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Emerging Principles of International Competition Law: Do Public Services Matter?

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Services of General Interest Beyond the Single Market

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

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Abstract

Over the years provisions on competition law have found their way into international trade agreements. Some of these provisions concern the supply of public services. This chapter explores how the various systems of international competition law deal with public services. Do principles for public services emerge in the various international systems of competition law? It will be argued that two approaches to public services have been developed: the ‘carve-out approach’ and the ‘market approach’. The first approach focuses on the question whether the special nature of a public service is such as to justify a carve-out from the competition rules. The second approach takes the applicability of the competition rules as point of departure, but also weighs the benefits of competition and the advantages of public services. It balances competition concerns with public service considerations.

Professor of the Law of European Integration, Radboud University Nijmegen and Staatsraad at the Raad van State (judge at the Dutch Council of State).

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Notes

  1. 1.

    For example, in 2008 competition laws entered into force in China. On this, see Wei 2011, p. 807 et seq.

  2. 2.

    See e.g. Article 3(3) of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, OJ 2009 L 211/55 and Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communication networks and services, OJ 2002 L 108/51 (amended by Directive 2009/136/EC, OJ 2009 L 337/11).

  3. 3.

    See e.g. European Commission, A Quality Framework for Services of General Economic Interest in Europe, COM(2011) 900 final, 20 December 2011, p. 5.

  4. 4.

    See, for example, the Protocol on Services of General Interest (connexed to the Treaty of Lisbon), OJ 2007 C 306/158 and European Commission, A Quality Framework for Services of General Economic Interest in Europe, COM(2011) 900 final, 20 December 2011, p. 3.

  5. 5.

    See European Commission, Commission Staff Working Document, Guide to the application of the European Union rules on state aid, public procurement and the internal market to services of general economic interest, and in particular to social services of general interest, SWD(2013) 53 final/2, 29 April 2013, p. 21 and European Commission, A Quality Framework for Services of General Economic Interest in Europe, COM(2011) 900 final, 20 December 2011, p. 3.

  6. 6.

    See Prosser 2005, pp. 1–16.

  7. 7.

    See previous note.

  8. 8.

    See Gerber 2010, p. 121 et seq.

  9. 9.

    See Abbott and Singham 2013, pp. 29–32.

  10. 10.

    See Mexico—Measures Affecting Telecommunications Services, Report of the Panel, WT/DS204/R.

  11. 11.

    See Abbott and Singham 2013, pp. 30 and 31.

  12. 12.

    See Papadopoulos 2010, p. 259 et seq.

  13. 13.

    See in this respect Hilpold 2013, pp. 84–86.

  14. 14.

    This treaty is available at http://www.uemoa.int/Documents/TraitReviseUEMOA.pdf.

  15. 15.

    See Article 88 TUEMOA.

  16. 16.

    See Article 89 TUEMOA and Règlement 02/2002/CM/UEMOA relatif aux pratiques anticoncurrentielles à l’intérieur de l’UEMOA (available at http://www.uemoa.int/Pages/Actes/NewPages/reglement_2_2002_CM_UEMOA.aspx).

  17. 17.

    This treaty can be found at http://www.caricom.org/jsp/community/revised_treaty-text.pdf.

  18. 18.

    See Article 177 of the CARICOM Treaty.

  19. 19.

    Council Decision of 18 July 2005 on the conclusion of the Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the People’s Democratic Republic of Algeria, of the other part, OJ 2005 L 265/1.

  20. 20.

    See Article 41 of the Euro-Mediterranean Agreement with Algeria.

  21. 21.

    Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part, OJ 2011 L 127/6.

  22. 22.

    See Article 11.1(3) of the EU South Korea Treaty.

  23. 23.

    See Article 11.4 of the EU South Korea Treaty.

  24. 24.

    See Article 11.5 of the EU South Korea Treaty.

  25. 25.

    Nsour 2010, p. 200.

  26. 26.

    Agreement on Trade in Services of the Framework Agreement on Comprehensive Economic Cooperation between the People’s Republic of China and the Association of Southeast Asian Nations. This Treaty is available at http://www.asean.org/news/item/agreement-on-trade-in-services-of-the-framework-agreement-on-comprehensive-economic-co-operation-between-the-association-of-southeast-asian-nations-and-the-people-s-republic-of-china-2.

  27. 27.

    See Article 8 of the Treaty mentioned in the previous note.

  28. 28.

    See Article 7 of the Treaty concerned.

  29. 29.

    Article 106(1) TFEU, for example, forbids Member States to take measures with regard to companies having a special position on the market contrary the competition rules. A similar provision is found in many trade agreements the EU is party to. Also in other trade blocks such as those of the WAEMU countries or the parties to the NAFTA, monopoly and similar rights are placed under critical scrutiny.

  30. 30.

    See Krajewski 2008, p. 211.

  31. 31.

    See Krajewski 2008, pp. 209 and 210.

  32. 32.

    See Krajewski 2008, p. 212.

  33. 33.

    See Annex 7-A-1 (cat. 1.A.j) and Annex 7-A-2 (cat. 6.h, j and k) of the EU South Korea Agreement.

  34. 34.

    See Annex 7-A-1 (cat. 2) and Annex 7-A-2 (cat. 7) of the EU-South Korea Agreement.

  35. 35.

    See Annex 7-A-1 (cat. 11.C) an Annex 7-A-2 (cat. 16.C) of the EU-South Korea Agreement.

  36. 36.

    See Annex 7-A-1 (cat. 14) of the EU-South Korea Agreement.

  37. 37.

    See Annex 7-A-1 (cat. 5 and 8) and Annex 7-A-2 (cat. 10 and 13) of the EU-South Korea Agreement.

  38. 38.

    See previous note.

  39. 39.

    See Article 7.10 of the EU-South Korea Agreement.

  40. 40.

    See Annex 7-A-2 of the EU-South Korea Agreement.

  41. 41.

    See Article 7.26 of the EU-South Korea Agreement.

  42. 42.

    See Articles 7.27–7.33 of the EU-South Korea Agreement.

  43. 43.

    See Article 7.34 of the EU-South Korea Agreement.

  44. 44.

    See also Van de Gronden 2013a, p. 143.

  45. 45.

    See previous note.

  46. 46.

    Supreme Court of the United States, Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307 (1943).

  47. 47.

    See Hovenkamp 2005, p. 332.

  48. 48.

    See Supreme Court of the United States, California Retail Liquor Dealers Ass’n v. Midcal Aluminum Co., 445 U.S. 97, 100 S.Ct. 937 (1980).

  49. 49.

    See e.g. Trujillo 2006, pp. 367–372.

  50. 50.

    See Areeda and Hovenkamp 2006, p. 73.

  51. 51.

    CJEU, Joined Cases C-359/95 and C-379/95 Commission of the European Communities and French Republic v. Ladbroke Racing Ltd. [1997] ECR I-6265. See also CFI, Case T-387/94 Asia Motor France SA a.o. v. Commission of the European Communities [1996] ECR II-961.

  52. 52.

    See e.g. Vedder 2003, pp. 5 and 237–246.

  53. 53.

    See e.g. CJEU, Case 267/86 Van Eycke v. ASPA NV [1988] ECR 4769.

  54. 54.

    See previous note.

  55. 55.

    Cf. Krajewski 2009a, p. 201.

  56. 56.

    See e.g. Adlung 2006, p. 465; VanDuzer 2004, p. 396.

  57. 57.

    See CJEU, Case C-41/90 Höfner and Elser v. Macrotron GmbH [1991] ECR I-1979.

  58. 58.

    See CJEU, Case 118/85 Commission of the European Communities v. Italian Republic [1987] ECR 2599.

  59. 59.

    See, e.g. CJEU, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband a.o. v. Ichthyol-Gesellschaft Cordes, Hermani & Co. a.o. [2004] ECR I-2493; CJEU, Case C-67/96 Albany International BV v. Stichting Bedrijfspensioenfonds Textielindustrie [1999] ECR I-5751; CJEU, Joined Cases C-115/97, C-116/97 and C-117/97 Brentjens' Handelsonderneming BV v. Stichting Bedrijfspensioenfonds voor de Handel in Bouwmaterialen [1999] ECR I-6025; CJEU, Case C-219/97 Maatschappij Drijvende Bokken BV v. Stichting Pensioenfonds voor de Vervoer- en Havenbedrijven [1999] ECR I-6121; CJEU, Case C-244/94 Fédération Française des Sociétés d'Assurance a.o. v. Ministère de l'Agriculture et de la Pêche [1995] ECR I-4013; CJEU, Joined Cases C-159/91; C-160/91 Poucet v. Assurances Générales de France and Caisse Mutuelle Régionale du Languedoc-Roussillon [1993] ECR I-637 and CJEU, Case C-205/03 Federación Española de Empresas de Tecnología Sanitaria (FENIN) v. Commission of the European Communities [2006] ECR I-6295.

  60. 60.

    See, for instance, CJEU, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband a.o. v. Ichthyol-Gesellschaft Cordes, Hermani & Co. a.o. [2004] ECR I-2493.

  61. 61.

    See, for example, CJEU, Case C-67/96 Albany International BV v. Stichting Bedrijfspensioenfonds Textielindustrie [1999] ECR I-5751; CJEU, Joined Cases C-115/97, C-116/97 and C-117/97 Brentjens' Handelsonderneming BV v. Stichting Bedrijfspensioenfonds voor de Handel in Bouwmaterialen [1999] ECR I-6025 and CJEU, Case C-219/97 Maatschappij Drijvende Bokken BV v. Stichting Pensioenfonds voor de Vervoer- en Havenbedrijven [1999] ECR I-6121.

  62. 62.

    CJEU, Case C-350/07 Kattner Stahlbau GmbH v. Maschinenbau- und Metall- Berufsgenossenschaft [2009] ECR I-1513.

  63. 63.

    CJEU, Case C-437/09 AG2R Prévoyance v. Beaudout Père et Fils SARL [2011] ECR I-973.

  64. 64.

    See also Neergaard 2013, p. 228.

  65. 65.

    The issues of AG2R were raised in a preliminary procedure, where, pursuant to Article 267 TFEU, a domestic court of a Member State poses questions regarding, for example, the interpretation of EU law to the CJEU.

  66. 66.

    See e.g. Nagy 2013, p. 101 et seq.

  67. 67.

    See Elhauge and Geradin 2011, pp. 180–208. Cf. also Nagy 2013, pp. 123–127.

  68. 68.

    See the Statements of Antitrust Enforcement Policy in Health Care, issued by the U.S. Department of Justice and the Federal Trade Commission, August 1996, available at http://www.ftc.gov/bc/healthcare/industryguide/policy/hlth3s.pdf. The following statements (taken from p. 70 of these guidelines) are illustrative for the approach adopted in this respect: “The Agencies emphasize that it is not their intent to treat such networks either more strictly or more leniently than joint ventures in other industries, or to favour any particular pro-competitive organization or structure of health care delivery over other forms that consumers may desire. Rather, their goal is to ensure a competitive marketplace in which consumers will have the benefit of high quality, cost-effective health care and a wide range of choices, including new provider-controlled networks that expand consumer choice and increase competition.”

  69. 69.

    CJEU, Case C-364/92 SAT Fluggesellschaft mbH v. Eurocontrol [1994] ECR I-43.

  70. 70.

    See para 24 of CJEU, Case C-364/92 SAT Fluggesellschaft mbH v. Eurocontrol [1994] ECR I-43.

  71. 71.

    CJEU, Case C-138/11 Compass-Datenbank GmbH v. Republik Österreich [2012] ECR I-449.

  72. 72.

    See para 40 of CJEU, Case C-138/11 Compass-Datenbank GmbH v. Republik Österreich [2012] ECR I-449.

  73. 73.

    Van de Gronden 2004, p. 85.

  74. 74.

    See in this regard Geradin and Petit 2004, p. 78. Cf. in this regard also Papadopoulos 2010, p. 184 and Tschaeni and Engammare 2013, pp. 63–67.

  75. 75.

    See, for example, CJEU, Case C-475/99 Firma Ambulanz Glöckner v. Landkreis Südwestpfalz [2001] ECR I-8089.

  76. 76.

    CJEU, Case C-320/91 Corbeau [1993] ECR I-2533.

  77. 77.

    Cf. Buendia Sierra 1999, pp. 319 and 320; Schweitzer 2011, pp. 38–41.

  78. 78.

    This stands in sharp contrast with the CJEU’s case law on free movement. In this areas of law, the CJEU has held that an exception can only be relied upon, if a specific objective of general interest cannot be realized by less restrictive means than the measure under review. See e.g. para 37 of CJEU, Case C-55/94 Gebhard v. Consiglio dell'Ordine degli Avvocati e Procuratori di Milano [1995] I-4165.

  79. 79.

    CJEU, Case C-475/99 Firma Ambulanz Glöckner v. Landkreis Südwestpfalz [2001] ECR I-8089.

  80. 80.

    See, for example, CJEU, Case C-203/96 Chemische Afvalstoffen Dusseldorp BV a.o. v. Minister van Volkshuisvesting, Ruimtelijke Ordening en Milieubeheer [1998] ECR I-4075 and CJEU, Case C-437/09 AG2R Prévoyance v. Beaudout Père et Fils SARL [2011] ECR I-973 (already mentioned). See furthermore Jones and Sufrin 2014, p. 634.

  81. 81.

    See Sauter 2008, pp. 179 and 180 and Van de Gronden 2006, pp. 133–135.

  82. 82.

    Council Decision of 18 July 2005 on the conclusion of the Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the People’s Democratic Republic of Algeria, of the other part, OJ 2005 L 265/1.

  83. 83.

    Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, on the one part, and the Arab Republic of Egypt, on the other part, OJ 2004 L 304/39.

  84. 84.

    See Article 179(2) of the EC-Chile Agreement.

  85. 85.

    See Van de Gronden 2013a, p. 140.

  86. 86.

    See Article 115 of the EC-Chile Agreement.

  87. 87.

    See Article 11.4(1) of the EU South Korea Treaty.

  88. 88.

    See Articles 7.26, 7.27 (2 sub h) and 7.34 of the EU South Korea Treaty.

  89. 89.

    Agreement establishing an Association between the European Union and its Member States, on the one hand, and Central America on the other, OJ 2012 L 346/3.

  90. 90.

    See Article 280(2) of the EU Central America Association Agreement.

  91. 91.

    See Article 191 of the EU Central America Association Agreement.

  92. 92.

    Règlement 02/2002/CM/UEMOA relatif aux pratiques anticoncurrentielles à l’intérieur de l’UEMOA, available at http://www.uemoa.int/Pages/Actes/NewPages/reglement_2_2002_CM_UEMOA.aspx.

  93. 93.

    See Article 1502(3) NAFTA.

  94. 94.

    CJEU, Case C-280/00 Altmark Trans GmbH and Regierungspräsidium Magdeburg v. Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht [2003] ECR I-7747.

  95. 95.

    It is apparent from paras 161–162 of CFI, Case T-289/03 British United Provident Association Ltd a.o. v. Commission of the European Communities [2008] ECR II-81, that Public Service Obligations and Services of General Economic Interest are identical concepts.

  96. 96.

    See Szyszczak 2013, pp. 7–11.

  97. 97.

    See the Communication from the European Commission on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest, OJ 2012 C 8/4; the Commission Decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, OJ 2012 L 7/3; the Communication from the European Commission on a European Union framework for State aid in the form of public service compensation, OJ 2012 C 8/15 and Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest, OJ 2012 L 114/8.

  98. 98.

    On this package, see e.g. Szyszczak and Van de Gronden 2013.

  99. 99.

    See Kavanagh 2013, pp. 158 and 159.

  100. 100.

    See Van de Gronden 2013b, pp. 282 and 283.

  101. 101.

    United Parcel Service of America Inc. v. Government of Canada, NAFTA/UNCITRAL Arbitration, Award on the Merits, 24 May 2007.

  102. 102.

    Nsour 2010, p. 151.

  103. 103.

    See United Parcel Service of America Inc. v. Government of Canada, NAFTA/UNCITRAL Arbitration, Award on the Merits, 24 May 2007, paras 139 and further.

  104. 104.

    See United Parcel Service of America Inc. v. Government of Canada, NAFTA/UNCITRAL Arbitration, Award on the Merits, 24 May 2007, para 175.

  105. 105.

    On this, see Van de Gronden and Rusu 2012, p. 413 et seq.

  106. 106.

    Protocols to be annexed to the Treaty on European Union, to the Treaty on the Functioning of the European Union and, where applicable, to the Treaty establishing the European Atomic Energy Community, OJ 2007 C 306/148.

  107. 107.

    See Article 6(1) Treaty establishing the EU.

  108. 108.

    See Krajewski 2009b, pp. 504 and 505.

  109. 109.

    See in this respect the UNCTAD 2005, p. 31 and Nsour 2010, p. 153.

  110. 110.

    See Van de Gronden 2013a, p. 146.

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    Johan van de Gronden

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    Markus Krajewski

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van de Gronden, J. (2015). Emerging Principles of International Competition Law: Do Public Services Matter?. In: Krajewski, M. (eds) Services of General Interest Beyond the Single Market. Legal Issues of Services of General Interest. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-063-3_6

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