C-163/96

RASO AND OTHERS

OPINION OF ADVOCATE GENERAL FENNELLY delivered on 9 October 1997 *

Table of Contents

I — Introduction I - 536

II — The legal context I - 536

A — The pre-Porto di Genova legislative context I - 536

A — The prima facie application of Article 59 of the Treaty I - 545

B — The possible application of Articles 30 and 48 of the Treaty I - 549

C — Restriction of freedom to provide terminal-operator services I - 550

(i) Observations of parties and Member States I - 550

(ii) Analysis I - 551

D — Justification I - 553

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(i) The application in principle of Article 86 I - 557 (ii) Member State responsibility and the requirements of Article 90(1) I - 559 (iii) The abusive conduct alleged in the present case I - 564 C — The second question I - 567 VII — Conclusion I - 568

I — Introduction II — The legal context

2. The national legislative provisions are complex. In order to facilitate comprehen- sion of the current ports legislation, I will, first, set out the legislative provisions in force prior to the Porto di Genova judgment; then I will examine in some detail the rel- evant aspects of the Court's judgment in that 1. This preliminary reference requires the case before describing the general national Court once again to examine the compatibil- legislation on employment procurement. ity with Community law of aspects of the Finally, I will summarise the relevant provi- legislation regulating activities at Italian sions of the new ports legislation, adopted ports. In Merci Convenzionali Porto di by Italy largely in reaction to Porto di Genova 1 the Court held that Article 90(1) of Genova. the Treaty, in conjunction with Articles 30, 48 and 86 of the Treaty, precluded rules which conferred on undertakings established in Italy the exclusive right to organise dock work at Italian ports and required them to have exclusive recourse to the services of A — The pre-Porto di Genova legisUtive dock-work companies formed exclusively of context dockers of Italian nationality. The present reference concerns the conformity with Community law of a fresh exclusive right conferred on a reconstituted version of those dock-work companies regarding the provi- sion of temporary port labour only. 3. The salient features of the pre-Porto di Genova legislation may be described as fol- lows. First, as is apparent from the Report for the Hearing in Porto di Genova, Italian 1 — Case C-179/90 [1991] ECR I-5889, hereinafter the 'Porto di Genova' case. seaports were (as they remain) administered

5. The compatibility with Community law of the above-described system of rules was impugned in the Porto di Genova case.

6 — It is clear from the explanation of the Italian legislation fur- nished by the national judge in the memorandum annexed to the order for reference (hereinafter 'the memorandum') that 4. Article 111 of the Code empowered the the port authorities were entitled to authorise other compa- nies to carry out activities in ports under the supervision of relevant port authorities to grant concessions the harbourmaster. It appears from the response to a ques- tion posed at the hearing that such authorisations were granted pursuant to Article 68 of the same Code and that the undertakings represented by Mr Raso's co-defendants in the main proceedings each held such an authorisation. 2 — [1991] ECR I-5889, at p. 1-5891. The public regulation of 7 — The obligation of concessionaires under Article 111 of the ports is a phenomenon which is probably replicated in most, Code appears only to have applied to the provision of labour if not all, Member States and could not, in itself, be regarded or services involving a high labour content. as incompatible with Community law. 8 — It should be noted that at the time of the Porto di Genova 3 — Royal Decree N o 337 of 30 March 1942. case, the dock-work company at the Port of Genoa was wholly owned by the public authority which administered 4 — See section 2 of the Opinion of Advocate General Van Ger- the port. Accordingly, that authority effectively fixed the fees ven; [1991] ECR I-5889, at p. I-5905. charged by its own subsidiary; see section 2 of the Opinion 5 — Decree N o 328 of the President of the Republic of 15 Febru- of Advocate General Van Gerven, [1991] ECR I-5889, at ary 1952, hereinafter 'the Regulation'. p. I-5906.

6. In Porto di Genova an Italian company, Siderurgica, imported a consignment of steel from Germany in a chartered vessel. 9 Although the ship was equipped for unload- ing by its own crew, the Code reserved such dock work to the relevant dock-work com- 8. The decision of the Court combines two elements. Firsdy, the principle of non- pany at the Port of Genoa; viz. the discrimination on grounds of nationality Compagnia Unica Lavoratori Merci Varie found in Article 7 of the EEC Treaty (now del Porto di Genova (hereinafter Article 6 of the EC Treaty) had been specifi- 'Compagnia'). 10Accordingly, Siderurgica, in cally applied to workers by Article 48 of the conformity with the Code, was obliged to Treaty. For this purpose, the Court con- call upon Merci Convenzionali Porto di strued the Community-law concept of a Genova, the relevant dock-work undertaking 'worker' as covering a person who '... whilst (hereinafter 'Merci'), to organise the unload- being linked to the undertaking by a rela- ing of its steel. Merci, in turn, was obliged to tionship of employment, is linked to other utilise the services of Compagnia. workers by a relationship of association'. 12 Secondly, it considered Merci and the Compagnia to be in a dominant position on the market in respect of 'the organisation on behalf of third persons of dock work ... and the performance of such work' in the Port of Genoa, which, for the purposes of the case, '[could] be regarded as constituting a sub- stantial part of the common market'. 1 3O n the possible abuse of that dominant position, 7. The delivery of the goods was, however, the Court, having referred both to its earlier delayed due to a series of strikes involving decisions in Höfner and Elser 14and ERT 15 Compagnia's workforce. Siderurgica ulti- mately sought compensation for the damage thus caused and reimbursement of the charges levied for the compulsory, but unso- 11 — In fact, the parties were in agreement as to the incompat- licited, use of Compagnia's dockers. The Tri- ibility of the Italian legislation with Community law. As Advocate General Van Gerven pointed out in footnote 5 to bunale di Genova (District Court, Genoa) his Opinion, there was disagreement between the parties regarding only 'the consequences which the incompatibility involves for Merci as regards the reimbursement of the sums paid by Siderurgica for the dock-work services'; see [1991] ECR I-5889, at p. I-5906. 12 — Porto di Genova, paragraph 13. 9 — See the Report for the Hearing, [1991] ECR I-5889, at p. I-5892. 13 — Ibid., paragraph 15. 10 — See section 3 of the Opinion of Advocate General Van Ger- 14 — Case C-41/90 [1991] ECR I-1979. ven, [1991] ECR I-5889, at p. I-5906. 15 — Case C-260/89 [1991] ECR I-2925.

and to the terms of subparagraphs (a), (b) C — The general Italian labour-procurement and (c) of Article 86, held that it appeared legislation 'from the circumstances described by the national court . . . that the undertakings enjoying exclusive rights in accordance with the procedures laid down by the national rules in question are, as a result, induced either to demand payment for services which have not been requested, to charge dispro- portionate prices, to refuse to have recourse to modern technology, which involves an increase in the cost of the operations and a 9. The employment-procurement market in prolongation of the time required for their Italy is subject to a mandatory placement performance, or to grant price reductions to system administered by public employment certain customers and at the same time to agencies (sezioni circoscrizionali per offset such reductions by an increase in the l'impiego), which are regulated primarily by charges to other customers'. 16 Consequently, Law N o 264 of 29 April 1949 (hereinafter the Court was satisfied '.

. .'. 17 It, there- to criminal penalties, the management of any fore, advised the national court that: 18 undertaking from arranging with intermedi- aries or subcontractors for the provision of labour, or from entrusting the execution of particular tasks to such persons or, indeed, to third parties. The objective of the rules is '. . . aimed at protecting employees against exploitation and loss of rights where the real employer is different from the person for- mally described as the employer, but who in reality is a mere intermediary'. 19 The present case is concerned with specific employment- procurement rules applicable in the ports

At para- recourse to a dock-work company formed graph 39 of his subsequent Opinion of 15 May 1997 in Case C-55/96 Job Centre COOP. a. r. L en voie de constitution exclusively of national workers.' (hereinafter 'Job Centre U'), where the compatibility of the system established by the 1949 and 1960 Laws with various provisions of the Treaty is raised, Advocate General Elmer states that it is logical to regard the prohibition of the pro- vision of temporary workers under the 1960 Law as consti- tuting an integral part of the general monopoly in favour of 16 — Porto di Genova, paragraph 19. public placement established by the 1949 Law, although he 17 — Sec paragraph 20. accepts that a final determination of the objectives of 18 — See paragraph 24. national laws is a matter for the national court.

13. Article 18 provides for the temporary grant to individual operators, by way of 11. The new rules essentially restrict the exclusive concession, of the 'State-owned monopoly of the former dock-work compa- areas and wharves in the port area to the nies to the provision of temporary labour. It would, however, appear from Article 27(8) of 22 — It is, however, material to the present case that the recon- stituted dock-work companies are exempt from this requirement. See paragraph 16 below. 23 — Thus, both such authorised undertakings (hereinafter 20 — GURI, N o 21 of 4 February 1994. According to the infor- 'authorised port operators') and those undertakings granted mation provided by the Commission in its written observa- concessions under Article 18 to operate designated port ter- tions, the 1994 Law entered into force on 19 April 1994. minals, discussed in the next paragraph, must be entered on 21 — See further paragraph 17 below. the register.

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'Where the employees of [the authorised port operators] referred to in Article 16, including those employed under "temporary mobility" conditions within the meaning of Article 23(3), 25 are not sufficient to meet operating requirements, the said undertak- 14. In summary, as is stated in the memoran- ings may, by way of derogation from dum of the national judge, the new rules Article 1 of Law 1369/60 of 23 October 'continue to allow the simultaneous presence 1960, ask the companies or cooperatives of authorised undertakings and concession- referred to in Article 21(l)(b) of this Law to aire undertakings which, in theory, operate in the same port areas'. Nevertheless, a ter- minal operator is now not only permitted to 25 — Those employees of the dock-work companies who are not use its own labour but, indeed, required to required upon the reconstitution of those companies in accordance with Article 21 and who are not otherwise engaged by authorised port operators and terminal opera- tors must, apparently, be retained by the reconstituted com- panies under a temporary-employment scheme. The details concerning the operation of this scheme are to be fixed by 24 — The grantees of such concessions will hereinafter be decree, but the Court has not been referred to any such described for convenience as 'terminal operators'. decree.

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provide the workforce necessary to provide services, including, by way of deroga- the services comprising only labour.' 26 tion from Article 1 of Law N o 1369/60 of 23 October 1960, services comprising only labour, until 31 December 1995.' 29

(b) a company or a cooperative of the kind provided for in Titles V and VI of Book 29 — It appears from information provided by the Commission and Italy, in response to a written question posed by the Five of the Civil Code, to supply Court, that the deadline of 31 December 1995 was initially extended until 30 September 1996 by Decree-Law N o 322/96 of 17 June 1996. Furthermore, pursuant to Law N o 647 of 23 December 1996 (GURI, Serie generale, N o 303 of 28 December 1996), Article 17 of the 1994 Law 26 — In those ports where no companies or cooperatives have has been replaced by a new Article 17 which currently gov- been reconstituted in accordance with Article 21(l)(b) of erns the duration or the derogation from the prohibition of the 1994 Law (to which reference will presently be made), private employment-placement activities set out in the relevant port authorities are empowered, as the Com- Articles 17 and 21(1) of the 1994 Law. Pending the amend- mission points out in its written observations, under ment of the 1960 Law, which is apparently now under con- Article 17(2) to promote the establishment, again in deroga- sideration, the new provision envisages the establishment, tion from Arricie 1 of the 1960 Law, of a port labour asso- on the initiative of the relevant port authorities, of a volun- ciation (una associazione del lavoro) to deal with fluctua- tary cooperative (un consorzio volontario) at each port com- tions in traffic and guarantee the maximal efficiency of port prising the existing authorised port operators, terminal activities, and from which terminal operators may request operators) and reconstituted company(ies). Where such a the provision of temporary labour. Tne present reference, cooperative is formed, the port authority may authorise which concerns the Port of La Spezia, deals, however, with one, or several, of the cooperative's potential members to >rovide, in derogation from the 1960 Law, temporary a situation where, notably on the basis of the information provided to the Court at the hearing, it appears that a dock- f abour to other members. In the event of no such coopera- tive being formed, the new provision envisages the estab- work company has been reconstituted under Article 21(l)(b). Certainly, the national court's express lishment of an exclusive 'agency' to provide the service of omission of any reference to the terms of Article 17(2) i n its making temporary workers available (l'Agenzia per memorandum also provides a strong indication that no port l'erogazione de mere prestazioni di mano d'opera). Never- labour association exists at La Spezia. theless, pending the creation cither of such a cooperative or agency, the new Article 17(2) would seem to preserve 27 — See paragraph 3 above. indefinitely, in favour of the reconstituted companies, the 28 — They will hereinafter be referred to as 'the reconstituted sole right to derogate from the 1960 Law in respect of the company(ies)'. provision of temporary labour at ports.

31 — The defendants are in fact the legal representatives of the terminal operator and five other companies and coopera- tives whose activities have been impugned by the prosecu- tion. According to information provided to the Court at the hearing, all of them were initially authorised to carry 17. In the main proceedings before the Pre- out port activities under Article 68 of the Code but subse- tura Circondariale, La Spezia (District Mag- quently obtained authorisations under Article 16 of the 1994 Law (and presumably also the corresponding provi- istrates' Court for the District of La Spezia, sions of the emergency decrees that predated the enactment of that Law). The terminal operator, La Spezia Container hereinafter 'the national court'), Mr Raso Terminal (hereinafter, for brevity, 'LSCT'), of which and his co-defendants (hereinafter 'the Mr Raso is the representative, has been granted a terminal- operator concession under Article 18 of the 1994 Law. defendants') have been accused, jointly and 32 — The duration of this period (hereinafter 'the relevant severally, of having committed various period') is apparent upon examination of the case-file. The Commission submits that the Court should assume May 1994, to wit the month following the entry into force of the 1994 Law, to be the operative part of the relevant period for the purpose of answering the questions referred. Since the 1994 Law effectively codifies the rules contained in earlier 30 — Indeed, at the hearing, it was claimed on behalf of the emergency rules (see paragraph 10 above), this suggestion defendants in the main proceedings that the reconstituted would appear to be sound notwithstanding the fact that company at the Port of La Spezia actually operated as a ter- part of the relevant period (almost a year and a half) actu- minal operator. ally predated the judgment in Porto di Genova.

would have the effect of requiring the termi- the following questions to the Court under nal operator to provide itself with a "verti- Article 177 of the Treaty: cal" organisation such as to ensure availabil- ity to users of the totality of services ...' that they might require. Although the national court does not comment on the financial repercussions of such an organisation, either for terminal operators or their clients, it does identify the following consequences: '... first: access to the market would be denied to any '1. Does Article 59 of the Treaty preclude outside undertaking, and, second: the exist- Italian legislation which prohibits an ing dominant position would be further undertaking holding a port terminal strengthened...'. 33 concession from having recourse to work done by other undertakings — not set up by former port companies and groups — comprising the supply of services of the kind provided for users including those belonging to other Member States, with the further impli- cation that, as a result of the Italian leg- islation, the terminal operator itself is required to make available the whole range of services that might be required by users in the port terminal, giving rise to the risk of hampering access to the 19. While the national court has not yet market for the provision of individual decided whether the 1960 Law 'can be inter- services by undertakings authorised to preted so as to prohibit those forms of coop- operate in the port other than those eration between terminal operators and referred to by Article 21(1 )(b) of Law authorised undertakings that are not terminal N o 84/94? operators other than those referred to in Article 17 of Law N o 84/94, namely former port companies that have adopted another form', it, none the less, states that, if that interpretation were correct, the two conse- quences cited in the previous paragraph would ensue. The national court states that '... the Port of La Spezia is the leading Medi- 2. Does Article 90(1) of the E C Treaty, in terranean container port and that the com- conjunction with Article 86, preclude pany La Spezia Container Terminal moves national legislation which (by reason of about 70% of the containers entering and its effects on the market, namely, first, leaving the port. Users of La Spezia Con- the fact that it prevents undertakings tainer Terminal are also shippers and ship- other than the terminal operator — not ping lines of various Member States of the set up by former port companies and European Union'. Hence, it decided to refer groups — from providing services within the confines of the port for would-be users; secondly, the fact that the terminal operator is obliged to pro- 33 — In this respect, the national judge refers, without further explanation, to Porto di Genova. vide all port operations and services

21. The first question is concerned in substance with the compatibility, exclusively with Article 59 of the Treaty, of the national legislation that operates to restrict terminal operators at Italian ports from engaging the services of all but one type of subcontractor 3. Do Articles 59 and 90 of the EC Treaty, in (viz. reconstituted companies) when provid- conjunction with Article 86, in any event ing terminal-op erator services to port users. preclude national legislation which only Notwithstanding the doubts which have allows an undertaking operating in a port to been expressed regarding the relevance of provide to other undertakings operating in Article 59 to the facts of the dispute before the port, and in particular terminal opera- the national court, it is appropriate to con- tors, services limited to the mere supply of sider the potential application of that article labour?' before addressing the other questions referred, since, if the Court were to find such a restriction to be incompatible with Article 59, the prosecution in point in the main proceedings would have to fail.

IV — Observations

A — The prima facie application of Article 59 of the Treaty

20. Written observations have been submit- 22. The first question focuses on the restric- ted by the defendants, the Italian and French tive effects of the prohibition of terminal Republics, the Federal Republic of Germany, operators from having recourse to supplies

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23. In this respect, the national court, as stated at paragraph 1 8above, refers espe- cially to the consequences of the prohibition upon the capacity of terminal operators to provide to their clients 'the totality of the services'. 25. Both Italy and the Commission point out that all of the undertakings involved in the main proceedings are Italian. The only conceivable trans-frontier element in the ser- vices provided to LSCT by the companies represented by Mr Raso's co-defendants is wholly hypothetical; to wit, the possibility that, but for the exclusive nature of the dero- gation from the 1960 Law in favour of the 24. The defendants claim that the 1960 Law reconstituted companies, a non-Italian constitutes a restriction on the freedom of undertaking might be prevented from pro- terminal operators to provide their services viding such services. However, if the Court to the shipping companies that use the port. were to find such an element sufficient in By preventing terminal operators from using principle to render Article 59 applicable, the the specialised services of authorised port Commission would submit that the reserva- operators they are forced to integrate verti- tion of the benefits of the derogation from cally. It is claimed that such integration the general provisions of the 1960 Law to the would cause them to lose the benefits of the reconstituted companies, which are all Ital- economies of scale and professionalism ian, should be regarded as incompatible with which result from being able, in respect of that article. certain services required by users, such as the releasing and fixing of containers, to call upon the services of specialised undertakings operating throughout the port; they are 34 — To rely on this principle against their own Member State, the defendants cite, in particular, Alpine Investments; Case forced to incur the increased costs of C-384/93 [1995] ECR I-1141.

28. Therefore, it is the compatibility with Article 59 of the Treaty of the grant of a monopoly for the provision of temporary labour in favour of certain (necessarily national) port companies that is central to the first question in the present reference. The issue of its compatibility with Commu- 27. In my opinion, the objections of Italy nity law arises because of the effects of the and the Commission concerning the rel- monopoly on the provision of port services evance of Article 59 to the facts of the main to national and non-national users of Italian proceedings are misconceived. By focusing ports by undertakings, like the defendants, on the freedom to provide employment- who have been authorised to provide such procurement services at ports, which is services; notably in the light of the fact that reserved under the relevant national rules to those undertakings may face competition the reconstituted companies, their objections from the undertakings enjoying the fail to address the real restriction identified monopoly. In my opinion, since Mr Raso's by the national court in the order for refer- co-defendants have effectively been charged ence (see, in particular, paragraph 22 above); in the main proceedings with cooperating viz., the restriction affecting the activities of with LSCT in the provision by the latter of a terminal operators and, by extension, those comprehensive service to its clients, it is of authorised port operators in the provision appropriate to focus, as, indeed, the national of port services to clients many of whom are court has done in its reference, on the situa- shipping companies established in other tion of terminal operators under the Member States. From the information con- impugned national rules. Indeed, if the situ- tained in the case-file, it is clear that none of ation of Mr Raso's co-defendants, all of the defendants has ever sought to establish whom represent Italian companies charged

29. In Procureur du Roi v Debauve the 30. It is true that in Höfner and Elser, Court held that 'the provisions of the Treaty where: 'the dispute [was] between German on freedom to provide services cannot apply recruitment consultants and a German to activities whose relevant elements are con- undertaking concerning the recruitment of a fined within a single Member State', 35 which German national', the Court, referring to '... depends on findings of fact which are for Procureur du Roi v Debauve, found '... no the national court to establish'. 36 In the link with any of the situations envisaged by present case the national court has based its Community law', a conclusion which could view on the existence of a sufficient intra- not 'be invalidated by the fact that a contract Community element on the fact that many concluded between the recruitment consult- of the users of the services at issue were ants and the undertaking concerned includes undertakings established in Member States the theoretical possibility of seeking German other than Italy. The agent for the Commis- candidates resident in other Member States sion at the hearing claimed that it was not or nationals of other Member States'. 39 possible to identify the nationality of the users of LSCT's services. The Court has held that, once there is a trans-border element, the precise nationality of the recipients is not 38 — In Joined Cases C-321/94 to C-324/94 Pistre [1997] ECR 1-2343, the Court, admittedly in the context of relevant. 37 Furthermore, in the light of the Article 30 of the Treaty, rejected the submission that the article was inapplicable to a prosecution brought in France of a French company for having allegedly unlawfully labelled, as originating in a specific French mountainous region, certain French goods destined for sale on the French market. The Court stated (at paragraph 44) that, '... 35 — Case 52/79 [1980] ECR 833, paragraph 9 of the judgment whilst the application of a national measure having no 36 — Ibid. actual link to the importation of goods does not fall within 37 — See Case C-484/93 Svensson and Gustavsson v Ministre du the ambit of Article 30 of the Treaty ..., Article 30 cannot be Logement et de l'Urbanisme (hereinafter 'Svensson and considered inapplicable simply because all of the facts of Gustavsson') [1995] ECR I-3955, where the fact that the the specific case before the national court are confined to a plaintiffs in the main proceedings were, at the material time, single Member State'. Even in those circumstances, the nationals of a third country was not regarded by the Court, Court found (at paragraph 45) that '... the application of the contrary to the express recommendation of Advocate Gen- national measure may also have effects on the free move- eral Elmer, as capable of precluding their capacity to rely on ment of goods between Member States, in particular when Article 59 to challenge a Luxembourg interest-rates subsidy the measure in question facilitates the marketing of goods provision which was available effectively only to loans of domestic origin to the detriment of imported goods'. taken out with Luxembourg-based banks. 39 — Loc. cit., at paragraphs 38 and 39 (emphasis added).

40 — Loc. cit at footnote 34 above, especially at paragraph 30 of the judgment. 41 — Case C-18/93 [1994] ECR I-1783. 42 — Case C-70/95 Sodemare and Others v Regione Lombardia [1997] ECR I-3395. 43 — Council Regulation (EEC) N o 4055/86 of 22 December 33. Although no question has been referred 1986 applying the principle of freedom to provide services to maritime transport between Member States and between in the present case regarding the application Member States and third countries, OJ 1986 L 378, p. 1. I agree with the view expressed by Advocate General Van of Article 30 of the Treaty, I would not like Gerven in section 16 of his Opinion in Porto di Genova to ignore the views of the Court on that that 'dock work must be distinguished from actual mari- time transport properly so called ...'; see [1991] issue in Porto di Genova. The Court referred ECR I-5889, at p. I-5913. In my opinion, the same distinc- tion should apply, mutatis mutandis, between the provision to the national court's rinding '... that the of port services and maritime transport services. 44 — Corsica Ferries, at paragraph 30. It should be noted that Article 1(1) of the Regulation expressly states that '[F]re-- dom to provide maritime transport services between Mem- ber States and between Member States and third countries 45 — Sodemare, at paragraph 37. In the event, however, the shall apply in respect of nationals of Member States who recipients of the services, though to some extent non- are established in a Member State other than that of the per- Italian, were all considered to be resident in Italy where the son for whom the services are intended'. services were provided, see paragraph 39.

34. It is not so easy to discount possible application of Article 48 of the Treaty despite the silence of the order for reference on this point. In my opinion, the combined effects of the fact that the 1994 Law provides both for the reconstitution of former dock- work companies, which, by their very nature as cooperatives of workers of Italian nation- 35. The defendants allege that to prevent ter- ality, were exclusively Italian enterprises, and minal operators from using the services of for rules requiring reconstituted companies, other authorised port operators merely terminal operators and authorised port because those services have a high labour operators to engage on a priority basis the component is to restrict the provision of dockers formerly employed by the dock- port services by both the terminal operators work companies, may well result in the and the other authorised port operators, since it effectively induces the former uneco- nomically to expand their operations (and workforce) so as to be able to provide a 46 — Porto di Genova, at paragraph 22. complete range of port services to users 47 — See, in this respect, Case C-379/92 Peralta [1994] ECR I-3453, paragraphs 23 to 25 of the judgment. while denying the latter a valuable source of

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36. Italy, supported by Germany, refers to (ii) Analysis the sensitive nature of the labour-hiring mar- ket. At the hearing, its agent submitted that

48 — They also rely on the consequential restriction on the users' right to receive all the port services they require from one source. The possible adverse consequences for such service recipients of a restriction affecting the provision of the ser- vices in question, may not, in my view, be relied upon by the provider in order to establish an infringement of Article 59 of the Treaty unless the exercise of its activity is also thereby prejudiced. Thus, in Svensson and Gustavsson, for example, loc. cit, it was clear that the restriction affect- 37. The general Italian employment- ing the provision of loans by banks not established in Luxembourg to Luxembourg-resident clients which procurement regime established by the 1949 resulted from the impugned Luxembourg measures also and 1960 Laws has never been applied to the adversely affected the freedom of the plaintiffs in the main proceedings to receive banking services. In the present case, ports sector. In effect, the original monopoly since I am of the view that the restriction on procuring labour other than from the reconstituted companies conferred upon the dock-work companies adversely affects the provision of terminal-operator ser- vices, I do not consider it necessary to examine separately the relevance of the possible restriction on the right of non- Italian users of the Italian ports freely to receive port ser- vices. 49 — Case 279/80 [1981] ECR 3305.

39. Do these arrangements constitute a restriction on freedom to provide services? As they affect a terminal operator in the pos- ition of LSCT, I think they do. LSCT claims the right to offer to port users (which for the 38. In the first place, the terminal operators purposes of this analysis are those estab- are required to employ a workforce 'appro- lished in other Member States) a complete priate' to their submitted programme of package of port services, i. e. it wishes to activities. In this respect, it is noteworthy, as subcontract various highly labour-intensive the Commission points out in its written observations, that until 31 December 1996 components of its package to other port Article 23(3) of the 1994 Law required both operators who are, themselves, authorised to terminal operators and authorised port provide such services direcdy to the users. operators, as well as the reconstituted com- The 1994 Law prohibits the terminal opera- panies, to employ, on the basis of priority, tor and the various authorised port operators whenever positions became available those from cooperating to this end. The coopera- dock workers formerly employed by the old tive arrangement is designed to enable the dock-work companies but not permanently terminal operator to provide to the end-user re-engaged upon the reconstitution of those a service which adapts to the varying needs

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42. I do not think that France's view on the issue of discrimination is correct. As I have already stated (see paragraph 28 above), the 40. Since I am satisfied that the rules consti- essential issue raised by the first question tute a restriction on the freedom of terminal does not concern the compatibility with operators to provide port services to users Community law of the reconstituted compa- from other Member States, it is necessary to nies' monopoly but, instead, its downstream assess whether that restriction can be justi- effects on the free provision of port services fied.

51 — See, for example, Svensson and Gustavsson, loc. cit., para- 50 — See, in particular, paragraph 28 above. graph 15 of the judgment.

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particularly by terminal operators. 52 Under non-national users, it is necessary to assess Article 18 of the 1994 Law, no restriction is whether any imperative reason of public placed on non-Italian undertakings from interest recognised by Community law applying for terminal-operator concessions. would provide a justification for the restric- Accordingly, the monopoly in point poten- tion. tially affects both national and non-national concessionaires in the same way and cannot, in my view, be regarded as discriminatory.

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identified by the Court in its Porto di the rights of workers may constitute an over- Genova judgment, 56 that the combined riding policy requirement. In the present commercial and cooperative objectives of case, however, other than a general reference those companies distinguish them signifi- to the cooperative nature of the reconstituted cantly from public employment agencies. companies, the Court has no information as Italy has nevertheless alleged that a more to how and to what extent the monopoly general worker-protection objective provides enjoyed by those companies serves to further a justification for the 1994 Law. Although the protection of dock workers. such an objective might be recognised by Community law, I do not agree that it is applicable in the present case.

56 — In this respect, it is only necessary to recall that all of the 60 — See, for example, Case C-288/89 Collectieve Antennevoorz- dockers employed by the former dock-work companies iening Gouda [1991] ECR I-4007, paragraph 15 of the judg- were Italian nationals and it is this class of dockers which ment. enjoys preferential rights to employment under the new 61 — It might be of assistance to the national court to note that rules; see paragraph 34 above. no allegation has been made in the proceedings before the 57 — Loc. cit., paragraph 18 of the judgment. Court to the effect that dockers formerly employed by the dock-work companies and subsequently re-employed by 58 — Ibid., at paragraph 19. terminal operators or authorised p o r toperators have suf- 59 — Case C-272/94 [1996] ECR I-1905. fered any consequential diminution of their rights.

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49. In the memorandum, the national court focuses both on the general prohibition of the activities of workforce intermediaries 50. It must, nevertheless, be recalled that the under the 1960 Law and the derogation defendants' prosecution does not concern — favouring the reconstituted companies con- at least not directly — an alleged infringe- tained in the 1994 Law. Referring to the ment of the monopoly of the reconstituted established fact that authorised port opera- companies but, rather, a potential infringe- tors represented by Mr Raso's co-defendants ment of the 1960 Law. Accordingly, I do not

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(i) The application in principle of Article 86

B — The third question

52. Article 86 of the Treaty applies only to undertakings enjoying a dominant position in the common market or a substantial part thereof. There is no doubt that the notion of

62 — It does not appear that the public employment agencies established under the 1949 Law operate in the ports sector. 51. The de facto consequence of the manda- 63 — It has not been alleged in the observation submitted to the Court that the provision of temporary dock workers con- tory reconstitution of the dock-work com- stitutes 'a service of general economic interest* within the meaning of Article 90(2) of the Treaty. Nor, in view of the panies pursuant to the 1994 Law is that the Court's decision in Porto di Genova (see paragraph 27), and reconstituted companies enjoy a monopoly the even more forthright view of Advocate General Van Gerven (see section 27 of his Opinion, [1991] ECR I-5889, regarding the provision of temporary at p. I-5919), could that provision apply.

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54. The relevant product market should first 55. In this respect, the national court has be identified in accordance with the criteria already found La Spezia to be the leading established in the Court's case-law. 65 It is Mediterranean container port. Although the central tö the relevant product market to agent for Italy intimated at the hearing that establish whether there are competing or the finding may now actually underestimate substitutable products or services. 66 In the the position of the Port of Genoa, it has not present case, the reconstituted companies been alleged that the national court's view of alone may supply temporary labour at Ital- the importance of La Spezia is substantially ian ports, since Italian law does not permit flawed. Accordingly, subject to the preroga- the employers of permanent labour at ports tive of that court ultimately to determine whether the market in question constitutes a substantial part of the common market, the 64 — In Höfner and Eber, for example, the Court declared that importance for intra-Community trade of 'the concept of an undertaking encompasses every entity the Port of La Spezia as a container terminal engaged in an economic activity, regardless of the legal sta- tus of the entity and the way in which it is financed ...'. It is, in my view, sufficient in principle to ren- also held expressly that 'employment procurement is an economic activity'; loc. cit., at paragraph 21. der substantial, for the purposes of Article 86 65 — See, for example, Case 27/76 United Brands v Commission of the Treaty, the position held by the recon- [1978] ECR 207, notably paragraph 11 of the judgment, and Case 322/81 Michelin v Commission [1983] ECR 3461, at stituted company regarding the provision of paragraphs 23 to 28. 66 — See, for example, United Brands v Commission and Michelin v Commission, ibid., paragraphs 22 and 37 of the respective judgments, and Case C-333/94 P Tetra Pak v Commission [1996] ECR 1-5951, at paragraph 19. 67 — Loc. cit., paragraph 28 (emphasis added).

57. Article 86 of the Treaty is directed only at the conduct of undertakings. However, the case-law of the Court demonstrates that in certain circumstances Member States may be held responsible for breaches of Commu- nity competition law resulting from the activities of undertakings. In this respect, the Court held in Porto di Genova that 'the simple fact of creating a dominant position by granting exclusive rights within the mean- ing of Article 90(1) of the Treaty is not as 56. I have already viewed the restriction on such incompatible with Article 86'. 70 Never- freedom to provide intra-Community port theless, it also held that a Member State services flowing from the monopoly con- would breach those provisions if the under- ferred upon reconstituted companies as taking upon which the monopoly has been capable of falling within the scope of conferred either abuses its dominant position Article 59 of the Treaty. 68 Given the impor- merely by exercising its exclusive rights, or if tance of the Port of La Spezia, I am also sat- isfied that any abuse by the reconstituted company at that port of the dominant pos- 69 — See, inter alia, Höfner and Elser, paragraph 32 of the judg- ition it enjoys would affect trade between ment. Indeed, in his Opinion in that case, Advocate Gen- eral Jacobs had recommended (paragraph 48) that Article 86 Member States for the purposes of could even apply in cases involving purely internal situa- Article 86. In any event, it must be recalled tions. Thus, as regards the application of Article 86, the Court is concerned with 'the consequences of the conduct complained of for the competitive structure in the Com- mon Market ...'; see Joined Cases 6/73 and 7/73 Commer- cial Solvents v Commission [1974] ECR 223, paragraph 33 of the judgment. 68 — See paragraphs 22 to 32 above. 70 — Paragraph 16.

59. I accept that a distinction may be made 58. In its observations the United Kingdom between situations where, on the one hand, submits that the judgment of the Court in the grantee of an exclusive right is placed in a Porto di Genova, and particularly its state- dominant position on a substantial part of ment at paragraph 20 'that a Member State the common market capable of affecting creates a situation contrary to Article 86 of trade between Member States and either, the Treaty where it adopts rules of such a merely by exercising the rights conferred kind as those at issue before the national upon it, cannot avoid abusing its position, or court', is difficult to apply. The United King- is compelled or encouraged by the relevant dom submits that it is unclear from para- Member State measure to commit such an graph 19 of the judgment in Porto di Genova abuse, and those where, on the other hand, what particular State measure was contrary the national measure merely places the to Articles 86(1) and 90, since there was no grantee in a position to commit an abuse but obvious link between the creation of the does not directly compel or encourage abuse. monopoly and the abuses cited by the Court. 71 Accordingly, the United Kingdom suggests that the approach elaborated by the Court regarding the application of Articles 5 and 85 of the Treaty to measures adopted by Member States, namely that there must be a 60. In choosing to adopt this delimitation of clear and direct causal link between the the extent of Member State responsibility, I impugned State measure and the conduct of have consciously drawn upon the wording the undertakings concerned, should also be used by the Court in the English-language applied when considering the possible com- texts of its judgments in, respectively, Höfner bined application of Articles 90(1) and 86. and Elser 72 and France v Commission, 73 Furthermore, it contends that the Court since, to my mind, some of the difficulties should only hold the grant of an exclusive alleged by the United Kingdom to be inher- ent in interpreting the Porto di Genova judg- ment may be attributed to the differing 71 — The relevant part of paragraph 19 of the judgment is quoted at paragraph 8 above. By way of recapitulation the alleged abuses in question comprised: (i) demanding payment for unrequested services; (ii) charging disproportionate prices; (iii) the adverse cost and temporal consequences of refusing 72 — Loc. cit., paragraph 29. to use modern technology; (iv) practising a discriminatory 73 — Case C-202/88 [1991] ECR I-1223; see paragraph 56 of the price reductions policy. judgment

61. The purpose of the distinction is to attribute responsibility. Since Article 90(1) permits Member States to grant 'exclusive 62. While this distinction may be clear in rights', this act does not, in itself, constitute principle, its precise application in practice is an abuse in terms of the Treaty, whatever the not easy. Thus, the Höfner and Eher and underlying economic reality. A distinction is, Porto di Genova judgments have been criti- thus, made between the creation of the cised for not defining 'what factors make it exclusive right and 'any measure contrary to possible to distinguish a situation necessarily the rules contained in this Treaty, in particu- leading to an abuse from a situation which lar ... Articles 85 to 94'. Consequently, where on the other hand does not have that an abuse for which a Member State is not effect'. 77 To my mind, Höfner and Elser is responsible occurs, the victims must undeni- one of those necessarily rare cases where the ably seek their remedy against the dominant nature of the exclusive right of employment firm pursuant to Article 86 of the Treaty placement granted to the Bundesanstalt für which has direct effect. In the absence of Arbeit (Federal Office for Employment) in such a distinction, Member States would Germany was such that, for all practical pur- effectively be obliged to justify the grant of poses, its mere grant placed the grantee in exclusive rights notwithstanding the Court's the unenviable position of being unable to consistent case-law to the effect that the avoid abusing the right. 78 Thus, had it mere creation of a dominant position insisted upon the exercise of its monopoly in through the grant of such rights cannot, in circumstances where it was manifestly itself, be incompatible with Article 86. 75 To unable to meet demand, at least for the impose such an obligation on Member States placement of business executives, a finding of would be contrary to the purpose of abuse would have been almost inescapable. Article 90(1), which, as the Court has The situation was complicated somewhat by

the fact that the Bundesanstalt voluntarily paragraph 8 above) that the Court was satis- indicated that it was prepared 'to tolerate fied that the abusive conduct, though osten- certain activities on the part of recruitment sibly effected by the dock-work company consultants concerning business execu- and undertaking concerned, resulted directly tives'. 79 Nevertheless, the Court was satis- from monopoly rights granted under the rel- fied that an unavoidable abuse had effectively evant Italian legislation. In this respect, I occurred, at least in respect of executive think it is particularly noteworthy that in recruitment, because the Bundesanstalt was paragraph 19 of its judgment, when referring '... manifestly not in a position to satisfy the to the rights granted, the Court states that, demand prevailing on the market for activi- 'as a result', the undertakings in question are ties of that kind and when the effective pur- 'induced' to commit the abuses at issue suit of such activities by private companies is (emphasis added). The Court thus, presum- rendered impossible by the maintenance in ably, shared the view expressed by Advocate force of a statutory provision under which General Van Gerven, that those abuses '... are such activities are prohibited and non- made possible, if not inevitable, by the observance of that prohibition renders the national legislation and are facilitated, if not contracts concerned void'. 80 made compulsory, by the port authorities under the powers conferred upon them by national legislation'. 82 Unfortunately, there is a significant difference between inevitable and possible abuses of legal monopolies. Few would contest the culpability of a Member State for the former but many might feel that responsibility for the latter type of abuse should rest with the dominant undertaking.

fraught with difficulty from the legal point of 66. In my opinion, the judgment in Centre view. The Court is rarely in possession of a d'Insémination de L· Crespelle v Cooperative sufficient factual basis to enable it to form de L· Mayenne 83 (hereinafter 'La Crespelle') for itself a confident view about complex provides support for the approach I have just economic, social and legal considerations suggested. La Crespelle concerned the com- within a Member State. National courts patibility with Articles 5, 86 and 90(1) of the when applying Article 90(1) of the Treaty Treaty of the French system of regional arti- and Member State governments when con- ficial insemination centres, each centre templating the grant of exclusive rights will enjoying a monopoly regarding the insemi- reasonably look to the Court to give clear nation of animals within their assigned geo- principled guidance in its judgments. The graphic area. The alleged abuse consisted language of that provision, whilst explicitly essentially of the charging of exorbitant noting the right of Member States to grant prices by the insemination centres to breed- 'special or exclusive rights', enjoins them not ers, notably, when the latter requested the to enact or maintain in force any 'measure' centres to provide them with semen from contrary to certain rules of the Treaty other production centres. The Court formu- (emphasis added). In my view, the primary lated the issue as being whether such an focus of the prohibition is, therefore, on alleged abusive practice could be regarded as 'measures'. Naturally, the scope and effect of '... the direct consequence of the national 'measures' cannot be analysed in isolation Law'. 84 Noting that the French legislation from their surroundings. None the less, it permitted the insemination centres to charge seems to me that the Court should, in apply- breeders 'the additional costs entailed by ing Article 90(1), look to identify some [choosing semen from other centres]', the measure leading clearly to an infringement of Court was still satisfied that '... the task of the competition articles of the Treaty, or, to calculating those costs' did not constitute a use the language proposed by the United provision that would 'lead the centres to Kingdom, 'national rules which are de facto charge disproportionate costs and thereby inextricably linked with the statutory monopoly'.

abuse their dominant position’. 85 It follows, observations submitted. Thus, France con- in my opinion, that it is not sufficient for an tends that there is a de facto abuse akin to infringement of Article 90(1) in conjunction that identified by the Court in Porto di with Article 86 of the Treaty to occur for the Genova, while the defendants and the Com- grantee of an exclusive right under national mission allude to various potential abuses. law to be placed, by virtue of its resulting Having regard to the division of competence dominance, in a position to commit abuses that exists between the Court and national unless the monopoly system itself compels courts in Article 177 references, it is, of or strongly encourages the abuse by being course, for the national court to determine directly linked to and largely responsible for whether any of the alleged abuses have in it. fact occurred.

(iii) The abusive conduct alleged in the present case

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law. Therefore, subject to one exception, if contradicted by Italy. While it is for the abuse attributable to the State were to exist national court ultimately to determine their in the present case, it would have to lie in the veracity, the following observations may be de facto operation of the amended system of made by way of assistance. rules introduced by the 1994 Law.

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72. In any event, I am convinced that the able to withhold services (presumably it is most disturbing aspect, from the point of free to do so) and still gain the business at view of the combined application of the expense of the terminal operator, which Articles 90(1) and 86 of the Treaty, of a sys- could not go elsewhere for temporary tem of rules such as that established by the labour. 1994 Law must be the dual role granted to reconstituted companies. It seems to me to be inescapable that a company to which not only an exclusive right to provide temporary labour is granted but which is simulta- neously permitted, without apparently even the need to satisfy the normal requirements of Articles 16 and 18 of the 1994 Law, to compete with terminal operators and autho- rised port operators on the market for the provision of port services, will be compelled or feel strongly encouraged to abuse its 73. In my opinion, the privileged position dominant position. The position enjoyed by conferred upon the reconstituted company the reconstituted company is particularly by the 1994 Law is akin to that conferred privileged when it is recalled that its upon the Greek radio and television monopoly powers will be enhanced in the monopolist in ERT. In that case, the Court only circumstances in which its services are found that 'Article 90(1) of the Treaty pro- required by the terminal operator. The latter hibits the granting of an exclusive right to has its own workforce and will, except in retransmit broadcasts to an undertaking cases of high demand, be normally in a pos- ition to serve port users without resort to the reconstituted company. When peak demand 88 — It must, however, be noted that no information is before occurs at the port, access to a temporary the Court regarding the actual prices charged, or method of labour supply will be essential if the terminal calculation thereof, by the reconstituted company at the

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which has an exclusive right to transmit national rules but which may only procure broadcasts, where those rights are liable to temporary outside labour from the grantee. create a situation in which that undertaking is led to infringe Article 86 of the Treaty by virtue of a discriminatory broadcasting policy which favours its own pro- grammes'. 89

C — The second question

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VII — Conclusion

76. In the light of the foregoing, I recommend that the following answers be pro- vided to the questions referred by the Pretura Circondariale, La Spezia:

(1) As regards the first question, I suggest the following answer:

Article 59 of the Treaty precludes national legislation which prohibits an undertaking holding a port terminal concession from having recourse, in order to supply port services to port users established in other Member States, to work done by other undertakings authorised to carry out activities at ports with the exception of reconstituted versions of the type of dock-work com- pany involved in Case C-179/90 Merci Convenzionali Porto di Genova, unless the indispensability and appropriateness, for the purpose of ensuring the pro- tection of dock workers at Italian ports, of granting such an exclusive right to the reconstituted companies concerned can be established.

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