Social Services of General Interest (SSGI)

Social Services of General Interest
effective instrument in the hands of the dominant entity for keeping competitors away from
the market.
However, meeting the discussed conditions will not in itself result in any infringement
of Community competition rules. This has to be joined by other circumstances, such as
proven influence on trade between the Member States and dominant position on a substantial
part of the common market. Owing to the usually small-scale organisation and local nature of
social sector services this will frequently not be the case so that competition rules cannot be
applied for lack of relevance to the internal market. Trade between Member States, according
to case-law, is affected by a measure which prevents an undertaking from establishing itself in
another Member State with a view to providing services there on the market in question. 118
The Court of Justice held that there was no need to prove any actual effect; it would suffice to
invoke potential effects. 119 The effect in question, however, must be ‘appreciable” and not just
minimal. 120 Hence social services which are usually provided at a local level need additional
characteristics to entail the application of competition rules. One would have to provide
evidence that international providers could have a potential interest in entering the market.
Any cross-border context may also arise simply because the protected provider is located
close to this border. 121 Also, it will be difficult to prove a dominant position held by Austria
on a substantial part of the common market. Although the Court of Justice includes
substantial parts of a Member State, such as southern Germany, or larger constituent states,
such as the Land of Rheinland-Pfalz, 122 this case-law cannot easily be transferred to Austrian
laender simply because of their size. Market interventions by laender-level legislation, as is
often the case in Austria owing to the terms of reference accorded to the laender in the social
sector, could thus be seen as falling outside the scope of Art 82 EC for lack of meeting this
size criterion.
If, however, the conditions quoted so far are fulfilled, a last criterion for assessment
would be justification under Art 86(2) EC, since as a rule social services are services of
general economic interest.
Art 86(2) EC in conjunction with (1) permits Member States to grant to undertakings
entrusted with the operation of services of general economic interest exclusive rights which
may be contrary to the rules on competition, in so far as restraints on competition or even the
exclusion of any competition by other economic operators is necessary to ensure performance
of the particular tasks assigned to the undertakings through such exclusive rights. 123
According to case-law one would have to examine whether such restraints on
competition are necessary to enable the holder of an exclusive right to perform his task in the
general interest and under economically acceptable conditions. The latter wording signifies a
change in case-law. Whereas the ECJ and, following its example, also the Commission held
until the end of 1980 that non-compliance with Treaty provisions was needed to provide such
services at all 124 , the Court now examines to what extent it is necessary to give preference to
125 126
the undertaking concerned to enable it to perform its task under economically acceptable
118
see judgment in Case 161/84, Smits and Peerbooms, ECR 1986, 353, par. 26.
119
Case C-41/90, Höfner and Elser, ECR 1991, I-1979, par. 32.
120
see Case C-306/96, Javico, ECR 1998, I-1983, par. 16.
121
see for instance Opinion of AG Jacobs, Conclusions, Case C-475/99, Ambulanz Glöckner, ECR 2001, I-
8089, par. 168.
122
see again Case C-475/99 Ambulanz Glöckner, ECR 2001, I-8089, par. 35; and section I.5.
123
see Case C-320/91, Corbeau, ECR 1993, I-2533, par. 14.
124
see for instance Koenig/Kühling (FN 110) Art 86 par. 58 with added references.
125
Case C-320/91, Corbeau, ECR 1993, I-2533, par. 16.
29