Page - 4 - in Austrian Law Journal, Volume 1/2019

ALJ 2019 Martina Melcher 4 II. The EU as the Key Player in SGEI Law When studying the secondary and soft law surrounding Article 106 (2) TFEU and the relevant case law of the CJEU, one increasingly notices that this provision no longer addresses the inconsistencies of EU and Member States interests, but rather deals with contrasting EU interests. This internalization of the struggle of conflicting interest is particularly obvious if one takes the scope of application of Article 106 (2) TFEU into consideration. Naturally, the EU and its institutions deal with conflicts that affect EU law. Hence, it should not be surprising that the EU must be considered as the (new) key player in this area of law. However, what is curious is the extent of the reach of EU law. The following examples show that the EU and its institutions shape this area of law not only substantively, but also by giving it a very broad scope of application, thereby ensuring that a large number of SGI is subject to EU law. Special concessions in view of the particular nature of these services can still be made, as the second part of this paper demonstrates, but only as approved by EU law. A. The Concept of an Undertaking as a One-Size-Fits-All Modell? 1. Economic Activity as a Prerequisite Generally, the application of the EU competition rules7 is contingent on the economic nature of an activity. Whereas SGEI are subject to these rules, neSGI are not. The term ‘economic’ as part of the notion SGEI is to be interpreted as reference to an ‘economic nature’ of the service rather than a (genuine) economic interest. In competition law, the understanding of what constitutes an economic activity is inextricably linked to the concept of an undertaking, which is defined by settled case law as ‘any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed’.8 Whether the rules on competition, including State aid, apply to a certain activity is thus solely determined by the nature of said activity and does not depend on the private or public status of the entity. In that regard, the CJEU considers ‘any activity consisting in offering goods or services on a given market’ as an economic activity.9 In view of such a broad definition, it seems as if virtually any activity might be covered; especially given that also purchasing activities are included as long as the subsequent use of the purchased goods (or services) amounts to an economic activity (e.g. resale after processing).10 However, there are a number of activities that have been qualified as non-economic activities and are thus exempted from competition law. In particular for SGI it is relevant to examine why and under which conditions some SGI, namely neSGI, are exempted from competition law altogether 7 Although, the free movement rules also require an ‘economic activity’, slightly different criteria (e.g. cross-border activity, remuneration) are used, see also Communication from the Commission, Services of general interest, including social services of general interest: a new European commitment, COM (2007) 725 final, 5; see also Okeoghene Odudu, Economic activity as a limit to Community law, in THE OUTER LIMITS OF EUROPEAN UNION LAW 225, 226-230 (Catherine Barnard, Okeoghene Odudu eds., 2009). Dissenting CAROLINE WEHLANDER, SERVICES OF GENERAL ECONOMIC INTEREST AS A CONSTITUTIONAL CONCEPT OF EU LAW 35 seq (2016) (‘unitary interpretation’). 8 Originally, Case C-41/90 Höfner, ECLI:EU:C:1991:161, para 21 (emphasis added). 9 Settled case law, see for example Case 118/85 Commission v Italy, ECLI:EU:C:1987:283, para 7; Case C-437/09 AG2R, ECLI:EU:C:2011:112, para 42. 10 Case C-205/03 P FENIN, ECLI:EU:C:2006:453, para 26.