To which entities do the public procurement rules apply? This is a fundamental gateway question. For the great majority of entities, the answer is clear – entities such as State authorities, government departments and local and regional authorities are obviously all covered.
A potential grey area arises in respect of entities that are linked to the State in some way but may or may not be subject to the procurement rules. In the EU regime, these are “bodies governed by public law.” Much of the case law on the topic of entity coverage is concerned with the test for such bodies.
The regime for Utilities can also raise questions as to whether a particular entity engaged in utilities provision is covered, with that regime also encompassing public undertakings and entities which have been granted special or exclusive rights.
The UK Procurement Act 2023 follows a broadly similar approach. Again, there is no doubt about the application of the Act’s procurement rules to arms of government and the State. The Act’s concept of “public authority” will, however, capture a broader category of entities that are linked to the State.
-
EU
-
Directive 2014/24
-
Article 2 Definitions
View article
1(1) ‘contracting authorities’ means the State, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law;
(2) ‘central government authorities’ means the contracting authorities listed in Annex I and, in so far as corrections or amendments have been made at national level, their successor entities;
(3) ‘sub-central contracting authorities’ means all contracting authorities which are not central government authorities;
(4) ‘bodies governed by public law’ means bodies that have all of the following characteristics:
(a) they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) they have legal personality; and
(c) they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law; or are subject to management supervision by those authorities or bodies; or have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
Annex I sets out a list of Central Government Authorities in individual Member States
-
Article 34 Activities directly exposed to competition
View article
1. Contracts intended to enable an activity mentioned in Articles 8 to 14 to be carried out shall not be subject to this Directive if the Member State or the contracting entities having introduced the request pursuant to Article 35 can demonstrate that, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted; nor shall design contests that are organised for the pursuit of such an activity in that geographic area be subject to this The activity concerned may form a part of a larger sector or be exercised only in certain parts of the Member State concerned. The competition assessment referred to in the first sentence of this paragraph, which will be made in the light of the information available to the Commission and for the purposes of this Directive, is without prejudice to the application of competition law. Such assessment shall be made having regard to the market for the activities in question and the geographical reference market within the meaning of paragraph 2.
2. For the purposes of paragraph 1 of this Article, the question of whether an activity is directly exposed to competition shall be decided on the basis of criteria that are in conformity with the provisions on competition of the Those may include the characteristics of the products or services concerned, the existence of alternative products or services considered to be substitutable on the supply side or demand side, the prices and the actual or potential presence of more than one supplier of the products or provider of the services in question.
The geographical reference market, on the basis of which exposure to competition is assessed, shall consist of the area in which the undertakings concerned are involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because, in particular, conditions of competition are appreciably different in those areas. That assessment shall take account in particular of the nature and characteristics of the products or services concerned, of the existence of entry barriers or of consumer preferences, of appreciable differences of the undertakings’ market shares between the area concerned and neighbouring areas or of substantial price differences.
3. For the purposes of paragraph 1 of this Article, access to a market shall be deemed not to be restricted if the Member State has implemented and applied the Union legislation listed in Annex III.
If free access to a given market cannot be presumed on the basis of the first subparagraph, it must be demonstrated that access to the market in question is free de facto and de jure.
-
Article 35 Procedure for establishing whether Article 34 is applicable
View article
1. Where a Member State or, where the legislation of the Member State concerned provides for it, a contracting entity considers that, on the basis of the criteria set out in Article 34(2) and (3), a given activity is directly exposed to competition on markets to which access is not restricted, it may submit a request to the Commission to establish that this Directive does not apply to the award of contracts or the organisation of design contests for the pursuit of that activity, where appropriate together with the position adopted by an independent national authority that is competent in relation to the activity Such requests may concern activities which are part of a larger sector or which are exercised only in certain parts of the Member State concerned.
In the request, the Member State or contracting entity concerned shall inform the Commission of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in Article 34(1).
2. Unless a request coming from a contracting entity is accompanied by a reasoned and substantiated position, adopted by an independent national authority that is competent in relation to the activity concerned, which thoroughly analyses the conditions for the possible applicability of Article 34(1) to the activity concerned in accordance with para graphs 2 and 3 of that Article, the Commission shall immediately inform the Member State concerned. The Member State concerned shall in such cases inform the Commission of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in Article 34(1).
3. Upon request submitted in accordance with paragraph 1 of this Article, the Commission may, by means of implementing acts adopted within the periods set out in Annex IV, establish whether an activity referred to in Articles 8 to 14 is directly exposed to competition on the basis of the criteria set out in Article 34. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 105(2).
Contracts intended to enable the activity concerned to be carried out and design contests that are organised for the pursuit of such an activity shall cease to be subject to this Directive in any of the following cases:
(a) The Commission has adopted the implementing act establishing the applicability of Article 34(1) within the period provided for in Annex IV;
(b) has not adopted the implementing act within the period provided for in Annex IV.
After the submission of a request, the Member State or the contracting entity concerned may, with the Commission’s agreement, substantially modify its request, in particular as regards the activities or the geographical areas In that case, a new period for the adoption of the implementing act shall apply, which shall be calculated in accordance with paragraph 1 of Annex IV, unless a shorter period is agreed on by the Commission and the Member State or contracting entity which has presented the request.
-
Recital 10
View article
The notion of ‘contracting authorities’ and in particular that of ‘bodies governed by public law’ have been examined repeatedly in the case-law of the Court of Justice of the European Union. To clarify that the scope of this Directive ratione personae should remain unaltered, it is appropriate to maintain the definitions on which the Court based itself and to incorporate a certain number of clarifications given by that case-law as a key to the understanding of the definitions them selves, without the intention of altering the under standing of the concepts as elaborated by the case-law. For that purpose, it should be clarified that a body which operates in normal market conditions, aims to make a profit, and bears the losses resulting from the exercise of its activity should not be considered as being a ‘body governed by public law’ since the needs in the general interest, that it has been set up to meet or been given the task of meeting, can be deemed to have an industrial or commercial character.
Similarly, the condition relating to the origin of the funding of the body considered, has also been examined in the case-law, which has clarified inter alia that being financed for ‘the most part’ means for more than half, and that such financing may include payments from users which are imposed, calculated and collected in accordance with rules of public law.
-
Article 2 Definitions
-
Directive 2014/25 on procurement by entities operating in the water, energy, transport and postal services sectors
-
Article 3 Contracting Authorities
View article
1. For the purpose of this Directive ‘contracting authorities’ means State, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public
2. ‘Regional authorities’ includes all authorities of the administrative units, listed non-exhaustively in NUTS 1 and 2, as referred to in Regulation (EC) No 1059/2003 of the European Parliament and of the Council.
3. ‘Local authorities’ includes all authorities of the adminis trative units falling under NUTS 3 and smaller administrative units, as referred to in Regulation (EC) No 1059/2003.
4. ‘Bodies governed by public law’ means bodies that have all of the following characteristics:
(a) they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) they have legal personality; and
(c) they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law; or are subject to management supervision by those authorities or bodies; or which have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
-
Article 4 Contracting Entities
View article
1. For the purpose of this Directive contracting entities are entities, which:
(a) are contracting authorities or public undertakings and which pursue one of the activities referred to in Articles 8 to 14;
(b) when they are not contracting authorities or public undertakings, have as one of their activities any of the activities referred to in Articles 8 to 14, or any combination thereof and operate on the basis of special or exclusive rights granted by a competent authority of a Member State.
2. ‘Public undertaking’ means any undertaking over which the contracting authorities may exercise directly or indirectly a dominant influence by virtue of their ownership of it, their financial participation therein, or the rules which govern it.
A dominant influence on the part of the contracting authorities shall be presumed in any of the following cases in which those authorities, directly or indirectly:
(a) hold the majority of the undertaking’s subscribed capital;
(b) control the majority of the votes attaching to shares issued by the undertaking,
(c) can appoint more than half of the undertaking’s administrative, management or supervisory body.
3. For the purposes of this Article, ‘special or exclusive rights’ means rights granted by a competent authority of a Member State by way of any legislative, regulatory or administrative provision the effect of which is to limit the exercise of activities defined in Articles 8 to 14 to one or more entities, and which substantially affects the ability of other entities to carry out such activity.
Rights which have been granted by means of a procedure in which adequate publicity has been ensured and where the granting of those rights was based on objective criteria shall not constitute special or exclusive rights within the meaning of the first subparagraph.
Such procedures include:
(a) procurement procedures with a prior call for competition in conformity with Directive 2014/24/EU, Directive 2009/81/EC, Directive 2014/23/EU or this Directive;
(b) procedures pursuant to other legal acts of the Union listed in Annex II, ensuring adequate prior transparency for granting authorisations on the basis of objective criteria.
4. The Commission shall be empowered to adopt delegated acts in accordance with Article 103 concerning the modification of the list of Union legal acts set out in Annex II, when on the basis of the adoption of new legal acts, repeal or modification of such legal acts, such amendments prove necessary.
-
Recital 1, 12, 20, 21
View section / regulation
(1) In the light of the results of the Commission staff working paper of 27 June 2011 entitled ‘Evaluation Report — Impact and Effectiveness of EU Public Procurement Legislation’, it appears appropriate to maintain rules on procurement by entities operating in the water, energy, transport and postal services sectors, since national authorities continue to be able to influence the behaviour of those entities, including participation in their capital and representation in the entities’ administrative, managerial or supervisory bodies. Another reason to continue to regulate procurement in those sectors is the closed nature of the markets in which the entities in those sectors operate, due to the existence of special or exclusive rights granted by the Member States concerning the supply to, provision or operation of networks for providing the service concerned.
(12) The notion of ‘contracting authorities’ and in particular that of ‘bodies governed by public law’ have been examined repeatedly in the case-law of the Court of Justice of the European Union. To clarify that the scope of this Directive ratione personae should remain unaltered, it is appropriate to maintain the definitions on which the Court based itself and to incorporate a certain number of clarifications given by that case-law as a key to the understanding of the definitions them selves, without the intention of altering the under standing of the concept as elaborated by the case-law.
For that purpose, it should be clarified that a body which operates in normal market conditions, aims to make a profit, and bears the losses resulting from the exercise of its activity should not be considered as being a ‘body governed by public law’ since the needs in the general interest, that it has been set up to meet or been given the task of meeting, can be deemed to have an industrial or commercial character. Similarly, the condition relating to the origin of the funding of the body considered, has also been examined in the case-law, which has clarified, inter alia, that being financed for ‘the most part’ means for more than half, and that such financing may include payments from users which are imposed, calculated and collected in accordance with rules of public law.
(20) The notion of special or exclusive rights is central to the definition of the scope of this Directive, since entities which are neither contracting authorities nor public undertakings within the meaning of this Directive are subject to its provisions only to the extent that they exercise one of the activities covered on the basis of such rights. It is therefore appropriate to clarify that rights which have been granted by means of a procedure based on objective criteria, in particular pursuant to Union legislation, and for which adequate publicity has been ensured do not constitute special or exclusive rights for the purposes of this Directive.
That legislation should include Directive 2009/73/EC of the European Parliament and of the Council, Directive 2009/72/EC of the European Parliament and of the Council, Directive 97/67/EC of the European Parliament and of the Council, Directive 94/22/EC of the European Parliament and of the Council and Regulation (EC) No 1370/2007 of the European Parliament and of the Council.
It should also be clarified that that listing of legislation is not exhaustive and that rights in any form, including by way of acts of concession, which have been granted by means of other procedures based on objective criteria and for which adequate publicity has been ensured do not constitute special or exclusive rights for the purposes of defining the scope of this Directive ratione personae. The concept of exclusive rights should also be used in the context of determining whether use of a negotiated procedure without prior call for competition would be justified because the works, supplies or services can be supplied only by a particular economic operator because of the protection of certain exclusive rights.
However, bearing in mind the different ratio legis behind these provisions, it should be clarified that the notion of exclusive rights does not need to have the same meaning in the two contexts. It should thus be clarified that an entity, which has won the exclusive right to provide a given service in a given geographic area following a procedure based on objective criteria for which adequate transparency has been ensured would not, if a private body, be a contracting entity itself, but would, nevertheless, be the only entity that could provide the service concerned in that area.
(21) Certain entities are active in the fields of production, transmission or distribution of both heat and cooling. There may be some uncertainty as to which rules apply to respectively heat and cooling related It should therefore be clarified that contracting authorities, public undertakings and private companies, which are active in the heating sector are subject to this Directive, however, in the case of private under takings, on the additional condition of operating on the basis of special or exclusive rights. On the other hand, contracting authorities operating in the cooling field are subject to the rules of Directive 2014/24/EU, whereas public undertakings and private undertakings, irrespectively of whether these latter operate on the basis of special or exclusive rights, are not subject to procurement rules. It should finally be clarified that contracts awarded for the pursuit of both heating and cooling contracts should be examined under the provisions on contracts for the pursuit of several activities to determine which procurement rules, if any, will govern their award.
-
Article 3 Contracting Authorities
-
Directive 2014/23 on the award of concession contracts
-
Article 6 Contracting authorities
View article
1. For the purposes of this Directive, ‘contracting authorities’ means State, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law other than those authorities, bodies or associations which pursue one of the activities referred to in Annex II and award a concession for the pursuit of one of those activities.
2. ‘Regional authorities’ includes all authorities of the administrative units listed non-exhaustively in NUTS 1 and 2, as referred to in Regulation (EC) No 1059/2003 of the European Parliament and of the Council.
3. ‘Local authorities’ includes all authorities of the administrative units falling under NUTS 3 and smaller administrative units, as referred to in Regulation (EC) No 1059/2003.
4. ‘Bodies governed by public law’ means bodies that have all of the following characteristics:
(a) they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b) they have legal personality; and
(c) they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law; or are subject to management supervision by those bodies or authorities; or have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.
-
Article 7 Contracting Entities
View article
1. For the purposes of this Directive, ‘contracting entities’ means entities which pursue one of the activities referred to in Annex II and award a concession for the pursuit of one of those activities, and which are one of the following:
(a) State, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law;
(b) public undertakings as defined in paragraph 4 of this Article;
(c) entities other than those referred to in points (a) and (b) of this paragraph, but which operate on the basis of special or exclusive rights, granted for the exercise of one of the activities referred to in Annex
2. Entities which have been granted special or exclusive rights by means of a procedure in which adequate publicity has been ensured and where the granting of those rights was based on objective criteria shall not constitute ‘contracting entities’ within the meaning of point (c) of paragraph Such procedures shall include:
(a) procurement procedures with a prior call for competition in conformity with Directive 2014/24/EU of the European Parliament and of the Council (2) and Directive 2014/25/EU, Directive 2009/81/EC or this Directive;
(b) procedures pursuant to other legal acts of the Union listed in Annex III, ensuring adequate prior transparency for granting authorisations on the basis of objective
3. The Commission shall be empowered to adopt delegated acts in accordance with Article 48 concerning amendments to the list of the Union legal acts set out in Annex III where necessary because of the repeal or amendment of those acts, or because of the adoption of new
4. ‘Public undertaking’ means any undertaking over which the contracting authorities may exercise, directly or indirectly, a dominant influence by virtue of their ownership thereof, their financial participation therein, or the rules which govern
A dominant influence on the part of the contracting authorities shall be presumed in any of the following cases, in which those authorities, directly or indirectly:
(a) hold the majority of the undertaking’s subscribed capital;
(b) control the majority of the votes attaching to shares issued by the undertaking;
(c) can appoint more than half of the undertaking’s administrative, management or supervisory body.
-
Article 6 Contracting authorities
-
Directive 2014/24
-
UK
-
Procurement Act 2023
-
Section 2 Contracting Authorities
View section / regulation
2 Contracting authorities
(1) In this Act “contracting authority” means—
(a) a public authority, or
(b) in the case of a utilities contract, a public authority, public undertaking or private utility,
other than an excluded authority.
(2) In this Act—
“public authority” means a person that is—
(a) wholly or mainly funded out of public funds, or
(b) subject to public authority oversight,
and does not operate on a commercial basis (but see subsections (9) and (10));
“public undertaking” means a person that—
(a) is subject to public authority oversight, and
(b) operates on a commercial basis;
“private utility” means a person that—
(a) is not a public authority or public undertaking, and
(b) carries out a utility activity.
(3) A person is subject to public authority oversight if the person is subject to the management or control of—
(a) one or more public authorities, or
(b) a board more than half of the members of which are appointed by one or more public authorities.
(4) The following are examples of factors to be taken into account in determining whether a person operates on a commercial basis—
(a) whether the person operates on the basis that its losses would be borne, or its continued operation secured, by a public authority (whether directly or indirectly);
(b) whether the person contracts on terms more favourable than those that might reasonably have been available to it had it not been associated with a public authority;
(c) whether the person operates on a market that is subject to fair and effective competition.
(5) The following authorities are excluded authorities—
(a) a devolved Scottish authority, except where a devolved Scottish authority carries out procurement falling within section;
(b)the Security Service, the Secret Intelligence Service and the Government Communications Headquarters;
(c) the Advanced Research and Invention Agency;
(d) any person that is subject to public authority oversight—
(i) only by reference to a devolved Scottish authority, or
(ii) by reference to an authority mentioned in paragraph (b) or (c).
(6) An authority is a “devolved Scottish authority” if its functions are exercisable only in or as regards Scotland, and—
(a) none of its functions relate to reserved matters, or
(b) some of its functions relate to reserved matters and some do not.
(7) A contracting authority that is a public undertaking or private utility is to be treated as a devolved Scottish authority for the purposes of this Act if it operates only in or as regards Scotland, and—
(a) none of its activities relate to reserved matters, or
(b) some of its activities relate to reserved matters and some do not.
(8) In this Act, a reference to a devolved Scottish authority includes a reference to an authority that is to be treated as a devolved Scottish authority for the purposes of this Act.
(9) In this Act, a reference to a public authority includes a reference to the Common Council of the City of London.
(10) For the purposes of this Act, a person that operates on a commercial basis but is, as a controlled person, awarded an exempted contract by a public authority in reliance on paragraph 2 of Schedule 2 (vertical arrangements) is to be treated as a public authority in relation to any relevant sub-contract.
(11) This Act does not apply to His Majesty acting in his private capacity.
(12) In this section—
“relevant sub-contract” means a contract substantially for the purpose of performing (or contributing to the performance of) all or any part of the exempted contract;
“reserved matters” has the same meaning as in the Scotland Act 1998.
-
Section 2 Contracting Authorities
-
Procurement Act 2023
-
EU - CJEU
-
Case 31/87 Beentjes
Region: EU - CJEU
The concept of the 'State' is to be interpreted in functional terms
“11 For the purposes of this provision, the term “the State” must be interpreted in functional terms. The aim of the directive, which is to ensure the effective attainment of freedom of establishment and freedom to provide services in respect of public works contracts, would be jeopardized if the provisions of the directive were to be held to be inapplicable solely because a public works contract is awarded by a body which, although it was set up to carry out tasks entrusted to it by legislation, is not formally a part of the State administration.
12 Consequently, a body such as that in question here, whose composition and functions are laid down by legislation and which depends on the authorities for the appointment of its members, the observance of the obligations arising out of its measures and the financing of the public works contracts which it is its task to award, must be regarded as falling within the notion of the State for the purpose of the abovementioned provision, even though it is not part of the State administration in formal terms.”
-
Case C-44/96 Mannesmann
Region: EU - CJEU
A majority-owned subsidiary of the State or other public authority is not necessarily subject to procurement
“37. By its fourth and fifth questions, the national court is essentially asking whether an undertaking which carries on commercial activities and in which a contracting authority has a majority shareholding must itself be considered to be a contracting authority within the meaning of Article 1(b) of Directive 93/37, if that undertaking was established by the contracting authority in order to carry on commercial activities or if the contracting authority transfers to it funds derived from activities it pursues in order to meet needs in the general interest, not having an industrial or commercial character.
38. As pointed out at paragraph 21 above, it is clear from the wording of the second subparagraph of Article 1(b) of Directive 93/37 that the three conditions set out therein are cumulative.
39. It is therefore not sufficient that an undertaking was established by a contracting authority or that its activities are financed by funds derived from activities pursued by a contracting authority in order for it to be regarded as a contracting authority itself. It must also satisfy the condition set out in the first indent of Article 1(b) of Directive 93/37, that it must be a body established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character.
40. If that condition is not satisfied, an undertaking such as the one referred to by the national court cannot be considered to be a contracting authority within the meaning of Article 1(b) of the directive.
41. The answer to the fourth and fifth questions referred by the national court must therefore be that an undertaking which carries on commercial activities and in which a contracting authority has a majority shareholding is not to be regarded as a body governed by public law within the meaning of Article 1(b) of Directive93/37, and thus as a contracting authority within the meaning of that provision, on the sole ground that that undertaking was established by the contracting authority or that the contracting authority transfers to it funds derived from activities pursued in order to meet needs in the general interest, not having an industrial or commercial character.”
-
Case C-353/96 Commission v Ireland
Region: EU - CJEU
Indirect State control is sufficient for an entity to be subject to public procurement (as a body governed by public law)
“38 Moreover, the Minister’s power to give instructions to Coillte Teoranta, in particular requiring it to comply with State policy on forestry or to provide specified services or facilities, and the powers conferred on that Minister and the Minister for Finance in financial matters give the State the possibility of controlling Coillte Teoranta’s economic activity.
39 It follows that, while there is indeed no provision expressly to the effect that State control is to extend specifically to the awarding of public supply contracts by Coillte Teoranta, the State may exercise such control, at least indirectly.”
-
Case C-393/06 Ing Aigner
Region: EU - CJEU
Entity providing environmentally friendly heating was established to meet needs in the general interest not of an industrial/commercial character
“39 With regard, firstly, to the purpose of the establishment of the entity in question and the nature of the needs met, it is appropriate to note that, as is apparent from the documents before the Court, Fernwärme Wien was established specifically for the purpose of supplying district heating to homes, public institutions, offices, undertakings etc. in the City of Vienna by means of the use of energy produced by the destruction of waste. At the hearing before the Court, it was stated that, at present, that heating system serves approximately 250 000 homes, numerous offices and industrial plants and, in practice, all public buildings. To provide heating for an urban area by means of an environmentally-friendly process constitutes an aim which is undeniably in the general interest. It cannot, therefore, be disputed that Fernwärme Wien was established specifically to meet needs in the general interest.
40 In that regard, it is immaterial that such needs are also met or can be met by private undertakings. It is important that they should be needs which, for reasons in the general interest, the State or a regional authority generally chooses to meet itself or over which it wishes to retain a decisive influence (see, to that effect, Case C‑360/96 BFI Holding [1998] ECR I‑6821, paragraphs 44, 47, 51 and 53, and Joined Cases C‑223/99 and C‑260/99 Agorà and Excelsior [2001] ECR I‑3605, paragraphs 37, 38 and 41).
41 Secondly, in order to ascertain whether the needs met by the entity in question in the main proceedings have a character other than industrial or commercial, account must be taken of all the relevant law and facts such as the circumstances prevailing at the time when the body concerned was established and the conditions under which it exercises its activity. In that regard, it is important to check, inter alia, whether the body in question carries on its activities in a situation of competition (Case C‑18/01 Korhonen [2003] ECR I‑5321, paragraphs 48 and 49).
42 As stated in paragraph 39 of the present judgment, Fernwärme Wien was established specifically for the purpose of supplying district heating in the City of Vienna. It is common ground that the pursuit of profit did not underlie its establishment. While it is not impossible that those activities may generate profits distributed in the form of dividends to shareholders of the entity, the making of such profits can never constitute its principal aim (see, to that effect, Korhonen, paragraph 54).
43 With regard, subsequently, to the relevant economic environment or, in other words, the relevant market which must be considered in order to ascertain whether the entity in question is exercising its activities in competitive conditions, account must be taken, as the Advocate General proposes in points 53 and 54 of his Opinion, having regard to the functional interpretation of the concept of a ‘body governed by public law’, of the sector for which Fernwärme Wien was created, that is to say the supply of district heating by means of the use of energy produced by the burning of waste.
44 It is clear from the order for reference that Fernwärme Wien enjoys a virtual monopoly in that sector, since the two other undertakings operating in that sector are of negligible size and accordingly cannot constitute true competitors. Furthermore, there is a considerable degree of autonomy in this sector, since it would be very difficult to replace the district heating system by another form of energy, since this would require large-scale conversion work. Finally, the City of Vienna attaches a particular importance to this heating system, not least for reasons of environmental considerations. Thus, having regard to the pressure of public opinion, it would not permit it to be withdrawn, even if that system were to operate at a loss.
45 Having regard to the various indications provided by the referring court and as the Advocate General observes in point 57 of his Opinion, Fernwärme Wien is currently the only undertaking capable of meeting such needs in the general interest in the sector under consideration, so that it might choose to be guided by considerations other than economic ones in the award of its contracts.
46 In the judgments in BFI Holding (paragraph 49) and Agorà and Excelsior (paragraph 38), the Court held that the existence of significant competition may be an indication in support of the conclusion that there is no need in the general interest, not having an industrial or commercial character. In the circumstances of the case in the main proceedings, it is clear from the reference for the preliminary ruling that the criterion requiring the existence of significant competition is far from fulfilled.
47 It must be borne in mind that it is immaterial whether, in addition to its duty to meet needs in the general interest, an entity is free to carry out other profit-making activities, provided that it continues to attend to the needs which it is specifically required to meet. The proportion of profit-making activities actually pursued by that entity as part of its activities as a whole is also irrelevant for its classification as a body governed by public law (see, to that effect, Mannesmann Anlagenbau Austria and Others, paragraph 25; Korhonen, paragraphs 57 and 58; and Case C‑373/00 Adolf Truley [2003] ECR I‑1931, paragraph 56).
48 In the light of the foregoing considerations, the answer to the second question must be that an entity such as Fernwärme Wien is to be regarded as a body governed by public law within the meaning of the second subparagraph of Article 2(1)(a) of Directive 2004/17 and the second subparagraph of Article 1(9) of Directive 2004/18.”
-
Case C‑567/15 LitSpecMet
Region: EU - CJEU
Status as body governed by public law is determined by the entity's own purpose, but may include meeting the needs of a parent which is a contracting authority; existence of significant competition does not, itself, mean the entity is not a contracting authority
“31 The concept of ‘contracting authority’, including that of ‘body governed by public law’, must, in the light of the objectives of the directives on public procurement, seeking to exclude both the risk of preferring national tenderers or bidders in any contract award made by the contracting authorities and the possibility that a body financed or controlled by the State, regional authorities or other bodies governed by public law may be guided by considerations other than economic ones, must be interpreted in functional terms and broadly (see, to that effect, judgment of 15 May 2003, Commission v Spain, C‑214/00, EU:C:2003:276, paragraph 53 and the case-law cited).
32 It must be noted that VLRD appears to satisfy the conditions laid down in the second subparagraph, (b) and (c), of Article 1(9) of Directive 2004/18. It is not, in fact, in dispute that it has legal personality. In addition, the referring court has noted that VLRD is a wholly owned subsidiary of LG and that it is ‘controlled’ by the latter company.
33 Consequently, the only question which needs to be analysed concerns whether or not VLRD constitutes a ‘body established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character’ within the meaning of the second subparagraph, (a), of Article 1(9) of Directive 2004/18.
34 It is clear from the wording of the second subparagraph, (a), of Article 1(9) of Directive 2004/18 that the requirement laid down therein must be satisfied by the entity whose classification is being examined and not by another entity, even if the latter is the parent company of the former which supplies the latter with goods or services. It is therefore not sufficient that an undertaking was established by a contracting authority or that its activities are financed by funds derived from activities pursued by a contracting authority in order for it to be regarded as a contracting authority itself (judgment of 15 January 1998, Mannesmann Anlagenbau Austria and Others, C‑44/96, EU:C:1998:4, paragraph 39).
35 In addition, it is necessary to take into consideration the fact that the use of the term ‘specific’ shows the EU legislature’s intention to make only entities established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, the activity of which meets such needs, subject to the binding rules on public contracts…
It must be noted that it is irrelevant that, in addition to the activities intended to meet needs in the general interest, the entity in question also carries out other activities for profit on the competitive market (see, to that effect, judgments of 15 January 1998, Mannesmann Anlagenbau Austria and Others, C‑44/96, EU:C:1998:4, paragraph 25, and of 10 April 2008, Ing. Aigner, C‑393/06, EU:C:2008:213, paragraph 47 and the case-law cited).
41 Thus, the fact that VLRD does not carry out only activities intended to meet needs in the general interest through internal transactions with LG, so that LG may carry out its transport activities, but also other profit-making activities is irrelevant in that regard.
42 In order to assess whether a body is covered by the concept of a ‘body governed by public law’ within the meaning of the second subparagraph, (a), of Article 1(9) of Directive 2004/18, it is also necessary for it to meet needs in the general interest, not having an industrial or commercial character.
43 In that regard, it is appropriate to note that in the assessment of that character account must be taken of relevant legal and factual circumstances, such as those prevailing when the body concerned was formed and the conditions in which it carries on its activity, including, inter alia, lack of competition on the market, the fact that its primary aim is not the making of profits, the fact that it does not bear the risks associated with the activity, and any public financing of the activity in question.
44 As the Court has held, if, with regard to the activities intended to meet needs in the general interest, the body operates in normal market conditions, aims to make a profit and bears the losses associated with the exercise of its activity, it is unlikely that the needs it seeks to meet are not of an industrial or commercial nature (judgment of 16 October 2003, Commission v Spain, C‑283/00, EU:C:2003:544, paragraphs 81 and 82 and the case-law cited).
45 That being the case, the existence of significant competition does not, of itself, allow the conclusion to be drawn that there is no need in the general interest, which is not of an industrial or commercial character.
46 In those circumstances, it is for the referring court to ascertain.”
-
Case 31/87 Beentjes
-
EU - General Court
-
Case T‑38/21 Inivos Ltd
Region: EU - General Court
Decision to use negotiated procedure without a competition was not open to challenge, as opposed to the award decision, which was; however, applicants did not satisfy the Commission's criteria to select operators and so challenge was inadmissible
Decision to use negotiated procedure could not be challenged; but final award decision could be challenged
“21. [According] to settled case-law, only measures which produce binding legal effects and are capable of affecting the interests of third parties by bringing about a distinct change in their legal situation constitute measures in respect of which an action for annulment may be brought (see, to that effect, judgments of 31 March 1971, Commission v Council, 22/70, EU:C:1971:32, paragraph 42; of 2 March 1994, Parliament v Council, C‑316/91, EU:C:1994:76, paragraph 8; and of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 36).
In order to determine whether an act the annulment of which is sought produces such effects, it is necessary to look to its substance (judgment of 11 November 1981, IBM v Commission, 60/81, EU:C:1981:264, paragraph 9), the context in which it was drafted (see, to that effect, judgment of 17 February 2000, Stork Amsterdam v Commission, T‑241/97, EU:T:2000:41, paragraph 62), and the intention of those who drafted it (judgment of 26 January 2010, Internationaler Hilfsfonds v Commission, C‑362/08 P, EU:C:2010:40, paragraph 52; see also, to that effect, judgment of 17 July 2008, Athinaïki Techniki v Commission, C‑521/06 P, EU:C:2008:422, paragraphs 42, 46 and 52). By contrast, the form in which an act is adopted is in principle irrelevant for assessing the admissibility of an action for annulment (judgments of 11 November 1981, IBM v Commission, 60/81, EU:C:1981:264, paragraph 9, and of 7 July 2005, Le Pen v Parliament, C‑208/03 P, EU:C:2005:429, paragraph 46)…
24. [Acts] or decisions adopted by a procedure involving several stages, in particular where they are the culmination of an internal procedure, are open to review only if they are measures definitively laying down the Commission’s position on the conclusion of that procedure, and not provisional measures intended to pave the way for the final decision (judgments of 7 March 2002, Satellimages TV5 v Commission, T‑95/99, EU:T:2002:62, paragraph 32, and of 16 December 2020, Balti Gaas v Commission and INEA, T‑236/17 and T‑596/17, not published, EU:T:2020:612, paragraph 88)…
29. [The] decision to use the negotiated procedure without prior publication of a contract notice states the reasons for using that procedure. That document thus determines the choice of the procedure applicable to the contract award at issue. However, as the Commission stated in a reply to a written question put by the Court, that document is not addressed to any particular person and does not prejudge the economic operators which are invited to tender for that contract. Therefore, no operators were invited to tender at that stage of the procedure and, consequently, no operators could have been excluded.
30 Accordingly, the applicants are adversely affected by the decision not to invite them to tender, which in the present case took the form of the contested award decision. The applicants may therefore, provided that they were aware of it, bring an action against the last act available at the time when they brought their action, which excludes them from the procedure. The decision to use the negotiated procedure without prior publication of a contract notice does not constitute a decision affecting the applicants’ interests since that decision did not exclude them from the tendering procedure at issue. When the action was brought, the Commission had already adopted, on 3 November 2020, the award decision which definitively awarded the contract and which resulted in the definitive exclusion of the applicants from the tendering procedure at issue.
31 Consequently, the decision to use the negotiated procedure without prior publication of a contract notice is preparatory in nature.
As regards the applicants’ argument that the fact that they were absent from the tendering procedure cannot be used to challenge the admissibility of their action against the decision to use the negotiated procedure without prior publication of a contract notice, it must be borne in mind that any legal defects in measures of a purely preparatory nature may be relied upon in an action directed against the definitive act for which they represent a preparatory step (see judgment of 16 December 2020, Balti Gaas v Commission and INEA, T‑236/17 and T‑596/17, not published, EU:T:2020:612, paragraph 101 and the case-law cited). In the present case, by their second head of claim, the applicants seek annulment of the contested award decision, which in principle allows them to rely on any irregularity in the choice to use the negotiated procedure without prior publication of a contract notice, provided that the head of claim seeking annulment of the contested award decision is admissible.
33 Accordingly, the first head of claim, seeking annulment of the decision to use the negotiated procedure without prior publication of a contract notice, must be declared inadmissible.”
Applicants could not meet criteria and so challenge was inadmissible
“In that regard, it is apparent from settled case-law that, where the decision affects a group of persons who were identified or identifiable when that measure was adopted by reason of criteria specific to the members of the group, those persons might be individually concerned by that measure inasmuch as they form part of a limited class of economic operators (judgment of 13 March 2008, Commission v Infront WM, C‑125/06 P, EU:C:2008:159, paragraphs 71 and 72; see also, to that effect, judgment of 12 July 2022, Nord Stream 2 v Parliament and Council, C‑348/20 P, EU:C:2022:548, paragraph 158 and the case-law cited).
71 In the specific circumstances of the contracting authority’s use of the negotiated procedure without prior publication of a contract notice, an operator which had not been invited to participate in that procedure, even though it was able to fulfil the criteria applied by the contracting authority to select the undertakings to be invited to tender, must be regarded as belonging to a limited class of competitors able to submit a tender if they had been invited to participate in the procedure…
78. [The] applicants have not adduced sufficient evidence to show that they were able to fulfil the criteria used by the Commission to select the operators which had been invited to tender under a negotiated procedure without prior publication of a contract notice. Consequently, they have not proved that they formed part of a limited class of operators in a position to be invited to tender and to submit a tender. It follows that the contested award decision is not of individual concern to the applicants.
79 Accordingly, the second head of claim, seeking annulment of the contested award decision, is inadmissible.”
-
Case T‑38/21 Inivos Ltd
GENERAL
The concept of a “contracting authority” is an EU law concept (and does not depend on national definitions or on the definition of a public/administrative law body in the law of the relevant Member State)
E.g. Advocate General Alber in Case C-283/00 Commission v Spain:
“48. … In spite of the wording body governed by public law , it does not depend on which branch of law the body is subject to, public or private.
49. In my Opinions in Truley (26) and Korhonen (27) I explained why I consider that it is not compatible with the spirit and purpose of the public procurement directives to interpret needs in the general interest according to how the Member State concerned itself defines its sphere of activity. The independent nature of Community law and the aim of its uniform application argue in favour of understanding and interpreting the term as an autonomous concept of Community law. This view is supported by the spirit and purpose of the public procurement directives, which is to contribute to the establishment and functioning of the single market.
50. The following example may illustrate this line of thought. If the branch of law to which the body was subject under national provisions were the deciding factor, the authorities of a Member State could easily evade the application of the public procurement directives. It would be sufficient to set up a company, a Procurement PLC, say, to which only private law was applicable, and to establish as the purpose of its business the procurement of office furniture, paper etc. for the State authorities. Although the State would be the sole shareholder and could influence all the decisions taken by the company, it would not be required to issue invitations to tender for contracts because Procurement PLC was subject to private rather than public law. That is clearly not consistent with the spirit and purpose of the public procurement directives.
51. The determination of the personal scope of Directive 93/37 cannot therefore depend on whether the body is subject to public or private law under domestic law.”
The concept of a contracting authority must be interpreted in functional terms (in order to give full effect to the principle of free movement)
Case 31/87 Beentjes at [11]-[12]:
“For the purposes of this provision, the term “the State” must be interpreted in functional terms. The aim of the directive, which is to ensure the effective attainment of freedom of establishment and freedom to provide services in respect of public works contracts, would be jeopardized if the provisions of the directive were to be held to be inapplicable solely because a public works contract is awarded by a body which, although it was set up to carry out tasks entrusted to it by legislation, is not formally a part of the State administration.
Consequently, a body such as that in question here, whose composition and functions are laid down by legislation and which depends on the authorities for the appointment of its members, the observance of the obligations arising out of its measures and the financing of the public works contracts which it is its task to award, must be regarded as falling within the notion of the State for the purpose of the abovementioned provision, even though it is not part of the State administration in formal terms.”
Case C-360/96 BFI at [62]:
“[It] must be borne in mind that, with a view to giving full effect to the principle of freedom of movement, the term ‘contracting authority must be interpreted in functional terms (see, to that effect, Case 31/87 Beentjes v Netherlands State [1988] ECR 4635, paragraph 11). In view of that need, no distinction should be drawn by reference to the legal form of the provisions setting up the entity and specifying the needs which it is to meet”
Case C-567/15 LitSpecMet at [31]:
“The concept of ‘contracting authority’, including that of ‘body governed by public law’, must, in the light of the objectives of the directives on public procurement, seeking to exclude both the risk of preferring national tenderers or bidders in any contract award made by the contracting authorities and the possibility that a body financed or controlled by the State, regional authorities or other bodies governed by public law may be guided by considerations other than economic ones, must be interpreted in functional terms and broadly.”
BODY GOVERNED BY PUBLIC LAW
3 Cumulative Conditions to be met
(I) Established to meet needs in the general interest not of an industrial or commercial character
Meeting the first condition will depend on why the entity was established and what functions it performs. This will involve a factual inquiry into why the entity was established. Its principal purpose must be to meet needs in the general interest. In deciding that question, it is immaterial that such needs are also met or can be met by private undertakings. In general, they should be needs which, for reasons in the general interest, the State chooses to meet itself or over which it wishes to retain a decisive influence.
Immaterial that the needs are also met or can be met by private undertakings
Case C‑393/06 Ing. Aigner:
“40 In that regard, it is immaterial that such needs are also met or can be met by private undertakings.”
Immaterial that entity is free to also carry out commercial activity (also immaterial that meeting needs in the general interest constitutes only a small proportion of the entity’s overall activities)
Case C-44/96 Mannesmann at [25]:
“[It] is immaterial that such an entity is free to carry out other activities in addition to that task, such as the production of other printed matter and the publication and distribution of books. The fact, raised by the Austrian Government in its written observations, that meeting needs in the general interest constitutes only a relatively small proportion of the activities actually pursued by the ÖS is also irrelevant, provided that it continues to attend to the needs which it is specifically required to meet.”
“55. It must be borne in mind here that, in Mannesmann Anlagenbau Austria … the Court held that it was immaterial whether, in addition to its duty to meet needs in the general interest, an entity was free to carry out other activities. The fact that meeting needs in the general interest constitutes only a relatively small proportion of the activities actually pursued by that entity is also irrelevant, provided that it continues to attend to the needs which it is specifically required to meet.
56. Since the status of a body governed by public law is not dependent on the relative importance, within its business as a whole, of the meeting of needs in the general interest not having an industrial or commercial character, it is a fortiori immaterial that commercial activities may be carried out by a separate legal person forming part of the same group or concern as it.
57. Conversely, the fact that one of the undertakings of a group or concern is a body governed by public law is not sufficient for all of them to be regarded as contracting authorities (see, to that effect, Mannesmann Anlagenbau Austria, cited above, paragraph 39).”
Condition as to non-commercial/non-industrial goal to be met by the entity itself (not the contracting authority which established it)
“34. It is clear from the wording of the second subparagraph, (a), of Article 1(9) of Directive 2004/18 that the requirement laid down therein must be satisfied by the entity whose classification is being examined and not by another entity, even if the latter is the parent company of the former which supplies the latter with goods or services. It is therefore not sufficient that an undertaking was established by a contracting authority or that its activities are financed by funds derived from activities pursued by a contracting authority in order for it to be regarded as a contracting authority itself (judgment of 15 January 1998, Mannesmann Anlagenbau Austria and Others, C‑44/96, EU:C:1998:4, paragraph 39).”
All circumstances relevant to determining nature of the activity
“41. [Account] must be taken of all the relevant law and facts such as the circumstances prevailing at the time when the body concerned was established and the conditions under which it exercises its activity. In that regard, it is important to check, inter alia, whether the body in question carries on its activities in a situation of competition.”
The fact that the needs are or can be met by private undertakings does not determine how they are categorised
Case C-360/96 Gemeente Arnhem v BFI Holding BV:
53. [The] term “needs in the general interest, not having an industrial or commercial character” does not exclude needs which are or can be satisfied by private undertakings as well”
Significant competition may indicate that the activity has a commercial/industrial character
“51. If the body operates in normal market conditions, aims to make a profit, and bears the losses associated with the exercise of its activity, it is unlikely that the needs it aims to meet are not of an industrial or commercial nature. In such a case, the application of the Community directives relating to the coordination of procedures for the award of public contracts would not be necessary, moreover, because a body acting for profit and itself bearing the risks associated with its activity will not normally become involved in an award procedure on conditions which are not economically justified.”
To be of industrial/commercial character, the activity must be exposed to competition
“46. In the judgments in BFI Holding (paragraph 49) and Agorà and Excelsior (paragraph 38), the Court held that the existence of significant competition may be an indication in support of the conclusion that there is no need in the general interest, not having an industrial or commercial character. In the circumstances of the case in the main proceedings, it is clear from the reference for the preliminary ruling that the criterion requiring the existence of significant competition is far from fulfilled.”
The use of the word “criterion” suggested that for an activity to fall outside the definition of a need in the general interest, not of an industrial or commercial character, there is a requirement that it face significant competition; although the conversethat where there is an absence of significant competition the entity would fall within the definitiondoes not hold true.
Expansion into profit-making areas does not affect status as body governed by public law
Examples of activities not of an industrial/commercial character
Examples of activities that have been found to be needs in the general interest, not of an industrial and commercial character, include the removal and treatment of household refuse (which for reasons of public health and environmental protection, the State may require to be carried out by public authorities or over which it wishes to retain a decisive influence) (Case C-360/96 Gemeente Arnhem v BFI Holding BV EU:C:1998:525, §52); funeral undertakers (an activity linked to public policy as the State has a clear interest in controlling the issuing of death certificates; and an activity which for public health reasons the State may be justified in controlling) (Case C-373/00 Adolf Truley GmbH v Bestattung Wien GmbH EU:C:2003:110 , §§52-53); the provision of public recreational and leisure facilities (Case C-306/97 Connemara Machine Turf Ltd v Coillte Teoranta EU:C:1998:623); and a body established by a local authority which acquires planning and construction services with a view to promoting the development of industrial or commercial activities on the territory of that local authority by constructing premises to be leased to undertakings (this activity stimulating trade and economic and social development of the local authority) (Case C-18/01 Arkkitehtuuritoimisto Riitta Korhonen Oy v Varkauden Taitotalo Oy EU:C:2003:300)
(II) Legal Personality
Whether a body has legal personality is a matter of national law
Case C-44/96 Mannesmann at [27]:
“As regards the second condition laid down in the second subparagraph of Article1(b) of Directive 93/37, it should be noted that, according to the national Law, theÖS has legal personality.”
(III) State Dependency
The third condition requires that the entity be dependent on the State, a regional or local authority or another body governed by public law. This dependency may be financial or based on control (management supervision or the right to appoint a majority of the board).
Only payments without specific consideration are public financing
Case C-380/98 University of Cambridge at [31]:
“Whilst the way in which a particular body is financed may reveal whether it is closely dependent on another contracting authority, it is clear that that criterion is not an absolute one. Not all payments made by a contracting authority have the effect of creating or reinforcing a specific relationship of subordination or dependency. Only payments which go to finance or support the activities of the body concerned without any specific consideration therefor may be described as ‘public financing.”
The phrase “for the most part” refers to more than half
Case C-380/98 University of Cambridge at [33]:
“[The] term ‘for the most part in Article 1(b), second subparagraph, third indent, of Directives 92/50, 93/36 and 93/37 means ‘more than half’.”
See, now, Article 2(1)(4)(c) of Directive 2014/24: “they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law.”
In deciding the proportion of State funding, all income is considered
Case C-380/98 University of Cambridge at [36]:
“[In] order to determine correctly the percentage of public financing of a particular body account must be taken of all of its income, including that which results from a commercial activity.”
The period for calculation of the entity’s budgetary year
Case C-380/98 University of Cambridge at [40]-[41]:
“40. Accordingly, the decision as to whether a body such as the University is a ‘contracting authority must be made annually and the budgetary year during which the procurement procedure is commenced must be regarded as the most appropriate period for calculating how that body is financed.
41. That being so, legal certainty and transparency require that both the University and third parties concerned are in a position to know from the beginning of the budgetary year whether the procurement contracts they envisage awarding during that year fall within the scope of Directives 92/50, 93/36 and 93/37. It follows that for the purposes of deciding whether a university is a ‘contracting authority the way in which it is financed must be calculated on the basis of the figures available at the beginning of the budgetary year, even if they are only provisional.”
State financing need not be direct, it may be indirect
Case C-337/06 Bayerischer Rundfunk at [48]-[49]:
Persons who possessed a receiver had to pay a fee
“48. [Financing] such as that at issue in the main proceedings, which is brought into being by a measure of the State, is guaranteed by the State and is secured by methods of charging and collection which fall within public authority powers, satisfies the condition of ‘financing … by the State’ for the purposes of application of the Community rules on the awarding of public contracts.
49 That method of indirect financing is sufficient for the condition on ‘financing … by the State’ laid down in the Community legislation to be satisfied and it is not necessary that the State itself establish or appoint a public or private body to the task of collection of the fee.”
-
Applications for Exemption under Article 35 of Directive 2014/25 (Utilities)
Article 34 of Directive 2014/25 allows contracting entities to seek a decision that the Directive does not apply to the award of contracts for a specific activity. This allows contracting entities to initiate requests and make direct submissions regarding market conditions.
Article 34 provides that Directive 2014/25 does not apply to contracts that would otherwise be covered, where, in the Member State in which it was performed, the specific activity (transport, energy etc) was “directly exposed to competition on markets to which access is not restricted”.
Thus, a Member State may apply to the Commission seeking a decision that certain activities are not subject to the Directive. A number of successful applications have been made under the former provision. For example, the Commission issued a decision that the production and sale of electricity in Sweden was not subject to the Directive (Commission Decision 2007/706/EC, 29 October 2007, [2007] OJ L287/18). That decision illustrates how the Commission carries out a market analysis in considering whether there is sufficient competition in the market to justify the application of Article 30 (under Directive 2004/17), focusing on factors such as market concentration, the number of competitors and the extent of customer switching (“an indicator of genuine price competition”). Other Article 30 exemptions granted by the Commission include those in relation to aspects of the postal sector in Italy, Sweden, Denmark and Finland and electricity in Austria, England, Wales and Scotland and Finland. There have also been a number of unsuccessful applications under Article 30, including in respect of the electricity industry in the Czech Republic and Poland (see the Commission’s website for details of these decisions).
Successful claims under Article 34 include a Decision by the Commission exempting courier services and other services than postal services in Poland from the application of the 2014 Utilities Directive. (Commission Decision 2016/1195/EU, 22 July 2016, [2016] OJ L197/4)
Article 34 of Directive 2014/25 also clarifies that an application for an exemption decision may relate solely to an activity which is otherwise part of a larger sector remaining under regulation, or in part of a Member State rather than the country as a whole. For example, a request may be made seeking an exemption for electricity distribution in a particular province only, or for sea ports shipping to certain markets, but not ports shipping to others.