Court of Justice of the European Communities (including Court of First Instance Decisions)

(Directives 92/50/EEC and 2004/18/EC Public service contracts Public broadcasting bodies Contracting authorities Bodies governed by public law Condition that the activity of the institution be 'financed, for the most part, by the State')

In Case C-337/06,

REFERENCE for a preliminary ruling under Article 234 EC, by the Oberlandesgericht Düsseldorf (Germany), made by decision of 21 July 2006, received at the Court on 7 August 2006, in the proceedings

Bayerischer Rundfunk,

Deutschlandradio,

Hessischer Rundfunk,

Mitteldeutscher Rundfunk,

Norddeutscher Rundfunk,

Radio Bremen,

Rundfunk Berlin-Brandenburg,

Saarländischer Rundfunk,

Südwestrundfunk,

Westdeutscher Rundfunk,

Zweites Deutsches Fernsehen

v

GEWA ' Gesellschaft für Gebäudereinigung und Wartung mbH,

intervening party:

Heinz W. Warnecke, trading under the name of Großbauten Spezial Reinigung,

composed of K. Lenaerts, President of the Chamber, G. Arestis, R. Silva de Lapuerta, E. Juhász (Rapporteur) and J. Malenovský, Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

Registrar: B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing on 14 June 2007,

after considering the observations submitted on behalf of:

Bayerischer Rundfunk, Deutschlandradio, Hessischer Rundfunk, Mitteldeutscher Rundfunk, Norddeutscher Rundfunk, Radio Bremen, Rundfunk Berlin-Brandenburg, Saarländischer Rundfunk, Südwestrundfunk, Westdeutscher Rundfunk, Zweites Deutsches Fernsehen, by B. Mitrenga and K.'P. Mailänder, Rechtsanwälte, and by C.-E. Eberle and J. Betz, Justiziare, and by N. Hütt, Referentin im Justiziariat,

GEWA ' Gesellschaft für Gebäudereinigung und Wartung mbH, by C. Antweiler and K. P. Dreesen, Rechtsanwälte,

the German Government, by M. Lumma, acting as Agent,

the Austrian Government, by M. Fruhmann, acting as Agent,

the Polish Government, by E. Ośniecka-Tamecka, acting as Agent,

the Commission of the European Communities, by X. Lewis and B. Schima, acting as Agents,

the European Free Trade Association Surveillance Authority, by B. Alterskjà...r and L. Young, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 6 September 2007

gives the following

1. This reference for a preliminary ruling relates to the interpretation of the first condition of the third indent of the second subparagraph of Article 1(b) and Article 1(a)(iv) of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1).
2. The dispute in the proceedings from which the reference has been made is whether the German public broadcasting bodies (Landesrundfunkanstalten) are contracting authorities for the purposes of application of the Community rules on the award of public contracts.

Legal context

Community legislation

3. Under Article 7(1), Directive 92/50 is to apply to public service contracts the estimated value of which, net of VAT, is not less than ECU 200 000.
4. Article 1(b) of Directive 92/50 provides:

''[C]ontracting authorities' shall mean the State, regional or local authorities, bodies governed by public law, associations formed by one or more of such authorities or bodies governed by public law.

'Body governed by public law' means any body:

established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character,

and

having legal personality

and

financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law.

The lists of bodies or of categories of such bodies governed by public law which fulfil the criteria referred to in the second subparagraph of this point are set out in Annex I to Directive 71/305/EEC. These lists shall be as exhaustive as possible and may be reviewed in accordance with the procedure laid down in Article 30b of that Directive'.

5. That provision is repeated in almost identical terms in Article 1(9) of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114). The purpose of that directive, as set out in Recital (1) of its preamble, was a recasting within a single measure of the separate directives which applied to the procedures for awarding public contracts in the three areas mentioned above and, under Article 80, the date for transposition of that directive into the legal systems of the Member States was to be no later than 31 January 2006.
6. The German public broadcasting bodies are not mentioned in either the Annex referred to in the last subparagraph of Article 1(b) of Directive 92/50 or Annex III to Directive 2004/18, which is of similar content.
7. Article 1(a)(iv) of Directive 92/50 provides that the following are excluded from its provisions:

'[C]ontracts for the acquisition, development, production or co-production of programme material by broadcasters and contracts for broadcasting time'.

8. That provision was repeated in identical wording in Article 16(b) of Directive 2004/18.
9. The rationale underlying that provision is set out in the eleventh recital of the preamble to Directive 92/50 where it is stated:

'Whereas the award of contracts for certain audiovisual services in the broadcasting field is governed by considerations which make the application of procurement rules inappropriate'.

10. That reason is further explained in Recital 25 of the preamble to Directive 2004/18 which provides:

'The awarding of public contracts for certain audiovisual services in the field of broadcasting should allow aspects of cultural or social significance to be taken into account which render application of procurement rules inappropriate. For these reasons, an exception must therefore be made for public service contracts for the purchase, development, production or co-production of off-the-shelf programmes and other preparatory services, such as those relating to scripts or artistic performances necessary for the production of the programme and contracts concerning broadcasting times. However, this exclusion should not apply to the supply of technical equipment necessary for the production, co-production and broadcasting of such programmes ... '

National legislation

11. The abovementioned Article 1(b) of Directive 92/50 has been transposed into national law by Article 98(2) of the Law against restrictions on competition (Gesetz gegen Wettbewerbsbeschränkungen). That provision is identical in content to the Community rules, the sole difference being that, as regards the definition of 'body governed by public law', the condition that the activities of the body in question be financed for the most part by the public authorities is qualified by the statement that the financing may be undertaken 'by shareholding in capital or otherwise'.
12. The second subparagraph of Article 5(1) of the German Basic Law is worded as follows:

'The freedom of the press and the freedom of reporting by broadcasts and film are guaranteed.'

13. That provision has been consistently interpreted by the highest German courts, in particular by the Bundesverfassungsgericht (Federal Constitutional Court) and the Bundesverwaltungsgericht (Federal Administrative Court), as imposing an absolute prohibition on any interference or any intervention by the public authorities in the management and operation of the public broadcasting bodies and an obligation of strict neutrality in relation to the programme material of those bodies. That provision of the Basic Law is of cardinal importance in the structure of the present German state and aims to ensure that broadcasting does not become a political instrument. It represents a constitutional guarantee of the right to freedom of expression and the right to receive information from a plurality of sources, and also of the existence of public broadcasting bodies and of their financing and development.
14. Those bodies are institutions governed by public law, endowed with legal personality and invested with a remit to serve the public interest. They are independent of the State authorities, self-managed and organised in such a way as to exclude any influence by the public authorities. In accordance with the case-law of the highest German courts, those bodies are not part of the structure of the State.
15. The financing of those bodies is governed by State Treaties (Staatsverträge), that is, treaties entered into by the Federal authority (Bund) and the Länder.
16. Article 11(1) of the State Treaty on broadcasting (Rundfunkstaatsvertrag) provides:

'The funds made available for operating costs must enable the public broadcasting bodies to fulfil their constitutional and statutory purposes; and must in particular guarantee the existence of public-law broadcasting and its development.'

17. In accordance with Article 12 of the State Treaty in question, more than half of the needs of the public broadcasting bodies are primarily financed by fees paid by citizens and, for the balance, by advertising and other revenues. In accordance with the case'law of the Bundesverfassungsgericht, financing by means of a fee is appropriate to the remit of public service broadcasting, satisfies the constitutional guarantee of financing and represents a functional method of financing which ensures that autonomy of programming is protected from any political interference by the State.
18. The detailed procedures for collection of the fee are governed by the State Treaty on the regulation of the broadcasting fee (Staatsvertrag über die Regelung des Rundfunkgebührenwesens) of 31 August 1991, as amended on 11 September 1996 (GVBl. NRW 1996, p. 431, 'the State Treaty on the broadcasting fee'). Under that State Treaty, it is possession of a broadcasting receiver which gives rise to the obligation to pay the fee. The circumstance that the receiver is not actually used has no bearing on the obligation to pay. Entitlement to the fee lies formally with the regional broadcasting bodies established in the territories of each of the Länder.
19. The regulations on the amount of the fee, calculated by reference to the established financial needs of the public broadcasting bodies, are to be found in the State Treaty on the financing of broadcasting (Rundfunkfinanzierungsstaatsvertrag) of 26 November 1996 (GVBl. NRW 1996, p. 484). The amount of the fee is formally approved by the Parliaments and Governments of the Länder.
20. The public broadcasting bodies have established, by means of an administrative agreement, a central agency for the collection of fees, the Gebühreneinzugszentrale der öffentlich-rechtlichen Rundfunkanstalten ('the GEZ'). The GEZ is an association governed by public law which has in particular the task of invoicing and collecting the fee. The GEZ has no legal personality and has no capacity to bring legal proceedings but it acts for and on behalf of the various regional public broadcasting bodies. However, as regards recovery of the fee from the citizens, the GEZ issues a notice of liability to the charge, which is to say it acts as an official authority. Similarly, if the fee is not paid, Article 7(6) of the State Treaty on the broadcasting fee provides that 'notices of arrears of the broadcasting fee are subject to enforcement by administrative proceedings. The regional broadcasting organisation entitled to the funds may send the request for assistance in enforcement directly to the authority having jurisdiction over the place of domicile or habitual residence of the persons liable to pay the fee ... '.
21. Monitoring and verification of the financial requirements declared by the public broadcasting bodies are entrusted to an independent commission, the Kommission zur à'berprüfung und Ermittlung des Finanzbedarfs der Rundfunkanstalten (Commission for the study and assessment of the financial needs of public broadcasting bodies 'the KEF'). That commission, consisting of 16 independent experts, receives and examines estimated requirements as submitted by the public broadcasting bodies and discusses them with their representatives. The KEF issues a report at least once every two years, and on that report the Parliaments and Governments of the Länder base their formal decisions on the amount of the fee. That procedure, in which the KEF now has a role, was set up following a judgment of the Bundesverfassungsgericht of 22 February 1994, which ruled that a procedure whereby the decision on the amount of the fee was taken by the First Ministers of the Länder without advice from an independent commission did not guarantee the independence required by the Basic Law.
22. The revenues from the fees are allocated, in particular, to the public broadcasting bodies and to the media authority of the Land concerned.

The main proceedings and the questions referred for a preliminary ruling

23. In August 2005, the GEZ sent a written invitation to 11 cleaning businesses to submit binding tenders for the provision of cleaning services in its premises in Cologne. No formal procedure for the awarding of public contracts compatible with the Community rules took place. The stipulated duration of the contract was from 1 March 2006 until 31 December 2008, the contract being tacitly renewable from year to year. The GEZ estimated the total outlays per annum at more than EUR 400 000.
24. The undertaking GEWA ' Gesellschaft für Gebäudereinigung und Wartung mbH, one of the cleaning businesses to which the invitation to tender was sent, was informed by the GEZ in November 2005 that it had not been awarded the contract. Since GEWA considered that the GEZ as a contracting authority should have submitted the cleaning contract to an invitation to tender which complied with the Community rules, it brought an action before the public contracts division of the Bezirksregierung (District Administration) of Cologne. That body upheld the action, ruling that the contract at issue was alien to the actual activity of broadcasting and was consequently subject to the Community law relating to public contracts.
25. The public broadcasting bodies appealed against that decision to the public contracts division of the Oberlandesgericht (Higher Regional Court) Düsseldorf, claiming that they were not contracting authorities, given that the public broadcasting service is financed for the most part by the fee paid by the television viewers and that there is no public funding nor public control of that service.
26. The referring court finds that the conditions set out in the first and second indents of the second subparagraph of Article 1(b) of Directive 92/50, and in indents (a) and (b) of the second subparagraph of Article 1(9) of Directive 2004/18, on the definition of 'body governed by public law' are satisfied in this case, inasmuch as the public broadcasting bodies were established specifically to satisfy needs in the general interest, not having an industrial or commercial character and are endowed with legal personality. The court states moreover that, as regards the three conditions to be found respectively, in the third indent of the second subparagraph of Article 1(b) of Directive 92/50 and in indent (c) in the second subparagraph of Article 1(9) of Directive 2004/18, the last two are not satisfied in this case, inasmuch as the public authorities do not exercise any supervision over the management of those bodies and have no influence on appointments to their governing bodies. The issue still to be determined therefore is whether the activity of the bodies in question is financed for the most part by the State or by other contracting authorities, so that they may be regarded as 'bodies governed by public law' and, consequently, as 'contracting authorities'.
27. The referring court states that, according to one school of thought in current German case-law and academic writing, the condition of being 'financed, for the most part, by the State' requires a direct causal link between that financing and the State. That approach takes as its sole criterion whether the State is the origin or source of the funds, which is to say whether the funds come from the State budget, and takes no account either of the fact that the liability of customers to pay the fee is based on a provision of law or of the fact that collection of that fee is carried out by means of a transfer of public authority powers. According to that first approach, direct State financing must also enable the State or other public authorities to exercise a concrete influence on the various procedures for the awarding of contracts by the body in receipt of the financing.
28. According to another school of thought in the case-law and academic writing, one to which the referring court subscribes, the fact that as a matter of law individuals are obliged to pay the fee is sufficient reason to hold that the condition of 'financing ...by the State' of the activity of the public broadcasting bodies in the main proceedings is satisfied. The Community rules on the awarding of public contracts therefore apply to those bodies, which are financed by the mandatory fee and are not therefore subject to the laws of the market. Moreover, to follow that school of thought further, the fact that the State is obliged by the Basic Law to maintain neutrality in relation to the management of those bodies and their programme material does not mean that public contracts entered into by them which are unconnected to their principal purpose remits should not be subject to the Community rules.
29. Having regard to the foregoing, the Oberlandesgericht Düsseldorf decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:

'(1) Where it appears in the first condition of indent (c) of the second subparagraph of Article 1(9) of Directive 2004/18, is the term 'financed...by the State' to be interpreted as including indirect financing of certain bodies through the payment of fees by persons who possess broadcasting receivers, taking into account the overriding obligation imposed on the State by constitutional law to ensure the independent financing and the existence of those bodies?

(2) If the first question is answered in the affirmative, is the first condition of indent (c) of the second subparagraph of Article 1(9) of Directive 2004/18 to be interpreted as requiring that 'financing by the State' must involve a direct public influence on the awarding of contracts by the body financed by the State?

(3) If the second question is answered in the negative, is indent (c) of the second subparagraph of Article 1(9) of Directive 2004/18, in the light of Article 16(b) [of that directive], to be interpreted as meaning that the only services excluded from its scope are those services specified in the latter provision, and that included within its scope are other services which are ancillary or secondary but which are not specifically related to programming (by argumentum a contrario)?'

Concerning the questions referred for a preliminary ruling

Preliminary observations

30. The questions as formulated by the national court make reference to the relevant provisions of Directive 2004/18. Given however that the facts of the case in the main proceedings fall within the scope ratione temporis of Directive 92/50, the Court's examination and answers will relate to the corresponding provisions of Directive 92/50 in the light of certain clarifications made by Directive 2004/18. In any event, the provisions of the latter directive and their underlying principles are identical in content to the provisions and principles of the preceding directives and Directive 2004/18 represents a recasting of pre-existing provisions. Accordingly there is no reasonable justification for a different approach under the new directive.
31. It must also be stated that even though the German system of financing the public broadcasting bodies excludes as a matter of principle the exercise by the public authorities of any political influence whatsoever on those bodies, that fact alone does not mean that the present case should be examined solely from the point of view that it is impossible, by definition, for the State to exercise such influence. For the purposes of uniform interpretation and application of Community law and of the realisation of the objectives of the EC Treaty the Court must also take into account other considerations such as freedom of movement and the opening of the market.

The first question

32. By this question, the Court is requested to interpret the concept of 'financed, for the most part, by the State' or by another public body, contained in the first condition of the third indent of the second subparagraph of Article 1(b) of Directive 92/50, in order to answer the question whether that condition is satisfied when the activities of public broadcasting bodies such as those involved in the main proceedings are financed for the most part by a fee charged, assessed and collected in accordance with rules such as those involved in the main proceedings.
33. It must first of all be pointed out that, as regards whether the financing is 'for the most part', it is common ground that, in accordance with the case-law of the Court, that condition is satisfied in this case, since more than one half of the income of the public broadcasting bodies in question comes from the fee at issue in the main proceedings (see, to that effect, Case C-380/98 University of Cambridge [2000] ECR I-8035, paragraph 30).
34. It must then be stated that the wording of the first condition of the third indent of the second subparagraph of Article 1(b) of Directive 92/50 contains no details as to the procedures for delivering the financing to which that provision relates. Thus, in particular, there is no requirement that the activity of the bodies in question should be directly financed by the State or by another public body failing which the condition attaching to that point is not satisfied. Examination of the financing procedures must therefore not be restricted to those put forward by the various interested parties in this case.
35. With a view to the interpretation of the concept of 'financed ... by the State' or by other public bodies, it is appropriate to refer to the aim of the Community directives in relation to public contracts, as stated in the case-law of the Court.
36. In accordance with that case-law, the aim of the directives in relation to awarding public contracts is to avoid both the risk of preference being given to national tenderers or applicants whenever a contract is awarded by the contracting authorities and the possibility that a body financed or controlled by the State, regional or local authorities or other bodies governed by public law may choose to be guided by considerations other than economic ones (University of Cambridge, paragraph 17, and case-law there cited).
37. The Court has restated those objectives, adding that the concept of 'contracting authority', including a 'body governed by public law', must be interpreted, in the light of those objectives, in functional terms (Case C-237/99 Commission v France [2001] ECR I-939, paragraphs 42 and 43, and case-law there cited).
38. The Court has held that the purpose of coordinating at Community level the procedures for awarding public contracts is to eliminate barriers to the freedom to provide services and goods and therefore to protect the interests of traders established in a Member State who wish to offer goods or services to contracting authorities established in another Member State (University of Cambridge, paragraph 16, and Commission v France, paragraph 41).
39. As regards specifically public service contracts, the Court has emphasised that same primary objective, namely the free movement of services and the opening-up to competition in the Member States which is undistorted and as wide as possible (see, to that effect, Case C-26/03 Stadt Halle and RPL Lochau [2005] ECR I-1, paragraphs 44 and 47).
40. A method of financing public broadcasting bodies such as that in the main proceedings must be assessed in the light of those objectives and in relation to those criteria, which implies that the concept of 'financed ... by the State' must also receive a functional interpretation.
41. It must first of all be stated that the fee which provides the greater part of the funding of the activities of the bodies in question has its origin in the State Treaty on broadcasting, in other words in a measure of the State. The fee is provided for and imposed by statute and is not the result of any contractual arrangement entered into by those bodies and the customers. Liability to pay that fee arises out of the mere fact of possession of a receiver and is not in consideration of actual use of the services provided by the bodies in question.
42. It must then be observed that the determination of the amount of the fee is not the product of any contractual relationship between the public broadcasting bodies in the main proceedings and the customers either. Under the State Treaty on the financing of broadcasting, the amount is determined by formal decision of the Parliaments and Governments of the Länder, adopted on the basis of a report drawn up by the KEF in relation to the financial requirements declared by those bodies themselves. The Parliaments and Governments of the Länder are free not to follow the recommendations of the KEF, while respecting the principle of the freedom of broadcasting, but on limited grounds, namely where the amount of the fee represents for the customers a financial burden which is disproportionate with regard to the general economic and social situation, and capable of affecting adversely their access to information (see judgment of the Bundesverfassungsgericht of 11 September 2007 BvR 2270/05, BvR 809/06 and BvR 830/06).
43. Even if the position were that the Parliaments and Governments of the Länder were obliged to follow without qualification the recommendations of the KEF, it would remain the case that this mechanism for fixing the amount of the fee was established by the State, which has thereby transferred public authority powers to a commission of experts.
44. As regards the procedures for the levying of the fee, it is clear from the State Treaty on the broadcasting fee that the latter is recovered by GEZ which, on behalf of the public broadcasting bodies, issues notices of liability to the charge, in other words by act of an official authority. Similarly, if payment is not made on time, notices of arrears are the subject of enforcement by administrative proceedings, and the public broadcasting organisation concerned, as the party entitled to payment, may send the request for enforcement assistance directly to the authority which has jurisdiction. Accordingly, in this respect the bodies in question enjoy the powers of a public authority.
45. The resources thus allocated to those bodies are paid without any specific consideration in return, within the meaning of the case-law of the Court (see, to that effect, University of Cambridge, paragraphs 23 to 25). Indeed, no contractual consideration is linked to those payments, since neither the liability to pay the fee nor its amount is the result of any agreement between the public broadcasting bodies and the customers, the latter being obliged to pay the fee provided only that they possess a receiver, irrespective of whether they use the service offered by those bodies. Accordingly, customers must pay the fee, even if they have never made use of the services of those bodies.
46. The argument of the applicants in the main proceedings that the determining factor cannot be that the fee is provided for in a provision of law, otherwise all the doctors, lawyers and architects established in the Federal Republic of Germany would be 'financed by the State' because the levels of their fees are fixed by the State, is ineffectual. Even though those levels are regulated by the State, the consumer always enters of his own free will into a contractual relationship with the members of those professions and always receives an actual service. In addition, the financing of the activities of members of those professions is neither ensured nor guaranteed by the State.
47. It must be observed, lastly, that, in the light of the functional approach referred to above, as the Commission of the European Communities rightly points out, the assessment made cannot vary according to whether the financial resources pass through the State budget, the State first collecting the fee and then making the fee income available to the public broadcasting bodies, or whether the State grants to those bodies the right to collect the fee themselves.
48. It must therefore be concluded that financing such as that at issue in the main proceedings, which is brought into being by a measure of the State, is guaranteed by the State and is secured by methods of charging and collection which fall within public authority powers, satisfies the condition of 'financing ... by the State' for the purposes of application of the Community rules on the awarding of public contracts.
49. That method of indirect financing is sufficient for the condition on 'financing ... by the State' laid down in the Community legislation to be satisfied and it is not necessary that the State itself establish or appoint a public or private body to the task of collection of the fee.
50. The answer to be given to the first question referred is therefore that the first condition of the third indent of the second subparagraph of Article 1(b) of Directive 92/50 must be interpreted as meaning that there is financing, for the most part, by the State when the activities of public broadcasting bodies such as those in the main proceedings are for the most part financed by a fee payable by persons who possess a receiver, which is imposed, calculated and levied according to rules such as those in the main proceedings.

The second question

51. By its second question, the referring court asks whether the first condition of the third indent of the second subparagraph of Article 1(b) of Directive 92/50 must be interpreted as meaning that, if a public broadcasting body is financed according to the procedures set out in the first question referred for a preliminary ruling, the condition of 'financing ... by the State' requires the direct interference of the State or other public authorities when a contract such as that in the main proceedings is awarded by such a body.
52. For the purposes of answering that question, it must first be observed that there is no requirement in the wording of the provision under consideration that, when a particular public contract is being awarded, there be direct intervention by the State or by another public body before the condition of 'financing ... by the State' can be satisfied.
53. As regards, secondly, the criterion of the dependence of a body on the public authorities, developed in the case-law of the Court as regards the three conditions to be found in the third indent of the second paragraph of Article 1(b) of Directive 92/50 (see, to that effect, Case C-44/96 Mannesmann Anlagenbau Austria and Others [1998] ECR I-73, paragraph 20), the referring court refers to the above mentioned approach of one school of thought in German case-law and academic writing, to the effect that dependence implies that the public authorities are able to have actual influence on the awarding of various contracts.
54. It must first be observed that the question whether the public broadcasting bodies in the main proceedings are dependent on the public authorities arises only in relation to the awarding of contracts which have no connection to performance of the defined public service remit of those bodies, as guaranteed by the German Basic Law, namely the creation and production of programme material. The contract at issue in the main proceedings does not fall within that particular function of those bodies.
55. It must then be stated that, in this case, as is clear from the considerations elaborated when examining the first question, the very existence of the public broadcasting bodies in question depends on the State. The criterion of the dependence of those bodies on the State is thereby satisfied, and it is not necessary for the public authorities to have any real influence on the various decisions of the bodies in question on the awarding of contracts.
56. That dependence in the broad sense does not exclude the risk, if the Community rules on the awarding of public contracts are not observed, that the public broadcasting bodies in the main proceedings may allow themselves to be guided by considerations other than economic, inter alia, by giving preference to national tenderers or candidates. Those bodies may take such an approach without breaching the requirements laid down by the German Basic Law, which does not prohibit it. As the referring court judiciously observes, the State's obligation of neutrality in relation to the creation of programme material by the bodies in question, as guaranteed by the German Basic Law and interpreted by the Bundesverfassungsgericht, does not require those bodies to be neutral in relation to awarding contracts. Such a risk is contrary to the objectives of the Community rules on the awarding of public contracts set out in paragraphs 38 and 39 of this judgment.
57. The referring court asks in addition what relevance, for the purposes of answering the second question, is to be attributed to the position adopted by the Court in paragraph 21 of University of Cambridge, to the effect that while the way in which a particular body is financed may reveal whether it is closely dependent on another contracting authority, that criterion is however not an absolute one. Not all payments made by a contracting authority have the effect of creating or reinforcing a specific relationship of subordination or dependency. Only payments which go to finance or support the activities of the body concerned without any specific consideration therefor may be described as 'public financing'.
58. In that regard it must be observed that, as regards the relationship of the bodies in question and the consumers, it is clear from paragraphs 23 to 25 of University of Cambridge, that it is possible to categorise as 'public financing' public outlays to which no consideration in return is contractually linked. As has been determined in paragraph 45 of this judgment, in this case no consideration in return is contractually linked to the resources allocated to the public broadcasting bodies in the main proceedings, since neither the liability to pay the fee nor the amount of the fee is the result of an agreement between those bodies and the consumers, whose obligation to pay the fee arises from the mere fact of their possession of a receiver, even if they never make use of the services of those bodies.
59. Equally, in this case the State obtains no specific consideration in return, given that, as the referring court judiciously states, the financing in the main proceedings serves to offset the obligations engendered by performance of the State's public'service remit, which is to ensure that citizens receive objective information from a number of audiovisual sources. To that extent, the broadcasting bodies in the main proceedings are no different from any other public service which is subsidised by the State for the performance of its tasks in the public interest.
60. The answer to be given therefore to the second question referred is that the first condition of the third indent of the second subparagraph of Article 1(b) of Directive 92/50 must be interpreted as meaning that, if the activities of public broadcasting bodies such as those in the main proceedings are financed according to the procedures set out when examining the first question, the condition of 'financing ... by the State' does not require that there be direct intervention by the State or by other public authorities in the awarding, by such bodies, of a contract such as that at issue in the main proceedings.

The third question

61. By its third question, the referring court asks whether Article 1(a)(iv) of Directive 92/50 must, in the light of the third indent of the second subparagraph of Article 1(b) of that directive, be interpreted as meaning that only public contracts relating to the services specified in the former provision are excluded from the scope of that directive.
62. Article 1(a)(iv) of Directive 92/50 provides that that directive does not apply to public contracts for services which fall within the essential function of public broadcasting bodies, namely the creation and production of programme material, for the cultural and social reasons alluded to in the eleventh recital of the preamble to Directive 92/50 and, more explicitly, in recital 25 of the preamble to Directive 2004/18, which render that application inappropriate.
63. That provision, as the Advocate General suggests in point 80 of his Opinion, reflects the same concern as that expressed in the German Basic Law, namely the guarantee that the public broadcasting bodies can accomplish their public service remit with complete independence and impartiality.
64. The provision in question being an exception to the principal objective of the Community rules on the awarding of public contracts, as stated in paragraph 39 of this judgment, namely freedom of movement of services and a market open to competition which is as wide as possible, it must be interpreted strictly. Accordingly, the only public contracts excluded from the scope of Directive 92/50 are those for the services specified in Article 1(a)(iv) of that directive. On the other hand, the Community rules apply in full to public contracts for services which have no connection to the activities which form part of the performance of the public'service remit, in the proper sense, of the public broadcasting bodies.
65. Support for that approach is found in the above-mentioned recital 25 in the preamble to Directive 2004/18 which states, by way of guidance, in the penultimate sentence, that the exclusion from application of that directive should not apply to the supply of technical equipment necessary for the production, co-production and broadcasting of programmes.
66. However, it must be made clear that that those considerations apply only when what is at issue in a particular case is a contract awarded by a body to be regarded as a 'contracting authority' within the meaning of Article 1(b) of Directive 92/50.
67. The answer to be given therefore to the third question referred is that Article 1(a)(iv) of Directive 92/50 must be interpreted as meaning that only those public contracts which relate to the services specified in that provision are excluded from the scope of that directive.

Costs

68. Since 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.

On those grounds, the Court (Fourth Chamber) hereby rules:

1. The first condition of the third indent of the second subparagraph of Article 1(b) of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts must be interpreted as meaning that there is financing, for the most part, by the State when the activities of public broadcasting bodies such as those in the main proceedings are financed for the most part by a fee payable by persons who possess a receiver, which is imposed, calculated and levied according to rules such as those in the main proceedings.

2. The first condition of the third indent of the second subparagraph of Article 1(b) of Directive 92/50 must be interpreted as meaning that, that, if the activities of public broadcasting bodies such as those in the main proceedings are financed according to the procedures set out when examining the first question, the condition of 'financing ... by the State' does not require that there be direct interference by the State or by other public authorities in the awarding, by such bodies, of a contract such as that at issue in the main proceedings.

3. Article 1(a)(iv) of Directive 92/50 must be interpreted as meaning that only the public contracts specified in that provision are excluded from the scope of that directive.

[Signatures]

---

* Language of the case: German.