The Court of Justice of the European Union said on Wednesday that the establishment of a national mobile payment system and the exclusive rights granted to state-owned Nemzeti Mobilfizetési violate the European Union’s Service Directive.
CJEU ruled that the system is not compatible with the provisions of the Service Directive relating to the freedom of establishment and noted that the measures taken by Hungary represent a disproportionate restriction on the freedom to provide services.
Since 1 July 2014 Nemzeti Mobilfizetési has operated the national mobile payment system, the use of which is mandatory for the mobile payment of public parking charges, tolls for using the road network, fares on public transport and fees connected with all the other services offered by a state body.
The European Commission brought an action against Hungary believing that the payment system adopted by Hungary constitutes an unlawful state monopoly and infringes the provisions of the Services Directive.
Hungary said the mobile payment system satisfies a public need and can be considered a service of general economic interest — thus the provisions of the Directive apply to it only to a limited extent.
The CJEU ruled that the Directive applies to the measures by which the monopoly was created and as it is indeed a service of general economic interest, it should fulfil the condition of proportionality, which it does not.
The CJEU noted that Hungary itself has recognised that there were measures less restrictive on the freedom of establishment than the contested ones it took. The Court stated that a system of concessions based on a competitive process could be less restrictive.