Page - 16 - in Austrian Law Journal, Volume 1/2019

ALJ 2019 Martina Melcher 16 with the rules on competition and the preservation of the unity of the common market’.84 While the configuration and standard of this balancing test shall be the same regardless of relevant secondary or soft law, its outcome may depend on whether specific rules exists which predefine the required balancing, i.e. in the absence of secondary law, several suitable and proportionate measures may be acceptable. Also, the intensity and details of the limits may vary depending on the situation in question. For example, in comparison with the criteria set forth in Federutility and ANODE, the time limits applied by the SGEI decision and framework regarding State aid are more generous and linked to the public service obligation instead of its compensation (e.g. any entrustment not exceeding ten years, in case of a significant investment also for more than ten years, falls into the scope of the Decision). In view of its elements and preconditions, Article 106 (2) TFEU – understood as a customized and limited derogation – is also very similar to the ‘mandatory requirements’ as defences to indistinctly applicable rules in violation of the fundamental freedoms.85 Both allow derogations from the Treaties, however, Article 106 (2) TFEU is not limited to the law on free movement and – contrary to the ‘objectively justifiable purposes’ of the ‘mandatory requirements’ – may also encompass economic objectives of general interest. To interpret the balancing test pursuant to Article 106 (2) TFEU as a (full) proportionality test tolerating only a limited and customized derogation also fits the general system. Whereas the requirement of an ‘economic activity’ excludes services from the scope of competition law that are generally incompatible with it, Article 106 (2) TFEU must not grant such a general exemption; otherwise it would be devoid of any particular meaning.86 In conformity with the system, Article 106 (2) TFEU may only grant a limited derogation customized to a particular situation. As such, a customized balancing test complements the ‘general compatibility test’ as it is performed to identify an economic activity. It allows a limited derogation only. While it is accepted that under certain circumstances a derogation from market law to provide economically viable SGEI may be required, such a derogation is limited in time and/or substance (scope) to what is (strictly) needed and still proportionate. In so far, the CJEU holds on to the idea of a liberalized market that will eventually provide such services under free market conditions, even if it requires some regulative restraints and derogations at the moment or to a limited extent. Thus, it is unsurprising that this customized balancing is particularly visible in markets that are intended to be fully liberalized, e.g. electronic communications and energy market. Consequently, derogations are largely tailored to the public service obligation in question. It is not the nature of an SGEI in general that is balanced with market interests in the context of Article 106 (2) TFEU, but their specific arrangement. IV. Conclusion Originally, Article 106 (2) TFEU represented a compromise between the more welfare-oriented interests of some Member States and the market-focused interests of other Member States and the EU. Today, Article 106 (2) TFEU remains crucial to the balancing of interests in the context of 84 Most recently C-660/15 P Viasat Broadcasting UK v Commission, ECLI:EU:C:2017:178, para 31; Case C-121/15 ANODE, ECLI:EU:C:2016:637, para 40; Case C-265/08 Federutility, ECLI:EU:C:2010:205, para 28; equally Case C- 67/96 Albany, ECLI:EU:C:1999:430, para 103 et seq. 85 Case 120/78 Rewe v Bundesmonopolverwaltung für Branntwein (‘Cassis de Dijon‘), ECLI:EU:C:1979:42. 86 As regards the close connection between the non-applicability of competition (and market) rules due to the lack of an economic activity and the limited derogation that may be granted to SGEI pursuant to Article 106 (2) TFEU, see also above II.A.3.