On 20 April 2023, the Court of Justice of the European Union delivered a judgment requiring the Municipality of Ginosa to apply an open and transparent selection procedure prior to granting an authorisation to occupy State-owned maritime property. By such ruling, the CJEU sided with the Italian Competition Authority and condemned the practice of automatic renewal of such concessions in favour of the incumbent beneficiaries.

The legal basis for such judgment was Art. 12(1) of the Services Directive (2006/123) requiring to apply a selection procedure when granting authorisations for an activity whose exercise is limited due to scarcity of natural resources available or technical capacities. The cited article and the Services Directive itself are the embodiments of EU freedoms of establishment and services laid down in Art. 49 and 56 TFEU respectively. All these provisions are addressed to EU member states (public authorities) which are prohibited from applying restrictions in intra-EU trade which also encompass the abovementioned freedoms.

Additionally, the notion of the “authorisation scheme” under the Services Directive (Art. 4(6)) relates to formal or implied decisions of the “competent authority”. This term, in turn, has been defined in Art. 4(9) of the Directive, which refers to bodies or authorities having a regulatory or supervisory role, which also includes professional bodies or associations.

Although commercial entities, which do not exercise any “regulatory or supervisory role”, are not covered by Art. 12(1) of the Services Directive, it is not that clear whether the logic applied by the CJEU cannot be extrapolated to them. It should be borne in mind that the aim of EU competition law is to eradicate the same cross-border trade restrictions, as those targeted by Art. 49 and 56 TFEU, which are (re)imposed by the business.

The situation of “the scarcity of available natural resources or technical capacity” could be the case of companies enjoying a dominant position in some markets, in particular natural monopolies. In the past the EU has condemned capacity hoarding by national incumbent energy companies to the detriment of potential competitors. Another example could be supply of wood by forest managing entities or rental of duty-free areas at the airports.

The logic of the principle enshrined under Art. 12(1) of the Services Directive suggests that art. 102 TFEU could be a stand-alone legal basis for requiring such companies to apply an open and transparent selection procedure before granting such contract (or to shorten the contract in force). Whether that intuition is valid and will be used by the competition authorities remains to be seen.