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					GREEN PAPER ON SERVICES OF GENERAL INTEREST




                  ANNEX
        STATE-OF-PLAY IN THE MAIN COMMUNITY POLICIES CONCERNING
                      SERVICES OF GENERAL INTEREST



I.        Main horizontal Community policies concerning services of general interest

1.        Internal Market

1.1       General Considerations

1. The four internal market freedoms (free movement of goods, persons, services and
   capital) constitute the foundations of European economic integration. In general, the four
   freedoms do not restrict the ability of operators to provide services of general interest.
   However, in some cases the internal market freedoms can have an impact on the way
   these services are provided. For instance, as regards the free movement of persons:
   - the principle of non-discrimination on grounds of nationality can oblige a provider of a
       service of general interest in a Member State to offer the service (e.g. a social service)
       to a national of another Member State (resident or non-resident);
   - Treaty rules can affect employment in the public administrations (application of
       Article 39 (4), but also more generally the employment of nationals of other Member
       States in organisations providing services of general interest).

2. The rules and principles of the Treaty concerning the free movement of goods apply also
   in cases where the production, import, export and distribution of a good is normally
   considered as a service of general economic interest in the Member States. This is the case
   in particular for electricity and gas, for which the full application of the internal market
   rules was explicitly confirmed by the Court in its judgements of 23 octobre 1997 on
   import and export monopolies1.

3. Services of general economic interest do not pose any specific problems with regard to the
   free movement of services (Article 49 of the Treaty). As regards the application of Article
   49 the Court does not refer to categories of services in order to justify restrictions of the
   free movement of services. However, it uses justifications based on general interest
   considerations fo allow certain restrictions of free movement. Even in its case law
   concerning health services (Kohll, Smits and Peerbooms and Vanbraekel), the Court
   applied the usual test. For instance in the case of public hospital services the Court
   justified the requirement of a prior authorisation for the reimbursement costs incurred in
   another Member State only by referring to the financial equilibrium of the social security
   system and to the availability of a balanced range of treatment, that it considered genral
   interest objectives.

4. Whilst in general the application of the internal market rules does not raise any major
   specific issues as regards services of general interest, there are three issues that the

1
    ECJ Commission/France (C-159/94), Commission/Spain (C-160/94), Commission/Italy (158/94),
    Commission/Netherlands (157/94).


                                                     2
      Commissions believes to require further consideration. These issues concern investment
      restrictions introduced in the context of privatisation programmes, the rules applicable to
      the selection of providers of services of general interest and the application of Directive
      98/34/EC on the provision of information on technical standards and regulations in the
      area of services of general interest.


1.2        Free movement of capital and privatisations

5. As already mentioned, according to the principle of neutrality set out in Art. 295 of the EC
   Treaty, the Community does not interfere with the private or public ownership of an
   undertaking. However, where a Member State decides to privatise an undertaking, it must
   ensure that the Treaty rules on the free movement of capital are being respected.

6. Considering the enormous increase of intra-EU investment in many sectors of the
   economy since the beginning of the 90‟s (boosted by the creation of the Single Market and
   the full liberalisation of capital movements since 1 January 1994), as well as the
   privatisation programmes undertaken by most Member States over the same period
   (involving frequently „general interest services‟), some Member States felt it necessary to
   introduce several measures in order to monitor, and in some cases control, direct and
   portfolio investment in specific privatised economic sectors or companies.

7. Usually, these measures were considered to be restrictions on the free movement of
   capital (Article 56 of the Treaty) incompatible with Treaty rules, hindering the functioning
   of the Single Market. This situation led the Commission to adopt on 19 July 1997 a
   Communication on certain legal aspects concerning intra-EU investments, which sets out
   the Commission‟s interpretation of the acquis on capital movements with respect to
   „special rights‟ of Member States in privatised companies. Although the strict conditions
   upon which such „special rights‟ might be considered to be compatible with the acquis
   were clearly described in this Communication, some Member States kept their „special
   rights‟ unchanged while these were in the Commission‟s opinion incompatible with the
   Treaty.

8. This triggered the opening of several infringement cases dealing with various types of
   restrictions to investment (authorisation procedures, veto rights, guaranteed representation
   in management instances, etc.), vested in various legal bases (investment legislation,
   articles of association, „golden shares‟, etc.). While the incompatibility of such „special
   rights‟ with the Treaty remained uncertain during the past years, the issue was clarified to
   a large extent by three Court of Justice rulings released on 4 June 2002 (C-367/98, C-
   483/99, C-503/99) which confirmed that the free movement of capital may be restricted
   only by national rules which fulfil the twofold criterion of being founded on overriding
   requirements of the general interest and being proportionate to the objective pursued (in
   other words, where the objective pursued cannot be attained by less restrictive measures).

9. As far as the freedom of capital movements is concerned, the parties involved have
   expressed two types of problems2 so far:

2
    Of course, in theory these restrictions could concern any economic sector. Nevertheless, in practice, the
    Member States use them mostly for services of general interest. The parties involved have usually expressed
    their problems by filing formal complaints with the European Commission against the Member States applying
    such control mechanisms


                                                        3
10. (a) Investment restrictions: Enterprises have complained about the fact that authorities of
    Member States sometimes introduce control mechanisms in specific economic sectors or
    privatised/private companies, which constitute a restriction on direct and portfolio
    investments in these sectors and companies (which should be free according to the
    provisions of Article 56 of the Treaty).

11. In most cases, these control mechanisms give national authorities two categories of special
    rights: (1) the right to limit or veto the acquisition by investors of certain stakes of the
    capital of enterprises involved, (2) the right to modify or veto strategic decisions of the
    management bodies of enterprises involved.

12. (b) Discriminatory privatisation methods: Enterprises and private individuals have
    complained about the fact that the privatisation methods selected by Member States
    sometimes led to a discriminatory treatment of foreign investors in comparison to
    domestic ones, be in terms of access to shares offered (additional technical constraints
    may be imposed on foreign investors) and/or in terms of all-in cost for shares acquisition.
    This discriminatory treatment can be considered as a restriction on direct and portfolio
    investments in these privatised companies.

13. Should some representatives of the parties involved (enterprises, consumers, NGO)
    express difficulties or problems in the application of Treaty rules with regard to enterprise
    ownership, privatisation methods, and special rights of Member States, the appropriate
    response from the Commission should be the adoption of proposals aiming at (1) the
    reinforcement of „public service obligations‟ laid down in Community legislation dealing
    with „general interest services‟, (2) as well as their strict enforcement by national
    supervision bodies.

14. Under these circumstances, the „appropriate response‟ proposed in 2. above
    (reinforcement of „public service obligations‟ in EU legislation and of enforcement
    measures) appears to be the only available option for the Commission. Furthermore, this
    type of response is certainly the most efficient one in terms of transparency for the parties
    involved, and is undoubtedly the most respectful of the free movement of capital
    movements (which is an essential pillar of the Single Market).



1.3    The selection of the provider of services of general economic interest

15. The legal framework for the selection of the provider of services of general interest by
    public authorities (e.g. local authorities) is defined in the Treaty and in the Community
    directives on public procurement3. As far as the internal market provisions of the Treaty
    are concerned, it is for the public administrations to decide whether they provide their
    services of general economic interest directly or whether they entrust the provision of
    these services to a third party (public or private entity).

16. However, all providers of services of economic interest are undertakings – including in-
    house service providers. They are all subject to the competition provisions of the Treaty.
    Decisions to award special or exclusive rights to in-house service providers, or to shelter

3
       Directives 92/50/CEE, 93/37/CEE; 93/36/CEE, 93/38/CEE.


                                                 4
    them in other ways from the provisions of the Treaty, can fall foul of Article 86. Case law
    shows that this is true, in particular, where the public service requirements to be fulfilled
    by the service provider are not properly specified4 ; where the service provider is
    manifestly unable to meet the demands placed on it by users5 ; or where there exists an
    alternative way of fulfilling the requirements that would have a less deleterious effect on
    competition6.

17. Where a public administration chooses to entrust the provision of a service of general
    interest to a third party the selection must respect certain rules and principles, in order to
    ensure a level playing field for all providers, public or private, that are potentially capabl;e
    of providing this service. This will ensure that these services will be provided at the
    economically most advantageous conditions available on the market. Of course, within the
    framework of these rules and principles public authorities remain free to define the
    characteristics of the service to be provided, including any conditions regarding the
    quality of the service, in order to pursue its public policy objectives.

18. If the act by which public authorities entrust the provision of a service of general
    economic interest to a third party is a contract concluded for pecuniary interest in writing
    between an awarding authority and a provider, this act falls under the definition of public
    procurement in Community law. Consequently, such contracts, if they reach or exceed a
    threshold defined in the relevant directives, must comply with the procedural requirements
    defined by the relevant directives.

19. In other cases, the contract by which public authorities entrust the provision of a service of
    general economic interest has all the characteristics of a public procurement contract with
    the exception that the service provider obtains a significant part of the revenue from the
    users, particularly by charging a fee, and bears the risk in operating the service in
    question. In this case, the provider pursues an economic activity and the relationship
    between the provider and the designating public authority can be qualified as a
    « concession ».7 Under these conditions, the rules and principles that the public authorities
    have to comply with for the selection of the provider derive directly from the Treaty and
    apply to contracts as well as to unilateral acts of public authority by which the provision
    of an economic activity is entrusted to a provider..

20. In its interpretative communication on concessions of 12 April 20008, the Commission set
    out the following rules and principles :
    - equality of treatment which requires that « the principle of open competition must be
        adhered to », that « the choice of candidates must be made on the basis of objective
        criteria » and that « the procedure must be conducted in accordance with the
        procedural rules and basic requirements originally set » ;
    - transparency which seeks to ensure «undistorted competitive conditions» and which
        can be achieved« by any appropriate means, including advertising » ;
    - proportionality which requires that « any measure chosen should be both necessary
        and appropriate in the light off the objectives sough» ;


4
       See the Court‟s judgement in Silver Line Reisebüro (C-66/86, judgement of 11.4.89)
5
       See the Court‟s judgement in Höfner (C-41/90, judgement of 23.4.91)
6
       See the Court‟s judgement in Vlaamse Televisie Maatschappij (T-266/97, judgement of 8.7.99)
7
       Independently of the definition used in national law.
8
       OJ No C 121, 29.4.2000, p. 2.


                                                    5
    -  mutual recognition which implies that the Member State in which the service is
       provided accepts the specifications or qualifications required in another Member
       State ;
    - protection of the rights of individuals, in particular of those who consider that they
       have been harmed by the award of a contract.
    These rules and principles were confirmed by the Court in the case « Telaustria » C
    324/98 of 7 December 20009.

21. The entrustment with the provision of a service of general economic interest can also
    coincide with the creation of a new entity ( e.g. an undertaking specifically set up for the
    provision of the service, or an entity which had already been providing the service and
    that is partially privatised through the sales of part of the public shareholding to a private
    party). In these cases, the entrustment should be subject to the rules and principles
    applying to public procurement or to concessions.

22. In principle, the rules and principles concerning the selection of the provider apply to all
    activities falling within the scope of application of the public procurement directives and
    of the Treaty.10 Therefore, only non-economic activities and activities that are covered by
    the derogations under Articles 45 and 46 concerning the exercise of public authority as
    well as reasons of public policy, public security or public health are excluded. 11. Article
    86 (2) would only apply if the application of the rules and principles on the selection of
    the provider could obstruct the performance of the public service mission assigned to this
    provider.

23. In conclusion, the Community rules set out above apply independently of whether an
    activity of whether an activity constitutes a service of general interest to the extent that
    they do not interfere with the Member States‟ possibility to entrust a public service
    mission to a provider. However, the requirement to apply these rules and principles can
    be difficult, in particular for local authorities. In some cases, the qualification under
    Community law of certain contracts can pose a problem. Other complex issues can be
    linked to the nature of the provider. The Commission currently examines, in the
    framework of the cases it is dealing with, the implications of the term « in-house » and
    similar situations such as those set out in the “Teckal” case12. In this case, the Court
    considered that the public procurement directives were not applicable to contracts
9
   In this case the Court held in particular that : «the fact that such a contract does not fall within the scope of
Directive 93/38 does not preclude the Court from helping the national court which has sent it a series of
questions for a preliminary ruling. […] In that regard, it should be borne in mind that, notwithstanding the fact
that, as Community law stands at present, such contracts are excluded from the scope of Directive 93/38, the
contracting entities concluding them are, none the less, bound to comply with the fundamental rules of the
Treaty, in general, and the principle of non-discrimination on the ground of nationality, in particular. As the
Court held in Case C-275/98 Unitron Scandinavia and 3-S [1999] ECR I-8291, paragraph 31, that principle
implies, in particular, an obligation of transparency in order to enable the contracting authority to satisfy itself
that the principle has been complied with. That obligation of transparency which is imposed on the contracting
authority consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to
enable the services market to be opened up to competition and the impartiality of procurement procedures to be
reviewed.» (paras 59-62)
10
    This conclusion is not in contradiction with the fact that certain acts are explicitly excluded from the scope of
application of the public procurement directives. These exemptions apply only to secondary legislation and
implies that the award of these contracts is not governed by the directives but must nevertheless comply with the
rules of the Treaty.
11
    For the sake of completeness, the derogation in Article 296 concerning the production of or trade in arms,
munitions and war material should also be mentioned.
12
    Of 18 November 1999, Case C-107/98.


                                                         6
      concluded between an awarding authority and an entity if this entity is held by this
      authority and if the awarding authority exerts a control over this entity that is comparable
      to the control it exerts over its own services. Nevertheless the award of these contracts
      should comply with the rules and principles of the Treaty, in particular the principles of
      transparency and of non-discrimination. Certain stakeholders have criticised this
      interpretation as being to strict on the grounds that it would prevent local authorities from
      providing public services indirectly themselves through public entities and that it would
      negatively affect the autonomy of local authorities in respect of their internal organisation.

24. The Commission has committed in its report to the Laeken European Council to
    « examine whether additional measures are required to further clarify the Community
    rules and principles applicable to the selection of the provider of services of general
    interest.». A declaration along the same lines was also made by the Commission at the
    Internal Market Council on the occasion of the political agreement on its above-mentioned
    proposal for a directive on public procurement.13


1.4      The provision of information in the field of technical standards and regulations

25. In general, secondary Community legislation on the internal market applies fully to
    providers of services of general economic interest like to any other undertaking (e.g. in the
    area of intellectual property or in company law). In general therefore, other measures of
    secondary legislation do not have to be specifically assessed. An issue that should be
    raised, however, is the transparency system established by directive 98/34/EC which
    requires a mandatory notification to the Commission of draft national technical rules.
    Undertakings need full transparency regarding the measures Member States adopt in the
    area of the provision of services of general economic interest. They must be informed as
    early as possible of the choices made by the Member States in order to be able to take full
    advantage of the market opening in liberalised sectors.


2.       Competition Rules

2.1      Antitrust and Merger Rules

26. The Antitrust rules as well as the Merger rules only apply where undertakings, i.e. entities
    performing economic activity are involved. In addition, the Antitrust rules only apply if
    there is effect on trade between Member States. In contrast to that, the applicability of
    Merger control under the EC Merger Regulation depends on the Community dimension of
    the concentration which according to Article 1 of that Regulation is a quantitative criterion
    based on a set of turnover thresholds of the participating undertakings. Therefore, the
    provision of services of general interest remains unaffected by the Antitrust and Merger
    rules, where the conditions of economic activity and effect on trade/turnover thresholds
    are not fulfilled.


13
  « La Commission considère que les questions relatives aux concessions de services et aux partenariats
publics/privés méritent un examen complémentaire afin d‟évaluer la nécessité d‟un acte législatif spécifique
permettant d‟assurer un meilleur accès des opérateurs économiques aux concessions et aux diverses formes de
partenariat public/privé et de garantir ainsi à ces mêmes opérateurs l'effectivité des droits que le traité leur
confère. »


                                                       7
     Economic activity

27. For the purpose of EC competition law, the ECJ follows a functional approach and
    defines an undertaking as: „every entity engaged in an economic activity, regardless of the
    legal status of the entity and the way in which it is financed“14. The ECJ has also
    consistently held that any activity consisting in offering goods or services on a given
    market is an economic activity15. On this basis, the ECJ/CFI has made clear that where
    powers of a public authority are exercised16 and where basic compulsory social security
    schemes are managed17 this does not amount to economic activity and the EC competition
    rules are thus inapplicable. The position however is different with regard to supplementary
    pension schemes.18 Moreover, the functional approach of the ECJ/CFI requires to focus on
    the activity in question when assessing whether an entity performing this activity has to be
    regarded as an undertaking within the meaning of the EC competition rules.

28. The applicability of the antitrust and merger rules to social services is often still not
    accepted by providers of these services who argue that as a matter of principle they do not
    engage in activity of economic nature. However, there there are no indications that the
    fact that the ECJ and the Commission apply the same criteria when assessing the
    economic nature of social services as well as when assessing the economic nature of any
    other service would endanger special features which distinguish social services from other
    services. In particular, the fear of some social service providers that the application of the
    EC rules on competition would lead to a general levelling and commercialisation of their
    services seems unfounded. The fact that within the scope of Community law social
    service providers have to comply with certain rules does not reduce their scope to
    continue providing social services on the basis of certain ideals, moral convictions or
    religious beliefs and to perform them in a way which goes beyond what can be perceived
    in purely economic terms. The spirit in which they provide their services, and immaterial
    features which characterise them, will survive as long as they maintain them, and as long
    as there are beneficiaries for whom this is important.

14
  Permanent case law since ECJ judgment of 23.4.1991 in case C-41/90 Höfner, at point 21.
15
  ECJ judgment in case 118/85 Commission v Italy [1987] ECR 2599 at point 7 ; ECJ judgment in case C-
35/96 Commission v Italy [1998] ECR I-3851 at point 36; ECJ in joined cases C-180/98 to C-184/98 Pavlov,
[2000] ECR I-6451 at point 75; ECJ judegment of 22.1.2002 in Case C-218/00 INAIL (not yet reported) at point
23.
16
17
   ECJ judgment of 17.2.1993 in Cases C-159/91 and C-160/91 Poucet and Pistre (points 6-20); judgement of
22.1.2002 in Case C-218/00 INAIL (points 31-45).
18
   In its judgment of 16.11.1995 in Case C-244/94 FFSA, the ECJ decided that a non-profitmaking organisation
managing a supplementary old-age insurance scheme, which was set up and regulated by Statute, but to which
membership was optional, did exercise economic activity. In this case, it was decisive (a) that this scheme
operated according to the principle of capitalisation rather than on a redistributive basis (i.e. a scheme in which
active members‟ contributions would have been directly used to finance the pensions of retired members), (b)
that the benefits depended solely on the amount of the contributions paid by the recipients and the financial
results of the investments made by the managing organisation, and (c) that altogether the activity was carried out
in competition with life insurance companies.
In three parallel judgments of 21.9.1999 in Cases C-67/97 Albany, C-115/97 Stichting Bedrijfspensioenfonds, C-
219/97 Drijvende Bokken, the ECJ also decided that a non-profitmaking pension fund charged with the
management of a supplementary pension scheme set up by representatives of employers and workers, to which
the State has made affiliation compulsory, exercises economic activity. In these cases, it sufficed (a) that the
fund itself and not the State determined the amount of contributions and benefits, (b) that the fund operated in
accordance with the principle of capitalisation, and (c) that the amount of benefits provided by the fund
depended on the financial results of the investments made by it. In its judgment of 12.9.2000 in Joined Cases C-
180/98 to C-184/98, Pavlov), the ECJ fully confirmed the line and reasoning of the Albany Case.


                                                        8
29. The granting of exclusive or special rights by the State to certain undertakings is a way of
    exercising powers of public authority and does in itself not constitute economic activity.
    Member States can use various forms for the act of granting exclusive or special rights,
    such as the adoption of laws or the conclusion of concession contracts with the
    undertakings concerned.19

30. However, the finding that the act of granting exclusive or special rights by the State in
    whatever form is in itself not economic activity does not mean that the activity for which
    the State grants exclusivity to one or a limited number of undertakings necessarily cannot
    be economic activity subjected to the EC competition rules20. As a consequence, where
    this activity is of economic nature, it is from this angle that the granting of an exclusive
    right by the State can come under the scrutiny of EC competition law, where that granting
    of an exclusive right establishes a dominant position in favour of the beneficiary
    undertaking. According to the case law of the ECJ/CFI, the Member State infringes its
    obligations under Articles 86(1) in conjunction with 82 where it creates a situation in
    which (1) the undertaking enjoying the exclusive right cannot avoid abusing its dominant
    position, or (2) there is a concrete likelihood that this undertaking will abuse its dominant
    position, or (3) the dominant position which the undertaking already held on one market is
    extended to a neighbouring but separate market without objective justification.

31. The Commission continuously closes cases (normally by rejections of complaints) where
    the relevant activity is not of an economic nature. As these cases hardly ever reach the
    level of a formal decision rejecting a complaint, they are normally not reported in
    published documents. However, e.g. the Commission‟s 2001 Annual Report on
    Competition Policy21 mentions the case in which a complaint by Ryanair against Italy,
    alleging that Italian law had required ENAV (the entity in charge of air traffic control in
    Italy) in the event of a strike of its personnel to discriminate in favour of domestic flights
    to the detriment of international flights such as operated by Ryanair, was not pursued by
    the Commission. In line with the ECJ judgment in Case C-364/92 SAT / Eurocontrol, the
    Commission held that Italy could not have infringed its obligations under Articles 86(1) in
    conjunction with 82 EC since ENAV‟s air control activities were not of economic nature
    so that ENAV did not constitute an undertaking within the meaning of Article 82.

     Effect on trade

32. Article 81(1) prohibits restrictive agreements between undertakings, decisions by
    associations of undertakings and concerted practices “which may affect trade between
    Member States”. Likewise, Article 82 prohibits any abuse by one or more undertakings
    of a dominant position “in so far as it may affect trade between Member States”. For
    both Articles 81 and 82, this criterion has an identical meaning and serves the purpose of
    distinguishing jurisdiction, i.e. delineating the area in which Articles 81/82 EC (and
    national competition laws) can be applied, from the area in which for lack of effect on
    trade between Member States only national competition law can be applied. In contrast to
    that, in Merger control the decision whether either national law or the EC Merger
    Regulation is applicable depends on whether the concentration has Community dimension

19
   ECJ judgment of 4.5.1988 in Case C-30/87 Bodson
20
   In fact in Bodson, the funeral services were considered to be economic activity and the behaviour by the holder
of the concessions was analysed under Article 82.
21
   Part I, para 503.


                                                        9
     which according to Article 1 of that Regulation is a quantitative criterion based on
     turnover thresholds of the participating undertakings.

33. According to the long-standing case law of the ECJ/CFI22, in order that an agreement
    between undertakings or an abusive behaviour by a dominant undertaking may affect
    trade between Member States, it must be possible to foresee with a sufficient degree of
    probability on the basis of a set of objective factors of law or fact that it may have an
    influence, direct or indirect, actual or potential, on the pattern of trade between Member
    States, such as might prejudice the realisation of the aim of a single market between the
    Member States. Accordingly, the effect on intra-Community trade is normally the result
    of a combination of several factors which, taken separately, are not necessarily decisive23.
    In view of the wording of Articles 81(1) and 82, the ECJ/CFI on the one hand expressly
    acknowledges that the applicability of these provisions does not require that the
    agreements or practices in question have actually affected trade between Member States.
    On the other hand, the ECJ/CFI stresses that in the absence of actual effect on trade,
    Articles 81(1) and 82 are only applicable if it is established that the agreements or
    practices in question are capable of having that effect, i.e. have a potential effect on
    trade24. This depends on the circumstances of each case25.

34. Moreover, the Commission and the ECJ/CFI have acknowledged that Articles 81(1) and
    82 are not applicable if the actual or potential effect is so small that it is not appreciable26.

35. In summary, it can be stated that Articles 81(1) and 82 are not applicable where on the
    basis of all factors relevant in the particular case, an actual or potential effect on trade
    between Member States can be ruled out, or such effect is not appreciable.

     De minimis

36. While no longer dealing with appreciable effect on trade27, the 2001 Notice on agreements
    of minor importance (“2001 de minimis Notice”)28 continues to provide quantitative
    indications as to how the Commission interprets the notion of appreciable restriction of
    competition in its application of Article 81(1). The 2001 Notice aims at defining more
    clearly and comprehensively when agreements between companies are not prohibited by
    Article 81(1), thus reducing the compliance burden for companies, especially smaller
    companies. At the same time, the 2001 Notice aims at enabling the Commission to avoid


22
   See e.g. Case 56/65 Société technique minière [1966] ECR 281, 303; Case 42/84 Remia and Others v
Commission [1985] ECR 2545, paragraph 22; ECJ Case 19/77 Miller [1978] ECR 131, 150-151.
23
   See e.g. Case C-250/92 Gottrup-Klim [1994] ECR I-5641, paragraph 54.
24
   Case C-219/95 P Ferriere Nord v Commission [1997] ECR I-4411, paragraph 19.
25
   Thus the grant of a statutory monopoly over the organisation of dock work in a single port, and the
establishment of a dominant position connected therewith, is capable of affecting trade between Member States
if that port has an important role in import and export operations (Judgment of 10 December 1991, Merci
convenzionali porto di Genova, C-179/90, ECR p. I-5889). Similarly, an agreement, decision of an association
of undertakings or concerted practice which covers the whole territory of a Member State has by its very nature
the effect of partitioning markets on a national basis and thus affecting trade between Member States (8/72,
Vereeniging van Cementhandelaren, 1972 ECR p.977, recently confirmed in C-309/99, Wouters).
26
   See e.g. ECJ Case 5/69 Völk v Verwaecke [1969] ECR 295, 302; ECJ Case 30/78 Distillers [1985] ECR 3801,
3824-3827; ECJ Case 27/76 United Brands [1978] ECR 207 paragraphs 201-202; ECJ Case C-306/96 Javico
[1998] ECR I-1983, paragraph 16.
27
   Except with regard to agreements between SMEs, see above para 35.
28
   OJ C 368 of 22.12.2001, p.13.


                                                      10
     examining cases which have no interest from a competition policy point of view, thus
     allowing it to concentrate on more important cases.

37. The 2001 Notice reflects an economics-based approach and has the following key
    features:
    - The de minimis thresholds are raised to 10% market share for agreements between
        competitors and to 15% for agreements between non-competitors. The 1997 Notice
        had fixed the de minimis thresholds at 5% and 10% market share respectively.
        Competition concerns are in general not to be expected where companies do not have
        a minimum degree of market power. The new thresholds take account of this while at
        the same time staying low enough to be applicable whatever the overall market
        structure looks like29. The difference between the two thresholds takes into account, as
        before, the fact that agreements between competitors in general lead more easily to
        anticompetitive effects than agreements between non-competitors.
    - It specifies for the first time a market share threshold for networks of agreements
        producing a cumulative anticompetitive effect. The 1997 de minimis Notice excluded
        from its benefit agreements operated on a market where “competition is restricted by
        the cumulative effects of parallel networks of similar agreements established by
        several manufacturers or dealers”. This meant in practice that firms operating in
        sectors such as the beer and petrol sectors could usually not benefit from the de
        minimis Notice. The 2001 Notice introduces a special de minimis market share
        threshold of 5% for markets where such parallel networks of similar agreements exist.
    - It contains the same list of hardcore restrictions as the horizontal and vertical block
        exemption regulations. The 2001 Notice defines more clearly and consistently the
        hardcore restrictions (such as price fixing and market sharing) which are normally
        always prohibited and cannot benefit from the de minimis notice. For agreements
        between non-competitors, the 2001Notice has taken over the hardcore restrictions set
        out in block exemption Regulation (EC) No 2790/1999 for vertical agreements30. For
        agreements between competitors, the 2001 Notice has taken over the hardcore
        restrictions set out in block exemption Regulation (EC) No 2658/2000 for
        specialisation agreements31.

38. This increase by the 2001 Notice of the market share thresholds up to which restriction of
    competition brought about by agreements and concerted practices will not be held
    appreciable and thus not be pursued by the Commission under Article 81 has increased the
    room for manoeuvre for many smaller providers of services of general economic interest.

     Derogation under Article 86 (2)

39. Where the above-described conditions in terms of economic activity and effect on
    trade/turnover thresholds are met, Articles 81/82 EC in its various forms or the EC Merger
    Regulation will apply in areas in which services of general economic interest are provided
    in principle like in any other area of the economy. Normally, the full applications of these
    rules does not create any problems for the well functioning of services of general
29
   This does not necessarily mean that agreements between companies that exceed the thresholds set out in this
Notice do appreciably restrict competition. Such agreements may still have only a negligible effect on
competition in the common market, but this can be assessed only on a case-by-case basis. Such assessment is
relevant in particular for agreements that are not covered by any of the Commission block exemption
regulations.
30
   OJ L 336, 29.12.1999.
31
   OJ L 304, 5.12.2000.


                                                     11
     economic interest. However, where it does, the application of these rules may be limited
     under the conditions set out in Article 86(2) EC

40. The ECJ/CFI underlines that - as Article 86(2) allows for the derogation from the EC
    Treaty, including the rules on competition and the internal market - this provision has to
    be interpreted strictly and its application is not left to the discretion of the Member
    States32. On the other hand, the Court acknowledges that the function of Article 86(2) is
    to reconcile the Member States„ interest in using certain undertakings, in particular in the
    public sector, as an instrument of economic and fiscal policy with the Community‟s
    interest in ensuring compliance with the rules on competition and preservation of the unity
    of the common market33. From this, the Court concludes that in view of the interests of
    Member States thus defined, they cannot be precluded, when determining what services of
    general interest they entrust to certain undertakings, from taking account of objectives
    pertaining to their national policy or from endeavouring to attain them by means of
    obligations and constraints which they impose on such undertakings34.

41. The conditions for the derogation under Article 86(2) can be set out in detail in the
    following way:
          (1) The activity in question must be a service of general economic interest, i.e. a
          service of economic nature which is in the general interest.

          (2) The service of general economic interest must be clearly defined by the State and
          it must have been entrusted by the State through and act of public authority to the
          undertaking concerned.

          (3) The full application of the EC Treaty rules (e.g. the Antitrust or Merger rules)
          would obstruct the performance, in law or in fact, of the particular tasks assigned to
          the undertaking entrusted.
42. Once the above conditions are fulfilled, the legal consequences under Article 86(2) are:
          (1) The application of the EC Treaty rules (e.g. the Antitrust or Merger rules) is
          limited to the extent strictly necessary to avoid obstructing the performance, in law
          or in fact, of the particular tasks assigned to the undertaking entrusted. This
          demonstrates that the application of the derogation is based on the principle of
          proportionality.

          (2) When determining the extent to which the application of the EC Treaty rules is to
          be limited, the interests of the Community, in particular in establishing and
          maintaining a competitive internal market, must be taken into account. This element
          is a “derogation of the derogation” under Article 86(2).

32
   ECJ judgment in case 127/73 BRT v SABAM, at point 19. ECJ judgment in case 41/83 Italy v Commission, at
point 30. CFI judgement of 19.6.1997 in case T-260/94 Air Inter, at point 135. ECJ judgment in case C-242/95
GT-Link [1997] ECR I-4449, at point 50. ECJ judgment of 17.5.2001 in case C-340/99 TNT Traco v Poste
Italiane, at point 56.
33
   ECJ judgment in case C-202/88 France v Commission, at point 12. ECJ judgment in case C-157/94
Commission v Netherlands, at point 39. ECJ judgment in case C-67/96 Albany, at point 103. ECJ judgment of
21.9.1999 in case C-115/97 Brentjens Handelsonderneming, at points 103. ECJ judgment of 21.9.1999 in case
C-219/97 Drijvende Bokken, at point 93.
34
   ECJ judgment in case C-157/94 Commission v Netherlands, at point 40. ECJ judgment in case C-67/96
Albany, at point 104. ECJ judgment of 21.9.1999 in case C-115/97 Brentjens Handelsonderneming, at points
104. ECJ judgment of 21.9.1999 in case C-219/97 Drijvende Bokken, at points 94.


                                                    12
43. Problems can arise where Member States and undertakings invoke Article 86(2) while the
    Member State has not clearly enough defined the contents and scope of the relevant
    service of general economic interest. This is the case in the broadcasting sector in which
    the boundaries of the “public service remit” granted to public service broadcasters poses
    particular problems. Various Member States have not yet clearly enough defined the
    scope of the relevant general economic interest obligations, e.g. regarding the ongoing
    expansion of public service broadcasters‟ activities to new media businesses, such as the
    Internet, which may give rise to serious competition concerns. However, this kind of
    problem does not stem from deficiencies of the criteria under Article 86(2) or from any
    other shortcomings in the relevant EC legal framework but from individual instances of
    failure on the part of Member States to co-operate in their own interest. The ECJ/CFI has
    made Member States‟ obligations quite clear. It has consistently held that Member States
    must clearly define the service of general economic interest and explicitly entrust it
    through an act taken in the exercise of public authority to one or more specifically
    named35 undertakings36. Moreover the ECJ has also ruled that for obligations imposed on
    an undertaking entrusted with the operation of services of general economic interest to be
    regarded as falling within the particular tasks entrusted to it in the sense of Article 86(2),
    they must be linked to the subject-matter of the service of general economic interest in
    question and designed to make a direct contribution to satisfying that interest 37. These
    strict requirements are necessary to ensure legal certainty as well as transparency vis-à-vis
    the citizens. Moreover, only if it is clear which undertaking has been entrusted by the
    State with which service of general economic interest, the Commission will be able carry
    out its proportionality assessment under Article 86(2).

44. In conclusion, it can be stated that experience has shown that the implementation of the
    EC Antitrust and Merger rules hardly ever conflicts and often even promotes the provision
    of high quality services of general economic interest for the benefit of the citizens as
    consumers and users of these services. For the rare cases of conflict, EC law offers
    adequate instruments for solving them on the basis of the proportionality principle. This
    guarantees the well-functioning of services of general economic interest in the most
    competition- and open market-friendly way possible.

2.2.    State Aid Rules

45. Dans le domaine de l'application des règles sur les aides d'Etat, il apparaît que les craintes
    portent principalement, sur la liberté des Etats membres de définir et financer les
    « services publics » qu‟ils souhaitent offrir à leur population, et sur les charges
    administratives qu‟impliquerait l‟application du droit communautaire en matière d‟aides
    d‟Etat. De nombreux éléments de réponses à ces craintes ont déjà été apportés par la
    Commission dans ses Communications de 1996 et 2000 sur les Services d‟intérêt général
    en Europe. Les développements ci-après se limitent donc aux questions essentielles. De
    façon générale, un examen des règles relatives aux aides d‟Etat permet d‟écarter de
    nombreuses craintes. Il apparaît en effet qu‟une application correcte des dispositions du
    traité en matière d‟aides d‟Etat n‟est pas de nature à interférer avec la fourniture de SIEG.

35
   ECJ Case 7/82 GVL [1983] ECR 483, 484 No 3, paras 29-33; ECJ Case 66/86 Ahmed Saaed Flugreisen
[1989] ECR 803, para 55.
36
   Normally, though not necessarily, the definition of the SGEI and the entrustment of an undertaking with that
SGEI coincide in one act of public authority.
37
   ECJ Case C-159/94 Commission v France (import and export monopoly for gas and electricity), [1997] ECR
I-5815 para 68.


                                                       13
     Do the state aid rules limit the Member States‟ freedom to define and ensure the good
     functioning of services of general economic interest?

46. Le droit communautaire, et notamment le droit des aides d‟Etat laisse aux Etats membres
    un large pouvoir d‟appréciation pour définir les services d‟intérêt général. Il est clairement
    établi, qu‟en l‟absence de réglementation communautaire en la matière, la Commission
    n‟est pas habilitée à se prononcer sur l‟organisation et l‟étendue des missions de service
    public, ni sur l‟opportunité des choix politiques décidés à cet égard par les autorités
    compétentes nationales38. A contrario, quand les conditions d‟imposition d‟obligations de
    service public sont prévues dans un texte communautaire, les Etats membres ne peuvent
    pas y déroger39. D‟une façon générale, la tâche de la Commission est de veiller à ce que
    ces dispositions soient appliquées sans erreur manifeste.40

47. Dans le cadre de sa pratique décisionnelle, la Commission s‟attache à suivre
    scrupuleusement la jurisprudence de la Cour, et ne conteste que rarement la qualification
    de SIEG. Tel est notamment le cas lorsque l‟activité en cause ne présente aucun caractère
    spécifique par rapport aux autres activités économiques, ou lorsque cette activité est déjà
    réalisée de façon satisfaisante par des entreprises opérant selon les règles du marché41. La
    liberté des Etats membres pour définir les SIEG s‟accompagne toutefois de l‟obligation de
    définir précisément la tâche des entreprises en cause et les compensations éventuelles qui
    leur sont attribuées, et le choix du prestataire doit se faire dans le respect du droit
    communautaire.

48. D‟une façon générale, la disponibilité de SIEG efficaces est dans l‟intérêt des
    consommateurs et contribue notamment aux objectifs visés à l‟article 153 du traité. La
    fixation du niveau qualitatif des SIEG relève toutefois essentiellement de la compétence
    des Etats membres.42

49. Les SIEG ne peuvent fonctionner correctement que s‟ils bénéficient d‟un financement
    suffisant. Les Etats membres disposent à ce sujet, de toute liberté pour déterminer le mode
    de financement le plus adéquat, et les subventions ne constituent qu‟un instrument parmi
    d‟autres. Des obligations de service public peuvent en effet être imposées à des entreprises
    opérant sur des marchés libéralisés, en l‟absence de soutien public. Tel peut notamment

38
   Notamment arrêt du TPI du 27.02.1997, FFSA Aff T-106/95, rec 1997 p II-0229, point 192.
39
   Voir notamment en ce sens la règlement (CEE) du Conseil du 23.07.1992, concernant l‟accès des transporteurs
aériens communautaires aux liaisons aériennes intracommunautaires (JO L 240 du 24.08.1992, p.0008).
40
   Dans son arrêt FFSA du 27 février 1997 dans l‟affaire T-106/95, le Tribunal a notamment précisé en ce qui
concerne l‟efficacité des SIEG : « La Commission, en l‟absence de réglementation communautaire en la matière,
n‟est pas habilitée à se prononcer sur l‟étendue des missions de service public incombant à l‟exploitant public, à
savoir le niveau des coûts liés à ce service, ni sur l‟opportunité des choix politiques pris à cet égard par les
autorités nationales, ni sur l‟efficacité économique de La Poste dans le secteur qui lui est réservé ».
41
   Voir notamment en ce sens, la décision de la Commission du 20.06.2001 dans l‟affaire Tirrenia di
navigazione. Affaire C 64/99
42
   Dans son arrêt FFSA du 27 février 1997 (affaire T-106/95), le TPI a en effet précisé que « les références aux
coûts d‟opportunité, coûts minima ou marge de référence, au dessous desquels la fermeture d‟un bureau serait
préférable pour La Poste, ne sont pas pertinentes. En effet la Commission, en l‟absence de réglementation
communautaire en la matière, n‟est pas habilitée à se prononcer sur l‟étendue des missions de service public
incombant à l‟exploitant public, à savoir le niveau des coûts liés à ce service, ni sur l‟opportunité des choix
politiques pris à cet égard par les autorités nationales, ni sur l‟efficacité économique de La Poste dans le secteur
qui lui est réservé ».Le droit de la concurrence, et notamment le droit des aides d‟Etat ne s‟oppose donc pas à ce
que les Etats membres mettent en place des SIEG de qualité s‟ils le souhaitent.


                                                        14
     être le cas lorsque toutes les entreprises d‟un secteur sont soumises aux mêmes
     obligations. Les charges particulières qui pèsent sur ces entreprises sont couvertes par les
     revenus retirés de l‟ensemble des activités réalisées par les entreprises en cause. Ces
     activités peuvent constituer en tout ou en partie, des activités de « service public ». En
     l‟absence de soutien public, la question des aides d‟Etat ne se pose pas.

50. Les Etats membres peuvent également assurer le financement des SIEG en attribuant des
    droits exclusifs ou spéciaux aux entreprises en cause. Ces droits permettent d‟assurer une
    péréquation entre les « activités rentables » et les « activités non rentables », et permettent
    ainsi aux entreprises de fournir les services en cause dans une situation d‟équilibre
    économique. Si l‟octroi de ces droits n‟implique pas le transfert de ressources d‟Etat, les
    règles en matière d‟aide d‟Etat ne trouvent pas application. Ces droits doivent toutefois
    être limités à ce qui est nécessaire pour le fonctionnement des services en cause43. Dans le
    cas contraire, ces droits sont susceptibles de contrevenir aux dispositions du traité CE, et
    notamment à l‟article 86.1 en combinaison avec les articles 81 et 82 et/ou les règles
    relatives à la libre circulation des marchandises et la liberté d‟établissement. . La question
    des droits exclusifs soulève par ailleurs des interrogations sur la qualification éventuelle
    de ressources d‟Etat. Ces interrogations devraient être développées dans un texte futur de
    la Commission sur les compensations de service public.

51. De la même façon, le droit communautaire ne s‟oppose pas à ce que les Etats membres
    octroient des subventions ou autres formes de soutiens publics, pour permettre aux
    entreprises en charge de SIEG, d‟accomplir leur mission. A ce sujet, le débat sur la
    qualification juridique des compensations de service public n‟a pas d‟implications
    majeures sur le fonctionnement des SIEG.


     The legal qualification of compensations has no consequences for the financing of
     services of general interest

52. Au regard de la jurisprudence récente de la Cour de Justice44, les compensations qui
    n‟excèdent pas le surcoût du service public ne procurent pas d‟avantages aux entreprises
    bénéficiaires, et dès lors, ne constituent pas des aides d‟Etat. Il en résulte que les Etats
    membres peuvent attribuer ces financements sans être soumis à l‟obligation de notification
    préalable prévue à l‟article 88 paragraphe 3.

53. La jurisprudence du Tribunal de Première Instance, telle qu‟elle résulte notamment de
    l‟arrêt FFSA du 27 février 199745, implique que les compensations sont susceptibles de
    constituer des aides d‟Etat, même si elles se limitent à compenser les surcoûts imposés
    aux entreprises en charge des SIEG. La qualification d‟aide d‟Etat implique que ces
    compensations doivent être préalablement notifiées à la Commission conformément aux
    dispositions de l‟article 88 paragraphe 3. Toutefois, les compensations qui ne font que
    compenser le surcoût du service public, y compris un bénéfice normal, sont normalement
    compatibles avec le traité, en application de l‟article 86 paragraphe 2, sauf dans les cas
    exceptionnels dans lesquels l‟intérêt de la Communauté visé à la dernière phrase de
    l‟article 86 paragraphe 2 serait affecté.

43
   cf notamment arrêt Corbeau du 19.05.1993. Aff C-320/91
44
   Arrêt Ferring du 22.11.2001 Aff C-53/00
45
   Aff T-106/95


                                                    15
54. Il convient également de souligner que pour relever de l‟article 87 du traité, les aides
    doivent être financées au moyen de ressources d‟Etat46. Ces aides doivent également être
    susceptibles d‟affecter les échanges entre Etats membres. A titres d‟exemples, la
    Commission a récemment considéré que ce critère n‟était pas réuni dans le cas de
    subventions allouées à une piscine municipale en Allemagne, à des hôpitaux en Irlande, et
    à des installations récréatives au Royaume Uni (Brighton West Pier).

55. De même, la Commission considère que les aides dont le montant ne dépasse pas 100 000
    euros par entreprise et par période de trois ans, ne remplissent pas tous les critères de
    l‟article 87 paragraphe 1, et ne doivent donc pas être notifiées à la Commission.47

56. En résumé, quelle que soit l‟évolution de la jurisprudence à ce sujet, le droit
    communautaire ne s‟oppose pas à l‟octroi aux entreprises en charge de SIEG, des soutiens
    financiers nécessaires à l‟accomplissement de la mission de service public. Le fait que la
    compensation soit qualifiée d‟aide d‟Etat, ne constitue pas une réelle difficulté pour les
    entreprises et les Etats membres concernés. Le droit communautaire s‟oppose uniquement
    à l‟octroi d‟aides dont le montant dépasse ce qui est nécessaire pour le financement du
    service en cause. Dans ce cadre, d‟éventuelles surcompensations constituent des aides
    incompatibles.

     Open questions and possible responses

     (1) Quelles limites aux notions d‟activité économique et d‟affectation des échanges ?

57. Les aides octroyées à des activités qui ne sont pas de nature économique et/ou qui
    n‟affectent pas les échanges entre Etats membres, échappent aux dispositions des règles de
    concurrence. Il est donc important pour les Etats membres et les entreprises de pouvoir
    déterminer avec un degré suffisant de certitude, quelles activités remplissent ces critères.
    Dans ses Communications de 1996 et 2000 sur les SIG, ainsi que dans son rapport au
    Conseil européen de Laeken, la Commission a donné des informations sur ces notions, et
    a expliqué pour quelles raisons l‟établissement d‟une liste d‟activités qui ne rempliraient
    pas ces critères, n‟est pas possible, et en tout état de cause, ne fournirait pas un degré
    élevé de sécurité juridique.

58. Afin d‟accroître la transparence et la sécurité juridique, dans son rapport au Conseil
    européen de Laeken, la Commission s‟est engagée à consacrer dorénavant une partie
    spécifique de son rapport annuel sur la politique de concurrence, aux services d‟intérêt
    général, dans laquelle elle décrira l‟application des règles de concurrence à ces services.
    De plus, la Commission identifiera à l‟avenir, les cas liés aux services d‟intérêt général
    dans son registre des aides d‟Etat.

59. Des mesures supplémentaires sont-elles nécessaires ? La Commission est d‟avis que les
    arrêts de la Cour de Justice et du TPI, ainsi que les décisions de la Commission
    concourent à accroître la transparence et la prévisibilité, et qu‟il convient donc d‟en
    assurer le maximun de diffusion. Dans son rapport au Conseil européen de Séville relatif à
    l‟état des travaux concernant les lignes directrices relatives aux aides d‟Etat liées aux
    SIEG, la Commission a notamment indiqué qu‟elle envisageait d‟adopter un texte en la

46
  Cette obligation a été rappelée par la Cour dans son arrêt du 13 mars 2001 dans l‟affaire C-379/98
PreussenElektra AG
47




                                                       16
     matière, et que celui-ci devrait notamment “faire le point de la jurisprudence pertinente, en
     particulier en ce qui concerne les notions d‟activité économique et d‟affectation des
     échanges.” Ce dernier texte abordera ces questions de façon plus détaillée.

     (2)Comment déterminer la « juste compensation » de service public en évitant la
     surcompensation constitutive d‟aide d‟Etat ?

60. Le calcul correct de la compensation présuppose que les obligations de l‟entreprise en
    charge d‟un SIEG, soient précisément énumérées dans un texte engageant l‟entreprise et
    les pouvoirs publics. Par ailleurs, les entreprises en charge de SIEG sont généralement
    titulaires de droits exclusifs ou spéciaux, et sont soumises, à ce titre, aux dispositions de la
    directive de la Commission 80/723 CE du 25 juin 1980 relative à la transparence des
    relations financières entre les Etats membres et les entreprises publiques, ainsi qu‟à la
    transparence financière dans certaines entreprises. Les dispositions de cette directive
    doivent bien sûr être respectées, en particulier la tenue d‟une comptabilité séparée quand
    l‟entreprise en charge d‟un SIEG preste également des services ouverts à la concurrence.
    La transparence est indispensable afin de définir correctement les coûts du service public
    et le montant justifié de compensation. La Commission encourage également la mise en
    place d‟autorités de contrôle dans les Etats membres, afin de veiller au respect des
    obligations de service public telles que définies dans l‟acte étatique octroyant ledit service.

61. Lors de la sélection du prestataire du SIEG, la Commission considère que le recours à la
    procédure de mise en concurrence est la règle quand l‟Etat membre a recours aux services
    d‟un tiers. Quand l‟attribution fait suite à une véritable mise en concurrence et que le
    montant de la compensation a été déterminé dans ce cadre, la Commission estime que ce
    montant reflète le prix du marché et ne comporte pas d‟éléments de surcompensation. Une
    telle présomption suppose toutefois que la concurrence a été réelle entre plusieurs
    entreprises candidates. Le pouvoir adjudicateur doit en particulier garantir à tout
    soumissionnaire potentiel, un degré de publicité adéquat permettant une ouverture du
    marché des services en cause à la concurrence ainsi que le contrôle de l‟impartialité des
    procédures d‟adjudication. En l‟absence de mise en concurrence, le calcul des coûts du
    service public et de la « juste compensation » peut s‟avérer très délicat, en particulier en
    l‟absence de répartition des coûts et de comptabilité adéquate.

62. Dans ce contexte, la transparence des relations financières entre l‟Etat et les entreprises en
    charge de SIEG est fondamentale. Les entreprises en charge de SIEG qui sont titulaires de
    droits exclusifs ou spéciaux, ou bénéficient des financements publics pour
    l‟accomplissement de leurs missions, relèvent du champ d‟application de la directive de la
    Commission 80/723 CE du 25 juin 1980 relative à la transparence des relations financières
    entre les Etats membres et les entreprises publiques ainsi qu‟à la transparence financière
    dans certaines entreprises48. La tenue d‟une comptabilité séparée quand une entreprise en
    charge d‟un SIEG preste également d‟autres activités ouvertes à la concurrence est
    nécessaire afin de veiller à ce que les compensations octroyées pour le service public ne
    sont pas en fait utilisées pour financer d‟autres activités ouvertes à la concurrence.
    Lorsque les dispositions de la directive 80/723/CE ne sont pas applicables, en particulier
    quand les seuils de chiffre d‟affaires ne sont pas atteints, la tenue d‟une comptabilité
    séparée demeure nécessaire quand une entreprise qui reçoit des compensations pour un
    SIEG est également active sur d‟autres marchés.
48
  Directive modifiée en dernier lieu par la directive de la Commission 2000/52/CE du 26 juillet 2000. JO L 193
du 29.07.2000.


                                                      17
63. Une autre question à examiner concerne les compensations établies de façon
    « forfaitaire » par les Etats membres. L‟affaire Ferring offre un exemple à ce sujet.
    Lorsqu‟un Etat membre impose des obligations à une catégorie d‟entreprises, celui-ci
    peut-il octroyer une compensation calculée de façon globale pour l‟ensemble des
    entreprises en cause, ou doit-il établir l‟absence de surcompensation au niveau de chaque
    entreprise ? Cette question devra être abordée dans le texte que la Commission s‟est
    engagée à préparer dans son rapport au Conseil européen de Séville.

    (3) Comment alléger la procédure de notification si les compensations constituent des
    aides d‟Etat ?
64. L‟article 88 paragraphe 3 CE permet aux Etats membres de notifier non seulement des
    projets d‟aide individuelle, mais également des projets de régimes d‟aides. Quand ces
    derniers sont autorisés par la Commission, les aides individuelles octroyées en application
    desdits régimes ne doivent pas être notifiés. La Commission estime donc que si les
    compensations sont des aides d‟Etat, le recours à l‟utilisation des régimes est de nature à
    réduire sensiblement la tâche administrative des Etats membres. Un texte de la
    Commission, notamment un « encadrement » pourrait faciliter l‟utilisation des régimes
    par les Etats membres. Conformement à l‟approche envisagée dans son Rapport à
    l‟intention du Conseil européen de Laeken, la Commission évaluera l'expérience acquise
    par l'application de ce texte et, si et dans la mesure justifiée par l'expérience, la
    Commission prévoit d'adopter un règlement exemptant certaines aides du domaine des
    services d'intérêt économique général de l'obligation de notification préalable.


1.4    Social Policy

65. Article 2 of the Treaty defines the promotion of a high level of employment and social
     protection as fundamental tasks of the Community. This is implemented through the
     provision of a broad range of social services in Member States, including social
     protection schemes, health services, care services and services to promote social and
     labour market integration of individuals (including housing).

66. All such services can be regarded as services of general interest, but not all of them would
     be regarded as an economic activity and fall under the scope of Article 16 of the Treaty.
     Internal market rules concerning the freedom to provide services and competition rules
     apply only to services of general economic interest. Other services would still have to
     comply with the rules that guarantee the free movement of persons (social security, non-
     discrimination regarding access to social services).

67. Setting up these services is, however, not a responsibility of the EU, but of the Member
     States, regional and local authorities or the social partners. To the extent that such
     services are considered as economic activities, the EU has the responsibility to ensure
     that they are delivered in conformity with the principles of the Internal Market. This does
     not imply any objective in terms of harmonising or shaping at the EU level how such
     services should be organised. However, it does mean that diverse national and sub-
     national systems which have evolved in response to specific political and social
     circumstances for the promotion of social welfare, health, employment and education are
     subject to scrutiny at EU level.



                                              18
68. In the wake of a series of legal cases, fears have been expressed by some actors in the
     social policy sphere that internal market rules have had the effect of creating legal
     uncertainty and that this could interfere with the ability of Member States to meet their
     policy objectives49. It should be stressed that there is very little concrete evidence that the
     application of Single Market or competition rules has impacted fundamentally on service
     provision in these areas. Nevertheless, it is useful to examine and clarify the rights of
     Member States with regard to the design and provision of different types of social
     services, taking into account the interests of the Community and to indicate where it may
     be necessary to create greater legal certainty and a clear framework for policy makers. 50

69. [Are there any social policy initiatives (programmes etc.) that are relevant for services of
     general interest?]



1.5       Consumer protection

70. Services of general interest are by their nature of special importance to EU citizens and
     businesses. As highlighted in Article 16, they are an essential pillar of our societies.
     Services of general interest cannot be politically and socially efficient in the Internal
     market without taking into account user and consumer needs as users and consumers are
     the final beneficiaries of services of general interest.

71. Market mechanisms are one of the best means to bring about efficiency, quality and value
    for money for consumers. Market opening has generally raised expectations for increased
    choice and lower prices. The market opening in some of the services of general interest
    sectors has also raised concerns in the public about possible negative effects of a profit
    and shareholder value-based approach, that could, for example, favour cost-cutting over
    quality and availability of the service. The conclusions of the first horizontal assessment
    of market performance of network industries providing services of general economic
    interest51 mentioned: “There is as yet insufficient evidence to assess the long term impact
    of liberalisation on services of general economic interest, but on the basis of available
    information, there seems to be no evidence supporting the thesis that liberalisation has
    had a negative net impact on their overall market performance, at least as far as
    affordability and the provision of universal service are concerned”. It would seem
    therefore necessary to continue the effort to monitor overtime the impact of liberalisation
    at Community level. There are nonetheless remaining issues, notably in areas which are
    not fully recognised as “services of general economic interest” (e.g. electronic payment
    systems) or subjected to universal service obligations (e.g. mobile telephony) that would
    appear to warrant further reflection on the means to ensure adequate protection of
    consumers‟ interests.

72. In areas where market opening has not taken place, the services continue to be provided
     under special or exclusive rights, and the promotion of user/consumer rights in these
     sectors depends critically on the effectiveness of regulators, e.g. the sanctions are

49
   See, for example, the remarks of the Belgian minister for social affairs, Frank Vandenbroucke, in a paper to
the Max Planck Institute: “Member States have lost more control over national welfare policies in the face of
pressure from integrated markets than the EU has de facto gained in transferred authority, substantial though the
latter may be. Thus, there is a growing gap in our steering capacity with regard to welfare policy.”
50
51
     COM (2001) 736 of 7.12.2001


                                                       19
      available to them in the event of poor performance by the monopolist, and whether there
      is a clear separation between the regulator and the monopoly service provider. In addition
      to the requirement to be run efficiently in order to supply the best service quality for the
      lowest possible price, adequate safeguards for users and consumers in the provision of
      those services should ensure that they will continue to be delivered with the best
      standards.

73. In order to make informed decisions, policy in relation to the consumer aspect of services
     of general services of general economic interest interest must be based on both
     quantitative and qualitative information and evidence. The assessment of services of
     general economic interest must depend not only on their economic performance and
     efficiency, but also on the degree to which they live up to the standards mentioned above,
     and the level of satisfaction they achieve among consumers and users. In particular, price
     monitoring and the prevention of anti-competitive market behaviour should be given
     special attention. Commission services have produced a “methodological note for the
     horizontal evaluation of services of general economic interest”52 which focuses on the
     market performance of services of general economic interest. In this context,
     Commission services are working on the development of indicators for the evaluation of
     consumer satisfaction levels in the area of services of general economic interest.

74. EU Consumer protection legislation addresses failures in the market that affect
     consumers. It is increasingly tending to do so through the use of horizontal legislative
     instruments that set out the broad objectives required to assure the safety or the economic
     interests of consumers. In the case of safety, there is a General Product Safety Directive,
     while the Commission is also examining together with Member States experts and with
     stakeholders whether or not a similar approach might be suitable for services 53. As
     regards the economic interests of consumers, the Commission services are, following the
     Green Paper on consumer protection, preparing a framework directive on fair
     commercial practices54. Framework legislation of this kind does not obviate the need for
     vertical legislation, it does, however, provide a coherent background for this. At the same
     time, it reduces the likelihood of over-regulation.

75. For horizontal consumer policy as well as sector specific policies, the enforcement of
     rules is crucial. The role of regulators for the enforcement of legislation including
     consumer and user rights as important as the policy approach and the legislation itself. It
     is the condition for ensuring a level playing field and predictability in market operations.


1.7     Regional Policy

76. Article 158 of the Treaty provides: "In order to promote its overall harmonious
     development, the Community shall develop and pursue its actions leading to the
     strengthening of its economic and social cohesion. In particular, the Community shall
     aim at reducing disparities between the levels of development of the various regions and
     the backwardness of the least favoured regions or islands, including rural areas." In
     addition, Article 16 of the Treaty explicitly recognises the role of services of general

52
   COM (2002) 331 of 18.6.2002
53
   Details are available at: http://europa.eu.int/comm/consumers/policy/developments/prod_safe/ps08_en.pdf
54
   Concerning the elements of a possible framework directive on fair commercial practices, see the annex I to the
follow-up Communication to the Green Paper on EU consumer protection COM (2002) 289 of 11 June 2002.


                                                       20
     economic interest services for the promotion of social and territorial cohesion. Les
     services d‟intérêt général touchent aux objectifs, aux missions et aux moyens de l‟Union
     et leur organisation relève de l‟ensemble des niveaux institutionnels (Union, Member
     States, Regions and local authorities). Au delà des convergences nationales influencées
     par la mondialisation, il existe en Europe une grande variété de systèmes nationaux ou
     locaux d‟offre des services d‟intérêt général qui doit être préservée dans le cadre du
     modèle européen de société. Dans un contexte de mondialisation et de rapides mutations
     technologiques, la cohésion économique, sociale et territoriale devient un impératif.55.
     Ce sera un défi majeur de la réussite de la politique de l‟élargissement et aura un impact
     direct sur le consensus de solidarité qui est à la base des choix communautaires actuels au
     travers de la mise en œuvre des politiques structurelles.

77. Face à ce défi, une politique active des services d‟intérêt général devient nécessaire pour
     permettre une intégration positive des populations des territoires défavorisées de l‟Union
     élargie. Une dynamique d‟intégration reposant uniquement sur la concurrence et la
     libéralisation des marchés conduira inévitablement à renforcer les clivages économiques
     et sociaux entre les citoyens européens et amplifiera les tensions entre les régions
     défavorisées de l‟Union et les régions mieux dotées en ressources qui seront minoritaires.
     L‟amplification de cette fracture sociale et territoriale doit être à tout prix évitée, sans
     compter son impact négatif à terme sur la compétitivité économique de l‟ensemble des
     territoires de l‟Union élargie.

78. From the point of view of economic, social and territorial cohesion the operation of
     services of general interest must be guided by a number of principles, in particular:
     – The guarantee of universal access, c‟est-à-dire la nécessité de fournir un service
        déterminé sur l‟ensemble d‟un territoire national à des prix abordables et à des
        conditions de qualité similaires, quelque soit la rentabilité des investissements : les
        conditions d‟accès aux réseaux deviennent déterminantes afin d‟ assurer la
        compétitivité des territoires et de garantir la satisfaction des besoins des citoyens, y
        compris les catégories défavorisées de la population

     – A complete territorial coverage, y compris pour les zones éloignées ou inaccessibles
       pour les services essentiels et les zones urbaines défavorisées : ce principe reconnaît
       l‟importance du droit des citoyens européens à l‟accès aux services essentiels ainsi
       que la prise en considération des spécificités territoriales dans le choix des SIG.

     – The right of public authorities to organise services of general interest at the
       appropriate level if they consider that market mechanisms are not sufficient to ensure
       a satisfactory provision of these services: this principle implicitly recognises the role
       of local and regional authorities in the definition and organisation of services of
       general interest, in line with the principle of subsidiarity.

79. The implementation of the objective of economic, social and territorial cohesion requires
     the establisment of systems based on financial solidarity (e.g. tariff averaging,
     compensation funds, structural funds) in order to guarantee universal access to certain
     services for all citizens. The principle of solidarity must however be complemented by
     the principles of efficiency, financial transparency, quality of services, and consumer
     protection.

55
  Commission européenne, Unité de l‟Europe, solidarité des peuples, diversité des territoires –Deuxième
rapport sur la cohésion économique et sociale, 2 Volumes, Luxembourg 2001


                                                     21
80. [Are there any concrete contributions made at Community through structural funds, EIB
     or other financial instruments?]


2          Main sectoral Community policies concerning services of general interest

2.1        Telecommunications, electronic communications

81. Since 1988, the telecommunications sector has been gradually liberalised at Community
     level until full liberalisation was achieved on 1 January 1998. The liberalisation measures
     adopted at Community level were complemented by harmonisation legislation ensuring
     that market distortions were avoided and public policy objectives were achieved. In 1999
     the Commission launched a comprehensive review of the Community regulatory
     framework in order to simplify regulation and to address problems experienced in its
     implementation and application.56

82. The 1999 communications review led to the adoption of a new regulatory package
     consisting of a framework directive and four specific directives in spring 2002. 57 The
     new directives will have to be implemented by 25 July 2003. The most important feature
     of the new framework is that it introduces competition law concepts (relevant market and
     dominant position) in the sector specific regulation. The aim is to allow the regulation of
     market players to evolve with future technology and market changes and to roll back
     regulation once competition law remedies are adequate to ensure market entry.

83. Like the current regulatory framework, the new package sets out detailed provisions
     defining public policy objectives and providing for the regulatory instruments necessary
     to ensure that they are effectively achieved. The provisions pertain inter alia to the
     provision and financing of a universal service, access to networks and services, price
     controls, consumer and user rights, data protection, privacy and security, services for
     persons with special needs, complaint mechanisms, price regulation, accounting
     transparency, regulatory authorities.

84. As a result of its continuous monitoring of the communications sector the Commission
     publishes annually a “Report on the Implementation of the Telecommunications
     Regulatory Package”.58 In preparation for the report, detailed questions on the state of
     liberalisation and the implementation measures are asked, including questions relating to
     services of general economic interest. The process involves country visits, follow up
     questionnaires and public hearings in Brussels with all stakeholders (industry, consumer
     bodies and regulators/governments).

85. In the process of gradual market opening in the telecommunications the Commission has
     applied the antitrust and merger rules in particular to prevent distortions of competition
     by the incumbent operators.59 The application of the state aid rules have recently been of
     little relevance in the electronic communications sector.

56
     The full text can be found at: http://europa.eu.int/ISPO/infosoc/telecompolicy/review99/review99en.pdf
57
58
     Cf. Seventh Report on the Implementation of the Telecoms Regulatory Package, COM (2001) 706, 28.10.2001
59




                                                        22
23
2.2.    Postal services

86. A regulatory framework for postal services has been established by Directive 97/67/EC of
     the European Parliament and of the Council.60 The Postal Directive has laid down the
     process and timetable for the gradual opening of the postal sector. At the same time, it
     has sets out a harmonised framework for the provision of a universal postal service
     within the Community, the criteria defining the services which may be reserved for
     universal service providers and the conditions governing the provision of non-reserved
     services, tariff principles and transparency of accounts for universal service provision,
     the setting of quality standards for universal service provision and the setting-up of a
     system to ensure compliance with those standards, the harmonisation of technical
     standards, and the creation of independent national regulatory authorities. In 2002,
     Parliament and Council adopted an amending Directive61 following the path of the
     opening of the sector and introducing further requirements and clarifications.

87. An assessment of the impact of Directive 97/67 was published by the Commission in a
     Report of 25 November 2002.62 The Reports states that the Directive had significant
     regulatory and market impacts and has reached its objectives of setting in place a basic
     harmonisation of the EU postal services market and of improving the quality of service.
     It concludes that no further update of the Community regulatory framework is required at
     this stage.

88. However, the report also stresses that "the level of harmonisation achieved remains
     limited across the Community beneath the umbrella of the basic regulatory framework
     set out by the Postal Directive. For example, the regulatory practice varies significantly
     between Member States, and this may have limited, both the actual development of
     competition in the EU postal services market and, the level of harmonisation in the
     efficiency of the USPs. This in turn has limited improvements in EU competitiveness.
     Continuing regulatory asymmetry threatens to distort the market as further steps are
     taken towards the full accomplishment of the internal market, and there have already
     been a number of infringement cases on this issue. Further, the coexistence of
     reservation, variable regulation and competitive market segments has produced perverse
     incentives for market players and when combined with the corporatisation and the
     privatisation of the USPs, clear issues of faircompetition have emerged." Therefore, the
     Commission called in its report on the Member States to ensure effective independence,
     adequate capacity and effectiveness of the competition and regulatory authorities in
     particular in the postal sector.




60
    Directive No 97/67/EC of the Parliament and of the Council, 15/12/1997 on common rules for the
   development of the internal market of Community postal services and the improvement of quality of service
   (OJ C, 21/01/1998).
61
    Directive 2/39/EC of the European Parliament and of the Council of 10 June 2002 amending Directive
   97/67/EC with regard to the further opening to competition of Community postal services, OJ L176, 5.7.2002,
   p. 21.
62
    Report from the Commission to the European Parliament and the Council on the application of the Postal
Directive (97/67/EC), COM(2002) 632, 25.11.2002.


                                                     24
2.3          Energy (electricity and gas)

89. Currently, the gas and electricity sectors are partially open to competition. This will be
     extended gradually over the next few years. The recent summit of the European Council
     at Barcelona agreed for the extension of market opening to all non-households by 2004,
     although, almost all Member States are planning to totally open these markets in any case
     and remove all exclusive rights. The Energy Council of 25 November 2002 has now
     agreed on a full opening of the gas and electricity markets (including for households) by
     1 July 2007.

90. The main points discussed in relating to the interaction of this process with the idea of
     services of general economic interest relate to the delivery of universal service. In
     particular some Member States and stakeholders are attached to the idea of a uniform
     price across the national territory for gas and electricity (perequation). Others are
     concerned that market opening may benefit certain groups at the expense of others.
     However, perequation may be accommodated within a liberalised framework. For
     electricity and gas there is not such a large difference in cost between supplying different
     customer types, especially if there is some mechanism to equalise the transmission and
     distribution charges paid in different regions. At the same time, however, the use of
     uniform charges may prevent the application of economic signals to the market about
     network costs implied by location of, for example, industry with large energy
     consumption.

91. Another potential problem might, however, arise if companies had some way of knowing
     the income of potential customers and avoided those which it thought might have a
     higher risk of non-payment. This can be avoided by an obligation on companies to offer a
     service to everybody on the same terms.

92. Another issue is security of supply, particularly relating to peak demand. Due to the
     uncertainty associated with predicting the occurence of peaks, there are concerns that the
     market may fail to guarantee enough energy to serve all customers at all times. This may
     require some safeguard mechanisms for which all customers are required to contribute.

93. The Commission supports the Member States in identifying additional measures that they
     need to take to support the market opening process. The Commission helps sharing best
     practice through benchmarking for the electricity and gas industry and produces an
     annual report which considers both the functioning of the internal market as well as
     questions related to services of general economic interest.63


2.4          Transport

           Air transport

94. Airports. The airport industry is currently going through a process of transformation. In
     the increasingly liberalised and competitive environment of air transport, airport
     operations have also been changing. In the past, the provision of airport facilities, i.e. the
     construction, development and operation of runways and terminals, was organised as a

63
     Cf.


                                                25
     non-market activity. Today these activities are increasingly carried out in a commercial
     manner. Cost efficiency, private finance, marketing and even acquisition strategies are
     characterising parts of the airport business as much as any other industry. Moreover, a
     degree of competition is emerging. Airports can, in some situations, be seen as
     undertakings competing with each other, regardless of whether they are publicly or
     privately owned: most notably when they have overlapping catchment areas and when
     they are hub airports competing for attracting transfer traffic. Changes are affecting
     airport ownership too. Direct national of local ownership has been the more usual thing
     so far, but the number of airports either privately owned or held by both public and
     private entities is going up. There is a trend towards privatisation which is giving rise to a
     true community-wide, or even world-wide, market for corporate control.

95. It can be said that airports nowadays have a twofold nature. On the one hand they continue
     to be providers of general economic interest as access to infrastructure is necessary to
     carry out transport operations. On the other hand they increasingly are and behave like
     commercial entities. Also, the core business of the airport industry is still monopolistic
     and this requires some form of price regulation, but it is also affected at least to some
     extent by competition and as consequence, subject to competition law. The Commission's
     policy on state aid for airport infrastructure is set out in the guidelines on state aid in the
     aviation sector64.

96. Air transport other than airports. In the area of air transport the “third package” of 1992
     set out a comprehensive harmonisation and liberalisation framework. 65 This regulatory
     framework which is at the center of European air transport law implements the
     fundamental Treaty principles of freedom of establishment and of free movement of
     services. Today, the licensing of operators by national authorities is based on harmonised
     criteria, the free access of Community operators to intra-Community connections is
     guaranteed and air fares have been fully liberalised. In this liberalised environment,
     Article 4 of Regulation 2408/9266 provides for the possibility of imposing public service
     obligations.

     Ports
97. In terms of ports, very few “special and exclusive rights” cases have emerged so far (e.g.
     see ECJ Case C-343/95 Calí). In ports, there is a tendency to use safety arguments to
     exclude competition and reserve certain activities. However, the market itself evolves in
     the direction where more and more private operators are involved in also safety-sensitive
     areas.

64
    According to these guidelines the construction and enlargement of airport infrastructure represent general
   measures of economic policy which can not be controlled by the Commission under the Treaty rules on State
   aids. However, the commercial evolution and the appearance of competition increasingly challenge this
   traditional view.
65
    Regulations (CEE) No. 2407/92, 2408/92 and 2409/92 of 23 July 1992
66
    Celles-ci ont pour objet d‟imposer des normes fixes en matière de continuité, de régularité, de capacité et de
   prix, auxquelles les transporteurs ne satisferaient pas s‟ils ne devaient considérer que leurs seuls intérêts
   commerciaux. Dans certaines conditions il est possible pour un Etat Membre de limiter l‟accès d‟une liaison
   sur laquelle une OSP a été imposée à un seul transporteur et de lui verser une compensation financière afin
   qu‟il satisfasse aux normes imposées. La sélection du transporteur se fait alors sur appel d‟offres. Les OSP et
   les appels d‟offres sont publiés au Journal Officiel des Communautés Européennes. Ce mécanisme est appliqué
   sous le contrôle de la Commission et fonctionne de façon satisfaisante. Il assure un équilibre entre les
   impératifs de la libéralisation et les règles de l‟économie de marché et les exigences des Etats Membres en
   matière de service public.


                                                       26
98. In the light of the above, the most important objective remains to ensure that the
     derogation in Article 86(2) is applied only when this is necessary for the achievement of
     a purpose of general economic interest that has been entrusted by the State to the
     undertaking in question. It is for the Commission to identify on a case-by-case basis
     where for example the safety arguments are a valid reason for excluding competition.

     Land transport
99. Railways. [Insert description of Community railway legislation]

100. Remaining problems lie in structural impediments to a properly functioning competitive
     internal market. First, in a number of Member States where domestic markets for socially
     necessary passenger services (i.e. passenger services of general economic interest) have
     been opened unilaterally, new entrants bidding to enter the market cannot do so on the
     same basis as the incumbent, because it is the latter in whom the necessary rolling stock
     (locomotives and carriages) is vested. Second, some Member States continue to adhere to
     the traditional model of vertically integrated incumbents. The railway infrastructure
     package adopted in 2001 does require that the essential functions for access to the
     infrastructure are independently organised from any railway undertaking. The
     Commission is receiving representations from third parties about unfair treatment in the
     allocation of train paths and one of the cases the Commission is currently pursuing
     concerns a formal complaint from a potential new entrant to the effect that the incumbent
     has, inter alia, refused him access to the network. The objective should be to create the
     proper framework for supply side competition and fair and non-discriminatory access to
     the network. The infrastructure package already adopted and the new railway package try
     to achieve this framework.

101. In order to create a level playing field, an option would be to unbundle rolling stock used
     for socially necessary services and to put it into separate companies, so that it could then
     be leased by the successful bidder for the duration of his contract. So far, only one
     Member State has taken such action in recognition that this category of rolling stock
     represents the single most significant barrier to a properly functioning market in the
     provision of services of general economic interest. On the basis of experience, one can
     therefore say that such unbundling would:
     - remove a considerable market entry barrier for would-be new entrants;
    - encourage competition, both among train operators and in the rolling stock rental
        market;
   - minimise disruption of services in the event of operator failure;
   - introduce greater transparency in operating costs.

102. There may be other options to take care that rolling stock is available to the different
     market players at reasonable terms : rolling stock such as end of contract conditions or
     public authorities acquiring rolling stock.

103. Inland public passenger transport. The majority of public transport provided in the EU
     today is not commercially viable67 because public authorities deem public transport to be
     a service of general economic interest and wish to intervene to provide a higher level of
     service and/or lower fares than the market would provide. Intervention has typically been
67
     To use a local example, the operating costs of STIB, the local public transport provider in the Brussels region,
     are funded 37% by commercial activities (mostly fares) and 63% by public subsidy.


                                                          27
     through the establishment of a public operator, owned and/or controlled by the authority,
     and granted exclusive monopoly rights and financial compensation68. Exclusive rights are
     an important characteristic of many public transport systems. As there is no current
     legislation requiring liberalisation, there have not traditionally been any obstacles to
     authorities granting exclusive rights (although we do receive a number of letters
     complaining about the adverse effects of monopoly markets in terms of price, service
     patterns etc). Because of the particular nature of public transport (a network industry ;
     often a social service ; loss-making overall but with some profitable routes and services),
     liberalisation has most often taken the form of „controlled competition‟ (competitive
     tendering for an exclusive right and subsidy). This is the model the Commission is
     proposing, without preventing Member States and authorities from introducing „open
     access‟ (direct competition between operators) if they wish.69 In general, „controlled
     competition‟ has led to increase passenger numbers and lower operating costs/lower
     subsidy. Historic monopolies sit uneasily with today‟s emerging single market for the
     provision of public transport services70.

104. A number of complaints have been received relating to the abuse of monopoly power
     from both excluded operators and disgruntled passengers : cases have come from all over
     the EU (most recently from France, Ireland, Sweden, UK and Austria). Issues concerning
     freedom of establishment/freedom to provide services and State aid have only really
     arisen recently with the emergence of an international industry for the provision of
     services. In the current „Altmark‟ case (C-280/00), the ECJ has been specifically asked to
     judge whether subsidy paid for purely regional services could have an effect on trade
     between Member States. The Advocate-General stated that there was a potential effect
     and that therefore such subsidies constitute State aid (the case is ongoing). On a small
     number of occasions, problems have been encountered with the application of the public
     procurement rules71

105. For the inland public transport sector, the Commission wants to ensure that liberalisation
     is not introduced at the expense of consumers, workers or the environment – otherwise it
     risks failing to meet its main objective of boosting passenger numbers and reversing the
     growth in car use. The Commission‟s proposed PSR Regulation72 makes it clear that
     authorities can (and, indeed, should) use selection and award criteria other than cost (e.g.
     environmental or consumer factors) when awarding public service contracts.

68
    One of the benefits of the public monopolies in public transport is the potential for a high degree of integration
   (of services, ticketing, information provision etc) – though this potential is not always (perhaps even often)
   realised. It is possible that without due care such integration may not be fully retained in a system where there
   may be more than one operator and where the relationship between authority and operator(s) is more
   contractual and commercial than at present. A loss of integration would disbenefit passengers. It seams that
   integration of services– with or without competition –, especially across national borders, is not currently
   meeting the needs of passengers. A small study is currently undertaking on this issue and in 2003 appropriate
   options will be considered in the light of the findings.
69
    COM(2002)107
70
    There are now about a dozen European operators providing services in more than one Member State ;
   however, we estimate that about ¾ of the market remains closed to any form of competition.
71
    References to the 2 Helsinki cases concerning the use of environmental award criteria and the protection of
   transferred workers.
72
    Amended proposal for a Regulation of the European Parliament and of the Council on action by Member
   States concerning public service requirements and the award of public services contracts in passenger transport
   by rail, road and inland waterways (COM, 2002, 107 final 21.02.02) It also clarifies that authorities can apply
   the employee protection rules of Directive 01/23 on safeguarding employees‟ rights in the event of transferts of
   undertaking, even when they are not required to.


                                                         28
2.5 Public Broadcasting and Audiovisual Services

106. Community broadcasting policy recognises the important role of public broadcasting in
     the Member States. Public broadcasting contributes to cultural and linguistic diversity,
     educational programming, to objectively informing public opinion, to guaranteeing
     pluralism and to the supply of quality programming. The future of the dual system of
     broadcasting in Europe, comprising public and private broadcasters, depends on the role
     of public service broadcasters being reconciled with the principles of fair competition
     and the operation of a free market, in accordance with the Treaty, as interpreted by
     Protocol n° 32 on the system of public broadcasting in the Member States.

107. In its communication on "Principles and guidelines for the Community's Audiovisual
     Policy in the digital age"73 the Commission sets out the following regulatory principles
     concerning public broadcasting:

     – Member States are free to confer, define and organise the public service remit and to
       decide how their public service broadcasters are to be financed (whether by licence
       fee, State funding, dual funding, etc.);
     – the public service remit, as defined by the Member States, shall be consistent with the
       Community interest with regard to services of general economic interest (as assessed
       by the Commission);
     – the funding scheme, as decided by the Member States, shall respect the principle of
       proportionality and not affect trading conditions and competition in the Community to
       an extent contrary to the common interest, in accordance with Article 86 (2) of the
       Treaty, as interpreted by the Protocol (while the realisation of the remit of that public
       service shall be taken into account) and the case law of the Court of Justice;
     – while the definition of the public service remit and the related funding scheme is the
       responsibility of Member States, the Commission has the duty to ensure that these are
       compatible with the Treaty, as interpreted by the case law of the Court, in respect of
       both state aid rules and the freedom to provide services.

108. In accordance with these principles only a few provisions of secondary legislation
     concern specifically these services. For instance, according to Article 31 of the Universal
     Service Directive74, Member States may impose “must carry” obligations for the
     transmission of specified radio and television broadcast channels and services on certain
     undertakings providing electronic communications networks. Furthermore, Article 3a of
     the “Television without Frontiers Directive”75 allows Member States to draw up a list of
     certain events which it considers to be of major importance for society. Member States
     may then take measures to ensure that broadcasters do not broadcast these events on an
     exclusive basis.


73
    COM(1999) 657, 14.12.1999.
74
    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 communications networks and services, OJ L 108 of 24.4.2002.
75
    Council Directive of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or
   administrative action in Member States concerning the pursuit of television broadcasting activities
   (89/552/EEC).


                                                       29
109. The Commission has explained its approach on the application of the state aid rules to
     public services broadcasting in a Communication of 17 October 2001.76 In this
     communication the Commission developed the following approach: The Commission
     recognises the particular role of public service broadcasting as acknowledged by the
     Protocol to the Amsterdam Treaty in the promotion of democratic, social and cultural
     needs of each society. Public broadcasting can be defined as a service of general interest,
     but its funding by state resources in general remains State aid. This means that while
     Member States are competent for the definition and choice of funding of the public
     service, the Commission retains a duty to check for abusive practices and absence of
     overcompensation. Member States are free to define as public service remit a broad
     programme spectrum. In other words, the public remit can be defined as providing the
     public with a balanced and varied programming that also includes, for instance,
     entertainment and sport. This means that no objections will be raised as to the nature of
     the programmes included in the public remit. The definition of the public service remit,
     however, could not extend to activities that could not be reasonably considered to meet in
     the wording of the Protocol the "democratic, social and cultural needs of each society".
     The Commission requires that the following three conditions are met: The establishment
     of a clear and precise definition of public service in broadcasting (whatever its content);
     The formal entrustment of the public service mission to one or more undertakings by
     means of an official act. It is also necessary that the public service be actually supplied as
     foreseen in the formal provision between the State and the entrusted undertaking. To this
     purpose, it is desirable that a body or authority of the Member State independent from the
     entrusted undertaking(s) monitor its fulfilment; The limitation of public funding to what
     is necessary for the fulfilment of the public service mission (proportionality). This
     approach is fully consistent with the provisions of the Amsterdam Protocol , which refers
     to the "public service remit as conferred, defined and organised by each Member State"
     (definition and entrustment) and provides a derogation to Treaty rules for funding of
     public service broadcasting "in so far as such funding is granted to broadcasting
     organisations for the fulfilment of the public service remit…and …does not affect trading
     conditions and competition in the Community to an extent which would be contrary to the
     common interest, while the realisation of the remit of that public service shall be taken
     into account". In carrying out the proportionality test, the Commission will consider
     whether any distortion of competition arising from the aid can or cannot be justified with
     the need to perform the public service as defined by the Member State and to provide for
     its funding. When necessary the Commission will also take action in the light of other
     Treaty provisions.

110. In so far as public broadcasters are beneficiaries of State aid and are also active in non-
     public service activities they are also subject to the transparency requirements set out in
     Commission Directive 723/80 (Transparency Directive).77



2.6 Water Services

111. Principles for an integrated water policy at Community level have been set out in
     Directive 2000/60/EC establishing a framework for Community action in the field of


76
     OJ C 320, 15.11.2001, p. 5.
77
     Directive 732/80


                                                30
       water policy78 The Directive highlights that water is not a commercial product like any
       other but, rather, a heritage which must be protected, defended and treated as such.79 It
       confirms that the supply of water is a service of general interest. 80 The Framework
       Directive establishes principles concerning the protection and sustainable use of water
       resources and on securing the quality of water in the Community. However, it does not
       create a regulatory framework for the organisation and management of water services.
       Water production and water services therefore continue to be regulated by the Member
       States according to different models and reflecting different traditions.

112. Although water is usually produced and supplied locally, the internal market rules and
     the competition rules of the Treaty can apply to such services under the conditions set out
     above.81


2.7 Waste management and environmental services

113. The economic and ecological importance of waste management and environmental
     services has dramatically increased in recent years. Nevertheless, at Community level
     there is currently only environmental legislation relating to these services.82 A specific
     regulatory framework for such services does not exist at Community level.

114. Waste management and environmental services are frequently provided in monopolistic
     or oligopolistic structures and sometimes under special or exclusive rights. The
     Commission has applied the Treaty competition rules in order to ensure competitive
     market structures and to prevent abuses of dominant popsitions with regard to the
     provisions of such services.83


2.8       Social services

115. This section describes briefly different types of social services and different delivery
     mechanisms used by the Member States (social services are in this context taken to
     include healthcare and housing provision - a wider definition than normally used - on the
     basis that the issues raised and possible approaches discussed may be relevant to these
     fields as well). It seeks to identify the social policy objectives in each of these areas as
     well as the interests related to the Internal Market and Competition Policy. Where there
     are possible areas of conflict between the two sets of policy objectives, these are
     identified. In conclusion of this section, a possible approach for future work in this area is
     developed.

       Statutory social protection schemes: income protection

116. All Member States have systems to provide incomes to people who are unable to earn a
     living or do not have sufficient other resources. The social risks covered typically include
     unemployment, sickness and invalidity, family responsibilities, old age and death of a
78
   OJ L 327, 22.12.2000, p. 1.
79
   Recital 1
80
   Recital 15
81
   cf. above nos.
82
83
     DSD etc.


                                                31
        provider of household income (survivors' benefits). This type of social protection can be
        organised as social insurance schemes with compulsory membership for all (or most)
        people in employment or as welfare programmes directly administered by the state. They
        are the main source of income for millions of Europeans (e.g. the vast majority of people
        over 60). A lower level of compulsory social protection would leave greater scope for
        private insurance. However, access to such private provision would be unequal and the
        social outcome would be very different. In particular, it would result in more people
        having to rely on means-tested social assistance. Means-tested benefits create poverty
        traps (people may face a one-for-one withdrawal of benefits if they make their own
        provision have little incentives to save for their old age) and can be detrimental to social
        cohesion by creating a two-tiered social protection system.

117. Member States wish to remain free to define the level of compulsory social protection
     and to maintain compulsory membership. They should be allowed to manage social
     protection schemes themselves or to create financing mechanisms and designate
     institutions for that purpose. The ECJ's interpretation of the Treaty seems to be fully
     compatible with this core objective84 and the main mechanisms used.

118. The main Community interest is to ensure that national social protection systems cannot
     discriminate on grounds of nationality as far as membership conditions and benefit
     entitlements are concerned. In addition, the national systems should be co-ordinated to
     prevent that persons moving within the Union would lose social security rights (art. 42,
     Regulation 1408/71 which foresee the principle of aggregation of qualifying periods and
     maintenance of benefits by exportation.). Institutions managing social protection schemes
     may wish to offer services on a voluntary basis. This may result in distortions to
     competition if cross-subsidisation in favour of the commercial activity takes place or if
     such institutions can use their privileged access information on potential customers
     among the population that is covered on a compulsory basis. This may need to be
     prevented. By contrast, the possibility to make voluntary additional contributions that
     exists in some schemes should be maintained. Although this may be in more or less
     direct competition with private insurance, it is an important mechanism for people on
     lower incomes or with broken careers (mostly women) to obtain an adequate and safe
     pension from a single source.

        Supplementary social protection schemes: income protection

119. Many workers will only be able to maintain a living standard more or less in line with
     previous earnings if they have access to supplementary social protection schemes, mostly
     occupational pension schemes. Particularly those countries with universal pension
     schemes offering mainly flat-rate benefits (e.g. Ireland, Netherlands, Denmark, the UK)
     tend to promote the development of occupational pension schemes. In some countries
     this is achieved through the collective bargaining system by enabling the two sides of
     industry to define a level of supplementary social protection and by designating or
     creating an institution to manage a scheme that frequently covers an entire sector of the
     economy. Membership in such a scheme can be made compulsory by the legislator.
     Other countries favour the development of supplementary social protection through their
     tax system by making contributions by workers and employers to such schemes
     deductible from taxable earnings and by exempting investment income of the pension

84
     See notably Cases C-159 and 160/91, Poucet and Pistre.


                                                       32
     scheme. Obviously, such preferential tax treatment is subject to certain conditions that
     need to be met by the scheme.

120. Promoting supplementary social protection through the collective bargaining process
     appears to be becoming more prevalent (notably in Belgium, Germany; it is already
     highly developed in the Netherlands, France, Denmark). This possibility should be
     maintained, for example in view of benefit reductions in statutory pension schemes
     which require a greater development of second pillar schemes. The ECJ accepts that
     collective agreements establishing supplementary social protection schemes are
     compatible with the Treaty and that articles 82 and 86 of the Treaty do not preclude
     public authorities from conferring on a pension fund the exclusive right to manage a
     supplementary pension scheme in a given sector. However, it has to be demonstrated that
     this is necessary to provide a service of general economic interest such as a pension
     scheme with a high level of solidarity. Regarding fiscal incentives, Member States will
     want to maintain the possibility to ensure that certain features are present in pension
     schemes benefiting from favourable tax treatment. This could pose problems with regard
     to the provision of services across borders and to the possibility of migrant workers to
     remain in their home country pension scheme.

121. Again, a major issue is to ensure that the Treaty freedoms are not hampered by social
     protection schemes. Work aimed at improving the portability of pension rights acquired
     in supplementary pension schemes is currently in progress85. Regarding fiscal incentives
     in the form of tax exemption for investment income of pension schemes, problems could
     arise where different institutions offering broadly similar pension products are treated
     differently. In such cases Member States should be capable of demonstrating a clear
     public policy justification for their approach. With regard to the tax treatment of
     contributions paid into a pension scheme established in another Member State, the
     Commission distinguishes two situations: “sedentary” workers (that is workers remaining
     in one Member State) and migrant workers. Where citizens resident in a Member State
     join a foreign scheme the Member State may, in the current state of Community law,
     require that the scheme meets conditions for tax approval relating to the nature and level
     of benefits, age of retirement, qualifying beneficiaries and similar proportionate
     conditions. In the case of citizens who already belong to a scheme approved for tax
     purposes in their home State and then move, often temporarily, to another Member State,
     the host State cannot refuse to grant tax deduction of contributions paid to the foreign
     scheme on the ground that the scheme does not meet its conditions for tax approval.86.

122. Another aim is to allow multinational companies to have all their national pension
     schemes in the EU managed by a single institution. This is one of the aims of the
     directive on institutions for occupational retirement provision on which the Council has
     reached an agreement in June 2002. This, too, requires the elimination of tax obstacles
     along the lines described above.

     Health and long-term care services


85
   "Improving the portability of supplementary pension rights", first stage consultation of the European social
partners (SEC/2002/597 published on 27/05/2002).
86
   See the Commission‟s Communication on the elimination of tax obstacles to the cross-border provision of
occupational pensions of 19 April 2001, COM(2001) 214 final. ECJ C-136/00 Danner, Judgement of 3 October
2002, not yet reported.


                                                       33
123. Mechanisms for ensuring that everyone has access to medical and social care regardless
     of income are a core feature of Member States' social policies. Two principal types of
     health system structure exist in Europe: insurance-based systems (costs reimbursed
     separately from care provision) and direct provision of care with financing direct to
     providers. Long-term care is frequently treated as a separate area, and is still to a large
     extent provided informally (by relatives). However, in coming years, with increasing
     numbers of older people and fewer younger people to look after them, it will become
     more and more important to develop access to professional care services.

124. Where healthcare is financed through insurance, statutory health insurance may be
     provided by a single institution or a number of different institutions. In some countries
     (e.g. Germany, Belgium, Czech Republic) citizens are free to choose between
     institutions, though effective competition between institutions remains limited.
     Furthermore, in some countries, statutory schemes provide limited cover (in terms of
     certain groups of people or benefits) and many people purchase additional private health
     insurance (notably in the Netherlands, Germany, France, Ireland).

125. Provision of care services and products may involve an array of different institutions,
     with, potentially, public, non-profit and private commercial organisations all playing a
     role. The nature of providers tends to be more mixed in systems financed through
     insurance rather than the predominantly public providers of direct provision systems.
     Member States may also wish to confer responsibility for the provision of some services,
     e.g. certain health and long-term care services, on particular providers, most notably the
     non-profit sector. This appears to be compatible with the ECJ's interpretation of the
     Treaty.87

126. Member States need to preserve the possibility to establish mandatory systems that
     ensure universal access to health and long-term care (insurance-based or through direct
     provision of services). This may require limiting competition amongst health insurers, to
     avoid risk selection prejudicing access of citizens to health insurance or the effectiveness
     or viability of the system as a whole. This policy objective is recognised under the
     current interpretation of EU law.88 Regarding private insurance, Member States that rely
     on the contribution of private health insurers to achieve a sufficient coverage level
     against health risks need to be able to regulate these markets so that public health and
     social objectives can be achieved. The 3rd non-life insurance directive (92/49/EEC of 18
     June 1992) explicitly envisages this possibility in article 54. Member States also regulate
     the provision of healthcare, for public health objectives (e.g: planning of service
     distribution and specialisation) and in order to assure the quality of services, and to attain
     priorities and outputs while controlling spending as a whole. By their nature, such
     measures affect the „market‟ in health services. Whilst recognising that such measures
     may constitute barriers to the free movement of goods and services, the Court has stated
     that certain restrictions could be justified by the risk of seriously undermining the
     financial balance of the social security system, or the need to ensure a high level of health
     protection and public health.89 More specifically, the Court has also recognised that these
     overriding reasons could justify restrictions in order to maintain a balanced medical and
     hospital service open to all, and to maintain essential treatment capacity or medical
     competence on national territory. However, jurisprudence and practice in this area is still

87
   C70-95, Sodemare
88
   Poucet and Pistre, see above
89
   See C-158/96 Kohll, C-157/99 Smits/Peerbooms


                                                  34
        evolving, and its implications are being considered in several forums (in particular the
        high level process of reflection on patient mobility and healthcare developments in the
        European Union).

127. In those countries which establish competing statutory health insurance institutions, there
     is a tendency for such institutions to offer additional services to their members in order
     become more attractive. Such services may be in direct competition with those offered by
     private insurers. It may therefore be necessary to ensure that statutory health insurers do
     not gain an unfair competitive advantage from their special status (e.g. more favourable
     tax treatment, privileged access to customer information, shared use of resources).

128. The ECJ has accepted that freedom to provide services should also apply to health care
     services. Applying the principles of free provision of services to the health care sector
     has the potential to create benefits for patients, for providers and for health system
     managers. Cross-border provision could enhance accessibility and the quality of
     provisions for citizens while opening up cost-effective co-operation among service
     providers. On the other hand, it may have the effect of complicating the challenge of
     ensuring effective care provision by distorting patterns of demand and funding flows.
     Internal market rules must, therefore, be applied with particular care in this area, with
     proper regard to ensuring that they contribute to a high level of health protection and in
     close collaboration with the Member States (who have responsiblity for the organisation
     and delivery of health services and medical care).

        Employment: access to placement services

129. All Member States have public bodies that offer placement services free of charge to job
     seekers and employers. Access to such services is defined as a right in a number of
     international documents including ILO Convention n° 88, the European Social Charter,
     the Community Charter of Fundamental Social Rights of Workers and the Charter of
     Fundamental Rights of the EU.

130. Private placement services were traditionally regarded with suspicion because of a risk
     that desperate job seekers could be forced to pay excessively high fees for such services.
     Also increased market selectivity at the expense of disadvantaged groups in the labour
     supply was feared. Recently, attitudes have changed resulting in a more liberal public
     regulation with regard to private placement services and temporary employment
     agencies. At the same time it is widely accepted – and usually guaranteed by national
     legislation – that job placement services should be free of charge for job seekers. The
     revenue to finance these services has to come from employers or, in the case of public
     placement services, from public budgets.

131. Monopolies for public placement services are incompatible with European law to the
     extent that not all market demand for placement services can be met by the public
     service.90 In any case, job placement services are regarded as economic activities and the
     public institutions offering such services are undertakings.

132. Member States may wish to maintain a strong public placement service as a tool for
     achieving the ambitious employment targets defined by the European Council. Insofar as
     public placement activities focus on people with poor employment chances direct
90
     C-41/90 Höfner and C-55/96 Job Centre


                                                35
    competition with private services will be limited (although there are experiments in
    which private placement services are being financed to help people with certain labour
    market handicaps). It might, however, be detrimental for the image of public placement
    services and for social cohesion if they only worked for people with special handicaps on
    the labour market. Therefore, Member States may wish to maintain a large market share
    for their public placement services. Clearly, a publicly financed employment service that
    remains free of charge to both job seekers and employers would reduce the potential
    market for private placement services. However, this is the same situation as in the case
    of a public health service or any other public service that is free of charge or offered at
    prices that do not fully cover costs. Preventing Member States from offering such
    services would be politically unthinkable.

133. To the extent that Member States decide to use the services of private placement
     agencies, it will be necessary to ensure that contracts are awarded in accordance with
     public procurement rules. To the extent that Member States allow providers of public
     services also to engage in paid services to employers comparable to those offered by
     private placement agencies, guarantees should be established against taking undue
     advantage of available public facilities. Moreover, placement services should take
     account of the full range of opportunities on the European labour market (notably
     through EURES).

    Support for families: child care

134. Child care services are increasingly important as the labour force participation of women
     rises. In some Member States, they are typically neighbourhood services under the
     control of local authorities and may be integrated in the education system. In some
     Member States, different types of operators - public, non-profit and private commercial -
     may be found.

135. For Member States it is essential to be able to ensure that high quality child care services
     are widely available to allow parents to remain in employment and to offer good
     conditions for the development of a child. The European Council of Barcelona has
     established specific targets for increasing the provision of child care places throughout
     the EU.

136. Child care services are normally provided on a very local scale. Direct public provision
     should not cause problems. Nevertheless, it is possible to envisage that public funding of
     certain operators could give rise to State Aids issues. In such cases, public authorities
     should be capable of demonstrating that their systems meet the conditions set out in
     Article 86§2 of the Treaty (in particular a clearly defined public interest that is being
     supported and aid that is proportional to that interest).

    Services to promote social integration and to support people in difficulties (e.g.
    homelessness, drug dependence, disability, mental or physical illness)

137. Whereas most social services are delivered as of right, there are numerous initiatives that
     provide support for people whose needs are not adequately met by legal entitlements.
     Numerous volunteer organisations and self-help groups try to meet such demands, often
     with financial support from public administrations.



                                               36
138. Grass-roots initiatives are important for innovation in social policy and for drawing
     attention to new social needs. Civil society associations often become important partners
     of public authorities in the implementation of social and health policies. This was the
     case in the past with organisations such as the Red Cross and Caritas, but also, in the area
     of social insurance, mutual benefit societies which turned into statutory social insurance
     bodies. It is essential to preserve the Member States' ability to foster the emergence of
     new players in the field of social policy and to use them as partners in the achievement of
     social goals.

139. Subsidies to organisations which are largely based on volunteer work may not pose
     problems with regard to the Internal Market. Legal uncertainty could potentially arise at a
     later stage of development of such organisations when they establish themselves as
     partners of public authorities and are professionalised in this process. The potential
     difficulties should not be overstated, given that problems have not emerged over the
     years from the extensive use of partnerships with large-scale civil society organisations
     by certain Member States. However, given the important role of such operators and the
     destabilisation that could flow if such problems did emerge, it would be in everyone's
     interest to seek to clarify how such operations can be made legally secure.

    Housing: provision of low-cost housing

140. Access to housing is an important social right. It can be achieved through means-tested
     housing benefits or through the provision of low-cost housing. Such socially provided
     housing can be in public ownership, or provided by housing associations benefiting from
     public subsidies or by private developers in exchange for building permits or tax
     advantages.

141. For the Member States, housing policy is an important tool for ensuring social cohesion
     and a balanced regional development. It also serves employment objectives by enabling
     workers to move to areas with good employment opportunities, but unaffordable
     housing.

142. Direct public provision should not cause problems. Nevertheless, it is possible to
     envisage that public funding of certain operators could give rise to State Aids issues. In
     such cases, public authorities should be capable of demonstrating that their systems meet
     the conditions set out in Article 86 (2) of the Treaty (in particular a clearly defined public
     interest that is being supported and aid that is proportional to that interest).

    Education and training

143. Basic education is compulsory and available free of charge. Member States also offer a
     wide range of free education and training opportunities up to post-graduate level.
     Providers of education and training can be the public sector or private institutions which
     may be fully financed by public budgets. However, there is also a wide range of
     education institutions at all levels (pre-school to post-graduate) offering education that is
     fully paid for by users. Training is, to a large extent, provided by employers, often with
     direct or indirect support from public budgets.

144. A high level of education and training is a precondition for competitiveness and high
     living standards. Member States must have the possibility to ensure the widest possible


                                                37
      access to education and training, through compulsory basic education, free provision of
      further education and training and through financial support for education and training
      institutions.

145. The provision of education and training above and beyond statutory requirements could
     well be regarded as economic activities, but so far Internal Market issues do not seem to
     have arisen. This cannot be excluded in the future, though, as institutions, notably for
     higher education, compete for pupils and students. A framework for financial support for
     enterprise-based training has already been adopted.91

      Possible Approaches to enhancing legal certainty

146. The analysis suggests that years of co-existence and successive judgements of the ECJ
     show that there is no fundamental contradiction between market rules and the core
     objectives and mechanisms of Member States' social policies. Nevertheless, the fears
     sometimes expressed by social policy actors should not be dismissed. The above analysis
     shows that problems may potentially arise, particularly where public authorities choose
     not to provide services directly but to do so through different types of intermediary
     providers. Furthermore, while core social objectives are well-established and relatively
     unchanging, delivery mechanisms are constantly undergoing change. Thus it would be
     useful for all policy makers and actors to seek to clarify the interaction between the two
     sets of policy objectives in a way which would help to facilitate and guide their future
     work.

147. The Report to the Laeken European Council suggested a two stage approach in order to
     improve legal certainty involving, as a first step, defining a new Community framework
     for state aids for services of general economic interest; and, at a later stage, block
     exemption for defined areas/practices. While such an approach has often been promoted
     in the past by groups in particular social policy sectors, it is unlikely that it could be
     applied across the diversity of structures and situations identified above. In addition,
     there would be the risk that such an exemption could act as a constraint on the way
     practices evolve for the future.

148. A possible complementary or alternative route would appear to lie in the development of
     guidelines and notices whereby the Commission sets out the approach it will take in
     various areas when deciding on the compatibility with Single Market and competition
     rules. These can achieve a high degree of reliability while maintaining sufficient
     flexibility to evolve with the economy and society. When deciding whether to develop
     guidelines for social services, a decision would have to be made whether to develop such
     guidelines directly with a view to the application of Article 86 (2) or whether an attempt
     should also be made to define how to evaluate whether a service is of an economic or
     non-economic nature.


2.9     Local services

      Problématique


91
 Commission Regulation (EC) No 68/2001 of 12 January 2001 on the application of Articles 87 and 88 of the
EC Treaty to training aid


                                                    38
149. Dans le débat sur les services d‟intérêt général (SIG), l‟attention a été portée en priorité
     sur les services d‟intérêt économique général (SIEG), et notamment ceux ayant fait
     l‟objet d‟un processus de libéralisation (par exemple, télécommunications, poste,
     énergie). Les services locaux n‟ont pas suscité une telle attention, bien qu‟ils jouent un
     rôle essentiel en termes de cohésion économique, sociale et territoriale , rôle qui doit être
     préservé. Il n‟est pas aisé de définir précisément ce que l‟on entend par „services locaux‟.
     Les services locaux couvrent un champ très vaste : certains d‟entre eux, par exemple les
     transports publics locaux ou la distribution d‟eau sont parfois ouverts à la concurrence
     alors que d‟autres activités ont un caractère non-économique92.. Lorsqu‟ils sont de nature
     économique, ils sont susceptibles d‟être soumis aux dispositions des règles de
     concurrence, notamment les règles en matière d‟aides d‟Etat. Il en va de même pour les
     règles du marché intérieur. Au plan général, les services d‟intérêt général sont définis à
     travers un certain nombre de critères objectifs : nature de la prestation, bénéficiaire, mode
     de financement, caractère économique ou non, apport pour la collectivité etc. Au niveau
     local, la distinction entre services d‟intérêt général et services d‟intérêt économique
     général est plus difficile à établir dans la mesure où le rôle économique des services
     locaux est de plus en plus reconnu. Comme pour tous les services d‟intérêt général, se
     pose la question du respect des règles du Traité sur la concurrence et le marché intérieur.
     Trois aspects méritent d'être examiné de plu près : l‟affectation des échanges entre Etats
     membres ; l‟application des règles de minimis ; la subsidiarité.

     Le critère d‟affectation des échanges 93
150. Les services locaux qui n‟affectent pas les échanges entre Etats membres ne sont pas
     soumis aux règles de la concurrence. Pour relever éventuellement de l‟article 87, il suffit
     que les aides menacent de fausser la concurrence et d‟affecter les échanges entre Etats
     membres. Le TPI a rappelé dans son arrêt Confederación Española de Transporte de
     Mercancias du 29 septembre 200094 que « lorsqu‟une aide financière renforce la position
     d‟une entreprise par rapport à d‟autres entreprises concurrentes dans les échanges
     intracommunautaires, ces derniers doivent être considérés comme influencés par
     l‟aide ». Ceci est particulièrement le cas lorsque l‟entreprise bénéficiaire de l‟aide
     participe activement aux échanges entre Etats Membres, ou quand elle participe à des
     marchés octroyés par appel d‟offres dans plusieurs Etats membres.

151. Dans le cas présent, il convient, cependant, de noter que les règles relatives à la
     concurrence ne s'appliquent aux entreprises chargées de la gestion de services d'intérêt
     économique général (…) que "dans les limites où l'application de ces règles ne fait pas
     échec à l'accomplissement en droit ou en fait de la mission particulière qui leur a été
     impartie"(art.86 §2).

     Les aides d‟un faible montant sont-elles susceptibles d‟affecter les échanges ?
152. Il résulte de la jurisprudence actuelle que l‟importance relativement faible d‟une aide ou
     la taille relativement modeste de l‟entreprise bénéficiaire n‟exclut pas a priori,
     l‟éventualité que les échanges soient affectés. Pour déterminer si ce critère est
92
   Ces dernières activités sont examinées dans le cadre du groupe 5 sur les services sociaux.
93
   Dans son rapport au Conseil européen de Séville relatif à l‟état des travaux concernant les lignes directrices
relatives aux aides d‟Etat liées aux SIEG, la Commission a notamment indiqué qu‟elle envisageait d‟adopter un
texte en la matière, et que celui-ci devrait notamment « faire le point de la jurisprudence pertinente, en particulier
en ce qui concerne les notions d‟activité économique et d‟affectation des échanges. Ce dernier texte sera donc de
nature plus technique que le Livre vert, et abordera ces questions de façon plus détaillée.
94
   Aff T-55/99


                                                         39
     effectivement rempli, il convient d‟examiner cas par cas, et en particulier la structure du
     marché en cause, notamment l‟existence ou non d‟une vive concurrence, et le nombre
     d‟entreprises présentes. Ceci ne signifie toutefois pas que la Commission ait vocation à
     examiner tout soutien financier octroyé par les Etats membres. C‟est la raison pour
     laquelle le 12 janvier 2001, la Commission a adopté le règlement (CE) 69/2001
     concernant l‟application des articles 87 et 88 du traité CE aux aides de minimis95. Celui-
     ci dispose que les aides dont le montant n‟excède pas 100 000 euros par entreprise sur
     une période de trois ans, ne relèvent pas de l‟article 87 paragraphe 1 du traité. Ce
     règlement est applicable à tous les secteurs, à l‟exception du secteur des transports, et des
     activités liées à la production et à la transformation ou à la commercialisation des
     produits énumérés à l‟annexe I du Traité. Sont également exclues les aides en faveur
     d‟activités liées à l‟exportation, ainsi que les aides subordonnées à l‟utilisation de
     produits nationaux de préférence aux produits importés. Par ailleurs, s‟il n‟est pas
     possible d‟identifier a priori tous les cas d‟aide qui n‟affectent pas les échanges ni la
     concurrence, la Commission s‟attache, dans sa pratique décisionnelle, à distinguer les cas
     d‟importance communautaire, des cas de nature purement locale (cf Encadré n°.1). Les
     décisions récentes illustrent le souci de la Commission de concentrer ses efforts sur les
     affaires qui sont susceptibles d‟avoir un impact réellement significatif sur les échanges
     entre Etats membres, tout en maintenant un équilibre entre les exigences de la
     concurrence et les besoins de l'intérêt général (article 86,2 TCE).


Encadré n°1 : Cas d’aides octroyées à des entreprises pour des services publics locaux
En 1998, la Commission a ainsi considéré que des aides octroyées à des entreprises pour l‟achat de véhicules
commerciaux utilisés pour des services publics locaux non ouverts à la concurrence, échappent aux dispositions
de l‟article 87 du traité.96
En 2000, la Commission a décidé que la subvention annuelle attribuée à l‟exploitant privé de la piscine de
Dorsten97 ne constitue pas une aide au sens de l‟article 87 du traité, car cet équipement sportif sera
essentiellement utilisé par les habitants de la ville et des communes voisines. En conséquence, le critère de
l‟affectation des échanges n‟est pas établi.
De même, le 27 février 2002, la Commission a adopté une décision relative aux soutiens publics octroyés à
certains hôpitaux irlandais98. La mesure en cause prévoit un avantage fiscal en faveur des personnes qui
investissent pour la construction, l‟extension ou l‟amélioration d‟hôpitaux. Les hôpitaux bénéficiaires de la
mesure doivent réserver une partie de leur capacité pour le service public des soins. La Commission a considéré
que la mesure procure un avantage aux hôpitaux qui peuvent ainsi développer leurs activités. Toutefois, la
Commission a estimé que la mesure en cause bénéficiera essentiellement aux hôpitaux locaux pour lesquels il
existe une sous-capacité, et n‟entraînera pas la création de complexes hospitaliers susceptibles d‟attirer des
clients en provenance d‟autres Etats membres. En conséquence, la mesure n‟est pas susceptible d‟affecter les
échanges entre Etats membres.

Le 6 juin 2002, la Commission a adopté une décision relative aux soutiens publics octroyés pour la rénovation
de Brighton West Pier99. Les Autorités publiques britanniques prévoient d‟octroyer une aide au propriétaire du
West Pier pour sa restauration. Celle-ci sera également en partie financée par une entreprise privée qui sera
ensuite chargée de son exploitation commerciale, et pourra dans ce cadre, utiliser des terrains publics mis à sa
disposition pour un montant symbolique. La Commission a considéré que ces mesures financées avec des
ressources publiques vont procurer un avantage au propriétaire du West Pier, ainsi qu‟à l‟entreprise qui assurera
son exploitation commerciale. Toutefois, la Commission a estimé que la mesure en cause n‟est pas susceptible
d‟affecter les échanges entre Etats membres. Il n‟existe pas d‟installation similaire dans les autres Etats
membres, et le West Pier est surtout susceptible d‟attirer des touristes britanniques. La renommée internationale

95
   JO L 10 du 13.01.2001
96
   Case C(1998) 2048 Plan Renove Industrial, Décison de la Commission du 01/07/1998, JO L 329/23
97
   Cas N-258/2000, Swimming pool Dorsten, Commission Communiqué de presse IP /00/1509 du 21/12/2000
98
   Cas N 543/2001 Capital allowances for hospitals
99
   Cas N 560/01 et NN 17/02. JO du 05.07.2002


                                                       40
de celui-ci est insuffisante pour attirer des touristes d‟autres Etats membres. La décision de la Commission a
toutefois fait l‟objet d‟un recours en annulation devant le TPI.



      Les règles „marché intérieur‟
153. De façon générale, les règles « marché intérieur » s‟appliquent d‟abord aux règles et
     comportements émanant des Etats membres, y compris des régions et des collectivités
     locales. Ainsi, les principes de libre circulation tels qu‟ils sont définis dans le Traité ont
     pour objet de réduire les obstacles causés par les mesures réglementaires adoptées et
     appliquées par les autorités publiques nationales. De la même façon, les mesures
     (directives et règlements) de droit dérivé « marché intérieur » visent à harmoniser les
     législations nationales. Dans certains cas, la transposition nationale pourra se faire à
     travers des mesures locales mais toujours par des autorités régulatrices. Dans cette
     perspective, les services locaux peuvent également être touchés par les règles « marché
     intérieur » mais au même titre que n‟importe quel citoyen ou entreprise qui se voit
     appliquer des règles obligatoires à portée générale (visant à la protection de la santé, de la
     sécurité, de la protection de l‟environnement ou des consommateurs…). Les règles
     « marché intérieur » s‟appliquent aux activités économiques mais d‟autres circonstances
     peuvent être évoquées.100.

154. Dans le domaine des marchés publics de services soumis aux directives communautaires
     pertinentes (92/50/CEE et 93/38/CEE), ces dernières imposent des règles de procédures
     importantes et le respect de certains principes (notamment non discrimination, égalité de
     traitement, ...). Ces marchés de services sont très souvent qualifiés de services d'intérêt
     économique général à caractère local (ramassage des ordures, traitement des déchets,
     distribution de l'eau, etc..:). Les directives "marchés publics" basées sur les règles
     "marché intérieur" ainsi que ces dernières trouvent donc une application constante dans
     la gestion des services publics locaux. Dans d‟autres cas, le contrat à travers lequel les
     pouvoirs publics confient à un tiers la gestion d‟un service d‟intérêt général, a le même
     caractère que celui des « marchés publics » à l‟exception du fait que le prestataire du
     service en question va se rémunérer principalement par l‟exploitation des services fournis
     à l‟usager et il supporte, en outre le risque lié à l‟exploitation de cette activité. Dans cette
     hypothèse, ledit prestataire exerce une activité économique au sens du Traité et la
     relation qui le lie avec le pouvoir public qui l‟a désigné peut être qualifiée de «
     concession » au sens du droit communautaire101. Dans ces conditions, les règles et
     principes devant être respectés par les pouvoirs publics pour le choix du prestataire de
     service (et de son offre) découlent directement du Traité et s‟appliquent à tous les
     contrats ainsi qu'à à tout acte étatique unilatéral ou imputable à l‟Etat, conclu par les
     pouvoirs publics et ayant pour objet la délégation d‟une prestation d‟activités
     économiques au sens du Traité. Il faudrait souligner que la qualification de services
     d‟intérêt général, ou autre, qui peut être attribuée à ces activités en droit national, ne
     préjuge en rien l‟obligation de respect de ses règles et principes. L'application des règles
     « marchés publics » telles que celles rappelées ci-dessus n‟est pas liée comme dans le

100
    Ainsi même lorsqu‟ils n‟exercent pas d‟activité économique, certaines règles du traité peuvent s‟appliquer à
des services locaux comme par exemple le principe d‟égalité de traitement (prestation sociale à des ressortissants
d‟autres Etats membres) ou le principe de libre circulation des personnes (accès non discriminatoire à l‟emploi
dans les SIG)
101
    Voir la communication interprétative de la Commission sur les concessions ( Communication du 12 avril
2000 publiée au JOCE série C n°121/2 du 29 avril 2000) ainsi que l'arrêt de la Cour "Teleaustria" du décembre
2000 (C-324/98)


                                                       41
      droit de la concurrence à l'affectation du commerce et des échanges mais à l'existence ou
      non d'une discrimination (potentielle ou réelle) des prestataires .

155. C'est à ce titre que la Commission a récemment lancé une enquête horizontale dans tous
     les Etats membres pour vérifier la compatibilité avec les règles des directives "marchés
     publics" et/ou du Traité des modalités de gestion des services publics locaux par les
     collectivités locales concernées. En particulier, il s‟agit de vérifier qu'à chaque fois que la
     collectivité ne gérait pas directement le service public local en question, elle ait procédé à
     une forme de mise en concurrence et de publicité préalables pour le choix du prestataire.

      Les enjeux des services locaux en termes de cohésion sociale et territoriale
156. A l‟instar des SIG, les mêmes principes doivent s‟appliquer aux services locaux à savoir
     „la garantie d‟un accès universel, une qualité élevée et des prix abordables‟102.
     Particulièrement pertinentes par rapport aux services locaux figurent, parmi les
     préoccupations des citoyens, un niveau élevé de protection de l‟environnement, la prise
     en compte des besoins spécifiques de certaines catégories de la population, telles que les
     personnes handicapées et les personnes à bas revenus » ainsi qu‟une‟ couverture
     territoriale complète‟, y compris dans des zones éloignées ou inaccessibles, pour les
     services essentiels „.

157. Le maintien d‟un niveau élevé de prestation de ces services demeure une préoccupation
     importante des citoyens. Des standards de qualité élevés doivent s‟appliquer pour les
     services locaux , comme pour tous les SIG, quelque soit leur mode d‟organisation et de
     gestion. Les enquêtes relatives à la satisfaction des consommateurs concernant les
     SIEG.menées en 2000 (Eurobaromètre)103 et 2001 (étude qualitative)104 intègrent les
     transports urbains et la distribution d‟eau dont on peut considérer qu‟il s‟agit de services
     locaux.

      Implications en termes de subsidiarité
158. En ce qui concerne l‟application du principe de subsidiarité dans le domaine des SIG, , il
     convient surtout de rappeler que les Etats membres ont la pleine liberté de définir les
     missions d‟intérêt général, d‟octroyer des droits spéciaux ou exclusifs de manière à
     assurer ces missions aux entreprises qui en sont chargées de trouver les méthodes
     d‟organisation du service public local les plus aptes et les plus efficaces à satisfaire
     l‟intérêt général et de veiller le cas échéant à leur financement, pour autant que le
     développement des échanges ne soit pas affecté de manière contraire à l‟intérêt de la
     Communauté. En particulier, la Communication de la Commission sur les services
     d‟intérêt général en Europe (COM 2000) reconnaît un rôle primordial des collectivités
     régionales et locales en matière de prestation des services d‟intérêt général. Il est ainsi
     affirmé que „la responsabilité de décider quel service doit être considéré comme d‟intérêt
     général et comment il doit fonctionner incombe en premier lieu au niveau local »
     Cependant, la prestation de certains services d‟intérêt économique général peut revêtir
     une dimension communautaire : c‟est le cas des réseaux d‟infrastructure trans-européen
     qui sont intégrés au niveau européen. En même temps, ils peuvent avoir des incidences
     importantes sur l‟organisation de ces services au niveau local en raison des externalités
     de réseau. Le développement de services à ce niveau est souvent lié à la mise en place de

102
    COM (2000) 580, Paragraphe 10
103
    http://europa.eu.int/comm/dgs/health_consumer/library/surveys/sur15_fr.pdf
104
    http://europa.eu.int/comm/internal_market/fr/update/economicreform/sig_report_fr.htm


                                                     42
partenariats publics-privés qui impliquent des acteurs divers dans les secteurs des
transports, de l‟énergie, du tourisme . Cette démarche implique néanmoins le respect des
compétences et des dispositions juridiques et administratives propres à chaque Etat
membre.




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