State monopolies, exclusive rights and competition policy in the European Union

Abstract

Monopolies set up by legislation of the Member States, at national or local level, have always been considered as potential obstacles to the achievement of the objectives of the European Union. On the one hand, they interfere with the free movement of goods and services; on the other hand, they may also be seen as infringing the EC rules on competition. A number of Commission decisions and judgements delivered by the Court of Justice have enriched the jurisprudence on this issue, so that it may be useful to examine the position as it now stands. In this thesis I have examined and discussed the ways in which monopolies and undertakings having exclusive rights may menace the market integration goal. The thesis may be said to be divided into four parts. Part I consists of Chapter 1 and provides a brief outline of articles 85 and 86 EC, which are the core provisions regulating the field of competition, and which apply to all undertakings, whether public or private. This is supplemented by an examination of recent judgements which have contributed to the development of the main principle. Chapter 2 constitutes Part II and it analyses art.37 EC, which governs State monopolies of a commercial character. Art.37 provides that Member States must adjust any State monopoly of a commercial character by the end of the transitional period, to ensure that no discrimination, direct or indirect, exists between nationals of Member States, affecting conditions under which goods are procured and marketed. Without regulation, State monopolies would be able to obstruct the free movement of goods. Part Ill, consisting of Chapters 3, 4 and 5 provides a thorough examination of art.90 EC, which deals with public undertakings and undertakings to which Member States grant special or exclusive rights. They are based on the underlying principle that an undertaking that has been granted special or exclusive rights by a Member State, whether it be State-owned or in private hands, is subject to the EC competition rules in the same way as any other company. This absolute rule is toned down by art.90 EC, which provides specific measures taken with respect to companies that enjoy monopoly rights. Another interesting issue which is tackled in Chapter 3 Is the link between art.86 and art.90 EC. The coupling of these two provisions has opened a new chapter in the control of monopolies, for it allows the very granting of the exclusive right to be questioned when it leads or is likely to lead to abusive behaviour. In Part IV of the thesis (Chapter 6) I have taken the telecommunications sector as a case study in liberalisation. In the EU, this sector has gradually moved away from a past dominated by monopoly operators and national champions. A number of developments have taken place over recent years and the telecommunications sector is to be fully liberalised by 1998.