The European Court of Justice (ECJ) has ruled that Spain infringed European Community law by requiring that mergers and acquisitions in Spain’s energy sector be approved in advance by the Spanish National Energy Commission (NEC). The system of prior notification, introduced in 2006, was applied controversially when the NEC blocked a takeover bid for Spanish energy company Endesa by E.ON, a German energy group—a move widely viewed as protectionist. The ECJ ruled that Spain’s prior notification system infringes EC Treaty rules on the free movement of capital and freedom of establishment because it is likely to deter investors located in other Member States from acquiring interests in Spanish energy entities. Moreover, the ECJ ruled that the prior notification system was not justified by—or proportionate to—any overriding public interest concerns, such as security of energy supply.