Judgment of the Court (Second Chamber) 19 March 1992

In Case C-60/91, REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal da Relação de Lisboa (Court of Second Instance, Lisbon), for a preliminary ruling in the criminal proceedings before that court against

THE COURT (Second Chamber), composed of: F. A. Schockweiler, President of the Chamber, G. F. Mancini and J. L. Murray, Judges, Advocate General: F. G. Jacobs, Registrar: H. A. Rühi, Principal Administrator,

after considering the written observations submitted on behalf of: José Antonio Batista Morais, by João Casinha, of the Lisbon Bar; the public prosecutor of the Tribunal da Relação (Court of Second Instance), Lisbon, by Maria Helena Delgado Antonio, State Prosecutor; the Portuguese Government, by Luis Inez Fernandes, Head of the Legal Service of the General Directorate for the European Communities of the Ministry for Foreign Affairs, and Pedro Coelho, member of the Legal Service of the General Directorate for the European Communities of that ministry, acting as Agents; for the United Kingdom, by John E. Collins, of the Treasury Solicitor's Department, acting as Agent; for the Commission of the European Communities, by Antônio Caeiro, Legal Adviser, and Xavier Lewis, member of the Legal Service, acting as Agents;

having regard to the Report for the Hearing,

after hearing the oral observations of the Portuguese Government, the United Kingdom, represented by John E. Collins and Andrew Macnab, Barrister, and the Commission at the hearing on 14 January 1992,

after hearing the Opinion of the Advocate General delivered at the sitting on 13 February 1992,

gives the following

Judgment

Costs

1. By order of 10 December 1990, which was received at the Court on 13 February 1991, the Tribunal da Relação de Lisboa referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty four questions on the interpretation of the rules of the Treaty on the free movement of persons and services and on competition, and of Council Directive 80/1263/EEC of 4 December 1980 on the introduction of a Community driving licence.

2. Those questions were raised in criminal proceedings brought by the public prosecutor against José Antonio Batista Morais, an instructor with a driving school established in Lisbon, who was charged with giving driving lessons on the motorway in a municipality adjoining the municipality of Lisbon. Portuguese legislation makes it an offence to give driving lessons in a municipality other than that in which the driving school is established.

3. Mr Batista Morais appealed against the judgment of the lower court in which he was fined, on the ground that the national legislation was contrary to Directive 80/1263 in so far as it did not permit instruction to be given on motorways.

4. The Tribunal da Relação, Lisbon, hearing the appeal, decided to stay the proceedings pending a preliminary ruling by the Court on the following questions:

5. Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the relevant provisions, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

6. In view of the logical structure of the reasoning, it is appropriate to deal first with Question 2 which, in substance, seeks to ascertain whether the rules of the Treaty on the free movement of persons and services apply to barriers affecting nationals of a Member State within the territory of that State.

7. In answering that question, it should be noted that the Court has consistently held that the Treaty provisions on the free movement of persons and services cannot be applied to activities which are confined in all respects within a single Member State (see, most recently, the judgment in Cases C-330/90 and C-331/90, Lopez Brea [1992] ECR I-323).

8. It appears from the facts, as established by the national court in its order for reference, that the dispute in the main proceedings concerns a Portuguese national who works in Portugal as a driving school instructor and that there is no factor connecting his situation to any of those envisaged by Community law.

9. The answer to Question 2 must therefore be that the rules of the Treaty on the free movement of persons and services do not apply to barriers affecting nationals of a Member State in that State, where there is no connecting factor between the situation of those nationals and any of the situations envisaged by Community law.

10. In view of the answer to Question 2, Question 1 is to be understood as seeking to ascertain whether it is contrary to Article 85(1) of the EEC Treaty for national legislation to limit the activities of a driving school to the municipality in which it is established.

11. In that connection, it should be noted that the Court has consistently held that Member States are obliged under the second paragraph of Article 5 of the Treaty not to detract, by means of national legislation, from the full and uniform application of Community law or from the effectiveness of its implementing measures; nor may they introduce or maintain in force measures, even of a legislative nature, which may render ineffective the competition rules applicable to undertakings (see, in particular, the judgment in Case 231/83 Cuttet v Ledere [1985] ECR 305, at paragraph 16).

12. There is no need to examine whether, and to what extent, legislation of the type at issue in the main proceedings encourages, renders obligatory or renders unavoidable any one of the business practices referred to in Article 85 of the Treaty, it is sufficient to note that that provision can be applied only to the extent to which allegedly anticompetitive practices may affect trade between Member States.

13. That condition would be satisfied only if it could be established that the national legislation, operating in a like manner to a network of similar agreements made in a reference market, would have the effect of denying access to that market to new national and foreign competitors (see the judgment in Case C-234/89 Delimitis v Henninger Bräu AG [1991] ECR I-935). However, national legislation of the type at issue in the main proceedings is not capable of having such an effect.

14. In those circumstances, the answer to Question 1 must be that Article 85 of the Treaty does not preclude national legislation from limiting the activities of a driving school to the municipality in which it is established.

15. In Question 3, the national court asks, in substance, whether Directive 80/1263 requires Member States to hold the driving test on motorways, whenever they are within reach of the test centre, and also to ensure therefore that driving instruction can be given on highways of that type.

16. In answering that question, it should be noted first that Directive 80/1263 was adopted as part of the progressive harmonization of national arrangements for driving tests and merely lays down in Annex II a number of minimum requirements without aiming to achieve total harmonization of the rules on driving tests.

17. Next, it should be borne in mind that Annex II, entitled Minimum Requirements for Driving Tests provides in point 9, with regard to the location of the test, that the part of the test relating to the candidate's behaviour in traffic must, wherever possible, be conducted on roads outside built-up areas and on motorways as well as in urban traffic.

18. It follows both from the aim of the directive and from the wording of point 9 of Annex II that the Member States have, when determining where the driving test is to be taken, a discretionary power which enables them to take account not only of the accessibility of certain types of highway but also of considerations relating to the need to ensure both uniform testing throughout the territory of a Member State and road safety.

19. In those circumstances, the answer to Question 3 must be that Directive 80/1263 does not require Member States to hold the driving test on motorways whenever they are accessible from the test centre; nor, therefore, are the Member States under any obligation to ensure that driving instruction can be given on highways of that type.

20. In the light of the answer to Question 3, there is no need to answer Question 4.

21. The costs incurred by the Portuguese Government, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT (Second Chamber), in answer to the questions referred to it by the Tribunal da Relação, Lisbon, by order of 10 December 1990, hereby rules:

1 The rules of the EEC Treaty on the free movement of persons and services do not apply to barriers affecting nationals of a Member State in that State, where there is no connecting factor between the situation of those nationals and any of the situations envisaged by Community law;

2 Article 85 of the EEC Treaty does not preclude national legislation from limiting the activities of a driving school to the municipality in which it is established;

3 Council Directive No 80/1263/EEC of 4 December 1980 relating to the introduction of a Community driving licence does not require Member States to hold the driving test on motorways whenever they are accessible from the test centre; nor, therefore, are the Member States under any obligation to ensure that driving instruction can be given on highways of that type.

1 Language of the case: Portuguese.