Provisional text
OPINION OF ADVOCATE GENERAL
ĆAPETA
delivered on 8 February 2024 (1)
Case C‑598/22
Società Italiana Imprese Balneari Srl
v
Comune di Rosignano Marittimo,
Ministero dell’Economia e delle Finanze,
Agenzia del demanio – Direzione regionale Toscana e Umbria,
Regione Toscana
(Request for a preliminary ruling from the Consiglio di Stato (Council of State, Italy))
(Reference for a preliminary ruling – Article 49 TFEU – Public contracts and freedom of establishment – Concessions for the occupation of State-owned maritime property – Expiry and renewal – National regulation providing, on expiry of the concession, for the transfer to the State, free of charge, of irremovable structures built on State-owned property – Other features of such a regulation – Concept of ‘restriction’)
I. Introduction
1. The Italian seafront, including its beaches, is public property. Running a business at an Italian beach, thus, requires a concession.
2. One national rule regulating such concessions provides that irremovable structures constructed on a public beach are automatically vested in the State after the expiry of the concession period, without any compensation being due to the concessionaire that constructed them.
3. Does such a rule constitute a restriction on freedom of establishment, as provided for by Article 49 TFEU?
II. The background to the dispute in the main proceedings, the question referred and the procedure before the Court
4. Since 1928, Società Italiana Imprese Balneari Srl (SIIB) has been managing the seaside resort ‘Bagni Ausonia’ in the Comune di Rosignano Marittimo (Municipality of Rosignano Marittimo, Italy; ‘the Municipality’). That resort is located mostly on land belonging to the State-owned maritime property, for which SIIB was granted consecutive concessions.
5. Over the years, that company has constructed various buildings on that State-owned land.
6. The last inventory of the structures incorporated on that property was conducted by the Municipality in 1958.
7. On 20 November 2007, during SIIB’s concession No 27/2003, which lasted from 2003 to the end of 2008, the Municipality adopted a decision by which it recalculated the fees payable for that concession. The increase in fees was the result of the reclassification of some of the structures under concession as difficult to remove, which meant that they now qualified as State-owned appurtenances. Those irremovable structures already existed on that State-owned domain on the date of expiry of the previous concession No 36/2002, which ran from 1 January 1999 to 31 December 2002 and which was granted to the same concessionaire, SIIB.
8. Decision No 31787 of 20 November 2007, is based on Article 49 of the Codice della navigazione (Shipping Code). The latter provides:
‘Unless otherwise established in the concession instrument, when the concession comes to an end, the non-removable works constructed on the State-owned area shall remain vested in the State, without any compensation or reimbursement, without prejudice to the granting authority’s right to order their demolition, with the State-owned asset thus to be returned to its original condition.’
9. In 2008, the Municipality initiated an administrative procedure with a view to vesting the appurtenances transferred to the State on maritime property after 1958. In response to written questions put by the Court, the referring court clarified that that procedure had never been completed. Nevertheless, the referring court explained in its response that an administrative statement concerning the transfer of property to the State would, in any event, be declaratory in nature only, as the acquisition of ownership by the State occurs ex lege on expiry of the period of concession, by virtue of Article 49 of the Shipping Code.
10. In May 2009, the Municipality issued SIIB a new concession (No 181/2009) (2) for the same location. During the procedure for the award of that concession, SIIB stated that all buildings on the domain were easy to remove. (3) Following an inspection of the site, the Municipality ultimately rejected such a characterisation by decision of 26 November 2014. It considered that the area of State-owned property under concession contained irremovable structures that had already been acquired by the State under Article 49 of the Shipping Code.
11. The Municipality reiterated that finding in a decision of 16 April 2015. (4) On that basis, it also increased the fees payable by SIIB with effect from 2009.
12. SIIB challenged the decisions of 26 November 2014 and of 16 April 2015 before the Tribunale amministrativo regionale per la Toscana (Regional Administrative Court, Tuscany, Italy). It claimed that, since the concession had been renewed, it was impossible for ownership to be vested in the State. That court joined those cases and dismissed all claims in their entirety by a judgment of 10 March 2021.
13. With regard to the classification of buildings as State-owned appurtenances under Article 49 of the Shipping Code, the Tribunale amministrativo regionale per la Toscana (Regional Administrative Court, Tuscany) considered that that transfer occurred as a result of an agreed acknowledgement in the concession instrument signed by both parties, rather than as a result of the unilateral decision of the Municipality. In that court’s view, the transfer of property without financial compensation is, according to Article 49 of the Shipping Code, the result of the lack of the parties’ stipulation to the contrary. Given that the parties had not expressly provided for a different legal regime for maritime State-owned appurtenances in the concession agreement, they were held to have consented to the dispositive regime provided for by Article 49 of the Shipping Code.
14. SIIB appealed against that judgment before the Consiglio di Stato (Council of State, Italy), the referring court in the present case.
15. In the appeal, SIIB argued inter alia that the effect of the transfer without compensation for structures that are difficult to remove is contrary to EU law and, in particular, to the principle of proportionality concerning restrictions on the market freedoms enshrined in Articles 49 and 56 TFEU, as set out by the Court in Laezza .(5)
16. Harbouring doubts as to whether Article 49 of the Shipping Code is compatible with EU law, the Consiglio di Stato (Council of State) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Do Articles 49 and 56 TFEU and the principles arising from the Laezza judgment (C‑375/14), where applicable, preclude the interpretation of a national provision such as Article 49 [of the Shipping Code] as meaning that it results in the transfer without consideration and without compensation, by the concessionaire on expiry of the concession, when that concession has been renewed on an uninterrupted basis, where applicable by virtue of a new measure, of the building works constructed on the State-owned land forming part of the complex of assets organised for the operation of the resort enterprise, since that effect of immediate forfeiture could constitute a restriction that goes beyond what is necessary to achieve the objective actually pursued by the national legislature and is therefore disproportionate to the aim?’
17. Written observations were submitted to the Court by SIIB, the Municipality, the Italian Government and the European Commission.
18. The Court requested a number of additional clarifications from the referring court, to which that court replied on 8 September 2023.
III. Analysis
A. Admissibility
19. In their written submissions, the Commission and the Italian Government discussed the admissibility of the present request for a preliminary ruling.
20. The Commission pointed out that the situation in the present case is purely internal. An Italian concessionaire is challenging the Italian rules on concessions on State-owned maritime property. Nevertheless, the Commission considers the question to be admissible, citing Ullens de Schooten, which clarified that the Court can establish jurisdiction in purely internal cases if the national rules, the validity of which is at issue, may potentially affect citizens or companies from other Member States. (6)
21. I agree with that position. First, the Italian rules on concessions apply equally to any concessionaire, be they of Italian or other Member State nationality. Second, the economic attractiveness of setting up a business in Italian maritime (or lakeside) areas confirms the existence of a certain cross-border interest, as the Court has already confirmed in the judgment in Promoimpresa. (7) Moreover, such potential cross-border effect was confirmed by the referring court’s answer to the Court’s request for further clarification.
22. Therefore, even without any clear indication to that effect in the order for reference, (8) the Court can conclude in the present case that the national rule at issue is of cross-border interest. (9)
23. The argument raised by the Italian Government on the issue of admissibility is of a different nature. That government considers that the answer to the question referred for a preliminary ruling is not helpful in resolving the dispute before the referring court. In its view, even if the answer given by the Court were to result in the inapplicability of Article 49 of the Shipping Code, that would have no effect on the case before the referring court.
24. However, in its reply to the request for clarification, the Consiglio di Stato (Council of State) explained that SIIB has a personal, specific and current legal interest in challenging the validity of the transfer to State ownership of the irremovable structures which it had constructed. If those structures are validly vested in the State, this influences the cost of fees payable for occupying the public domain at issue.
25. In a preliminary ruling procedure, it is, in principle, for the referring court to determine whether the answer to the question of interpretation or validity of EU law is necessary for the effective resolution of a dispute. (10) Given the clarification by the referring court, there is no reason for the Court to doubt its jurisdiction in the present case.
26. I therefore propose that the Court finds the request for a preliminary ruling admissible.
B. Applicable EU law
27. The national rules relating to concessions concerning scarce natural resources fall within the scope of the Services Directive. (11) However, the transposition period of that directive expired on 28 December 2009, (12) whereas the relevant facts of the present case occurred at an earlier date. (13)
28. As the Services Directive is not applicable to the case at issue in the main proceedings ratione temporis, the question referred for a preliminary ruling requires an interpretation of primary law. (14)
29. The referring court mentions both Article 49, relating to the freedom of establishment and Article 56 TFEU, relating to the freedom to provide services.
30. The Court has already clarified that concessions such as those in the present case, which enable tourist and leisure-oriented business activities to be conducted, fall within the scope of the right of establishment on State-owned land. (15)
31. It follows that the question of the referring court must be answered in light of Article 49 TFEU.
C. Substance
32. In the present case, the Court is required to answer whether Article 49 TFEU precludes a national rule according to which structures which are not easily removable, constructed by the concessionaire on public land become, on the expiry of the concession, the property of the State, without any consideration or compensation, even if the concession was renewed.
33. SIIB considers that such an automatic transfer without compensation is contrary to EU law and, in particular, to the principle of proportionality of the restrictions on market freedoms enshrined in Articles 49 and 56 TFEU. It invokes, in that respect, the judgment in Laezza.
34. The analysis of the alleged restrictions on market freedoms guaranteed by the Treaties is conducted in two steps. First, a national court would have to determine whether the national rule at issue falls within the scope of the relevant Treaty prohibition, in the present case, a prohibition of a restriction on freedom of establishment. If the national rule falls within the scope of Article 49 TFEU, the second step is to assess whether it can be justified. In order to reach the latter conclusion, the national court would have to establish the public interest which might legitimately justify the rule, and whether the rule is suitable and necessary to achieve that public interest.
35. I will therefore first assess whether a national rule such as Article 49 of the Shipping Code constitutes a restriction on the freedom of establishment envisaged under Article 49 TFEU. I am of the view that such a national rule might be excluded from the prohibition provided for by Article 49 TFEU (1). In the alternative, I will assess whether such a national rule can be justified (2).
1. Is the national measure at issue a restriction on freedom of establishment?
36. Article 49 TFEU prohibits measures which restrict the establishment of nationals from one Member State in the territory of another Member State.
37. According to settled case-law, any national measure which, albeit applicable without discrimination on grounds of nationality, prevents, hinders or renders less attractive the exercise by EU nationals of the freedom of establishment guaranteed by the Treaty, constitutes a restriction within the meaning of Article 49 TFEU. (16)
38. There are two possible approaches to be taken in order to answer the question of what kind of measures render the freedom of establishment less attractive to nationals of other Member States: either any State regulation should be considered as representing at least some hindrance to setting up a business; or, certain types of regulation of the relevant market may be excluded from the scope of Article 49 TFEU. In my opinion, the choice between these two possible interpretations has not been made clear in the case-law of the Court.
39. On the one hand, there are judgments that explain that any restriction, however minor, triggers the application of the Treaty rules imposing prohibitions on market freedoms, including the freedom of establishment. (17)
40. If the Court were to adopt such an approach in the present case, the rule such as the one at issue would automatically be classified as a restriction. That, however, does not mean that such a rule is prohibited. It may still be justified.
41. On the other hand, another line of case-law excludes from the application of the Treaty national measures that do not represent a real obstacle to market access. (18)
42. If the Court were to adopt such an approach in the present case, it would need to assess whether a national measure, such as the one at issue, would indeed deter an entrepreneur from setting up a business on Italian beaches. If the Court were to find that it would not, such a national rule could not be considered a restriction on the right of establishment, and would therefore not need to be justified.
43. One of the tests that the Court applied in its case-law is the test of a ‘too uncertain and indirect effect’. If the ‘effect’ of a national rule on the exercise of a market freedom were considered to be ‘too uncertain and indirect’, that rule would be excluded from the scope of the relevant provision of the Treaty.
44. Such a test was applied in the case-law in relation to all the market freedoms, (19) including the freedom of establishment. (20)
(a) Transfer without compensation on expiry of the concession period
45. Would an entrepreneur be deterred from setting up a business on an Italian beach if he or she knows that at the end of the concession period, he or she will not be compensated for the irremovable structures that he had built, which would automatically be vested in the State?
46. The Italian Government and the Commission suggest that Article 49 of the Shipping Code does not necessarily constitute a restriction on the freedom of establishment. According to the Commission, the transfer of irremovable structures built to State ownership is inherent in the concept of State-owned land. The available use of such an area by the public would be significantly reduced if concessionaires remained the owners of irremovable structures built on such land.
47. I agree with that argument. That is the essence of the inalienability of the public domain. (21)
48. Under Italian law, as explained by the Italian Government, rights that a concessionaire acquires on the land in concession are comparable to easement rights. (22) The concessionaire is the holder of such rights for the duration of the concession only. (23)
49. If a concessionaire were permitted to retain rights over irremovable structures built within the public domain, the public nature and practical availability of that domain to the State would be considerably reduced.
50. The present case does not raise any issue with the possibility of Italy maintaining its beaches in the public domain. Such a decision indeed falls within the competence of the Member States. The result of such a policy is that any economic operator wishing to run a seaside resort on an Italian beach needs to acquire a concession, the nature of which entails that on the expiry of the concession period, the land and everything irremovable on that land becomes vested in the State.
51. The only possibility of running a seaside resort on Italian beaches is by concluding a concession with the State. The Italian rule at issue applies to all potential concessionaires equally. (24) All economic operators are therefore faced with the same concern, that is whether it is economically viable to compete for a concession knowing that, upon its expiry, the irremovable structures constructed will be transferred to State ownership. That rule thus becomes simply one of the elements to consider when making economic calculations to determine whether to engage in the economic activity of running a seaside resort on an Italian beach.
52. Of course, if the State were obliged to compensate the concessionaire for irremovable structures that remain on the land after the concession has expired, that might make the investment even more attractive. However, if the investor is aware in advance that there will be no such compensation, that would not in itself deter it from bidding for the award of the concession.
53. I therefore agree with the Commission that if the duration of the concession is sufficiently long to allow for the amortisation of an investment, and if the concessionaire knows in advance that any irremovable structures that it builds on the maritime property will be vested in the State when the concession ends, such a rule would not dissuade an investor from establishing its business on an Italian beach.
54. Two additional aspects of Article 49 of the Shipping Code are worth mentioning. First, it provides for the possibility of financial compensation in the concession agreement. Therefore, if the period of concession were to prove insufficient to produce a return on investment, a certain amount of compensation may be agreed upon with the State.
55. Second, the absence of any financial compensation for the irremovable structures that are transferred has to be assessed in light of the possibility that the Municipality may oblige the concessionaire to return, at its own cost, the public domain to its original condition.
56. It is, therefore, possible to characterise a rule such as that contained in Article 49 of the Shipping Code as having too indirect and uncertain effects to be capable of deterring an operator from establishing a business on an Italian beach. It does not therefore trigger the application of the prohibition in Article 49 TFEU.
57. Nevertheless, such a rule has to be sufficiently transparent to enable economic operators to decide whether or not to invest in order to establish a business on an Italian beach. It is for the national court to assess whether Article 49 of the Shipping Code is sufficiently transparent.
(b) Does it make any difference that the concession is renewed?
58. SIIB considers that the fact that its concession was renewed means that the transfer to state ownership cannot happen.
59. To my mind, such a factor makes no difference to the preceding conclusion that the rule at issue is not a restriction on the right of establishment.
60. On the contrary, a rule that would treat economic operators that enter into concession for the first time differently from those that continue their businesses on the basis of the renewed concession would be contrary to EU law.
61. Such rules would place existing concessionaires in a more advantageous position than new concessionaires. If the non-removable structures could not be transferred into State ownership when the same economic operator is granted a renewed concession on the same land, this would not influence the value of the concession and, therefore, the fees payable. However, a new entrant to such a concession would have to pay higher fees, since the transfer of ownership would occur in such a case and would thus increase the value of the concession.
62. Given that it is more likely that the existing concessionaires are of Italian nationality, such a rule would represent indirect discrimination on the grounds of nationality, prohibited by Article 49 TFEU. (25)
63. Therefore, a rule according to which irremovable structures built within the public domain are vested in the State on expiry of a concession period, even if the same economic operator is awarded a new concession on the same land, is not a restriction on the freedom of establishment under Article 49 TFEU.
(c) The protection of legitimate expectations
64. SIIB also relied on the principle of the protection of legitimate expectations. Although the referring court did not include it in the question referred, I will briefly deal with that argument.
65. According to the settled case-law of the Court, the principle of the protection of legitimate expectations presupposes that precise, unconditional and consistent assurances, originating from authorised, reliable sources, have been given to the person concerned by the competent authorities. That right applies to any individual in a situation in which authorities, by giving that person precise assurances, have led him or her to entertain well-founded expectations. (26)
66. However, economic operators cannot justifiably claim a legitimate expectation that an existing situation, which may be altered by the competent authorities in the exercise of their discretionary power, will be maintained. (27)
67. As explained by the Italian Government, it seems that the Italian legislation, as it existed at the time, gave preference to the existing concessionaires when granting new concessions. That legislation was amended in 2011, in response to an infringement procedure initiated by the Commission for failure by Italy to transpose the Services Directive. (28)
68. Such legislation, which would in itself be contrary to EU law, (29) could have perhaps created an assumption that the previous concessionaire would succeed in the competition for the new concession. That is for the referring court to assess when deciding the case before it.
69. However, that kind of assumption is not at issue in the present case. That is, it does not matter whether SIIB could claim to have had a legitimate expectation that its concession would be renewed; what matters is that it could not claim to have a legitimate expectation that after such renewal, the irremovable structures would not be vested in the State, thus influencing the value of the concession.
70. When the facts in the main proceedings arose, Article 49 of the Shipping Code was already being interpreted and applied in practice as giving rise, upon expiry of the concession period, to the transfer without compensation to State ownership of the irremovable structures.
71. Therefore, the principle of the protection of legitimate expectations cannot affect the conclusion in the present case that the national rule that provides for the transfer of irremovable structures to State ownership without compensation, even if the same concessionaire is awarded a new concession, does not constitute a restriction on the freedom of establishment.
(d) The relevance of the judgment in Laezza
72. In its question, the referring court inquires about the relevance of the judgment of the Court in Laezza.
73. That case concerned an Italian rule that regulated licences for the management and collection of bets. The rule imposed an obligation on licensees to transfer free of charge, on expiry of the period of validity of the licence, the rights to use tangible and intangible assets which they owned and which constituted their network for the management and collection of bets.
74. The Court concluded first that the rule at issue in that case fell within the scope of Article 49 TFEU, (30) and then found that it was disproportionate to the legitimate aim it pursued. (31)
75. The situation in that case differs significantly from the one currently before the Court, even if, at first glance, the rule that was at issue in Laezza might seem similar to that at issue in the present case. Similar to Article 49 of the Shipping Code, the rule in Laezza required that assets created during the licensing period be transferred free of charge to the public authorities upon the expiry of the licence. Nevertheless, it is immediately obvious that there exists an important difference between those two rules. Whereas the rule in the present case relates only to irremovable structures, the rule at issue in Laezza related to all assets, tangible and intangible, created during the validity of the licence. That might indeed be sufficient to distinguish between these two cases.
76. However, what, in my opinion, distinguishes these two cases is, more importantly, the context in which the rules at issue are placed.
77. On the one hand, Laezza concerned a case in which a licence was required in order to control an economic activity on a market that was considered to be socially problematic, which was hence the very reason for the imposition of the licence. In principle, the case-law of the Court recognises the requirement of a licence in order to pursue a business as a restriction of market freedoms. Indeed, in Laezza, the Court simply referred to the earlier cases relating to licences, without elaborating on why the licence requirement at issue represented a restriction. (32)
78. On the other hand, a decision of a State to keep a certain type of land in public ownership, resulting in the need for a concession for any private economic activity on that land, falls within a different context to the one in Laezza. The policy decision behind such a rule is the idea that certain areas of land should be retained for public enjoyment, and therefore remain under State ownership.
79. There are different types of concessions, which may accordingly be categorised differently under EU law. For example, the concession awarded in the present case differs from the service concessions awarded to private investors through which a State satisfies certain public needs (such as constructing a road, or building an airport). (33) The nature and purpose of a concession should determine its legal treatment.
80. The concessions related to a decision to keep certain land in the public domain have some inherent features. One feature is that the economic activity for which the concession is granted is inseparable from the public nature of that domain. Whereas betting can be organised on private property, or even virtually, the concession in the present case is directly connected with the use of a particular plot of land under State ownership.
81. For that reason, the fact that the Court considered a rule that requires a transfer of the property acquired in relation to betting to the public authorities to be a restriction on freedom of establishment, is not, in and of itself, transposable to a situation in which irremovable structures on public domain is automatically transferred on the expiry of the concession granted.
82. Such a rule does not constitute a restriction on freedom of establishment for its own reasons, different from those characterising the licence for betting services as a restriction. I have developed the arguments as to why the rule at issue in this case is not a restriction in points 45 to 63 of this Opinion.
83. For the above reasons , I consider that Laezza is too far removed from the circumstances in the main proceedings to be applicable in the present case mutatis mutandis.
Interim conclusion
84. On the basis of the foregoing, I am of the view that a national rule such as Article 49 of the Shipping Code does not constitute a restriction on the right of establishment, which is why the prohibition of Article 49 TFEU does not apply.
2. Can the national measure at issue be justified?
85. If the Court decides nevertheless to classify a rule such as Article 49 of the Shipping Code as a restriction on freedom of establishment, it is necessary to assess whether such a restriction could be justified.
86. Non-discriminatory restrictions on freedom of establishment are not prohibited if they fulfil an overriding reason in the public interest in a proportionate manner. The restriction will be proportionate when it is suitable for securing the attainment of the objective pursued in a consistent manner, and when it does not go beyond what is necessary in order to attain it. (34)
87. The Italian Government put forward several reasons of public interest as justifications for Article 49 of the Shipping Code, should that provision be characterised as a restriction on the right of establishment: the protection of public property, the protection of public finances, as well as tourism, culture and the environment. All these reasons may indeed serve as legitimate objectives from the point of view of EU law. (35)
88. In the division of competence between the Court of Justice and national courts in the preliminary ruling procedure, it is for the latter to ascertain whether a national measure that restricts one of the market freedoms is indeed suitable and necessary for achieving the stated public aims.
89. Even if the Court cannot itself review the proportionality of national measures, it can provide guidance on the necessary methods when assessing the proportionality of the rule. In that respect, it is useful to repeat that the assessment of the suitability and necessity must be conducted in relation to each reason offered separately in justification thereof. The national court must ask, first, whether the national measure at issue really contributes to the desired aim and, second, whether the same aim could be achieved by a different measure, one that is less restrictive of the freedom of establishment.
90. As for the protection of public property as a justification, the Italian Government claims that the rule at issue prevents an area from becoming unavailable for the benefit of the general public through the conversion of part of that land into private property. As I have already argued, such a rule is inherent in the concept of the public domain (point 47 of the present Opinion). It is both suitable and necessary that irremovable structures built on public land revert back to State ownership after the expiry of a concession. Hence, in my view, Article 49 of the Shipping Code is not a restriction. However, if that is not accepted, the same arguments could be used for the purpose of justifying that rule.
91. One may add that the Italian rule concerns only structures that cannot easily be removed. Therefore, unlike the rule that was at issue in Laezza, it does not go beyond what is necessary to safeguard public property.
92. However, the protection of public property does not necessarily justify the transfer without compensation. Transfer to State ownership could also be achieved if the State were to compensate the concessionaire for the structures that it has already built, but which will remain on the State-owned land. In that respect, the Italian Government invoked the protection of public finances as a justification.
93. The rule at issue is without a doubt suitable to protect public finances, as no payment will have to be made from the public purse. However, does a less restrictive alternative exist that is capable of achieving the same aim?
94. To my understanding, the terms of a concession must create the possibility for an entrepreneur to make a reasonable profit on its investment during the concession period. The rationale for compensation might exist if that proves to be impossible. That might be the case if irremovable structures (such as steps leading to the sea, storage facilities, or restaurant buildings) are necessary to provide the service at the beach, but their construction costs exceeds the profits during the concession period.
95. Such an economic concern was important for the Court in Laezza, in finding that the measure at issue in that case, was a restriction on the right of establishment. The Court considered that the risk that an undertaking may have to transfer, without financial consideration, the rights to use the assets in its possession, may prevent it from obtaining a return on its investment. (36)
96. However, Article 49 of the Shipping Code provides that the ownership is to be transferred without compensation unless a different agreement is reached between the State and the concessionaire. That rule takes into consideration the economic concerns of potential concessionaires that their business would not generate profits, or would suffer losses, if there is no compensation on expiry of the concession for the structures in which they have invested.
97. If the concessionaire is aware of the applicable rules in advance, he or she may negotiate an adequate compensation in the event that the necessary investment is too great to be returned during the concession period.
98. Finally, if any additional compensation were to be paid to the exiting concessionaire, that would place new competitors competing for the new concession on the same land in a less advantageous position. Such an option would be contrary to EU law, which requires that Member States enable fair cross-border competition if they decide to offer public domains for private economic activities. (37)
99. Therefore, compensating the exiting concessionaire in an amount that exceeds the investment in the object that is transferred to State ownership is not an option under EU law.
100. In light of the above, it seems to me that a less restrictive alternative to the protection of the public finances than the one provided for in the Shipping Code does not exist. That rule allows for compensation where it is necessary to address an economic imbalance, but otherwise, as indeed required by EU law, prevents payment from the public budget, which would discriminate against new competitors for the same public domain.
101. Of course, the referring court, which has all the information about the effect and interrelation of applicable Italian rules, needs to assess whether the proposed analysis could indeed be applied in the specific situation of the concessions at Italian beaches. It is, in the end, for that court to decide whether Article 49 of the Shipping Code, placed within its proper context, is suitable and necessary for the protection of public domains and of public finances.
102. As far as additional justifications – protection of the environment, culture and tourism – are concerned, the Italian Government has not explained the link between the particular rule of Article 49 of the Shipping Code and the protection of those concerns. Even if the decision to keep beaches as part of the public domain can be justified by environmental or cultural reasons, protection of those public interests can be better achieved by measures requiring concessionaires to take, or refrain from taking, specific action. For example, they could be required to abide by rules to build in accordance with certain standards, or to take care of historic or cultural property in the area under concession. Nevertheless, the Municipality might elaborate on those justifications in the context of the national procedure and establish a clearer link as to why those reasons could justify Article 49 of the Shipping Code.
103. SIIB also invoked the possible infringement of the right to conduct a business and the right to property. The referring court, however, did not ask for the interpretation of Articles 16 and 17 of the Charter which concern those rights. Nevertheless, it may be useful to recall that the Court has already explained that the examination of the restriction represented by national legislation from the point of view of Article 49 TFEU also covers possible limitations of the exercise of the rights and freedoms laid down in Articles 15 to 17 of the Charter, so that a separate examination of the right to property enshrined in Article 17 of the Charter is not necessary. (38)
Interim conclusion
104. If the national rule at issue in the present case is characterised as a non-discriminatory restriction on the right of establishment, I find it, subject to the verifications to be carried out by the referring court, proportionate to the purpose of protecting public property and public finances.
IV. Conclusion
105. In the light of the foregoing, I propose that the Court of Justice answer the question referred by the Consiglio di Stato (Council of State, Italy) as follows:
A national measure such as Article 49 of the Codice della navigazione (Shipping Code), which, on the expiry of the concession results in the transfer of the irremovable structures built on the maritime property under concession to State ownership without compensation, does not constitute a restriction on the right of establishment as prohibited by Article 49 TFEU, if the concession period is sufficient for the amortisation of the investment by the concessionaire. That is so even if the same concessionaire is awarded the new concession on the same land.
Alternatively, if a national rule such as Article 49 of the Shipping Code is characterised as a non-discriminatory restriction on the right of establishment, such a restriction is not prohibited by Article 49 TFEU, as far as it is proportionate to the legitimate aims of the protection of public property and of public finances, which remains for the national court to verify.