Keywords

Summary



Keywords

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1. Competition ° Public undertakings and undertakings to which the Member States have granted special or exclusive rights ° Powers of the Commission ° Adoption of directives specifying in general terms the obligations of the Member States under the Treaty ° Obligations arising from Article 59 of the Treaty ° Need for prior Council legislation ° None ° Obligations arising from Article 86 ° Determination of an objective to be attained by the Member States using methods of their choice ° Legality

(EEC Treaty, Arts 59, 86 and 90(3))

2. Competition ° Public undertakings and undertakings to which the Member States have granted special or exclusive rights ° Recourse to Article 90 of the Treaty to eliminate anti-competitive conduct by undertakings acting on their own initiative ° Unlawful ° Appropriate legal basis ° Articles 85 and 86 of the Treaty

(EEC Treaty, Arts 85, 86 and 90; Commission Directive 90/388, Art. 8)

3. Acts of the institutions ° Statement of reasons ° Obligation ° Directive requiring Member States to withdraw special rights granted to certain undertakings in a particular sector ° Lack of particulars concerning the nature of the rights concerned and their incompatibility with the Treaty ° Unlawful

(EEC Treaty, Art. 190; Commission Directive 90/388)

4. Competition ° Public undertakings and undertakings to which the Member States have granted special or exclusive rights ° Undertakings with a monopoly over the operation of the public telecommunications network ° Extension of the monopoly to the market in telecommunications services through the grant of exclusive rights ° Prohibition justified under Article 86 of the Treaty

(EEC Treaty, Arts 86 and 90(1))

Summary

1. The supervisory power conferred on the Commission by Article 90(3) of the Treaty includes the possibility of specifying the obligations of the Member States. The extent of that power depends on the scope of the rules with which compliance is to be ensured.

As regards Article 59 of the Treaty, which is directly applicable, the Commission was empowered, with a view to promoting the effective exercise of the freedom to provide services in the telecommunications services sector, to specify, by means of Directive 90/388, the obligations arising from that article without the need for any prior legislative action by the Council.

In the case of Article 86 of the Treaty, it was entitled, by means of the same directive and without exceeding its powers, since the Member States remain free to choose the methods to be deployed, to require the latter to ensure the independence from the telecommunications organizations of the body vested with the powers to authorize, control and monitor telecommunications services.

2. Article 90 of the Treaty confers powers on the Commission only in relation to State measures and anti-competitive conduct engaged in by undertakings on their own initiative can be dealt with only by individual decisions adopted under Articles 85 and 86 of the Treaty.

The annulment is consequently necessary of Article 8 of Directive 90/388, adopted on the basis of Article 90, by which the Commission purported to require the Member States to facilitate the termination, at a period of notice of a maximum of one year, of contracts for the supply of telecommunications services in respect of which, at the time when they were concluded, special or exclusive rights had been granted to certain undertakings, even though it had not been established that the conclusion of long-term contracts, regarded as being anti-competitive, had been encouraged or compelled by State authorities.

3. Since the Commission intended to require the Member States, by virtue of its powers under Article 90 of the Treaty, to withdraw the special rights granted to certain undertakings regarding telecommunications services, it was under an obligation, on the one hand, to define specifically the type of rights concerned and, on the other, to show in what respect the exercise of such rights was contrary to the various provisions of the Treaty. In view of its failure to do so, the provisions of Directive 90/388 must be annulled to the extent to which they purport to govern special rights.

4. The extension of the monopoly on the establishment and operation of the telephone network to the market in telecommunications services, without any objective justification, is prohibited as such by Articles 86 and 90(1) of the Treaty where that extension results from a State measure, thus leading to the elimination of competition. Such a situation exists where exclusive rights to supply telecommunications services are granted to the telecommunications organizations, with the result that the latter exclude competitors from the market for telecommunications services or, at least, restrict their access to that market. The Commission was therefore justified in requiring, by means of Directive 90/388, the withdrawal of such rights.