C-439/99

A — Admissibility of the application I- 314

(1)Provisions not cited in the text of the reasoned opinion I- 314

(2)Provisions not cited clearly I- 316

(a) Article 7 of Regional Law No 43 of Emilia-Romagna of 26 May 1980 I- 316

(b) Article 6 of Provincial Law No 35 of the Autonomous Province of Trento of 2 September 1978 I- 316

(c) Article 15 of Regional Law of Lombardy No 45 of 29 April 1980 . . . I-317

(a) Applicability to the organisation of trade fairs of the freedom to supply

services I - 321

(b)Restrictions on freedom of establishment I- 321

(c) No restriction of the scope of applicability of the basic freedoms by prohibiting the pursuit of profit I - 323 (d)Provisions derogating from Article 55 of the EC Treaty I- 323 1 — Original language: German.

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(f) Public-authority participation in the appointment of trade-fair orga­ nisers I-335

(i) Freedom to provide services I - 336

(ii) Freedom of establishment I - 337

(g) Participation of a local authority from the region in the trade-fair organiser I-337

(3)Conditions for individual trade-fair events I- 338

(a) Periodicity and duration of fairs I - 338

(i) Restriction I-341

(ii) Justification I- 342

(d) Provisions requiring, in respect of the organisation of a trade fair, inclusion of particulars in an official calendar I - 342 (4) Conditions for organisers and events I - 344 IV — Costs I-348 V — Conclusion I-34g

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I — Introduction — the requirement for the trade-fair orga- niser to have a permanent establish- ment; 4

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infringe the freedom to provide services. 6. Lastly, the Commission also complains These requirements are: of those requirements which permit only producers to exhibit at fairs. 14

— that specified fairs must be held period- ically; 9

7. Italy responded substantively to these objections only in its reply to the Commis- sion's letter of formal notice. In its defence, the Italian Government referred to a draft — that fairs must be organised in con- law that had been submitted at that time formity with regional and national and was adopted early in 2001, which was planning; 10 intended to amend the provisions objected to. Therefore, although the failure to fulfil obligations is ultimately beyond dispute, this is the first time the fundamental free- doms have been applied to requirements imposed upon organisers of trade fairs and — that applications for authorisation for individual trade-fair events. How such rules fairs must be submitted two years are assessed is significant beyond the before they take place, 11 and boundaries of Italy. The Commission's objections must therefore be examined in detail. The submissions of the parties, that is the statement of reasons put forward by the Commission and the corresponding arguments put forward by Italy in the — that fairs may be held only after being response to the letter of formal notice, are included in an official calendar. 12 set out in detail in the section containing my opinion.

5. In addition, the Commission objects to other requirements providing for local undertakings to participate in the pro- cedure for recognition of the status of 8. As regards the Italian legislation, the organisers and authorisation of fairs. 13 State has overall competence in connection with trade-fair events. That competence is supplemented by regional laws. The Com- 9 — Point 122 et seq. of this Opinion. mission is therefore challenging rules com- 10 — Point 129 et seq. of this Opinion. 11 — Point 137 et seq. of this Opinion. 12 — Point 144 et seq. of this Opinion. 14 — On the admissibility of this complaint, see point 25 et seq. 13 — Point 154 et seq. of this Opinion. of this Opinion.

— Article 2, first paragraph, and Article 7 of Decree Law No 454 of 29 January 1934;

10. In a letter of formal notice, of 16 April 1996, the Commission drew the Italian Government's attention to these questions and required it to make its own observa- — Article 2, first paragraph, of Presi- tions within two months. The Italian Gov- dential Decree No 7 of 15 January ernment responded, in its letter of 16 July 1972; 1996, primarily raising basic objections to rebut the Commission's objections, at least in part. The latter, not persuaded by this response, sent the Italian Government its reasoned opinion of 18 May 1998, giving it — Article 2, paragraphs 4, 6 and 7 of a maximum of two months to reply to the Presidential Decree No 390 of criticisms. That period expired on 18 July 18 April 1994; 1998 but nothing had been done. With its letter of 15 February 1999, the Permanent Representation of the Italian Republic to the European Union forwarded a draft law already passed by the Senate but still under examination by a committee of the — Article 4 of Regional Law of Chamber of Deputies. The Commission Liguria No 40 of 14 July 1978;

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— Article 6, paragraph (l)(e), (f), (g) — Article 3, Article 5, Article 6, third and (h), Article 6(4) and Article 7 and fourth paragraphs, Article 12 of Regional Law of the Veneto and Article 19, first paragraph, of No 35 of 2 August 1988; Provincial Law No 35 of the Autonomous Province of Trento of 2 September 1978;

— Article 2, sixth paragraph, Article 4, first indent, Article 6, third and fourth paragraphs, and (2) Declare that the Italian Republic has Article 10, third paragraph, (a) of failed to fulfil its obligations under Regional Law of the Marches Article 52 et seq. and Article 59 et seq. No 16 of 12 March 1979; of the EC Treaty by maintaining in force the following provisions:

— Article 5, Article 13, Article 14 and Article 15, first paragraph, (a) of Regional Law No 10 of Friuli TTT — Opinion Venezia Giulia of 23 February 1981;

A — Admissibility of the application — Article 7 of Regional Law No 75 of Abruzzo of 13 November 1980;

13. Since the Commission has made some errors in its written submissions in citing — Articles 6, 7 and 23 of Provincial the provisions objected to, the admissibility Law No 35 of the Autonomous of the application must be verified. Province of Trento of 2 September 1978;

(3) Order the Italian Republic to pay the costs of the proceedings. (1) Provisions not cited in the text of the reasoned opinion

12. In its defence, submitted on 13 March 2000, the Italian Republic made no sub- 14. In its application, the Commission missions and in fact did not contest the objects to a number of Italian requirements failure to fulfil its obligations. It simply referred several times to a draft framework law to regulate trade fairs. In the meantime, 15 — GURI No 26, 1 February 2001.

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17. When, as in this case, the defendant — Article 7 of Regional Law of the State can identify an objection that is not in Veneto No 35 of 2 August 1988. the text of the closing plea in the reasoned opinion, but only in its statement of reasons, the quality of the drafting of that document certainly seems open to question, but the purpose of the pre-litigation pro- cedure none the less stands. In the final analysis, the objections arise from the 15. The question therefore arises whether statement of reasons and not from the the pre-litigation procedure was conducted simple requirement to amend this or that properly. That decision must be based on provision. A Member State charged with the spirit and purpose of the pre-litigation failure to comply with the Treaty may be procedure. The Court has consistently held expected to do its best to provide an that the purpose of this stage of proceed- explanation, if there is one, and if appropri- ings is 'to delimit the subject-matter of the ate to make good the failure. 20 The first dispute and to indicate to the Member step is a careful reading of the letter of State, which is invited to submit its obser- formal notice and the reasoned opinion. vations, factors enabling it to prepare its defence ... and, second, to enable the Member State to comply before proceed- 17 — See judgment in Case 347/88 Commission v Greece [1990] ings are brought before the Court'. 16 ECU I-4747, paragraph 16. 18 — See Opinion in Case C-230/99 Commission v France [20011 ECR I-1169, point 27 et seq. 19 — Judgment in Case C-296/92 Commission v Italy [1994] 16 —Judgment in Case C-230/99 Commission v France [2001] ECU I-1, paragraph 13 et seq. ECU I-1169, paragraph 31, in particular as regards the 20 — See judgment in Case 272/86 Commission v Greece [1988] letter of formal notice. ECR 4875, paragraph 26 et seq.

21. The application thus modifies the objection which the Commission made during the pre-litigation procedure. It might even be said that only the application (a) Article 7 of Regional Law No 43 of accurately reflects the objection to this Emilia-Romagna of 26 May 1980 provision, while the references in the pre- litigation procedure contain no evidence of impermissible influence in regard to the organisation of trade fairs. Therefore, in 19. In point 2 of the claims in its appli- respect of Article 7 of Regional Law No 43 cation, the Commission objects to the of Emilia-Romagna of 26 May 1980, no whole of Article 7 of Regional Law No 43 proper pre-litigation procedure has been of Emilia-Romagna of 26 May 1980. conducted and the claim set out in point 2 However, in point 54(i) of its application, of the action is thus inadmissible. the Commission mentions only Article 7(a) as a provision contrary to Community law. In the full quotation of the provision in footnote 85, it becomes clear that the Commission means to refer to Article 7, second paragraph, (a), which mentions subsidies for trade fairs organised with the participation of public entities or in the public interest. At most, therefore, the (b) Article 6 of Provincial Law No 35 of the application is admissible in respect of the Autonomous Province of Trento of part of the requirement mentioned in the 2 September 1978 statement of reasons.

22. The Commission made a further error when citing Article 6 of Provincial Law 20. But in addition to this, the letter of No 35 of the Autonomous Province of formal notice and the reasoned opinion, in Trento of 2 September 1978. During the the context of the draft law on intervention pre-litigation procedure and in the plea set

25. In reply to the Court's request for information, both parties acknowledged that: 23. Different considerations apply in so fai- as in the application, the Commission limits the number of provisions it claims are unlawful. For example, with reference to Article 15 of Regional Law of Lombardy — Regional Law of the Marches No 16 of No 45 of 29 April 1980, in the operative 12 March 1979 was revoked in part of the Commission's reasoned opinion Article 20 of Regional Law of the it challenges the whole of Article 15 Marches No 52 of 13 April 1995, and whereas, in the plea in point 1 of the application, it criticises only the third paragraph. Since, under the case-law men- tioned above, the scope of objections may — Regional Law No 75 of Abruzzo of 13 November 1980 was revoked in 21 — It should be noted here that, as regards their content also, Article 18 of Regional Law No 58 of these provisions clearly do not conflict with the freedom to provide services. Abruzzo of 10 September 1993.

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At the time of service of the letter of formal 29. It should be noted, firstly, that such notice of 16 April 1996, the provisions modification of the application is to be objected to in those laws were therefore no regarded as a new reason for the purposes longer in force. of Article 42(2) of the Rules of Procedure. Since it is founded on an element of fact occurring before the judicial proceedings started, it is to be rejected as out of time.

26. The Commission none the less pointed out that a number of provisions of Regional Law of the Marches No 52 of 13 April 1995, and of Regional Law of Abruzzo No 58 of 10 September 1993 follow, more or less word for word, the content of the 30. Nor is the Commission's argument rules to which it objects in the laws convincing on the substance. In its judge- mentioned above. It refers to the judgment ment in Case C-105/91, the Court observed in Case C-105/91, 22which is applicable by that, in an action for failure to fulfil analogy in the present case. obligations, the Commission may challenge legislation which the defendant Member State has adopted only after notification of the reasoned opinion and where such legis- lation as a whole maintains the system originally objected to. 23

35. Nor can the contention that Italy infringed its duty to cooperate construc- tively in proceedings for failure to fulfil obligations in the present case 25 justify 33. On the basis of the case-law referred to, subsequent modification of the subject of alteration of the subject-matter of the the dispute. In principle, the Italian Repub- dispute may be justified only where the lic was required to make an adequate Commission — although using its best response to the first letter of formal notice. endeavours — cannot foresee any change Since a Member State must have knowl- to national law. Furthermore, unless it is edge of its own law, the Italian Govern- possible to modify the subject-matter of the ment should have recognised the Commis- dispute, there would be a risk that Member sion's errors regarding Italian law and States might improperly obstruct proceed- should have referred to these errors in its ings for failure to fulfil obligations. Were response to the letter of formal notice. But, the Member States able to initiate the this (probably negligent) omission by the pre-litigation procedure by revoking the Italian Government is far less serious than contested legislation and embodying it in a repealing and re-enacting contested meas- new law without substantive changes, the ures (normally deliberate) after notification effectiveness of proceedings for failure to of the reasoned opinion. Furthermore, in fulfil obligations would be seriously jeop- the present circumstances, the Commission ardised. may also be accused of contributory, indeed overriding, negligence. Subsequent modification of the application is therefore not permissible.

38. Therefore the repeal of the following laws is of no effect in the proceedings for failure to fulfil obligations:

39. The remaining objections of the Com- mission relate to obligations on organisers of trade fairs and to obligations relating to the fairs. We must therefore first set out the — Regional Law of Liguria No 40 of principles on application of the freedom to 14 July 1978, repealed by Article 19 of provide services and the freedom of estab- Regional Law of Liguria No 8 of lishment as regards the organisation of 9 February 2000; trade fairs.

26 — Judgments in Case C-123/94 Commission v Greece [1995] 27 — Apart from revoking the two instruments specifically ECR 1-1457, paragraph 7, and in Case C-361/95 Com- indicated, this law also revokes all other legislation mission v Spain [1997] ECR 1-7351, paragraph 13 et seq. conflicting with the framework law.

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(1) Preliminary general considerations scope ratione personae of the freedom to provide services thus opens up and the cross-border requirement is satisfied.

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those relating to the right of establishment 46. I agree with the Commission. In dis- do not apply.' 30 tinguishing between freedom to provide services and freedom of establishment, the only decisive point is whether the party concerned is trading temporarily only or is firmly integrated into the economy of the host State. What distinguishes a trade fair or a market is that the event which takes place is restricted to a specific length of time, not more than a few days. The 44. In its reply to the letter of formal organiser of such an event is therefore, in notice, Italy objected that the contested principle, engaged in business only tempor- provisions cannot in fact breach the prin- arily. As the Gebhard judgment held as ciple of freedom to provide services because regards members of the legal profession, they do not apply to services to individuals this applies also where the organiser in Italy but to the general organisation of trade sets up with a certain level of infrastruc- fairs. That activity is directed at an unspeci- ture. 32 fied group of fellow traders and depends on the organiser's right of access, at least temporarily, over the area used for the fair. The principle of freedom of establishment therefore applies, whilst the freedom to provide services only comes into play in respect of individuals who offer support services for the fairs (for example, the setting-up of stands at the fairs, support and consultancy or secretarial services) 47. There is no need to clarify here where which are not restricted in Italian law. precisely the dividing line is to be drawn, where fairs are held with frequency, as between an organiser of fairs operating only occasionally in a Member State and an organiser who is established there.

49. In its reply to the Commission's letter 52. Nor is the fact that organising trade of formal notice the Italian Republic did fairs is a non-profit-making activity attribu- note that neither the principle of freedom table to the nature of the activity: it is of establishment, within the meaning of the simply a requirement of Italian law. As second paragraph of Article 58 of the EC such, that requirement is likely to restrict 33 Treaty (now the second paragraph of the freedom to provide services but it Article 48 EC), nor — pursuant to the cannot exclude its applicability altogether. cross-reference in Article 66 of the EC Treaty (now Article 55 EC) — the free- dom to provide services apply to non-profit companies. However, since only non-profit entrepreneurs may organise trade fairs or markets, in this case — the Italian Govern- ment maintains — the provisions on free- (d) Provisions derogating from Article 55 of dom to provide services are not applicable. the EC Treaty

53. In its reply to the letter of formal notice, the Italian Government had first objected that the organisation of trade fairs did not fall within the scope of the freedom 50. The Commission points out here that to provide services at all because Article 55 the Member States may not make certain of the EC Treaty, read together with sectors subject to exceptional rules by Article 66 of the EC Treaty (now permitting only service providers who fall Articles 45 EC and 55 EC respectively), within an exception. excludes activities which are connected with the exercise of official authority. The Commission believes that Article 55 of the EC Treaty is not relevant.

direct and specific participation in the only the elimination of any discrimination exercise of official authority. 34 The Court against a service provider established in has not given a conclusive definition of the another Member State on the basis of his exercise of official authority, but it is clear nationality but also the removal of any that merely having regard to the common restriction, even where that is applied interest is not sufficient to suppose a without distinction to national providers presumption of official authority. Rather, and those of other Member States, where it there must as a rule be authority to take is such as to prohibit, hinder or render less final official decisions that are capable of attractive the activities of the provider affecting the freedom of private persons. 35 established in another Member State where Although the organisation of trade fairs he lawfully provides similar services'. 36 may serve the common interest, the orga- nisers do not in principle have to take any official decisions. The organisation of trade fairs therefore does not constitute an offi- cial activity. 57. The Court has also ruled:

(e) Treatment of obstruction of the relevant fundamental freedoms and of the justifi- cation for this 'Secondly, the freedom to provide services, being a fundamental principle of the Treaty, may be restricted only by means of rules that are justified by overriding 55. The freedom to provide services and reasons relating to the public interest the freedom of establishment prohibit applicable to every person or undertaking unjustified discrimination and restrictions. pursuing an activity within the territory of the host Member State. Furthermore, in order to be so justified, the national legis- lation concerned must be capable of guar- anteeing attainment of the end pursued and not go beyond what is required to attain 56. Regarding the freedom to provide ser- that end'. 37 vices, the Court has most recently found as follows:

60. By way of clarification, it should be 59. Similar criteria apply to the freedom of added that special rules for foreigners can establishment, with the exception of the be justified only on the basis of Article 56(1) requirement to have regard to the rules to of the EC Treaty (now, after amendment, which the service provider is subject in the Article 46(1) EC), whereas overriding rea- State of origin: sons relating to the public interest are capable of justifying all other possible restrictions. The concept of overriding reasons relating to the public interest is to be construed in such a wide sense as to include the grounds set out in Article 56(1) of the EC Treaty: public policy, public 'Under the second paragraph of Article 52 security or public health. 40 of the Treaty, exercise of the freedom of establishment is subject to the conditions laid down for its own nationals by the law of the country of establishment. As a result, where access to or exercise of a specific activity is subject within the host Member State to certain rules, a citizen of another 61. Specifically, it will be seen that the Member State intending to pursue that contested Italian provisions do not create activity must as a rule meet the require- any overt discrimination, and no justifi- ments laid down in those rules. ... cation is therefore required under Article 56 of the EC Treaty.

The case-law of the Court shows however 62. In justification of the contested legis- that, to be justified, national measures lation, Italy essentially argued that trade restricting or rendering less attractive the fairs must be properly conducted, making a exercise of the fundamental freedoms guar- special point of the dangers to the health anteed by the Treaty must meet four con- and security of trade-fair visitors, particu- ditions: to be applied without discrimi- larly where a considerable number of nation, to satisfy overriding reasons relat- persons visit the site of the fair for a limited ing to the public interest, to be such as to time. Fairs must also be compatible with guarantee attainment of the end pursued

local conditions and with any other events Treaty (now Article 86(2) EC), its argu- to take place in the area. Traffic and ments in the reply to the Commission's environmental aspects must be taken into letter of formal notice show that it does account. That is why trade fairs are regu- regard trade fairs as services of general lated by the State in other Member States economic interest. For the purposes of too. Article 90(2) of the EC Treaty, the rules in the Treaty apply to undertakings entrusted with the operation of services of general economic interest, provided that the application of those rules does not obstruct the performance, in law or in fact, 63. The Commission rejects this viewpoint of the particular tasks assigned to them. In under each head of the objections. fact the most recent case-law makes use of this requirement also as a justification within the sphere of the fundamental free- doms. 41 It is therefore also necessary to examine how far this provision — in the light of the contested Italian legislation — excludes application of the fundamental 64. The interest in ensuring that trade fairs freedoms. are conducted in a manner compatible with public order is in principle worthy of protection. Ensuring that a trade fair does not disrupt local traffic, the reliability of the fair organisers and the security of the site justify measures by the public auth- orities. Simple restrictions on the freedom to provide services or the freedom of establishment, or legislation creating covert discrimination must therefore be scruti- nised to determine whether they are justi- fied by overriding reasons relating to the public interest. 66. In its interpretative communication concerning the application of the Single Market rules to the sector of fairs and exhibitions, the Commission describes these latter as the concrete expression of the market concept. 42 Trade fairs are also described as an instrument to promote sales, complementary to advertising, since (f) The organisation of trade fairs as a they bring together the demand for and provision of services of general economic supply of products exhibited in an atmos- interest phere that is propitious to the operators. They afford the participants an opportunity

67. So, it has been said in the Opinion in 71. Article 90(2) of the EC Treaty is Agorà, regarding application of the law on capable of justifying the imposition of public tenders, the organisation of a fair conditions on private organisers or on the can be of general interest. 43 fairs that they conduct only if those con- ditions relate to any consequences 'private' fairs may have for 'official' fairs which might compromise the provision of the services that are in the general economic interest. 68. The organisation of trade fairs can therefore essentially be regarded, like the provision of other infrastructures, as a provision of services of general economic interest. 72. The Italian argument might therefore be taken to mean that the entire system of Italian law on trade fairs is intended to allow only fairs of general economic inter- est conducted by 'public persons' of a 69. Therefore, the Member States may particular type, in a manner that is par- adopt measures vis-à-vis trade-fair orga- ticularly suited to serving the public inter- nisers which have been given responsibility est. The Italian Government's argument for conducting fairs that are incompatible could have been persuasive only if it had with the fundamental freedoms if those shown that it is not possible to ensure the measures are necessary to ensure the con- adequate provision of fairs in Italy by less duct of such 'official' fairs. strict measures. This it has not done.

70. However, it must also be remembered that trade fairs do not necessarily have to 73. If we consider the disputed legislation be conducted exclusively as a provision of in isolation, such justification is conceiv- services of general economic interest, char- able only in regard to the inclusion of trade-fair events in an official calendar. 44

— Article 2, first paragraph, of Decree — Article 5, first paragraph, of Provincial Law No 454 of 29 January 1934, as Law No 35 of the Autonomous Prov- amended by Article 2, first paragraph, ince of Trento of 2 September 1978, of Presidential Decree No 7 of under which trade fairs and markets 15 January 1972, under which entities can be organised by public and private established to organise trade fairs of entities, provided these are officially national and international standing recognised;

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— Article 7 of Regional Law of the offered any evidence to show that recogni- Veneto No 35 of 2 August 1988, under tion does not, in practice, prevent exercise which entities which wish to organise of the freedom to provide services. trade fairs and markets must obtain official recognition from the President of the Regional Council;

78. It is possible to plead by way of justification the public interest in ensuring — Article 4(1 )(c) of Regional Law of that a trade fair is conducted properly, Lombardy No 45 of 29 April 1980, since a recognition procedure is in principle under which trade-fair events may a good way of assessing the reliability of a legally be organised by private entities trade-fair organiser. recognised by the Region.

81. The Commission's first plea is therefore valid.

84. Therefore the second plea also is valid.

(b) Limitation on the permissible legal form of a trade-fair organiser (c) Requirement of a permanent establish- ment

82. The Commission raises this objection 85. The Commission challenges two only in relation to Article 4 of Regional regional provisions that prescribe con- Law No 43 of Emilia-Romagna of 26 May ditions of establishment for trade-fair orga- 1980. This provision, revoked in 2000, nisers: provides that markets and fairs may be organised only by legal persons recognised under Article 8 (bodies established for that purpose within the region), other public entities, organisations directly established by the trade associations, private associ- ations and by committees with other — Article 15, third paragraph, of objects. Regional Law of Lombardy No 45 of 29 April 1980 under which, for private persons to be recognised as organisers 47 — On the conditions that Italy's arguments should satisfy, see above, in point 78. of regional, national or international

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89. But this restriction is not discrimina- 86. The Commission maintains that this tory. If the requirement to set up an latter provision is to be taken in the sense establishment were restricted to Italy, it that an office is required within the Region. would have to be regarded as discrimina- That interpretation is plausible, in particu- tory since all Italian organisers would lar, because the rule does not refer to the necessarily satisfy that condition whereas organiser but to the trade fair itself which foreign organisers could satisfy it only in will, necessarily, be taking place within that exceptional cases. But the requirement here region. Since Italy did not challenge that is to establish an office in the region view, the rule must be considered as so concerned, which not even Italian orga- interpreted. nisers would necessarily satisfy. There is therefore no need to have recourse to Article 56 of the EC Treaty as a justifi- cation. Consideration must rather be given to whether there is a justification based on overriding reasons of general interest. 87. According to the Commission, the requirement to have a permanent establish- ment within the host State in principle, constitutes a restriction on the freedom to provide services 48 affecting foreign pro- 90. It must be pointed out here that having viders. It is precisely in the case of occa- a trading office where the fair takes place is sional and short-term events, such as the likely to be conducive to the trade-fair organisation of a trade fair or market, that 49 — See also judgments in Case 205/84 Commission v Ger- many (1986) ECR 3755, paragraph 52, and in Commis- 48 — The Commission refers to the judgment in Case C-222/95 sion v Belgium (cited in footnote 38), paragraphs 27 and Parodi [1997] ECR I-3899, paragraph 31. 31 et seq.

— Article 4(1)(c) of Regional Law of 50 — The Commission refers only to the first paragraph of this Lombardy No 45 of 29 April 1980; Article, and not to the second and third.

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incompatible with the organisation of trade — Article 6(1)(e), (f), and (h) of Regional fairs or of a specific fair for overriding Law of the Veneto No 35 of 2 August reasons of general interest. Examples might 1988; be activities which lead the organiser to deal unfairly with certain potential exhibitors for ideological or economic reasons. There must however be a less severe means of determining on a case-by- case basis whether an organiser's other — Article 4 of Regional Law No 10 of activities are compatible with organising Friuli Venezia Giulia of 23 February trade fairs or markets. 1981;

— Article 3, Article 5 and Article 12 of Provincial Law No 35 of the Auton- 96. This plea also is therefore valid. omous Province of Trento of 2 September 1978;

— Article 4 of Regional Law of Liguria No 40 of 14 July 1978; (e) Prohibition on profit-making

99. The Commission considers that the prohibition on profit-making discriminates against organisers from other Member States. Italian profit-making organisers may choose not to pursue their business in that region or to establish a non-profit associate there. Profit-making organisers (ii) Justification from other Member States face insur- mountable obstacles. They incur higher costs but cannot expect any economic 'return'. 102. The Commission notes that a require- ment like that above is always dispropor- tionate. This is because — as the absence of any requirement of this type in the national law indicates — the general inter- est does not require organisers of trade fairs 100. However, it is not clear here why to work without a profit motive. Italian organisers should in principle be treated more favourably than organisers from other Member States. The only obvious beneficiaries of the requirement appear to be established non-profit trade- fair organisers. All profit-making orga- nisers, on the other hand, who are banned 103. That argument is not convincing in so from organising fairs, are placed at a far as Article 117 of the Italian Constitu- disadvantage. The fact that Italian orga- tion assigns legislative power to the nisers probably incur lower costs and, Regions and it is not clear why this because they are closer, perhaps also derive requirement had to be laid down in the other benefits from non-profit activities framework law as a matter of urgency. does not of itself constitute discrimination. The advantage of being closer is rather an inevitable result of their location. The prohibition on profit-making therefore has no discriminatory effect. 104. But the Commission's conclusion must be right. There is no reason why 51 — See above, point 49 et seq. non-profit organisers should enjoy greater

— Article 3 of Presidential Decree No 7 of 15 January 1972: under this, the gov- erning boards of bodies which organise international trade fairs must include two members appointed by the — Article 8, second paragraph, and Regional Council of the region within Article 11(a), (b), (c) and (d) of which the fair is held. One of the Regional Law No 43 of Emilia-Rom- regional representatives must sit on the agna of 26 May 1980, under which the executive board of the entity and the president and the governing board of other must sit on the board of auditors. the organising entity must be appointed Three members of the governing board in a Decree of the President of the of entities set up to organise trade fairs Regional Council, and

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52 — The Italian Republic uses the term 'soggetti pubblici 109. The Commission says the State's italiani'. improper interference in the composition 53 — See, for example, Article 4 of Regional Law No 43 of Emilia-Romagna of 26 May 1980 and Article 3 of of trade-fair organisers is a restriction on Regional Law No 10 of Friuli Venezia Giulia of 23 February 1981, which expressly refer to legal persons the freedom to provide services. In seeking under public or private law.

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Justification of the prescribed structures are restricted in that they are required to tolerate the presence of outsiders who must be allowed to participate in their decision-making.

111. The Commission perceives no over- riding reason of general interest in main- taining these provisions and points out in particular that it is sufficient in order for 115. The Commission is right as regards the State to exercise the requisite control the restriction. Clearly the requirement to over these events that its control be exer- have outsiders on the board or to appoint a cised from outside. board at all is likely to deter companies from exercising the freedom of establish- ment.

112. However here again it could be countered that there is a public interest in trade fairs being managed properly which 116. This restriction on the freedom of must in principle be protected. But the establishment is no more justifiable than conditions imposed here are disproportion- that on the freedom to provide services.544 ate. A reasonable degree of State control may be exercised through supervisory auth- orities that are not directly represented on the boards of the trade-fair organisers.

124. The rule does not create open dis- crimination as it is not expressly connected (3) Conditions for individual trade-fair with nationality. However, it is less oner- events ous for a national than a non-national to have to hold a further trade fair solely to meet a periodicity requirement. An appli- cant from another Member State who wishes to organise a fair or a market in 121. Next the Commission maintains that various requirements laid down for indi- 55 — Article 8, last paragraph, of Regional Law No 10 of Friuli vidual trade-fair events infringe the free- Venezia Giulia of 23 February 1981 at least also includes a similar provision but the Commission has not objected to dom to provide services. that in this context.

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(i) Restriction one', because the plans are liable to be altered at regular intervals, the power is not necessarily uncertain in scope. The only decisive point is whether a citizen is in an unambiguous position in law. That means 130. The Commission maintains that it is the provisions must be made accessible to much more difficult for a foreign trade-fair those to whom they are addressed by organiser than for a national organiser to publication through the normal channels. keep abreast of the relevant provisions in The Commission did not claim this did not national or regional legislation. Fur- happen. Consequently, the legislative tech- thermore, the requirements relating to nique used in referring to regional plans economic objectives at national and does not constitute an infringement of the regional level contain a power, the scope principle of the freedom to provide ser- of which is uncertain, to refuse permission vices. and are unlawful because a (foreign) oper- ator may receive a refusal the validity of which he cannot verify.

133. Rather it is the fact that trade fair organisers are required to adjust to regional 131. Neither line of argument is convinc- and national economic plans in the area of ing. Undertakings with no permanent trade fairs that constitutes an infringement establishment in Italy naturally find it of the principle of the freedom to provide harder to obtain information in Italy. That services. Potential trade fairs that do not does not constitute discrimination. 56 correspond to such plans have no chance of coming to fruition. That is a substantial restriction on the freedom to provide ser- vices.

139. The need to comply with precise (c) Deadlines for applications for auth- deadlines applies in the same way to Italian orisation and foreign entities. At most there might be covert discrimination, to which the Com- mission also appears to point in stressing that it is more difficult for foreigners to meet these deadlines. However, on the view now propounded the claim of a need for 137. The Commission challenges Article 2 greater effort on the part of outlay for of Presidential Decree No 390 of 18 April foreign operators is not sufficient for a 1994. The fourth paragraph of that article, finding of indirect discrimination. 57 repealed in January 2001, provides that applications for the status of trade fair of international standing must be made to the 57 — The same arguments apply here as above, in points 100 competent authorities not later than and 131.

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140. The requirement to submit an appli- 143. This plea is therefore likewise well cation two years in advance is none the less founded. an obstacle to the organisation of trade-fair events. It is scarcely possible for undertak- ings to decide whether, after such a lengthy period of time, it is still worthwhile orga- nising a trade fair. It may be that the preparations for a fair do actually require such a long time period. Preparing the preparation of a fair and, in particular, the (d) Provisions requiring, in respect of the time when a binding commitment is under- organisation of a trade fair, inclusion of taken in regard to its organisation, are none particulars in an official calendar the less essentially matters within the responsibility of the organiser and not of the authorising body. In those circum- stances there is a restriction. 144. In this connection the Commission is challenging two provisions:

146. The latter provision is closely linked with the preceding one, because only those events which have completed the auth- orisation procedure, in compliance with all 149. In its interpretative communication the due dates are included in the official concerning the application of the Single calendar. In regard to substantiation of a Market rules to the sector of fairs and restriction on freedom to provide services exhibitions, the Commission itself reference may be made in general to the acknowledges explicitly that that interest matters set out above. deserves protection:

151. Article 15(3) of Regional Law No 43 of Emilia-Romagna of 26 May 1980 also appears to provide, in this connection, that 155. Those are the following provisions: the regional authorities may propose a change of dates where a trade fair competes as to timing with similar or identical events.

— Article 6, third paragraph, points 3 and 4 of Regional Law No 43/80 of Emilia- Romagna of 26 May 1980 under which, as part of the authorisation procedure, the relevant regional trade 152. Therefore the need for inclusion in an associations had first to be consulted official calendar is essentially justified by and, in addition, a favourable opinion the aim of ensuring the effectiveness of had to be obtained from the munici- trade-fair events as services provided in the pality concerned and an opinion from general economic interest. The Commission the regional union of chambers of has not specifically demonstrated that the commerce; Italian legislation is inappropriate, unnecessary or unreasonable for the pur- poses of securing that objective.

— Articles 6, 7 and 23 of Provincial Law No 35 of the Autonomous Province of Trento of 2 September 1978, under which the commission with compet- ence to regulate and promote trade-fair 153. This objection by the Commission events must — among its other must therefore be rejected. members — include a representative

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159. A particularly clear privilege favour- 162. Moreover, the Commission does not ing national organisers stems from the point to any actual cases in which the grant of official subsidies only to under- legislation cited has led to discrimination takings in whose incorporation public against organisers of trade fairs. Examin- bodies were involved, as, for example, ation of this allegation must therefore be provided for in Provincial Law No 35 of restricted to the objection that the institu- the Autonomous Province of Trento of tional structures create a disadvantage for 2 September 1978. Hence the assertion that organisers from other Member States. the competent authorities make impartial and fair decisions does not carry convic- tion.

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freedom, or make it less attractive, where bodies in appointments to leading positions direct competitors of the trade-fair event in regional trade-fair entities or concerning organisers participate. They might seek to the rules on the grant of subsidies lead to delay important decisions, they might pro- any different result. pose excessive restrictions or they might obtain information of relevance to compe- tition. However, such intervention is pro- vided for only in Article 14 of Regional Law No 10 of Friuli Venezia Giulia of 23 February 1981. 169. Involvement in appointments to lead- ing positions by competing undertakings does not result in those bodies being equated to competitors of the trade-fair entities: it does not follow from that involvement that those bodies also have an economic interest in the success of 166. Neither overriding reasons of general regional trade-fair entities. As regards the interest nor the possible assignment to these rules on the grant of subsidies, their competing trade-fair entities of services of discriminatory effect stems not from the general economic interest can justify such involvement of the representatives of the an infringement of the fundamental free- economic sector but solely from the doms. restrictive provisions of the law concerned.

167. Conversely, the intervention of gen- 170. Consequently, the Commission has eral business representatives or of represen- not been able to demonstrate that the tatives of the parties concerned in a fair involvement of regional business represen- cannot be regarded as an infringement in tatives in official decisions relating to the every case. Such groups might bring valu- management of trade fairs constitutes an able knowledge and experience to the infringement of the principle of freedom to procedure. Accordingly, there may be an provide services or of freedom of establish- infringement of the fundamental freedoms ment. only if it is possible to document actual cases where such intervention has operated to the detriment of trade-fair organisers from other Member States.

(1) The Italian Republic has failed to fulfil its obligations under Article 59 et seq. of the EC Treaty (now, after amendment, Article 49 EC et seq.) by retaining the following provisions:

— Article 2, first paragraph, of Decree Law N o 454 of 29 January 1934;

— Article 2, first paragraph, of Presidential Decree N o 7 of 15 January 1972;

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— Article 2, paragraphs 4, 6 and 7 of Presidential Decree No 390 of 18 April 1994;

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(2) The Italian Republic has failed to fulfil its obligations under Article 52 et seq. of the EC Treaty (now, after amendment, Article 43 EC et seq.) and Article 59 et seq. of the EC Treaty by retaining the following provisions:

— Article 3 of Presidential Decree No 7 of 15 January 1972;

— Article 2(c) and (d), Article 3, first paragraph, (b) and (c), and Article 5, first paragraph, (a) of Regional Law No 12 of Liguria of 3 November 1972;

— Article 8(1) of Regional Law No 35 of the Veneto of 2 August 1988;

— Article 8, second paragraph, and Article 11, first paragraph, (a), (b), (c) and (d) of Regional Law No 43 of Emilia-Romagna of 26 May 1980;