• In the case of Case C-58/08 Vodafone [2010] ECR I-4999, it was established that for a national measure to be held as proportionate with Community law it must not be ‘manifestly inappropriate’ in pursuing the objective.

Facts of Case C-58/08 Vodafone [2010] ECR I-4999

  • The Cs, Vodafone and other mobile companies, challenged the validity of Regulation No 717/2007
  • This Regulation, with the legal basis of Article 95 EC (now Article 114 TFEU), capped retail and wholesale charges on the roaming period services provided by mobile networks for calls between Member States
  • The Cs challenged the Regulation on 3 grounds:
  • The legal basis was inadequate,
  • The Regulation is disproportionate by not confining to just wholesale but also retail charges, and;
  • The Regulation offends against the principle of subsidiarity

Issues in Case C-58/08 Vodafone [2010] ECR I-4999

  • Were the Cs correct in their challenges, or did the Regulation have an adequate legal basis, was proportionate, and did fulfil the principle?

Held by the European Court of Justice

Claim dismissed – Regulation was upheld.

Findings of the Court

Adequacy of Article 95 as a legal basis:

  • “by using the expression ‘measures for the approximation’ in Article 95 EC the authors of the Treaty intended to confer on the Community legislature a discretion, depending on the general context and the specific circumstances of the matter to be harmonised, as regards the method of approximation most appropriate for achieving the desired result, in particular in fields with complex technical features” [35]
  • Applying this to the case, “it is clear that a divergent development of national laws seeking to lower retail charges only, without affecting the level of costs for the wholesale provision of Community-wide roaming services, would have been liable to cause significant distortions of competition and to disrupt the orderly functioning of the Community-wide roaming market, as is clear from recital 14 in the preamble to Regulation No 717/2007. Such a situation justified the Community legislature’s seeking to protect the proper functioning of the internal market, as stated in paragraph 38 of this judgment.” [47]

The principle of proportionality

  • “Community legislature must be allowed a broad discretion in areas in which its action involves political, economic and social choices and in which it is called upon to undertake complex assessments and evaluations. … since its legality can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue” [52]
  • Considering the capped charges, “the introduction by that provision of ceilings for retail charges must be considered to be appropriate for the purpose of protecting consumers against high levels of charges.” [60]
  • The measure does not go beyond necessary, as “the Community legislature proceeded on the basis that reductions in wholesale prices might not be reflected in lower retail prices for roaming owing to the absence of incentives for that to happen.” [62]
  • “the legislature considered retail controls to be necessary, in particular because, in that specific area, competition at retail level took place mainly in terms of the complete retail package and, for the majority of consumers, roaming was only a small part of that package and accordingly not a critical consideration when they choose or change their provider.” [64]

The principle of subsidiarity

  • “the Community, in areas which do not fall within its exclusive competence, is to take action only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community.” [72]
  • Applying this to the facts, the Court believed it necessary for Community law to intervene as “the interdependence of retail and wholesale charges for roaming services is considerable, so that any measure seeking to reduce retail charges alone without affecting the level of costs for the wholesale supply of Community-wide roaming services would have been liable to disrupt the smooth functioning of the Community-wide roaming market. … the Community legislature decided that any action would require a joint approach at the level of both wholesale charges and retail charges, in order to contribute to the smooth functioning of the internal market in those services.” [77]

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