The European Court of Justice (ECJ) ruled Wednesday that the Hungarian state’s monopoly on mobile payment systems for public parking, road tolls and public transportation fees is contrary to EU laws.
The mobile payment system, which is accessible through smartphones and computers, was made mandatory by the government. The mobile payments were processed by a company known as Nemzeti Mobilfizetési Zrt., a company that, according to the ECJ, is wholly owned by the Hungarian government.
The European Commission, the EU organ that brought the action against the Hungarian government, argued that the alleged monopoly violated the Commission’s Services Directive, a piece of EU legislation that aims to remove legal and administrative barriers to trade. The Hungarian government responded by arguing that their payment constituted a “service of general economic interest” (SGEI) and thus fell outside the scope of the directive.
The ECJ found that only SGEIs in place prior to the directive coming into force were outside of its scope. The court noted that Hungary acknowledged that there were measures that were less restrictive on trade than their current system and, because of this, the court found the state’s monopoly constitutes a “disproportionate restriction on the freedom to provide services” and is “not compatible with the provisions of [the] directive.”