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Private Distortions of Competition and SSGIs

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Social Services of General Interest in the EU

Part of the book series: Legal Issues of Services of General Interest ((LEGAL))

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Abstract

This chapter offers an examination of the importance of the application of the primary competition rules in the Treaty of the Functioning of the European Union (TFEU) to SSGIs. The focus of the enquiry is on the relationship between Article 101 TEFU and SSGIs. In particular, it will focus on the case law of the application of the primary competition rules to SSGIs and the question of how to interpret Article 101(1) and 101(3) TFEU in relation to SSGIs.

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Notes

  1. 1.

    Szyszczak 2009, p. 209.

  2. 2.

    Article 102 TFEU on the abuse of a dominant position and the Merger Regulation and the accompanying rules are part of the rules of private distortions of competition and could also be relevant for SSGIs, but the analysis in the following is limited to Article 101 TFEU, since this is where the case law is to be found.

  3. 3.

    Council Regulation No. 139/2004 of 20 January 2004 on the Control of Concentrations Between Undertakings (the Merger Regulation), OJ 2004 L 24/1.

  4. 4.

    For the competition law view, see e.g. Bellamy and Child et al. 2008; Whish 2009, p. 82 et seq. But this observation is also very common in the growing literature of SSGIs, see e.g. Neergaard 2009, Fig. 1, p. 20; Szyszczak 2009, p. 208.

  5. 5.

    For the general competition law literature, see e.g. Faull and Nikpay 2007; Bellamy and Child et al. 2008; Whish 2009. For the literature on SSGIs see e.g. Belhaj and van de Gronden 2004; Lasok 2004; van de Gronden 2004; Neergaard 2009; Szyszcak 2009; van de Gronden 2009.

  6. 6.

    CJEU, Case C-41/90 Höfner [1991] ECR I-1979, para 21.

  7. 7.

    CJEU, Joined Cases C-180/98 and C-184/98 Pavel Pavlov and others, [2000] ECR I-6451, para 75.

  8. 8.

    See, inter alia, CJEU, Case 118/85 Commission v. Italy [1987] ECR 2599, para 7; CJEU, Case C-35/96 Commission v. Italy [1998] ECR I-3851, para 36; CJEU, Joined Cases C-180/98 and C-184/98 Pavel Pavlov and others [2000] ECR I-6451, para 75; CJEU, Case C-475/99 Ambulanz Glöckner [2001] ECR I-8089, para 19; CJEU, Case C-309/99 Wouters [2002] ECR I-1577, para 47; CJEU, Case C-82/01 P Aéroports de Paris [2002] ECR I-9297, para 79; CJEU, Case C-205/03 P FENIN [2006] ECR I-6295, para 25; CJEU, Case C-49/07, MOTOE [2008] ECR I-4863, para 22; CJEU Case C-113/07 P SELEX [2009] ECR I-2207, para 69; and now the latest decision: CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr].

  9. 9.

    Se also the Opinion of AG Maduro of 10 November 2005 in CJEU, Case C-205/03 P FENIN [2006] ECR I-6295, where it is explained, that two criteria dominate in the determination of whether or not an entity is to be considered as an undertaking within competition law: first, a comparative criterion focusing on the nature of the activity (economical) and second, a market criterion focusing on whether the activity in question is being carried out under market conditions or not.

  10. 10.

    Whish 2009, p. 84.

  11. 11.

    The expression comes from Whish 2009, p. 83.

  12. 12.

    Latest in CJEU, Case C-49/07 MOTOE [2008] ECR I-4863, concerning a non-profit making association governed by private law whose object was to organize motorcycling competitions in Greece, where the CJEU held, that ‘The classification as an activity falling within the exercise of public powers or as an economical entity must be carried out separately for each activity exercised by a given entity’, para 25. See also GC, Case T-155/04 SELEX Sitemi Integrati SpA [2006] ECR II-4797, para 54.

  13. 13.

    CJEU, Joined Cases C-264/01, C-306-/01, C-354/01 and C-355/01, AOK Bundesverband [2004] ECR I-2493.

  14. 14.

    CJEU, Case C-205/03 P FENIN [2006] ECR I-6295.

  15. 15.

    CJEU, Case C-159/91 Poucet et Pistre [1993] ECR I-637.

  16. 16.

    CJEU, Case C-244/94 Fédération Francaises des Sociètés d’Assurance [1995] ECR I-4013.

  17. 17.

    Ibid. para 8.

  18. 18.

    Ibid. para 18.

  19. 19.

    Ibid.

  20. 20.

    Ibid. paras 14–17 and 22.

  21. 21.

    Ibid. paras 18–22.

  22. 22.

    In CJEU, Joined Cases C-180/98 and C-184/98 Pavel Pavlov and others [2000] ECR I-6451, the CJEU held, that a Dutch supplementary pension fund for doctors was an association of undertakings. The argument of the CJEU was, that the individual doctors were to be considered undertakings, that their contributions to a pension fund were closely linked to their professions, and that the elements of solidarity imposed on the pension scheme could not affect the fact, that it was an undertaking. See also CJEU, Joined Cases C-115-117/97 Brentjens [1999] ECR I-6025, where a sectoral pension fund was classified as a an undertaking; CJEU, Case C-67/96 Albany [1999] ECR I-3775, also concerning the classification of a sectoral pension fund as an undertaking; CJEU, Case C-219/97 Maatschappij [1999] ECR I-6121, concerning the classification of a sectoral pension scheme. CJEU, Case C-218/00 Cisal [2002] ECR I-691, the CJEU had to determine whether compulsory membership of a national insurance scheme against accidents at work and occupational diseases was to be considered an undertaking, and in doing so it found, that the body concerned (INAIL) operated on the basis of solidarity since the benefits paid to insured persons were not strictly proportionate to the contributions paid by them, and since the INAIL was subject to supervision by the state and the fact that the INAIL fulfilled ‘an exclusively social function’ (para 45), for which reasons the activities of INAIL could not be considered to be economic activities for the purpose of competition law. Accordingly, the INAIL was not considered an undertaking.

  23. 23.

    CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513.

  24. 24.

    Ibid. para 37.

  25. 25.

    Ibid. para 38.

  26. 26.

    Ibid. para 39.

  27. 27.

    Ibid. paras 44–59.

  28. 28.

    Ibid. para 59, with reference to CJEU, Case C-218/00 Cisal [2002] ECR I-691, para 42, where the exact same wording is used.

  29. 29.

    CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513, para 62.

  30. 30.

    Ibid. paras 65–66.

  31. 31.

    CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr]. AG Mengozzi delivered his Opinion on 10 November 2010.

  32. 32.

    CJEU, Case C-218/00 Cisal [2002] ECR I-691, paras 39–40, similarly in CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513, paras 44–59.

  33. 33.

    Opinion of AG Jacobs of 13 September 2001 in CJEU, Case C-218/00 Cisal [2002] ECR I-691 reflects on the elements of solidarity in paras 67–70, as so does AG Mazák in his Opinion of 18 November 2008 in CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513 paras 48–52.

  34. 34.

    See also Neergaard 2010; Ross 2009 .

  35. 35.

    And is being mentioned also in the earlier cases, see CJEU, Joined Cases C-159/91 and C-160/91 Poucet et Pistre [1993] ECR I-637, para 14.

  36. 36.

    Opinion of AG Jacobs of 13 September 2001 in CJEU, Case C-218/00 Cisal [2002] ECR I-691, para 71.

  37. 37.

    See CJEU, Case C-218/00 Cisal [2002] ECR I-691, para 43; Opinion of AG Jacobs of 13 September 2001 in CJEU, Case C-218/00 Cisal [2002] ECR I-691, paras 71–76; CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513, paras 60–67; and Opinion of AG Mazák of 18 November 2008 in CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513, paras 53–61.

  38. 38.

    CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr].

  39. 39.

    The literature on the healthcare cases is vast, for recent literature see: van de Gronden 2009; Szyszczak 2009.

  40. 40.

    CJEU, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband [2004] ECR I-2493.

  41. 41.

    Ibid. paras 45–66.

  42. 42.

    Ibid. para 51.

  43. 43.

    Ibid. para 56.

  44. 44.

    Ibid. paras 59–64.

  45. 45.

    Se e.g. Belhaj and van de Gronden 2004; Lasok 2004; van de Gronden 2004; Boeger 2007; van de Gronden 2009; Neergaard 2010; Szyszczak 2009.

  46. 46.

    Both Boeger 2007 and Lasok 2004 criticises the AOK judgment, CJEU, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband [2004] ECR I-2493. See Lasok 2004: ‘Where the dividing line now lies between entities that are undertakings and entities that are not is virtually impossible to identify with any degree of precision’ and further on ‘it is highly questionable that the solution found by the ECJ [now CJEU] in AOK provides a workable answer to the question when is an undertaking not an undertaking’.

  47. 47.

    Opinion of AG Jacobs of 22 May 2003 in CJEU, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband [2004] ECR I-2493.

  48. 48.

    GC, Case T-319/99 FENIN [2003] ECR II-357.

  49. 49.

    CJEU, Case C-205/03 P, FENIN [2006] ECR I-6295, AG Maduro delivered his Opinion 10 November 2005.

  50. 50.

    Ibid. para 35.

  51. 51.

    Ibid. para 36.

  52. 52.

    Ibid. para 37.

  53. 53.

    CJEU, Case C-205/03 P, FENIN [2006] ECR I-6295, AG Maduro delivered his Opinion 10 November 2005.

  54. 54.

    And FENIN had also argued before the CJEU (para 17) that this distinction was impossible to make.

  55. 55.

    GC, Case T-319/99 FENIN [2003] ECR II-357, paras 38–44.

  56. 56.

    Ibid. para 39.

  57. 57.

    Van de Gronden 2009, p. 13.

  58. 58.

    Van de Gronden 2009, p. 10.

  59. 59.

    Boeger 2007, p. 331.

  60. 60.

    Farley and Krajewski 2007, p. 121.

  61. 61.

    Boeger 2007, p. 331; Lasok 2004, p. 385.

  62. 62.

    Farley and Krajewski 2007, p. 123; Szyszczak 2009, p. 211.

  63. 63.

    Van de Gronden 2009, p. 6.

  64. 64.

    The BetterCare decision is mentioned in the Opinion of AG Maduro of 10 November 2005 in CJEU, Case C-205/03 P, FENIN [2006] ECR I-6295, and is also touched upon by Farley and Krajewski 2007, p. 122, and Szyszczak 2009, p. 210f, who explains how the OFT reacted to the FENIN judgment.

  65. 65.

    Farley and Krajewski 2007, p. 121.

  66. 66.

    Szyszczak 2009, p. 82.

  67. 67.

    CJEU, Case C-309/99 Wouters [2002] ECR I-1577.

  68. 68.

    CJEU, Case C-519/04 P Meca-Medina and Majcen [2006] ECR I-6991. See Townley 2009, p. 62ff, and further on p. 65ff on the possibility of reading Article 101(3) TFEU expansively, and p. 139 concluding, that it would be helpful, if the European Courts explained, when to balance under Article 101(1) and when under 10(3) TFEU.

  69. 69.

    It is an old and continuing discussion in competition law as to whether the weighing of the pro- and anti-competitive effects of agreement should be considered as part of the Article 101(1) analysis or whether this is only a matter for Article 101(3) TFEU, the discussion of rule of reason in EU Competition Law. One could argue, that this balancing-method/the inherent restrictions approach is not part of the rule of reason, see van de Gronden 2011, p. 277.

  70. 70.

    CJEU, Case C-309/99 Wouters [2002] ECR I-1577.

  71. 71.

    Whish 2009, p. 126ff, talks about ‘regulatory ancillarity’. See also Faull and Nikpay 2007, p. 237ff, arguing p. 239, that this has a narrow scope.

  72. 72.

    Van de Gronden 2011, p. 277. Townley 2009, p. 62ff, refers to the problem under the heading ‘Compromise’.

  73. 73.

    CJEU, Case C-309/99 Wouters [2002] ECR I-1577, para 97.

  74. 74.

    CJEU, Case C-519/04 P Meca-Medina and Majcen [2006] ECR I-6991.

  75. 75.

    CJEU, Case C-309/99 Wouters [2002] ECR I-1577, para 42.

  76. 76.

    Ibid. para 45.

  77. 77.

    Ibid. para 55.

  78. 78.

    Van de Gronden 2011, p. 276; Whish 2009, p. 127; Forrester 2006; Van de Gronden talks about ‘the inherent restrictions approach’.

  79. 79.

    CJEU, Case C-309/99 Wouters [2002] ECR I-1577, para 97.

  80. 80.

    According to Whish 2009, p. 127; and Forrester 2006, p. 291, the CJEU is conducting a balancing test. See also on this matter Faull and Nikpay 2007, p. 187, with reference to sports, and setting up three conditions, also at p. 237ff in general; Szyszczak 2007, p. 83; the thorough analysis in Townley 2009, p. 64; and van de Gronden 2011, p. 277, taking the method into the area of SSGIs.

  81. 81.

    Davis 2009, p. 60.

  82. 82.

    Davis 2009, p. 59 et seq., in general; and van de Gronden 2011 specifically for healthcare.

  83. 83.

    Townley 2009, p. 65; Whish 2009, p. 151 et seq.

  84. 84.

    Townley 2009, p. 65-69, explains this development in general until the judgment of the GC, Case T-168/01 GlaxoSmithKline [2006] ECR II-2969, see below at n. 94. See also Whish 2009, p. 153; Monti 2007, Chap. 4.

  85. 85.

    As is well known this started out with the major modernisation of the block exemption rules around 2000 and culminated with the decentralisation of the competition rules with Council Regulation No. 1/2003 on the Implementation of the Rules on Competition Laid Down in Articles 81 and 82 EC (now Articles 101 and 102 TFEU), OJ 2003 L 1/1 and the connected guidelines, and taken even further in the so-called modernisation of Article 102 TFEU, ending up with the Guidance of the Commissions enforcement priorities on Article 102 TFEU from 2009.

  86. 86.

    Commission, Communication from the Commission, Notice, Guidelines on the Application of Article 81(3) of the Treaty [now Article 101(3) TFEU], OJ 2004 C 101/97.

  87. 87.

    Faull and Nikpay 2007, p. 294 explains the rationale behind Article 101(3) TFEU exactly in this way. See also Whish 2009, p. 152; Monti 2007 for an explanation of the development in this field.

  88. 88.

    OJ 2004 C 101/97, para 42.

  89. 89.

    OJ 2004 C 101/97, para 13, but as well known seen many other places as well.

  90. 90.

    See inter alia Nielsen and Neergaard 2010, p. 441, drawing on the research results from the Blurring Boundaries Project; Micklitz 2010; Semmelmann 2010.

  91. 91.

    In the cases CJEU, Case C341/05 Laval [2007] ECR I-11767 and CJEU, Case C-438/05 Viking [2007] ECR I-10779. As to the conceptual matters see Nielsen and Neergaard 2010, p. 443; Semmelmann 2010.

  92. 92.

    See inter alia Nielsen and Neergaard 2010, p. 441 with references, drawing on the research results from the Blurring Boundaries Project, Semmelmann 2010.

  93. 93.

    Semmelmann 2010, p. 519.

  94. 94.

    Gerber 1998, was one of the earliest publications at the start of the modernisation programme. Other examples can be seen in Gormsen 2010; Akman 2009; Townley 2009; Semmelmann 2008.

  95. 95.

    GC, Case T-168/01 GlaxoSmithKline [2006] ECR II-2969.

  96. 96.

    Ibid. paras 114ff, and 148 et seq.

  97. 97.

    Ibid. para 118, repeated in para 171 when touching upon the CJEU, Case C-309/99 Wouters [2002] ECR I-1577.

  98. 98.

    GC, Case T-168/01 GlaxoSmithKline [2006] ECR II-2969, para 131.

  99. 99.

    Ibid. para 308.

  100. 100.

    CJEU, Joined Cases 501/06 P, C-513/06 P, C-515/06 P and C-519/06 P GlaxoSmithKline [2009] ECR I-9291.

  101. 101.

    Citing CJEU, Joined Cases C-468/06 to C-478/06 Sot. Lélos kai Sia and Others [2008] ECR I-7139, para 65, on parallel trade in pharmaceuticals.

  102. 102.

    GC, Case T-168/01 GlaxoSmithKline [2006] ECR II-2969, paras 63–64.

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  1. Faculty of Law, Copenhagen University, Copenhagen, Denmark

    Caroline Heide-Jørgensen

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  1. Caroline Heide-Jørgensen
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  1. , Faculty of Law, University of Copenhagen, Studiestræde 6, Copenhagen K, 1455, Denmark

    Ulla Neergaard

  2. , School of Law, University of Leicester, University Road, Leicester, LE1 7RH, United Kingdom

    Erika Szyszczak

  3. , Faculty of Law, Radboud University, Comeniuslaan 4, Nijmegen, 6525 HP, Netherlands

    Johan Willem van de Gronden

  4. , Fachbereich Rechtswissenschaft, Universität Erlangen-Nürnberg, Schillerstraße 1, Erlangen, 91054, Germany

    Markus Krajewski

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Heide-Jørgensen, C. (2013). Private Distortions of Competition and SSGIs. In: Neergaard, U., Szyszczak, E., van de Gronden, J., Krajewski, M. (eds) Social Services of General Interest in the EU. Legal Issues of Services of General Interest. T.M.C. Asser Press, The Hague, The Netherlands. https://doi.org/10.1007/978-90-6704-876-7_11

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