JUDGMENT OF THE COURT (Ninth Chamber)
29 February 2024 (*)
(Failure of a Member State to fulfil obligations – Article 258 TFEU – Directive (EU) 2018/1808 – Provision of audiovisual media services – Failure to transpose and to communicate transposition measures – Article 260(3) TFEU – Application for an order to pay a lump sum and a penalty payment)
In Case C‑679/22,
ACTION for failure to fulfil obligations under Article 258 TFEU and Article 260(3) TFEU, brought on 4 November 2022,
European Commission, represented by L. Armati, U. Małecka, L. Malferrari and E. Manhaeve, acting as Agents,
applicant,
v
Ireland, represented by M. Browne, Chief State Solicitor, A. Joyce and D. O’Reilly, acting as Agents, and by B. Doherty, Barrister-at-Law,
defendant,
THE COURT (Ninth Chamber),
composed of O. Spineanu-Matei, President of the Chamber, J.‑C. Bonichot and L.S. Rossi (Rapporteur), Judges,
Advocate General: P. Pikamäe,
Registrar: A. Calot Escobar,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 By its application, the European Commission requests the Court to:
– declare that, by failing to adopt the laws, regulations and administrative provisions necessary to comply with Directive (EU) 2018/1808 of the European Parliament and of the Council of 14 November 2018 amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) in view of changing market realities (OJ 2018 L 303, p. 69), or, in any event, by failing to communicate them to the Commission, Ireland has failed to fulfil its obligations under Article 2 of that directive;
– order Ireland to pay a lump sum based on a daily amount of EUR 5 544.90 per day and amounting to a minimum of EUR 1 376 000;
– if the failure to fulfil obligations found in the first indent has continued until the date of delivery of the judgment, order Ireland to make a penalty payment of EUR 32 257.20 per day, from that date until the date of compliance with its obligations under Directive 2018/1808, and
– order Ireland to pay the costs.
Legal context
2 Recitals 1, 4 and 16 of Directive 2018/1808 are worded as follows:
‘(1) The last substantive amendment to Council Directive 89/552/EEC [of 3 October 1989 on the coordination of certain provisions laid down by Law, Regulation or Administrative Action in Member States concerning the pursuit of television broadcasting activities (OJ 1989 L 298, p. 23)], subsequently codified by Directive 2010/13/EU of the European Parliament and of the Council [of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) (OJ 2010 L 95, p. 1)], was made in 2007 with the adoption of Directive 2007/65/EC of the European Parliament and of the Council [of 11 December 2007 (OJ 2007 L 332, p. 27)]. Since then, the audiovisual media services market has evolved significantly and rapidly due to the ongoing convergence of television and Internet services. Technical developments have allowed for new types of services and user experiences. Viewing habits, particularly those of younger generations, have changed significantly. While the main TV screen remains an important device for sharing audiovisual experiences, many viewers have moved to other, portable devices to watch audiovisual content. Traditional TV content still accounts for a major share of the average daily viewing time.
However, new types of content, such as video clips or user-generated content, have gained an increasing importance and new players, including providers of video-on-demand services and video-sharing platforms, are now well-established. This convergence of media requires an updated legal framework in order to reflect developments in the market and to achieve a balance between access to online content services, consumer protection and competitiveness.
…
(4) Video-sharing platform services provide audiovisual content which is increasingly accessed by the general public, in particular by young people. This is also true with regard to social media services, which have become an important medium to share information and to entertain and educate, including by providing access to programmes and user-generated videos. Those social media services need to be included in the scope of Directive [2010/13]. because they compete for the same audiences and revenues as audiovisual media services. Furthermore, they also have a considerable impact in that they facilitate the possibility for users to shape and influence the opinions of other users. Therefore, in order to protect minors from harmful content and all citizens from incitement to hatred, violence and terrorism, those services should be covered by Directive [2010/13] to the extent that they meet the definition of a video-sharing platform service.
…
(16) Because of the specific nature of audiovisual media services, especially the impact of those services on the way people form opinions, users have a legitimate interest in knowing who is responsible for the content of those services. In order to strengthen freedom of expression, and, by extension, to promote media pluralism and avoid conflicts of interest, it is important for Member States to ensure that users have easy and direct access at any time to information about media service providers. It is for each Member State to decide, in particular with respect to the information which may be provided on ownership structure and beneficial owners.’
3 Article 1 of Directive 2018/1808 amends certain of the provisions of Directive 2010/13 and inserts new provisions into it.
4 Thus, by virtue of Article 1(10) of Directive 2018/1808, an Article 6a has been inserted into Directive 2010/13, which is worded as follows:
‘1. Member States shall take appropriate measures to ensure that audiovisual media services provided by media service providers under their jurisdiction which may impair the physical, mental or moral development of minors are only made available in such a way as to ensure that minors will not normally hear or see them. Such measures may include selecting the time of the broadcast, age verification tools or other technical measures. They shall be proportionate to the potential harm of the programme.
The most harmful content, such as gratuitous violence and pornography, shall be subject to the strictest measures.
…
3. Member States shall ensure that media service providers provide sufficient information to viewers about content which may impair the physical, mental or moral development of minors. For this purpose, media service providers shall use a system describing the potentially harmful nature of the content of an audiovisual media service.
…’
5 Likewise, by virtue of Article 1(23) of Directive 2018/1808, a Chapter IXa, entitled ‘Provisions applicable to video-sharing platform services’, has been inserted into Directive 2010/13, which includes, inter alia, Article 28b, paragraph 1 of which states:
‘Without prejudice to Articles 12 to 15 of Directive 2000/31/EC [of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (OJ 2000 L 178, p. 1)], Member States shall ensure that video-sharing platform providers under their jurisdiction take appropriate measures to protect:
(a) minors from programmes, user-generated videos and audiovisual commercial communications which may impair their physical, mental or moral development in accordance with Article 6a(1);
(b) the general public from programmes, user-generated videos and audiovisual commercial communications containing incitement to violence or hatred directed against a group of persons or a member of a group based on any of the grounds referred to in Article 21 of the Charter [of Fundamental Rights of the European Union];
(c) the general public from programmes, user-generated videos and audiovisual commercial communications containing content the dissemination of which constitutes an activity which is a criminal offence under Union law, namely public provocation to commit a terrorist offence as set out in Article 5 of Directive (EU) 2017/541 [of the European Parliament and of the Council of 15 March 2017 on combating terrorism and replacing Council Framework Decision 2002/475/JHA and amending Council Decision 2005/671/JHA (OJ 2017 L 88, p. 6)]; offences concerning child pornography as set out in Article 5(4) of Directive 2011/93/EU of the European Parliament and of the Council [of 13 December 2011 on combating the sexual abuse and sexual exploitation of children and child pornography, and replacing Council Framework Decision 2004/68/JHA (OJ 2011 L 335, p. 1)] and offences concerning racism and xenophobia as set out in Article 1 of [Council] Framework Decision 2008/913/JHA [of 28 November 2008 on combating certain forms and expressions of racism and xenophobia by means of criminal law (OJ 2008 L 328, p. 55)].’
6 Article 2 of Directive 2018/1808 provides:
‘1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 19 September 2020. They shall immediately communicate the text of those provisions to the Commission.
When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.
2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.’
Pre-litigation procedure and proceedings before the Court
7 Having received no communication from Ireland of the laws, regulations and administrative provisions necessary to comply with Directive 2018/1808 within the period prescribed in Article 2 thereof, the Commission sent Ireland, on 20 November 2020, a letter of formal notice and invited it to submit its observations.
8 On 18 January 2021, the Irish authorities replied to that letter, explaining that, in order to give effect to Directive 2018/1808 in Ireland, it was necessary to revise its broadcasting and media regulatory framework and to make substantial amendments to it. Those authorities stated that they hoped that the transposition measures would be adopted in 2021, in particular after the expiry, on 11 March 2021, of the standstill period following the communication to the Commission, on 10 December 2020, of the general scheme of the bill transposing Directive 2018/1808, under Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services (OJ 2015 L 241, p. 1).
9 In the absence of any indication from the Irish authorities of a timetable or date for transposition of Directive 2018/1808, the Commission sent, on 23 September 2021, a reasoned opinion to Ireland, asking it to comply with its obligations within two months of receipt of that reasoned opinion.
10 By letter of 23 November 2021, the Irish authorities replied to the said reasoned opinion, indicating that intensive work was ongoing in order to ensure the swift enactment of the measures necessary to transpose that directive. They explained that the bill had been drafted and that it was hoped that publication would take place before the end of 2021 with a view to commencing the process of its adoption by the Oireachtas (Irish Parliament).
11 Finding that the measures for the full transposition of Directive 2018/1808 had still not been adopted by Ireland, the Commission decided, on 19 May 2022, to bring the present action before the Court.
12 On 4 November 2022, the Commission brought the present action.
13 In its rejoinder of 8 May 2023, Ireland indicated that it had notified to the Commission, on 2 March 2023, the Online Safety and Media Regulation Act 2022 (‘the Online Safety Act’), which transposes the main provisions of Directive 2018/1808.
14 On 8 May 2023, the written part of the procedure was closed.
15 By letter of 26 January 2024, the Commission adapted the form of order sought so far as concerns the application for the imposition of financial penalties on Ireland (‘the letter of 26 January 2024’), account being had of the progress made by that Member State in transposing Directive 2018/1808 since the entry into force of the Online Safety Act in March 2023.
16 As far as the lump sum is concerned, the Commission now proposes applying, first, for the period from the date following that of the expiry of the time limit for transposition of that directive, namely 20 September 2020, until 14 March 2023, a lump sum of EUR 4 983 000 and, second, for the period from 15 March 2023 to the date on which the infringement comes to an end or, failing that, to the date of the delivery of the judgment in the present case, a lump sum of EUR 4 400 per day.
17 In terms of the penalty payment, the Commission now asks the Court to impose a daily penalty payment of EUR 26 400 until the date on which Ireland fully complies with the obligations laid down in Article 2 of Directive 2018/1808.
18 On 12 February 2024, Ireland submitted its observations on the adaptation of the form of order sought by the Commission.
The action
Admissibility
19 Ireland contends that the action is inadmissible on the ground that the Commission failed to observe the principle of collective decision making. In that regard, Ireland submits that, assuming that the members of the College of Commissioners merely took a decision in principle to bring the matter before the Court without examining the seriousness of the infringement, that circumstance would be contrary to the principle according to which the Commission, in accordance with its Rules of Procedure, is to decide collectively. In so far as it is apparent from the application that the Commission wrongly relies on assumptions as to the seriousness of the infringement in order to determine the amounts of the lump sum and penalty payment requested, however, the members of the College were not properly briefed about the true facts of the case.
20 The Commission contends that the plea of inadmissibility raised by Ireland should be rejected.
21 In that regard, suffice it to note that, in criticising the Commission for relying on assumptions concerning, in particular, the assessment of the factor relating to the seriousness of the alleged infringement, from which it must be inferred that that institution did not act in accordance with the principle of collective decision making, Ireland is in fact challenging not the admissibility of the action for failure to fulfil obligations brought under Article 258 TFEU, but the merits of the application for the imposition of financial penalties under Article 260(3) TFEU.
22 In those circumstances, the plea of inadmissibility of the action must be rejected.
Failure to fulfil obligations under Article 258 TFEU
Arguments of the parties
23 The Commission recalls that, in accordance with the case-law of the Court, the provisions of a directive must be implemented with unquestionable binding force, with the specificity, precision and clarity required in order to satisfy the requirement of legal certainty. What is more, Article 2 of Directive 2018/1808 requires the Member States to adopt a specific measure transposing the directive.
24 In any event, Member States are required to provide the Commission with precise information to enable it to identify unambiguously which legislative, regulatory and administrative measures they consider to have fulfilled the obligations imposed by a directive.
25 On the expiry of the period laid down in the reasoned opinion and until the bringing of the present action, however, Ireland had not adopted the measures necessary to transpose Directive 2018/1808 into national law and, at any rate, had failed to communicate them to the Commission. The Commission moreover notes that Member States may not rely on internal circumstances or practical difficulties to justify failure to transpose provisions within the prescribed time limits.
26 Ireland does not dispute that, by the expiry of the period laid down in the reasoned opinion, it had not adopted the measures necessary to transpose Directive 2018/1808.
27 It is true that, in its rejoinder, Ireland states that it notified to the Commission, on 2 March 2023, the Online Safety Act, which transposes most of the provisions of Directive 2018/1808. However, Ireland concedes that it has not transposed that directive in its entirety or communicated all the relevant transposition measures, but asserts that its transposition into Irish law is at a very advanced stage.
Findings of the Court
28 According to the Court’s settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in that Member State at the end of the period laid down in the Commission’s reasoned opinion (judgments of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 30, and of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 15 and the case-law cited).
29 In the case at hand, the Commission having notified the reasoned opinion to Ireland on 23 September 2021, the two-month period accorded to that Member State for complying with its obligations expired on 23 November 2021.
30 However, as is apparent, in particular, from the defence and the rejoinder lodged by Ireland in the present proceedings, it is common ground that, on the expiry of the deadline laid down in the reasoned opinion of 23 September 2021, Ireland had not adopted the laws, regulations and administrative provisions necessary to comply with Directive 2018/1808 nor, consequently, had it communicated them to the Commission.
31 The existence, in Irish law, of legislation which Ireland considers to ensure, at least in part, compliance with the same values as those protected by Directive 2018/1808 does not invalidate that conclusion in the light of the obligation on Member States to adopt a specific measure transposing a directive which expressly provides that the necessary measures transposing the directive are to include a reference to it or that such reference is to be made when those measures are officially published (see, to that effect, judgment of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 31 and the case-law cited), as is the case with Article 2 of Directive 2018/1808. That legislation cannot, therefore, be regarded as constituting a specific measure transposing that directive.
32 It follows that Ireland has failed to fulfil its obligations under Article 2 of that directive.
Financial penalties under Article 260(3) TFEU
Arguments of the parties
33 In its application, the Commission notes, first, that Directive 2018/1808 was adopted under the ordinary legislative procedure and thus falls within the scope of Article 260(3) TFEU and, second, that Ireland’s failure to fulfil the obligation laid down in Article 2 of that directive, owing to the fact that it did not communicate to the Commission the national provisions transposing the directive, clearly constitutes a failure to notify all the measures transposing that directive, within the meaning of that Article 260(3) TFEU.
34 Pursuant to that provision, and in accordance with the guidance in Communication 2017/C 18/02, entitled ‘EU law: Better results through better application’ (OJ 2017 C 18, p. 10), the Commission asks the Court to impose a lump sum and a penalty payment on Ireland.
35 The Commission also observes that, in its Communication 2011/C 12/01, entitled ‘Implementation of Article 260(3) [TFEU]’ (OJ 2011 C 12, p. 1; ‘the 2011 Communication’), it stated that the periodic penalty payments that it would propose under Article 260(3) TFEU would be calculated according to the same methodology as that used for referrals to the Court pursuant to paragraph 2 of that provision, as is set out in points 14 to 18 of the Communication of 12 December 2005, entitled ‘Application of Article 228 of the EC Treaty’ (SEC(2005) 1658; ‘the 2005 Communication’).
36 Consequently, the determination of the financial penalty must be based on the three fundamental criteria used in the implementation of Article 260(2) TFEU, namely (i) the seriousness of the infringement; (ii) the duration of the infringement, and (iii) the need to ensure that the penalty itself has a deterrent effect in order to avoid repeated infringements.
37 Regarding, first, the seriousness of the infringement, in accordance with the 2011 Communication, the Commission proposes that the coefficient for seriousness should be set taking into account two parameters, namely the importance of the EU rules subject to the infringement and their consequences for general and individual interests.
38 In that context, in the first place, the Commission emphasises that the rules laid down by Directive 2018/1808 aim to develop further the internal market in the very dynamic sector that is the audiovisual media sector. The purpose of those rules is to specify the rights of providers of those services, to extend the scope of Directive 2010/13 to video-sharing platforms, to establish additional criteria to determine the jurisdiction of Member States and to provide for a mechanism for gathering up-to-date information regarding the jurisdiction of Member States over media service providers. In addition, Directive 2018/1808 creates a safer, fairer and more diverse audiovisual landscape, in the light of technological progress. Thus, its rules reinforce the protection of viewers, with particular regard to the safety of those most vulnerable, such as minors, by introducing rules to protect them against content which might be harmful for their development (including in audiovisual commercial communications and video-sharing platforms), and to prohibit content that incites violence or hatred. That directive also aims to facilitate accessibility for persons with disabilities and to allow national measures to facilitate the prominence of content of general interest. The said directive fosters cultural diversity and promotes the production of European works by video-on-demand. It also includes provisions which ensure signal integrity and regulate audiovisual commercial communications. Last, the same directive reinforces the provisions of Directive 2010/13 intended to guarantee the independence of national regulatory bodies.
39 In the second place, the Commission considers that the lack of transposition of Directive 2018/1808 in Ireland is liable to have a negative influence on the situation of business users and end users.
40 In terms of the former, in the absence of transposition of that directive, non-linear services, that is to say, on-demand services, are still not subject to obligations similar to those of linear services. Likewise, apart from the fact that media companies cannot benefit from a modernised legal framework, service providers do not benefit either from the new provisions which strengthen the Member State of origin principle or from more flexibility in television advertising, when such flexibility would allow broadcasters to choose more freely when to show advertisements throughout the day.
41 As for end users, they cannot benefit from the rules protecting them against content which incites violence and hatred, or from those ensuring accessibility for disabled people. Minors do not benefit from the strengthened measures against inappropriate audiovisual commercial communications and, in view of the lack of transposition of Chapter IXa of Directive 2018/1808, the responsible behaviour of video-sharing platform providers – whose users are primarily minors – is not guaranteed in Ireland. Nor do end users benefit from the new obligations to promote the production and distribution of European works.
42 In the light of those considerations and in view of the fact that no transposition measure was communicated to the Commission, which must be regarded as definitely serious, the Commission proposes a seriousness factor of 10 in the present case on the scale of 1 to 20 provided for in its 2005 Communication, to which the 2011 Communication refers. In its letter of 26 January 2024, the Commission reiterates that proposal in relation to the period running until 14 March 2023. However, in view of the entry into force of the Online Safety Act, it proposes, pursuant to its Communication of 4 January 2023, entitled ‘Financial sanctions in infringement proceedings’ (OJ 2023 C 2, p. 1; ‘the 2023 Communication’), reducing the seriousness coefficient to 8 for the period from 15 March 2023 until the date on which the infringement comes to an end or, failing that, until the delivery of the judgment in the present case.
43 Second, as regards the duration of the infringement, the Commission submits, in its application, that, in accordance with its 2011 Communication, that communication corresponds to a 20-month period, which began on the day following the expiry of the time limit for transposition, set in Directive 2018/1808 at 19 September 2020, and ended on the date of adoption of the decision to bring an action against Ireland before the Court, namely 19 May 2022. Applying a rate of 0.10 per month leads to a duration factor of 2 on the scale of 1 to 3 provided for in that communication, which refers to the 2005 Communication. In its letter of 26 January 2024, the Commission proposes that the duration of the infringement should be adjusted so as to take account of the fact that the full transposition of that directive by Ireland had still not taken place as of 14 March 2023 – 906 days after the time limit set in Article 2 of Directive 2018/1808 – and continued even after that date.
44 Third, as far as the deterrent effect of the penalty is concerned, the Commission proposes, in its application, using the calculation method provided for in its Communication 2019/C 70/01 entitled ‘Modification of the calculation method for lump sum payments and daily penalty payments proposed by the Commission in infringement proceedings before the Court of Justice of the European Union’ (OJ 2019 C 70, p. 1; ‘the 2019 Communication’). That method, expressed by the ‘n’ factor, takes into account the ability of the Member State concerned to pay and is based on two elements, namely the gross domestic product (GDP) and the institutional weight of that Member State, represented by the number of its seats in the European Parliament.
45 Even though the Court, in its judgment of 20 January 2022, Commission v Greece (Recovery of State aid – Ferronickel) (C‑51/20, EU:C:2022:36), called into question the relevance of both that second element and the adjustment coefficient of 4.5 provided for in the 2019 Communication, the Commission explains that it nevertheless decided to apply in this case the criteria laid down in that communication, pending the adoption of a new communication which would take account of the recent case-law of the Court.
46 Thus, in accordance with the update of the 2019 Communication, set out in Communication 2022/C 74/02, entitled ‘Updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice of the European Union in infringement proceedings’ (OJ 2022 C 74, p. 2; ‘the 2022 Communication’), the ‘n’ factor for Ireland is 0.61. In the letter of 26 January 2024, the Commission now proposes using the ‘n’ factor, as follows from the 2023 Communication. According to that communication, that factor for Ireland is 0.55.
47 As for the amount of the daily penalty payment, it is calculated by multiplying a basic flat-rate amount by the seriousness factor and the duration factor, then by the ‘n’ factor applicable to the Member State concerned.
48 Even though, in the application, for the calculation of the daily penalty payment, the Commission used data from the 2022 Communication, it relied, in the letter of 26 January 2024, on those established in the 2023 Communication. Thus, in accordance with the latter communication, the basic flat-rate amount is EUR 3 000 per day. Given the proposed seriousness factor of 8, the proposed duration factor of 2.0 and the proposed ‘n’ factor of 0.55, this would result in a daily amount of EUR 26 400 from the day on which the judgment is delivered until the date on which Ireland complies with its obligations.
49 In respect of the lump sum, the Commission considers that it should have a minimum base fixed for each Member State. In the case at hand, in accordance with the 2023 Communication, that minimum lump sum for Ireland is EUR 1 540 000.
50 In the light of point 21 of the 2005 Communication, if the calculation of the lump sum exceeds the minimum lump sum fixed for each Member State, the Commission will propose that the Court determine the lump sum by multiplying a daily amount by the number of days the infringement persists between the day which follows the expiry of the time limit for transposition set in Directive 2018/1808 and the date the infringement comes to an end, or, failing compliance, the date of delivery of the judgment under Article 260(3) TFEU.
51 Thus, the daily amount should be calculated by multiplying the basic flat-rate amount by the seriousness factor and by the ‘n’ factor.
52 In accordance with the 2023 Communication, the Commission proposes, in the letter of 26 January 2024, that the basic flat-rate amount for Ireland should be EUR 1 000 per day. In the case at hand, with the seriousness factor set, first, at 10 for the period from the date following that of the expiry of the time limit for transposing that directive, namely 20 September 2020, until 14 March 2023 and, second, at 8 for the period from 15 March 2023 to the date on which the infringement comes to an end or, failing that, to the date of delivery of the judgment in the present case, and the ‘n’ factor at 0.55, the daily amount of the lump sum would be EUR 5 500 for the first period referred to above and EUR 4 400 for the second period, it being further specified that the lump sum which Ireland should be ordered to pay cannot be less than EUR 1 540 000.
53 Ireland disputes, first, the Commission’s assessments relating to the seriousness of the infringement. It submits that it is incorrect to claim that Irish law contains neither rules protecting users against content inciting violence and hatred nor provisions relating to commercial communications concerning minors, given that Directive 2010/13, which provides for such rules and provisions, has been transposed into the Irish legal order. The same is true of the Commission’s other assertions relating to audiovisual service providers. Thus, the Commission formed an opinion on the seriousness of the infringement without having any real knowledge of the national legislative context and without having analysed Irish law, relying solely on false assumptions. The Commission has therefore failed to substantiate its allegation as to the seriousness of the infringement.
54 Second, Ireland notes that the Commission itself admits that its method of calculating the deterrent effect of the penalty is incompatible with the judgment of 20 January 2022, Commission v Greece (Recovery of State aid – Ferronickel) (C‑51/20, EU:C:2022:36). It is unacceptable, however, for the Commission to ask the Court to impose penalties using an adjustment coefficient of 4.5, while admitting that it cannot provide an objective justification for that coefficient.
55 Third, in terms of the duration of the infringement, Ireland acknowledges that the transposition of Directive 2018/1808 into its legal order faced a number of difficulties and required complex legislative changes. That Member State also requests that the standstill period, arising from the obligation to communicate the general scheme of the draft Online Safety Act (‘the Online Safety Bill’), pursuant to Directive 2015/1535, be taken into account in the calculation of the duration of the infringement, which is necessarily based on periods after the transposition deadline. During the standstill period, after all, the Member State is legally prevented from enacting national rules.
56 Fourth and last, Ireland asks the Court, primarily, not to impose any penalty. The payment of a lump sum would be disproportionate, given that the enactment of all the national provisions necessary for the transposition of Directive 2018/1808 is imminent and that Ireland has cooperated with the Commission throughout the pre-litigation procedure and kept it informed of the progress of the relevant regulatory framework. Moreover, the Commission is proposing to use an unlawful methodology and, in addition, gives a completely misleading description of the state of Irish law.
57 So far as concerns the penalty payment, Ireland contends that it should not be necessary to impose it, assuming that all the national provisions for the purposes of transposition are in place by the date of delivery of the forthcoming judgment.
58 In the alternative, Ireland submits that any lump sum or penalty payment imposed on it should be only a token amount, adapted to the circumstances and proportionate to the infringement.
59 In its reply, the Commission states, with regard to the alleged lack of seriousness of the infringement, that it systematically applies a coefficient for seriousness of 10 in case of a complete failure to notify transposition measures, since, in a Union based on the rule of law, all directives are to be considered of equal importance.
60 In any event, the Commission refutes the claims that it has relied on presumptions. It states that it mentioned the provisions of Directive 2018/1808 concerning protection against content inciting violence and hatred and commercial communications aimed at minors as essential elements of that directive, which strengthen previous legislative acts, without claiming to have analysed Irish law, which, moreover, it is under no obligation to do. That does not disprove its statement that the provisions in Irish law were not ‘strengthened’ as regards those essential elements, which is based precisely on the failure to transpose the said directive.
61 As far as the duration of the infringement is concerned, the Commission observes that the various internal difficulties cited by Ireland to justify its failure to comply with the time limit for transposing Directive 2018/1808 cannot be accepted. In addition, any requirement to notify proposed changes under Directive 2015/1535 or any other Union act should be taken into account by the Member State in order to ensure timely transposition of a directive. In the case at hand, the notification of the general scheme of the bill partly transposing Directive 2018/1808, pursuant to Directive 2015/1535, was made almost three months after the expiry of the time limit for transposition set by Directive 2018/1808.
62 Last, the Commission does not see how, in the circumstances of the case, its application for Ireland to be ordered to pay a lump sum is disproportionate. The fact that Ireland cooperated by informing the Commission of the state of progress – or lack thereof – does not preclude the imposition of penalties. In terms of Ireland’s argument based on the judgment of 20 January 2022, Commission v Greece (Recovery of State aid – Ferronickel) (C‑51/20, EU:C:2022:36), the Commission recalls that, in that case, despite the criticisms made of the taking into account of the institutional weight of the Member State concerned, the Court nevertheless imposed both a penalty payment and a lump sum payment on that Member State. It considers that the proposal in its application provides a useful guide to the Court in the exercise of its discretion.
63 In its rejoinder, Ireland states that the Online Safety Act, which entered into force on 22 February 2023 and which was formally notified to the Commission on 2 March 2023, addresses most of the issues identified by the Commission in its application, which underpinned the importance of Directive 2018/1808 to general and individual interests. That aspect should therefore be taken into account when examining the seriousness of the infringement.
64 As regards Ireland’s ability to pay, Ireland submits that, since the Commission admits that the Court is not bound by its calculations, the Court should not use the adjustment coefficient of 4.5 or indeed any element of the calculations proposed by the Commission. Thus, the Court should not impose any penalty or, at the very least, it should be only a token amount.
65 In its letter of 12 February 2024, Ireland welcomes the adaption of the form of order sought by the Commission to the extent that it revises certain aspects of the calculation of the penalties that it initially proposed, such as the seriousness factor. However, Ireland reiterates its position according to which the Court should not impose any penalties or, at the very least, they should be only token amounts. That Member State nevertheless concedes that several provisions of Directive 2018/1808 must still be transposed into Irish law by rules or codes that must be adopted by Coimisiún na Meán (Media Commission, Ireland), the regulatory authority which was established following the adoption of the Online Safety Act.
Findings of the Court
– Application of Article 260(3) TFEU and imposition of financial penalties
66 Article 260(3) TFEU provides, in its first subparagraph, that, where the Commission brings before the Court an action pursuant to Article 258 TFEU, on the grounds that the Member State concerned has failed to fulfil its obligation to notify the measures transposing a directive adopted through a legislative procedure, that institution may, when it deems appropriate, specify the amount of the lump sum or penalty payment to be paid by that Member State which it considers appropriate in the circumstances. In accordance with the second subparagraph of that Article 260(3), if the Court finds that there is an infringement, it may impose a lump sum or penalty payment not exceeding the amount specified by the Commission, the payment obligation to take effect on the date set by the Court in its judgment.
67 Since, as is apparent from paragraph 30 above, it is established that, on the expiry of the deadline laid down in the reasoned opinion of 23 September 2021, Ireland had neither adopted nor, therefore, notified to the Commission the measures necessary to transpose the provisions of Directive 2018/1808 into its national law, the failure to fulfil obligations thus declared falls within the scope of Article 260(3) TFEU.
68 Furthermore, it should be recalled that the objective pursued by the introduction of the system set out in Article 260(3) TFEU is not only to induce Member States to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist, but also to simplify and speed up the procedure for imposing financial penalties for failures to comply with the obligation to notify a national measure transposing a directive adopted through a legislative procedure (see, to that effect, judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 52 and the case-law cited).
69 In order to achieve that objective, Article 260(3) TFEU provides for the imposition of two types of financial penalty: a lump sum and a penalty payment.
70 While the imposition of a penalty payment seems particularly suited to inducing a Member State to put an end as soon as possible to a breach of obligations, the imposition of a lump sum is based more on assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period (see, to that effect, judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 54 and the case-law cited).
71 In the case at hand, the Commission has proposed that the payment of both a lump sum and a penalty payment should be imposed on Ireland.
– Application for the imposition of a lump sum
72 As regards whether or not the payment of a lump sum should be imposed in the present case, it must be borne in mind that, in each case, it is for the Court to determine, in the light of the circumstances of the case before it and according to the degree of persuasion and deterrence which appears to it to be required, the financial penalties that are appropriate, in particular, for preventing the recurrence of similar infringements of EU law (judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 69 and the case-law cited).
73 In the present case, it must be found that, notwithstanding the fact that Ireland cooperated with the Commission services throughout the pre-litigation procedure and kept them informed of the reasons which prevented it from ensuring the transposition of Directive 2018/1808 into national law, all the legal and factual circumstances culminating in the breach of obligations established – namely, the fact that no measure necessary for the transposition of that directive had been notified at the expiry of the period laid down in the reasoned opinion or even at the date on which the present action was brought – indicate that if the future repetition of similar infringements of EU law is to be effectively prevented, a dissuasive measure must be adopted, such as a lump sum payment (see, by analogy, judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 70 and the case-law cited).
74 With regard, in the second place, to the calculation of the lump sum which it is appropriate to impose in the present case, it must be borne in mind that, in exercising its discretion in the matter, as delimited by the Commission’s proposals, it is for the Court to fix the amount of the lump sum which may be imposed on a Member State pursuant to Article 260(3) TFEU, in an amount appropriate to the circumstances and proportionate to the failure to fulfil obligations. Relevant considerations in that respect include factors such as the seriousness of the failure to fulfil obligations, the length of time for which the failure has persisted and the relevant Member State’s ability to pay (judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 73 and the case-law cited).
75 As regards, first of all, the seriousness of the infringement, it must be borne in mind that the obligation to adopt national measures for the purposes of ensuring that a directive is transposed in full and the obligation to notify those measures to the Commission are fundamental obligations incumbent on the Member States in order to ensure optimal effectiveness of EU law and that failure to fulfil those obligations must, therefore, be regarded as definitely serious (judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 74 and the case-law cited).
76 In addition, in the case at hand, Directive 2018/1808 is an important instrument for adapting and revising EU rules according to the rapid and significant developments in the audiovisual media services market. Due to the convergence between television and internet services and the emergence of new types of content, including video-sharing services providing audiovisual content, it has been necessary, as recitals 1 and 4 of that directive highlight, to update the existing legal framework with the aim of achieving a balance between access to online content services, consumer protection – including the most vulnerable of them, such as minors – and competitiveness. However, the absence or inadequacy of appropriate measures transposing the provisions of that directive, which are intended, in particular, to protect minors from harmful content and to protect citizens from incitement to hatred, violence and terrorism, in particular on video-sharing platforms providing audiovisual content, including social media, must be regarded as definitely serious in the light of the consequences of that absence or inadequacy for public and private interests within the European Union, given the impact of audiovisual media services on the way people form opinions, as recital 16 of the same directive states.
77 The seriousness of that infringement is, moreover, heightened by the fact that, despite the adoption, in the course of the proceedings before the Court, of the Online Safety Act, Ireland had not adopted all the measures transposing Directive 2018/1808, including the essential elements thereof.
78 It is thus that Ireland conceded, in its rejoinder, that it had not yet transposed the provisions, contained in Article 6a(1) and (3) of Directive 2010/13, as inserted into that directive by Directive 2018/1808, which seek to ensure that audiovisual media services do not make available to minors content which may impair their physical, mental or moral development and those in Article 28b(1) of Directive 2010/13, as inserted into that directive by Directive 2018/1808, relating to the taking of appropriate measures by video-sharing platform providers under the jurisdiction of each Member State to protect the general public from programmes, videos or audiovisual commercial communications containing incitement to violence or hatred or which constitute an activity which is a criminal offence under EU law. Furthermore, while Ireland claims that the Online Safety Act contains provisions allowing for the adoption of codes aimed either at the protection of children or at video-sharing platforms, it accepts that the rules required to that end have not yet been fully implemented. Likewise, in the letter of 12 February 2024, Ireland conceded that, despite the adoption of the said act, several provisions of Directive 2018/1808 must still be transposed into Irish law.
79 As regards, next, the duration of the infringement, it must be recalled that that duration must, in principle, be assessed by reference to the date on which the Court assesses the facts and not the date on which proceedings are brought before it by the Commission. That assessment of the facts must be considered as being made at the date of conclusion of the proceedings (judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 79 and the case-law cited).
80 In the present case, it is common ground that the failure to fulfil obligations in question had not yet come to an end at the close of the written procedure, on 8 May 2023.
81 As regards the beginning of the period which must be taken into account in order to fix the amount of the lump sum, the relevant date for evaluating the duration of the infringement at issue is not the date of expiry of the period prescribed in the reasoned opinion, but the date of expiry of the transposition deadline laid down in the directive in question (judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 81 and the case-law cited).
82 In the case at hand, it is common ground that, by the expiry of the time limit for transposition laid down in Article 2 of Directive 2018/1808, namely 19 September 2020, Ireland had not adopted the laws, regulations and administrative provisions necessary to ensure the transposition of that directive nor had it, therefore, communicated the measures transposing it to the Commission.
83 It follows that the infringement at issue lasted for over two years and seven months.
84 That assessment is not invalidated by Ireland’s argument that it was obliged to observe a standstill period of three months following the communication to the Commission, in December 2020, of the general scheme of the Online Safety Bill, pursuant to Directive 2015/1535, a period which, according to Ireland, should be deducted from the total duration of the infringement. It is, after all, common ground that compliance with that period is in no way the cause of Ireland’s delay in transposing the said directive, communication under Directive 2015/1535 having been effected after the expiry of the time limit for transposition of Directive 2018/1808. In that regard, it must be borne in mind that, if the period allowed for the transposition of a directive proves to be too short, as the case may be, because of the need to ensure, before the expiry of that period, compliance with the standstill period provided for by Directive 2015/1535, the only means of action compatible with EU law available to the Member State concerned consists in taking the appropriate initiatives in order to obtain the necessary extension of the period by the competent EU institution (see, to that effect, judgment of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 85).
85 Last, far as concerns the ability to pay of the Member State concerned, the Commission proposed, in its application, taking into account, in addition to the GDP of that Member State, its institutional weight in the European Union expressed by the number of seats it has in the European Parliament, in accordance with the 2019 Communication.
86 However, even before the present action was brought, the Court held that taking into account the institutional weight of the Member State concerned is not essential to ensuring sufficient deterrence and inducing that Member State to change its current or future conduct in the area concerned (judgments of 20 January 2022, Commission v Greece (Recovery of State aid – Ferronickel) (C‑51/20, EU:C:2022:36, paragraph 115, and of 9 November 2023, Commission v Sweden (Control of the acquisition and possession of weapons), C‑353/22, EU:C:2023:851, paragraph 75).
87 Although, in the letter of 26 January 2024, the Commission proposed using a method which follows from the 2023 Communication, in particular as regards the calculation of the ability to pay of the Member State concerned, it is not necessary to rule on that new method at this stage of the procedure. It is moreover important to note that, in accordance with point 7 of that communication, the rules and criteria set out therein apply only to decisions to refer matters to the Court under Article 260 TFEU taken after the publication of the said communication.
88 Having regard to the foregoing and in the light of the Court’s discretion under Article 260(3) TFEU, which provides that the Court cannot, as regards the payment of the lump sum imposed by it, exceed the amount specified by the Commission, it must be held that the effective prevention of future repetition of infringements similar to that resulting from the infringement of Article 2 of Directive 2018/1808 affecting the full effectiveness of EU law requires the imposition of a lump sum in the amount of EUR 2 500 000.
– Application for the imposition of a daily penalty payment
89 As regards the appropriateness of imposing a penalty payment in the present case, it should be recalled that the imposition of such a penalty payment is, in principle, justified only if the failure continues up to the time of the Court’s examination of the facts, which must be considered as being made at the date of conclusion of the proceedings (judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraphs 55 and 57 and the case-law cited).
90 As has been stated in paragraph 80 above, however, it is not disputed in the case at hand that, on the date of the closure of the written procedure, namely 8 May 2023, Ireland had neither adopted nor, therefore, notified all the measures necessary to ensure the transposition of the provisions of Directive 2018/1808 into national law. Accordingly, it must be held that Ireland persisted in its failure to fulfil its obligations.
91 The Court therefore considers that the imposition of a penalty payment on Ireland, sought by the Commission, is an appropriate financial means by which to ensure that that Member State puts a prompt end to the infringement established and complies with its obligations under Directive 2018/1808. Conversely, since it cannot be ruled out that, on the date of delivery of the judgment in the present case, that directive will have been transposed in full, that penalty payment is imposed only in so far as the infringement persists at the date of delivery of that judgment (see, by analogy, judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 61).
92 In exercising its discretion in the matter, it is for the Court to set the penalty payment so that it is, first, appropriate to the circumstances and proportionate to the infringement established and the ability to pay of the Member State concerned and, second, does not exceed, in accordance with the second subparagraph of Article 260(3) TFEU, the amount indicated by the Commission (judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 62).
93 In that context, for the purposes of determining the amount of the penalty payment, the criteria which must be taken into consideration are, in principle, the duration and seriousness of the infringement and the ability to pay of the Member State concerned (see, to that effect, judgment of 25 February 2021, Commission v Spain (Personal Data Directive – Criminal law), C‑658/19, EU:C:2021:138, paragraph 63).
94 As regards, first of all, the seriousness of the infringement, as has been stated in paragraph 75 above, the failure to fulfil the obligations to adopt national measures for the purposes of ensuring that a directive is transposed in full and to notify those measures to the Commission must be regarded as definitely serious.
95 In the case at hand, it is common ground that, on the expiry of the period laid down in the reasoned opinion, namely 23 November 2021, Ireland had failed to fulfil its obligations under Article 2 of Directive 2018/1808, such that, having regard also to the considerations set out in paragraphs 76 and 77 above, the effectiveness of EU law was manifestly not ensured.
96 However, it is important to take into account the fact that Ireland communicated to the Commission, on 2 March 2023, legislation partly transposing Directive 2018/1808, which led the Commission to adapting the form of order sought.
97 In terms, next, of the duration of the infringement, which must be taken into account in order to determine the amount of the penalty payment to be imposed, it must be held that the infringement continued after the expiry of the period laid down in the reasoned opinion, namely 23 November 2021, and had not yet come to an end at the close of the procedure before the Court.
98 Finally, so far as concerns the ability to pay of the Member State concerned, it is not necessary, as has been stated in paragraph 86 above, to take into account in that regard the institutional weight of the Member State concerned in order to ensure sufficient deterrence and to induce that Member State to change its current or future conduct in the area concerned. Likewise, in relation to the Commission’s proposal to use an adjustment coefficient of 4.5 in order to ensure that the penalty payment is proportionate and dissuasive, it should be recalled that the Court has already held that the Commission failed to establish the objective criteria on the basis of which it had fixed the value of that adjustment coefficient (judgment of 20 January 2022, Commission v Greece (Recovery of State aid – Ferronickel), C‑51/20, EU:C:2022:36, paragraph 117). Furthermore, as has been indicated in paragraph 87 above, it is not necessary to rule on the method used by the Commission in the 2023 Communication.
99 In the light of the foregoing, and having regard to the Court’s discretion under Article 260(3) TFEU, which provides that the Court may not, as regards the penalty payment which it imposes, exceed the amount indicated by the Commission, it is appropriate, should the infringement established in paragraph 32 above persist at the date of delivery of this judgment, to order Ireland to pay the Commission, as from that date and until that Member State has put an end to that infringement, a daily penalty payment in the amount of EUR 10 000.
Costs
100 Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and Ireland has been unsuccessful, the latter must be ordered to bear its own costs and to pay those incurred by the Commission.
On those grounds, the Court (Ninth Chamber) hereby:
1. Declares that, by failing to adopt, by the expiry of the period laid down in the reasoned opinion, the laws, regulations and administrative provisions necessary to comply with Directive (EU) 2018/1808 of the European Parliament and of the Council of 14 November 2018 amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) in view of changing market realities, and, therefore, by failing to communicate them to the European Commission, Ireland has failed to fulfil its obligations under Article 2 of Directive 2018/1808;
2. Declares that, by failing to adopt, by the time the Court examined the facts, the provisions necessary to transpose into its national law the provisions of Directive 2018/1808 and, therefore, failing to notify those measures to the Commission, Ireland persisted in its failure to fulfil its obligations;
3. Orders Ireland to pay the Commission:
– a lump sum in the amount of EUR 2 500 000;
– should the infringement established in point 1 of the operative part persist at the date of delivery of this judgment, as from that date and until that Member State has put an end to that infringement, a daily penalty payment in the amount of EUR 10 000;
4. Orders Ireland to bear its own costs and to pay those incurred by the Commission.
Spineanu‑Matei | Bonichot | Rossi |
Delivered in open court in Luxembourg on 29 February 2024.
A. Calot Escobar | | O. Spineanu‑Matei |
Registrar | | President of the Chamber |