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Provisional text
(Request for a preliminary ruling from the Državna revizijska komisija za revizijo postopkov oddaje javnih naročil (State Public Procurement Tribunal, Slovenia))
( Reference for a preliminary ruling – Approximation of laws – Procedures for the award of concession contracts – Directive 2014/23/EU – Article 4(2) and Article 19 – Scope – Activity consisting in the operation of a pharmacy )
4. Recitals 6, 14, 17, 19 and 53 of Directive 2014/23 are worded as follows:
‘(6) It should be recalled that Member States are free to decide, in compliance with the principles of the TFEU on equal treatment, non-discrimination, transparency and the free movement of persons to organise the provision of services either as services of general economic interest or as non-economic services of general interest or as a mixture thereof. … In addition, this Directive does not deal with the funding of services of general economic interest or with systems of aid granted by Member States, in particular in the social field, in accordance with Union rules on competition. It is appropriate to clarify that non-economic services of general interest should not fall within the scope of this Directive.
…
(14) In addition, certain Member State acts such as authorisations or licences, whereby the Member State or a public authority thereof establishes the conditions for the exercise of an economic activity, including a condition to carry out a given operation, granted, normally, on request of the economic operator and not on the initiative of the contracting authority or the contracting entity and where the economic operator remains free to withdraw from the provision of works or services, should not qualify as concessions. In the case of those Member State acts, the specific provisions of Directive 2006/123/EC of the European Parliament and of the Council [of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36)] apply. In contrast to those Member State acts, concession contracts provide for mutually binding obligations where the execution of the works or services are subject to specific requirements defined by the contracting authority or the contracting entity, which are legally enforceable.
…
(17) Contracts not involving payments to the contractor and where the contractor is remunerated on the basis of the regulated tariffs, calculated so as to cover all costs and investments borne by the contractor for providing the service, should not be covered by this Directive.
…
(19) Where sector-specific regulation eliminates the risk by providing for a guarantee to the concessionaire on breaking even on investments and costs incurred for operating the contract, such contract should not qualify as a concession within the meaning of this Directive. The fact that the risk is limited from the outset should not preclude the qualification of the contract as a concession. This can be the case for instance in sectors with regulated tariffs or where the operating risk is limited by means of contractual arrangements providing for partial compensation including compensation in the event of early termination of the concession for reasons attributable to the contracting authority or contracting entity or for reasons of force majeure.
…
(53) It is appropriate to exclude from the full application of this Directive only those services which have a limited cross-border dimension, such as certain social, health, or educational services. Those services are provided within a particular context that varies widely amongst Member States, due to different cultural traditions. A specific regime should therefore be established for concessions for these services, which takes into account the fact that they are newly regulated. An obligation to publish a prior information notice and a concession award notice of any concession with a value equal to or greater than the threshold established in this Directive is an adequate way to provide information to potential tenderers on business opportunities, as well as to provide information to all interested parties on the number and type of contracts awarded. Furthermore, Member States should put in place appropriate measures with reference to the award of concession contracts for those services, aimed at ensuring compliance with the principles of transparency and equal treatment of economic operators, while allowing contracting authorities and contracting entities to take into account the specificities of the services in question …’
‘1. This Directive establishes rules on the procedures for procurement by contracting authorities and contracting entities by means of a concession, whose value is estimated to be not less than the threshold laid down in Article 8.
…
4. Agreements, decisions or other legal instruments that organise the transfer of powers and responsibilities for the performance of public tasks between contracting authorities or contracting entities or groupings of contracting authorities or contracting entities, and which do not provide for remuneration to be given for contractual performance, are considered to be a matter of internal organisation of the Member State concerned and, as such, are not affected in any way by this Directive.’
6. Article 4 of that directive, entitled ‘Freedom to define services of general economic interest’, provides, in paragraph 2:
‘Non-economic services of general interest shall fall outside the scope of this Directive.’
7. Point (b) of the first subparagraph of Article 5(1) and the second subparagraph of Article 5(1) of that directive state:
‘For the purposes of this Directive the following definitions apply:
…
(b) “services concession” means a contract for pecuniary interest concluded in writing by means of which one or more contracting authorities or contracting entities entrust the provision and the management of services other than the execution of works referred to in point (a) to one or more economic operators, the consideration of which consists either solely in the right to exploit the services that are the subject of the contract or in that right together with payment;
The award of a works or services concession shall involve the transfer to the concessionaire of an operating risk in exploiting those works or services encompassing demand or supply risk or both. The concessionaire shall be deemed to assume operating risk where, under normal operating conditions, it is not guaranteed to recoup the investments made or the costs incurred in operating the works or the services which are the subject matter of the concession. The part of the risk transferred to the concessionaire shall involve real exposure to the vagaries of the market, such that any potential estimated loss incurred by the concessionaire shall not be merely nominal or negligible …’
8. Article 8 of Directive 2014/23, entitled ‘Threshold and methods for calculating the estimated value of concessions’, provides:
‘ 1. This Directive shall apply to concessions the value of which is equal to or greater than EUR 5 186 000.
…’
9. Article 18 of that directive, entitled ‘Duration of the concession’, states:
‘1. The duration of concessions shall be limited. The contracting authority or contracting entity shall estimate the duration on the basis of the works or services requested.
The investments taken into account for the purposes of the calculation shall include both initial investments and investments during the life of the concession.’
10. Article 19 of that directive, entitled ‘Social and other specific services’, provides:
‘Concessions for social and other specific services listed in Annex IV falling within the scope of this Directive shall be subject only to the obligations arising from Article 31(3) and Articles 32, 46 and 47.’
11. Article 2(18) of the Zakon o nekaterih koncesijskih pogodbah (Law on certain concession contracts; ‘the ZNKP’), (3) provides:
‘“non-economic services of general interest” [means] non-economic services that, by law, are provided as services of general interest and are not offered on the market for remuneration, which are therefore subject to specific public service obligations.’
16. Article 2 of the Zakon o zdravstveni dejavnosti (Law on healthcare; ‘the ZZDej’), (4) provides:
‘Healthcare is provided at primary, secondary and tertiary levels.
Primary healthcare covers basic healthcare and pharmaceutical activity.’
17. Article 3 of that law provides:
‘Healthcare providers are domestic and foreign natural and legal persons that have obtained authorisation from the Ministry for Health to provide healthcare.
The public health service includes health services that are guaranteed to be provided on a continuous and regular basis, in the public interest, by the State and local authorities and which, on the basis of the principle of solidarity and in accordance with the rules governing healthcare and health insurance, are guaranteed as rights deriving from compulsory health insurance and are funded, in whole or in part, through public resources, drawn primarily from compulsory health insurance. The health services referred to in the preceding sentence, as non-economic services of general interest, must be provided by non-profit healthcare providers in such a way that the surplus of revenue over expenditure is allocated to the provision and development of healthcare.’
18. Article 20(1) of that law states:
‘Pharmaceutical activity is carried out in accordance with a special law. This Law shall apply to matters not regulated by a special law.’
19.Article 1 of the Zakon o lekarniški dejavnosti (Law on pharmaceutical activity; ‘the ZLD-1’), provides:
‘This Law regulates the purpose, content and conditions for carrying out pharmaceutical activity, the organisation, conditions and procedures for issuing and implementing concessions, professionals in the pharmaceutical sector and their professional associations, online pharmaceutical activity and supervision.’
20.The first paragraph of Article 2 of that law provides:
‘The purpose of pharmaceutical activities shall be to ensure an efficient and high-quality supply of medicines and other products to support medical treatment and health protection and to provide advice to patients and health professionals on their safe, correct and effective use.’
21.Article 4(1)(8) of that law states:
‘Pharmaceutical activity provider means a natural or legal person having a concession to exercise a pharmaceutical activity in accordance with this Law, a public pharmacy establishment, a hospital or other providers in accordance with this Law.’
22.Article 5 of that law provides:
‘1. Pharmaceutical activity is a public health service that guarantees the continuous and regular supply of medicines to the population and health professionals and the pharmaceutical treatment of patients.
23.Article 10(2), (3), (4) and (7) of the ZLD-1 provides:
‘2. A pharmacy branch may operate only under the professional supervision of the pharmacy that organised it. The manager of the pharmacy that organised the branch shall be responsible for its operation.
4. Authorisation to operate a pharmacy branch may also be issued for a limited period or for a specific period of the year (the tourist season).
…
7. A pharmacy branch shall commence its pharmaceutical activity only when authorisation has been issued to it in accordance with the first paragraph of Article 67 of this Law.’
25.Article 15(1) of that law states:
‘Pharmaceutical activity shall be funded through public and private resources. The public resources referred to in the preceding sentence shall include, in particular:
– payments for services provided in the context of pharmaceutical activity on the basis of contracts concluded with health insurance bodies,
– payments from budget appropriations,
– the institution’s own resources.’
25.Article 27(1) of that law provides:
‘A public pharmacy body at primary level shall be established within its territory by a municipality or jointly by several neighbouring municipalities, after prior consultation with the competent professional body and with the consent of the Ministry.’
26.Article 39(1) and (2) of that law provides:
‘1. For the exercise of pharmaceutical activity at primary level, a concession may be granted, under the conditions laid down in this Law, to a natural person engaged in that activity who is the owner of the pharmaceutical business or to a legal person in which the person engaged in that activity – who is also the manager or the governing body of the legal person – holds more than 50% of the share capital (“the concessionaire”).
27.On 11 March 2022, the Municipality of Benedikt, without first publishing a concession notice, granted MN authorisation to operate a pharmacy branch on its territory for an indeterminate period.
28.Farmacija, the applicant in the main proceedings, is entered on the commercial register as a pharmaceutical products business; its majority shareholder holds a licence allowing it to exercise autonomously the profession of pharmacist in the context of the exercise of a pharmaceutical activity.
29.Farmacija filed an application for review with the Municipality of Benedikt, on the ground that, in issuing that authorisation, it had granted a concession for the exercise of a pharmaceutical activity without having followed the applicable procedure, in breach of Directive 2014/23.
30.The Municipality of Benedikt dismissed the application for review, without examining the merits of the application, as it considered that Farmacija did not have a right of action either in the context of the pre-review procedure or in the context of the actual review procedure. The Municipality of Benedikt thus considers that the grant of an authorisation to operate a pharmacy branch does not, in essence, constitute the award of a services concession.
31.Farmacija lodged an appeal against that decision of the Municipality of Benedikt, which the latter referred to the Državna revizijska komisija za revizijo postopkov oddaje javnih naročil (State Public Procurement Tribunal; ‘the State Public Procurement Tribunal’ or ‘the referring body’).
32.The State Public Procurement Tribunal considers that the Municipality of Benedikt, in issuing an authorisation for the operation of a pharmacy branch, granted a concession for the exercise of a pharmaceutical activity. However, the State Public Procurement Tribunal is uncertain whether pharmaceutical services constitute, in essence, services falling within the scope of Directive 2014/23.
33.In those circumstances, the State Public Procurement Tribunal decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling, it being understood that an answer to the second question is necessary only if the answer to the first question is in the negative:
‘(1) Can a service relating to the exercise of a pharmaceutical activity, the main purpose of which is to supply users with prescription and non-prescription medicines for human use, along with advice to users on the correct and safe use of those medicines, be classified as a “non-economic service of general interest” within the meaning of Article 4(2) of Directive 2014/23?
(2) Can a service relating to the exercise of a pharmaceutical activity, the main purpose of which is to supply users with prescription and non-prescription medicines for human use, along with advice to users on the correct and safe use of those medicines, be classified in the same way as social and other specific services within the meaning of Article 19 of Directive 2014/23?’
34.The order for reference dated 23 November 2023 was received at the Registry of the Court of Justice on the same day.
35.Farmacija, the Slovenian, Czech and Greek Governments and the European Commission lodged written observations within the period prescribed in Article 23 of the Statute of the Court of Justice of the European Union.
36.At the hearing on 12 December 2024, the representatives ad litem of Farmacija, of the Slovenian, Czech and Greek Governments and of the Commission submitted observations.
37.As I stated in the introduction, this case concerns the applicability of Directive 2014/23 to the present situation. According to the referring body, whether that directive is applicable depends on whether the pharmaceutical services at issue may be characterised as ‘non-economic services of general interest’. In that context, it should be noted that the questions put by the referring body are based on the premiss that the present case concerns a ‘concession’ within the meaning of that directive. Since the Slovenian legal order provides for various regimes to regulate the operation of pharmacies on the territory of that Member State, I consider it necessary, in the interest of completeness, to recall briefly the EU legal framework applicable to that field, and in particular the difference between the concepts of ‘concession’ and ‘authorisation’, particularly since the first of those concepts falls within the scope of that directive.
38.Recital 14 of Directive 2014/23 states that ‘certain Member State acts such as authorisations or licences, whereby the Member State or a public authority thereof establishes the conditions for the exercise of an economic activity, including a condition to carry out a given operation, granted, normally, on request of the economic operator and not on the initiative of the contracting authority or the contracting entity and where the economic operator remains free to withdraw from the provision of works or services, should not qualify as concessions’. That recital further states that ‘in the case of those Member State acts, the specific provisions of Directive [2006/123] apply’ (emphasis added).
39.In that regard, it should be noted that Article 4(6) of Directive 2006/123 defines ‘authorisation scheme’ and that it may be inferred from that definition that ‘authorisation’ refers to ‘a formal decision, or an implied decision, concerning access to a service activity or the exercise thereof’. Nonetheless, Article 2(2)(f) of that directive provides that that directive is not to apply to ‘healthcare services’. Recital 22 of that directive states that ‘the exclusion of healthcare from the scope of this Directive should cover healthcare and pharmaceutical services provided by … professionals’ (emphasis added). In other words, Directive 2006/123 should not apply if the conditions of the operation of a pharmacy were determined by the grant of an ‘authorisation’.
40.However, as mentioned above, that does not seem to be the case here. According to the classification made by the referring body in application of EU law and under its own responsibility, the Municipality of Benedikt granted a ‘concession’ within the meaning of Directive 2014/23. In that context, recital 14 of that directive is relevant in so far as it states that, ‘in contrast to those Member State acts, concession contracts provide for mutually binding obligations where the execution of the works or services are subject to specific requirements defined by the contracting authority or the contracting entity, which are legally enforceable’ (emphasis added). Lastly, it should be borne in mind that a ‘concession of services’ is characterised, inter alia, by a situation in which the right to operate a particular service is transferred by the contracting authority to the concessionaire and that the latter enjoys, in the framework of the contract which has been concluded, a certain economic freedom to determine the conditions under which that right is exercised and, in addition, is, to a large extent, exposed to the risks of operating the service.
41.It is in the light of those observations concerning the legal framework governing the award of ‘concessions’ and of ‘authorisations’ that I shall examine below the questions submitted by the referring body. Those questions will be examined in the order in which they were put, after I have dealt with the plea of inadmissibility raised by the Slovenian Government.
42.The Slovenian Government contests the admissibility of the request for a preliminary ruling, on the ground that the State Public Procurement Tribunal does not have, in the present case, the status of a ‘court or tribunal’ within the meaning of Article 267 TFEU. More precisely, the Slovenian Government maintains that the reason why that body cannot be characterised as a ‘court or tribunal’ within the meaning of that provision is linked to the fact that it does not have jurisdiction, under the provisions of national law, to adjudicate in the main proceedings.
43.According to settled case-law, whether a body making a reference is a ‘court or tribunal’ depends on a number of factors, such as whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent. In that regard, it should be borne in mind that the Court has already had occasion to rule on whether the State Public Procurement Tribunal is a court or tribunal. That circumstance deserves particular attention.
44.In Medisanus, the Court found, for the first time, that the State Public Procurement Tribunal met all the criteria for being regarded as a ‘national court or tribunal’ for the purposes of Article 267 TFEU. The Court justified that finding by a series of arguments which I shall summarise briefly. First, it recognised that that body is a body provided for by the Zakon o pravnem varstvu v postopkih javnega narocanja (Law on appeals in public procurement procedures), which makes it permanent and its jurisdiction compulsory. Second, the Court considered that that body has no connection with the public authorities whose decisions it reviews and that its members enjoy the safeguards laid down by the Law on the duties of a judge concerning their appointment, their term of office and the grounds for removal from office, so that their independence is guaranteed. Third, the Court found that the procedure before the State Public Procurement Tribunal is inter partes and that the decisions which it adopts, in applying the Law on appeals in public procurement procedures, and the Law on civil procedure, have the force of res judicata.
45.I would emphasise that that conclusion was not subsequently called into question by the Court in its judgments in Tax-Fin-Lex and in SHARENGO, respectively, which had as their subject matter questions for a preliminary ruling submitted by the same State Public Procurement Tribunal. In those two judgments, unlike in the judgment in Medisanus, the Court did not question the status of the State Public Procurement Tribunal as a court or tribunal.
, the Court no longer addressed admissibility, in particular the status of the referring body as a ‘court or tribunal’ for the purposes of Article 267 TFEU, but directly examined the substance of the questions put by that body. Although the Slovenian Government claims that the case in the main proceedings differs from the cases that formed the subject matter of the judgments referred to, it does not specify which criterion derived from the case-law set out above the referring body no longer meets in the present case. From that viewpoint, I see no reason why the Court should depart from the classification decided upon, especially since that classification has been confirmed on a number of occasions. It is thus clear that the Court has not reconsidered its position.
46. The Slovenian Government’s line of argument seems to me to be intended to challenge the referring body’s jurisdiction to adjudicate in the main proceedings and, consequently, to call into question the need, and indeed the usefulness, of the Court’s answer to the questions submitted in the request for a preliminary ruling. In particular, the Slovenian Government claims that, under national law, in particular the provisions on legal protection in the context of concessions regulated by sectoral legislation, the referring body lacks jurisdiction to adjudicate in the main proceedings. The Government maintains that the legal protection provided for in the Law on appeals in public procurement procedures does not apply in the present case, since the decision adopted by the Municipality of Benedikt is an administrative decision that should be settled, initially, by the Mayor of the municipality and, if necessary, according to the general administrative procedure.
47. To my mind, however, that line of argument is irrelevant for the purposes of the present case, for the reasons which I shall set out below.
48. First, I would point out that it follows from the Court’s case-law that the assertion that the referring court does not have jurisdiction, under the rules of national law, to adjudicate in the dispute does not suffice to render the request for a preliminary ruling inadmissible, in so far as it is not for the Court to call into question the referring court’s assessment of the rules of national law governing the organisation of the courts and legal proceedings. (14) The Court must abide by the decision from a court of a Member State requesting a preliminary ruling in so far as that decision has not been overturned in any appeal procedures provided for by national law. (15) Accordingly, for the purposes of the assessment of the admissibility of the request for a preliminary ruling under Article 267 TFEU, it is sufficient in principle that the referring body has declared that it has jurisdiction in the main proceedings, (16) without the precise legal characterisation of the contested administrative decision, in this instance the grant of a ‘concession’, being relevant.
49. Second, it must be borne in mind that, in the context of the cooperation between the Court and the national courts and tribunals established in Article 267 TFEU, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to give judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation or the validity of a rule of EU law, the Court is in principle bound to give a ruling.
50. Questions relating to EU law thus enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation or the assessment of the validity of an EU rule that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it. (17) In this instance, it does not appear that the interpretation of EU law sought by the referring body bears no relation to the actual facts of the main action or its purpose, or that the problem raised by it is hypothetical.
51. Having regard to the foregoing considerations, I am of the view that the present request for a preliminary ruling is admissible. The Court should therefore answer the questions submitted by the referring body.
52. By its first question, the referring body asks, in essence, whether the activity of operating a pharmacy, the essential part of which consists in supplying to users prescription and non-prescription medicines for human use and providing them with advice on the correct and safe use of those medicines, is covered by the concept of ‘non-economic services of general interest’ within the meaning of Article 4(2) of Directive 2014/23.
53. I note at the outset that the concept of ‘non-economic services of general interest’ contains two elements. In order to be covered by Article 4(2) of Directive 2014/23, a service must, first, be supplied for purposes of general interest and, second, be non-economic. As those two elements are cumulative, the absence of just one of them renders that provision inapplicable. For the purposes of this Opinion, I prefer to concentrate on what is ‘non-economic’ and not to address the element ‘of general interest’, since that approach seems to me to be sufficient to propose a useful answer to the national court. Although of interest from an academic viewpoint, the question whether the element ‘of general interest’ assumes an autonomous scope in the concept at issue, that is to say, whether a ‘non-economic’ service always corresponds to the ‘general interest’ or indeed whether it is possible for such a service not to be supplied in the ‘general interest’, does not need to be answered in this case.
54. I shall refer to the criteria that allow a ‘non-economic’ activity to be distinguished from an ‘economic’ activity, before applying them to the present case constituted by the activity of the operation of a pharmacy. Before embarking on that analysis, however, I consider it necessary to examine the preliminary issue of the discretion which the Member States enjoy in defining ‘non-economic services of general interest’. That discretion constitutes the keystone of the Slovenian Government’s argument that, in essence, a ‘non-economic service of general interest’ is whatever the national legislature defines as such.
55. Under paragraph 2 of Article 4 of Directive 2014/23, entitled ‘Freedom to define services of general economic interest’, ‘non-economic services of general interest’ are to fall outside the scope of that directive. As confirmed by recital 6 of that directive, Member States are free to organise the provision of services either as ‘services of general economic interest’ or as ‘non-economic services of general interest’, or as a mixture thereof, subject to compliance with EU law, in particular the principles of equal treatment, non-discrimination, transparency and the free movement of persons. However, that recital expressly precludes from the scope of that directive the funding of ‘services of general economic interest’ and the systems of aid granted by Member States, in particular in the social field, and also ‘non-economic services of general interest’.
56. It should be noted that such an exclusion also exists in the context of Directive 2006/123, since Article 2(2)(a) thereof provides that that directive is not to apply to ‘non-economic services of general interest’. In addition, it should be observed that ‘healthcare services’ are the subject of a separate exclusion from the scope of that directive, in Article 2(2)(f) of that directive. (18) Although that provision does not include the ‘pharmaceutical services’ at the heart of the present case, the fact remains that recital 22 of that directive expressly refers to those services, with the consequence that that directive does not apply to services of that type. Lastly, I note in that context that the concept of ‘service’ for the purposes of Directive 2006/123 is itself ‘economic’ in nature, in so far as, under Article 4(1) of that directive, ‘service’ is to mean ‘any self-employed economic activity, normally provided for remuneration, as referred to in Article [57 TFEU]’ (emphasis added).
57. In the light of those observations, it is appropriate to recall at this stage of the analysis, first, that classification as a ‘non-economic service of general interest’ is decisive for the purpose of establishing which rules are applicable to a particular case. Second, it is clear that, in so far as that classification depends on the characteristics of the ‘service’ in question, that service must be assessed on a case-by-case basis. The concept of ‘non-economic services of general interest’, to which the referring body makes reference in its first question, is found in Article 2 of Protocol No 26 on services of general economic interest, annexed to the FEU Treaty (‘Protocol No 26’), which states that ‘the provisions of the Treaties do not affect in any way the competence of Member States to provide, commission and organise non-economic services of general interest’. However, that concept is not defined in the FEU Treaty or in secondary law. (19) In particular, Directive 2014/23 does not define ‘non-economic services of general interest’.
58. Furthermore, I would emphasise that Article 4(2) of that directive contains no express reference to the law of the Member States. The question therefore arises whether the Member States are free to define what falls within that concept in the exercise of their competence to provide, commission and organise non-economic services of general interest, which, according to Article 2 of Protocol No 26, is not affected by the provisions of the Treaties. If, on the other hand, the concept of ‘non-economic services of general interest’ is to be given an autonomous interpretation in EU law, the question of its relationship with Article 2 of Protocol No 26 arises. The answer to that question follows from the principles of the functioning of the internal market.
59. The proper functioning of the internal market of the European Union, which includes, inter alia, freedom to provide services and freedom of establishment, as is apparent from Article 26(2) TFEU, can be ensured only by a uniform understanding of the concept of ‘non-economic services of general interest’, failing which there would be a risk of the heterogeneous application of its rules, liable to cause the fragmentation of the internal market.
60. The internal market requires by definition the existence of equivalent conditions for the exercise of an economic activity throughout the European Union. To that end, fundamental freedoms, which ensure an area without internal borders or regulatory obstacles, are interpreted and applied uniformly. In order for natural and legal persons to be able to rely on them directly and on an equal footing, the content and the scope of the rights enshrined in the Treaties must be the same. (20) Conversely, any national legislation contrary to the objectives of the internal market is disapplied. (21) Where legislation in certain areas proves necessary for the purposes of achieving the internal market, the EU legislature may adopt measures relating to the approximation of the provisions laid down by law, regulation or administrative action in the Member States, in accordance with Article 114 TFEU. The internal market is one of the most significant achievements of the European Union, since it provides an integrated economic area in which all Member States and other associated States participate. (22)
61. It seems to me that, if the Slovenian Government’s argument that the services at issue should be classified as ‘non-economic’ activities on the ground that the national legislature has defined them as such, in accordance with the historical, cultural and political traditions of that Member State, were to be followed unreservedly, the consequence would be precisely such a risk of fragmentation of the internal market. Having regard to the fact that the details of the pharmaceutical activity may vary significantly from one Member State to another, owing to the specific characteristics of the applicable national legislation, the legal characterisation of its nature by the Member States cannot be decisive on its own. It will be noted that, at this stage of the development of EU law, none of its provisions lays down rules on access to activities in the sphere of pharmacy that seek to set the conditions for opening new pharmacies and any branches in the Member States. (23)
62. Member States’ competence to provide, commission and organise non-economic services of general interest, provided for in Article 2 of Protocol No 26, cannot constitute a barrier to an autonomous understanding of the concept of ‘non-economic services of general interest’. It is true that, in accordance with Article 168(7) TFEU, as clarified by the Court’s case-law, EU law does not detract from the power of the Member States to organise their social security systems and to adopt, in particular, provisions to govern the organisation of health services such as pharmacies. However, it should be borne in mind that the Court has reiterated that, in exercising that power, the Member States must comply with EU law, in particular the provisions of the Treaty on fundamental freedoms, including freedom of establishment. Those provisions prohibit the Member States from introducing or maintaining unjustified restrictions on the exercise of those freedoms in the healthcare sector. (24)
63. The law of the EU internal market thus limits Member States’ discretion, independently of their ability to define the level at which they intend to ensure the protection of public health and the way in which that level must be attained. In that regard, it will be recalled that the Court has already ruled on several occasions on the conditions governing the establishment of pharmacy branches and has held that freedom of establishment could be restricted for reasons relating to the general interest, provided that the restrictions are appropriate for securing attainment of the objective pursued and do not go beyond what is necessary for attaining that objective. (25)
64. To my mind, in order to answer the first question, it is appropriate to refer to the case-law of the Court, whereby it defined what constitutes an ‘economic activity’ for the purposes of the law of the EU internal market. As I said earlier, the ‘economic’ nature of a particular activity is decisive for the purposes of the demarcation between the field of ‘services of general economic interest’ and that of ‘non-economic services of general interest’. That criterion thus defines the scope of the powers of the European Union by comparison with those of the Member States. (26) In so far as those two concepts are mutually exclusive, determining the outlines of the concept of ‘economic activity’ will logically make it possible to clarify what is to be understood by ‘non-economic activity’. On the basis of that distinction, it will be possible to determine how ‘pharmaceutical services’ must be classified.
In that regard, it must be borne in mind at the outset that the Court has held that services normally provided for remuneration constitute ‘economic activities’, since the essential characteristic of remuneration resides in the fact that it constitutes financial consideration for the service in question, although there is no requirement that it be paid for by the recipient of that service. It is apparent from the order for reference that the essential purpose of the pharmaceutical services in question is to issue prescription and non-prescription medicines for human or veterinary use, along with providing advice on the correct and safe use of those medicines. Those pharmaceutical services are financed either from public resources, in the case of prescription medicines covered by public health insurance, or directly by the consumer, in the case of medicines not covered by such insurance.
67.The Court has expressly recognised in its case-law that the pharmaceutical activity provides profits for pharmacy operators, even though, having regard to the importance of the public health objective, that activity is generally carried out not only with an economic objective, but also in a social and professional public interest. That case-law is consistent with another finding of the Court, that the acquisition of a pharmacy for an indefinite period falls within the scope of Article 49 TFEU on freedom of establishment, in that it enables an ‘economic activity’ to be pursued by means of a stable arrangement.
68.In a related area, the Court has made clear that specialist medical services provided by independent specialist doctors in their capacity as self-employed economic operators at their own risk and for remuneration must be regarded as an ‘economic activity’. The reference to ‘risk-taking’, which accurately defines EU law on concessions, is not without relevance in this context, as it shows that the award of concessions in the public health sector is not precluded.
69.While the case-law cited above certainly provides some valuable reference points when it comes to addressing some of the questions raised by the interested parties in the present case, I nonetheless consider that a more detailed analysis is necessary in order to support the ‘economic’ nature of the activity of pharmacist. That analysis will focus on the reasons that, in my view, led the Court to make such a characterisation.
70.First, it must be taken into account that the Court has emphasised in its case-law that the concepts of ‘economic activity’ and ‘supply of services’, in that they define the scope of one of the fundamental freedoms guaranteed by the Treaty, cannot be interpreted restrictively. When seen from that aspect, it seems to me to be coherent from a legal viewpoint to conclude that an activity closely linked to public health, such as that of a pharmacist, comes within the scope of the fundamental freedoms in question, namely freedom of establishment, and is therefore ‘economic’.
71.Second, the fact that the Court relied on the element of remuneration to assess the economic nature of the activity at issue, irrespective of who paid that remuneration, means that services paid for by the user, but also those paid for by the Member State, may be included in the concept of ‘economic activity’. The latter example implies that aspects linked with the financing of a national health system may play a certain role and must therefore be taken into account in the analysis.
72.In the present case, the Court must examine whether an activity ceases to be an ‘economic’ activity because it is also financed by State resources. The Slovenian Government’s argument essentially amounts to denying that the system for managing pharmacies in Slovenia is ‘economic’ in nature, relying on the principle of solidarity that underlies that system. According to that reasoning, the social purpose of the regime, the implementation of the principle of solidarity, the absence of a profit motive and the State supervision of that activity clearly distinguish the operation of a pharmacy from an ‘economic activity’.
73.I do not find that line of argument convincing, for the reasons which I shall set out below. Like the Czech Government, I consider that the fact that the pharmaceutical activity in Slovenia is carried out in the context of the public health system is not relevant for the purpose of determining the nature of the services in question. The supply of a pharmaceutical service in pharmacies, as described in the order for reference, does not entail the exercise of public authority, within the meaning of Article 51 TFEU, read in conjunction with Article 62 TFEU, since the activities in question are not directly and specifically linked to the exercise of public powers. There is thus no objective reason to exclude that service from classification as an ‘economic activity’ merely because it is closely linked to a government policy, in this instance health policy.
74.In addition, the existence of a transfer of public funds to finance the medicines covered by sickness insurance is not in my view capable of affecting the ‘economic’ nature of the service provided by pharmacies. A service is still a service provided for consideration even where its supply is financed by public funds. In that regard, it should be borne in mind that the Court has already considered that payments made by sickness insurance funds are the consideration for the hospital services provided and unquestionably represent remuneration for the hospital which receives them and which is engaged in an activity of an ‘economic’ nature.
75.The argument put forward by the Slovenian Government, to the effect that the for-profit activity of the pharmacy is merely ancillary to the principal non-economic public service activity without the primary objective of seeking a profit, does not seem to me to be sufficient to preclude its ‘economic’ nature. As the Court has established in its case-law, the ‘economic’ nature of an activity is independent of any profit-making motive. More particularly, the Court has held that the fact that the activity is carried out by a not-for-profit entity does not preclude that entity from carrying out an ‘economic activity’. That applies a fortiori where the private pharmacy operators seek to make a profit, as the Slovenian Government acknowledged at the hearing, even where that objective is subordinated to other objectives, in particular those linked to the protection of public health.
76.Having regard to the broad definition of ‘economic activity’ in the context of fundamental freedoms, the Court has not hesitated, for example, to characterise as ‘services’ for the purposes of Directive 2004/18/EC contractual agreements for the supply of ambulance services, even where the contracting authority entered into those agreements with voluntary services and where those agreements were based on the principle of solidarity. In a similar vein, the Court considered that the fact that the activity is carried out on a not-for-profit basis by a private partner such as a social solidarity institution does not preclude the activity from being characterised as an ‘economic activity’.
77.In addition, as I have already stated in my account of the applicable legal framework, the fact that the EU legislature has decided that pharmaceutical services should be expressly precluded from the scope of Directive 2006/123 shows, in my view, that it did not consider them to be ‘non-economic services’. It simply did not wish services of that type to be subject to the specific rules of that directive.
78.Lastly, I would point out that all the public health systems of the Member States are characterised by the fact that they are based on the principles of accessibility to health care, universality and, to a greater or lesser degree, the principle of solidarity. That is why those principles are regarded, in the same way as the principle of fairness, as common values and principles in EU health systems. That is reflected, in particular, in their funding. It therefore seems to me that the health system at issue in the present case, as described by the Slovenian Government, does not display any particular characteristics that would justify a different assessment.
79.That conclusion, in my view, is not undermined by Commission Decision C(2024) 3755 final of 10 June 2024 in Case SA.45844 declaring, on the basis of the principle of solidarity, that the system for the supply of health services in Slovenia does not entail State aid within the meaning of Article 107 TFEU. In that regard, it should be noted that that decision does not concern the operation of pharmacies in Slovenia, as the Commission made clear at the hearing, at the request of the Court. Furthermore, although the rules on concessions in EU law were initially developed in the context of fundamental freedoms, a legal situation which, moreover, endured until those rules were codified in Directive 2014/23, and although there is a certain overlap between those freedoms and other areas of law (namely competition law or State aid), the fact nonetheless remains that the concepts of ‘services of general interest’ and ‘economic activity’ tend to diverge, depending on whether they are used in the context of fundamental freedoms or developed in those other areas of law.
80.Although they also seek to achieve the common objective of the attainment of the internal market, the rules relating to competition law and State aid are characterised by the fact that they have specific regulatory objectives and procedures for application specific to those areas of law, which clearly distinguishes them from fundamental freedoms. Thus, the concept of ‘economic activity’ is closely linked to the concept of ‘undertaking’ within the meaning of Article 107(1) TFEU, which, if additional criteria are met, triggers the application of those rules, while the absence of an ‘undertaking’ within the meaning of competition law does not necessarily preclude the application of the provisions relating to fundamental freedoms.
81.It follows that any considerations relating to the area of law of State aid cannot be fully transposable to the law on concessions. In any event, it must be stated that their application to the present case is not the object of the present case. As observed in the preceding points, according to the case-law on freedom of establishment and freedom to provide services, it is the provision of services for remuneration that must be regarded as an ‘economic activity’. It is precisely that criterion that must, in my view, be used by the Court in the present case for the purpose of drawing a distinction vis-à-vis ‘non-economic services of general interest’.
82.For the reasons set out above, I consider that the pharmaceutical activity the essential object of which is to issue prescription and non-prescription medicines for human use, to the user, including providing the user with advice on the correct and safe use of those medicines, must be regarded as an ‘economic activity’ and cannot therefore be characterised as a ‘non-economic service of general interest’ for the purposes of Article 4(2) of Directive 2014/23. Consequently, I propose that the first question should be answered in the negative.
83.That conclusion, which I have reached on the basis of the concept of ‘economic activity’, as interpreted by the Court, also seems to me to be substantively correct. It should be borne in mind that ‘services of general interest’ have changed considerably over the last decades, from both a political and a social viewpoint. Services which were previously considered to be ‘non-economic’ are increasingly influenced by the rules of the internal market. They are also the subject of regulations at EU level. Likewise, an increasing number of services of general interest are performed by economic operators. The health sector is certainly no exception. The concept of ‘non-economic services of general interest’ is thus subject to assessments peculiar to the specific era, so that nowadays only certain areas can still be defined unequivocally as ‘non-economic’ within the meaning of the Court’s case-law, such as justice, the police, national security, management of the signalling system, certain educational services, etc.. Those areas come under the public powers of the State and are financed by taxes. That is clearly not the situation with which the present case is concerned.
84.In view of the answer which I propose should be given to the first question, it is appropriate to address the second question too, whereby the referring body asks, in essence, whether the exercise of a pharmaceutical activity is covered by ‘social and other specific services’ within the meaning of Article 19 of Directive 2014/23.
85.In that regard, I note that the award of concessions for the supply of ‘social and other specific services’ listed in Annex IV to Directive 2014/23 is subject to the special rules laid down in Article 19 of that directive, namely a simplified procedure. Those services are therefore exempted from the application in full of that directive. That simplified award procedure is characterised by the fact that, in accordance with the abovementioned provision, contracting authorities and contracting entities are required only to make known their intention of planned concession award by means of a prior information notice, in accordance with Article 31(3) of that directive, and a concession award notice relating to the results of a concession award procedure, in accordance with Article 32 of Directive 2014/23.
86.The reason for that simplified award procedure is that the services in question have only a limited cross-border dimension. As is clear from recital 53 of Directive 2014/23, social, health and educational services in particular are provided within a particular context that varies widely amongst Member States, due to different cultural traditions. The formal requirements are therefore less strict, although it must be emphasised that, in accordance with Article 3 of that directive, the principles of equal treatment, non-discrimination and transparency must be complied with in all cases.
87.Furthermore, it should be noted that among the category of ‘health, social and related services’ referred to in Annex IV to that directive are the codes ‘from 85000000-9 to 85323000-9’ of the Common Procurement Vocabulary (‘the CPV’). The CPV establishes a single classification system for public procurement designed to standardise the references used by the contracting authorities and entities to describe public procurement contracts. As the Court has observed, with reference to Article 27 of Directive 2014/23 and Article 1 of Regulation No 2195/2002, the contracting authority is required to apply the CPV in the context of the award of concessions. Since ‘pharmacy services’ correspond to code CPV 85149000-5, those services must be considered to be part of the ‘specific services’ within the meaning of Article 19 of that directive. That observation is sufficient, in principle, to answer the second question in the affirmative. Furthermore, the fact that pharmaceutical services are referred to in Annex IV to that directive confirms once again that the EU legislature considers them to be an ‘economic activity’.
In the interest of completeness, it may prove useful to observe that classification as a ‘specific service’ would have the consequence that only the obligations arising under Article 31(3) and Articles 32, 46 and 47 of Directive 2014/23 would apply to the pharmaceutical activities carried out in a pharmacy branch. Accordingly, if the referring body, in the exercise of its jurisdiction to assess the facts and apply EU law, were to confirm the award of a ‘concession’ in the present case, it would in all likelihood be required to determine whether the legal requirements arising under the abovementioned articles have been met. The referring body would then have to ascertain whether the operation of the pharmacy branch was the subject of the prior information notice provided for in Article 31(3) of that directive and the concession award notice provided for in Article 32(1) of that directive.
In addition, like the directives on public contracts, Directive 2014/23 sets a threshold above which it is to apply. Under Article 8(1) thereof, in the version in force at the time of the facts, that directive is to apply for concessions the value of which is equal to or above EUR 5 186 000. In fact, the order for reference contains no information about the value of the concession. Therefore, in so far as the request for a preliminary ruling is based on the premiss that the main proceedings concern the award of a ‘concession’, the referring body must ascertain whether the value of the concession exceeds the relevant threshold in order to establish whether that directive is applicable in the present case. In the absence of more precise information, the duration of the concession might possibly provide an indirect indication in that regard. As stated in Article 8(2) of that directive, ‘the value of a concession shall be the total turnover of the concessionaire generated over the duration of the contract’ (emphasis added), which argues in favour of the application of that criterion. In that regard, it is common ground that the authorisation to operate a pharmacy branch was awarded for an indeterminate period. In those circumstances, the possibility cannot be ruled out that the relevant threshold was exceeded.
In view of those considerations, I consider that the pharmaceutical activity the main purpose of which is to supply users with prescription and non-prescription medicines for human use, along with advice to users on the correct and safe use of those medicines, falls within ‘social and other specific services’ within the meaning of Article 19 of Directive 2014/23.
91.In the light of all of the foregoing considerations, I propose that the Court of Justice should answer the questions submitted by the Državna revizijska komisija za revizijo postopkov oddaje javnih naročil (State Public Procurement Tribunal, Slovenia) as follows:
(1)Article 4(2) of Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts must be interpreted as meaning that pharmaceutical services the main purpose of which is to supply users with prescription and non-prescription medicines for human use, along with advice to users on the correct and safe use of those medicines, cannot be classified as ‘non-economic services of general interest’.
(2)Article 19 of Directive 2014/23, entitled ‘social and other specific services’, must be interpreted as meaning that it covers pharmaceutical services the main purpose of which is to supply users with prescription and non-prescription medicines for human use, along with advice to users on the correct and safe use of those medicines.
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Original language: French.
OJ 2014 L 94, p. 1.
Official Gazette of the Republic of Slovenia, No 9/2019, 11.2.2019.
Official Gazette of the Republic of Slovenia, No 9/92, 21.2.1992.
Official Gazette of the Republic of Slovenia, No 85/16, 28.12.2016.
See judgment of 14 July 2016, Promoimpresa and Others (C‑458/14 and C‑67/15, EU:C:2016:558, paragraph 45).
See judgments of 21 July 2005, Coname (C‑231/03, EU:C:2005:487, paragraph 10); of 10 March 2011, Privater Rettungsdienst und Krankentransport Stadler (C‑274/09, EU:C:2011:130, paragraphs 29 and 36); and of 21 May 2015, Kansaneläkelaitos (C‑269/14, EU:C:2015:329, paragraph 25) concerning the exclusive jurisdiction of the national court to classify the operation in question. The Court’s role is confined to providing the national court with an interpretation of EU law that will be of use for the purposes of the decision that that the national court must take in the dispute before it.
See judgments of 11 June 2009, Hans & Christophorus Oymanns (C‑300/07, EU:C:2009:358, paragraph 71), and of 14 July 2016, Promoimpresa and Others (C‑458/14 and C‑67/15, EU:C:2016:558, paragraph 46).
See judgment of 8 June 2017, Medisanus (C‑296/15, EU:C:2017:431, paragraph 33 and the case-law cited).
See judgment of 8 June 2017, Medisanus (C‑296/15, EU:C:2017:431, paragraphs 32 to 38).
Official Gazette of the Republic of Slovenia, No 43/11, 3.6.2011.
Judgment of 8 June 2017, Medisanus (C‑296/15, EU:C:2017:431).
See point 40 of this Opinion.
See judgment of 11 April 2000, Deliège (C‑51/96 and C‑191/97, EU:C:2000:199, paragraph 52).
See judgment of 6 September 2011, Scattolon (C‑108/10, EU:C:2011:542, paragraphs 43 and 44).
See judgment of 12 September 2000, Pavlov and Others (C‑180/98 to C‑184/98, EU:C:2000:428, paragraphs 76 and 77).
See point 40 of this Opinion.
See judgment of 11 April 2000, Deliège (C‑51/96 and C‑191/97, EU:C:2000:199, paragraph 52).
See judgment of 6 September 2011, Scattolon (C‑108/10, EU:C:2011:542, paragraphs 43 and 44).
See judgment of 12 September 2000, Pavlov and Others (C‑180/98 to C‑184/98, EU:C:2000:428, paragraphs 76 and 77).
See point 40 of this Opinion.
See judgment of 11 April 2000, Deliège (C‑51/96 and C‑191/97, EU:C:2000:199, paragraph 52).
See judgment of 6 September 2011, Scattolon (C‑108/10, EU:C:2011:542, paragraphs 43 and 44).
See judgment of 12 September 2000, Pavlov and Others (C‑180/98 to C‑184/98, EU:C:2000:428, paragraphs 76 and 77).
See judgments of 18 December 2007, <i>Jundt</i> (C‑281/06, EU:C:2007:816, paragraph 33), and of 23 February 2016, <i>Commission</i> v <i>Hungary</i> (C‑179/14, EU:C:2016:108, paragraph 154).
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37See judgments of 23 December 2009, <i>CoNISMa</i> (C‑305/08, EU:C:2009:807, paragraph 45), of 19 June 2014, <i>Centro Hospitalar de Setúbal and SUCH</i> (C‑574/12, EU:C:2014:2004, paragraph 33), and also Opinion of Advocate General Medina in <i>ASADE</i> (C‑436/20, EU:C:2022:77, point 54).
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38Directive of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114).
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39Judgments of 29 November 2007, <i>Commission</i> v <i>Italy</i> (C‑119/06, EU:C:2007:729, paragraphs 36 to 41); of 11 December 2014, <i>Azienda sanitaria locale n. 5 ‘Spezzino’ and Others</i> (C‑113/13, EU:C:2014:2440, paragraphs 32 to 43); and of 28 January 2016, <i>CASTA and Others</i> (C‑50/14, EU:C:2016:56, paragraphs 33 to 41).
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40See judgment of 19 June 2014, <i>Centro Hospitalar de Setúbal and SUCH</i> (C‑574/12, EU:C:2014:2004, paragraph 33).
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41See point 56 of this Opinion.
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42See Council Conclusions on Common values and principles in European Union Health Systems <i> </i> (2006/C 146/01) (OJ 2006 C 146, p. 1).
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43The exercise of the pharmaceutical activity in Slovenia is financed to a large degree by public funds and in part by private funds.
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44OJ C/2024/4421.
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45See judgments of 21 July 2005, <i>Coname</i> (C‑231/03, EU:C:2005:487, paragraph 15 et seq.); of 13 October 2005, <i>Parking Brixen</i> (C‑458/03, EU:C:2005:605, paragraph 46 et seq.); of 13 September 2007, <i>Commission</i> v <i>Italy</i> (C‑260/04, EU:C:2007:508, paragraph 22 et seq.); and of 10 March 2011, <i>Privater Rettungsdienst und Krankentransport Stadler</i> (C‑274/09, EU:C:2011:130, paragraph 49).
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46See judgments of 8 May 2019, <i>Rhenus Veniro</i> (C‑253/18, EU:C:2019:386, paragraph 27), and of 16 March 2023, <i>OL (Extension of Italian concessions)</i> (C‑517/20, not published, EU:C:2023:219, paragraph 27).
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47Sánchez-Graells, A., ‘State Aid and EU Public Procurement: More Interactions, Fuzzier Boundaries’, in Piernas López, J.J., and Hancher, L. (dir.), <i>Research Handbook on European State Aid Law</i>, Cheltenham, 2021, p. 329 et seq.; Grith Skovgaard, Ø., ‘The Notice of the Notion of State Aid and Public Procurement Law’, <i>European State Aid Law Quarterly</i>, Vol. 15, No 4, 2016, p. 508 et seq..
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48See Opinions of Advocate General Medina in <i>ASADE</i> (C‑436/20, EU:C:2022:77, point 52), and of Advocate General <i>Poiares Maduro</i> in <i>FENIN</i> v <i>Commission</i> (C‑205/03 P, EU:C:2005:666, point 51).
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49See judgments of 19 December 2012, <i>Mitteldeutsche Flughafen and Flughafen Leipzig-Halle</i> v <i>Commission</i> (C‑288/11 P, EU:C:2012:821, paragraph 50), and of 22 October 2015, <i>EasyPay and Finance Engineering</i> (C‑185/14, EU:C:2015:716, paragraph 37), and also the Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union <i> </i> (2016/C 262/01), OJ 2016 C 262, p. 3 (point 6).
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50See also European Commission, <i>Handbook on the implementation of the ‘Services’ Directive</i>, Luxembourg, 2022, p. 8, paragraph 1.1.2.1 (‘Non-economic services of general interest’).
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51Hatzopoulos, V., <i>Regulating Services in the European Union</i>, Oxford University Press, 2012, p. 38 et seq..
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52See judgment of 7 December 1993, <i>Wirth</i> (C‑109/92, EU:C:1993:916).
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53Adopted under Regulation (EC) No 2195/2002 of the European Council and of the Council of 5 November 2002 on the Common Procurement Vocabulary (CPV) (OJ 2002 L 340, p. 1).
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54See judgment of 10 November 2022, <i>SHARENGO</i> (C‑486/21, EU:C:2022:868, paragraph 94 et seq.).