JUDGMENT No. 137

YEAR 2024

ITALIAN REPUBLIC

IN THE NAME OF THE ITALIAN PEOPLE

THE CONSTITUTIONAL COURT

composed of:

President: Augusto Antonio BARBERA

Justices: Franco MODUGNO, Giulio PROSPERETTI, Giovanni AMOROSO, Francesco VIGANÒ, Luca ANTONINI, Stefano PETITTI, Angelo BUSCEMA, Emanuela NAVARRETTA, Maria Rosaria SAN GIORGIO, Filippo PATRONI GRIFFI, Marco D’ALBERTI, Giovanni PITRUZZELLA, Antonella SCIARRONE ALIBRANDI,

has issued the following

JUDGMENT

in the proceedings concerning the constitutional legitimacy of Article 10-bis, paragraph 6, of Decree-Law No. 135 of 14 December 2018 (Urgent provisions regarding support and simplification for businesses and the public administration), converted, with amendments, into Law No. 12 of 11 February 2019, initiated by the Constitutional Court with order of 7 March 2024, registered under No. 49 of the register of orders 2024 and published in the Official Gazette of the Republic No. 13, first special series, of the year 2024.

Having regard to the instruments of constitution of the Region of Calabria and of the President of the Council of Ministers;

Having heard in the public hearing of 3 July 2024 the reporting Judge Luca Antonini;

Having heard the lawyer Domenico Gullo for the Region of Calabria and the State Attorney Paola Palmieri for the President of the Council of Ministers;

Having deliberated in the council chamber of 3 July 2024.

Facts of the Case

1. – By appeal notified on 23 June 2023 and filed on 27 June 2023 (reg. appeal No. 20 of 2023), the President of the Council of Ministers, represented and defended by the State Attorney General’s Office, initiated, with reference to Articles 117, second paragraph, letter e), and 118, first and second paragraphs, of the Constitution, proceedings concerning the constitutional legitimacy of Article 1 of the Law of the Region of Calabria No. 16 of 20 April 2023, containing "Authorisation for the operation of the rental service with driver (NCC)”.

2. – In the course of the proceedings, this Court, by order No. 35 of 2024 (registered under No. 49 reg. ord. 2024), raised, ordering its treatment before itself, proceedings concerning the constitutional legitimacy, with reference to Articles 3, 41, first and second paragraphs, and 117, first paragraph, of the Constitution, the latter in relation to Article 49 of the Treaty on the Functioning of the European Union (TFEU), of Article 10-bis, paragraph 6, of Decree-Law No. 135 of 14 December 2018 (Urgent provisions regarding support and simplification for businesses and the public administration), converted, with amendments, into Law No. 12 of 11 February 2019.

The aforementioned provision stipulates that: "[f]rom the date of entry into force of this decree and until the full operation of the national public computerised register of businesses referred to in paragraph 3, the issuance of new authorisations for the performance of the rental service with driver by car, motorised tricycle, and vessel shall not be permitted.”

2.1. – This Court has stated that in the main proceedings the violation of Article 117, second paragraph, letter e), of the Constitution, in relation to the matter of "protection of competition,” was raised by the appellant as the challenged regional provision – providing for the issuance of two hundred authorisations for the purpose of carrying out the rental service with driver (hereinafter also referred to as: NCC) and directly identifying their recipient – would conflict, on the one hand, with Articles 5, paragraph 1, and 8, paragraph 1, of Law No. 21 of 15 January 1992 (Framework Law for the transport of persons by non-scheduled public car services).

On the other hand, with Article 10-bis, paragraph 6, of Decree-Law No. 135 of 2018, as converted, which precludes the granting of new authorisations to carry out the activity of NCC until the "full operation” of the aforementioned computerised register.

This Court has therefore reversed the order of the profiles of censure, since the aforementioned Articles 5, paragraph 1, and 8, paragraph 1, governing the procedures for awarding authorisations, are positioned downstream of the prohibition on issuing them imposed by Article 10-bis, paragraph 6, of Decree-Law No. 135 of 2018, as converted, for which the examination of the complaint concerning the conflict with the latter provision is logically preliminary.

Hence, the relevance of the questions referred before it, given the "evident relationship of necessary prejudiciality [...] between the question raised by the appellant with reference to Article 117, second paragraph, letter e), of the Constitution and those arising from the doubts about constitutional legitimacy raised by the discipline provided by Article 10-bis, paragraph 6, of Decree-Law No. 135 of 2018, as converted.”

2.2. – On the point of not being manifestly unfounded, the order for reference noted that paragraph 3 of the same Article 10-bis provides for the establishment of "a national public computerised register of businesses holding licenses for taxi service [...] and those holding authorisations for the service” of NCC, then delegating to a decree "of the Ministry of Infrastructure and Transport” the identification of the "technical specifications for implementation and the procedures by which the aforementioned businesses must register”.

However, the effectiveness of this ministerial decree, which was adopted on 19 February 2020 and also established the full operation of the computerised register from 2 March 2020 (Ministry of Infrastructure and Transport, Decree of the Head of Department for Transport, Navigation, General Affairs and Personnel, of 19 February 2020, No. 4), was, the following day, suspended and deferred (Ministry of Infrastructure and Transport, Decree of the Head of Department for Transport, Navigation, General Affairs and Personnel, of 20 February 2020, No. 86) until the adoption of the further decree provided for by paragraph 2 of the same Article 10-bis, aimed at determining the technical specifications of the service sheet in electronic format, which has not been issued again.

The order for reference then recalled that this Court had ruled out, with judgment No. 56 of 2020, that the prohibition established by the challenged provision entailed "an unreasonable restriction of competition to the advantage of holders of licenses for taxis, for which the temporary prohibition of issuance does not operate,” but this "only insofar as ‘the number of businesses operating in the sector’ was blocked ‘for the technical time strictly necessary to adopt the new register in concrete terms’”.

This "technical time” – the order then specified – could, however, have "prolonged in a completely unjustified way” as a consequence "of the modality with which the aforementioned Article 10-bis, paragraph 6, established the prohibition under discussion.”

In fact, it would be the "‘same structure’ (judgment No. 132 of 2018) of the ‘regulatory mechanism’ provided for by the provision in question and [its] ‘combination’ (judgment No. 166 of 2022) with the planned procedures aimed at giving ‘full operation [to] the national public computerised register’” that would allow "the possibility of blocking the issuance of new authorisations for the performance of the NCC service for an indefinite period.”

This, this Court noted, has in fact occurred by virtue of the persistent non-operation, more than five years after the entry into force of Decree-Law No. 135 of 2018, as converted, of the national computerised register.

Having clarified this, this Court, in the first place, doubted the conformity of Article 10-bis, paragraph 6, of Decree-Law No. 135 of 2018, as converted, with Article 3 of the Constitution, with reference to the principles of reasonableness and proportionality, both with regard to its intrinsic rationality, in light of "an ‘assessment of conformity between the rule introduced and the normative "cause” that must assist it’”, and in relation to the "existence of a rational connection between the means provided by the legislator and the purpose he intends to pursue.”

Secondly, it doubted its conformity with Article 41, first and second paragraphs, of the Constitution.

The suspected provision, in fact, "as structured,” could give rise to "blocks or suspensions of authorisations functional to the exercise of economic activities” susceptible to "translating into ‘an undue barrier to entry into the market’, placing ‘in contrast, also, with the formal freedom of access to the market guaranteed by the first paragraph of Article 41 of the Constitution’ (judgment No. 7 of 2021).”

Moreover, the prohibition contained therein would not even be "attributable to a reason of social utility or an interest of the community, rather appearing to respond to a protectionist instance,” moreover referred to the non-scheduled public transport market, already characterised by an inadequate opening to the entry of new subjects.

Finally, it doubted the conformity of the challenged provision with Article 117, first paragraph, of the Constitution, in relation to Article 49 of the TFEU, since, precisely with reference to the specific sector of passenger transport by NCC service, the judgment of the Court of Justice of the European Union, First Chamber, 8 June 2023, in case C-50/21, Prestige and Limousine SL, specified that restrictions on the freedom of establishment may be allowed only on the condition, "firstly, of being justified by an overriding reason of public interest and, secondly, of respecting the principle of proportionality, which implies that they are suitable to ensure, in a coherent and systematic way, the achievement of the pursued objective and do not go beyond what is necessary to achieve it.”

2.3. – Consequently, this Court ordered the suspension of the proceedings initiated by the President of the Council of Ministers with the appeal registered under No. 20 reg. appeal 2023.

3. – In the proceedings introduced by the order registered under No. 49 reg. ord. 2024, the Region of Calabria, in the person of the President of the Regional Council pro tempore, was constituted, which, after having summarised the questions of constitutional legitimacy raised by this Court, requested their acceptance.

4. – The President of the Council of Ministers also appeared in the proceedings, represented and defended by the State Attorney General’s Office, requesting that the questions of constitutional legitimacy be declared unfounded.

4.1. – Regarding the censures of violation of Articles 3 and 41, first and second paragraphs, of the Constitution, the state defence observes that the establishment of the computerised register would be functional to having "a clear picture of the arrangements” of the NCC market, in order to allow its "efficient regulation”. It would be, in other words, an instrument designed for a correct "programming of the authorisations” that can be issued.

In this perspective, the suspected provision would not have "been inspired by protectionist instances,” nor would it have "intended [...] to introduce a ‘regular block’” of the market, aiming "simply [to] ensure to the system an adequate means of general survey”: an objective that would constitute a reason of social utility suitable to justify a temporary suspension of the issuance of new authorisations.

On the other hand, the Ministry of Infrastructure and Transport would have given impetus, in the month of February 2024, to the discussion with the categories of the sector in order to proceed "promptly with the publication,” among other things, of a new "decree on the computerised register.”

Ultimately, therefore, concludes the state defence, the constraint deriving from the non-operation of the register de quo would be the result of a reasonable and proportionate balancing between the performance of private economic initiative, and therefore the opening to the market, on the one hand, and social utility, on the other.

4.2. – According to the State Attorney General’s Office, the alleged conflict with Article 117, first paragraph, of the Constitution, in relation to Article 49 of the TFEU, would not be discernible either.

In consideration of the purpose highlighted above, in fact, the preclusion to the entry into the market of new operators would satisfy the interest in a "correct management of transport” and this interest could "certainly constitute an overriding reason of public interest” suitable, according to the EU Court of Justice, to justify restrictions on the freedom of establishment guaranteed by the evoked interposing parameter.

5. – In the capacity of amicus curiae, the National Association of Passenger Transport Companies (ANITRAV) filed a written opinion – admitted by decree of the President of this Court of 21 May 2024 – arguing in support of the acceptance of the questions of constitutional legitimacy and emphasizing the Italian situation of shortage of supply of non-scheduled public car transport services.

The opinion specifies, among other things, that neither the judgment of the Regional Administrative Court for Lazio, third section, 27 March 2024, No. 6068, which annulled the aforementioned suspension decree No. 86 of 2020, nor the possible publication medio tempore of the "new” ministerial decree referred to by the state defence would have "effects on the present proceedings.”

Not the first, because the annulment of the suspension decree would not entail the "revival” of the one (establishing the computerised register) suspended and, therefore, in any case, would not allow the municipalities to issue new authorisations.

Not the second, because from the mere establishment of the "new” computerised register would not in itself also derive its "full operation”, to which the undoubted provision subordinates the issuance of new authorisations.

6. – The Sistema trasporti confederation of companies, the MuoverSì federation rental with driver, and the NCC Italia Association also filed an opinion – admitted by presidential decree of 21 May 2024.

They emphasise, on the one hand, the lack of reasonableness and proportionality of the challenged regulatory provision, which has produced "paralysing consequences on the granting of new authorisations.”

On the other hand, that the judgment of the Lazio Regional Administrative Court No. 6068 of 2024 would not affect the relevance of the questions raised by this Court, considering that the suspected provision would in any case be "suitable to allow any subsequent suspensions or derogations of the MIT decrees on electronic registration, with consequent paralysis of the power to issue new authorisations to carry out the activity of NCC.”

7. – In the proximity of the hearing, the Region of Calabria filed an illustrative memorandum, which insisted on the conclusions already submitted, arguing, in particular, that the survey requirements, deduced by the State Attorney General’s Office, could not justify the continuation of the block on the issuance of new authorisations, instead deriving from the "regulatory structure” of the provision under consideration.

8. – The day before the hearing of 3 July 2024, the State Attorney General’s Office filed a copy of the decree of 2 July 2024, No. 203, then published on the following 4 July, of the Head of Department for Transport and Navigation of the Ministry of Infrastructure and Transport, which defined "the activation procedures” of the aforementioned computerised register.

Reasons for the Decision

1. – In the course of the proceedings registered under No. 20 of the reg. appeal 2023, this Court, by order No. 35 of 2024 (reg. ord. No. 49 of 2024), raised questions of constitutional legitimacy of Article 10-bis, paragraph 6, of Decree-Law No. 135 of 2018, as converted, with reference to Articles 3, 41, first and second paragraphs, and 117, first paragraph, of the Constitution, the latter in relation to Article 49 of the TFEU, ordering their treatment before itself, by virtue of the "evident relationship of necessary prejudiciality” with respect to the decision of the appeal on Article 1 of the Law of the Region of Calabria No. 16 of 2023, challenged by the Government, among other things, for violation of the state competence in the matter of protection of competition.

2. – The challenged provision stipulates that: "[f]rom the date of entry into force of this decree and until the full operation of the national public computerised register of businesses referred to in paragraph 3, the issuance of new authorisations for the performance of the rental service with driver by car, motorised tricycle, and vessel shall not be permitted.”

Specifically, it would be the very structure of this provision, in the combination between the duration of the prohibition of issuance and the procedures aimed at giving full operation to the national public computerised register, that would allow "the possibility of blocking the issuance of new authorisations for the performance of the NCC service for an indefinite period,” as, moreover, has occurred by virtue of the persistent non-operation, more than five years after the entry into force of Decree-Law No. 135 of 2018, as converted, of the aforementioned computerised register.

Article 10-bis, paragraph 6, of Decree-Law No. 135 of 2018, as converted, would therefore be in conflict: a) with Article 3 of the Constitution, with reference to the principles of reasonableness and proportionality, since doubts may arise both about its intrinsic rationality and about the existence of a rational connection between the means provided and the objective pursued; b) with Article 41, first and second paragraphs, of the Constitution, as it may translate into a protectionist instance that determines an undue barrier to entry into the market, without, moreover, being attributable to a reason of social utility or an interest of the community; c) with Article 117, first paragraph, of the Constitution, in relation to Article 49 of the TFEU, as it would result in a restriction on the freedom of establishment guaranteed by the latter, neither proportionate nor justified by an overriding reason of public interest.

3. – After the establishment of these constitutional proceedings, decree No. 203 of 2024 of the Head of Department for Transport and Navigation of the Ministry of Infrastructure and Transport was adopted, which, on the one hand, "defines the activation procedures” of the aforementioned computerised register and establishes its "full operation” starting from one hundred and eighty days from the publication of the decree itself; on the other hand, it provides that the ministerial decrees No. 4 of 2020, establishing the register itself, and No. 86 of 2020, which suspended its effectiveness (the latter also already annulled by the judgment of the Lazio Regional Administrative Court No. 6068 of 2024), "are repealed from the date of entry into force of this decree.”

4. – Preliminarily, it is necessary to clarify that the adoption of the aforementioned decree No. 203 of 2024 has no impact on the present proceedings, since the censures were raised on the legislative provision by virtue of its "structure”, regardless of the "de facto” events and the "contingent circumstances” relating to its concrete application.

And this is because it is precisely the configuration of the challenged provision that allows the administrative authority to raise a barrier to the entry of new operators into the NCC market simply by blocking, with the succession of decrees (or with their issuance and their subsequent suspension), the full operation of the computerised register.

The historical event has concretely demonstrated this, because the provision under consideration has allowed for more than five years since its entry into force (and could allow it in the future) to maintain in effect a prohibition, binding on regions and local authorities, which has seriously compromised the possibility of increasing the already deficient supply of non-scheduled public car services.

5. – This deficiency, however, has been the subject, since 1995 (Report of 1 August 1995, No. 053), of repeated reports from the Italian Competition Authority (AGCM), as "mainly due to an insufficient number of licenses for the [taxi] service issued by the municipalities concerned”. Even when some municipalities then proceeded to issue new licenses for the operation of the taxi service, these interventions "have proved insufficient also in the face of a demand for non-scheduled mobility in strong growth” and a supply "of NCC services” which, likewise, "has not been sufficient to satisfy the demand for mobility” (Report of 10 March 2017, No. 1354).

Yet, despite "the different configuration of non-scheduled public services”, the "demand for non-scheduled mobility now largely considers taxi and NCC services to be interchangeable, as reported by the Italian Competition Authority (Report of 15 October 2019), the Public Transport Regulatory Authority (Reports to Parliament and the Government of 21 May 2015 and 10 March 2017), the European Commission (Communication of the European Commission on a well-functioning and sustainable local passenger transport on demand, taxis and vehicles for hire with driver, 2022/C 62/01)” (judgment No. 36 of 2024).

Therefore, the concern of the AGCM aimed at highlighting that "the expansion of the supply of non-scheduled public services responds to the need to cope with a high and widely unmet demand, especially in metropolitan areas, generally characterised by greater traffic density and the inability of scheduled public transport and the taxi service to fully cover the mobility needs of the population” (again, Report No. 1354 of 2017) has remained completely unheeded by the legislator.

In fact, shortly after this report, the challenged provision intervened, which, introducing the described regulatory mechanism, has allowed the administrative authority to block until now the possibility of issuing new authorisations for the performance of the activity of NCC.

6. – The question raised with regard to Article 3 of the Constitution, with reference to the principles of reasonableness and proportionality, is well-founded.

6.1. – As has been stated by this Court in judgment No. 56 of 2020, Article 10-bis, paragraph 6, should have "the purpose of blocking the number of businesses operating in the sector [only] for the technical time strictly necessary to adopt the new register in concrete terms.”

In the aforementioned pronouncement, this provision was therefore considered not unreasonable as it was assessed according to a "static” logic.

From the "dynamic” point of view in which, after several years, the order of this Court registered under No. 49 reg. ord. 2024 considers it again, a clear "intrinsic contradiction” is instead highlighted between the rule introduced, which allows the indefinite preclusion of the issuance of new authorisations, and "the normative ‘cause’ that must assist it” (ex plurimis, judgment No. 195 of 2022), which should instead be to implement in a short time a mapping of businesses holding licenses for the operation of the taxi service and those holding (with the market at a standstill) authorisations for the operation of the NCC service.

6.2. – The lack of proportionality is also evident.

With reference to the NCC sector, this Court has recently stated that "the prohibitions and obligations placed on businesses authorised for the NCC service, in order to be legitimate, must be [...] adequate and proportionate with respect to the purpose to be pursued” (judgment No. 36 of 2024) and has equally emphasised the need for a "rational connection between the means provided by the legislator [...] and the purpose he intends to pursue” (judgment No. 8 of 2024).

This connection is clearly lacking in the challenged norm, which in practice allows the administrative authority to block indefinitely the issuance of new authorisations for the operation of the NCC service, with protectionist effects consisting of raising an undue barrier to the freedom of access to the market, which not only has translated into a further position of privilege for the operators already present in this sector – who operate in a situation in which demand is far greater than supply – but, above all, has caused, disproportionately, serious prejudice to the interest of citizens and the entire community.

6.2.1. – Non-scheduled car transport services, in fact, contribute to giving "effect” to the freedom of movement, "which is the condition for the exercise of other rights” (judgment No. 36 of 2024), so that the strong deficiency of supply – which places Italy among the least equipped European countries in this regard, as shown by the data reported in the opinio presented by ANITRAV both in the present proceedings and in the quo proceedings – generated by the public formative power has resulted in a serious inconvenience caused to entire sections of the population and to the possibilities of economic development.

It has in fact primarily harmed the elderly and frail population, which, especially in the metropolises, is unable to use (or even simply reach) the other scheduled transport services, but which has pressing mobility needs that, in particular, manifest themselves with reference to healthcare requirements. It has compromised the needs of access to fast mobility, often indispensable for those who travel for work reasons. It has caused damage to tourism and to the international image of Italy, since the insufficient supply of mobility has impaired the possibility of easily reaching holiday destinations, as documented by the Region of Calabria in the quo proceedings.

In short, these examples demonstrate that, in the limited distortion of competition that has occurred as a result of the challenged legislation, not only the well-being of the consumer has been unduly compromised, but something broader, which pertains to the effectiveness in the enjoyment of some constitutional rights, as well as the interest in the economic development of the country.

7. – The question referred to Article 41, first and second paragraphs, of the Constitution is similarly well-founded.

The challenged norm, as has been said, has allowed and allows the administrative authority to erect an undue barrier to entry: this precludes competition for the market, in contrast to the freedom guaranteed by the first paragraph of Article 41 of the Constitution (judgments No. 8 of 2024, No. 171 and No. 117 of 2022 and No. 7 of 2021), in a sector that has long been "characterised, as the Italian Competition Authority has repeatedly emphasised (most recently, by report of 3 November 2023, ref. No. S4778), by an inadequate opening to the entry of new subjects” (judgment No. 8 of 2024).

According to the constant jurisprudence of this Court, moreover, a compression of the freedom of private economic initiative is only possible "when the imposition of general limits on its exercise corresponds, in addition to the protection of primary values relating to the human person, as enshrined in Article 41, second paragraph, of the Constitution, to social utility” (judgment No. 150 of 2022; in the same sense, ex plurimis, judgments No. 151 and No. 47 of 2018, No. 16 of 2017 and No. 56 of 2015).

What has been highlighted above (points 6.2 and 6.2.1) instead clearly leads to exclude that the challenged provision, referring to a full operation of the register susceptible to being postponed sine die, is attributable to some reason of social utility or to an interest of the community, responding, on the contrary, to a protectionist instance that has, not marginally, affected social well-being and the interests of the community.

8. – Finally, the censure relating to Article 117, first paragraph, of the Constitution, in reference to Article 49 of the TFEU, is also well-founded.

The EU Court of Justice, with reference to the application of the aforementioned Article 49, has clarified that it guarantees the freedom of establishment also in the relationships between businesses that provide the taxi service and businesses authorised for the NCC service.

Ruling with regard to the smaller number of licenses that a Spanish law attributed to those who operate the NCC service (one thirtieth of those reserved for taxis), the EU Court of Justice considered it appropriate to rigorously examine the preeminent purposes of public interest that are placed to protect the restrictive discipline – such as the objectives of correct management of transport, traffic, and public space of the urban agglomeration, as well as of environmental protection – also specifying that the measures adopted must be adequate and not capable of going beyond what proves indispensable to achieve the objectives set by law (EU Court of Justice, judgment of 8 June 2023, Prestige and Limousine SL).

As already recalled in judgment No. 36 of 2024, the pronouncement, moreover, "has highlighted the crucial role that NCC services are destined to play, precisely by virtue of the use of technological innovation, to ‘contribute to achieving the objective of efficient and inclusive mobility, thanks to their level of digitalisation and the flexibility in the provision of services, such as a technological platform accessible to the blind’ (paragraph 96)”.

In light of this jurisprudence, the challenged provision affects the freedom of establishment without a proportionate reason of public interest to justify it being discernible, as already set out.

9. – Therefore, the constitutional illegitimacy must be declared – for violation of Articles 3, 41, first and second paragraphs, and 117, first paragraph, of the Constitution, the latter in relation to Article 49 of the TFEU – of Article 10-bis, paragraph 6, of Decree-Law No. 135 of 2018, as converted.

Therefore,

THE CONSTITUTIONAL COURT

declares the constitutional illegitimacy of Article 10-bis, paragraph 6, of Decree-Law No. 135 of 14 December 2018 (Urgent provisions regarding support and simplification for businesses and the public administration), converted, with amendments, into Law No. 12 of 11 February 2019.

Thus decided in Rome, at the seat of the Constitutional Court, Palazzo della Consulta, on 3 July 2024.

Signed:

Augusto Antonio BARBERA, President

Luca ANTONINI, Drafting Judge

Valeria EMMA, Registrar

Filed in the Registry on 19 July 2024