele­ which it considers to be covered by this communications pic ('the applicant'), exclusion, for information in the Official Mercury Communications Ltd ('Mercury') Journal of the European Communities. In so and City of Kingston upon Hull ('Hull plc'). doing, the Commission shall respect any sen­ sitive commercial aspects the contracting entities may point out when forwarding this information.'

Lastly, I would observe that, according to Article 33(1 )(d), contracting entities are to keep on each contract appropriate infor­ mation to permit them at a later date to jus­ tify decisions taken in connection with, inter alia, non-application of Titles II, III and IV (provisions on the criteria and procedures to 3. Article 2(2)(d) includes, among the activi­ be observed when awarding contracts), in ties which fall within the scope of the direc­ accordance with the derogations provided tive, the 'provision or operation of public for in Title I, which includes, so far as is rel­ telecommunications networks or the provi­ evant here, the derogation in Article 8(1). sion of one or more public telecommunica­ tions services'. According to Article 2(l)(b), the directive applies also to contracting enti­ ties which 'when they are not public author­ ities or public undertakings, have as one of their activities any of those referred to in paragraph 2 or any combination thereof and operate on the basis of special or exclusive rights granted by a competent authority of a Member State'. Article 2(3)(a) then specifies 4. The United Kingdom implemented the that, for the purpose of applying paragraph directive by means of the Utilities Supply 1(b), a contracting entity enjoys special or and Works Contracts Regulations 1992. In exclusive rights in particular where 'for the particular, the provisions of the directive purpose of constructing the networks or restricting its application, as stated in the facilities referred to in paragraph 2, it may 13th recital in the preamble thereto, to cases take advantage of a procedure for the expro­ involving the award of contracts intended priation or use of property or may place net­ exclusively to enable the provider to exercise work equipment on, under or over the pub­ one of the activities listed in the directive, are lic highway'. According to Article 2(6), 'the implemented by Regulations 5 and 6(a) of contracting entities listed in Annexes I to X the national legislation concerned.

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Regulation 7(1), which is intended to give describing the public telecommunications effect to Article 8(1) of the directive, con- services provided by it which it considers are cerns, on the other hand, the exclusions spe- services specified in the Part of Schedule 2 in cifically regarding the telecommunications which the utility is specified. That provision sector and is thus the provision disputed by thus implements Article 8(2) of the directive. the applicant. It provides: 'These Regulations shall not apply to the seeking of offers in relation to a contract by a utility specified in Schedule 2 for the exclusive purpose of enabling it to provide one or more of the public telecommunications services specified in the Part of Schedule 2 in which the utility is specified'. Finally, I would observe that, pursuant to Article 33 of the directive, Regulation 25(1) provides that when a utility decides not to apply the provisions on exclusions contained in, inter alia, Regulation 7, it is required to keep appropriate information sufficient to justify that decision as regards contracts awarded according to procedures other than those provided for by the procurement Schedule 2 is in two parts. Part A concerns regime. all public telecommunications operators other than the applicant and Hull plc. As regards those operators, the services excluded from the scope of the Regulations are specifically 'all public telecommunica- tions services'. Part B, on the other hand, concerns exclusively the applicant and Hull Facts of the case and questions submitted pic, in respect of which the services referred for a preliminary ruling to are 'all public telecommunications ser- vices, other than the following services when they are provided within the geographical area for which the provider is licensed as a public telecommunications operator: basic voice telephony services, basic data transmis- sion services, the provision of private leased 5. The applicant is a company limited by circuits and maritime services'. shares set up on 1 April 1984 by the British Telecommunications Act 1984. Under that Act, the property, together with all the rights and obligations of the predecessor public corporation, also known as British Telecom- munications, were transferred to the appli- cant. Under the British Telecommunications Act 1981, British Telecommunications had in Regulation 7(2) provides, moreover, that all turn succeeded the Post Office which had, the utilities specified in Schedule 2 when until then, held the exclusive monopoly on requested are to send a report to the Minister the management of the telecommunications for onward transmission to the Commission systems.

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The British Telecommunications Act (which includes voice telephony between ter­ 1984 provides that any person intending to minals which are not mobile), the United run a telecommunications system within the Kingdom granted the appropriate licences United Kingdom following the abolition of only to the applicant and Mercury which, in the monopoly is required to obtain a licence particular, had been authorized to intercon­ which must specify exhaustively the activi­ nect with the telecommunications systems of ties which he is authorized to exercise. Pur­ the applicant. This gave rise to a duopoly suant to that provision, the Secretary of State specifically in the fixed-link sector. for Trade and Industry granted to the appli­ cant in June 1984 a licence for 25 years. That licence, whereby the applicant is designated as a 'public telecommunications operator', authorizes it to run public telecommunica­ tions systems throughout the United King­ dom, but with limitations in relation to the geographical area in which Hull pic is licensed to operate. In particular, the appli­ cant is required to provide voice telephony The duopoly in that sector was abandoned in services to anyone who requires them, irre­ the early 1990s, giving way to a policy of spective of the fact that demand may be open competition. Accordingly, all licence insufficient to cover the costs of providing applications made by private undertakings them. Moreover, the applicant, uniquely which satisfy objective and transparent crite­ among licensees, is subject to regulation in ria are considered against a general presump­ respect of changes in the prices charged for tion in favour of allowing them unless there its services ('price cap'). Finally, it should be are 'specific reasons' to refuse them. In order noted that the State had gradually sold off by to ensure the proper functioning of such a July 1993 its shareholding in the applicant. complex system in which numerous licensed operators are active, the 1984 Act imposed an obligation on public telecommunications operators to agree to interconnect their net­ work with other operators' systems on request. This allows the customers of an operator to have access to the networks run by other operators and thus, ultimately, to communicate with users who benefit from the services provided by those operators.

6. The considerable opening up of the mar­ ket made possible by the British Telecommu­ nications Act 1984 has led to the granting of more than 600 licences authorizing various activities in the sector and to the designation of some 110 public telecommunications operators. The content of the licences, how­ 7. The national legislation implementing the ever, varied considerably. In the field of directive, as stated above, exempts from the fixed-link telecommunications services obligation to comply with the directive itself,

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so far as concerns contracts intended exclus- within the discretion accorded to a ively to enable the provision of telecommu- Member State by Article 189 of the nications services, almost all the operators in EEC Treaty, when implementing Article the sector, including Mercury, which is also 8(1) of the directive, itself to identify mentioned in Annex X to the directive. O n the telecommunications services pro- the other hand, only the applicant and Hull vided by each contracting entity in plc remain subject to the provisions of the respect of which the exclusion in that directive, although only so far as concerns article does or does not apply? basic voice telephony services, basic data transmission services, the provision of pri- vate leased circuits and maritime services.

2. (a) Do the words "where other entities It is those implementing provisions which are free to offer the same services in the applicant has challenged in proceedings the same geographical area and under before the national court. The applicant substantially the same conditions" in maintains that the United Kingdom should Article 8(1) refer only to "freedom" not itself have determined which services and and to "conditions" of a legal or reg- operators were excluded from the scope of ulatory nature? the directive, since, according to Article 8(1) thereof, that is a matter for the contracting entities themselves. In its form of order, the applicant also seeks compensation for the losses it claims to have suffered by reason of the incorrect transposition of the provision in question.

(b) If the answer to Question 2(a) is in the negative:

8. In order to resolve the dispute before it, the national court therefore considered it (i) what other matters do the words appropriate to refer to the Court for a pre- refer to; and liminary ruling the following questions:

(ii) is a contracting entity's position in the market for a particular '1. On the proper interpretation of Council telecommunications service rele- Directive 90/531/EEC, does it fall vant to those matters; and

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(iii) if its position is relevant, how is national authorities charged with it relevant and, in particular, in the implementation of Article 8(1) what circumstances may it be in order to determine whether or conclusive? not a particular service is or is not covered by the exclusion, are such that it is impossible for the con­ tracting entity to ascertain whether a particular service is or is not so covered, has Directive 90/531/EEC (c) Are the answers to Questions (ii) and or any general principle of Commu­ (iii) in subparagraph (b) above nity law, in particular the require­ affected by the fact that the entity is ment of legal certainty, been subject to regulatory constraints and, infringed; if so, in what respects are they affected?

3. If the answer to Question 1 is in the affirmative:

(c) in defining certain telecommunica­ tions services is a Member State entitled to adopt definitions based upon descriptions of the technical (a) in the event of a dispute between a means by which a service is pro­ contracting entity and the national vided rather than a description of authorities charged with the imple­ the service itself? mentation of Article 8(1), how is the national court seised with the dis­ pute to ensure that the criteria for the application of the exclusion in Article 8(1) are properly applied and, in particular, must it substitute its own assessment of the applica­ tion of the exclusion in Article 8(1) for that made by the national authorities charged with the imple­ mentation of Article 8(1); 4. If a Member State has erred in its imple­ mentation of Article 8(1) of Council Directive 90/531/EEC, is that Member State liable as a matter of Community law to compensate a contracting entity in damages for loss which it has suffered (b) if the national court finds that the as a result of that error and, if so, under definitions of certain telecommuni­ what conditions does such liability cations services, adopted by the arise?'

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Question 1 The absence of any reference to the Member States would thus seem to suggest that it is a matter for the contracting entities them- selves, as the only ones mentioned in the provision, to decide which contracts are excluded. Such a conclusion is supported, at least at first sight, by the fact that other pro- 9. The first question seeks to ascertain visions of the directive, also included in Title whether, when transposing a directive into I thereof and thus relating to authorized der- national law, the Member States are autho- ogations, in fact make express provision for rized, bearing in mind the discretion which the role entrusted to the Member States in they enjoy under Article 189 of the Treaty, defining the contracts which are covered by to define and identify the telecommunica- the derogations concerned. 3 tions services which under Article 8(1) of the directive may be excluded therefrom, subject to certain conditions, or whether such a decision is a matter for the contracting enti- ties themselves.

11. Furthermore, according to Article 8(2), the contracting entities are entrusted with the task of notifying the Commission, at its request, of any services which 'they regard as To that end, it is appropriate first of all to covered by the exclusion referred to in para- refer to the actual wording of the provision graph 1'. The Commission then publishes in in question, to the context in which it is set the C Series of the Official Journal of the and to the rationale underlying it. European Communities, if only for infor- mation, the list of services 'which it consid- ers to be covered by this exclusion'.

10. There is nothing in the literal wording of Article 8(1) of the directive that would appear to support the argument that the Member States themselves have the right to If, as claimed by the United Kingdom, it determine which services and operators are were for the Member States to decide which excluded from the scope of the directive. The services are, by virtue of Article 8(1), to be provision in question merely excludes from regarded as excluded from the scope of the the scope of the directive the contracts which directive, it would not be easy to understand the contracting entities award for purchases why Article 8(2) should require the contract- intended exclusively to enable them to pro- ing entities, and not the States, to notify the vide one or more telecommunications ser- services considered to be excluded. If that vices, provided that other entities are free to offer the same services under the same con- ditions. 3 — See, in particular. Articles 3 and 10.

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provision is not to be seen as utterly mean­ imposed on all the Member States to which ingless, Article 8(2) must be acknowledged the directive is addressed, to adopt, in their to have a purpose to the extent that it is the national legal systems, all the measures nec­ contracting entities themselves which are to essary to ensure that the directive is fully decide which services provided by them are effective, in accordance with the objective of such a kind as to be covered by the exclu­ which it pursues'. 4 This means that the sion provided for in Article 8(1). Member States are required to adopt all the measures necessary to ensure that the provi­ sions of the directive are fully effective and thus to guarantee the outcome which it pre­ scribes. Furthermore, as the Court has itself held, the provisions of a directive must be implemented 'with unquestionable binding 12. That point of view is further confirmed force ... precision and clarity ... in order to by Article 33 of the directive, according to satisfy the requirement of legal certainty'. 5 which, I would recall, the contracting entities are to keep on each contract 'appropriate information ... which shall be sufficient to permit them at a later date to justify deci­ sions taken in connection with ... (d) non- application of Titles II, HI and IV in accord­ ance with the derogations provided for in Title I'.

It is quite clear from the abovementioned provision that the intention of the Commu­ Clearly those statements mean, first, that the nity legislature was to address the contract­ discretion accorded to the Member States ing entities themselves, through national leg­ when transposing a directive into national islation, assigning to them the responsibility law may not in any event be used in such a for the exclusions decided on the basis of way as to jeopardize the objective pursued Article 8(1) of the directive, as well as impos­ by that directive; secondly, that what matters ing on them the burden of justifying those is precisely the result pursued, so that the exclusions. transposition of a directive must be held to be correct where, although its provisions are not slavishly reproduced in the national implementing legislation, 6 it none the less enables the objective pursued by the direc­ tive to be attained.

13. That said, I would point out that it is settled case-law that the freedom which the 4 — Judgment in Case 14/83 Von Colson (1984] ECR 1891. para­ third paragraph of Article 189 leaves to graph 15. Member States to choose the ways and 5 — Judgment in Case C-59/89 Commission ν Germany [1991] means of ensuring that the directive is imple­ ECR 1-2607, paragraph 24. 6 — See, for example, the judgment in Case 363/85 Commission ν mented 'does not affect the obligation Italy [1987] ECR 1733.

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14. The implications for the present case are 'considers [to be] covered by this exclusion'. that, although the literal wording of the pro- This means that it is for that institution to vision in question, as well as the context in verify whether the services notified by the which it is set, lead to the conclusion that it contracting entities in fact meet the criteria is for the contracting entities themselves to laid down in Article 8(1) in order to be cov- identify which services provided by them are ered by the exclusion. to be regarded as excluded from the scope of the directive, it still remains to be verified whether the implementing measures adopted by the United Kingdom are in any event such as to bring about the result sought by the directive, in particular by Article 8(1) thereof.

However, it is only too clear that the trans- position of the directive effected by the United Kingdom prevents the Commission from carrying out such verification, since the lists notified to it by the contracting entities I consider that the answer to that question through the competent national authorities 7 cannot but be in the negative. The prelimi- will perforce coincide with those under nary definition of 'excluded' services, in the Schedule 2 of the national legislation in ques- terms set out above, is in my view such as to tion. The supervisory role accorded to the conflict with the rationale underlying the Commission by Article 8(2) of the directive provision in question, essentially because is therefore disregarded in the case of opera- such an a priori determination, by reflecting tors and services in the United Kingdom. the situation which exists in a Member State at a given moment, takes no account of any potential development in the sector in ques- tion or of the fact that the excluded services may vary in relation to a single operator. At the same time, such an approach prevents the Commission from exercising the supervision with which the directive itself has entrusted it in the matter. 16. However, in defending the way in which it transposed the directive into domestic law, the United Kingdom maintained that it would not have been appropriate to leave to the contracting entities themselves the power to identify the contracts covered by the exclusion inasmuch as this would, in all probability, have led to conflicting assess- 15. Although the contracting entities com- ments in similar cases and would inevitably municate to the Commission, at its request, have jeopardized the requirement of legal the contracts which they consider to be certainty. excluded and the Commission itself pub- lishes them for information, it is equally true that the list so published includes only those services which the Commission itself 7 — See Regulation 7(2) of the national implementing legislation.

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In this connection, I would merely observe In conclusion, I am of the view that Article that the operation of the system envisaged 189 of the Treaty requires the Member States by the directive, as interpreted herein, is suf­ to implement Article 8(1) of the directive in ficiently guaranteed by the supervisory role such a way that the contracting entities which the directive itself entrusts to the themselves are authorized to apply the crite­ Commission, also and above all as regards ria laid down in that provision and therefore the possible abuses to which the United to establish which telecommunications ser­ Kingdom refers. Moreover, in so far as the vices provided by them are to be excluded exclusion is decided upon by the contracting from the scope of the directive itself. entities themselves rather than by the Mem­ ber States, it will be possible for any chal­ lenge to be asserted in accordance with the national legislation adopted to implement Directive 92/13/EEC 8 on the remedies avail­ able. That directive, according to Article 1 thereof, applies exclusively to 'decisions Question 2 taken by contracting entities'.

18. Question 2(a), referred by the national court, asks whether the words 'where other entities are free to offer the same services in the same geographical area and under sub­ stantially the same conditions' in Article 8(1) 17. Finally, I can but observe that the inter­ should be interpreted as meaning that the pretation thus far provided of Article 8(1) of freedom which other contracting entities the directive shows that it is a provision enjoy and the conditions in question are of a which confers on individuals, in this case on legal or regulatory nature. the contracting entities, rights upon which they may rely directly in proceedings before the national courts; in other words, it is a provision with direct effect. From that point of view, it must be acknowledged that a pre­ liminary and detailed definition of the ser­ vices excluded, as applied by the national legislature, is necessarily contrary to the out­ come pursued by the directive itself. Essentially, the question is whether, in order to come within the exclusion in Article 8(1) of the directive, the freedom 'to offer the 8 — Council Directive 92/13/EEC of 25 February 1992 coordi- same services in the same geographical area' naling the laws, regulations and administrative provisions and the existence of 'substantially the same relating to the application of Community rules on the pro­ curement procedures of entities operating in the water, conditions' are to be established only de jure, energy, transport and telecommunications sectors (OJ 1992 I. 76, p. 14). as the applicant contends, or also de facto.

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19. It need hardly be stated that, in the 20. I cannot endorse that view. First, it is by former case, it would suffice for statutory or no means apparent from its actual wording regulatory provisions to guarantee the possi- that the provision in question is restricted to bility of freedom of competition in the sec- the obstacles resulting from statutory or reg- tor concerned. In other words, provisions ulatory provisions. The freedom of the other which prevent freedom of competition, contracting entities to be able to offer the whether by conferring special or exclusive same services under substantially the same rights or by rendering access to the market conditions is set out in general terms. Nor itself either impossible or difficult in any could it be otherwise, taking into account the other way, would have to be removed wher- rationale behind the provision in question ever they exist. and the system considered as a whole. More- over, the 13th recital in the preamble to the directive, referred to earlier, expressly states that exclusion from the scope of the directive is subject to the condition that the activities of the entities in question should be 'directly exposed to competitive forces in markets to which entry is unrestricted'. 9

That is the applicant's argument, in support of which it claims that the directive is addressed not only to the public authorities and the public undertakings operating in the sectors covered by the directive, but also to those bodies which in any event enjoy, in respect of their activities, special or exclusive rights granted by the competent authorities In short, it is certainly not sufficient for of the Member States. The rationale behind access to the market not to be excluded by that extension of the directive is in fact law; there should also be genuine compe- based, according to the applicant, on the tition. The criteria mentioned in Article 8(1) assumption that the conferral of such rights of the directive must therefore be interpreted entails the closure of the market to compe- as meaning that they must be satisfied not tition, creating a 'reserved' market. It follows only de jure but also de facto. The first con- — in the applicant's view — that where dition may be considered to have been met domestic legislation has been brought into where entities other than the contracting force to remove such special or exclusive entity concerned are authorized to operate rights, as was the case in the United King- on the market in the services in question, dom as a result of the British Telecommuni- access to which is not restricted by law. The cations Act 1984, there is no longer any rea- second, on the other hand, may be regarded son to apply the directive by virtue of the as having been satisfied where the entities in exclusion under Article 8(1) thereof. The rel- question are not only formally authorized evant market is not 'reserved', within the but also actually able to provide the services meaning of Article 2(3) of the directive, but is a liberalized market, that is, open to com- petition from a variety of operators. 9 — Emphasis added.

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concerned under the same conditions as the In particular, the national court asks whether, contracting entity. in the event of its being necessary to assess the state of the market also on the basis of factual considerations, any significance attaches to that end to the dominant position which the contracting entity might have on the market for a particular telecommunica­ tions service, what form that dominant pos­ ition should take in order to be conclusive for these purposes and, finally, whether the 21. In the result, the words at issue are to be fact that the contracting entity is subject to interpreted as referring to a number of tech­ special regulatory constraints is of any rele­ nical and economic as well as legal factors. vance. The 'freedom' to offer services must be actual and not potential, that is, possible only in theory. In the latter case, there would still be only one person, the contracting entity, actually operating in the relevant mar­ ket.

23. First of all, the applicant denies that it occupies a dominant position on the mar­ ket, 1 0 and submits particulars intended to confirm that there is genuine competition in many areas of the sector concerned. Sec­ ondly, it rejects the view that the mere fact of occupying a dominant position is relevant for the purposes of the directive on public It is therefore for the contracting entity, if it procurement, whilst denying that the exist­ considers that it should be exempted from ence of a dominant position can be proven the application of the directive, to establish, simply by means of an analysis of market on the basis of Articles 8 and 33 of the direc­ shares. tive, that other persons are in a position to pursue the same activities under 'substantial­ ly the same conditions'.

In the applicant's opinion, other factors should instead be taken into consideration when assessing its position on the market, in particular the statutory constraints by which, 22. By Questions 2(b) and (c), the national court seeks to ascertain what factors are to be taken into account when assessing 10 — The United Kingdom takes the opposite view. According to whether the telecommunications market is in the observations submitted by the French Government, fact competitive in respect of a particular ser­ which have not been contested, it appears, moreover, that thefixed-linkmarket was shared out as follows: 90% to the vice. applicant, 7% to Mercury and 3% to the other operators.

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unlike the majority of the other licensees, it legislative constraints of the kind described is bound. 11 above, and any other condition which may be regarded as relevant in practice.

Question 3

24. I believe that, in these proceedings, the Court has neither the jurisdiction nor the means to assess whether, in the present case, all the elements of fact and law are present for the derogation laid down in Article 8(1) of the directive to be fully applied. That is a task for the national court and, in most cases, 25. The third question, itself subdivided into corresponds exactly to the examination with three parts, essentially seeks a ruling from which the provision in question entrusts the the Court as to the role of the national court contracting entities and, ultimately, the where the latter is called upon to verify that Commission in its supervisory role. the national authorities have properly applied the criteria referred to in Article 8(1) of the directive, in particular in the event of a dispute between a contracting entity and the national authorities concerning the correct application of the criteria for exclusion laid down in the provision in question, and in the event of the national court itself reaching the conclusion that those criteria are such as to Suffice it to observe here, therefore, that the preclude the contracting entity from ascer- decision as to whether or not certain services taining whether or not a particular service is may be covered by the exclusion, in compli- covered by the exclusion. ance with the conditions (of fact and law) laid down in Article 8(1) of the directive, can only be made on a case-by-case basis, having regard in particular to all the characteristics of the services concerned, the existence of alternative services, the price factor, the mar- ket position of competitors, the existence of It is clear that the national court submitted this question in the event of the Court 1 1— As clearly stated in the order for reference, the applicant is answering Question 1 in the affirmative, that under an obligation to guarantee interconnection to its own networks on request. Furthermore, the applicant has a uni- is, in the event of its upholding the view that versal service obligation, that is, to provide telephony ser- the Member States may themselves designate vices throughout the United Kingdom even if demand is not sufficient to cover the costs. Finally, uniquely among all which services are to be regarded as excluded licensees, it is required to respect the 'price cap' rule, from the scope of the directive under Article according to which the applicant may not change its prices except in the cases and within the limits prescribed by law. 8(1) thereof. Having regard to the conclusion

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which I have arrived at in that respect, there national law incorrectly, albeit in due time. 1 5 is no need to answer this question. The applicant seeks reparation for the loss and damage which it claims to have suffered as a result of the incorrect transposition of Article 8(1) of the directive. Such loss and damage is equated by the applicant with the additional costs incurred in complying with Question 4 the (incorrect) national legislation imple- menting the directive, which, moreover, allegedly prevented it from concluding prof- itable transactions, and with the disadvan- tages suffered in commercial and competitive terms because of the requirement, which is not applicable to the other operators in the sector, to publish in the Official Journal its procurement plans and contracts. 16 26. The fourth question again raises before the Court the problem of the liability of and the obligation incumbent on the State to compensate individuals for loss or damage caused by a breach of Community law, a problem which is central to Brasserie du Pêcheur and Factortame III 12 and Dillen- kofer and Others, 1 3in which I will be deliv- ering my Opinion today. In the former case, I would observe, the infringement with which the Member State is charged is apply- ing national legislation contrary to the provi- sions of the Treaty; the latter case, on the 27. Even in these circumstances, as in those other hand, like Francovich,14 concerns fail- noted in the preceding section, the starting ure to transpose a directive within the period point cannot be other than the Francovich laid down for that purpose. judgment, in which the Court, it is worth bearing in mind, laid down that the State was under an obligation to make reparation for failure to transpose a directive, specifying the

15 — In contrast with Case C-48/93 (Factortame III) in which the infringement of Community law is attributable to the legislature, in the present case the legislation implementing the directive is an act of the executive. However, even in The present case raises the same problem those circumstances, the extremely stringent conditions laid once again but in relation to the situation down in English case-law in respect of State liability for legislative action make recognition of the right to reparation where a directive has been transposed into for individuals who have suffered loss and damage as a result of a breach of Community law extremely difficult. For a basic overview of the national case-law in the field of State liability for the legislative activities of the public authorities, in particular so far as concerns the various cases in which reparation is granted under the English legal sys- 12 — Joined Cases C-46/93 and C-48/93. tem, see point 7 of my Opinion in the abovementioned 13 — Joined Cases C-178/94, C-179/94, C-188/94, C-189/94 and case. C-190/94. 16 — The applicant also applied to the national court for interim 14 — Joined Cases C-6/90 and C-9/90 Francovich [1991] ECR relief in the form of an order suspending the application of I-5357. the disputed national provisions, which was refused.

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conditions which must be satisfied, in such a therefore could well have been, as such, case, in order for a right to reparation to directly challenged before the national arise in favour of individuals. courts. In other words, the fact that an indi- vidual may in such a case secure protection of the right asserted before the national court is not per se such as to preclude any possibil- ity of protection in respect of his financial interests. 17 In the present case, therefore, it is necessary to establish whether: (a) the principle of State liability extends to the timeous but incorrect transposition of a directive; (b) the condi- tions laid down by the Court in Francovich are sufficient to impose on the State an obli- gation to make reparation even in circum- In that regard, I would point out, in partic- stances such as those of this case, or whether ular, that in its ruling in Francovich 18 the there must be something more; and (c) the Court, recalling the fundamental characteris- conditions have been satisfied in this case. tics of the Community system, arrived at the conclusion that 'the principle whereby a State must be liable for loss and damage caused to individuals as a result of breaches of Community law for which the State can be held responsible is inherent in the system 28. Since I have fully discussed some of the of the Treaty' (paragraph 35). This is clearly abovementioned issues in my Opinion in a general affirmation of principle which Joined Cases C-46/93 (Brasserie du Pêcheur) holds good for any situation in which Com- and C-48/93 (Factortame III), I consider it munity law is infringed and not merely appropriate to refer, for the details where where there has been a failure to implement necessary, to that Opinion. I will therefore a directive. 19 As far as failure to implement a restrict myself in the present case to a few directive is concerned, the Court merely summary observations of a general nature, stated that the right to reparation is particu- dwelling more specifically upon only those larly indispensable, precisely because other- aspects which are of particular relevance to wise the individual would be deprived of any the case under consideration. protection, contrary to the rights conferred on him by the directive. However, this affir- mation does not preclude liability in dam- ages for injury caused by breaches of other types, particularly since the Court itself went

29. First, I would observe that the obligation to make reparation for damage and loss can- 17 — On those aspects, see points 23 to 34 of the Opinion in not be restricted to the situation where a Case C-46/93 {Brasserie du Pêcheur) and C-48/93 (Factor- directive has not been implemented, but tame III). 18 — As regards specific references concerning the Francovich extends to the situation where, as in the case, the basis and scope of the principle of the liability and present case, the damage sustained by an the obligation to make reparation of the Member State in default, as they appear from that ruling, I would refer to individual stems from the application of my Opinion in Joined Cases C-46/93 (Brasserie dit Pêcheur) and C-48/93 (Factortame III), in particular points national legislation implementing a directive 15 to 22. which proves to be incorrect and which 19 — See, in particular, paragraphs 33, 35 and 37 of the judgment.

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on to hold that the conditions under which 31. With regard to the conditions determin- liability gives rise to a right to reparation ing the financial liability of the State, it is depend on the »ature of the breach of Com­ worth noting first of all that, as pointed out munity law giving rise to the loss and dam­ in the aforementioned Opinion, in order for age (paragraph 38). protection in damages to be assured in all the Member States in at least a homogeneous — if not exactly uniform — manner, it is vital that it should be Community law itself which lays down the minimum conditions determining the right to compensation, in particular the criteria by which those condi- tions are established, and the 'Community' 30. On the other hand, as emphasized in the limits imposed on the 'national' conditions Opinion in Brasserie du Pêcheur and Factor- relating to compensation, be they procedural tame III, annulment of an unlawful measure or otherwise. or setting aside a law which is inconsistent with a superior parameter of legality may at times not be enough. In order to render the protection real and effective, it may be neces- sary to bring back into balance also the financial content of the right which has been impaired and hence to ensure that the dam- age is made good. This, moreover, was the solution adopted by the Court in Francovich, albeit with some particular features connected with the case at issue. There is no ground for considering that that solution should apply only in the event of failure to implement a directive and not to the infringement of provisions with direct effect or to the incorrect transposition of a directive. The principle of the State's financial liability must be applied as a remedy which is both alternative and additional to substantive pro- tection; consequently, it must be applied in the event of infringements both of provisions without direct effect, that is to say provisions which may not be directly relied upon before the national courts, and of provisions 32. In Francovich, I would recall, the liabil- which may be so relied upon. 20 This is also ity of the State was recognized by the Court, true, of course, where, as in this case, a direc- subject to finding that the following three tive has been incorrectly implemented. conditions were met: 'First, the purpose of the directive must be to grant rights to indi- viduals. Second, it must be possible to iden- 20 — To the same effect, moreover, the Court stated in its judg- tify the content of those rights on the basis ment in Case C-188/89 Foster [1990] ECR I-3313, para- of the provisions of the directive. Finally, graph 22, that Article 5(1) of Directive 76/207/EEC, a pro- vision with direct effect, 'may be relied upon in a claim for there must be a causal link between the damages against a body' entrusted with the task of provid- ing a public service. breach of the State's obligation and the

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damage suffered.' The Court, moreover, to establish liability on the part of the State. made it clear that such conditions are 'suffi­ Instead, the conditions which ought to be cient to give rise to a right on the part of satisfied should be the same as those applied individuals to obtain reparation, a right in the field of non-contractual liability of the 23 founded directly on Community law'. The 22 Community institutions: alternatively, Member State responsible for the failure to State liability should be firmly linked to the transpose a directive is therefore required in requirement of fault. any event, provided the conditions laid down by the Court are satisfied, to make repara­ tion for the damage and loss sustained by an individual.

The Commission has taken a different view, Must that conclusion also apply to the cir­ according to which the conditions laid down cumstances of the present case, where the by the Court in Francovich are sufficient, issue is not the failure to transpose a direc­ since Article 189 of the E E C Treaty draws tive within the period laid down for that no distinction between non-implementation purpose, but that it has been incorrectly and incorrect implementation of a directive. transposed? In other words, are the condi­ In other words, in the Commission's view, tions sufficient to give rise to the obligation the crux of the matter in both cases is that on the part of the Member State in default to the Member State has failed to comply with pay compensation the same, or are they its obligation to achieve the result prescribed instead different, in the two situations in by the directive. question?

33. In that regard, widely divergent replies have been given in the course of these pro­ ceedings. According to most of the interven­ 34. Let me say at once that I cannot endorse ing Governments, the conditions laid down that position. N o r does it strike me as con­ by the Court in Francovich are not sufficient sistent with the view taken by that institu­ tion in Joined Cases C-46/93 and C-48/93. In those cases, I would recall, the Commis­ sion suggested that the same restrictive con­ 21 — However, the three conditions in question, which the Court ditions as those laid down by the Court in identified in Francovich (paragraph 40), are set out here ver­ batim in the form in which they were stressed and summa­ its case-law concerning Article 215 should be rized by the Court in Case C-91/92 Faccini Dori ν Reach [1994] ECR I-3325, paragraph 27. See, moreover, the judg­ applied as a minimum standard. ment in Case C-334/92 Wagner Miret [1993] ECR I-6911, paragraphs 22 and 23. In the latter case, although the direc­ tive in question, the same one as in Francovich, had been transposed into national law, the problem concerned the failure, in the relevant national provisions, to take account of a specific category of workers, in respect of whom, 23 — The judgments in question, or rather the criteria developed therefore, the directive had not been implemented. therein by the Court, are discussed, in so far as is relevant, in points 61 to 69 of the Opinion in Joined Cases 22 — Judgment in Francovich, cited above, paragraph 41. C-46/93 Brasserie du Pêcheur and C-48/93 Factortame III.

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While it is true that the directive imposes an no importance attaches to fault viewed as a obligation as to the result to be achieved, subjective component of the unlawful con- leaving to the State a margin of discretion duct imputed to the State itself. 25 only as to the method and the means of ensuring its implementation, it is equally true, in my view, that this is a characteristic shared by many Community provisions, whether forming part of the Treaty or other­ wise. I do not believe, for instance, that it is possible to deny that Article 30 of the Treaty Seen in those terms, the fact that there is no imposes on the Member States an obligation discernible clarification in the ruling in Fran- as to the result to be achieved; yet the pos­ covich as regards the criteria by which to ition of the Commission in that respect is define the unlawfulness of the conduct of the that, in order for there to be an obligation party causing the damage does not in any incumbent upon the State to pay compensa­ way imply that every breach of Community tion, there must not only be a breach, but it law affecting the financial interests of an must also be a serious and manifest breach. individual occupying a legal position claimed under the Community provision infringed entails per se and automatically a right to reparation. 26 Instead, put far more simply, in that case there was a manifest and serious breach.

35. Accordingly, the problem cannot be resolved exclusively on the basis of the type of obligation laid down, in particular whether or not it is an obligation as to the result. Instead, in my view, it must be acknowledged that a decisive factor, for the 36. More generally, as already stated in the purpose of setting a limit to the possibility of Opinion in Brasserie du Pêcheur and Factor- translating unlawfulness into liability, is not tame III, 27 there can be considered to have only the discretion which the States may been a manifest and serious breach where: enjoy in the sector concerned but also the greater or lesser degree of precision of the obligation imposed and ultimately the possi­ bility of identifying with a sufficient degree of precision the content of the right asserted by an individual in a particular situation. (a) obligations whose content is clear and Those factors, as I have made abundantly precise in every respect have not been clear in my Opinion in Brasserie du Pêcheur complied with; and Factortame III, 24 are the characteristic features of a manifest and serious breach. On the other hand, for the purpose of establish- 25 — Sec, to the same effect, points 85 to 90 ibid. ing the liability of a Member State in default, 26 — Sec, in particular, points 55 to 60 of the Opinion in Joined Cases C-46/93 Brasserie dit Pêcheur and C-48/93 Factor- tame 111, and point 28 of the Opinion in Joined Cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer and Others. 24 — Sec, in particular, points 74 to 84. 27 — Sec, in particular, point 84 of that Opinion.

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(b) the Court's case-law has provided suffi- rendered the infringement per se a serious cient clarification, either by an interpreta- and manifest breach. 28 tion given in a preliminary ruling or by means of a judgment pursuant to Article 169, of doubtful legal situations which are identical or, in any event, similar to that at issue;

38. As to the fact, also highlighted in these proceedings, that such an approach would ultimately 'encourage' timeous though (c) the national authorities' interpretation of totally incorrect implementation, it is suffi- the relevant Community provisions in cient to observe that the solution proposed their legislative activity (or inactivity) is here is such as to prevent abuses, which are manifestly wrong. unlikely moreover, on the part of the Mem- ber States. The fact remains that manifestly incorrect transposition or, to put it another way, clear and unambiguous provisions transposed incorrectly, should be regarded as constituting a manifest and serious breach of such a kind, therefore, as to render the Mem- 37. As regards the situation at issue here, it ber State concerned financially liable. seems to me that there can be no doubt, tak- ing into account the interpretation of Article 8(1) of the directive, that the implementation thereof in the national legal system by the Member State concerned cannot be regarded as manifestly incorrect. The fact that the United Kingdom itself determined which services were excluded from the scope of the directive, by virtue of a provision (Article Subject to an appropriate assessment by the 8(1)) whose content is far from being clear national court on the basis of the criteria set and unequivocal, leads me therefore to the out herein, I conclude that infringement of conclusion that in the present case there has Article 8(1) of the directive, in the terms set been no manifest and serious breach. out above, does not constitute a manifest and serious breach and is therefore not of such a kind as to render the Member State con- cerned financially liable vis-à-vis the con- tracting entity for any damage and loss which it may have sustained as a result of the incorrect implementation of the provision in In that respect Francovich was undoubtedly question. different. The Member State concerned had not transposed the directive in question into national law within the prescribed period, in 28 — See, in that regard, point 81 of the Opinion in Brasserie dil regard to which it clearly had no discretion Pêcheur and Factortame 111, and the Opinion in Dillen- kofer and Others, which correspond, in so far as is relevant at all. It is precisely that aspect which here, to the situation in Francovich.

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Conclusion

39. In the light of the foregoing considerations, therefore, I propose that the ques­ tions referred to the Court by the national court should be answered as follows:

(1) Article 8(1) of Directive 90/531/EEC must be interpreted as meaning that the determination of the telecommunications services, provided by each contract­ ing entity, in respect of which the exclusion envisaged in that article does or does not apply must be made by the contracting entities themselves.

(2) The words 'where other entities are free to offer the same services in the same geographical area and under substantially the same conditions' in Article 8(1) of Directive 90/531/EEC are to be interpreted as meaning that the entities concerned must be not only formally authorized to operate on the market in the services concerned, access to which is not restricted by law, but must actu­ ally be able to provide those services under the same conditions as the con­ tracting entity.

The decision as to whether or not certain services may be covered by the exclusion, in compliance with the conditions of fact and law laid down in Article 8(1) of Directive 90/531/EEC, must have regard to all the characteris­ tics of the services concerned, the existence of alternative services, the price factor, the market position of competitors and the existence of any legislative constraints.

(3) The Member State concerned is not required to make reparation for any loss or damage which a contracting entity may have suffered as a result of the incorrect implementation of Article 8(1) of Directive 90/531/EEC, since in the present case the infringement may not be characterized as a manifest and seri­ ous breach.

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