Case C-322/15, Google Ireland and Italy – refusing to let the Italians look at their financial books [order 2016, ECLI:EU:C:2016:672]

Italian law requires all Internet advertising companies to supply ‘economic system information’ to the Italian telecoms regulator, AGCOM. Data must be supplied in accordance with Italy’s accounting standards. Italian companies should therefore be able to comply. However, Google is seeking to annul this regulatory set up. It claims that it would be contrary to EU law’s ban on discrimination to extend the Italian rule to companies like Google Italy which is governed by its headquarters in Ireland.

Background
The Italian telecoms sector is governed by the Italian regulator, AGCOM [Autorità per le garanzie nelle comunicazioni].

In 2013, AGCOM issued a Resolution. It concerned the creation of an ‘Economic Information System’ – superficially, an Italian communications industry database, plus a register of the various companies operating in the Italian communications sector.

However, the Resolution also extended the Consolidated Audiovisual Media Services Act, which in Italy goes under the acronym of TUSMAR [Testo Unico dei Servizi di Media Audiovisivi e Radiofonici]. The effect of the Resolution was that the Act would now apply not just to the registered press, radio and television companies in Italy but to all companies who advertise on the web and digital platforms.

Henceforth, companies with or supplying web-advertising would be required to supply AGCOM with financial information about their revenues, and this revenue data would be included in the database. The policy justification advanced by AGCOM for their Resolution was that the database and the register together would help AGCOM obtain the information which was necessary for it to discharge its various statutory obligations.

Consequently, AGCOM’s reporting obligation embodied in the Resolution covered those companies which generate income inside Italy – even if, for accounting purposes, those revenues were included in the financial statements of companies that were located outside of Italy.

Unsurprisingly, Google Ireland and Google Italy objected to AGCOM’s Resolution. They therefore sought to have it annulled by an administrative law judge at the relevant court in Rome, the TAR Lazio.

Google Ireland claims that it is not obliged to be registered in the database – the rule was only for Italian-registered press and broadcasters. Further, the data to be supplied needs to conform to Italian accounting standards, and compliance would be contrary to EU discrimination law particularly when Google Italy is governed by its headquarters in Ireland, and prepares its corporate statements in Ireland. In any event, Google Italy claims that AGCOM’s rule falls outside the scope of the relevant Italian legislation and so AGCOM is acting ultra vires.

The force of that legal argument is denied by AGCOM. It explained the proportionality of their measures and added that Recital 19 in the EU’s ‘e-commerce’ Directive 2000/31/EC states:

(19) The place at which a service provider is established should be determined in conformity with the case-law of the Court of Justice according to which the concept of establishment involves the actual pursuit of an economic activity through a fixed establishment for an indefinite period; this requirement is also fulfilled where a company is constituted for a given period; the place of establishment of a company providing services via an Internet website is not the place at which the technology supporting its website is located or the place at which its website is accessible but the place where it pursues its economic activity; in cases where a provider has several places of establishment it is important to determine from which place of establishment the service concerned is provided; in cases where it is difficult to determine from which of several places of establishment a given service is provided, this is the place where the provider has the centre of his activities relating to this particular service.

Judge Tosti did not know what the correct interpretation of EU law should be and therefore decided to make a preliminary reference to the CJEU.

Question Referred
According to the Curia website, the TAR Lazio has asked:

Does Article 56 TFEU preclude application of contested Resolution No 397/13/CONS of the Autorità di garanzia delle Telecomunicazioni, and of the related provisions of national law, as interpreted along the lines proposed by that authority, which require the submission of complex ‘economic system information’ (which must be drawn up in accordance with Italian accounting standards) on the economic activities carried out in relation to Italian consumers, motivated by objectives of protecting competition but necessarily connected to the various and more limited institutional functions of that authority of safeguarding pluralism within the sector concerned, to operators which none the less do not come within the scope of the national legislation governing that sector (the Testo Unico dei Servizi di Media Audiovisivi e Radiofonici), and in particular, in the case under review here, to a national operator carrying out only services for its fellow subsidiary governed by Irish law and also, as regards the latter, to an operator not having its headquarters and not carrying on any business using employees within national territory; alternatively, does this constitute a measure restricting freedom to provide services within the European Union in breach of Article 56 TFEU?