WRITTEN QUESTION E-2614/98

by Ernesto Caccavale (UPE) to the Commission

(1 September 1998)

Subject: Infringement of legislation on free competition by "Italia Lavoro"

The Italian Prime Minister Romano Prodi recently submitted to the Senate and the Chamber of Deputies the government's new plans for economic growth in southern Italy. In addition to the existing incentive of 18 million for firms who employ workers in "socially useful" jobs and mobility incentives, the Prime Minister announced that "Italia Lavoro" - a public corporation which used to belong to the former GEPI group - had been assigned the task of setting up a temporary employment agency to employ workers in "socially useful" jobs under market conditions and on the basis of all the economic and tax advantages already laid down. This was to be combined with the launching of the "Agency for the South", whose activity is specifically designed to create a number of jobs to be determined from year to year.

- Does the Commission not consider it necessary and appropriate to ascertain the regularity of the procedure being used by the Italian Government in assigning this task, in view of the fact that there was no public call to tender which would have enabled all firms dealing with temporary employment to take part on an equal footing and that the procedure therefore blatantly infringes the principle of free competition?

- Does the Commission not consider that there are reasons for fearing that "Italia Lavoro" will end up by establishing a monopoly in temporary employment, since it is able to operate without complying with national and European legislation, thereby preventing other temporary employment agencies from competing and creating a market for themselves and introducing the risk of re-creating dangerous forms of patronage and welfare dependency?

Answer given by Mr Van Miert on behalf of the Commission

(13 October 1998)

Services in the employment sector come under category 22 of Annex I.B of Council Directive 92/50/EEC of 18 June 1992 relating to the co-ordination of procedures for the award of public service contracts(1). According to Article 9 of this directive contracts which have as their object services listed in Annex I.B shall be awarded in accordance with Articles 14 (common rules in the technical area) and 16 (obligation to publish the intention to award a public service contract). The facts given by the Honourable Member do not indicate, that one of these provisions have been violated.

Concerning the application of European competition rules to "Italia Lavoro", the establishment of a company in a dominant position by virtue of the conferment of special or exclusive rights on an enterprise is in principle not in itself an infringement of the competition rules of the EC Treaty.

The Court of justice, in its decision of 23 April 1991(2), has already ruled that the granting of a legal monopoly to a national employment office did not necessarily entail a breach of Article 90(1) and 86 of the EC Treaty. There would however be a breach if the mere exercise of this right would inevitably lead to an abuse of market power under Article 86 of the EC Treaty. This could for example be the case if the enterprise is unable to satisfy demand, and if the monopoly prevents a competitor from trying to satisfy this demand.

On the basis of the facts given by the Honourable Member it is not possible to assess whether "Italia Lavoro", on which has been conferred the right to provide certain services within the employment sector, is in a dominant position and, if this were the case, whether it is abusing this dominant position by exercising its rights.

(1) OJ L 209, 24.7.1992.

(2) Case C-41/90, Höfner and Elsner v. Macrotron, ECR I-1979.