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Mobile payment system violates EU Services Directive, CJEU rules

The Court of Justice of the European Union (CJEU) has ruled that the establishment of Hungaryʼs national mobile payment system and the exclusive rights granted to state-owned Nemzeti Mobilfizetési Zrt. violate the European Union’s Services Directive.

In a press release on the CJEU website, the court recalls that since July 1, 2014, Nemzeti Mobilfizetési has operated the national mobile payment system, use of which is mandatory, for the mobile payment of public parking charges, tolls for use of the road network, fares on public transport, and fees connected with all the other services offered by a state body.

The European Commission brought an action against Hungary with respect to its mobile payment system, believing that it constitutes an unlawful state monopoly and infringes the provisions of the Services Directive.

The CJEU notes Hungaryʼs argument that the services provided constitute a service of general economic interest (SGEI) in respect of which the application of the directive is subject to restrictions. However, the court has ruled that "only SGEIs reserved to public or private entities, or monopolies which existed at the date on which the directive entered into force, are excluded from its scope."

The CJEU has therefore ruled that the system is not compatible with the provisions of the Services Directive relating to the freedom of establishment, noting that the measures taken by Hungary are a disproportionate restriction on the freedom to provide services.

"Hungary has failed to fulfill its obligations under Article 15(2)(d) and Article 16(1) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36), and, in the alternative, under Articles 49 and 56 TFEU," the court said in its judgement.

"An action for failure to fulfil obligations directed against a Member State which has failed to comply with its obligations under European Union law may be brought by the Commission or by another Member State. If the Court of Justice finds that there has been a failure to fulfil obligations, the Member State concerned must comply with the Court’s judgment without delay," the CJEU press releases notes.