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How internal market principles might affect SGEI

A recent European Court of Justice ruling

Luxembourg, 4 March 2016 | Published in Economy, Future of the EU & Housing

The European Court of Justice precised the application of the services directive to the SGEI in the case of a chimney sweep.

If article 2 of the directive 2006/123 excludes clearly social services relating to social housing, other kind of services provided by Housing Europe members which could be considered as a SGEI are concerned. The case is also interesting to understand how SGEI are affected by the internal market principles.

To provide a SGEI some restrictions to the freedom of establishment could be accepted if those are not discriminatory, justified by an overriding reason regarding public interest, proportionated as necessary to achieve that public interest objective (point 55 of the case).

The first condition to apply this exception is to control whether the directive obstructs the performance, in law or in fact, of the particulart task assigned to SGEI provider. The other conditions are related to necessity and proportionality.

Considering the particular case, a territorial restriction of a license to perform service activity could be accepted; a restriction in economically profitable sectors may be justified because the obligation for the people entrusted with a task in the general economic interest to perform their services in conditions of economic equilibrium, presupposes that it will be possible to offset less profitable sectors against the profitable sectors, except if those profitables services are severable from the SGEI in question (points 74&75 of the case).