Disruptive innovations and

state measures
EU antitrust law perspective
OECD, 123rd meeting of the Competition Committee
Paris, 16 June 2015
Denis Sparas
DG COMP Unit F1: antitrust: Transport, Post and other services
16/06/2015

Disruptive innovations

DEFINITION: a process by which a product or service takes

root initially in simple applications at the bottom of a market
and then relentlessly moves up market, eventually displacing
established competitors

(Re)action to disruptive innovations

Resisted by incumbents
Many of the sectors where they appear heavily regulated
Calls for ensuring "fair competition" by incumbents
New/additional state measures

EU antitrust tool box

Collusion amongst
competitors

Abuse of market power

State measures
encouraging/requiring
undertakings to
restrict competition

collusion, i.e. behaviour

that substitutes
competition risk by
(explicit, tacit) coordination
of behaviour
horizontal and vertical
agreements

a special responsibility on an
undertaking that holds a
dominant position not to allow
its conduct to impair genuine
undistorted competition in the
internal market

undertakings with
special/exclusive rights
Member States shall not
enact measures against
EU law, including
competition rules
possible justification
(SGEI)

BEHAVIOUR OF UNDERTAKINGS

STATE MEASURES

State measures under EU competition

rules (1)
Article 4(3) of the Treaty on the European Union - principle
of loyal cooperation between Member States
Could be used together with:

Article 101 TFEU (agreements/concerted practice); or

Article 102 TFEU (abuse of market dominance)

State measure that encourages undertaking to conclude

anticompetitive agreement/abuse market dominance

State measures under EU competition

rules (2)
Article 106 of the Treaty on the Functioning of the
European Union ("TFEU"):
in the case of public undertakings or undertakings to which
Member States grant special or exclusive rights
Member States shall neither enact nor maintain in force any
measure contrary to the rules contained in the [EU] Treaties,
in particular competition rules
the development of trade must not be affected to such an
extent as would be contrary to the interests of the Union

What state measures are caught by

Article 106 TFEU?
Any measure of a public authority legal form immaterial
Concern public undertakings or undertakings with exclusive
or special rights
Creating dominance by granting exclusive rights is not as
such problematic
Restrictive measures could be justified (e.g. necessary for
performance of SGEI)

When are state measures

anticompetitive?
Creates unavoidable risk of abuse (Article 106/102 TFEU),
such as (non-exhaustive list of examples):
extension of dominance to neighbouring markets
discrimination
manifest inability to meet demand

Encourages the conclusion of anticompetitive agreements

(Article 106/101 TFEU)

Application of 106/102 TFEU

Article 106 TFEU does not apply on its own
Burden of proof concerning actual conduct of undertaking
Type of conduct on the part of the public/privileged
undertaking?
Sufficient to establish a potential anticompetitive consequence
resulting from the State measure?

Example: creation of unequal conditions of competition

through a State measure

Application of 106/101 TFEU

Need to identify agreement
At least one of the parties should be public or
privileged undertaking (special/exclusive rights)

Thank you for your attention!

Any questions?