Exclusive Rights under Article 86(1) EC

Abstract: Over the past few decades, the progressive elimination of Member State involvement in competition has been considered as essential for the establishment of the common market. State involvement in competition can take many forms and may have the effect of privileging undertakings in which Member States maintain ownership. A Member State may through its legislation or acts, take steps to manipulate markets and thereby prejude the competitive process. The purpose with Article 86 is to prevent that from taking place. Under Article 86(1) EC, there are two categories of undertakings mentioned, public undertakings and undertakings granted with exclusive or special rights. Exclusive rights can, in a concise way, be described as 'rights granted to more than one undertaking operating in the same market where their number is limited and they are chosen upon discriminatory and subjective criteria.' Since Article 86 is a reference provision, it does not have an independent application, therefore it must be combined with another provision of the EC Treaty, in order for it to be applicable. In this thesis, its relation to Article 82 will be examined. There is an extensive case law by the Court of Justice concerning the granting of exclusive rights by Member States to undertakings, which is neither considered consistent nor predictable. Many authors have expressed that there is a difficulty with these cases and with ECJ's subsequent judgments to determine the circumstances in which a Member State can be liable under Article 86(1) for an infringement of Article 82. While some cases have led most authors to draw the conclusion that the granting of exclusive rights is prohibited per se, the Court changed its approach by La Crespelle case, and took some steps backwards from its previous case law. Despite the judgment delivered in La Crespelle, the overall view in the doctrine is that the Court has taken a liberalization process by restricting the legality of measures taken by the Member States. The liberalization of the public sector has been viewed by many as an unavoidable consequence of the establishment of the internal market.