Summary: 10. Public Undertakings

Read the summary and the most important questions on 10. Public Undertakings

• 3 Structure of the norm Art 106 TFEU

• What does the three para's of art 106 TFEU provides?

  1. Para 1: prohibition of undue measures related to public/privileged undertakings
  2. Para 2: services of general economic interest
  3. Para 3: competence of the commission

• 3.1 Scope of para 1

• In the scope of art. 106 para 1 TFEU, what does the referencing norm consists of?

  • Measure contrary to the rules contained in Treaties + art. 18 and 101-109 TFEU.
    
  • In principle all Treaty rules apply to public or privileged undertakings
  • Purpose of prohibition: to prevent the violation of other Treaty provisions by a MS abusing its possibilities to take influence.

• What are the three important things of art. 106 para 2 TFEU?

  • Services of general economic interest
    
  • character of a revenue-producing monopoly
  • does not obstruct the performance

  
  
  Restriction of applicability of para 1.

• What are the difference competences of the Commission acc. To art. 106 para 3 TFEU?

  • Monitoring competence
    
  • regulatory competence
  • Transparency Directive adopted
  • Transparency obligations (in order to control compliance with state aid law)
  • Separation obligations (separate accounts in order to control cross-subsidies)

• 4 Prohibition of para 1

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• What does the term public undertaking in art. 106 TFEU mean?

  • Identical with that of other provision of EU competition law
    
  • "every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed"
  • functional understanding: competition with other undertakings
  • health insurances, core areas of the general educational system, administration of justice -> no market-related objectives, conditions. 

• Where can we find the legal definition of the term public undertaking?

  No legal definition -> reference to art 2 of Transparency-Directive.

• What does the term privileged undertaking mean in scope of prohibition of art 106 para 1 TFEU?

  • Granting special or exclusive rights 
    
  • any legally preferential treatment of one or more undertakings
  • exclusive rights of sale, operating licenses, service concessions

  
  
  Protection from competition!

• What does anti-competitive state measure mean and when is it allowed?

  • Any legal or factual influence by the state on public or privileged undertakings may be covered
    
  • Mere privileged status allowed

• When is anti-competitive state measure NOT allowed?

  • Unlawful design of the granted right
    
  • state enables privileged undertaking to abuse its dominant position
  • state provides for abuse 
  • abuse as direct consequence of national law

• 5 Exception of para 2

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• What does the term 'service of general economic interest (SGEI)' mean as exception of 106 para 2 TFEU?

  • Economic activities which, according to MS' discretion, are connected to special public welfare obligations or conditions and which are performed in general interest
    
  • local public transport, postal services, energy and water supply, waste management
  • excessive privileges not covered!