Concessions to run beach properties: their automatic extension violates EU law

Following the automatic extension, provides by the Italian legislation, of the date of termination of the concessions for the use of State-owned maritime and lakeside property (especially beaches), national judges lodged preliminary questions with the Court of Justice asking if such legislation is to be considered compatible with the directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (the so-called “services” directive), and the freedom of establishment enshrined in the Treaty on the functioning of the European Union.

Article 12 of the “services” directive states that, under national legislation, the number of authorization for a given activity can be limited, if there is scarcity of available natural resources or technical capacity.

By the judgement delivered on 14 July, the Court found that Article 12 precludes the automatic extension of the concessions to run beach properties, without a prior selection procedure, which must guarantee impartiality and transparency. According to Court’s view, the legitimate interest of the current holders of such concessions to recoup the cost of investments made has to be taken into account, but it cannot justify their automatic renewal without a prior selection procedure.

In addition, even if the “services” directive is not applicable to the facts referred to in the main proceedings, the Court has stated that the automatic extension of the concessions concerned will violate the freedom of establishment, inasmuch as there is a certain cross-border interest. In this case the failure to award concessions in absence of a public, transparent and non-discriminant selection procedure would implicate a difference in treatment to the detriment of undertakings established in other Member States.