In its Judgment of 12 December 2013 in case C-327/12 Soa Nazionale Costruttori, the Court of Justice of the EU has followed rather closely AG Cruz Villalon's Opinion (commented here) and declared that a scheme of compulsory minimum tariffs for certification services supplied to undertakings seeking to participate in procedures for the award of public contracts is not per se contrary to EU competition and free movement rules, always provided that it is not disproportionate (which determination it referred back to the domestic courts).
One of the remarkable features of the Judgment is the level of detail in which the CJEU has summarised its State action doctrine. In this useful reminder, the CJEU has stressed that
37 [...] although it is true that Articles 101 TFEU and 102 TFEU are concerned solely with the conduct of undertakings and not with laws or regulations emanating from Member States, those articles, read in conjunction with Article 4(3) TEU, which lays down a duty of cooperation between the European Union and the Member States, none the less require the latter not to introduce or maintain in force measures, even of a legislative or regulatory nature, which may render ineffective the competition rules applicable to undertakings (see Joined Cases C‑94/04 and C‑202/94 Cipolla and Others [2006] ECR I‑11421, paragraph 46, and Case C‑393/08 Sbarigia [2010] ECR I‑6337, paragraph 31).
38 Articles 101 TFEU or 102 TFEU, read in conjunction with Article 4(3) TEU, are infringed where a Member State requires or encourages the adoption of agreements, decisions or concerted practices contrary to Article 101 TFEU or reinforces their effects, or where it divests its own rules of the character of legislation by delegating to private economic operators responsibility for taking decisions affecting the economic sphere, or requires or encourages abuses of a dominant position (see, to that effect, Cipolla and Others, paragraph 47) [C-327/12 at paras 37-38, emphasis added].
Further than this, and after dismissing the applicability of the State action doctrine on the basis of a lack of evidence of the existence of such effects--which is at least questionable where we are in presence of a de facto agreement on minimum prices between certification entities--the CJEU rejects the application of Art 106 TFEU on the basis that the authorisation given by the Italian State to the certification entities is not an exclusive or special right because there is no numerus clausus of authorisations. On this point, the CJEU must be praised for sticking to its stated case law in Ambulanz Glockner and not accepting the rather counterintuitive remarks made by the AG in his Opinion (criticised here).
Finally, and looking at the compatibility with freedom of establishment rules (art 49 TFEU), in the Soa Nazionale Construttori Judgment, the CJEU has followed very closely the Opinion of the Advocate General and accepted some premises for the existence of mandatory public procurement certification schemes subject to (non-disproportionate) minimum tariffs that I find objectionable. In particular, I think that the CJEU should have avoided declaring such a system adequate to protect a public interest in the following terms:59 A restriction on the freedom of establishment may be justified where it serves overriding requirements relating to the public interest, is suitable for securing the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain it (see DKV Belgium, paragraph 38).
60 Unionsoa and the Italian Government consider that the national legislation at issue in the main proceedings seeks to ensure the independence of SOAs and the quality of the certification services which they supply. Competition between SOAs at the level of tariffs negotiated with their customers and the possibility of fixing those tariffs at a very low level would risk compromising their independence with respect to those customers and having a negative impact on the quality of the certification services.
61 In that regard, it must be observed that the public interest in the protection of recipients of services can justify a restriction on the freedom of establishment (see Case C‑451/03 Servizi Ausiliari Dottori Commercialisti [2006] ECR I‑2941, paragraph 38).
62 In this case, first, SOAs are entrusted with certification of undertakings, receipt of an appropriate certificate being a necessary condition in order for the undertakings concerned to participate in public works contracts. In that context, the Italian legislation seeks to ensure the lack of any commercial or financial interest such as to result in unimpartial or discriminatory behaviour on the part of SOAs with regard to those undertakings.
63 Secondly, as is apparent from the order for reference, SOAs may only carry out certification activities. Moreover, they are required, in accordance with national legislation, to have resources and procedures suitable for ensuring that their services are carried out effectively and in good faith.
64 It is with a view to protecting the recipients of the services that the independence of SOAs vis-à-vis the specific interests of their customers is particularly important. A certain restriction of the possibility to negotiate the prices of services with those customers is likely to strengthen their independence.
65 In those circumstances, it must be held, as the Advocate General essentially stated in point 58 of his Opinion, that the setting of minimum tariffs for the supply of such services is intended, in principle, to ensure the quality of those services and it is suitable for attaining the objective of protecting the recipients of those services [C-327/12 at paras 59-65, emphasis added].
In my view, the CJEU's position is exceedingly lenient. Particularly if one takes into consideration that the ultimate "beneficiaries" of the certification services (i.e.the Italian contracting authorities) cannot impose the provision of those certificates to all entities willing to participate in their tenders for public contracts. Under Art 52(5) of Directive 2004/18 (the same provision that allows for the creation of certification entities such as the Italian SOAs) it is clearly stated that 'economic operators from other Member States may not be obliged to undergo such
registration or certification in order to participate in a public contract. The
contracting authorities shall recognise equivalent certificates from bodies
established in other Member States. They shall also accept other equivalent
means of proof' (emphasis added). So, even if only in relation to non-national undertakings, it is clear that contracting authorities need to retain independent capacity to assess alternative methods of proof of suitability of tenderers. Moreover, under Art 52(4), contracting authorities can challenge the certifications (or the information derived therefrom) as long as they have a sufficient reason to distrust it. Therefore, their reliance on the certificates (of domestic) tenderers is not intended to be acritical or necessarily automatic if there are reasons that justify a request for further information.
Consequently, the creation of systems of mandatory certification seem to protect a weak public interest inasmuch as they are simply a mechanism of administrative simplification (or red tape reduction). If this is borne in mind, the reasoning based on the independence of the certifying entities and the need to set minimum prices in order to preserve it so that contracting authorities' interests are sufficiently protected seems to fade away rather quickly.
Moreover, the CJEU's lukewarm approach to the proportionality of the Italian minimum certification tariffs (which is limited to indicate that 'It is for the referring court to determine whether, in the light of, inter alia, the method of calculating the minimum tariffs, particularly in the light of the number of categories of work for which the certificate is drawn up, that national legislation goes beyond what is necessary to attain that objective', para 69) does not establish a sufficiently clear indication of the lack of proportionality of a system that, effectively, forces (!) certification entities to charge larger sums for exactly the same amount of work depending on the number of contracts the certified undertaking wants to tender for. In this regard, the Opinon of Advocate General Cruz Villalon is much more detailed and convincing.
All in all, in my view, this is a formally correct and substantially very deficient Judgment of the CJEU, and one that keeps a very formal approach to restrictions on free movement (as the CJEU has only looked at restrictions on the freedom of establishment, forgetting completely about the implications of the system on the free movement of goods and free provision of services subjected to the EU public procurement rules). A more holistic and funcional approach would have been preferable.
