EU Competition Law and LiberalProfessions: an Uneasy Relationship?

Copyright

Contents

PREFACE

ACKNOWLEDGEMENTS

ABBREVIATIONS

LIST OF DIAGRAMS

CHAPTER ONE: INTRODUCTION – REASON AND PASSION IN DISCUSSING PROFESSIONAL REGULATION

A. Context

1. Liberal professions in the European economy

2. Liberal professions and their regulatory environment

3. Better regulation in regulated professions to enhance the internal market for services

B. Objective and Scope

C. Approach

CHAPTER TWO: LEGAL ISSUES IN PERSPECTIVE

A. The Origins of Liberal Professions and their Regulation

Diagram (no. 1) on the actors in the field of professional regulation

B. Economic Theory and the Control of Professional Activities

C. The Framework of EU Competition Law in a Nutshell

D. Opening the Market for Liberal Professions

1. Free movement of liberal practitioners

2. Towards applying EU competition law to professional regulation

E. The Case Law Applying EU Competition Law to the Liberal Professions

1. 1987 – Case Vlaamse Reisbureaus

2.1993, 1998, 2000 – Case (trilogy) Consiglio Nazionale degli Spedizionieri Doganali (CNSD)

3. 1995 – Case Colegio Oficial de Agentes de la Propriedad Industrial (COAPI)

4. 1995, 1997 – Case Bilanzbuchhalter v Commission

5. 1999, 2000, 2001 – Case Institute of Professional Representatives before the European Patent Office (EPI)

6. 2000 – Case Pavlov

7. 2001 – Case Giuseppe Conte v Stefania Rossi

8. 2001 – Case Ambulanz Glöckner

9. 2002 – Case Wouters et al. v NOvA

10. 2002 – Case Arduino

11. 2004 – Case Belgian Architects

12. 2005 – Case Piau v Commission (FIFA)

13. 2005 – Case Mauri v Ministero della Giustizia

14. 2006 – Case Servizi Ausiliari Dottori Commercialisti v Giuseppe Calafiori

15. 2006 – Cases Macrino and Cipolla

16. 2008 – Case Ioannis Doulamis

17. 2010 – Case French Pharmacists (LABCO/ONP)

F. More Recent Developments to Modernise the Professions in Terms of Competition Law

1. At Union level – the modernisation of professional regulation

2. At national level – between deregulation, re-regulation and inertia

Conclusion

CHAPTER THREE: LIBERAL PROFESSIONS IN THE REMIT OF EU COMPETITION LAW: TWO JURISDICTIONAL ELEMENTS

A. The Concept of Undertaking in EU Competition Law

The Höfner formula

Distinguishing economic from non-economic activities

1. Members of a profession as undertakings in the sense of competition law

1.1. Höfner formula: Every entity engaged in an economic activity

1.2. regardless of the legal status of the members of a profession

2. Certain categories of members of the professions not qualifying as undertakings

2.1. Profession-specific concerns to outweigh the economic character of activities exercised by members of a profession?

Comparison to the field of sports

Diagram (no. 2) on the distinction made in Meca-Medina II

Trying the relativity of the concept of undertaking: nature of an activity versus motives for certain rules

2.2. Höfner contrasted with activities not having a character justifying the application of competition law

2.2.1. Background: the necessary exercise of public authority is not covered by the EU competition rules

2.2.2. Critical discussion of the case law disregarding the comparative market criterion

2.2.2.1. Assessing the 1994 case SAT/Eurocontrol and the 1997 case Calì

The exercise of public authority as a substantive consideration

The exercise of public authority corelating to classical State prerogatives

A seeming objective standard revealing a case by case approach

A contrasting example from the aviation control sector

Diverting from ‘necessary’ to ‘typical’ powers of public authority

2.2.2.2. Contrasting the case law with the 2001 case Glöckner

2.2.2.3. Activities not to be carried out under market conditions

Activities genuinely devoid of an economic character?

More case law to be contrasted: the 2006 case SELEX

Diagram (no. 3) on the latitude of the jurisdictional scope of (EU) competition law

2.2.3. Justiciable or not: fundamental critique on the criterion of ‘typical’ exercise of public authority

2.2.3.1. First fundamental critique: the criterion does not respect the objective character of the concept of undertaking

More opposition to an imperative public authority criterion

Second-guessing Member States’ intentions

Dr. Jekyll and Mr. Hyde

2.2.3.2. Second fundamental critique: more tangible criteria are required

Comparison to the field of State aid

In search of a predictable standard: securing essential functions without gaining a competitive advantage

Interim conclusions

2.2.4. Illustration by particular professional sectors: legal aid, health care and notarial activities

2.2.5. Preliminary conclusion: Limiting the limits

2.3. Employed professionals

3. Professional associations as undertakings?

B. Union Dimension – The Potential of Professional Regulations to Affect Trade between Member States

1. A broad interpretation – Professional regulations capable of affecting trade between Member States

2. Limits to an all-encompassing Union dimension

2.1. Objective factors for a sufficient predictability of an effect on interstate trade

2.1.1. Possible effects on suppliers and customers of the sector concerned

2.1.2. Objective factors in professional services sectors

The nature of professional rules

The nature of professional services

2.2. Appreciability of the potential effect on interstate trade

Professional activities regulated at national level

Professional activities regulated at regional level

3. National instances applying EU competition law to liberal professions

C. Closing Remarks: in Favour of a Universal Applicability of EU Competition Law

INTRODUCTION TO CHAPTERS FOUR AND FIVE

CHAPTER FOUR: ARTICLE 101(1) TFEU AND ITS FIELD OF APPLICATION WITH REGARD TO PROFESSIONAL SELF-REGULATION

A. Collective Professional Regulation and the Jurisdictional Scope of Article 101(1) TFEU

1. Collective self-regulation within the remit of Article 101(1) TFEU

1.1. The accessory concept of association of undertakings: A body organising economically active members

1.1.1. Professional bodies as associations of undertakings

1.1.2. Associations with members that are no undertakings

Professional associations with employee members

Professional associations composed of professional associations

1.2. Professional self-regulation: agreement or decision

1.2.1. Decision of association: a relative concept reflecting an objective interpretation

1.2.2. The concept of decision interpreted

1.2.3. The practical difference between agreement and decision illustrated

2. Collective professional regulation not having a character that would justify the application of Article 101(1) TFEU

2.1. Limiting the jurisdictional scope ratione personae I: professional associations exercising activities connected with powers carried out by a public authority

A line of case law fit for extrapolation?

Coercive powers of professional associations

2.1.1. Regulatory powers of professional associations

2.1.2. Supervisory powers of professional associations

2.2. Limiting the jurisdictional scope ratione personae II: professional associations subject to control by a public authority

2.2.1. Composition of self-regulatory bodies

2.2.2. Obligation to observe public interest criteria

2.3. Preliminary conclusions on the scope ratione personae: two lines of case law compared

2.4. Particular professional sectors: the exception ratione personae II illustrated by national examples

Examples from the legal sector

Examples from the sector of architecture

Example from the medical sector

Interim observations

2.5. Exception ratione materiae: Regulation of ‘purely ethical issues’

B. Substantive Assessment under Article 101(1) TFEU: the Object and Effect of Professional Regulation

1. The concept of restriction of competition

An economic concept interpreted objectively: Allocative (in)efficiencies and relative rise in price

1.1. The distinction between restriction by object and by effect

Restrictions by object: presuming intention to restrict competition

Restrictions by effect and market definition

1.2. Confining the substantive scope of Article 101(1) TFEU

1.2.1. Net effect of reduced competitive forces: context

Article 101(1) TFEU is not a mere jurisdictional clause

No delimitation of scope in the form of grounds for justification

No rule of reason due to the bifurcated structure of Article 101 TFEU

1.2.2. Giving shape to the boundaries of the substantive element of restriction of competition

Ancillary restraints doctrine implementing an objective necessity testing

Ancillary restraints and restrictions by object: an integrated test of rebutting intention and demonstrating net effect

Diagram (no. 4) illustrating the different steps in deciding whether a certain conduct is restrictive of competition in the sense of Article 101(1)

2. Professional regulation and the object requirement

2.1. Price fixing

2.2. Market sharing

2.3. Other restrictions necessarily restricting competition

Entry requirements to the exercise of a professional activity

Prohibition of multi-disciplinary partnerships

2.4. Ancillary restraints and professional regulation

3. Professional regulation and the effect requirement

4. Limiting the prohibition of Article 101(1) TFEU: the overall context of professional regulation

4.1. The Wouters proviso introduced

4.2. Ancillary restraints sift through: Wouters compared with Gøttrup-Klim v DLG

4.2.1. Opposite results in applying the same test

4.2.2. Beyond ancillary restraints: limiting the reach of the prohibition of Article 101(1) TFEU

Diagram (no. 5) illustrating the effect of the Wouters proviso

A shift in paradigm: ‘proper’ commercialisation of professional services

Commercial versus ‘regulatory’ versus ‘deontological’ ancillarity?

Contra legem development of the law to achieve a just solution

Conflicting interest: regulatory vacuum versus legal stability

Alternative solution: limiting the legal consequences in time

4.3. Concluding remarks

CHAPTER FIVE: ARTICLE 102 TFEU AND SELF-REGULATORY PROFESSIONS

A. The Concept of Collective Dominance and Collectively Organised Professions

Collectivity and dominance

The ECJ and GC applying Article 102 TFEU in collectively regulated sectors: a conflict?

Diagram (no. 6) comparing Wouters and Piau on collective dominance

1. Connective links and the collectivity of liberal professions

Ability to know how other members are behaving (common policy)

Incentive not to depart from the common policy on the market

The foreseeable reaction of other market forces does not jeopardise the common policy

2. Measuring dominance and the market power of liberal professions

3. Dominance on a substantial part of the internal market and effect on intra-Union trade

B. The Competition Related Concept of Abuse and its Meaning in Relation to Professional Self-Regulation

1. Joint or individual manifestation of collective dominance: ‘collective abuse’ versus ‘abuse by proxy’

2. Abuse of a collective position

2.1. The concept of abuse: Special responsibility of the dominant entity

2.1.1. Instrumental use of market power (exploitation)

2.1.2. Market structure abuses: connecting likely effects and intent (exclusion)

Interim conclusions

2.2. Self-regulated professions abusing of collective dominance

2.2.1. Illustrating exploitative conduct by liberal professions

Against customers and consumers: pricing

Against competitors: gatekeeping

Against competitors: the prevention of emerging new types of professional services

2.2.2. Illustrating exclusionary conduct by liberal professions

Minimum quality standards

Standard contract terms

Pricing

2.2.3. Interim conclusions: Abuse of collective dominance by a profession – a question of degree?

2.3. Liability for an abuse of collective dominance

3. Objective justification, efficiency gains and the principle of proportionality

3.1. Meeting competition defence

3.2. Objective necessity defence

3.3. Efficiency defence

3.4. State compulsion defence

CONCLUDING REMARKS TO CHAPTERS FOUR AND FIVE

COMPARING THE APPLICATION OF ARTICLES 101 AND 102 TFEU IN RESPECT OF PROFESSIONAL SELF-REGULATION

CHAPTER SIX: STATE INVOLVEMENT IN PROFESSIONAL REGULATION MEETING LEGAL REVIEW

A. A Duty on Member States to Respect the Competition Provisions Applicable to Undertakings

1. Contemplating the INNO v ATAB principle in light of Protocol No 27

2. Contemplating the legal basis of the INNO v ATAB principle

The character of Article 4(3) TEU

Parallelism between Article 106(1) TFEU and the general duty under Article 4(3) TEU

3. Summary

B. Case Law Built Standard to Control State Intervention in Self-Regulatory Markets

1. The application of the INNO v ATAB principle

1.1. Member States’ duty in respect of Article 101 TFEU: the Van Eycke standard

1.2. Member States’ duty in respect of Article 102 TFEU: the Spediporto test

1.3. Comparing the standards under Van Eycke and Spediporto

2. The diverging application of Article 4(3) TEU in professional services markets

2.1. The three prongs of the Van Eycke test applied

Member States depriving their legislation of its official character: gross violation of a democratic principle

The last prong of the Van Eycke test prevailing?

2.2. Focussing on the third Van Eycke prong: Arduino and after

2.2.1. Review of public ex ante control mechanisms

2.2.2. Review of public ex post control mechanisms

The approval of the decision by the competent minister

The degree of public control exercised

The role taken by the judiciary in establishing individual fees

2.2.3. The standard to build: effective control

Interim conclusions

3. State compulsion defence

State compulsion in perspective

C. Closing Remarks: a Sliding Scale of Competition Law Control on State Measures

CHAPTER SEVEN: JUSTIFYING PROFESSIONAL REGULATION – SOLUTIONS REFLECTING THE STRUCTURE AND BROAD LOGIC OF THE TREATIES

Which roads lead to Rome? – Immunity in competition law and the structure of the Treaties

A. Article 101(3) TFEU: the Competition Specific Exemption

1. A positive balancing act: the four cumulative criteria of Article 101(3) TFEU introduced

Diagram (no. 7) on the substantive scheme of Article 101 TFEU

2. Distributional justice: objective efficiencies indispensable to compensate restrictive effects

2.1. Cost efficiencies and qualitative efficiencies

2.2. Economic theory and competition policy choices

Economic theory

Competition policy and market integration

2.3. The bounds of Article 101(3)–[1] TFEU: economic non-market concerns

Diagram (no. 8) categorising economic and non-economic public interest concerns in regulation

2.4. Indispensability under Article 101(3)-[3] TFEU: a comparative element

Comparative diagram (no. 9) on objective justification testing

2.5. Economically beneficial effects of professional regulations

2.5.1. Cost efficiencies in advertising restrictions and tariff schemes

2.5.2. Entry requirements

2.5.3. Restriction of ownership

2.5.3.1. Legitimate justification grounds in Wouters

Synchronising the Treaty rules on free movement and on competition?

Comparing the Wouters proviso and Article 101(3)–[1] TFEU

2.5.3.2. Prevailing perceptions of a profession

Domestic policy choices

Reasonably indispensable

Wouters: reasonableness versus strict proportionality

Whose role to determine professional standards: democratic process versus lobbying

2.5.3.3. Prospects: strict proportionality in case of collective regulation

3. Consumer welfare under Article 101(3)-[2] TFEU

4. Limiting the limit in accordance with Article 101(3)-[4] TFEU: no elimination of competition in respect of a substantial part of the professional services

5. Interim conclusions

B. Article 106(2) TFEU: the General Justification Avenue – Professional Regulation and Services of General Economic Interest

Article 106(2) TFEU outlined

1. The scope of Article 106(2) TFEU with regard to professional regulation

1.1. Do professional services qualify as SGEI?

1.2. Beneficiaries

1.2.1. State measures

1.2.2. Professional bodies

Advocate General Léger in Wouters applying Article 106(2) TFEU to the professional body

Necessary exemption due to the subject matter of professional regulation?

Associating collective self-regulation with undertakings charged with an SGEI?

Including collective self-regulation for their affinity with State measures?

1.3. Entrusted

Act of public authority

The collectivity of the members of a professional group as specific undertakings entrusted in a distinguishable manner?

2. Proportionality test: obstruction of the performance of the undertakings’ task to provide an SGEI

Professional regulation: area of political conflict

3. Union interest

C. Closing Remarks: Formulating Policy Guidelines

CHAPTER EIGHT: CONCLUSIONS

A matter of timing

A. A Twofold Systematisation

1. Systematising the application of competition law to the professions

2. Systematising the grounds of immunity

B. Perspectives

1. Legal implications of the principle of free competition in the internal market

A uniform EU law approach for professional State and self-regulation?

Monitoring the legality of professional regulation by competition rules

2. Reason: what ought to be

Concerning the field of application of the competition prohibitions

Concerning regulatory structures involving State measures

Concerning the justification system of competition law

Passion: to act professionally

BIBLIOGRAPHY

Cases and decisions, public acts and bills, reports, press releases, literature

INDEX