Public Services and EU Competition Law
eBook - ePub

Public Services and EU Competition Law

The Social Market Economy in Action

Daniele Gallo

  1. 162 pagine
  2. English
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eBook - ePub

Public Services and EU Competition Law

The Social Market Economy in Action

Daniele Gallo

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This monograph, which was also designed as a short reference book for specialized undergraduate and graduate courses on EU law, intends to shed light on, and legally frame, the evolution of the doctrine of services of general economic interest (SGEIs). The book emphasizes the pivotal role played by SGEIs in striking a fair balance between market and social objectives. To this end, the book claims, first of all, that SGEIs have a dual nature inasmuch as they act as a limitation to/derogation from the free market and, simultaneously, as a value and positive obligation addressed at national authorities, undertakings, and EU institutions. The EU notions of access to public services and universal service are the clearest signal of such phenomenon. Secondly, the book claims that the transfer of competences from the Union to the Member States and the reaffirmation of Member States' sovereignty in crucial sectors of the economy are not the only solutions to foster social rights. In fact, this narrative is apt to undermine the foundations, spirit, and purpose of the process of European integration, especially at a time like the present, when new forms of populism and anti-Europeanism are on the rise, and when a European response is imperative to counter the spread of the coronavirus in European countries. The book concludes that SGEIs' regulation is an area of law where the EU institutions have generally successfully put into action and consolidated the social market economy principles on which the EU was founded. This is even further proof that the EU is not merely the reflection of interests linked to market completion, but also and foremost a 'Community based on the rule of law'.

The book will be a valuable resource for academics and researchers in EU Law, European Public Law and EU competition law.

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  2. 1. The Historical and Legal Background on the Financing of Services of General Economic Interest Prior to the “Almunia Package”
  3. 2. The “Almunia Package” and the Social Dimension of State Aid
  4. 3. The Commission's Sectorial Practice after the “Almunia Package” and the Relevant Case Law of the CJEU
  5. 4. The Developments Regarding Economic Social Services of General Interest
  6. 5. The New Temporary Framework on State Aid in the Context of the Coordinated Economic Response to the COVID-19 Outbreak

1. The Historical and Legal Background on the Financing of Services of General Economic Interest Prior to the "Almunia Package"

Since the 1970s,1 the EU institutions have been clear in affirming that Member States can compensate the costs incurred by undertakings entrusted with the operation of SGEIs in order to assist in the carrying out of their missions of general interest. The (more) complex issue to be solved by those institutions, including above all the CJEU, was and still is another: how and to what extent such compensation may be considered admissible under EU law. In this regard numerous contrasts arose between the ECJ and the GC and amongst Advocate Generals, as well as between the CJEU and the Commission. The main problem was and to a certain extent still is whether compensation must be regarded ex ante as legitimate and not amounting to State aid according to Article 107(1) TFEU because no economic advantage is conferred (the so-called “compensation criterion”) or whether the compensation does constitute aid but is nevertheless compatible with the internal market by virtue of Article 106(2) TFEU (the “State aid criterion”).2
1 Case 78/76, Steinike and Weinlig v. Germany, EU:C:1977:52, at para. 18.
2 On such criteria, see Conor Quigley, European State Aid Law and Policy, at 231-36 (Oxford, Hart, 3rd ed. 2015).
From the 1970s until 2005, in a first phase which included the Altmark judgment of 2003,3 the EU Courts behaved as agents of change, responding to the issues and needs raised by Member States, undertakings, and, lato sensu, civil society. They acted to fill lacunae and secure legal certainty in the absence of horizontal secondary law in the field. What can be inferred from those judgments is that, in the great majority of cases, the compensation criterion prevailed. However, as a matter of fact, the ECJ, with the identification of the four famous Altmark requirements,4 rendered it de facto very difficult for compensation not to be treated as State aid.5
3 Accord, SIC, supra Chapter II note 74, at paras 82-84; Joined Cases C-34 to 38/01, Enirisorse S.p.A. v Sotacarbo S.p.A., EU:C:2003:640, at para. 31; Case T-157/01, Danske Busvognmoed v. Comm’n, EU:T:2004:76, at para. 98; Case T-274/01, Valmont Nederland B.V. v. Comm’n, EU:T:2004:266, at paras 129–39; Case C-280/00, Altmark Trans GmbH et al., v. Nahverkehrsgesellschaft Altmark GmbH et al., EU:C:2003:415, at paras 78–95; Case C-53/00, Ferring S.A. v. Agence centrale des organismes de sécurité sociale (ACOSS), EU:C:2001:627, at paras 20-29; Case C-2/98 P, Henri De Compte v Parliament, EU:C:1999:158, at paras 27-33; Case T-106/95, Fédération française des sociétés d’assurances (FFSA), et al., v. Comm’n, EU:T:1997:23, at paras 164-172; Case 280/83, Comm’n v. Italy, 1984 EU:C:1984:211, at para. 18.
4 Altmark, supra note 3, at paras 88-95.
5 On the limits of Altmark, see Erika Szyszczak, Altmark Assessed, Research handbook on European state aid law 293 (Erika Szyszczak, ed., Cheltenham, Edward Elgar 2011).
As is well-known, in Altmark the ECJ set out the following conditions under which the funding of SGEIs escapes State aid scrutiny, as it does not qualify as aid: the recipient undertaking must have public service obligations that are clearly defined; the parameters for calculating the compensation must be objective, transparent and established in advance; the compensation must not exceed what is necessary to cover all or part of the costs incurred in the discharge of the public service obligations, taking into account the relevant receipts and the need for a reasonable profit; and, where the relevant undertaking is not chosen pursuant to a public procurement procedure allowing for the selection of a tenderer capable of providing those services at the least cost to the public, the level of compensation needed must be determined on the basis of an analysis of the costs of a typical, well-run company.
The activism of the CJEU pushed the Commission to step in. Therefore, in a second phase, with a view to providing legal certainty, the Commission adopted the “Monti Package,”6 named after the Commissioner responsible for competition at the time. This Package, which remained in force until November 2011, made a (more or less) clear distinction between those public measures which were not to be considered State aid ab origine and those which qualified as State aid but were potentially compatible with Article 106(2) TFEU.
6 The “Monti Package” was composed of the following acts: Commission Decision 2005/842 of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, O.J. (L 312) 67 (EC); Communication from the Commission - Community Framework for State aid in the form of public service compensation, at 4, COM (2005) 297 final (29 Nov. 2005). On this Package, accord, Barbara Rapp-Jung, State Financing of Public Services – The Commission’s New Approach, 2 Eur. State Aid Law Q. 205 (2004); Lars Peter Svane, Public Service Compensation in Practice: Commission Package on State Aid for Services of General Economic Interest, 3 Competition Pol’y Newsl. 34 (2005).
In a third phase, after a few years of judicial restraint, the GC took action, and with decisions such as BUPA,7 tried to solve problems that had not been settled by the “Monti Package.” It thus attempted to indicate more precisely when Article 106(2) TFEU was to be used, and how compensation for public service was to be evaluated in light of the universal and binding character of that service.
7 Accord, Case T-222/04, Comm’n v. Italy, EU:T:2009:194; BUPA, supra Chapter I note 32; Case T-266/02, Deutsche Post, A.G. v. Comm’nt, EU:T:2008:235.
Besides the issue of ensuring the effet utile of Article 106(2) TFEU in the area of State aid,8 the option of applying the compensation criterion rather than the State aid criterion represents a “burning” procedural matter filled with very relevant practical consequences in terms of the distribution of competences between the EU and its Member States. Indeed, if the compensation does not amount to State aid, Member States are neither required to notify the measure nor are they bound by the standstill obligation under Article 108(3) TFEU. By contrast, if the compensation does constitute State aid, then, even though compatible under Article 106(2) TFEU, both the notification and standstill obligations will normally apply. This raises a problem of decentralization in the field of State aid. In particular, a very broad application of the compensation criterion, by opening up the possibility of selfassessment of financing schemes by the Member States, would risk calling into question the Commission’s ex ante powers of control in the field of State aid when public service compensation is at issue.
8 On the overlap between Altmark conditions and Article 106(2) TFEU, see Maik Wolf, Services of General Economic Interest (SGEI), European State Aid Law. A Commentary 296, at 330-31 (Franz Jürgen Säcker & Frank Montag, eds., München, Beck 2016); Kevin Bacon, European Union Law of State Aid, at 55 (Oxford, Oxford University Press, 3rd ed. 2017).

2. The "Almunia Package" and the Social Dimension of State Aid

Under the overall umbrella of the Communication of 20 Dece...

Indice dei contenuti

  1. Cover
  2. Half Title
  3. Title
  4. Copyright
  5. Dedication
  6. Table of Contents
  7. Acknowledgments
  8. Foreword
  9. Abbreviations
  10. Introduction. Background, Aims, Scope and Structure of the Book
  11. I. The Elusive Notion of Service of General Economic Interest
  12. II. Rationale, Content and Scope of Article 106(2) TFEU
  13. III. Services of General Economic Interest beyond Article 106(2) TFEU
  14. IV. Distribution of Competences between Member States and the EU
  15. V. Services of General Economic Interest and the Abuse of Dominant Position
  16. VI. Services of General Economic Interest and State Aid
  17. Conclusions
  18. Case Law
  19. Bibliography
  20. Index