EU Commission – CJEU Judgment (European Union, 2010)

The European Commission alleged that the Federal State of Germany was in violation of [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A31995L0046 Article 28(1) of Directive 95/46/EC] (this provision is now replaced by the GDPR, specifically Article 52 GDPR) for subjecting the supervisory authorities that monitored data processing carried out by public bodies to federal states’ scrutiny. Therefore, a distinction was made between data processed by public bodies and data processed by non-public bodies. The State of Germany allowed for the government of the respective federal states to influence and even cancel and replace decisions of the supervisory authorities. The second sentence of [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A31995L0046 Article 28(1) of the Directive] stated: "These authorities shall act with complete independence in exercising the functions entrusted to them". The Commission The Commission relied on a broad interpretation of the words “with complete independence” meaning that a supervisory authority must be free from any influence therefore including state scrutiny. Germany The State of Germany highlighted that in light of the principle of democracy, independence should be interpreted narrowly. The state of Germany put forward a narrower interpretation of the words “with complete independence” to mean that supervisory authorities must have function independence meaning that those authorities must be independent from bodies outside of the public sector which are under their supervision. Germany interpreted the state scrutiny as the the administration’s internal monitoring mechanism implemented by the authorities attached to the same administrative machinery which were also bound by the GDPR. Further, it claimed that certain principles of EC law and the principle of democracy opposed the interpretation of the Commission. The principles of EC law related to the retention of implemented national systems. The CJEU analysed the different interpretations of the phrase “with complete independence” under [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A31995L0046 Article 28(1) of the Directive]. The court stated that “independence” usually means a status ensuring that the body can act with complete freedom without taking any instructions or being put under any pressure. The word “complete” was held to mean decision-making power without any direct or indirect external influence on the supervisory authority. The CJEU pointed out that further clarification is found in [https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2001R0045:20010201:EN:PDF Article 44(2) of Regulation No 45/2001]. This Article governs the independence of the EDPS and shows that independence means that the EDPS “may neither seek nor take instructions from anybody”. The court concluded that no direct or indirect influence from external bodies shall affect the decisions of the supervisory authorities. It therefore concluded that the exercisable influence by governments is not consistent with the requirement of independence. In relation to the EC principles brought forward by Germany, the CJEU held that the fact that Germany had implemented this system and that it had been functioning for many years did not prove a valid argument. Further, it held that precluding state scrutiny did not go beyond the objectives of the European Community Treaty. The CJEU concluded that Germany had failed to implemented Article 28(1) of the Directive.