Telekomunikacja Polska (Industrial policy) [2010] EUECJ C-522/08 (11 March 2010)

Judgment This reference for a preliminary ruling concerns the interpretation of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (OJ 2002 L 108, p. 33; 'the Framework Directive') and Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive) (OJ 2002 L 108, p. 51; 'the Universal Service Directive'). The reference has been made in the context of proceedings between Telekomunikacja Polska SA w Warszawie ('TP') and the Prezes UrzČdu Komunikacji Elektronicznej (President of the Office for Electronic Communications; 'the President of the UKE'), concerning the prohibition, imposed on TP, on making the conclusion of a contract for the provision of services contingent on the conclusion, by the end'user, of a contract for the provision of other services. Legal context European Union legislation The Framework Directive and the Universal Service Directive In accordance with Article 1(1) of the Framework Directive: 'This Directive establishes a harmonised framework for the regulation of electronic communications services, electronic communications networks, associated facilities and associated services. It lays down tasks of national regulatory authorities ['NRAs'] and establishes a set of procedures to ensure the harmonised application of the regulatory framework throughout the [Union].' Under Article 2(g) of the Framework Directive, an NRA is 'the body or bodies charged by a Member State with any of the regulatory tasks assigned in this Directive and the Specific Directives'. Article 8 of the Framework Directive provides: '1. Member States shall ensure that, in carrying out the regulatory tasks specified in this Directive and the Specific Directives, the [NRAs] take all reasonable measures which are aimed at achieving the objectives set out in paragraphs 2, 3 and 4. Such measures shall be proportionate to those objectives. ... 4. The [NRAs] shall promote the interests of the citizens of the European Union by inter alia: ... (b) ensuring a high level of protection for consumers in their dealings with suppliers, in particular by ensuring the availability of simple and inexpensive dispute resolution procedures carried out by a body that is independent of the parties involved; ...' Article 15 of the Framework Directive concerns the market definition procedure. Article 15(3) provides: '[NRAs] shall, taking the utmost account of the recommendation and the guidelines, define relevant markets appropriate to national circumstances, in particular relevant geographic markets within their territory, in accordance with the principles of competition law. [NRAs] shall follow the procedures referred to in Articles 6 and 7 before defining the markets that differ from those defined in the recommendation.' Article 16 of the Framework Directive, referring to the market analysis procedure, provides: '1. As soon as possible after the adoption of the recommendation or any updating thereof, [NRAs] shall carry out an analysis of the relevant markets, taking the utmost account of the guidelines. Member States shall ensure that this analysis is carried out, where appropriate, in collaboration with the national competition authorities. 2. Where a [NRA] is required under Articles 16, 17, 18 or 19 of [the Universal Service Directive], or Articles 7 or 8 of Directive 2002/19/EC [of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive) (OJ 2002 L 108, p. 7; 'the Access Directive')], to determine whether to impose, maintain, amend or withdraw obligations on undertakings, it shall determine on the basis of its market analysis referred to in paragraph 1 of this Article whether a relevant market is effectively competitive. ... 4. Where a [NRA] determines that a relevant market is not effectively competitive, it shall identify undertakings with significant market power on that market in accordance with Article 14 and ... shall on such undertakings impose appropriate specific regulatory obligations referred to in paragraph 2 of this Article or maintain or amend such obligations where they already exist. ...' Under Article 10(1) of the Universal Service Directive: 'Member States shall ensure that designated undertakings, in providing facilities and services additional to those referred to in Articles 4, 5, 6, 7 and 9(2), establish terms and conditions in such a way that the subscriber is not obliged to pay for facilities or services which are not necessary or not required for the service requested.' Article 17 of the Universal Service Directive, entitled 'Regulatory controls on retail services', provides in paragraphs (1) and (2): '1. Member States shall ensure that, where: (a) as a result of a market analysis carried out in accordance with Article 16(3) a [NRA] determines that a given retail market identified in accordance with Article 15 of [the Framework Directive] is not effectively competitive, and (b) the [NRA] concludes that obligations imposed under [the Access Directive], or Article 19 of this Directive would not result in the achievement of the objectives set out in Article 8 of [the Framework Directive], [NRAs] shall impose appropriate regulatory obligations on undertakings identified as having significant market power on a given retail market in accordance with Article 14 of [the Framework Directive]. 2. Obligations imposed under paragraph 1 shall be based on the nature of the problem identified and be proportionate and justified in the light of the objectives laid down in Article 8 of [the Framework Directive]. The obligations imposed may include requirements that the identified undertakings do not charge excessive prices, inhibit market entry or restrict competition by setting predatory prices, show undue preference to specific end'users or unreasonably bundle services. [NRAs] may apply to such undertakings appropriate retail price cap measures, measures to control individual tariffs, or measures to orient tariffs towards costs or prices on comparable markets, in order to protect end'user interests whilst promoting effective competition.' Article 20(1) of the Universal Service Directive states, with regard to contracts, that it is to apply without prejudice to European Union rules on consumer protection and to national rules in conformity with European Union law. Directive 2005/29/EC Article 2 of Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business'to'consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council ('Unfair Commercial Practices Directive') (OJ 2005 L 149, p. 22) provides: 'For the purposes of this Directive: ... (d) 'business'to'consumer commercial practices' ... means any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers; ...' According to Article 4 of that directive: 'Member States shall neither restrict the freedom to provide services nor restrict the free movement of goods for reasons falling within the field approximated by this Directive.' National legislation Article 46(2) of the Law on Telecommunications (ustawa Prawo telekomunikacyjne) of 16 July 2004 (Dz. U. No 171, item 1800), in the version applicable to the facts in the main proceedings ('the Law on Telecommunications'), provides: '2. For the purpose of protecting the end'user, the President of the [UKE] may, by way of a decision, impose on a telecommunications undertaking with significant market power in the retail market the following obligations: ... (5) not to oblige an end'user to subscribe to services which that end'user does not require. ...' Article 57(1) of the Law on Telecommunications provides: '1. A service provider may not make the conclusion of a contract for the provision of publicly available telecommunications services, including connection to a public telecommunications network, contingent on: (1) the conclusion, by the end'user, of a contract for the provision of other services or the purchase of equipment from a specific provider; ...' The dispute in the main proceedings and the questions referred for a preliminary ruling By decision of 28 December 2006, the President of the UKE called on TP to put an end to irregularities which had been identified, consisting in making the conclusion of a contract for the provision of 'neostrada tp' broadband internet access services contingent on the conclusion of a contract for telephone services. Following the application for re-examination of the matter lodged by TP, the President of the UKE, by decision of 14 March 2007, upheld the decision of 28 December 2006. By an action brought on 13 April 2007 before the Wojewódzki Sąd Administracyjny w Warszawie (Regional Administrative Court, Warsaw), TP sought annulment of the two decisions of the President of the UKE, claiming that Article 57(1)(1) of the Law on Telecommunications had been applied, wrongly, in spite of its incompatibility with the Universal Service Directive. The Wojewódzki Sąd Administracyjny w Warszawie dismissed that action and held that the President of the UKE had correctly applied that article. On 8 January 2007, TP brought an appeal in cassation against that last decision before the Naczelny Sąd Administracyjny (Supreme Administrative Court), which decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: '1. Does Community law permit the Member States to introduce a prohibition, directed at all undertakings providing telecommunication services, on making the conclusion of a service-provision contract contingent on the purchase of another service (combined sale) and, in particular, does a measure of this kind go beyond what is necessary to attain the objectives of the directives contained in the telecommunications package [the Access Directive; Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (the Authorisation Directive) (OJ 2002 L 108, p. 21); the Framework Directive; and the Universal Service Directive]? 2. If the first question is answered in the affirmative, is the [NRA] competent, in the light of Community law, to monitor compliance with the prohibition laid down in Article 57(1)(1) of [the Law on Telecommunications]?' Consideration of the questions referred The first question By its first question, the national court asks, in essence, whether the directives on the common regulatory framework for electronic communications must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which prohibits the making of the conclusion of a contract for the provision of services contingent on the conclusion, by the end'user, of a contract for the provision of other services. It is apparent from the order for reference that the dispute in the main proceedings originates in TP's allegations that Article 57(1)(1) of the Law on Telecommunications is, inter alia, incompatible with Articles 15 and 16 of the Framework Directive and with Articles 10 and 17 of the Universal Service Directive. TP claims that those provisions preclude national legislation which requires all operators to refrain from linking provision of their services without an assessment of the degree of competition on the market and independently of their position thereon. It follows that, in order to reply to the question referred, it is necessary to interpret the relevant provisions of the Framework Directive and the Universal Service Directive. Pursuant to Article 1(1) of the Framework Directive, the objective of that directive is to establish a harmonised framework for the regulation of electronic communications services, electronic communications networks, associated facilities and associated services. The directive lays down the tasks of the NRAs and establishes a set of procedures designed to ensure the harmonised application of the regulatory framework throughout the Union. The Framework Directive thus confers on the NRAs specific tasks in regulating the electronic communications markets. Under Article 15 of the Framework Directive, and in particular Article 15(3), the NRAs are required to define, in close collaboration with the European Commission, the relevant markets in the electronic communications sector. In accordance with Article 16 of that directive, the NRAs are required to carry out an analysis of the relevant markets thus defined and to assess whether those markets are effectively competitive. If a market is not effectively competitive, the NRA concerned is required to impose regulatory obligations ex ante on undertakings with significant market power on that market. With regard to the Universal Service Directive, Article 1(1) thereof provides that, within the framework of the Framework Directive, the Universal Service Directive concerns the provision of electronic communications networks and services to end'users. It is designed to ensure the availability throughout the Union of good-quality publicly available services through effective competition and choice and to deal with circumstances in which the needs of end'users are not satisfactorily met by the market. The Universal Service Directive establishes the rights of end'users and the corresponding obligations on undertakings providing publicly available electronic communications networks and services. Pursuant to Article 10(1) of the Universal Service Directive, Member States are required to ensure that designated undertakings, in providing facilities and services additional to those referred to in Articles 4, 5, 6, 7 and 9(2) of that directive, establish terms and conditions in such a way that the subscriber is not obliged to pay for facilities or services which are not necessary or not required for the service requested. Article 17 of the Universal Service Directive concerns regulatory controls on retail services. Pursuant to Article 17(1), NRAs are required to impose appropriate regulatory obligations on undertakings identified as having significant market power on the market where, as a result of analysis of that market, a NRA determines that that market is not effectively competitive and the NRA concludes that the obligations imposed under the Access Directive or Article 19 of the Universal Service Directive would not result in the achievement of the objectives set out in Article 8 of the Framework Directive. In that regard, Article 17(2) of the Universal Service Directive provides, inter alia, that the obligations imposed under Article 17(1) may include requirements that the identified undertakings do not unreasonably bundle services. Thus, such a provision permits NRAs which have established that a market is not competitive to impose on undertakings having significant market power on that market the regulatory obligation not to link provision of their services unreasonably. It is therefore necessary to examine whether national legislation, such as that at issue in the main proceedings, affects the powers that the NRA concerned derives from the abovementioned provisions of the Framework Directive and the Universal Service Directive. In that regard, it must be stated, first, that such legislation, which, generally and without discrimination, prohibits linked sales, does not affect the powers of the NRA concerned to define and analyse the different electronic communications markets, in accordance with the respective provisions of Articles 15 and 16 of the Framework Directive. Nor does it affect the power of that NRA to impose, after carrying out an analysis of a market, regulatory obligations ex ante on undertakings which have been identified as having significant market power on that market in accordance with Article 16 of the Framework Directive and Article 17 of the Universal Service Directive. Second, as the President of the UKE and the Polish Government have emphasised, the prohibition laid down in Article 57(1)(1) of the Law on Telecommunications seeks to guarantee enhanced protection of consumers in their relations with operators of telecommunications services. Although, in carrying out their tasks, the NRAs are, in accordance with Article 8(4)(b) of the Framework Directive, required to promote the interests of citizens of the Union by ensuring a high level of protection for consumers, the fact remains that the Framework Directive and the Universal Service Directive do not provide for full harmonisation of consumer-protection aspects. Article 20 of the Universal Service Directive, which relates to contracts concluded between consumers and providers of electronic communications services, states that it applies without prejudice to European Union rules on consumer protection and national rules in conformity with European Union law. It follows that the Framework Directive and the Universal Service Directive cannot preclude national legislation, such as that at issue in the main proceedings, which, for the purpose of protecting end'users, prohibits an undertaking from making the conclusion of a contract for the provision of telecommunications services contingent on the conclusion, by the end'user, of a contract for the provision of other services. As to the compliance of national legislation, such as that at issue in the main proceedings, with European Union legislation on consumer protection, the Court has already held that Directive 2005/29 is to be interpreted as precluding national legislation which, with certain exceptions, and without taking account of the specific circumstances, imposes a general prohibition of combined offers made by a vendor to a consumer (Joined Cases C-261/07 and C-299/07 VTB'VAB and Galatea [2009] ECR I-0000, paragraph 68). In the present case, in view of the fact that the decisions under challenge in the main proceedings were adopted before the date on which the period for the transposition of Directive 2005/29 expired, that directive applies to the case in the main proceedings only with effect from that date, that is, from 12 December 2007. It follows that the answer to the first question is that the Framework Directive and the Universal Service Directive must be interpreted as not precluding national legislation, such as Article 57(1)(1) of the Law on Telecommunications, which prohibits making the conclusion of a contract for the provision of services contingent on the conclusion, by the end'user, of a contract for the provision of other services. However, Directive 2005/29 must be interpreted as precluding national legislation which, with certain exceptions, and without taking account of the specific circumstances, imposes a general prohibition of combined offers made by a vendor to a consumer. The second question In the light of the answer to the first question, it is not necessary to answer the second question. Costs Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Third Chamber) hereby rules: Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) and Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive) must be interpreted as not precluding national legislation, such as Article 57(1)(1) of the Polish Law on Telecommunications (ustawa Prawo telekomunikacyjne) of 16 July 2004, in the version applicable to the facts in the main proceedings, which prohibits making the conclusion of a contract for the provision of services contingent on the conclusion, by the end'user, of a contract for the provision of other services. However, Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business'to'consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council ('Unfair Commercial Practices Directive') must be interpreted as precluding national legislation which, with certain exceptions, and without taking account of the specific circumstances, imposes a general prohibition of combined offers made by a vendor to a consumer. [Signatures] * Language of the case: Polish. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII