Article 13 - Freedom of the arts and sciences
Article 14 - Right to education
Article 16 - Freedom to conduct a business
Article 52 - Scope and interpretation
Key facts of the case:
Failure of a Member State to fulfil obligations – Admissibility – Jurisdiction of the Court – General Agreement on Trade in Services – Article XVI – Market access – Schedule of specific commitments – Requirement of authorisation – Article XX(2) – Article XVII – National treatment – Service provider having its seat in a third country – National legislation of a Member State imposing conditions for the supply of higher education services within its territory – Requirement relating to the conclusion of an international treaty with the State in which the provider has its seat – Requirement relating to the provision of education in the State in which the provider has its seat – Modification of conditions of competition to the benefit of national providers – Justification – Public order – Prevention of deceptive practices – Article 49 TFEU – Freedom of establishment – Directive 2006/123/EC – Services in the internal market – Article 16 – Article 56 TFEU – Freedom to provide services – Existence of a restriction – Justification – Overriding reason in the public interest – Public order – Prevention of deceptive practices – High quality of the education – Charter of Fundamental Rights of the European Union – Article 13 – Academic freedom – Article 14(3) – Freedom to found educational establishments – Article 16 – Freedom to conduct a business – Article 52(1).
Outcome of the case:
On those grounds, the Court (Grand Chamber) hereby:
26) The Commission, having considered that, by adopting Law No XXV of 2017, Hungary had failed to fulfil its obligations under Articles 9, 10 and 13, Article 14(3) and Article 16 of Directive 2006/123, and, in the alternative, Articles 49 and 56 TFEU, Article XVII of the GATS, and Article 13, Article 14(3) and Article 16 of the Charter, sent a letter of formal notice to Hungary on 27 April 2017, setting a period of one month for the submission of observations. Hungary replied by a letter dated 25 May 2017 in which it disputed the infringements alleged against it.
27) On 14 July 2017, the Commission issued a reasoned opinion in which it concluded, in particular, that:
– by requiring foreign higher education institutions situated outside the EEA to conclude an international agreement as a prerequisite for providing education services, pursuant to Article 76(1)(a) of the Law on higher education, Hungary had failed to fulfil its obligations under Article XVII of the GATS;
– by requiring foreign higher education institutions to offer higher education in their country of origin, pursuant to Article 76(1)(b) of the Law on higher education, Hungary had failed to fulfil its obligations under Article 16 of Directive 2006/123 and, in any event, under Articles 49 and 56 TFEU; and
– by imposing the measures at issue, Hungary had failed to fulfil its obligations under Article 13, Article 14(3) and Article 16 of the Charter.
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43) Furthermore, Hungary contends that, by giving a clear indication that it had initiated the present infringement procedure solely in the interest of the Central European University (CEU) and for purely political considerations, the Commission seriously undermined the right to good administration, provided for in Article 41(1) of the Charter.
208) The Commission submits that, when Member States perform their obligations under international agreements concluded by the Union, such as the GATS, they are ‘implementing Union law’, within the meaning of Article 51(1) of the Charter, with the result that they are obliged to respect the provisions of the Charter.
209) Furthermore, in so far as Article 76(1)(b) of the Law on higher education restricts fundamental freedoms guaranteed by the FEU Treaty, Directive 2006/123 and the GATS, that provision must be compatible with the Charter.
210) Hungary contends that, first, a national measure which infringes the commitments undertaken by the Member States within the framework of the GATS cannot be considered part of the implementation of EU law, within the meaning of Article 51(1) of the Charter.
211) Second, given that, according to Hungary, neither the provisions of the FEU Treaty concerning the freedom to provide services nor the provisions of Directive 2006/123 apply in the present case, and that, therefore, the measures at issue do not constitute a restriction that infringes the fundamental freedoms laid down by the FEU Treaty or Directive 2006/123, they do not fall within the scope of EU law, and therefore the Charter is of no relevance.
212) So far as the actions of the Member States are concerned, the scope of the Charter is defined in Article 51(1) thereof, according to which the provisions of the Charter are addressed to the Member States only ‘when they are implementing Union law’.
213) In the present case, first, as has been noted in paragraph 71 of the present judgment, the GATS forms part of EU law. It follows that, when the Member States are performing their obligations under that agreement, including the obligation imposed in Article XVII(1) thereof, they must be considered to be implementing EU law, within the meaning of Article 51(1) of the Charter.
214) Second, where a Member State argues that a measure of which it is the author and which restricts a fundamental freedom guaranteed by the FEU Treaty is justified by an overriding reason in the public interest recognised by EU law, such a measure must be regarded as implementing EU law within the meaning of Article 51(1) of the Charter, such that it must comply with the fundamental rights enshrined in the Charter (judgment of 18 June 2020Commission v Hungary (Transparency of associations), C‑78/18, EU:C:2020:476, paragraph 101 and the case-law cited). The same applies with respect to Article 16 of Directive 2006/123.
215) Consequently, the measures at issue must comply with the fundamental rights enshrined in the Charter.
217) According to the Commission, the measures at issue affect, in the first place, academic freedom, guaranteed in Article 13 of the Charter, and, in the second place, the freedom to found educational establishments and the freedom to conduct a business, enshrined, respectively, in Article 14(3) and in Article 16 of the Charter.
222) As regards, in the first place, academic freedom, this is enshrined in general terms in the second sentence of Article 13 of the Charter, according to which ‘academic freedom shall be respected’.
223) Under Article 52(3) of the Charter, rights enshrined therein which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’) must be given the same meaning and, at the very least, the same scope as those laid down by that convention.
224) It is true that the text of the ECHR makes no reference to academic freedom. However, it is apparent from the case-law of the European Court of Human Rights that that freedom is associated, in particular, with the right to freedom of expression enshrined in Article 10 of the ECHR (ECtHR, 15 April 2014, Hasan Yazıcı v. Turkey, CE:ECHR:2014:0415JUD004087707, § 55 and 69, and ECtHR, 27 May 2014, Mustafa Erdoğan and Others v. Turkey, CE:ECHR:2014:0527JUD000034604, § 40 and 46), as is also confirmed by the comments on Article 13 of the Charter in the Explanations relating to the Charter of Fundamental Rights (OJ 2007 C 303, p. 17).
228) In the light of the foregoing, it must be held that the measures at issue are capable of endangering the academic activity of the foreign higher education institutions concerned within the territory of Hungary and, therefore, of depriving the universities concerned of the autonomous organisational structure that is necessary for conducting their academic research and for carrying out their educational activities. Consequently, those measures are such as to limit the academic freedom protected in Article 13 of the Charter.
229) As regards, in the second place, the freedom to found educational establishments and the freedom to conduct a business, these are enshrined, respectively, in Article 14(3) and Article 16 of the Charter.
230) Under Article 14(3) of the Charter, the freedom to found educational establishments with due respect for democratic principles must be respected, in accordance with the national laws governing the exercise of such freedom.
231) Moreover, Article 16 of the Charter provides that the freedom to conduct a business in accordance with EU law and national laws and practices must be recognised.
232) As a preliminary point, it should be noted that, as is apparent from the Explanations relating to the Charter of Fundamental Rights, the freedom to found educational establishments, whether public or private, is guaranteed as one of the aspects of the freedom to conduct a business, and it is therefore appropriate to examine them together.
234) Consequently, those measures must be regarded as limiting both the freedom to found educational establishments guaranteed in Article 14(3) of the Charter and the freedom to conduct a business enshrined in Article 16 of the Charter.
235) Hungary maintains that the measures at issue are justified in the light of the requirements set out in Article 52(1) of the Charter.
37) The Commission submits that the limitations – as a result of the measures at issue – on the freedoms enshrined, respectively, in Article 13, Article 14(3) and Article 16 of the Charter are not justified in the light of the requirements set out in Article 52(1) of the Charter.
239) Article 52(1) of the Charter provides that any limitation on the exercise of the rights and freedoms recognised by the Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.
241) It follows that those measures, which place limitations on the rights enshrined, respectively, in Article 13, Article 14(3) and Article 16 of the Charter, as the Court has ruled in paragraphs 228 and 234 of the present judgment, do not in any event meet those objectives of general interest.
242) Having regard to the foregoing considerations, it must be held that, by adopting the measures at issue, Hungary has failed to fulfil its obligations under Article 13, Article 14(3) and Article 16 of the Charter. 243 In the light of all of the foregoing considerations, it must be held that:
– by adopting the measure provided for in Article 76(1)(a) of the Law on higher education, Hungary has failed to fulfil its obligations under Article XVII of the GATS;
– by adopting the measure provided for in Article 76(1)(b) of the Law on higher education, Hungary has failed, in so far as that provision applies to higher education institutions which have their seat in a third country member of the WTO, to fulfil its obligations under Article XVII of the GATS and, in so far as the provision applies to higher education institutions having their seat in another Member State, to fulfil its obligations under Article 49 TFEU and Article 16 of Directive 2006/123; and
– by adopting the measures at issue, Hungary has failed to fulfil its obligations under Article 13, Article 14(3) and Article 16 of the Charter.
244) Under Article 138(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. In the present case, since Hungary has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.
