Judgments nº T-289/03 of Court of First Instance of the European Communities, February 12, 2008

• Resolution Date: February 12, 2008
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-289/03

In Case T-289/03,

British United Provident Association Ltd (BUPA), established in London (United Kingdom),

BUPA Insurance Ltd, established in London,

BUPA Ireland Ltd, established in Dublin (Ireland),

represented by N. Green QC, K. Bacon and J. Burke, Barristers, and B. Amory, lawyer,

applicants,

v

Commission of the European Communities, represented initially by N. Khan and J. Flett, then by N. Kahn and T. Scharf, acting as Agents,

defendant,

supported by

Kingdom of the Netherlands, represented by N. Bel, acting as Agent,

by

Ireland, represented by D. Hagan, acting as Agent, with G. Hogan SC and E. Regan, Barrister,

and by

Voluntary Health Insurance Board, established in Dublin, represented by D. Collins, G. FitzGerald and D. Clarke, Solicitors, and P. Gallagher SC,

interveners,

APPLICATION by, inter alia, BUPA Ireland Ltd, a provider of private medical insurance services in Ireland, for annulment of the Commission-s Decision C(2003) 1322 final of 13 May 2003 not to raise objections, under Article 4(2) and (3) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1), concerning the establishment of a risk equalisation scheme (RES) in the Irish health insurance market (State aid N 46/2003 - Ireland),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Third Chamber, Extended Composition),

composed of M. Jaeger, President, V. Tiili, J. Azizi, E. Cremona and O. Czúcz, Judges,

Registrar: J. Palacio González, Principal Administrator,

having regard to the written procedure and further to the hearing on 7 March 2007,

gives the following

Judgment

Legal background

I - Treaty provisions

1 Article 16 EC provides:

-Without prejudice to Articles 73, 86 and 87, and given the place occupied by services of general economic interest in the shared values of the Union as well as their role in promoting social and territorial cohesion, the Community and the Member States, each within their respective powers and within the scope of application of this Treaty, shall take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions.-

2 Under the first paragraph of Article 43 EC: -[R]estrictions on the freedom of establishment of nationals of a Member States in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.-

3 Pursuant to the first paragraph of Article 49 EC, -restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended-.

4 Article 86 EC provides:

-1. In the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in this Treaty, in particular to those rules provided for in Article 12 and Articles 81 to 89.

2. Undertakings entrusted with the operation of services of general economic interest - shall be subject to the rules contained in the Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Community.

3. The Commission shall ensure the application of the provisions of this Article and shall, where necessary, address appropriate directives or decisions to Member States.-

   5 Article 87(1) EC provides:

   -Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.-

   6 Article 88(2) and (3) EC provides:

   -2. If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the common market having regard to Article 87, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission.

   -

3. The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 87, it shall without delay initiate the proceedings provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.-

   7 Article 152(1) and (5) EC provides:

   -1. A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities.

   Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health. -

   -

5. Community action in the field of public health shall fully respect the responsibilities of the Member States for the organisation and delivery of health services and medical care. --

   II - Regulation (EC) No 659/1999

   8 Article 4(3) and (4) of Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1) provides:

   -3. Where the Commission, after a preliminary examination, finds that no doubts are raised as to the compatibility with the common market of a notified measure, in so far as it falls within the scope of Article [87](1) [EC], it shall decide that the measure is compatible with the common market (hereinafter referred to as a -decision not to raise objections-). The decision shall specify which exception under the Treaty has been applied.

4. Where the Commission, after a preliminary examination, finds that doubts are raised as to the compatibility with the common market of a notified measure, it shall decide to initiate proceedings pursuant to Article [88](2) [EC] (hereinafter referred to as a -decision to initiate the formal investigation procedure-).-

   III - Directive 92/49/EEC

   9 Article 54(1) of Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (OJ 1992 L 228, p. 1; -the third non-life insurance directive-) provides:

   -Notwithstanding any provision to the contrary, a Member State in which contracts covering the risks in class 2 of point A of the Annex to Directive 73/239/EEC may serve as a partial or complete alternative to health cover provided by the statutory social security system may require that those contracts comply with the specific legal provisions adopted by that Member State to protect the general good in that class of insurance, and that the general and special conditions of that insurance be communicated to the competent authorities of that Member State before use.-

   IV - Communication from the Commission on services of general interest in Europe

   10 According to point 14 of the communication from the Commission on services of general interest in Europe (OJ 2001 C 17, p. 4, -the communication on services of general interest-):

   -Services of general economic interest are different from ordinary services in that public authorities consider that they need to be provided even where the market may not have sufficient incentives to do so. - [I]f the public authorities consider that certain services are in the general interest and market forces may not result in a satisfactory provision, they can lay down a number of specific service provisions to meet these needs in the form of service of general interest obligations. - The classical case is the universal service obligation - [that is to say] the obligation to provide a certain service throughout the territory at affordable tariffs and on similar quality conditions, irrespective of the profitability of individual operations.-

   11 Point 15 of the communication on services of general interest states:

   -Public authorities may decide to apply general interest obligations on all operators in a market or, in some cases, to designate one or a limited number of operators with specific obligations, without granting special or exclusive rights. In this way, the greatest competition is allowed and users retain maximum freedom with regard to choice of service provider. --

   12 Point 22 of the communication on services of general interest is worded as follows:

   -Member States- freedom to define [services of general economic interest] means that Member States are primarily responsible for defining what they regard as [such] services - on the basis of the specific features of the activities. This definition can only be subject to control for manifest error. They may grant special or exclusive rights that are necessary to the undertakings entrusted with their operation, regulate their activities and, where appropriate, fund them. In areas that are not specifically covered by Community regulation Member States enjoy a wide margin for shaping their policies, which can only be subject to control for manifest error. Whether a service is to be regarded as a service of general interest and how it should be operated are issues that are first and foremost decided locally. The role of the Commission is to ensure that the means employed are compatible with Community law. However, in every...