Page - 6 - in Austrian Law Journal, Volume 1/2019

ALJ 2019 Martina Melcher 6 control, has also been applied in the area of healthcare, where public hospitals that provide their services free of charge form an integral part of a national health service and are directly funded from State resources (e.g. based on general social security contributions).19 3. A ‘General Compatibility Test’ In a nutshell, the decisive criterion to identify an economic activity seems to be the (hypothetical) possibility that a certain activity may be carried out within a competitive system, i.e. ‘a given market’, or at least in competition for a market (‘general compatibility test’). For this purpose, an entity does not actually have to be profitable or to pursue a profit-making motive.20 Even the fact that certain activities ‘are normally entrusted to public agencies cannot affect the economic nature of such activities’, especially if these activities have ‘not always been, and [are] not necessarily, carried out by public entities’.21 In contrast, non-economic activities are assumed to be absolutely incompatible with the concept of a (competitive) market. In any case, one has to determine the character of each activity separately, as an entity may carry out economic as well as non-economic activities at the same time. Furthermore, the purpose and motivation of an activity are not decisive, but only of subordinate importance in so far as they may reflect particular needs of an activity. In other words, SGI cannot be exempted from the scope of competition law due to the ‘general interest’ involved, but the fact that a certain service is of general interest may influence its general incompatibility with a competitive market (as well as the need for a customized exemption in the context of Article 106 (2) TFEU). In the end, the concept of an undertaking in EU law is not a one-size-fits-all model. However, by giving this notion a very broad meaning, the CJEU makes sure that a significant number of activities of general interest are regulated by EU competition law, while at the same time visibly curtailing the Member State’s competences in that regard.22 This interpretation is also in line with the legislative attempts of the Council and the European Parliament to open SGI in the utilities (energy, electronic communications etc) to competition. To be clear, this does not mean that such activities are subject to all rules on competition at any rate, it just enables the EU to have the final say and set the tone, because as economic activities such services are subject to EU competition law. In the context of Article 106 (2) TFEU, the EU then has a chance to balance welfare and market interests in a much more customized way by granting limited exemptions (only). B. Transparent Entrustment of Public Service Obligations as the Key to the SGEI Derogation Only services that qualify as SGEI in the sense of Article 106 (2) TFEU may be subject to the derogation provided therein. For that purpose, the activity in question must, first, pursue or serve to pursue an objective of general economic interest ‘presenting specific characteristics as 19 Case T-319/99 FENIN, ECLI:EU:T:2003:50, para 38 et seq. 20 Sometimes, however, at least a hypothetical chance to make profit is requested, see Odudu, supra note 7, at 231. 21 Case C-41/90 Höfner, ECLI:EU:C:1991:161, para 22. 22 Also WEHLANDER, supra note 7, at 83. Equally noticing the expansion of the notion of economic services by the Commission without further references: Hans-Wolfgang Micklitz, Universal Services: Nucleus for a Social European Private Law, in MARKET INTEGRATION AND PUBLIC SERVICES IN THE EUROPEAN UNION 63, 64 (Marise Cremona ed., 2011).