The European Commission has published its Report on Competition Policy 2012. Its theme is the 20th anniversary of the relaunch in 1992 of the European Single Market and the Report focuses on the role of competition policy in leveraging the Single Market for growth--which is interesting, although a clearer connection with the current Europe 2020 Strategy could have been included.
The Report describes the enforcement activities of the Commission in those sectors where it was more active in 2012, which are described as: "sectors of systemic and cross-cutting importance to the EU economy: financial services; key network industries such as energy, telecoms and postal services; as well as knowledge-intensive markets such as smartphones, e-books and pharmaceuticals".
The Report is full of interesting remarks by the Commission, some of which may be excessively optimistic and highly contingent on difficult to foresee future developments. For instance, the assumption that "the bulk of the [State aid] activity involved the restructuring of banks, so that no more taxpayer funding will be needed for the foreseeable future" may sound excessively triumphalist and optimistic in case of a further deterioration of the economy of any of the Member States (such as Spain, to mention one).
It also shows the first experiences applying the 2012 new SGEI rules, which concerned the postal sector in the UK:
In March 2012, the Commission adopted two decisions concerning UK Post Office Limited based on the new SGEI framework. The Commission found that the aid did not exceed the net cost of the public service mission entrusted to the Post Office Ltd and that its entrustment complied with public procurement rules. Moreover, the entrustment letter and funding agreement governing the payment of the compensation contained appropriate provisions to incentivise an efficient provision of the public service, in line with the Post Office Ltd's strategic plan for the period 2012-2015 which aims at modernising and improving the provision of services over its network according to yearly efficiency milestones.
The content of the UK postal sector decisions will be highly relevant to the roll-out of the 2012 SGEI Framework, which is likely to gain relevance as the reform of the public sector picks its expected pace in the UK and elsewhere in the EU. Hence, the criteria used in these decisions and the clear (but naive) connection that they establish with the mandatory compliance of EU public procurement rules need to be properly understood and duly stressed. The Commission itself emphasized that:
the UK government commits to ensure, in the future, the compliance of all [Poste Office]'s public contracts with European Union public procurement rules [...]. This commitment is particularly important in the light of the link between Product SGEI and Network SGEI. The Commission will also check that this commitment has been respected in case of extension of the subsidies for the Network SGEI beyond 2015 or adoption of new State aid measures for the financing of that SGEI (Decision SA.33054 (2012/N)–United Kingdom, para. 68).
For commentary on these (stronger) interaction between competition, State aid and public procurement rules, see Koukiadaki, A (2012): ‘EU governance and social services of general interest: When even the UK is concerned’, in: Barbier, Jean-Claude (ed.) EU Law, Governance and Social Policy European Integration online Papers (EIoP), Special Mini-Issue 1, Vol. 16, Article 5 , and Sánchez Graells, A, 'The Commission’s Modernization Agenda for Procurement and SGEI' in Szyszczak & van de Gronden (eds), Financing SGEIs: State Aid Reform Modernisation, Series Legal Issues of Services of General Interest (TMC Asser Press/Springer, 2013) 161-181.
On a different note, the Report has some signs of dumbing down competition discourse that, in my opinion, do not contribute to make the policy more accessible and, on the contrary, may water down important debates, such as the current State Aid Modernisation process (SAM). In that regard, I find it surprising that the European Commission explains the main rationale of SAM in these terms:
SAM's aim is to facilitate the treatment of aid which is well-designed, targeted at identified market failures and objectives of common interest, and least distortive. Aid which does not provide real incentives for companies crowds out private investment and keeps inefficient and non-viable companies on life support ("bad aid"). Good aid strengthens the Single Market while bad aid weakens it (footnote omitted, emphasis added).
What may be acceptable for a Commissioner's Speech (most likely not even for that), sounds odd and puerile in an official Report from the European Commission. Maybe it is just a matter of etiquette, but a different tone should be expected from one of the largest competition law enforcers in the world.
Finally, overall, the times where the European Commission used the Annual Report to announce changes in policy seem long gone and it is hard to see that the contents of the 2012 Report can be considered (relevant) soft law--a situation that reverses a clear trend of using this document to set the agenda for the future (as analysed by Stefan in her recent book Soft Law in Court).
