EU ANTITRUST: HOT TOPICS & NEXT STEPS

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Prague, Czechia

TFEU. However, EU law also provides for exceptions where interventions in the market may be considered permissible under certain circumstances. One of these exceptions concerns, in accordance with Article 106(2) TFEU (resp. in conjunction with Article 14 TFEU and Protocol No 26 to the TFEU), provision of SGEIs. SGEIs can be broadly defined as services of an economic nature that are so crucial to the daily lives of EU citizens that it is essential for a Member State to be involved, directly or indirectly, in their provision in the event of a market failure (Communication from the Commission, 2007, Article 2). Otherwise, these services would not be provided either at all or would be provided under less favourable conditions (e.g., to a limited extent or quality). It follows that these SGEIs, which usually include social services, postal services, or services in energy supply, telecommunications or public transport (Communication from the Commission, 2011), can be characterized by four main defining features: (i) their object is an economic activity; (ii) they are performed in the public interest; (iii) they represent a service to citizens; (iv) they may only be provided in the event of a market failure. This definition of SGEIs is probably the most frequently used and is also used by the Czech Office for the Protection of Competition (ÚOHS [online], 2013), although it is certainly not all-encompassing and flawless. Unfortunately, SGEIs – often referred to and interchanged as a synonym, in particular in the area of transport, with PSOs (see C-480/06; Wehlander C., 2016, pp. 8) – are not uniformly defined in the EU law. Hence, it is not easy to clearly define these services and to draw a precise boundary when a service becomes a SGEI, and thus, when we can consider whether provision of such service is able to “trigger” an exception to the general competition rules. This is not only due to the fact that the EU institutions (notably the Commission) have hitherto used and defined the term of SGEIs in different ways, but also to the fact that under EU law Member States have a very wide margin of discretion when defining the SGEIs (Commission Staff Working Document, 2013). And even delimitation of SGEIs differs greatly across Member States (Commission Staff Working Paper, 2011). All the more so that the SGEIs are an appropriate tool to pursue a policy objective (especially at regional level) in an otherwise liberalized EU market, since they may - as one of the few services provided within the EU internal market - benefit from exemptions from strict EU competition rules. However, for the purposes of this paper, it is sufficient to mention that even transport services, including air services, may be deemed SGEIs and as such may, under certain circumstances, be exempted from application of EU competition rules. 3. The legal regulation of the provision of SGEIs in air transport The legal regulation of SGEIs is contained in particular in Article 106(2) TFEU, according to which “undertakings entrusted with the operation of services

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