Validity of German and Austrian monopolies seriously threatened
Stephen Ketteley, partner on the betting and gaming team at law firm Berwin Leighton Paisner, looks at the recent ECJ judgements.
The European Court of Justice (ECJ) has issued judgments, on successive days, that dent the strength of the monopolistic policies adopted within some Member States.
Yesterday, judgments were given in the Carmen Media, Winner Wetten and various other cases regarding the legality of betting intermediaries and the concept of mutual recognition of gambling licenses issued outside of a Member State, all arising in the German courts. In essence the court held that monopoly operators’ promotional activities should be moderate and genuinely intended to channel gambling into a regulated and controlled system, rather than “maximising profits”¦.thereby departing from the objectives justifying the existence of these monopolies”.
Following hot on its heels comes the decision today in the Austrian case, Engelmann, in which the court held that “the absence of a competitive procedure when the concessions were granted to [the monopoly] Casinos Austria AG does not comply with freedom of establishment and freedom to provide services”.
The court has made it clear that monopolies cannot have completely unrestricted freedoms and also warns Member States over the breadth of their monopolies’ promotional activity whilst also reminding them to be consistent in their approach to the way they regulate the sector.
Furthermore, “the categorical exclusion of operators whose seat is in another Member State is disproportionate” as a condition of the receipt of an authorisation to operate.
However, the court has, again, confirmed the Advocate General’s previous Opinions that EU law does not oblige Member States to recognise licences issued in other Member States. Moreover, the court went further, making it clear that a Member State can require operators to obtain “authorisations issues by its authorities”, a clear statement endorsing the licensing objectives being progressed in certain Member States.
Following judgments in relation to Portugal, Sweden and Holland that undoubtedly were viewed as negative for the private operators, comes these fresh decisions in relation to German and Austria which will be seen as helpful to an industry struggling to re-evaluate its regulatory position in the face of an ongoing (and arguably highly-politicised) series of judgments.
The monopolies cannot have it all their own way and the private sector will be buoyed by the court’s application of EU law in such a way as recognises the anti-competitive systems operating in Germany and Austria, potentially rendering them unenforceable (the preliminary rulings now need to be considered in the local, referring courts). Operators will hope they will be applied to other monopolies which are similarly operating to swell the coffers of Member States, rather than as a method of genuinely protecting the interests of the vulnerable within society.