Instituto do Cinema e do Audiovisual, I.P. v NOWO Communications, S.A (C-411/21)

Contents

Judgment of the Court (Seventh Chamber)27 October 2022^note(Reference for a preliminary ruling — Article 56 TFEU — Freedom to provide services — Services consisting in the creation and production of cinematographic and audiovisual works — Operators of subscription television services — Subscription fee payable by subscription television operators — Allocation of the revenue from the fee — Restriction — Effects too uncertain or too indirect)In Case C‑411/21,REQUEST for a preliminary ruling under Article 267 TFEU from the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal), made by decision of 10 March 2021, received at the Court on 5 July 2021, in the proceedingsInstituto do Cinema e do Audiovisual IPvNOWO Communications SA,THE COURT (Seventh Chamber),composed of M.L. Arastey Sahún, President of the Chamber, N. Wahl (Rapporteur) and J. Passer, Judges,Advocate General: A. Rantos,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– Instituto do Cinema e do Audiovisual IP, by M. Ferreira, A. Moura Portugal, I. Teixeira and A.T. Tiago, advogados,– NOWO Communications SA, by R. Camacho Palma, advogado,– the Greek Government, by A. Magrippi, O. Patsopoulou, M. Tassopoulou, and D. Tsagkaraki, acting as Agents,– the European Commission, by M. Afonso and G. Braun and M. Mataija, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 56 TFEU.

2The request has been made in proceedings between the Instituto do Cinema e do Audiovisual, IP (Film and Audiovisual Media Institute; ‘the ICA’) and NOWO Communications SA (‘NOWO’) concerning the collection of a subscription fee payable by subscription television service operators.

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

3The ICA is the body responsible for awarding, pursuant to Lei n.^o 55/2012 – Princípios de ação do Estado no quadro do fomento, desenvolvimento e proteção da arte do cinema e das atividades cinematográficas e audiovisuais (Law No 55/2012 – Principles of State action in the context of the promotion, development and protection of the art of cinema and film and audiovisual activities), of 6 September 2012 (Diário da República, No 173/2012, series I of 6 September 2012), support – particularly financial – to cinematographic and audiovisual activities.

4That support is funded, inter alia, by the revenue from the annual subscription fee payable by subscription television service operators under Article 10(2) of that law (‘the subscription fee’) and by the tax on the broadcasting of advertisements laid down in Article 10(1) of that law.

5In August 2013, the ICA, as the body responsible for collecting the subscription fee, claimed from NOWO, a subscription television operator, the sum of EUR 886 042.50 in respect of that fee.

6NOWO challenged that taxation before the Tribunal Administrativo e Fiscal de Almada (Administrative and Financial Court, Almada, Portugal), claiming, in essence, that the subscription fee is not in conformity with EU law.

7That court upheld NOWO’s action and found that, having regard to the purpose and characteristics of the support scheme for cinematographic and audiovisual activities, that scheme was contrary to Article 56 TFEU. It considered, in particular, that the revenue generated by the collection of the subscription fee was intended solely to finance the promotion and dissemination of Portuguese cinematographic works, with the result that the allocation of that revenue reduced the cost of domestic production compared to that of foreign production and, consequently, indirectly discriminated against the cross-border supply of those services in relation to the national supply thereof.

8The ICA brought an appeal against that decision before the referring court and submits that the subscription fee complies with EU law in so far as, in particular, it does not infringe Article 56 TFEU.

9In that regard, it claims that there is no cross-border element justifying the application of Article 56 TFEU since the activity of providing subscription television services is confined to Portuguese territory. Furthermore, it argues that the court of first instance based its decision on an incorrect premiss that the subscription fee is intended solely to finance the promotion and dissemination of Portuguese cinematographic works, whereas that financing also benefits European works. Lastly, the ICA submits that even if the revenue generated by that fee were intended to finance national works, in the absence of evidence that operators of television services would favour the acquisition of national works to the detriment of European works by reason of the funding and support granted to national works, it cannot be found that that fee is contrary to EU law.

10The referring court considers it necessary to refer the matter to the Court in so far as there are serious doubts as to the conformity of the subscription fee with Article 56 TFEU.

11In those circumstances, the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Is Article 10(2) of [Law No 55/2012], if interpreted as meaning that the fee for which it provides is to be used exclusively to finance the promotion and dissemination of Portuguese film and audiovisual works, liable to give rise to indirect discrimination against the provision of services between Member States as compared with the corresponding national provision of services, inasmuch as it makes the provision of services between Member States more difficult than the purely domestic provision of services within a Member State, thus infringing Article 56 TFEU?(2) Might the answer to be given to the first question referred be altered by the fact that other Member States of the European Union operate schemes which are identical or similar to that provided for in Law No 55/2012?’

Consideration of the questions referred

The first question

12By its first question, the referring court asks, in essence, whether Article 56 TFEU must be interpreted as precluding national legislation introducing a fee intended to finance the promotion and dissemination of cinematographic and audiovisual works.

13In the first place, it should be observed that that question is based on the premiss that the revenue from the subscription fee introduced by Article 10(2) of Law No 55/2012 is allocated to the financing of the promotion and dissemination of Portuguese cinematographic and audiovisual works.

14However, it is apparent from the information before the Court that, first, that interpretation does not clearly follow from the provisions of that law and, second, that interpretation of national law is disputed, before the referring court, by the ICA and, in the present proceedings, by both the ICA and the European Commission.

15In that regard, it should be noted that, according to settled case-law, questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance (judgment of 6 October 2015, Târșia, C‑69/14, EU:C:2015:662, paragraph 12 and the case-law cited).

16In particular, it is not for the Court of Justice, in the context of the judicial cooperation established by Article 267 TFEU, to call back into question or to verify the accuracy of the interpretation of national law made by the national court, as such interpretation falls within the exclusive jurisdiction of that court. In addition, when hearing a reference for a preliminary ruling from a national court, the Court of Justice must base its reasoning on the interpretation of national law as described to it by that court (judgment of 6 October 2015, Târșia, C‑69/14, EU:C:2015:662, paragraph 13 and the case-law cited).

17Consequently, the interpretation of national law given by the referring court, in particular as regards the allocation of revenue from the subscription fee, cannot be called into question by the Court.

18In the second place, in the proceedings before the Court, the Commission and the Hellenic Republic have stated that, inasmuch as it does not expressly follow from the Portuguese legislation that the revenue generated by the subscription fee is allocated exclusively to the promotion of Portuguese cinematographic and audiovisual activities, that fee must be construed in the light of provisions of EU law other than Article 56 TFEU. Thus, first, according to the Commission, the subscription fee forms part of an aid scheme for audiovisual works within the meaning of Article 54 of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 [TFEU] (OJ 2014 L 187, p. 1). Second, according to that institution and the Hellenic Republic, the subscription fee is in conformity with Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) (OJ 2010 L 95, p. 1), the provisions of which allow Member States to impose financial contributions on media service providers established on their own territory if the funds collected are intended to support the production of European works.

19In that connection, it is true that, according to settled case-law, the fact that a question submitted by the referring court refers only to certain provisions of EU law does not mean that the Court may not provide the national court with all the guidance on points of interpretation that may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to those points in its questions (judgment of 7 March 2017, X and X, C‑638/16 PPU, EU:C:2017:173, paragraph 39).

20However, it should be noted that it is for the referring court alone to determine the subject matter of the questions it intends to refer to the Court. It is solely for the national courts before which actions are brought, and which must bear the responsibility for the subsequent judicial decision, to determine in the light of the special features of each case both the need of a preliminary ruling in order to enable them to deliver judgment and the relevance of the questions which they submit to the Court (judgment of 11 July 2013, Belgian Electronic Sorting Technology, C‑657/11, EU:C:2013:516, paragraph 28).

21Even though it cannot be ruled out that the provisions of Regulation No 651/2014 and Directive 2010/13 are relevant to the promotion of cinematographic and audiovisual works for the purpose of financing those works, the fact remains that it is not for the Court to change the subject matter of the present reference for a preliminary ruling by way of which the referring court, in order to determine whether the subscription fee is compatible with Article 56 TFEU, confined itself to seeking the Court’s interpretation of that provision.

22As regards the interpretation of that provision, it should be recalled that, in accordance with Article 56 TFEU, restrictions on freedom to provide services within the European Union are prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended.

23National measures which prohibit, impede or render less attractive the exercise of the freedom to provide services are restrictions on that freedom (judgment of 3 March 2020, Google Ireland, C‑482/18, EU:C:2020:141, paragraph 26 and the case-law cited).

24Such restrictions on the freedom to provide services are warranted only if they pursue a legitimate objective compatible with the FEU Treaty and are justified by overriding reasons in the public interest; if that is the case, they must be suitable for securing the attainment of the objective pursued and must not go beyond what is necessary in order to attain that objective (judgment of 18 June 2019, Austria v Germany, C‑591/17, EU:C:2019:504, paragraph 139 and the case-law cited).

25It must also be borne in mind that, according to settled case-law, the freedom to provide services is for the benefit of both providers and recipients of services (judgment of 8 September 2009, Liga Portuguesa de Futebol Profissional and Bwin International, C‑42/07, EU:C:2009:519, paragraph 51 and the case-law cited).

26In the present case, the referring court seeks to determine whether the subscription fee restricts the provision of services within the European Union in so far as the allocation of revenue from that fee to the production and promotion of cinematographic and audiovisual works reduces the cost of the services provided by providers established in Portugal and facilitates the use of those services to the detriment of those supplied by providers established in other Member States.

27In that regard, it is clear, first, that providers of audiovisual media services and operators of subscription television services, such as NOWO, are, in the course of their activities, the recipients of services related to the production of cinematographic and audiovisual works and may rely on Article 56 TFEU.

28Second, it is apparent from the information provided by the referring court that the purpose of Article 10(2) of Law No 55/2012 is not to regulate the production of cinematographic and audiovisual works, but to impose a fee on subscription television operators which is intended to finance the promotion and dissemination of such works.

29In that regard, it is apparent from settled case-law that national legislation the purpose of which is not to regulate the conditions concerning the provision of services by the undertakings concerned and any restrictive effects of which on the freedom to provide services are too uncertain and indirect for the obligation laid down to be regarded as being capable of hindering that freedom, does not contravene the prohibition laid down in Article 56 TFEU (judgment of 27 April 2022, Airbnb Ireland, C‑674/20, EU:C:2022:303, paragraph 42 and the case-law cited).

30In the present case, first, in the absence of details of the total amount of the revenue from the subscription fee and in view of the fact that the revenue from that fee is intended to support the production of cinematographic and audiovisual works throughout that economic sector, it cannot be established that that fee has restrictive effects on the freedom to provide services.

31First of all, in the light of the case file submitted to the Court, it is not possible to calculate the total amount of support for the creation and production of cinematographic and audiovisual works financed by the revenue from the subscription fee. It is apparent at most from the file submitted to the Court that, in the present case, the amount imposed on NOWO in respect of that fee is EUR 886 042.50 for the year 2013, whereas the revenue from that subscription fee must be used to support the cinematographic and audiovisual production sector as a whole and that amount must be assessed in the light of the overall cost of producing cinematographic and audiovisual works.

32Next, it should be noted that the production of a cinematographic or audiovisual work requires the participation of many suppliers of different services at various stages in the production, and offering separate services.

33Lastly, since the allocation of revenue from the subscription fee is randomised, it cannot be claimed that each work produced benefits from it.

34It follows that the financial support, the total amount of which is not determined, is distributed randomly between a large number of cinematographic and audiovisual productions and service providers involved at various stages of production in such a way that the effect of that support on the price of services consisting in the production of cinematographic and audiovisual works must be regarded, in the light of the information available to the Court, as uncertain, even hypothetical.

35Second, the price is not the only variable determining the acquisition of cinematographic and audiovisual works.

36The choice, on the part of an operator of television services, to acquire cinematographic or audiovisual works also depends on cultural factors, in particular, on the specific features prevailing in each of the Member States and on the expectations of the public.

37Accordingly, it cannot be established, in the light of the information before the Court, that the allocation of revenue from the subscription fee has the effect of favouring services consisting in the production of Portuguese cinematographic and audiovisual works to the detriment of services supplied by providers established in other Member States, with the result that, in those circumstances, any effects that the subscription fee might have on the provision of services consisting in the production of audiovisual and cinematographic works must be regarded as too uncertain and indirect to constitute a restriction within the meaning of Article 56 TFEU.

38In the light of all the foregoing considerations, the answer to the first question is that Article 56 TFEU must be interpreted as not precluding national legislation introducing a fee intended to finance the promotion and dissemination of cinematographic and audiovisual works, provided that any effects of that fee on the freedom to provide services for the production of such works are too uncertain and indirect to constitute a restriction within the meaning of that provision.

The second question

39By its second question, the referring court seeks to ascertain whether the fact that there are schemes in other EU Member States which are identical or similar to that for which Law No 55/2012 provides might alter the answer to the first question.

40The second question is based on the premiss that the subscription fee falls within the scope of the prohibition laid down in Article 56 TFEU. It follows from the answer given to the first question that, in the light of the information available to the Court, that is not the case. There is therefore no need to answer that question.

Costs

41Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national 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.

Operative part

On those grounds, the Court (Seventh Chamber) hereby rules: Article 56 TFEU must be interpreted as not precluding national legislation introducing a fee intended to finance the promotion and dissemination of cinematographic and audiovisual works, provided that any effects of that fee on the freedom to provide services for the production of such works are too uncertain and indirect to constitute a restriction within the meaning of that provision.