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Article 86 EC, the Ec's Economic Approach to Competition Law, and the General Interest

Article 86 EC is intended to regulate the relationship between services of general economic interest (SGEIs) and the economic rules found in the EC Treaty, notably those on competition, state aid and free movement.1 On the one hand it provides that states must not regulate SGEIs in a way conflicting with these Treaty rules, in Article 86(1), but on the other it provides also that the rules will not apply to undertakings providing SGEIs if this would obstruct their public service mission, in Article 86(2). The article therefore emphasises that economic law does in principle apply to SGEIs, but also provides that this application may be limited where necessary. It embodies a compromise between the benefits of the free market and social interests, such as the need for universal access to important services and the stable, high quality provision of these, which may be better served by regulated, even restricted markets. The primary assumption upon which Article 86 rests is that without such a dedicated Treaty rule economic law would harm these social interests.2 The strict requirements of competition law, and to a lesser extent free movement, would prevent states from enacting important and justified but market-restricting measures, such as the granting of partial monopolies or exclusive rights in certain areas. It would become impossible to exercise the necessary control over providers and services in fields such as education, healthcare, transport and the utilities, which require close control in the name of universal access, equality of access, quality of provision and safety. A secondary assumption is that Article 86(1) actually extends the scope of competition law to state measures that would otherwise fall outside it. August 2009 European Competition Journal 549