European Commission

On 25 February 2021, the Eighth Chamber of the Court delivered its judgment in Case C-658/19 concerning the failure of Spain to transpose Directive 2016/680 regarding the protection of personal data by law enforcement authorities. The case was brought by the European Commission who asked the Court to declare that the Kingdom of Spain has failed to fulfil its obligations under Article 63(1) of Directive 2016/680. Since the Commission had not received any information concerning transposing measures adopted by the Kingdom of Spain within the transposition deadline, the guardian of the treaties initiated infringement proceedings pursuant to Article 258 TFEU in July 2018 and referred the case to the Court of justice on 25 July 2019. As consequence to this alleged failure, which persisted after a reasoned opinion was sent to Spain on 25 January 2019, the Commission requested the Court to impose on that Member State, first, a penalty payment of 89 548.20 € for each day of delay as from the date of delivery of the judgment in the present case and, second, the payment of a lump sum of approximately 15 500 000 € pursuant to Article 260(3) TFEU.

The Spanish authorities do not dispute that they have failed to fulfill their obligations to adopt and notify measures transposing Directive 2016/680. To justify the alleged non-compliance with the transposition deadline, the Kingdom of Spain explains that a series of very exceptional circumstances delayed the activities of the national government and parliament with regard to the adoption of the transposition measures required. The Kingdom of Spain considered the amount requested by the Commission disproportionate in the light of the institutional circumstances in the present case.

As a first step of its reasoning, the Court acknowledges that the Kingdom of Spain has failed to fulfil its obligations under Article 63 of Directive 2016/680. The Court reaches this conclusion after recalling that the failure of a Member State to fulfill its obligations must be determined by reference to the situation prevailing in that Member State at the end of the period laid down in the reasoned opinion sent by the Commission. In the present case, this period ended on 25 March 2019 without any measures being taken by the Spanish authorities to comply with the opinion within this period.

The Court then moves to the question of the applicability of Article 260(3) TFEU laying down the conditions to impose a lump sum or a penalty payment on the Member State concerned by the infringement proceedings. In this regard, the Court considers that the infringement thus established falls within the scope of that provision while also recognizing that the Commission enjoys a margin of discretion to decide on the imposition of a financial penalty under Article 260(3) TFEU. Nonetheless, the Commission has the obligation to state reasons for the nature and the amount of the financial penalty sought, taking into account the guidelines it has adopted in this regard. In determining the amount of the financial penalties to be imposed in the present case, the Commission considered the importance of the provisions of EU law which have been disregarded, notably the protection of personal data as enshrined in Article 8 of the charter of Fundamental Rights of the European Union and in Article 16 TFEU. The Court has only a limited power to assess the appropriateness of the financial penalty proposed. According to previous case-law, “where it finds that there is an infringement, the Commission’s proposals are binding on it as to the nature of the financial penalty which the Court may impose and the maximum amount of the penalty it may set”.

The Court starts its assessment by recalling the objective of the system established under Article 260(3) TFEU. This mechanism does not only aim to induce Member States to put an end as soon as possible to a breach of obligations. It is also intended to simplify and speed up the procedure for imposing financial penalties for failures to transpose a directive. In order to achieve the abovementioned objective, two types of financial penalties, namely a lump sum and a penalty payment, are provide for. According to the Court’s case-law, the appropriateness of each of these measures must be determined on a case-by-case basis taking into account the relevance of the objective pursued and the circumstances of the case. In the present case, the Court considers that the imposition of a penalty payment on the Kingdom of Spain, as requested by the Commission, “is an appropriate financial means by which to ensure that that Member States puts a prompt end to the infringement established and complies with its obligations under Directive 2016/680”. However, the Court states that that penalty payment should be imposed only in so far as the infringement persists at the date of delivery of the judgment. In addition, the Court founds the imposition of a lump sum payment an appropriate dissuasive measure in this case to effectively prevent future repetition of similar infringements of EU law.