1 Introduction I Background - Efta Surveillance Authority

Transcript

Case handler: Caspar Ebrecht Brussels, 8 July 2015 Case No: [email protected] 7488I Document No:.759724 Ministry of Transport and Communications Postboks 8010 Dep 0030 Oslo Norway Dear Sir or Madam, Subject: Complaint against Norway concerning access to the taxi services market in Oslo 1 Introduction i Background By letter dated 6 March 2014 (Document No 700930), the EFTA Surveillance Authority (,;the Authority'') informed the Norwegian Government that it had received a complaint conceming rules limiting access to the taxi services market in Oslo. The complainant alleges that the systern currently in place in the Oslo Municipality to regulate the access of new entrants to the taxi service market is in conflict with EEA law. The Norwegian Government replied by letter dated 9 April 2014 (Document No 705245 your ref.: ;p.tltZ). The matter was further discussed during the package meeting which took place in Oslo on 16 October 2014. According to the complainant, the municipality has rejected, on different occasions, his application to establish a new taxi service in Oslo. The complainant argues that in general, the number of available licences in a district is limited and that applications by new entrants for a new licence are treated on a "needs-based" analysis, i.e. the competent authority restricts the total number of available taxi licences in correspondence with the demand in a given district. Furthermore, the complainant claims that the Norwegian rules require taxi drir"r, to be members of a taxi dispatch central and pay a fee for that. In this regard, the complainant contends that there are no objective criteria for assessing whether in a given situation there is a need for new taxi licences. In addition, the complainant submits that the Municipality imposes independent taxi pay fees businesses to become utnUut.a with so-called taxi centrals ("drosjesentraf') and to for this affiliation. According to the complainant, this systan, which limits the number of taxi licences and restricts new entrants, has led to disproportionally high prices for taxi services in Oslo. Rue Belliard 35, B-1040 Brussels, tel: (+32X0)2 286 l8 I l, fax: (+32X0)2286 18 00' www'eftasurv'int Page2 tn the Oslo municipality, several taxi dispatch centrals have been established and all taxi service operators are obliged to be affiliated with one of them. Both existing licence holders and recipients of a new licence in Oslo are free to choose their affiliation among the approved taxi dispatch centrals, subject to the quantitative restriction that no dispatch central can have more than 50% of the total available licences. The Norwegian Government has not contested the underlying facts as described in the complaint. In its reply dated 9 April 2014, the Norwegian Government has made reference to two letters (dated 12 March 2072, Document No 627756, and 14 May 2012, Document No 634780) that it had sent to the Authority in a previous complaint case (Case 69474\, as it considered the relevant legal issues in the present complaint to be to a wide extent similar to those in the previous complaint. In particular, the Norwegian Government has reiterated its view that the limitations to the licensing of new entrants to the taxi services market and the quantity regulation are in conformity with EEA law, as it considers any potential restrictions of the freedom of establishment to be justified by legitimate objectives in the public interest. On the basis of the information obtained from the Norwegian Govemment, the Authority's Internal Market Affairs Directorate ("the Directorate") has undertaken a more in-depth examination of the case. The Directorate's preliminary assessment of the complaint leads to the conclusion that the Norwegian national measures on access to taxi services constitute a restriction on the freedom of establishment. The restriction cannot be justified by proportionate overriding requirements in the public interest. 2 Legal Framework 2.1 EEA Law There is no secondary EEA legislation laying down rules regarding the access to the market of providing taxi transport services. Council Directive 96126/EC on admission to the occupation of road haulage operator and road passenger transport operator and mutual recognition of diplomas, certificates and other evidence offormal quali.fications intended to.facilitatefor these operators the right to freedom of establishment in national and international transport operationsl, which was superseded in the EU by Regulation (EU) No 107l/2009 of the European Parliament and of the Council establishing common rules concerning the conditions to be complied with to pursue the occupation of road transport operator and repealing Couniit Directive 96/26/EC (entry into force in the EEA currently pending), regulates the admission to the occupation ofroad haulage operator and road passenger transport operators.3 As regards Regulation (EC) No l2lgSlayrng down the conditions under which non-resident carriers may operate national road passenger transport services within a Member State, it should be pointed out that the conditions for its application are not met in the present case, given that the regular transport services envisaged by the complainant do not constitute the national segment of a regular international service, for the purposes of Article 3(3) of that t^oJ rt2q,T.5.1996, p. l. Referred ro at point 19 of chapter II of Annex XIII to the EEA Agreement. OJ L300, 12.11.2009,p. 51. Referred to at point 33b of bhapter II of Annex XIII to the EEA Agreement. 3 Road passenger transport operators in this context are limited to operators of motor vehicles suitable for carrying more than nine persons, cf. Article 2(3) Regulation (EC) No l07l/2009. 2 Page 3 Regulation, and furthernore since they constitute urban or suburban services which are expressly excluded from the scope of the Regulation by means of Article 3(3) thereof. Furthermore, as regards Directive 2006ll23lBC on services in the internal marketa, transport services, including urban transport and taxis are expressly excluded from the scope of the Directive, pursuant to its Article 2(2)(d) and Recital (21). 2.2 Norwegian Law The complaint relates to the Norwegian national legislation on the access to the taxi services market in the Oslo Municipality. The provisions in question are contained in the Norwegian Act on Professional Transport of 21 June 2002 no.45 ("Professional Transport Act")s and Regulation 40 1 I 2003 ("the Profes sional Transport Regulation")6. The following rules and principles apply to new applicants seeking to obtain a professional transport licence: - New taxi services transport operators are required to obtain a taxi licence (Section 9(1) of the Professional Transport Act). In orderto obtain the licence, applicants have to fulfil the requirements in Sectiot 4(2) of the Act, i.e. they must be of good repute, have a satisfactory financial standing, and have sufficient professional competence. - The number of taxi licences available in each licence district is limited and new licences are awarded subject to a needs test, which means that the competent authority in a licence district decides on the number of necessary taxi licences in correspondence with the (assumed) demand and supply, in line with the needs of the respective district.T New licences are only granted if and when an existing licence becomes available (due to death or retirement), or when a new licence is issued by the authority. - In order to determine the right correlation between demand and supply for taxi services in a licence district, the competent authority in that district shall carry out an analysis of the taxi industry. Relevant factors to be taken into account in this analysis are the population in the licence district, statistics from the taxi industry with regard to earnings as well as changes in the demand for taxi services and the level of functioning of other forms of public transport services in the district. - Available existing licences shall be publicly announced, cf. Section 37(3) of the Professional Transport Regulation. The criteria for the distribution and the grant of existing licences are listed in Sections 43 and 44 of the Professional Transport Regulation. The competent authority of each licence district decides upo^n the substantive conditionJunder which new licence(s) shall be granted/allocated.s OJ L 376,27.12.2006, p. 36. Referred to at point t in Annex X to the EEA Agreement. Lov om yrkestransport med motorvogn ogfartay (yrkestransportlova), LOV-2002-06-21-45. 6 Forskrift om yrkestransport innenlands med motorvogn ogfartay $trkestransportfurskriften), FOR-2003-03- 4 5 26-401. Norwegian Ministry of Transport and Communication's information page on the arrangement: http://www.reeieringen.no/nb/dep/sd/terna/).rkestransoort/lower.html?id:4443 16 8 See the Norwegian Ministry of Transport and Communication's information page on the arrangement: http://www.reqierinsen.no/nb/depisd/teruaiyrkestransport/loyver.html?id:4443 l6 TSee the Page 4 Section 43(3) of the Professional Transport Regulation foresees that the applicant with the longest service as a full-time taxi driver within the licence district shall be awarded the available licence. If a licence cannot be awarded on the basis of seniority, the decision is subject to the licensing authority's discretion, cf. Section 44 of the Professional Transport Regulation. All available licences, both existing and new ones, shall be publicly announced. In the announcement, the decisive criteria for the decision shall be stated. Furthermore, the Norwegian Government has referred to Circular N-14/81 paragraph 3, according to which the relevant criteria to be taken into account in this regard are the following: previous experience as a cab driver, gained seniority, connection with the taxi profession in general and geographical conditions. If the applicant claims that there are special circumstances which speak in his favour these shall be considered. to Section 46 of the Professional Transport Regulation, the competent licensing authority can decide to establish one or more taxi dispatch centrals (drosjesentraler) within a licensing district and to require licence holders to be Pursuant affiliated with a dispatch central. According to the Norwegian Government, Section lfl of the Professional Transport Regulation implies that operators are under an obligation to offer their services 24 hours aday, or, if attached to a dispatch central, contribute to a24 hours a day supply (see Section 46 of the Professional Transport Regulation). 3 The Directorate's preliminary assessment As indicated at the outset, the Directorate takes the view that the Norwegian national measures on access to taxi services constitute a restriction on the freedom of establishment. The restriction cannot be justified by proportionate overriding requirements in the public interest. 3.1 Applicability of Article 31(1) EEA In its letters dated 12 March and 14 May 2012, the Norwegian Government has made reference to Article 48(1) of the EEA Agreement and argued that as a result of that provision, it is not necessary to assess whether the Norwegian rules in question here constitute restrictions on the freedom of establishment under Article 3 1( 1) EEA. Article 48(1) EEA reads: "The provisions of an EC Member State or an EFTA State, relative to transport by rail, road and inland waterway and not covered by Annex XIII, shatl not be made less.favourable in their direct or indirect effect on carriers of other States as compared with carriers who are nationals of that State." The Norwegian Government interprets this provision in such away that national provisions regulating road transport in existence at the time of entry into force of the EEA Agreement and which have remained unchanged afterwards in such a way as to make them less favourable to foreign operators, continue to be in force. Furthermore, the Norwegian Government argues that the Norwegian rules in question here are based on objective and transparent, non-discriminatory criteria. Accordingly, and due to Article 48 EEA, the Norwegian Government argues that it is not necessary to consider whether the aforementioned rules constitute restrictions on the freedom of establishment under Article 3l(1) EEA. Page 5 The Directorate does not agree with the Norwegian Government's interpretation of Article 48(1) EEA. The corresponding rule in the TFEU, Article 92, provides for a national "standstill obligation" for Member States in the area of transport policy until the EU has passed measures foreseen under Article 91 TFEU. It prohibits Member States from applying existing national rules in the area of transport in such a way as to directly or indirectly discriminate against carriers from other Member States, unless a derogation is granted. The CJEU has held with regard to Article 92(1) TFEU that the other basic rules of the Treaty are applicable insofar as not being excluded, and can only be rendered inapplicable "as a result of an express provision in the Treaty''.e The only express provision in the EEA Agreement rendering inapplicable basic rules in this regard is Article 38 EEA which foresees a special exemption under which the freedom to provide services in the field of transport shall be governed by the provisions of Chapter 6 of the EEA Agreement. Furthermore, in its judgment in Case C-195190, the CJEU ruled with regard to the standstill obligation in Article 92(1) TFEU that"thefact that a common transport policy has not yet been achieved does not empower the Member States to adopt national legislation, even limited in time, which is incompatible with the requirements of [Article 76J fuow Article 92 TFEU) of the Treaty."to The Directorate holds that it follows from this case-law that also during the standstill period mentioned in Article 92(l) TFEU and Article 48(1) EEA, national legislation in the field of transport must be compatible with the general rules of the Treaty and the EEA Agreement. Accordingly, it is the view of the Directorate that Article 3l EEA is directly applicable in the field of transport, e.g. as regards national measures regulating access to the market for taxi services. Article 48(1) EEA does not provide that all national measures regulating road transport in force at the time of signature of the EEA Agreement can be maintained, regardless of their restrictive or discriminatory effect. 3.2 Restriction within the meaning of Article 31(1) EEA Article 3l(1) EEA (corresponding to Article 49(l) TFEU) provides, in its first subparagraph, for the abolition of all restrictions on the freedom of establishment between the EEA States. According to the second subparagraph, the freedom of establishment includes the right of nationals of the EEA States to take up and pursue activities as selfemployed persons and to set up and manage undertakings in another EEA State under the same conditions as are laid down by the law of the EEA State of establishment with respect to its own nationals. Article 31 EEA also prohibits discriminatory national measures which do not distinguish upon nationality as such, but de facto have (indirect) discriminatory effects.ll Furthermore, it prohibits rules which impede or render less attractive the exercise of the freedom of establishment, in particular through the application of a prior authorisation procedure.l2 e Case C-167 l73,ECLI,ELI:C:1974:35, Commission v France. paras. 21-33; See also CJEU, Case C-338i09, ECLI:EU :C :20 I 0 8 I 4, Yell ow Cab Verke hrsb etrieb, para. 23 . r0 Case C-195/90, ECLI:EU:C:1992:.219, Commission v Germany, para. 33. II Case E-l4ll2 ESA v Liechtenstein, para. 281, Case E-8/04 ESA v Liechtenstein, para. 16. 12 Case C-265112, ECLI:EU:C:2013:498, Citrodn Belux NV v Federatie voor Verzekerings- en FinanciEle Tussenpersonen (FvF), para. 35; Case C-205l99, ECLI:EU:C:2001:107, Analir and Others, para. 2l; Case C-439 I 99, ECLI: EU: C :2 002:14, Commission v I taly, para. 22. : Page 6 As the CFEU has consistently held, Article 3l(1) EEA precludes any national measure which, even though it is applicable without discrimination on grounds of nationality, is liable to hinder or to render less attractive the exercise by EU citizens of the freedom of establishment.13 The concept of 'restriction' for the purposes of Article 31(1) EEA covers measures taken by an EEA State which, although applicable without distinction, affect the access to the market for undertakings from other Member States and thereby hinder intraEEA trade.ra National legislation which makes the establishment of an undertaking from another Member State conditional upon the issue of prior authorisation constitutes a restriction, since it is capable of hindering the exercise by that undertaking of its freedom of establishment, by deterring or even preventing it from freely pursuing its activities through a fixed place of business.ls Consequently, legislation requiring prior authorisation to be obtained in order to operate a taxi transport service, constitutes a restriction of the freedom of establishment, in that it seeks to restrict the number of service providers. Such a restriction exists notwithstanding the fact that the legislation in question applies irrespective of the nationality of the persons concerned.l6 The Norwegian legislation in question, taken as a whole, establishes a system under which prior authorisation, in the form of a licence, is necessary for the establishment of a new taxi business and the necessary licence is only granted under very specific conditions that are outside the sphere of influence of the provider seeking to obtain a licence. Such a system has the potential to deter and prevent new operators from establishing a new taxi business. Furthermore, the (potential) obligation upon service providers to be connected to a taxi dispatch central, including the corresponding requirements that follow from this affiliation, constitutes an additional restriction of the freedom of establishment. The Directorate concludes that the Norwegian legislation in question, governing the access of transport operators to the taxi services market, constitutes a restriction of the freedom of establishment. As a result of these provisions, the number of taxi services available in a district is limited and transport operators seeking to establish themselves in a district are impeded from doing so. The Norwegian licensing scheme impedes or renders less attractive the exercise of the freedom of establishment, cf. Article 31(1) EEA. 3.3 Justification Restrictions on the freedom of establishment and the freedom to provide services are lawful only if they are justified by overriding reasons in the public interest.lT r3 ECJ, Case C400/08, ECLI:EU:C:2011:172, Commission v Spain, para. 64; ECLI EU : : C : 20 I 0 : 8 I 4, Yell t4 ECJ, Case C-442102, ECLI:EU:C:2004:586, CaixaBank France, para. ECLI:EU:C:2009:270, Commission v ltaly, para. 64. 15 Case Joined Cases C-l71107 andC-172107, ECLI:EU:C:2009:316, Doc Morris 169107, ECLI:EU:C:2009: 141, Hartlauer,paras. 34, 35 and 38 r6 Case C-400/08, ECLI:EU:C:2011:172, Commission ECLI : EU C: 20 : I 0 :8 I 4, Ca-se C-338/09, ow C ab Verkehrs b etrieb, para. 45. Y e I low C ab V erkehrs b etrie b, para. 45 . ll; Case C-518/06, W,para.23; v Spain, para. 64; Case Case C- C-338/09, lTCaseE-g/ll, ESAvNorway,para.83;CaseE-15/ll,ArcadeDrillingAS,para.82;CaseE-3/06 Ladbrokes, para. 4l ; Case E-8i04, ESA v Liechtenstein, para. 23. PageT ln order for a prior authorisation scherne to be justified even though it derogates from the freedom of establishment, it must be based on objective, non-discriminatory criteria known in advance, in such a way as adequately to circumscribe the exercise of the national authorities' discretion. I 8 National measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditionsre, namely they must: (l) be justified by overriding requirements in the general interest, (2) be based on objective, nondiscriminatory criteria known in advance, (3) be suitable for securing the attainment of the objective which they pursue and (4) not go beyond what is necessary in order to attain it (proportionality). 3.3.1 Arguments broughtforward by the Norwegian Government The Norwegian Government argues that the existing Norwegian rules on access to the taxi services market are necessary in order to ensure a satisfactory service justified by legitimate objectives in the public interest. The main purpose of the rules, according to the Norwegian Government, is to always provide the public with a satisfactory supply of taxi services in all counties and, more precisely, that in order to oblige operators to be available 24 hours a day, it is necessary to award licences based on a needs-based test. Furthermore, the Norwegian Govemment claims that the limitation of taxi licences also seeks to meet the objective of providing a secure and foreseeable income for taxi service operators, as well as a steady recruitment to the profession. With regard to the obligation to become member of a dispatch central, the Norwegian Government claims that this limitation is necessary in order to avoid that one taxi dispatch central obtains a too dominant position. Moreover, as regards the regulation of the size and the structure of the dispatch centrals, the Norwegian Government submits that this should make the dispatch centrals capable of competing with each other. In addition, the Norwegian Government invokes security objectives in this regard, claiming that the obligatory affiliation to dispatch centrals will ensure that customers will feel safer when using taxi services, as the connection of each taxi to the dispatch central enables customers to contact the central in case of an abuse and it enables the central to know where a taxi was located at a certain moment. As regards the restrictive measure conferring competence upon the competent authorities to oblige licence holders to attach to a dispatch central and pay a fee for it, the Norwegian Government claims that this is necessary to pursuepublic interest and security objectives. The Norwegian Govemment states that the measure shall ensure that customers only have to dial one single telephone number when ordering a taxi and that this system makes it easier to locate a taxi and a driver, thereby also guaranteeing safety for the customers. r8 Joined Cases C-128/10 and C-129110, ECLI:EU:C:2011:163, Naftiliaki Etaireia Thasou, para.48; Case C338/ 09, ECLI: EU:C :20 I 0 : 8 I 4, Yel low C ab Verkehrsb etieb, para. 53. re Case C-400/08, ECLI:EU:C:2011:172, Commission v Spain, para. 73; Case C-55194, ECLI:EU:C:1995:411, Gebhard,para.3T; EFTA Court, CaseE-3/05 ESA v Norway, para. 57. Page 8 3.3.2 Assessment The Directorate has assessed the arguments that the Norwegian Government has brought forward to demonstrate that the restrictions inherent in the contested legislation governing taxi services are justified by overriding requirements relating to the public interest. In this regard, it should be recalled that it is for the national authorities to demonstrate that that a restrictive measure is appropriate for securing the attainment of the objective relied upon and does not go beyond what is necessary to attain it. The reasons which may be invoked by a Member State in order to justify a restriction must thus be accompanied by an appropriate analysis of the appropriateness and proportionality of the measure adopted by that State and by specific evidence substantiating its arguments.2o a) Overriding requirements in the public interest The grounds that have been invoked by the Norwegian Govemment as overriding requirements in the public interest justifoing the restriction will be assessed first. In general, prior authorisation schemes which entail the requirement to possess an administrative licence before taking up an activity are not prohibitedper se, and,the restriction that follows from such a requirement can be justified by imperative reasons of public interest.2r It has to be noted, first, that grounds of purely economic nature cannot constitute an overriding reason in the public interest justifying a restriction on a fundamental freedom and may thus not serve as a justification in this regard.22 The objective of securing the right correspondence between supply and demand in a licence district appears, as such, to be purely economic in nature. However, the reasoning of the Norwegian Government is that to guarantee a satisfactory (with 24 hours daily availability) supply is necessary in particular in rural areas, where taxis are often a indispensable means of transport and thereby serve a public interest. The requirement invoked by the Norwegian Government thus relates to safeguarding a necessary standard and frequency of passenger transport services for the inhabitants of a district and is, as such, not purely economic in nature. Ensuring that taxis are perrnanently available serves the protection of consumers which in itself can constitute an overriding requirement justifoing a restriction of the freedom of establi shment.23 ln contrast, with regard to the argument that the limitation of available taxi licences shall also serve to guarantee a secure and foreseeable income for taxi service operators as well as a steady recruitment to the profession, these grounds are undoubtedly purely economic in nature. To ensure a sufficient profit for existing taxi licence holders and dispatch centrals does not serve a public interest, but rather aims at the economic interests of specific 20 Cf. EFTA Court, Case E-12110 ESA v lceland,para.5T; ECJ, Case C-8/02, ECLI:EU:C:2004:161, Leichtle, para. 45; Case C-73l08, ECLI:EU:C:2010:181, Bressol and Others. para. 7l; Case C-110/05, ECLI:EU:C:2009:66, Commission v ltaly, para. 66; Case C-400/08, ECLI:EU:C:2011:172, Commission v. Spainparu.75. 2r Case C-76190, ECLI:EU:C:1991:331, Siigerv Dennemeyer, para. 15. 22 Case C-400i08, ECLI:EU:C:2011:172. Commission v. Spain para. 74, Case C-338/09, ECLI:EU:C:2O10:814, Yellow Cab Verkehrsbetrieb, para. 51; Case C-254198, ECLI:EU:C:2000:12, TKHeimdienst, paras. 32-33; Case C-456110, ECLI:EU:C:2012:241, ANETT, para. 53; Case C-I09/04, ECLI:EU :C:2005 : I 87, Kranemann, para. 34. 2r Case C-260l04,ECLI:EU:C:2007:508, Commission v ltaly,para.27;Case C-393/05, ECLI:EU:C:2007:722, Commission v Austria,para. 52l, Case C-458/08, ECLI:EU:C:2010:692, Commission v Portugal, para. 89. Page9 economic operators. The same is true for the objective of guaranteeing a steady recruitment to the taxi driver profession, as it aims solely at regulating the conditions for new employment and the continuity of a specific business, which in itself are not requirements in the public interest. The same applies with regard to the obligation to become member of a dispatch central and the Norwegian Government's claim that this requirement is necessary to sectre competition between different dispatch centrals. Considerations such as the impact on competition and on market shares in a specific ssctor are purely economic in nafure and therefore do not constitute an overridinginterest in the puUiic inierest justiffing a restriction.2a Based on objective, non-discriminatory criteria known in advance For a prior administrative authorisation scheme to be justified, it must be based on objective, non-discriminatory criteria known in advance, in s-uch a way as adequately to circumscribe the exercise of the national authorities' discretion.2s b) According to the Norwegian Government's submission, new applications for a taxi service operator's licence will be considered only if and when there is an available (free) licence. In deciding on whether or not to make new licences available, priority is given to local drivers with at least two years experience, in accordance with Section 43 of the Professional Transport Regulation, taking into account criteria such as previous experience as a cab drivei and gained seniority in the profession. Section 44 of the Professional Transport Regulation frovides that if no applicant has priority or preference pursuant to Section 43, the-competent authority shall diiiOe, at its own discretion, who should be awarded the licence(i). No further criteria for how this discretion is to be used are provided. Directorate, it is doubtful whether these conditions satisff the requirements set up by the CJEU for prior authorisation schemes, namely that they must be based on objective, non-discriminatory criteria which are known in advance, in such away not used as to circumscribe the exercise of the national authorities discretion, so that it is to be, appear drivers as taxi arbitrarily.26 Criteria such as seniority and previous experience primafacie, discriminatory, as they clearly favour existing taxi operators over new entrants without there being a legitimate justification. In the view of the In a case concerning the application by Spanish pharmacists for new licences, the CJEU held that national *I"r *t eriby licences for the establishment of new pharmacies are to be granted in accordance with an order of priority in which precedence is given to pharmacists *ho huu, pursued their professionil activities within the province, are indirectly discriminato4fT, as they, Member State. 2a Case C-400/08, ECLI:EU:C:2 de facto, favour national pharmacists over those from another 0ll:172, Commission v. Spain paras. 95-98, in which the Court held, in the for the purposes context ofa decision to grant a licence for a new retail establishment, that to take account' the impact of a new and concemed area in the of granting such a licenc-e, of the existence of retail facilities traders and the existing on impact the concerns area, establishment on the commercial structure of that protection. consumer to market structure, and therefore does not relate 25 c-33g/0g, ECLI:EU:C:2o10:814, Yellow cab verkehrsbetrieb, para. 53; Case C'169107, case ECLI:EU:C:2009: 14 l, Hartlauer, paru. 64. Del Estado, para. 35 26 Case C-3g)lgg ECtt:iU:C:2 002:3+, Canal Satilite Digital v Administrqtion General and Case C-205 lgg,ECLI:EU:C:200 I : I 07, Analir and Others, pata' 37' 22 Joined Cases C-570 /07 arld C-571107, ECLI:EU:C:2010:300, Josd Manuel Blanco Perez and Maria del Pilar Chao Gomez,Paras. 122'125- Page 10 c) Suitability While the objective of guaranteeing a satisfactory, permanent supply of taxi transport services in the interest of consumers can be accepted as a requirement in the public interest justifoing a restriction, the Directorate has doubts as to whether the national rules restricting the access to the taxi services market are suitable in order to attain the objectives referred to above. The Norwegian Government submits that particularly in sparsely populated districts with less demand for taxi services, the current system guarantees a secure and stable supply of taxi services. To substantiate this claim, the Norwegian Government argues that the rules in force, in particular the need to be afEliated with a dispatch central, serve to ensure that customers only have to dial one single telephone number when ordering a taxi and that this system makes it easier to locate a taxi and a driver, thereby also guaranteeing safety for the customers. The Directorate considers it appropriate to argue that some of the restrictions, such as the requiranent to be affiliated with a taxi central and the obligation to offer 24 hours a day taxi service, can be suitable for attaining the objective that the Norwegian Government has invoked, as these requirements in fact do ensure the existence of a satisfactory supply of taxi services in certain rural areas where it is not commercially viable to offer round the clock taxi services in an unregulated market. However, in the Directorate's view, this reasoning does not hold when applied to providing taxi services in densely populated licence districts where different means of transport are available at all times. to th.r" areas it is rather likely that the Norwegian rules limiting the number of available licences for each taxi district on the basis of a needs test will have the result of limiting supply by restricting the availability of new market entrants. It is the Directorate's view that allowing new entrants to the market would, incidentally, also likely lead to a reduction of taxi fur"r, thereby benefitting the customers in their need for affordable means of transport. In contrast, there are evidently indications that show that the current system of regulating access to the taxi services market have had adverse effects for customers, since taxi pricei in Oslo have seen a rather steep increase in recent years28, while at the same time the demand for taxis has decreased significantly. Such adverse effects point to the absence of a right balance of supply and demand. Furthermore, the Norwegian Government has failed to demonstrate, in its submission, how exactly the "right correlation" between supply (as part of the analysis underlying the needs test) and demand is established in the Oslo municipality and other large, densely populated municipalities in Norway. Therefore, the Directorate concludes ihat it has not been demonstrated that reshicting the number of available licences does in fact have the result of guaranteeing a satisfactory (with 24 hours daily availability) supply in the public interest. d) Necessity In addition, the Directorate has assessed whether the Norwegian provisions are proportionate, i.e. that they do not go beyond what is necessary in order to attain the legitimate objective of safeguarding a satisfactory supply of taxi services. 28 Pursuant to a newspaper article published on 24 Novemb er 2014 (http:i/www.nettavisen.noina24lellevilletaxipriser---76-prosent-priskning-pa-7-ar/8512709.htm1), the average taxi fare p"r tilo.*,t"r f,us risen from l6.56NoK to29-15 NOKbetween200T and20l4,thusanincreaseof T6percent. Thesefiguresarebased, on data collected by Statistics Norway (Statistisk sentratbyrd, SSB). Page I 1 In the Directorate's view, the Norwegian Govemment has not put forward any arguments to support its view that the limitation of the number of licences is necessary in order to a satisfactory supply of taxi services. For the following reasons, the Directorate "nr* considers that the rules go beyond what is strictly necessary: - Pursuant to the Norwegian rules in question, the so-called needs-based test is applied in such a way that new applicants shall not be granted a nelv licence where the demand for taxi services in a district can be satisfied by the existing number of taxi operators. However, the Directorate takes the view that in such a situation, the entry operators to the market will not immediately result in overcapacity. Rather, it can reasonably expected that there will be a margin within which new entrants to the taxi market can be admitted, despite the fact that the existing demand can be met by the existing number of operators. The argument that without a needs-based test there would be too many taxi operators which would in turn lead to taxi services of lower quality must be rejected, as the Norwegian Govemment has not presented any evidence to support this claim. oin"* - A less restrictive rule than a needs-based test is possible and feasible. For example, an alternative rule could be that applications for new licences can only be rejected where the admission of new entrants would put the functioning of the local taxi services business in danger. Such a provision would set a higher threshold for limiting the number of licences in a district: it would not be sufficient for rejecting an application for a new licence that the existing supply and demand for taxi services are in balance.. Rather, rejecting an application for a new licence would only be possible if, under the specific circumstances in the respective district, there are indications that allowing new entrants into the market would seriously threaten to destabilise the local taxi services market. Under such a framework, rejecting an application for a new licence would be the exception rather than the rule. - As has already been established under b) above, the criteria that are applied in Norway for the decision to award a new licence, i.e. to give priority to licence applicants that have been working for at least two years within the licence district (seniority rule) are clearly discriminatory. What is more, this seniority rule clearly goes beyond what is necessary to achieve the pursued objectives. The rule is in itself very restrictive as it will, in most situations, make it practically impossible for new operators from outside a district to establish a new business in the district. During the Package Meeting in October 2014, the Norwegian Government representatives expressed their view that this rule contributes to ensuring a steady recruitment to the professions of taxi driver and taxi operator, as it makes the professions more attractive, by giving an incentive for entering a business which may be perceived by some as not having the highest status. The Directorate notes that there is no evidence to support the claim that recruitment to the taxi profession is improved by the seniority rule. Rather, it would seem that opening up the market for new entrants would allow for an increase of recruits to the profession' - Furthermore, the Directorate considers that the obligation for operators to be connected to a taxi dispatch central and to comply with the corresponding requirements, such as being part of a shift plan, appears to go beyond what is necessary in order to achieve the legitimate objectives. The Norwegian Government's arguments in favour of the affiliation to a dispatch centre, such as being able to hold track of drivers and taxis in the interest of security, could be achieved in the same way with less restrictive measures, such as the requirement for Page 12 taxi operators to make use of technological equipment like GPS-tracking electronic means of identiffing a taxi in connection with payment. Conclusions Based on the above, the Directorate's preliminary view is that the Norwegian national rules on access to taxi services constitute a restriction on the freedom of establishment. These rules establish a system under which new licences are granted only under very restrictive conditions and which creates unnecessarily high barriers to enter the taxi services market, thereby deterring and preventing new operators from establishing a new taxi business. The different elements constituting the restriction, in particular the limitation of the number of licences available in each licence district, the priority rule according to which existing operators in a district are given priority when awarding new or renewing licences and the obligation for operators to be affiliated to a taxi dispatch central, all impede or render less attractive the exercise of the freedom of establishment. These restrictions cannot be justified by proportionate overriding requirements in the public interest. In the light of the above, the Norwegian Government is invited to submit its observations on the content of this letter by I September 201 5 . After that date, the Authority will consider, in light of any observations received from the Norwegian Government, whether to initiate infringement proceedings in this matter in accordance with Article 31 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice.