The series on the preliminary ruling C-348/22 Comune di Ginosa include a rich diversity of comments by European and administrative law scholars, each of whom has been able to grasp, according to their own sensitivity, some remarkable aspects from the point of view of EU law as direct effect (see. F. Liguori, Realaw blog), automatic extension, scarcity of resources (C. Burelli, Realaw blog) and comparative analysis as a tool for better understanding solutions from other jurisdictions and their potential transferability to different contexts (M. P. Chiti, Diritto amministrativo europeo, Torino: Giuffrè, 2008, 172). Consequently, the knowledge of other legal systems facilitates the transposition of legal institutions from one legal system to another, as well as normative and jurisprudential solutions to similar problems arising in different contexts, according to a functionalist approach. In fact, this alone reveals a great deal about the importance and function of the reference for a preliminary ruling, and also about the (European) relevance of the issue of beach concessions. In the opinion of the present author, although the analysis of some specific countries, such as Spain, Portugal, and France, reveals different contexts in an internal market without borders, it cannot be denied that the problem of the economic exploitation of activities falling under the scope of the Services Directive (C. Barnard, The substantive Law of the EU, Oxford: OUP, 2022, 454) exercised on beaches requires administrative interventions in compliance with common rules, to ensure the compatibility of national law with the EU law, as it is supposed is going to happen also in Greece (M. Rodopoulos, Realaw blog).
This is the starting point: we need common rules to regulate the authorisation procedure, to define its subject matter, its duration and the exceptions thereupon, for example, to the existence of scarce resources (C. Burelli, Realaw blog) as well as the reopening of ongoing concessions to competition (M. Cirotteau, Realaw blog). Respect for the principle of equality is not only a principle that inspires EU law and administrative action, but it is also subsidiary to the supply and demand in the services market and also in providing access to the sea for all. It is therefore inevitable that the problem of the exercise of service activities exploiting natural resources should also be addressed at European level, without neglecting the specificities of the national context, so as to allow for progressive harmonisation in the management and regulation of similar situations in service activities…
Authorization schemes: a definitory issue?
A common trend emerges from reading the Comune di Ginosa judgment and the comments of this series: the Services Directive has had a huge impact on institutions of national administrative law (for instance in Italy, Spain, Portugal) and on the duration and the renewal of many administrative regimes (P. Bogdanowicz, Realaw blog). Again, Directive 2006/123/EC (Chapter III), provides for the progressive reduction of authorisation schemes since making a service subject to authorisation leads to delays and restricts. According to article 4 (6) an authorisation scheme is defined as “any procedure under which a provider or recipient is in effect required to take steps in order to obtain from a competent authority a formal decision, or an implied decision, concerning access to a service activity or the exercise thereof”. Consequently, the authorisation system must be non-discriminatory as regards the provider and, in any event, may be maintained only if the objective cannot be achieved by a less restrictive measure: the need for such a measure must therefore be justified by the existence of a public interest to be protected. The requirement of prior administrative authorisation “must in any event, be based on objective, non-discriminatory criteria which are known in advance to the undertakings concerned, in such a way as to circumscribe the exercise of the national authorities’ discretion, so that it is not used arbitrarily” (C-205/99, Analir, 38). Again authorization scheme “is thus distinct from a ‘requirement’ within the meaning of Article 4(7) of that directive, inasmuch as it involves steps being taken by the service provider and a formal decision whereby the competent authorities authorise that service provider’s activity” (Joined Cases C-724/18 and C-727/18, Cali Apartments, 49). Having said that, EU law is interested in the fact that the economic activity exercised on (or near the beach) is carried out in compliance with the principles of competition even more when public evidence is required in case of national procurement and authorisations schemes, and the name used for the authorisation and its various declinations does not matter (A. Monica, I regimi di autorizzazione e la libertà di circolazione dei servizi nel mercato unico dell’Unione europea, in D.U. Galetta, Diritto amministrativo europeo, Torino, 2021, 226). In other words, it is not a matter of a service provision determined by a contracting authority (in which case the EU rules on public contracts would apply) but of the authorisation to carry out an economic activity on a state-owned property or asset. Against this backdrop, Article 12 of the Services Directive acts as a guiding provision for Member States as far as their national procurement and authorisation laws are concerned with services. Although Article 12. 1. and 12.2 have direct effect, these provisions do not specify how the Member States are supposed to conduct the selection among competitors. These criteria must be defined in advance by the national legislator and to be enforced and implemented by national authorities. In any case, according to the duration of the authorization schemes, when article 12 is not applicable, this aspect is stated in article 11 of the Directive.
Having said that, the CJEU’s judgement is also likely to have a direct impact on the access to local markets which is going to be the next compelling challenge in Italy (see Consiglio di Stato, 9104/2023) and in Germany (S. Korte, Realaw blog) due the scarcity of the resource (in the case of beaches), or difficulties in dealing also with general interests such as public order in the public area (in the case of street markets). It goes without saying that “Article 12 paragraphs 1 and 2 of the Services Directive could attribute positive legal positions to private entities, as private companies or entrepreneurs, potentially interested in the beach tourism services market (or another specific market), who are excluded from entering the market, because there are no areas available for public selection procedures” (A. Cossiri, Realaw blog)). Therefore, “third parties”, whose advantage stems from the change in their legal situation, could rely on the prohibition stated in the Directive relying on art. 12 to obtain the disapplication of an unfavourable national law with direct effect and the withdrawal of an administrative act adopted on the basis of an “internal rule” which gave to the administration a power which is unlawful under EU law. (A. Monica, Realaw blog, 09 February 2023).
From beaches to coasts: a European strategy
The private activity exercised on a state-owned asset by the concessionaire is required to enhance the ‘objectively public nature’ of the asset as it is the case of maritime concession. With regard to beaches, they are part of the coasts. Two main considerations arise: first of all their economic exploitation not only requires taking into account different stakeholders such as institutions, economic operators and addressees (citizens, tourists), although the Directive is only effective in a vertical sense; secondly it is worthwhile considering beaches as part of the coastal zones (this was the purpose also in Spain with the Ley de Costas). Recalling the Recommendation of the European Parliament and of the Council of 30 May 2002 concerning the Integrated Coastal Zone Management in Europe (2002/413/EC), this shift of paradigm (M. De Benedetto, Dalle spiagge alle coste: una strategia regolatoria, p. 43) can enhance a strategic approach to the management of the sea-land interaction. Consequently, the use of the coast must be made compatible with many of the objectives of EU policies: from sustainable development to the protection and enhancement of economic assets, as well as the “adequate accessible land for the public, both for recreational purposes and aesthetic reasons”. Besides, following also the Visser case law (joined case C-360/15 and 31/16) litigants challenging national measures will be encouraged to consider whether their case could be argued under the Services Directive, rather than simply under the provisions of the Treaty pertaining to the four freedoms. It follows that the automatic extension of the authorization goes against the duration limit and may lead to market foreclosure (P. Bogdanowicz, Realaw blog). The CJEU has already held that these restrictions, “by analogy with public contracts”, apply to, among other things, service concessions falling at the time beyond the scope of EU Directives on concession contracts and public procurement (respectively, Directive 2014/23 and 2014/24). Moreover, because the private activity exercised by the concessionaire/provider is required to enhance the ‘objectively public nature’ of the asset taking care of the environment (according with principle of solidarity and the pursuit of sustainable development), in full respect of the principles of competition.
In order for the national legislative framework to also offer adequate guarantees to protect competition in the award of services for beach activities, the principles of transparency of procedures and equal treatment of bidders must be respected, as the failure to open up competition to new potential bidders is tantamount to direct discrimination, and therefore contrary to the free movement of services (Parking Brixen, C-458/03, 55). Having said this, each coastal context is different and should therefore be valued in this sense without forgetting that there are purely different situations but also comparable situations between the various Member States. Therefore, even if the process of European integration takes place precisely through the progressive harmonisation of national law, this process is a complex exercise “surrounded by legal and political difficulties which are determinative both of the order in time which harmonization measures are adopted and in the specific contents of those measures” (T. Tridimas, The General Principles of EU Law, Oxford: OUP, 2006, 95). Again, articles 9 to 13 of Directive 2006/123 provide for exhaustive harmonisation concerning the services falling within their scope (Comune di Ginosa, p.to 37). Hence, the equal treatment principle, as a general principle of law, along with the proportionality principle cannot be ignored when dealing with maritime concessions.
The boundaries of administrative discretion in the selection process for an authorization.
In this context, national administrations can play their role both in ensuring compliance with EU law in the exercise of their administrative functions (they must refrain from applying national law that is incompatible with EU law (F.lli Costanzo, C-103/88; Farrell, C-413/15) and in protecting certain local specificities to be enhanced. The emphasis on the protection of cultural identities and the coexistence of the community with the natural environment specific to each place constitute essential elements in the evaluation of the criteria used for selecting the economic operators to whom the rights for the economic exploitation of the maritime concession are to be transferred, as well as a lever for differentiating the offer with a view to ensuring multiple choices also for the beneficiaries (A. Monica, Il destinatario e le concessioni demaniali marittime nel mutato contesto del mercato europeo dei servizi, 2021). In the Comune di Ginosa case, in fact, in addressing the issue of the scarcity of natural resources (and the consequent direct applicability of art. 12 of the Directive to State maritime concessions), the CJEU highlighted the existence, for the Member States, of “a certain margin of discretion in the choice of criteria applicable to the evaluation of natural resources” that could lead them to prefer an evaluation valid for the whole territory, rather than a case-by-case approach that enhances the local territory, or even to combine these two approaches (Comune di Ginosa, C-348/22, 46). In this passage there is the key for a functionalistic approach already from the EU level: in the definition of planning instruments and in the involvement of stakeholders (EC, Better Regulation Guidelines, 2021) to understand what actions are most urgently needed for the protection and enhancement of the coastline, also with a view to guaranteeing the right to equality, linked to the public nature of the environment, even though the Treaties leave the existing property regime in the Member States not affected (345 TFUE). Of course, the Services Directive has a vertical effect so that it only affects the relations between the EU and the Member States, but this case demonstrates well how the interests of the ongoing providers and the interests of various “third parties” involved (i.e. “potential candidates”, “addressees of the services”, or the “general public”) must be taken into account. This aspect can be better discussed following the pending CJEU preliminary ruling C-598/22, which concerns the possible transfer of immovable structures built on maritime State property, without compensation to the current operator at the end of the concession and the compliance with art. 49 TFEU. In short, the stakeholder arena is quite crowded. At least, who better than national administrations, through the exercise of discretion in full respect of the principle of proportionality, can work towards a reasonable reconciliation of the multiple interests involved (where is embedded the public interest) in the selection among several candidates?
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Posted by Dr A. Monica (Researcher in Administrative Law, University of Milan).
