Brussels, 22/10/2013 (Agence Europe) - In Cases C-105, C-106 and C-107/12 on 22 October, the European Court of Justice ruled that restrictions on the free movement of capital affecting undertakings active in the electricity and natural gas markets may be compatible with EU law in terms of protecting consumers and ensuring secure energy supplies.
The Dutch appeals court asked the Court of Justice whether aspects of the Dutch energy rules comply with EU legislation. Under recent Dutch legislation, a private investor may not acquire or own shares or interests in the capital of an electricity or gas distribution system operator in the Netherlands (“the privatisation prohibition”). Also prohibited are ownership or control links between, on the one hand, companies which are members of the same group as an operator of such distribution systems and, on the other, companies which are members of the same group as an undertaking which generates/produces, supplies or trades in electricity or gas in the Netherlands (“the group prohibition”). Lastly, the national legislation also prohibits engagement by such an operator and by the group of which it is a member in transactions or activities which may adversely affect the operation of the system concerned.
The Court of Justice states that the three restrictions are indeed a restriction on the free movement of capital under Article 63 of the EU treaty. On the privatisation prohibition, member states can opt for a public ownership system under Article 345 of the treaty, but the ownership system is still subject to other treaty rules, viz. non-discrimination, freedom of establishment and free circulation of capital, but the Court says the reasons for choosing public ownership can justify restrictions on the free circulation of capital. For the other prohibitions, the Court of Justice says that the objectives of maintaining undistorted competition in order to protect consumers and ensuring security of energy supply constitute overriding reasons in the public interest that justify the restrictions on the free movement of capital under the Dutch legislation in question. (FG/transl.fl)