DIGI Communications (Telecommunications - Electronic communications networks and services - Award of rights to use frequencies - Judgment) [2023] EUECJ C-329/21 (20 April 2023)

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(Reference for a preliminary ruling – Telecommunications – Electronic communications networks and services – Directive 2002/21/EC (Framework Directive) – Article 4(1) – Directive 2002/20/EC (Authorisation Directive) – Article 7 – Award of rights to use frequencies – Auction procedure – Holding company not registered as a provider of electronic communications services in the Member State concerned – Exclusion from the award procedure – Right of appeal against the award decision)

REQUEST for a preliminary ruling under Article 267 TFEU from the Fővárosi Törvényszék (Budapest High Court, Hungary), made by decision of 18 May 2021, received at the Court on 26 May 2021, in the proceedings

composed of K. Lenaerts, President of the Court, acting as President of the Fifth Chamber, D. Gratsias (Rapporteur), M. Ilešič, I. Jarukaitis and O. Spineanu-Matei, Judges,

having regard to the written procedure and further to the hearing on 1 June 2022,

– Nemzeti Média- és Hírközlési Hatóság Hivatala, by K. Géczi, A. Kovács and A. Lapsánszky, acting as Agents, and by G. Trinn, ügyvéd,

– the European Commission, by L. Malferrari and K. Talabér-Ritz, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 20 October 2022,

1 This request for a preliminary ruling concerns the interpretation of Article 4(1) of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (OJ 2002 L 108, p. 33), as amended by Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 (OJ 2009 L 337, p. 37) (‘the Framework Directive’), of Article 7 of Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive) (OJ 2002 L 108, p. 21), as amended by Directive 2009/140 (‘the Authorisation Directive’), and of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

2 The request has been made in proceedings between DIGI Communications NV and the Nemzeti Média- és Hírközlési Hatóság Hivatala (National Communications and Media Authority, Hungary) (‘the NMHH’) concerning a decision taken by the NMHH, following an auction procedure, awarding rights to use radio frequencies for additional wireless broadband services in support of the roll-out of 5G (‘the contested award decision’).

3 Article 4 of the Framework Directive, entitled ‘Right of appeal’, provides in paragraph 1 thereof:

‘Member States shall ensure that effective mechanisms exist at national level under which any user or undertaking providing electronic communications networks and/or services who is affected by a decision of a national regulatory authority [an ‘NRA’] has the right of appeal against the decision to an appeal body that is independent of the parties involved. This body, which may be a court, shall have the appropriate expertise to enable it to carry out its functions effectively. Member States shall ensure that the merits of the case are duly taken into account and that there is an effective appeal mechanism.

4 Article 8 of that directive, entitled ‘Policy objectives and regulatory principles’, provides in paragraphs 2 and 5 thereof:

‘2. The [NRAs] shall promote competition in the provision of electronic communications networks, electronic communications services and associated facilities and services by inter alia:

(a) ensuring that users, including disabled users, elderly users, and users with special social needs derive maximum benefit in terms of choice, price, and quality;

(b) ensuring that there is no distortion or restriction of competition in the electronic communications sector, including the transmission of content;

(d) encouraging efficient use and ensuring the effective management of radio frequencies and numbering resources.

5. The [NRAs] shall, in pursuit of the policy objectives referred to in paragraphs 2, 3 and 4, apply objective, transparent, non-discriminatory and proportionate regulatory principles by, inter alia:

(c) safeguarding competition to the benefit of consumers and promoting, where appropriate, infrastructure-based competition;

5 Article 2 of the Authorisation Directive, entitled ‘Definitions’, provides:

‘1. For the purposes of this Directive, the definitions set out in Article 2 of [the Framework Directive] shall apply.

“general authorisation” means a legal framework established by the Member State ensuring rights for the provision of electronic communications networks or services and laying down sector specific obligations that may apply to all or to specific types of electronic communications networks and services, in accordance with this Directive.’

6 Article 3 of the Authorisation Directive, entitled ‘General authorisation of electronic communications networks and services’, states:

‘1. Member States shall ensure the freedom to provide electronic communications networks and services, subject to the conditions set out in this Directive. To this end, Member States shall not prevent an undertaking from providing electronic communications networks or services, except where this is necessary for the reasons set out in Article 46(1) of the Treaty.

2. The provision of electronic communications networks or the provision of electronic communications services may, without prejudice to the specific obligations referred to in Article 6(2) or rights of use referred to in Article 5, only be subject to a general authorisation. The undertaking concerned may be required to submit a notification but may not be required to obtain an explicit decision or any other administrative act by the [NRA] before exercising the rights stemming from the authorisation. Upon notification, when required, an undertaking may begin activity, where necessary subject to the provisions on rights of use in Articles 5, 6 and 7.

3. The notification referred to in paragraph 2 shall not entail more than a declaration by a legal or natural person to the [NRA] of the intention to commence the provision of electronic communication networks or services and the submission of the minimal information which is required to allow the [NRA] to keep a register or list of providers of electronic communications networks and services. This information must be limited to what is necessary for the identification of the provider, such as company registration numbers, and the provider’s contact persons, the provider’s address, a short description of the network or service, and an estimated date for starting the activity.’

7 Article 6 of the Authorisation Directive, entitled ‘Conditions attached to the general authorisation and to the rights of use for radio frequencies and for numbers, and specific obligations’, provides, in paragraph 1 thereof:

‘The general authorisation for the provision of electronic communications networks or services and the rights of use for radio frequencies and rights of use for numbers may be subject only to the conditions listed in the Annex. Such conditions shall be non-discriminatory, proportionate and transparent and, in the case of rights of use for radio frequencies, shall be in accordance with Article 9 of Directive 2002/21/EC (Framework Directive).’

8 Article 7 of the Authorisation Directive, entitled ‘Procedure for limiting the number of rights of use to be granted for radio frequencies’, provides:

‘1. Where a Member State is considering whether to limit the number of rights of use to be granted for radio frequencies or whether to extend the duration of existing rights other than in accordance with the terms specified in such rights, it shall inter alia:

(a) give due weight to the need to maximise benefits for users and to facilitate the development of competition;

3. Where the granting of rights of use for radio frequencies needs to be limited, Member States shall grant such rights on the basis of selection criteria which must be objective, transparent, non-discriminatory and proportionate. Any such selection criteria must give due weight to the achievement of the objectives of Article 8 of [the Framework Directive] and of the requirements of Article 9 of that Directive.

The dispute in the main proceedings and the questions referred for a preliminary ruling

9 On 18 July 2019, the NMHH launched an auction procedure for the award of rights to use radio frequencies for additional wireless broadband services in support of the roll-out of 5G (‘the contested auction procedure’), in accordance with the detailed rules set out in a ‘consultation file’ published on the same date (‘the documentation’).

10 DIGI Communications, a company formed in the Netherlands but not registered in Hungary as an electronic communications service provider, applied to take part in the contested auction procedure. The NMHH took the view that that application was not formally valid because, according to that authority, DIGI Communications had abused its right to take part in that auction procedure, and had engaged in conduct designed to circumvent the procedure, by attempting to mislead the NMHH.

11 Indeed, according to the NMHH, DIGI Communications had applied in place of its Hungarian subsidiary DIGI Távközlési és Szolgáltató Korlátolt Felelősségű Társaság, a company registered in Hungary and providing electronic communications services there. An application from that subsidiary would have been excluded from the contested auction procedure by virtue of a ground for exclusion provided for in the documentation.

12 The NMHH continued the contested auction procedure following its decision to exclude DIGI Communications from it.

13 DIGI Communications brought a legal action to challenge that exclusion decision. Its action was dismissed at first instance, and then at second instance by the Kúria (Supreme Court, Hungary).

14 In the meantime, the NMHH adopted the contested award decision, by which it granted the rights to use radio frequencies that were the subject of the contested auction procedure to three providers of electronic communications services present on the Hungarian market.

15 By an action brought before the Fővárosi Törvényszék (Budapest High Court, Hungary), which is the referring court, DIGI Communications sought the annulment of the contested award decision, basing its standing to bring proceedings on its status as an ‘affected undertaking’ within the meaning of Article 4(1) of the Framework Directive.

16 The referring court is uncertain as to the interpretation of that provision, noting the absence of a definition of the concept of ‘affected undertaking’ in the Framework Directive and relying, inter alia, on the judgments of 21 February 2008, Tele2 Telecommunication (C‑426/05, EU:C:2008:103), and of 22 January 2015, T-Mobile Austria (C‑282/13, EU:C:2015:24). It refers, more specifically, to the three conditions examined by the Court in the cases giving rise to those judgments, in order to establish that an undertaking is affected within the meaning of Article 4(1) of the Framework Directive.

17 According to the referring court, those conditions consist in establishing, first, that the undertaking in question provides electronic communications networks or services and is in competition with those persons to whom the NRA’s decision is addressed, secondly, that that decision is adopted in the context of a procedure intended to safeguard competition and, thirdly, that the decision is likely to have an impact on the position on the market of the undertaking in question.

18 In those circumstances the Fővárosi Törvényszék (Budapest High Court) stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

‘(1) (a) Can an undertaking be considered a competitor of the undertakings to which a decision of [an NRA] falling within the terms of Article 4(1) of [the Framework Directive] is addressed, where the undertaking in question is registered and operates in another Member State and does not itself provide electronic communications services in the market to which the decision refers, but an undertaking under its direct control is present in the relevant market as a service provider and competes in that market with the undertakings to which the decision is addressed?

(b) In order to reply to question 1(a), is it necessary to examine whether the parent company that wishes to bring the action forms an economic unit with the undertaking under its control which is present as a competitor in the relevant market?

(2) (a) Is an auction of rights to use radio frequencies for additional wireless broadband services in support of the roll-out of 5G conducted by [an NRA], falling within the terms of Article 4(1) of the Framework Directive and Article 7 of the Authorisation Directive, a procedure intended to safeguard competition? Must the decision of the [NRA] announcing the outcome of the auction procedure also be considered a procedure intended to safeguard competition in that regard?

(b) If the reply from the Court of Justice to question 2(a) is in the affirmative, is the decision’s objective of safeguarding competition affected by the fact that, in a final decision contained in a separate ruling, the [NRA] refused to register the bid submitted by the undertaking that is bringing an action, with the result that that undertaking was unable to take part in the auction procedure and was therefore not an addressee of the decision that determined the outcome of that procedure?

(3) (a) Must Article 4(1) of the Framework Directive, in conjunction with Article 47 of the [Charter], be interpreted as conferring a right of appeal against a decision by [an NRA] on an undertaking only where the position of that undertaking in the market:

(b) Is the fact that the undertaking submitted a bid in the auction procedure, that is to say, that it wished to take part in the procedure but was unable to do so because it did not satisfy the requirements, in itself proof of the effect referred to in question 3(a), or can the court legitimately require the undertaking also to furnish evidence to show that it is affected by the decision?

(4) In the light of the replies to questions 1 to 3, must Article 4(1) of the Framework Directive, in conjunction with Article 47 of the [Charter], be interpreted as meaning that an undertaking is an electronic communications provider affected by a decision of the [NRA] announcing the outcome of an auction of rights to use radio frequencies for additional wireless broadband services in support of the roll-out of 5G, and therefore has a right of appeal, where that undertaking:

(a) does not carry on an economic activity involving the provision of services in the relevant market, but directly controls an undertaking that provides electronic communications services in that market; and

(b) was denied registration in the auction procedure by a final decision of the [NRA] before the decision on the outcome of the contested auction procedure was adopted, thus preventing the undertaking from subsequently taking part in the procedure?’

19 In its observations, the NMHH submits that the questions referred for a preliminary ruling are not relevant to the resolution of the dispute in the main proceedings. It takes the view, in essence, that the question of the application of Article 4(1) of the Framework Directive does not arise in the present case, given the fact that the Hungarian legal system provides for legal remedies available to undertakings which, like DIGI Communications, are excluded from an auction procedure such as that at issue in the main proceedings and which, having exercised those remedies, may no longer be regarded as being affected by a decision closing such a procedure.

20 The Court of Justice has consistently held that 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 deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions put by national courts concern the interpretation of a provision of EU law, the Court is, in principle, bound to give a ruling. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law 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 (judgment of 2 October 2018, Ministerio Fiscal, C‑207/16, EU:C:2018:788, paragraph 45 and the case-law cited).

21 In the present case, as is apparent from the order for reference, the questions referred concern, in particular, the interpretation of Article 4(1) of the Framework Directive and Article 7 of the Authorisation Directive. Moreover, the interpretation sought appears to be necessary for the resolution of the dispute in the main proceedings, the existence of which, moreover, is not disputed, and the referring court, in that order, provided sufficient factual and legal material to enable the Court to give a useful answer to those questions. Furthermore, the arguments put forward by the NMHH relate, in essence, to the field of application and scope, and therefore to the interpretation, of the provisions of EU law to which the questions referred for a preliminary ruling relate. Such arguments, which concern the substance of the questions referred, cannot lead to the inadmissibility of the questions (see, to that effect, judgment of 27 October 2022, Proximus (Public electronic directories), C‑129/21, EU:C:2022:833, paragraph 59 and the case-law cited).

22 In those circumstances, it must be held that the questions referred for a preliminary ruling are admissible.

23 It must be recalled that, in accordance with settled case-law, in the context of the cooperation procedure between the national courts and the Court established in Article 267 TFEU, it is for the Court to provide the national court with an answer which will be of use to it and enable it to decide the case before it. With that in mind, it is for the Court, where appropriate, to reformulate the questions submitted to it. In addition, the Court may be prompted to consider rules of EU law to which the national court has not referred in the wording of its questions (judgment of 14 May 2020, T-Systems Magyarország, C‑263/19, EU:C:2020:373, paragraph 45 and the case-law cited).

24 By its second question, which it is appropriate to examine first, the referring court asks, in essence, whether Article 7 of the Authorisation Directive must be interpreted as meaning that a selection procedure for the award of rights to use radio frequencies and the award decision resulting from that procedure are intended to safeguard competition and, if that question is answered in the affirmative, whether the fact that such a procedure includes a stage for examining whether any applications comply with the relevant tender specifications, which may lead to the definitive exclusion of a candidate from that procedure, may be regarded as contrary to that objective.

25 In the first place, it should be noted, first, that Article 7(1)(a) of the Authorisation Directive requires Member States, when considering whether it is appropriate to limit the number of rights of use to be granted for radio frequencies, or to extend the duration of existing rights other than in accordance with the terms specified in such rights, to give due weight to the need to facilitate the development of competition. Secondly, Article 7(3) states that where the granting of such rights of use needs to be limited, Member States must grant them on the basis of selection criteria which must be objective, transparent, non-discriminatory and proportionate, which must give due weight to the achievement of the objectives of Article 8 of the Framework Directive.

26 As the Court has held, Article 8 of the Framework Directive places on the Member States the obligation to ensure that the NRAs take all reasonable measures aimed at promoting competition in the provision of electronic communications services, ensuring that there is no distortion or restriction of competition in the electronic communications sector and removing remaining obstacles to the provision of those services at EU level (judgment of 26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraph 37 and the case-law cited).

27 In addition, the regulatory framework applicable in the present case is based, inter alia, on an objective of effective and undistorted competition, and aims to develop that competition while respecting, in particular, the principles of equal treatment and proportionality (judgment of 26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraph 42).

28 It follows from the foregoing that a procedure such as the contested auction procedure and, consequently, the award decision resulting from that procedure are intended to promote and develop effective and undistorted competition, while respecting the principles of equal treatment and proportionality.

29 In the second place, it should be noted that the referring court seeks to ascertain whether that objective of promoting and developing effective and undistorted competition is called into question by the fact that, by a separate decision, the NRA concerned refused to register the application of the undertaking which, as a result, is no longer an addressee of the decision closing the contested auction procedure.

30 As regards the procedures for awarding radio frequencies, the regulatory framework applicable in the present case permits, in principle, the reduction of the number of rights of use to be granted for radio frequencies, in view of the scarcity of radio frequencies and the need to ensure their efficient use (judgment of 26 July 2017, Europa Way and Persidera, C‑560/15, EU:C:2017:593, paragraph 73). In that regard, the Member States enjoy, in accordance with the objectives and obligations laid down by the regulatory framework applicable, unfettered discretion as to the establishment of competitive or comparative procedures, whether they be free of charge or fee-based, and the national court must ascertain whether such a selection procedure is in conformity with those objectives and obligations (judgment of 26 July 2017, Europa Way and Persidera, C‑560/15, EU:C:2017:593, paragraphs 65 and 66).

31 It follows that the Member States enjoy discretion, as regards the nature and detailed rules of the procedures for granting frequencies which they organise, and that there is nothing to suggest, in principle, that such a procedure cannot include a stage for examining whether any applications comply with the tender specifications defined by the NRA, entailing, where appropriate, the exclusion from that procedure of some of the entities which have tendered, provided that that procedure, taken as a whole, can be regarded as complying with the requirements and conditions laid down in Article 7 of the Authorisation Directive.

32 In the light of the foregoing considerations, the answer to the second question is that Article 7 of the Authorisation Directive must be interpreted as meaning that a selection procedure for the award of rights to use frequencies and the award decision resulting from that procedure are intended to promote and develop effective and undistorted competition, while respecting the principles of equal treatment and proportionality. The fact that such a procedure includes a stage for examining whether any applications comply with the relevant tender specifications is not contrary to that objective, provided that that procedure, taken as a whole, complies with the requirements and conditions laid down in Article 7 of that directive.

33 It must be recalled at the outset that, according to settled case-law, Article 4 of the Framework Directive is an expression of the principle of effective judicial protection safeguarded by Article 47 of the Charter, pursuant to which it is for the courts of the Member States to ensure judicial protection of an individual’s rights under EU law (judgment of 13 October 2016, Prezes Urzędu Komunikacji Elektronicznej and Petrotel, C‑231/15, EU:C:2016:769, paragraph 20 and the case-law cited).

34 In the situation contemplated in Article 4 of the Framework Directive, the requirement to provide effective judicial protection, which is at the origin of that article, must also apply to users and undertakings which may derive rights from the EU legal order, in particular from the directives on electronic communications, and whose rights are affected by a decision taken by an NRA (judgment of 22 January 2015, T-Mobile Austria, C‑282/13, EU:C:2015:24, paragraph 34 and the case-law cited).

35 Moreover, since – as has been noted in paragraph 26 above – the NRAs are required, under Article 8(2) of the Framework Directive, to promote competition in the provision of electronic communications networks, electronic communications services and associated facilities and services by, inter alia, ensuring that there is no distortion or restriction of competition in the electronic communications sector, a strict interpretation of Article 4(1) of the Framework Directive to the effect that that provision confers a right of appeal only on persons to whom the decisions of the NRAs are addressed would be difficult to reconcile with the policy objectives and regulatory principles resulting, for the NRAs, from Article 8 of the Framework Directive, and, in particular, with the objective of promoting competition (judgment of 22 January 2015, T-Mobile Austria, C‑282/13, EU:C:2015:24, paragraph 36 and the case-law cited).

36 Thus, according to settled case-law, Article 4(1) of the Framework Directive covers the addressees of the decision in question as well as the other undertakings providing electronic communications networks or services and which may be competitors of those addressees, in so far as the decision in question is likely to have an impact on their position on the market (judgment of 22 January 2015, T-Mobile Austria, C‑282/13, EU:C:2015:24, paragraph 37).

37 However, contrary to what appears to be the referring court’s premiss and as the Advocate General also observed in point 24 of his Opinion, it cannot be inferred from that case-law that the scope of Article 4(1) of the Framework Directive is limited, in addition to those addressees, only to the undertakings competing with such addressees.

38 It is apparent from the very wording of that provision that Member States are required to recognise a right of appeal to any user or undertaking, first ‘providing electronic communications networks and/or services’ and, secondly, which ‘is affected by’ the decision of an NRA which it intends to challenge, without limiting that right solely to competitors of the addressee or addressees of that decision.

39 In the light of the foregoing, and having regard to the case-law referred to in paragraph 23 above, it must be found that, by its first, third and fourth questions, which it is appropriate to consider together, the referring court asks, in essence, whether Article 4(1) of the Framework Directive, read in conjunction with Article 47 of the Charter, must be interpreted as conferring a right of appeal on an undertaking:

– which participated, as an applicant, in an auction procedure in the electronic communications sector, conducted by the NRA of a Member State other than that in which that undertaking is established and carries out its operations,

– which does not itself provide an electronic communications service on the market of the Member State concerned by that procedure, but directly controls an undertaking which is present on that market, and

– which was the subject of a decision of that NRA refusing to register its application in the context of that procedure on the ground that it does not satisfy the necessary conditions, that decision having then become final,

in order to challenge the subsequent decision by which that NRA awarded the contract concerned by the auction procedure to third parties.

40 In that regard, it must be borne in mind that the Court’s interpretation of Article 4(1) of the Framework Directive which, as recalled in paragraph 33 above, is an expression of the principle of effective judicial protection, safeguarded by Article 47 of the Charter, must take account of the significance, as resulting from the system applied by the Charter as a whole, of that fundamental right. In particular, it should be taken into account that, whilst Article 52(1) of the Charter allows limitations on the exercise of the rights enshrined by the Charter, it nevertheless lays down that any limitation must respect the essence of the fundamental right in question and requires, in addition, that, subject to the principle of proportionality, the limitation must be necessary and genuinely meet objectives of general interest recognised by the European Union (see, to that effect, judgment of 4 June 2013, ZZ, C‑300/11, EU:C:2013:363, paragraph 51).

41 Furthermore, according to settled case-law, in interpreting a provision of EU law, it is necessary to consider not only the wording of that provision, but also its context and the objectives pursued by the rules of which it is part (judgment of 22 January 2015, T-Mobile Austria, C‑282/13, EU:C:2015:24, paragraph 32 and the case-law cited).

42 In the present case, it should, in the first place, be noted that neither the Framework Directive nor the Authorisation Directive contains a definition of ‘provider of electronic communications services’ (judgment of 30 April 2014, UPC DTH, C‑475/12, EU:C:2014:285, paragraph 55). It is, therefore, necessary, in order to define the scope of that concept, to refer to the legislative framework established by the Authorisation Directive and to the objectives pursued by all the relevant provisions.

43 It should be borne in mind that, according to Article 3 of the Authorisation Directive, Member States must ensure the freedom to provide electronic communications networks and services, subject to the conditions set out in that directive. The provision of electronic communications networks or the provision of electronic communications services may, in accordance with Article 3(2) of that directive, only be subject to a general authorisation, which, under Article 2(2) thereof, constitutes a legal framework established by the Member State ensuring rights for the provision of electronic communications networks or services and laying down sector-specific obligations that may apply to all or to specific types of electronic communications networks and services, in accordance with that directive.

44 Under Article 6(1) of the Authorisation Directive, the general authorisation for the provision of electronic communications networks or services may be subject only to the conditions listed in the Annex to that directive, which must be non-discriminatory, proportionate and transparent.

45 Furthermore, pursuant to the second sentence of Article 3(2) of the Authorisation Directive, ‘the undertaking concerned may be required to submit a notification but may not be required to obtain an explicit decision or any other administrative act by the [NRA] before exercising the rights stemming from the authorisation’. Article 3(3) states, in that regard, that the notification referred to in Article 3(2) is not to entail more than a declaration by a legal or natural person to the NRA of ‘the intention to commence the provision of electronic communication networks or services’.

46 It follows from the foregoing that, in a Member State such as – according to the information provided at the hearing by the NMHH – Hungary, which requires interested undertakings to lodge a notification, within the meaning of Article 3(2) of the Authorisation Directive, those undertakings must submit that notification only before commencing the actual provision of electronic communications networks or services. It cannot, therefore, be excluded that an undertaking which intends to commence such an activity may participate in a procedure such as the contested auction procedure before lodging such a notification with the NRA concerned.

47 In the light of that finding, to recognise only undertakings which have already lodged a notification with the competent NRA as an undertaking ‘providing electronic communications networks and/or services’, for the purposes of applying Article 4(1) of the Framework Directive, would amount to excluding, in principle, any new player wishing to enter the market from the judicial protection afforded in that provision, including operators who have taken the initiative to participate, as an applicant, in an auction procedure in order to actually enter that market. Such an interpretation of Article 4(1) of the Framework Directive, read in conjunction with the abovementioned provisions of the Authorisation Directive, would not respect the essence of the fundamental right to an effective remedy enshrined in Article 47 of the Charter, since it would deprive such operators of any possibility of challenging a decision which might adversely affect them, and would be contrary both to the objectives recalled in paragraph 26 above and to the case-law cited in paragraphs 33 to 36 above.

48 Consequently, in order to be recognised as an undertaking ‘providing electronic communications networks and/or services’, within the meaning of Article 4(1) of the Framework Directive, an undertaking does not necessarily have to have lodged a formal notification with the competent authorities of the Member State concerned, in cases where such a notification would be required by the law of that Member State pursuant to Article 3(2) of the Authorisation Directive, nor, more generally, already be present on the market of that Member State, provided that that undertaking fulfils the objective conditions to which the general authorisation referred to in that provision is subject in that Member State, which is for the referring court to ascertain.

49 Consequently, an undertaking which, although it has not yet entered the market, has participated in a procedure such as the contested auction procedure, as an applicant, is considered to satisfy the requirements referred to in the preceding paragraph, provided that it fulfils those objective conditions, irrespective of whether it has a subsidiary which is itself present on the market.

50 As regards, in the second place, the condition laid down in Article 4(1) of the Framework Directive, according to which an undertaking must be ‘affected by’ the decision taken by an NRA which it intends to challenge, that condition must be considered to be fulfilled in so far as that decision is likely to have an impact on the position of that undertaking on the market or where its rights under EU law are potentially affected by that decision (see, to that effect, judgments of 21 February 2008, Tele2 Telecommunication, C‑426/05, EU:C:2008:103, paragraphs 32 and 39, and of 22 January 2015, T-Mobile Austria, C‑282/13, EU:C:2015:24, paragraph 37). Thus, that condition is fulfilled if the rights of the undertaking in question are potentially affected by the decision of the NRA concerned by reason of its content and the activity exercised or envisaged by that undertaking (see, to that effect, judgment of 24 April 2008, Arcor, C‑55/06, EU:C:2008:244, paragraph 176).

51 Therefore, an undertaking which participated, as an applicant, in a procedure such as the contested auction procedure is affected, within the meaning of Article 4(1) of the Framework Directive, as interpreted by the Court in the case-law referred to in the preceding paragraph, by a decision taken by the NRA at the end of that procedure.

52 Indeed, the specific action taken by such an undertaking, consisting in submitting an application in the context of an auction procedure with a view to actually entering the market concerned by that procedure, is sufficient, in principle, to establish that the decision by which the NRA closes that procedure by awarding to third parties the rights to use radio frequencies which that undertaking had hoped to obtain, has, by its content, an impact on the activity envisaged by that same undertaking and, consequently, potentially affects the latter’s rights within the meaning of that provision.

53 The mere fact that such an undertaking was excluded from the auction procedure which led to the award decision closing that procedure by a decision which has become final, as would be the case here – which is, however, for the referring court to ascertain – cannot deprive that undertaking of its status as an undertaking affected, within the meaning of Article 4(1) of the Framework Directive, by that award decision.

54 It must be added that the Court has indeed already held, in the context of public contracts falling within the scope of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395, p. 33), that the legal interest in bringing proceedings of a tenderer who has been eliminated from a contract award procedure against the decision awarding that contract cannot be based on the fact that that tenderer could possibly be awarded the contract if, following annulment of that decision, the contracting authority decided to launch a new award procedure (order of 17 May 2022, Estaleiros Navais de Peniche, C‑787/21, not published, EU:C:2022:414, paragraph 27).

55 However, Article 2a(2) of that directive provides, in essence, that tenderers and candidates must have a right to a review of the award decision if they are ‘concerned’, in the sense that they ‘have not yet been definitively excluded’. In the judgment of 21 December 2021, Randstad Italia (C‑497/20, EU:C:2021:1037, paragraphs 72 and 75), the Court thus concluded, by reference to that provision, that such definitively excluded tenderers had no legal interest in bringing proceedings.

56 However, it must be stated that the Framework Directive does not contain any provision similar to Article 2a(2) of Directive 89/665. Consequently, since the provision in question limits the fundamental right to effective judicial protection, and in view of the case-law referred to in paragraph 40 above, which emphasises the importance of the principle of proportionality in that context, the same approach should not be applied by analogy for the purposes of interpreting Article 4(1) of the Framework Directive, given that the legislature did not consider it necessary to include such a provision in that directive.

57 It must, therefore, be held that, in the context of an action brought, under Article 4(1) of the Framework Directive, by an undertaking with a view to challenging the award decision closing the auction procedure in which that undertaking participated by submitting an application, but from which it was eliminated by an earlier decision which has become final, that undertaking’s legal interest in bringing proceedings may be derived, inter alia, from the fact that it might possibly participate in a new auction procedure relating to the award of the same rights to use radio frequencies and, where appropriate, be awarded those rights if, following the annulment of the decision in question, the contracting authority decided to launch such a procedure.

58 In the third place, it is necessary to bear in mind, however, the importance, both in the legal order of the European Union and in the national legal orders, of the principle of res judicata. In order to ensure both stability of the law and legal relations and the sound administration of justice, it is important that judicial decisions which have become final after all rights of appeal have been exhausted or after the time limits prescribed for such appeals have expired can no longer be called into question (judgment of 14 May 2020, Országos Idegenrendészeti Főigazgatóság Dél-alföldi Regionális Igazgatóság, C‑924/19 PPU and C‑925/19 PPU, EU:C:2020:367, paragraph 185 and the case-law cited).

59 Consequently, where an undertaking which has been excluded from an auction procedure, such as the contested auction procedure, by a decision of the NRA which has become final following a judicial decision, brings an action, under Article 4(1) of the Framework Directive, in order to challenge the award decision terminating that procedure, that action must not undermine the force of res judicata attaching to the aforementioned judicial decision.

60 It should be noted, in that regard, that, according to the case-law of the Court, the force of res judicata extends to the matters of fact and law actually or necessarily settled by a judicial decision (judgment of 16 July 2009, Commission v Schneider Electric, C‑440/07 P, EU:C:2009:459, paragraph 102 and the case-law cited). Thus, the application of the principle of res judicata in the present case depends, as a rule, on the scope of the action brought by DIGI Communications with a view to challenging the contested award decision and, therefore, on any overlap between that scope and that of the judicial decision by which its action challenging the decision to exclude it from the contested auction procedure was definitively dismissed. More specifically, as the Advocate General observes, in essence, in point 86 of his Opinion, the application of the aforementioned principle depends on whether DIGI Communications disputes the contested award decision in order to challenge its exclusion from that auction procedure, by arguing that an unlawful exclusion criterion was applied to it, or whether it challenges the lawfulness of the award of rights to use frequencies, for reasons other than those used to justify its own exclusion from that procedure.

61 In the light of all the foregoing reasons, the answer to the first, third and fourth questions is that Article 4(1) of the Framework Directive, read in conjunction with Article 47 of the Charter, must be interpreted as conferring a right of appeal on an undertaking:

– which does not itself provide an electronic communications service on the market of the Member State concerned by that procedure, but fulfils the objective conditions to which the general authorisation, referred to in Article 3(2) of the Authorisation Directive, is subject in that Member State, irrespective of whether it controls, as the case may be, another undertaking which is present on that market, and

– which was the subject of a decision of the NRA refusing to register its application in the context of that procedure on the ground that it does not satisfy the necessary conditions, that decision having become final following a judicial decision dismissing an action brought against that decision,

in order to challenge the subsequent decision by which the NRA in question awarded the contract concerned by the auction procedure to third parties, provided that the appeal brought by that undertaking does not undermine the force of res judicata attaching to the aforementioned judicial decision.

62 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

1. Article 7 of Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services, as amended by Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009,

– a selection procedure for the award of rights to use frequencies and the award decision resulting from that procedure are intended to promote and develop effective and undistorted competition, while respecting the principles of equal treatment and proportionality;

– the fact that such a procedure includes a stage for examining whether any applications comply with the relevant tender specifications is not contrary to that objective, provided that that procedure, taken as a whole, complies with the requirements and conditions laid down in Article 7 of Directive 2002/20, as amended by Directive 2009/140.

2. Article 4(1) of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services, as amended by Directive 2009/140, read in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union,

– which participated, as an applicant, in an auction procedure in the electronic communications sector, conducted by the national regulatory authority of a Member State other than that in which that undertaking is established and carries out its operations,

– which does not itself provide an electronic communications service on the market of the Member State concerned by that procedure, but fulfils the objective conditions to which the general authorisation, referred to in Article 3(2) of Directive 2002/20, as amended by Directive 2009/140, is subject in that Member State, irrespective of whether it controls, as the case may be, another undertaking which is present on that market, and

– which was the subject of a decision of the national regulatory authority refusing to register its application in the context of that procedure on the ground that it does not satisfy the necessary conditions, that decision having become final following a judicial decision dismissing an action brought against that decision,

in order to challenge the subsequent decision by which the national regulatory authority in question awarded the contract concerned by the auction procedure to third parties, provided that the appeal brought by that undertaking does not undermine the force of res judicata attaching to the aforementioned judicial decision.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> DIGI Communications (Telecommunications - Electronic communications networks and services - Award of rights to use frequencies - Judgment) [2023] EUECJ C-329/21 (20 April 2023) URL: http://www.bailii.org/eu/cases/EUECJ/2023/C32921.html Cite as: [2023] EUECJ C-329/21, ECLI:EU:C:2023:303, EU:C:2023:303

Court of Justice of the European Communities (including Court of First Instance Decisions)