Freedom of establishment: Commission inquires into restrictions on the establishment of retail facilities in Poland - Main contents

The European Commission has decided to send an official request for information on the Polish legislation restricting the establishment of retail facilities in Poland. The Commission wishes to verify whether the measures in question are compatible with Article 43 of the EC Treaty which guarantees the freedom of establishment. The letter of formal notice is the first step in an infringement procedure under Article 226 of the EC Treaty.

The Commission decision to inquire into the compatibility of the measures in question is based on complaints by several retail companies and on information gathered by the Commission services. The Commission has asked questions to the Polish authorities in relation to national legislation that requires an authorisation for the establishment of new retail facilities and for the operation of existing retail facilities greater than 400 square metres. First of all the new procedure put in place by the law of 11 May 2007 provides for a procedure which is potentially excessively lengthy and costly. Moreover it allows already established operators to participate in the decision on authorisation for new establishments. Furthermore, whether an authorisation is granted depends on criteria such as "the maintenance of a balance between various forms of retailing". The law does not specify how the criteria should be applied or the time framework in which authorisation decisions should be taken.

The Commission has concerns about the possibly discriminatory nature of the Polish legislation and the suitability and proportionality of the measures concerned. According to the case-law of the European Court of Justice all measures which render the exercise of the freedom of establishment less attractive should be eliminated. According to the Court, restrictions on fundamental freedoms of the Treaty are only admissible when they are non-discriminatory, justified by imperative requirement in the general interest, suitable and proportionate. The Court has also stated that objectives of an economic nature cannot justify restrictions to a fundamental freedom.

The Commission has also pointed to the risk that the new law might hamper the proper implementation of the Services Directive, which must be transposed by the end of 2009. According to the case-law of the Court, during the transposition period Member States must refrain from adopting measures which are liable to seriously compromise the result prescribed by the Directive (in this case, the abolition of economic test in the framework of authorisation procedures).

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