Application of EU Competition Law on HEIs?— The Notions of ‘Undertaking’ and ‘SGEIs’

As we have seen in Chap. 2, competition law is only applicable to ‘undertakings’ which, as will be discussed further below, are defined as entities which are conducting an economic activity. Through competition law undertakings are supposed to be prevented from disrupting competition in the single market, while state aid law prohibits Member States to disrupt competition by selectively benefitting undertakings. Competition law is, in so far, the counterpart to the free movement provisions which prevent barriers by the Member States.[1] Originally public services, such as utilities and employment and health services were thus not the focus of the competition law regime. However, with increasing liberalisation of these services[2] they have, over time, been progressively regarded as economic activities.[3] Therefore, the entities which conduct them, as well as public market regulations regarding such service have been subjected to EU competition law.[4] The aim behind this development has been to achieve the single market in public service sectors by excluding national protectionism.[5] The problem is, however, that such services cannot always both be provided in a competitive market and, at the same time, retain their general interest character including such elements as universal provision, trust based relationships[6] or equality of access.[7] Therefore, Article 106(2) TFEU offers an exemption for SGEIs in cases where the application of the competition rules obstructs their provision. The importance of Article 106(2) TFEU has increased with more public services being regarded as economic in nature. Nevertheless, placing public services ‘in the market’ requires a more commercial mode of operation and the exemption is not necessarily always available because the Court sometimes conducts a very strict proportionality test.[8] The rest of this section (Sect. 3.2) is organised as follows: the notion of ‘undertaking’ (Sect. 3.2.1), the relationship between public regulation of markets and EU competition law (Sect. 3.2.2) and the concept of ‘SGEIs’ (Sect. 3.2.3) will be analysed before evaluating the position of HEIs in these regards (Sect. 3.2.4).

  • [1] Schiek 2012, p. 25; Sauter p. 110 seq.
  • [2] For more on liberalisation tendencies in the Member States, see Vincent-Jones 2006, p. 358 seq.
  • [3] This is in line with critical political economist assumptions that the European integration project became more neo-liberal in the last quarter of the 20th century and can also be seen as afunctional spill-over. For more on integration theory, see Chap. 1, Sect. 1.3.4 above.
  • [4] For more on the inclusion of public services into EU competition and internal market law seeSteyger 2002, p. 275; Prosser 2005, 2010; Neergaard 2011, p. 174 seq; Chalmers et al. 2014,Chapter 25 (online resource), p. 1 seq; Sauter 2015, pp. 12, 18, 125, 222 seq, 228, 233, 238.
  • [5] In the sphere of the utilities this had led to EU level sectoral approaches. An extreme example of liberalisation in this respect is Directive 2008/6/EC amending Directive 97/67/EC withregard to the full accomplishment of the internal market of Community postal services OJ [2008]L 52/3, which, in Article 1(8) provides that all special and exclusive rights shall be abandonedin postal services. In rare cases, liberalisation has, instead of with national regulation, been metwith regulatory failure and the EU legislator intervened due to the cross-border nature of the service as in the case of Regulation 531/2012 on roaming on public mobile communications networks within the Union OJ [2012] L 172/10. See further on the relation between liberalisation,regulation and application of competition law as well as on the sectoral approaches Sauter 2015p. 12, 32 seq, 125, 133 seq, 222, 225 seq, 231 seq.
  • [6] On the latter, see Newdick 2007.
  • [7] Additionally, the question has been raised by Chalmers et al. 2014, Chapter 25 (onlineresource), p. 36 seq with further references, if liberalisation has actually practically led to morecompetitive markets and, in effect, to greater consumer welfare or if any such results may havebeen due to other factors such as technical advances.
  • [8] Prosser 2005, pp. 544, 549, 560; Prosser 2010, p. 315 seq, 335 seq.
 
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