Regulatory case law, June 2015: financing internet subscription services at a fixed location

This past June, the European Court of Justice reviewed financing mechanisms in internet subscription services requiring a connection to the internet at a fixed location, as well as state aid in competition – both in hydrocarbon and nuclear.

Information society

Case C 1/14 Base Company and Mobistar: contributing to the financing of mobile communications services

In Case C‑1/14 Base Company and Mobistar the Court of Justice of the European Union held that special tariffs and the financing mechanism respectively apply to internet subscription services requiring a connection to the internet at a fixed location.

 

However they do not apply to mobile communication services, including internet subscription services provided by means of those mobile communication services. If those services are made publicly available within the national territory as ‘additional mandatory services’ they cannot be financed, under national law, by a mechanism involving specific undertakings.

 

The request for a preliminary ruling has been made in proceedings between, on the one hand Base Company and Mobistar’ and the Ministerraad (Council of Ministers) concerning an action for the annulment of national-law provisions requiring operators providing consumers with mobile communication services and/or internet subscription services to contribute to the financing of the net cost of those services.

 

It concerns the interpretation of Articles 9 and 32 of 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 (OJ 2002 L 108, p. 51), as amended by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 (OJ 2009 L 337, p. 11), and the validity of the Universal Service Directive in the light of the principle of equality as provided for in Article 20 of the Charter of Fundamental Rights of the European Union.

 

Competition – state aid

Case C – 15/14 P Commission v MOL: exploitation of hydrocarbon fields

In Case C – 15/14 P Commission v MOL, the Court of Justice of the European Union, like the General Court, confirms that the agreement between the Hungarian State and the oil company MOL relating to the exploitation of hydrocarbon fields does not constitute State aid.

 

The combination of that agreement and the increase in the rate of mining fees resulting from the amendment of the Mining Act did not confer a selective advantage on MOL.

 

The Court finds that the General Court was right to hold that the mere fact that the Hungarian authorities enjoy limited discretion,defined by law, to determine the rate of the extension fee is not sufficient to establish that certain undertakings might gain a selective advantage therefrom.

 

Likewise, the General Court did not err in law in finding that the fact that the rates set by the 2005 agreement were the result of negotiation between MOL and the Hungarian authorities did not suffice to confer on that agreement a selective character. Court states that that the General Court could validly conclude that the discretion enjoyed by the Hungarian authorities with regard to the choice of whether or not to conclude an extension agreement did not enable MOL to gain any selective advantage.

 

In that regard, the Court of Justice, like the General Court, finds that there are no such links between the 2005 agreement and the amendment of the Mining Act. In those circumstances, the Court of Justice dismisses the Commission’s appeal in its entirety.

Case C – 5/14 Kernkraftwerke Lippe - Ems GmbH v. Hauptzollamt Osnabrück: German duty on nuclear fuel compatible with EU law

In Case C – 5/14 Kernkraftwerke Lippe – Ems GmbH v. Hauptzollamt Osnabrück the Court of Justice of the European Union found that German duty on nuclear fuel is compatible with EU law.

 

In 2010, Germany adopted a law on excise duty on nuclear fuel (Kernbrennstoffsteuegesetz). That law introduced, for the period from 1 January 2011 to 31 December 2016, a duty on the use of nuclear fuel for the commercial production of electricity. The Court held that EU law does not preclude a duty such as the German duty on nuclear fuel.

 

It rejects the argument that nuclear fuel must be exempt from taxation under the directive on taxation of energy products and electricity and finds that the directive concerning the general arrangements for excise duty does not preclude the German duty on nuclear fuel, which is levied on the use of such fuel for the commercial production of electricity.

 

As it is not levied (directly or indirectly) on the consumption of electricity or that of any other product subject to excise duty, that duty does not constitute excise duty or ‘other indirect taxes’ on that product within the meaning of the directive. German duty on nuclear fuel does not constitute State aid prohibited by EU law while it is not a selective measure. Treaty establishing the European Atomic Energy Community (‘Euratom Treaty or EAEC’), which covers nuclear fuel, does not preclude the duty in question.

 

The Court held that article 267 TFEU must be interpreted as meaning that a national court which has doubts as to whether national legislation is compatible with both EU law and with the Constitution of the Member State concerned neither loses the right nor, as the case may be, is exempt from the obligation to submit questions to the Court of Justice of the European Union concerning the interpretation or validity of that law, on the ground that an interlocutory procedure for review of the constitutionality of that legislation is pending before the national court responsible for carrying out such review.

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