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PAGE 46 EC COMPETITION POLICY NEWSLETTER Vol. 1, N° 2, Summer 1994

Liberalisation & State Intervention

Application of Article 90 EEC

Main developments between 1st April and 28th July 1994

Summary of most important recent developments

by Brona Carton, DG IV-B-5

On 1 June 1994, an internal reorganization took effect within

DG IV, with the disbandment of unit A.4, which was

responsible for the application of the competition rules to

public undertakings and state monopolies. Issues formerly

dealt with within unit A.4 will now be handled by the

operational units in Directorates B, C and D (restrictive

practices, abuse of dominant positions and other distortions

of competition).

The legal interpretation of Article 90 has become much

clearer over recent years, and is being applied on a regular

basis. In such circumstances it is appropriate to benefit from

the synergies available by merging the officials responsible

in the past for examining cases in this area, with the units in

DG IV that possess in-depth knowledge of the sectors in

question. The coordination unit of A-3 ensure a harmonious

approach in this area by the Commission across all sectors.

At the same time, a new unit was set up within Directorate

B which will deal specifically with the application of

Articles 85, 86 and 90 in the telecommunications and postal

sectors, given the important developments expected in these

areas over the forseable future.

DG IV is continuing to deal with a number of individual

complaints relating to state measures in favour of public

undertakings or state monopolies, as well as broader areas

for legislation.

In particular, the draft satellites directive has this year been

considered by the Council, the European Parliament and the

Economic and Social Committee.

The draft directive has two main aims. Firstly, it extends the

application of the telecommunications terminal equipment

(Commission Directive on competition in the markets in

telecommunications terminal equipment, OJ L 131 of

27.5.88) and services (Commission Directive on competition

in the markets for telecommunications services, OJ L 192 of

24.7.90) directives to satellite communications. As the draft

directive does not relate to the liberalization of voice

telephony by satellite, its effects are limited to only a portion

of satellite communications, which in turn account for a

negligible amount of the turnover of the Member States

telecommunications operators. Secondly, the draft directive

will clarify the notion of special rights in the two

telecommunications directives, which had been annulled by

the Court of Justice in this regard for lack of motivation.

The discussions in Council and Parliament concentrated for

the main part on this latter aspect.

The Commission received their observations by the end of

April and since then the text has been reconsidered in

several respects in the light of these observations. The

amended text will be delivered to the Commission for

adoption by early autumn.

At its meeting of 7 December 1993, the Council adopted a

resolution (Council Resolution on the development of

Community postal services, OJ C 48 of 16.2.94) in the light

of the Commission's guidelines for the development of the

postal sector (COM (93) 247 final) of 2 June 1993. The

Commission had taken an approach based on a combination

of harmonization and liberalization measures, guaranteeing

a high quality universal service in the Member States while

at the same time assuring greater liberalization of the postal

sector. DG IV has been developing specific measures

intended to delimit the scope of the area that may be

reserved by the Member States for their universal service

providers, and, consequently, the areas of activity which

should be open to competition. Work in this area should be

completed in time for the next telecommunications Council

(currently scheduled for 17 November 1994).

Following Commissioner Van Miert's announcement in

August 1993 of a Community initiative aimed at preventing

the market opening already achieved in the air transport

sector being undermined by restrictions on ground handling

at airports, the Commission launched a public consultation

on the matter. A consultation document (SEC (93) 1696

final) of 14 December 1993 anticipated the partial or total

liberalization of certain ground handling services in airports

serving more than two million people or through which more

than 50,000 tonnes of freight pass each year. The

Commission has received comments from various interested

parties and in the light of these, measures are currently being

developed which are aimed at opening up different aspects

of this market.

Finally, in the energy sector, the Commission has lodged

infringement proceedings under Article 169 with the Court

of Justice in cases taken against France, Italy, Spain, The

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