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SGEIs

If public services are regarded as economic, the competition rules have to be complied with unless they can be exempted as SGEIs by Article 106(2) TFEU. However, SGEIs are not a straightforward concept and confusion has arisen in many areas.[1]

Terminology

The term SGEIs is, itself, bewildering, since, despite the word ‘economic’ being part of the term, the interest behind those services[2] is public rather than economic. The criterion ‘economic’ refers to the fact that these are economic services to start with, as otherwise they would not fall under competition law and thus would not need to be exempted. The term ‘services of general interest’ (SGIs) is used as an umbrella category for SGEIs and non-economic services by the Commission.[3] According to Hatzopoulos the notion of SGIs seems to correspond with the French ‘service public’ and the ‘overriding principles of general interest’ established as a justification in the field of the free movement provisions.[4] The terms ‘public services’ and ‘public service obligations’ are not used by the Commission, as it deems them ‘ambiguous’.[5] Yet, ‘public services’ is used as a term by the Court and in literature in the same context as SGIs or SGEIs.[6] The main characteristics of SGIs are universality, equality of access, a certain level of quality, continuity and a public aim.[7]

Additionally, a new category, called ‘social services of general interest’ (SSGIs), was introduced by the Commission in the early 2000s.[8] The definition of SSGIs is still rather disputed. In its Communication from 2006, the Commission states that ‘in addition to health services, which are not covered by this communication, we find two main categories of social services’. These categories are, according to the Commission, social security schemes and ‘other essential services provided directly to the person’. In a footnote to the latter category the Commission explains that ‘education and training, although they are services of general interest with a clear social function, are not covered by this Communication’.[9] This vague definition has led to different interpretations in the literature; whilst some believe health and education are included in the definition others argue in favour of separate categories, namely health services of general interest (HSGIs) and education and training services of general interest (ETSGIs).[10] Either way, it seems that SSGIs (and, if separate categories, also HSGIs and ETSGIs), comprise services which have a social aim in the broader sense. In them, Member States have primary competences and they are often traditionally regarded as non-economic, but have recently also sometimes been categorised as economic. These services thus seem to contain the unclear cases and seem to be situated somewhat in the middle of SGEIs and noneconomic services with overlaps into both. The question of whether or not such services fall under the competition law regime, however, still depends on their classification as economic in nature.[11]

  • [1] Steyger 2002, p. 276; Mestmacker and Schweitzer 2004, §34 para 17; Sauter 2008, pp. 167,183; Aicher et al. 2009, para 69; Neergaard 2011, p. 183 seq; Whish 2015, pp. 234, 247 seq.
  • [2] The term ‘services’ under Article 106(2) TFEU is to be understood in a wider sense than‘services’ under Article 57 TFEU to also include the production and distribution of goods. SeeMestmacker and Schweitzer 2004, §34, para 17.
  • [3] See Communication ‘Services of general interest in Europe’ OJ [2001] C 17/04 Annex II.
  • [4] Hatzopoulos 2009, p. 226. Regarding the correspondence of the term with the French ‘servicepublic’ see Mestmacker and Schweitzer 2004, §34, para 17. See Sauter and Schepel 2009, 89 seq,95 regarding convergence with internal market reasoning.
  • [5] See SGEIs in Europe Communication (n 41) Annex II.
  • [6] Sauter 2015, p. 9.
  • [7] For more on terminology see Mestmacker and Schweitzer 2004, § 34, para 17 seq, Sauter2008, p. 181; Hatzopoulos 2009, p. 225 seq; Neergaard 2011, p. 175 seq; Jones and Sufrin 2014,p. 632 seq; Sauter 2015, p. 10 seq.
  • [8] See Neergaard 2013, p. 206 who spotted the first use of the term SSGIs in the Commission’sReport to the Laeken European Council COM(2001) 598 final, where the term is, however, onlymentioned and not further elaborated upon.
  • [9] Commission Communication ‘Implementing the Community Lisbon Programme: SocialServices of General Interest in the European Union’ COM (2006) 177 final p. 4.
  • [10] See Neergaard 2013, p. 210 seq. A useful diagram is also provided in Neergaard 2009a, p. 20.Explanations of SGIs, SGEIs, non-economic services, market service and the disputed categoriesof SSGIs, HSGIs and ETSGIs are provided on the following pages.
  • [11] See further Neergaard 2009a, p. 19 seq; Neergaard 2013, p. 210 seq, 239 seq; Sauter 2015p. 17 seq, 28.
 
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