Privatisation and EC law: Is the european commission “neutral” with respect to public versus private ownership of companies?

International and Comparative Law Quarterly

Volumn 45, Issue 4, 1996, Pages 861-887

  Verhoeven, Amaryllis ^a  

^a NONE

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EID: 84937278759     PISSN: 00205893     EISSN: 14716895     Source Type: Journal    
DOI: 10.1017/S002058930005973X     Document Type: Article

References (121)

1. C. D. Ehlermann, “Liberalisation et privatisation” (1994) Rev. Marchć Unique Eur. 5–10.
2. The Commission has a limited discretionary power, i.e. power to pass a political judgment, in the context of its review of the compatibility of aid with the common market (cf. infra).
3. See H. Smit and P. Herzog, The Law of the European Economic Community. A Commentary on the EEC Treaty, no. 6–216,63
4. G. Marenco, “Public Sector and Community Law” (1983) C.M.L.R. 495
5. M. Collard, “L'entreprise publique et rćvolution du Marchć commun” (1965) Rev. Trim. Dr. Eur. 1.
6. In the context of the EU subsidiarity is indeed mostly understood as a question of a “just” balance of powers between the EU and the member States. See e.g. P. J. G. Kapteyn, “Community Law and the Principle of Subsidiarity” (1991) Rev. des Affaires Europćennes 35.
7. See C.H. Joerges, “European Economic Law, the Nation State and the Maastricht Treaty”, in R. Dehousse, The European Union Treaty (1993).
8. Cf. K. Lenaerts, and P. Van Ypersele. “Le principe de subsidiaritć et son contexte: etude de l'article 3d du Traitć CE” (1994) Cah. Dr. Eur. 3
9. A. Toth, “Is Subsidiarity Justiciable?” (1994) E.L.Rev. 268
10. see also CaseT-114/92. BEMIM v. Commission, judgment of 24 Jan. 1995.
11. Case 6/64, Costa v. E.N.E.L. [1964] E.C.R. 1149.
12. Case C-202/88, France v. Commission [1991] E.C.R. 1–1223
13. Case C-18/88, Rćgie des Tćlćgraphes et Tćtćphones v. CB-Inno-BM [1991] E.C.R. 1–5941.
14. Recent judgments have somewhat weakened this principle; e.g. in Case C-69/91, Decoster [1993] E.C.R. 1–5335 the ECJ did not object to the fact that the body in charge of approving telecommunications terminal equipment was controlled by the same minister who controlled the public telecommunications operator.
15. Case 30/59, Steenkolenmijnen v. High Authority [1961] E.C.R. 1 (in the context of the ECSC Treaty)
16. Case C-387/92, Banco Exterior de Espaňa [1994] E.C.R. 1–877.
17. The obligation of Art.93(3) is directly effective and may be enforced before the national courts: Case C-354/90, Fćdćration nationale v. France [1991] E.C.R. 1–5523.
18. Case 730/79, Philip Morris v. Commission [1980] E.C.R. 2671. Art.92(2) lists certain exceptional categories of aid that are pe rse compatible with the common market.
19. Cf. Commission communication concerning public authorities' holdings in company capital (1984) 17(9) E.C.Bull.
20. Commission communication on the application of Arts.92 and 93 EC and Art.5 of Commission Directive 80/723/EEC to public undertakings in the manufacturing sector (1991) O.J. C273/2.
21. Case 323/82, Intermills v. Commission [1984] E.C.R. 3809.
22. Case 142/87, Belgium v. Commission [1986] E.C.R. 2263.
23. See also Joined Cases 296 and 318/82, The Netherlands and Leeuwarder Papierfabriek v. Commission [1985] E.C.R. 809
24. Case C-234/84, Belgium v. Commission (Meura) [1986] E.C.R. 2263
25. Case C-142/87, Belgium v. Commission (Tubemeuse) [1990] E.C.R. 1–959
26. Case C-305/89, Italy v. Commission (Alfa Romeo) [1991] E.C.R. 1–1603
27. Case C-303/88, Italy v. Commission (EN1 Lanerossi) [1991] E.C.R. 1–1433.
28. The following is a non-exhaustive list of State aid decisions with regard to privatisations: Rover(1989) OJ. L25/92
29. (1993) OJ. L143/7
30. Alfa Romeo (1989) OJ. L394/9
31. IOR (1992) OJ. L183/30
32. Intelhorce (1992) OJ. L176/57
33. Imepiel (1992) OJ. L172/76
34. Hilaturasy Tejidos Andaluces S.A. (1992) OJ. L172/54
35. EKO Stahl (1994) OJ. LI 12/45 and L274/3
36. KLM (1994) OJ. L379/13
37. Neue Maxhütte Stahlwerke (1996) OJ. L53/41 and L198/40.
38. Joined Cases C-278/92, C-279/92 and C-280/92, Spain v. Commission [1994] E.C.R. 1–4103
39. Case C-42/93, Spain v. Commission [1994] E.C.R. 1–4175;see also C-399/95R, Germany v. Commission, order of the President, 3 May 1996.
40. See e.g. Case 817/79. Buyl v. Commission [1982] E.C.R. 245
41. K. Lenaerts, “Gelijkheid en non-discriminatie in het Europees Gemeenschapsrecht”, in Gelijkheid en non-discrimi-natie, p.48.
42. Joined Cases 188–190/80, France, Italy and the United Kingdom v. Commission [1982] E.C.R. 2545.para.21.
43. E.C.R., at p.2263 (emphasis added).
44. E.C.R., at p. 1640, para.20.
45. E.C.R., at p.1476, para.21.
46. Iberia (1996) OJ. L104/25.
47. Rover, OJ.
48. another example is low-interest shareholders' loans granted by the Treuhandanstalt to EKO Stahl to cover losses of that company, in the context of its proposed sell-off to the Italian Riva Group (EKO Stahl, OJ
49. Commission notice commenting on that case (1994) OJ. C274/3.
50. Neue Maxhütle Stahlwerke, OJ.
51. Joined Cases C-278–280/92, OJ, at para.22.
52. Imepiel, OJ, at pp.76 and 82.
53. For indirect aid to exist it is not necessary for the “intermediary” enterprise to belong to the public sector. It is sufficient that the enterprise in question acts upon a mandate or under the supervision of a State and that the aid results in the State receiving less revenue: Case 57/86, Greece v. Commission [1988] E.C.R. 2855
54. opinion of Advocate-General Darmon in Joined Cases C-72/91 and C-73/91. Sloman Neplun [1993] E.C.R. 1–889.
55. State aid may be involved, however, if an apparently general measure benefits or favours, in practice, a particular sector or industry: L. Hancher, T. Ottervanger and P. J. Slot, EC State Aids (1993). pp.25–33
56. XXV Report on Competition Policy (1995), No.156.
57. Admittedly, such general measures may result in different competitive conditions in different member States. Such problems should be solved, however, on the basis of Arts. 101 and 102 EC, i.e. on the basis of recommendations of the Commission and, in principle, unanimous action by the Council; see the Commission's Second Survey of State Aids in the European Community (1990), p.4.
58. Gasunie (1985) O.J. L97/49
59. Case 169/84, Cofaz v. Commission [1986] E.C.R. 408
60. Joined Cases 67,68,70/84, Kwekerij Gebroeders van de Kooy v. Commission [1988] E.C.R. 219
61. Case 169/84. Cofaz v. Commission [1990] E.C.R. 3083
62. Gasunie (1992) OJ. C344/4; Case C-56/93, Belgium v. Commission, judgment of 29 Feb. 1996 (not yet pub.).
63. See Case C-56/93, idem, para. 10; originally, the preferential tariffs applied by Gasunie were considered State aid since only industrial consumers who use gas as a raw material for production of ammonia profited from the tariff and since there appeared to be no economic justification for such differential treatment. After a revision of the tariff system, it was decided that Tariff F was justified on commercial grounds.
64. See e.g. Cenemasa (1993) OJ. L309/21.
65. Compare Lufthansa, OJ.
66. KLM, OJ.
67. (1993) OJ. C253/1.
68. OJ.
69. Joined Cases 188–190/80. OJ.
70. Case C-325/91. France v. Commission, judgment of 16 June 1993.
71. While the Commission has no power to declare an aid measure incompatible with the common market on the sole ground that it has been granted unlawfully, it may take “measures … to counteract any infringement of Article 93(3)” (see Case C-301/87, Boussac [1990] E.C.R. 1–307).
72. A breach of Art.93(3) may also be sanctioned by the national courts. In a recent communication, moreover, the Commission announces that it considers itself competent to adopt a provisional decision ordering a member State to recover any money which has been disbursed in violation of the notification requirement (1995) OJ. C156/5.
73. See XXIst Competition Report. No.402.
74. Joined Cases C-278/92, C-279/92 and C-280/92, Spain v. Commission, XXIst Competition Report.
75. See the Commission's guidelines on State aid for rescuing and restructuring firms in difficulty (1994) OJ. C386/12.
76. Cf. the Commission's White Paper, XXIst Competition Report.
77. In its guidelines, XXIst Competition Report. the Commission indicates that “like rescue aid. aid for restructuring should normally only need to be granted once”
78. See also C.-D. Ehlermann, “State Aid Control: Failure or Success?” (1995) Fordham Corp. L. Inst. 9.
79. Bull (1994) OJ. L386/1
80. Air France (1994) OJ. L254/73
81. Enichem Agricultura (1996) OJ. L28/18
82. see also Crćdit Lyonnais (press release of 26 July 1995).
83. E.g. in Air France, idem, p.3, the government's commitment is stated as follows: “the process of privatizing Air France shall begin once the company's economic and financial recovery has been achieved, in accordance with the Plan, having regard also to the situation on the financial markets”.
84. The acquisition of a company in another member State constitutes an “establishment” in that member State within the meaning of Art.52; therefore member States must give all EU nationals equal opportunities to participate in the capital of companies on their territories (Case 270/83, Commission v. France [1986] E.C.R. 273).
85. Case 81/87, Daily Mail [1988] E.C.R. 5483.
86. As to the direct effect of Art.221 EC see Case 81/87, E.C.R.
87. Written Question No.570-85 (1986) OJ. C48.
88. With regard to Arts.30 and 59 EC the ECJ has held that individuals may not invoke the protection of the free movement rules with the sole purpose of circumventing national legislation which would otherwise apply: see Case 33/74, Van Binsbergen [1974] E.C.R. 1299
89. Case 229/38, Leclerc [1985] E.C.R. 35, point 27. These precedents arguably also apply, mutatis mutandis, in the context of Art.52.
90. Cf. Case 249/81, Commission v. Ireland [1982] E.C.R. 4005 (“Buy Irish”).
91. Case C-188/89. Foster v. British Gos [1990] E.C.R. 1–3313. In Foster the ECJ decided that British Gas, at the time the question arose, i.e. before its privatisation, was bound by the not yet implemented provisions of the Equal Treatment Directive (76/207/EEC). However, the ECJ's broad ruling in that case suggests that the Treaty obligations may also apply to privatised undertakings which, functionally, still belong to the public sector
92. see also Walrave v. Union Cycliste [1974] E.C.R. 1405.
93. Case 2/74, Reyners v. Belgium [1974] E.C.R. 631.
94. See Smit and Herzog, E.C.R., at paras.2–603 et seq.
95. See e.g. Joined Cases 115 and 116/81, Adoui and Cornuaille [1981] E.C.R. 1665
96. in addition, measures that seek justification under Art.56 must also constitute the least restrictive means to attain the goal for which justification is sought; see Case C-106/91, Ramrath [1992] E.C.R. 1–3351.
97. Case C-19/92. Kraus [1993] E.C.R. 1–1663
98. Case C-55/94. Gebhard, judgment of 30 Nov. 1995 (not yet pub.).
99. Case 107/83. Ordre des Avocals du Barreau de Paris v. Klopp [1984] E.C.R. 2971.
100. Following Klopp, the ECJ has struck down a series of similar “single-practice” restrictions (see e.g. Case C-351/90, Commission v. Luxembourg [1992] E.C.R. 1–3945).
101. See e.g. Case 71/76, Thieffry [1977] E.C.R. 765
102. Case C-340/89, Vlassopolou [1991] E.C.R. 1–2357
103. Case C-55/94, Gebhard, E.C.R. 1–2357.
104. See N. Reich, “The November Revolution of the European Court of Justice: Keck, Meng and Audi Revisited” (1994) C.M.L.R. 459,480.
105. See also opinion of Advocate-General Tesauro in Case C-292/92, Hunermund [1993] E.C.R. 1–6787.
106. N. Bernard, “Discrimination and Free Movement in EC Law” (1996) 45 I.C.L.Q. 82, 108.
107. Cases C-267 and C-268/91 [1993] E.C.R. 1–6097.
108. Advocate-General's opinion in Joined Cases C-401/92 and C-402/92, Tankstation 't Heukske [1994] E.C.R. 1–2199.
109. Certain authors argue that Art.30 applies to all measures that restrict trade, whether or not discriminatory (see e.g. M. Mattera, “De I'arrêt ‘Dassonville’ à l'arrêt ‘Keck’: I'ob-scure clarté d'une jurisprudence riche en principes novateurs et contradictions” (1994) Rev. Marché Unique Eur. 117). Advocate-General Jacobs, in his opinion in the Leclerc-Siplec case, proposed to replace the Keck test by a de minimis test.
110. The ECJ did not, however, follow the Advocate-General's opinion (Case 412/93. Leclerc-Siplec v. TFI Publicité and M6 Publicité, judgment of 9 Feb. 1995).
111. Cf. Case 384/93, Alpine Investment BV, judgment of 10 May 1995
112. not yet pub.: W. Devroe and J. Wouters. “Liberté d'établissement et libre prestation de services (ler Janvier 1995–31 décembre 1995)” (1996) J.T.Dr.Eur. 56.
113. The regulatory framework of the British privatisations is discussed in more detail in J. Flynn, “British Report to the XVI FIDE Congress on Competition Law Implications of Deregulation and Privatization” (1994) pp.175–177.
114. Loi No.86–912 du 6 août 1986 relative aux modalités d'application des privatisations. Journal Officiel. 7 Aug. 1986, p.9695
115. discussed e.g. in R. Turrini, “Privatisations et droit communautaire”, in Revue des Affaires Internationales (1993). p.823.
116. (1993) OJ. C253/3 (17 Sept.).
117. Case C-281/89. Factortame [1991] E.C.R. 1–3906.
118. see e.g. Case 149/79. Commission v. Belgium [1980] E.C.R. 3881.
119. Turrini, E.C.R. at p.822.
120. See Art.9 of Loi 86–912, E.C.R.
121. A. Abate, “Droit communautaire. privatisations et déréglementations” (1994) Rev. Marché Unique Eur. 28.