Commentary on Judgment No. 18623 of 2024: Direct Award to In-House Companies and Competition

Judgment No. 18623 of July 8, 2024, issued by the Court of Cassation, offers an important opportunity for reflection on the direct award of integrated water services to in-house companies. This decision not only clarifies the legitimacy of such practices but also serves as a benchmark for understanding the dynamics between public law and competition within our legal system.

The Regulatory Context

Integrated water services are fundamental to citizens' daily lives, and their management is often entrusted to companies wholly owned by public entities. The judgment in question establishes that direct awarding to these companies does not violate the EU principle of competition, as they are considered an internal division of the public entity.

JOINT-STOCK COMPANIES (DEFINITION, CHARACTERISTICS, DISTINCTIONS) - IN GENERAL. The performance of activities related to integrated water services can be directly awarded to "in-house" companies (wholly owned by public entities and falling within the optimal territorial scope), without this constituting a violation of the EU principle of competition, given that such companies, despite having separate legal personality, are equivalent to an internal division of the public entity that established them, with the consequent need to respect the principles governing the correctness and legitimacy of administrative activity, in view of the protection of the specific public interest for which they are responsible.

Implications of the Judgment

This judgment underscores the importance of ensuring that in-house companies operate in compliance with the principles of correctness and legitimacy. This implies that, even if these companies are exempt from competition, they must still operate transparently and responsibly. The relevant regulations, including Legislative Decree No. 152 of April 3, 2006, establish a clear legal framework for the awarding of public services but also require constant oversight.

• Direct award to in-house companies is legitimate.
• Principle of competition is not violated.
• Necessity to respect principles of correctness and legitimacy.

Conclusions

Judgment No. 18623 of 2024 represents a significant victory for in-house companies and their legitimacy in the management of public services. However, it is crucial that these entities continue to operate with a high degree of responsibility and transparency to ensure that integrated water services are managed efficiently and in the public interest. It is now the responsibility of public entities to closely monitor these companies, ensuring that service and quality objectives are always met.