Volume 6 - Issue 1
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Editorial - Competition: Efficiency and Other Things
Many Member States have taken measures in order to finance their health care systems. However, it cannot be ruled that these measure run counter the European state aid rules, which could have adverse effects on health care. Therefore, the central question of the present paper is whether the ECJ’s and CFI’s case law and the measures taken by the Commission accommodate health care concerns in the application of the Articles 87-89 EC (Articles 107-107 TFEU). In this context the health care competences of the Member States are of great interest, because by balancing the health care and competition concerns the Community institutions could develop an approach that respects these competences. This article starts by exploring which health care concerns should play a role in applying the Community state aid rules. It will be argued that universal coverage is an important issue in the EU law approach towards health care. Hence, it will be examined to what extent concerns of universal coverage play a role in the application of the European State aid rules. Firstly, the concept of undertaking, which is the ‘gate’ to the state aid rules, will be explored. Subsequently, attention will be paid to Articles 87-89 EC.
DG Competition has persistently advocated externality pricing (through measures like the Emissions Trading Scheme and tradable green certificates) over subsidies to renewable energy suppliers to tackle carbon emissions. The evidence thus far is that these shadow market methods, as implemented to date within the EU, have not incentivised large scale investment away from fossil fuels but rather have bestowed anti-competitive windfall profits on incumbents. On the other hand, DG Competition has been hostile to national price supports for renewable energy on the basis that they are distorting subsidies. There is evidence which suggests however that these feed-in tariffs provide more and cheaper renewable power than shadow market tools. The EU’s 2020 ambitious target of obtaining 20% of all energy (not just electricity) from renewables means that most new and replacement grid capacity will have to be sourced from renewables, nuclear or clean coal. However the recent Renewables Directive largely entrenches the fragmentation of the EU renewable energy market arising from the existence of separate national support schemes. In Preussenelektra the European Court of Justice ruled that feed-in tariffs were not state aid and so DG Competition has limited legal powers to shape Member State policy in this area. Given the sunk costs involved, some form of long-term price security for renewables (along with nuclear and clean coal) is essential. This will require much greater state involvement in energy markets and the liberalisation trend will be reversed.
This paper investigates the role that competition law may play in increasing efficiency and ensuring better protection of non-economic objectives. It does so be identifying aspects of jurisdiction and justification in the application of EU competition law, and notably Articles 81, 86 and 87 EC and the useful effect-doctrine (Article 10 in connection with 81 EC), concerning these non-economic objectives concerning environmental protection, media markets and the liberal professions. The underlying thesis is that the application of competition law can expose instances of regulatory capture and thus increase efficiency as well result in a higher level of protection of the non-economic objective.
Competition belongs to one of the most important values of the European Union. However, competition is not an exclusive path to create welfare and generate efficiency. In this respect competition can be seen as a ‘luxury product’ of market-oriented societies, which is not indispensable for achieving such values as industrial growth, market integration, social coherency, consumer welfare or innovations. Why then should competition be perceived as a separate economic value? What features does it contain which are so important for liberal democracy? How should competition be correlated with consumer welfare? These questions are central to this paper, which argues for conceptual separation of competition and consumer welfare and offers a methodology for the ‘unbundled’ analysis of these societal values.
The paper discusses application of the State aid rules in the banking sector. It compares the rules relevant to that sector before October 2008 with the legislative framework adopted as a response to the financial crisis. The research question is focused on how the balance between limiting distortions of competition and rebuilding financial stability is struck, and on a more general level it examines the role of State aid control in managing the financial crisis. The paper finds that the Commission has firmly applied the legal test on the notion of aid, mainly due to its expertise originating from previous cases in the banking sector. On the compatibility level, in the rescue phase the crux of the method is a relaxed approach towards solvent banks, with due safeguards concerning remuneration, exit and lending to the real economy. This allowed the stabilization of the financial system, with the cost of treating competition issues as subordinate. In the restructuring of distressed banks, the overriding aim of financial stability serve to justify various measures that are otherwise not a standard under the R&R Guidelines. For that reason the risk of moral hazard may be hardly evitable in the future. With regard to the management of the crisis, it is submitted that under Article 87(3)(b) State aid should be compatible as a part of a broader structural and regulatory programme.
The Compulsory Licence of Intellectual Property Rights under the EC Competition Rules: an analysis of the exception to the general rule of ownership immunity from competition rules
This contribution analyses the special position of intellectual property right owners in the context of competition law enforcement. Whereas normally an intellectual property right provides an almost absolute and exclusive right to exploit the intellectual innovation achieved, such exploitation may have to be shared with third parties wishing to obtain access to the protected right in order to pursue exploitation activities of their own, whether or not in competition with the original owner of the right. In particular this may be the case if such access is indispensable for the achievement of the third party’s objectives. This contribution focuses on the issue of ‘compulsory licensing’, which may be seen as impinging upon the absolute ownership of an intellectual property right with the direct effect of making that right open to competition. The owner of the intellectual property right may be seen as a gatekeeper, who under certain specific circumstances may be forced to grant third parties access to the right to exploit his protected property, even against his will. From an economic point of view, his position is comparable to that of other ‘owners’ of exclusive user rights, such as the owners of an essential facility or the undertakings holding an exclusive concession to provide services of general economic interest. Also these may be seen as gatekeepers who may under specific circumstances be forced to grant third party access to the whole or parts of their exclusive ownership or concession. This contribution analyses, inter alia in the light of the 2007 Microsoft judgment of the CFI, whether all gatekeepers are subject to the same rules in relation to granting third parties access to their individual exclusive rights. The analysis will focus on the doctrines developed by the Commission and the European Courts in the context of Art 82 EC only.
• ©2003-2011 Angus MacCulloch & Andrew Matthews •