European Competition Law. Prof. Fabio Bassan a.a

Transcription

1 European Competition Law Prof. Fabio Bassan a.a

2 Competition, the State and public undertakings Art. 106: 1. In the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in the Treaties, in particular to those rules provided for in Article 18 and Articles 101 to 109.

3 Competition, the State and public undertakings Art. 106: 2. Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the applications of such rules does not obstruct the performance, in law or in fact, of the particular task assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.

4 Competition, the State and public undertakings Art. 106: 3. The Commission shall ensure the application of the provisions of this Article and shall, where necessary, address appropriate directives or decision to Member States.

5 The format of article (1): prohibition addressed to member states 106(2): provision addressed to undertakings providing for limited immunity from the Treaty rules 106(3): policing and legislative powers of the Commission

6 106(1): Public undertakings: means any undertaking over which the public authorities may exercise, directly or indirectly, a dominant influence by virtue of their ownership of it, their financial participation therein or the rules which govern it. A dominant influence on the part of the public authorities shall be presumed when these authorities, directly or indeirectly, in relation to an undertaking: (i) hold the major part of the undertaking s subscribed capital, or (ii) control the majority of votes attached to the shares issued by the undertakings, or (iii) can appoint more then half of the members of the undertaking s administrative, managerial or supervisory body. (Transparency Directive, 2006).

7 106(1): Undertakings granted special or exclusive rights: Exclusive rights: monopoly granted by the State to one entity to engage in a particular economic activity on an exclusive basis. ex: broadcasting monopolies, (Sacchi, 1974), employment recruitment services (Hofner, 1991) air routes (Ahmed Saeed, 1989) unloading services at a port (Merci convenzionali v. porto di Genova, 1991).

8 106(1): Undertakings granted special or exclusive rights: Special rights: rights that are granted by a member state to a limited number of undertakings through any legislative, regulatory or administrative instruments which, within a given geographical area, limits to two or more, otherwise than according to objective, proportional and non-discriminatory criteria, the number of undertakings which are authorised to provide any such service, or designates, otherwise than according to such criteria, several competing undertakings, as those which are authorized to provide any such service, or confers on any undertaking or undertakings otherwise than according to such criteria, legal or regulatory advantages which substantially affect the ability of any other undertaking to provide the same service in the same geographical area under substantially equivalent conditions (telecommunications service directive, 94/46).

9 106(1): Undertakings granted special or exclusive rights: Measures:laws, regulations, adiminstrative provisions, administrative practices, and all instruments issued from a public authority, included recommendations (Directive 70/50). It is clear since the telecommunications equipment case (1991) that member states do not have unassilable rights to create legal monopolies under any conditions they choose. ex: Hofner (1991): the fact of creating a dominant position by granting exclusive rights is not as such incompatible with the Treaty. However, a member state will infringe the Treaty if the undertaking in question, merely by exercising the exclusive right granted to it, cannot avoid abusing its dominant position. In that case a company was granted the monopoly over recruitment services, the demand for which it was incapable of satisfying. Such limitation of the service offered to customers constituted an abuse under article 102(b), and the member state had created a situation where the undertaking could not avoid infringing art idem: Corbeau, 1993, post office.

10 106(1): Undertakings granted special or exclusive rights: Summary of the measures which make abuse unavoidable or create a situation in which and undertaking is led to abuse its dominant position: Inability to meet demand: Hofner, 1991: article is infringed when a statutary monopoly is set up in such a way that it is incapable of meeting the demand in the reserved sector. Merci convenzionali/porto di Genova (1991): art is infringed where the monopolist is enabled to behave inefficiently, exploit customers, and not modernize.

11 106(1): Undertakings granted special or exclusive rights: Summary of the measures which make abuse unavoidable or create a situation in which and undertaking is led to abuse its dominant position: The cumulation of rights conferred on an undertaking create a conflict of interest: When a regulatory function is given to the monopoly, enabling it to disadvantage competitors in a downstream market (RTT, 1991, ERT, 1991) When a company is given a monopoly over the supply of temporary labour to authorized port operators although competed with them in the market for port services (Silvano Raso, 1998). Inequality of opportunity The extention of exclusive rights: measures enabling an undertaking to extend its monopoly into neighbouring markets (RTT) Pricing abuses Refusal to supply (i.e. Port of Rodby: essential facility)

12 Art. 106(2) Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the applications of such rules does not obstruct the performance, in law or in fact, of the particular task assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.

13 Services of general economic interest (SIEG): Market services which the Member States or the Community subject to specific public service obligations by virtue of a general interest criterion (Commission Communication, 2000). They are economic services, because they belong to the market. Elements one can use include: universal service, continuity, quality of service, affordability, user and consumer protection. Case: BUPA (2008): an SGEI has to satisfy certain minimum criteria derived from the case law: the mission has to be universal and compulsory.

14 Different concepts often misunderstood: _ Services of general interest (SGI): market and non-market services which the public authorities class as being of general interest and subject to specific public service obligations. Public services: services whose deliver is in the public interest and which may be either regulated, provided or financed by the State. Universal service: is the obligation on a supplier of goods and services to provide them at an affordable cost and guaranteed quality to all who require them.

15 Obstruct the performance of the particular task assigned to them: Hofner (1991): an undertaking is subject to competition rules unless and to the extent to which it is shown that their application is incompatible with the discharge of its duties. Merci convenzionali porto di Genova (1991): even if SIEG are involved, it was no necessary for the undertaking to infringe Treaty rules. RTT (1991): the undertaking entrusted with the public telephone network didn t need the power to lay down the standards for telephone equipment Corbeau (1993): postal service: article contains a proportionality requirement (idem: Almelo, 1992).

16 Art. 106(3): the Commision may adopt decisions or directives without going through any of the usual legislative procedures laid down in Articles 289 to 297 involving the EU institutions. telecommunications equipment and services (both 1991): the Court held that article does not give the Commission a general legislative power, but only a specific one to deal with State measures concerning legal monopolies.