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Public Energy Companies Under the EC Treaty: An Overview of Law and Policy

  • Anna Papaioannou and P.J. Slot


This article examines state intervention in the energy sector under the EC Treaty. The analysis focuses upon Articles 37, on state trading monopolies, and 90, on public undertakings, the conferment of exclusive rights and undertakings entrusted with the operation of services of general economic interest. All these forms of business organisation are very common in the energy sector. The Commission's wish to introduce more competition in the public utilities sector is well served by the application of the Treaty rules on a case-to-case basis. Secondarily, legislation has also been adopted for the energy sector pursuant to Article 100A EC. There is considerable public debate on new proposals for directives which aim at further liberalisation in the energy market.



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1. XXIInd Report on Competition Policy, 33–45 (1992).

2. Case 59/75, Public Prosecutor v. Manghera, E.C.R. 1976, 91.

3. See also the Accession Treaties for Greece, Spain and Portugal which refer specifically to the adjustment of state monopolies and public enterprises in the Member States.

4. Case 374/88 Commission v. Greece, E.C.R. 1990, 1–4747, point 38 of the Judgment.

5. Point 49 of the Judgment in supra note 4.

6. It is hoped that the Court will deal with this issue in the Branchero case (O.J. 1992 C–157/92, C 160/90) still pending.

7. Point 36 of the Judgment in supra note 4. Cf. in this respect, COM(92) 152 final of 14 April 1992: The Oil Market and the Refining Industry in the Community: Recent Developments and Prospects.

8. See Case 288/89 Stichting Collectieve Antennevoorziening Gouda judgment and Case 353/89 Commission v. Netherlands E.C.R. 1991, 1–4069: the broadcasting (service) monopoly was found to be incompatible with Article 59 and not justified by any mandatory requirements. Article 59 was infringed even if similar companies established in the same Member State are excluded as well: cf. also, Case 21/88 Du Pont de Nemours v. USL, E.C.R. 1990,1–889.

9. CD. Ehlermann, WEG-Vertrags fürdie Stromversorgungsunternehmen, Forum, 13 November 1993.

10. See IP/91/251.

11. The discussions between the Commission and these Member States are based on the respective Treaties of Accession to the EC. On their progress, see XXIInd Report on Competition Policy, points 513–17(1992).

12. Cf. J. Temple Lang, Community Antitrust Law and Government Measures relating to Public and Privileged Enterprises: Article 90 EEC Treaty, in B. Hawk (ed.), Annual Proceedings of the Fordham Corporate Law Institute, ch. 21, 543 et seq., (1989) at 565.

13. Case 155/73, Sacchi v. Tele Biella, E.C.R. 1974, 408 at 429–30.

14. Case 260/89 ERT v. DEP, E.C.R. 1991, 1–2925, point 10 of the Judgment.

15. See Case 72/83 Campus Oil v. Minister for Industry, 1984 E.C.R. 1984, 2727, discussed below.

16. Case 352/84 Bond van Adverteerders v. Netherlands, E.C.R. 1988, 2085, point 34 of the Judgment and Case 353/89, supra note 8.

17. supra note 15.

18. Case 202/88 France v. Commission, E.C.R. 1991, 1–1223, points 34–36 of the Judgment;Case 374/88, supra note 4, point 40 of the Judgment; Case 18/88 RTT v. GB INNO, E.C.R. 1991,1–5941, points 33–36 of the Judgment.

19. Case 41/90 Hōmer and Else v. Macrotron, E.C.R. 1991, 1–1979, point 29 of the Judgment; Case ERT, supra note 14, point 37 of the Judgment; Case 179/90 Merci Convenzionali Porto di Genova v. Siderurgia Gabrielli, E.C.R. 1991, 1–5889, point 17 of the Judgment.

20. Case Porto di Genova, supra note 19, point 18 of the Judgment.

21. Case 18/88, supra note 18, point 24 of the Judgment.

22. Case ERT, supra note 14, point 22 of the Judgment; Case 18/88, supra note 18, point 15 of the Judgment.

23. Case ERT, supra note 14, points 24–25 of the Judgment; Case 353/89, supra note 8, point 15 of the Judgment.

24. Case ERT, supra note 14, point 38 of the Judgment; Case Porto di Genova, supra note 19, point 25 of the Judgment.

25. Case 120/80 Rewe-Zentral v. Bundesmonopolverwaltung für Branntwein, E.C.R. 1979, 649.

26. Case 374/88, supra note 4, point 35 of the Judgment.

27. Case 7/82 GVL v. Commission, E.C.R. 1983, 483. In its case Usselcentrale, at point 40, analysed infra section 3, the Commission accepted an implicit governmental provision as constituting an act of public authority.

28. For a further example see Telecom guidelines; O.J. 1991, Case 233/2 at 18, para. 92.

29. Joint Cases 240–2, 261, 268,269/82 SSI v. Commission, E.C.R. 1985, 3831.

30. Cases 209–215, 218/78 FEDETAB v. Commission, E.C.R. 1980, 3125.

31. Case 320/91 Procureurdu Roi v. Corbeau, May 19, 1993 (not yet reported).

32. Decision No IV/32.723, O.J. 1991, L 28/32, at 44.

33. See Telecom Guidelines, supra note 28, at 7, para. 22.

34. Case ERT, supra note 14, point 34 of the Judgment, where the Court observed that it is for the national courts to assess the compatibility of the public enterprise's behaviour with Article 86 in the light of the exemption provided in Art. 90(2). Compare with Case 66/86 Ahmed Saeed Flugreisen v. Silver Line Reisebūro, E.C.R. 1989, 803 and Case 172/82 Syndicat national des Fabricants Raffineurs d'Huile de Graissage v. Inter-Huiles, E.C.R. 1983, 555 where the Court seemed to deny that Art. 90(2) had direct effect.

35. The wording of the Treaty actually reminds of the terminology used in anti-dumping legislation notably. Council Regulation 2423/88, O.J. 1988, L 209/1, Articles 2(1) and 3(1).

36. E.g. Council Regulations 4056/86, O.J. 1986, L 378/4 and 3975/87, O.J. 1987 L 374/1.

37. With regard to the directives allowed by Article 90(3) see recent Case 325/91, France v. Commission, Judgment of June 16, 1993 (not yet reported); with regard to the decisions see Case 48/90, Case 66/90, Netherlands v. Commission, E.C.R. 1992, 1–565.

38. Decision of 16 Jan., 1991, relating to proceedings under Art. 85 of the EEC Treaty (IV/32.732 Usselcentrale) O.J. 1991 L 28/32.

39. See also P.J. Slot, The Regulation of the Electricity Sector in the Netherlands, in Energy Law '90, 9th Advanced Seminar on Petroleum, Mineral and Energy Resources Law Proceedings 330–348 (1990).

40. Judgment of 18 Nov. 1992, T-16/91, E.C.R. 1992, 11–2417.

41. Case 393/92 City of Almelo v. Ijsselmij., O.J. 1992, C 3236/10.

42. College van Beroep (1991), No 90/3076/090/195. The Court may use the precedent of the Corbeau case, supra note 31.

43. Case T-39/90 SEP v. Commission, E.C.R. 1990, 11–649.

44. O.J. 1993, L 50/14 in paras. 28 and 31.

45. Notice pursuant to Art. 19(3) of Council Reg. 17/62, O.J. 1990 C 191/9

46. Decision of 30 April 1991, L 178/31.

47. See COM SEC(99) 1248 final, of September 14, 1990.

48. L. Hancher, EC Electricity Law, 185 et seq. (1992).

49. See infra note 59 and also COM SEC(90) 1248 final, paras. 24, 27, 38.

50. Notice pursuant to Art. 19(3) of Council Regulation 17 concerning a request for negative clearance or exemption pursuant to Art. 85(3) of the EEC Treaty, O.J. 1993, C 265/3.

51. COM(88) 238 final, Brussels, May 2, 1988.

52. At 20–22.

53. Directive No 90/547/EEC, O.J. 1990, L 313/30.

54. Directive No 91/296/EEC.O.J. 1991, L 147/37.

55. L. Hancher, supra note 48, at 140.

56. Directive No 90/377/EEC, O.J. 1990, L 185/16.

57. Council Directive No 93/38/EEC, O.J. 1993, L 199/84, coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors. These are the so-called ‘excluded sectors’ because previous directives on the award of pubic works contracts and public supply contracts did not apply to them. The reason for that is that companies involved could be both private and public bodies.

58. Hereinafter called the ‘licencing Directive’; first proposal for a Council Directive submitted by the Commission on 11 May 1992, O.J. C 139/12; amended proposal in COM(92) 587 final, Brussels, Dec. 21, 1992.

59. For gas in O.J. 1992, C 65/14; for electricity in O.J. 1992, C 65/4.

60. The proposal is actually meant to complement Art. 3 of the Directive on public procurement in the utilities sector (No 93/38/EEC, O.J. 1993, L 199/84), which enables Member States to ask for an exemption from the public procurement rules in favour of authorisations for the exploitation of a geografic area. Compliance with the ‘licencing Directive’ would entail compliance with Art. 3 of the ‘utilities Directive’.

61. See report on Council ofEnergy Ministers of December 10, 1993, Europe Energy, No. 414, 1993, at 5.

62. Presented in the Council of Energy Ministers of December 10, 1993.

63. For a summary of the amended proposals see Europe Energy, No 414, 1993, at 8–9.

64. See J. Oudin (member of the French Senate), Rapport d'Information sur L'Europe et les Services Publiques of October 6, 1993; for the latest French reaction, concerning the Commission's renewed proposals see TPA to energy grids still unacceptable to France, Europe Energy, No 417, 1993, at 6.

65. For details in national laws see L. Ritter, W.D. Braun, F. Rawlinson, EEC Competition Law: a Practitioner's Guide, at 586, nn. 152–153, (1993); see also, M. M. Roggenkamp, The Impact of the Nogat Pipeline on Netherlands Output and Development 11 Oil and Gas Law and Taxation Review 135 (1993) where it is argued that TPA already exists in the offshore gas transportation system, probably due to the “higher level of competition and the smaller degree of direct government involvment”.

66. For a critical appraisal see House of Lords, Report on the Structure of the Single Market for Energy, ordered to be printed on February 9, 1993.

67. See Power in Europe, No 160, (1993) at 9.

68. Notably the opinion expressed by French Senator J. Oudin in the Report mentioned above.

69. For a detailed description of this differentiation in the middle 1980's see T.Daintith, L. Hancher, Energy Strategy in Europe. The Legal Framework (1986) and also the ‘Working Document’ supra note 65, at 7.

* Anna Papaioannou is a Research Fellow at the International Energy Law Institute of the University of Leiden and P. J. Slot is Professor of Public Economic Law at the University of Leiden.


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