6 - Article 86(1): public undertakings, special and exclusive rights

Summary

Introduction

Article 86(1) EC provides a regime for special and exclusive rights in that it highlights the fact that their aexistence is warranted provided the free movement and competition rules are respected. This section will discuss, sequentially:

1. – the role and structure of Article 86 EC;

2. – public undertakings, special and exclusive rights;

3. – the legality of monopoly rights;

4. – the prohibition on abuse of statutory monopoly rights;

5. – general public interest defences under Article 86(1) EC;

6. – convergence between the free movement and competition rules under Article 86 EC;

7. – delegation of regulatory functions under Article 86 EC; and

8. – the possibility of pre-emption under Article 86 EC.

The next chapter will then examine the role of Article 86(2) EC, concerning services of general economic interest.

The role and structure of Article 86 EC

Article 86 EC provides a special regime for public monopolies and for undertakings granted ‘special and exclusive rights’ by the Member States in respect to both the free movement and the competition rules. Consequently, Article 86 EC is a key provision as regards the distinction between the public and the private spheres in EU law. It is structured as follows:

1. – Article 86(1) EC formulates the general rule prohibiting the Member States from taking, concerning public undertakings or undertakings enjoying special and/or exclusive rights, any measures contrary to the rules contained in the Treaty. These Treaty rules are further specified as the anti-discrimination provisions of Articles 28 and 49, the competition rules and the rules on State aids.

2. […]