Article 86
Article 86 of the EC Treaty (was Article 90 in the Treaty of Rome) makes provisions for the application of the competition rules to public undertakings and undertakings to which Member States grant special or exclusive rights.
Article 86(1) applies to States, and ensures the effectiveness of the free-trade, non-discrimination and competition rules set out elsewhere in the Treaty:
(1) In the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in this Treaty, in particular to those rules provided for in Article 12 and Articles 81 to 89.
In particular, Article 86(1) it prohibits discrimination on the grounds of nationality through national rules governing public undertakings. It has also been interpreted (see for example Corbeau) as prohibiting States from creating or maintaining special or exclusive rights which would have the same effect as an abuse of a dominant position by the relevant undertaking.
Article 86(2) applies to public undertakings and to undertakings that have been granted special or exclusive rights by a State:
(2) Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in this Treaty, in particular to the rules on competition, insofar as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Community.
Article 86(2) provides a justification for acts that would otherwise infringe the competition rules, in particular Article 81 and Article 82, insofar as they are proportionate to legitimate purposes arising from their having been entrusted with the operation of services of general economic interest (public services) or having the character of a revenue-producing monopoly (fiscal monopoly: monopole fiscal in the French text).
Article 86(3) entrusts the European Commission with enforcement of these provisions:
(3) The Commission shall ensure the application of the provisions of this Article and shall, where necessary, address appropriate directives or decisions to Member States.
Links
Related legislation:
- Article 81 (agreements and concerted practices)
- Article 82 (abuse of a dominant position)
- Article 87 (State aid)
- Competition Act 1998 (UK)
Some cases featured on Reckon Open:
Relevant articles:
- Public services and competition law | viewpoint: Franck
This article discusses the way in which EC competition law applies to public services.
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Last changed by Franck at 6:42 PM on Wednesday 13 June 2007.