## Facts

- EU company-law rules required Member States to ensure public disclosure of specified company documents, including annual accounts, and to provide effective penalties for noncompliance.
- The Commission concluded that, despite implementing legislation, many German companies failed to file required annual accounts and related documents and that German enforcement mechanisms did not reliably penalize non-disclosure.
- In June 1990, the Commission sent Germany a formal notice alleging insufficient implementation and inadequate penalties.
- In June 1992, the Commission issued a reasoned opinion asserting failures under the disclosure and sanctions obligations; Germany later argued the Commission’s internal adoption process violated the Commission’s collegial decisionmaking requirement.
- After unsuccessful discussions, the Commission filed an infringement action in June 1995, narrowing its claims to the effectiveness of Germany’s penalties for non-disclosure.

## Issues

1. Whether the Commission’s decision to issue a reasoned opinion and to bring an infringement action required collegial adoption by the College of Commissioners, and whether that requirement was met.
2. Whether the application impermissibly altered the subject matter compared to the pre-litigation notice and reasoned opinion.
3. Whether Germany failed to fulfill its obligations under the relevant disclosure directives by not ensuring effective penalties for failure to disclose annual accounts and other required company information.

## Decision

- The Court rejected Germany’s admissibility objections and held the action was properly brought.
- The Court held that decisions to issue a reasoned opinion and to bring an infringement action are part of the Commission’s supervisory function and must be adopted collegially, but found collegiality satisfied because the College had essential information and collectively deliberated.
- The Court held the Commission may narrow, but not broaden, the subject matter of an infringement action; the application did not introduce a new complaint.
- On the merits, the Court declared Germany had failed to fulfill its obligations by not providing penalties that effectively ensured compliance with disclosure requirements, including publication of annual accounts.

## Legal Principles

- Commission decisions to issue a reasoned opinion and to refer an infringement action to the Court are not mere internal administration; they require collegial adoption reflecting equal participation and collective responsibility.
- In infringement proceedings, the letter of formal notice and reasoned opinion define the dispute’s framework; the Commission may refine or narrow claims in the application if it does not change the essential factual and legal basis.
- Where EU law requires penalties for noncompliance, Member States retain choice of form but must ensure sanctions are effective, proportionate, and dissuasive and secure real observance of the directive’s objectives.
- A Member State may not justify failure to comply with directive obligations by invoking internal legal, administrative, or practical difficulties.
- Corporate disclosure regimes intended to protect creditors and third parties are ineffective if companies can systematically avoid filing obligations without facing real consequences.

## Conclusion

The Court held that the Commission’s infringement decisions were validly adopted and that the Commission did not impermissibly change the dispute’s scope, then found Germany in breach for failing to ensure effective, dissuasive penalties that would secure actual compliance with EU company disclosure obligations, including publication of annual accounts.


Comm’n of the Eur. Cmtys. v. Fed. Republic of Ger., Case C-191/95 (C.J.E.C. 1998)