Social Services of General Interest (SSGI)

1.3.3. Substantive content of law
Eilmansberger/Herzig
The provisions of the SD apply to all other services of an economic nature which are
not expressly exempted. In this context we have to distinguish between forms of restriction
that are absolutely inadmissible and forms of restriction that can be justified for overriding
reasons relating to the public interest.
The former are summarised as prohibited requirements in Art 14. For the latter,
distinction is to be made between requirements existing on 28-12-2006 and new ones
introduced after this cutoff date. In respect of existing requirements Member States need only
inform the Commission and explain why they consider that those requirements comply with
the conditions set out in the SD, whereas new requirements have to be notified to the
Commission and may only be promulgated if no objections have been raised (see Art 15(5) ff
SD).
Requirements that are absolutely prohibited include nationality requirements,
residence requirements, but according to Art 14(5) also the case-by-case application of an
economic test. This is why needs tests can only be maintained in areas not covered by the SD.
Prohibition is absolute and, unlike the other requirements according to Art 15, will not depend
on an evaluation of justification. However, the last sentence of Art 14(5) clarifies that this
prohibition of economic tests does not concern planning requirements which do not pursue
economic aims but serve overriding reasons relating to the public interest. The Commission
appears to relate this exemption only to territorial planning requirements which do not pursue
economic aims and quotes as examples the protection of the environment, including urban
environment, or the safety of road traffic. 89 It is true that, according to case-law, reasons of a
purely economic nature, such as the protection of certain market participants or maintenance
of specific market structures, are not admissible as reasons for justification. Limiting this
provision to urban planning considerations would, however, be too narrow in scope.
Especially in the social sector, as far as it is covered by the SD, one could argue with reasons
such as social policy objectives, protection of those in receipt of services, or maintenance of
the social security systems’ financial balance.
Requirements that are not absolutely prohibited, but need to be examined for their
necessity and proportionality under Art 15, are for instance the obligation to take a specific
legal form, requirements which relate to the shareholding of a company, requirements fixing a
minimum number of employees, or fixed minimum or maximum tariffs. This signifies that
rules intended to reserve certain social sector activities to non-profit entities need to be
notified to the Commission and evaluated for their necessity. 90 It remains to be seen whether
the Commission uses the rather large room for discretion introduced by the ECJ in the
Sodemare case, 91 all the more so as the Advocate General held that discriminatory effects
could not be excluded. 92 A Community act of law on services of general interest might create
legal certainty. 93
Finally, reference should be made to Art 9 of the SD. This Article subjects any form of
authorisation scheme to separate reporting requirements. Under the SD an authorisation
89
as argued by the Commission in its Handbook (FN 87) 36.
90
Handbook (FN 87) 39.
91
a Commission Services’ Working Paper, SEC(2007) 1514, 11, par. 2.7, talks of the necessity of a case-bycase
examination.
92
This view is not shared here. See section I.2.5 above.
93
for more details see section II.2 below.
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