In its Judgment in Commission v DEI, C-553/12 P, EU:C:2014:2083, the CJEU has (further) clarified the threshold of competitive distortion required in the application of Arts 102 and 106(1) TFEU to State measures concerned with public undertakings or undertakings with special or exclusive rights.
This Judgment goes beyond the precedent in MOTOE, C-49/07, EU:C:2008:376 (and others cited therein) in the trend of lowering the threshold of competitive distortion required in the declaration of incompatibility of State regulation with EU competition rules. The step forward fundamentally consists in decoupling the issue of "unequal conditions of competition" from the push of the State towards abuse of a dominant position through regulation, and in recognising (not as an obiter dictum) that the creation of "unequal conditions of competition" in favour of public undertakings or undertakings with special or exclusive rights suffices to find an infringement of Articles 106(1) and 102 TFEU [provided, of course, that the "public mission exception" of Article 106(2) TFEU is not applicable, which was not considered in the case].
Such decoupling is particularly clear in the plea submitted by the Commission (which the CJEU will accept, bit by bit, in its Judgment), whereby it argued that
35 [...] when Article [102 TFEU] is applied in conjunction with Article [106(1) TFEU] to situations where there is inequality of opportunity between economic operators, and thus distorted competition which stems from a State measure, that State measure in itself constitutes an infringement [...] It is therefore sufficient to prove that the measure indeed created inequality of opportunity by favouring the privileged public undertaking and thereby affected the structure of the market by allowing that undertaking to maintain, strengthen or extend its dominant position to another, neighbouring or downstream market, for example by preventing new competitors from entering that market (C-553/12 P, at para 35).
There are some passages in the Commission v DEI Judgment that are worth highlighting:
46 [...] infringement of Article [106(1) TFEU] in conjunction with Article [102 TFEU] may be established irrespective of whether any abuse actually exists. All that is necessary is for the Commission to identify a potential or actual anti‑competitive consequence liable to result from the State measure at issue. Such an infringement may thus be established where the State measures at issue affect the structure of the market by creating unequal conditions of competition between companies, by allowing the public undertaking or the undertaking which was granted special or exclusive rights to maintain (for example by hindering new entrants to the market), strengthen or extend its dominant position over another market, thereby restricting competition, without it being necessary to prove the existence of actual abuse.
47 In those circumstances, it follows that [...] it is sufficient to show that that potential or actual anti-competitive consequence is liable to result from the State measure at issue; it is not necessary to identify an abuse other than that which results from the situation brought about by the State measure at issue (C-553/12 P, at paras 46-47, emphasis added).
These very clear statements of the sufficiency of identifying the creation (or perpetuation) of "unequal conditions of competition" are further developed later in the Judgment:
57 [...] if inequality of opportunity between economic operators, and thus distorted competition, is the result of a State measure, such a measure, be it legislative, regulatory or administrative, constitutes an infringement of Article [106(1) TFEU] read in combination with Article [102 TFEU] (C-553/12 P, at para 57, emphasis added).
In my view, by switching from a language concerned with potential abuses of a dominant position by the public undertaking or undertaking with special or exclusive rights, to a more clearly-spelled (and simple) focus on "unequal conditions of competition", the CJEU has fuelled the enforcement of these provisions against State action that perpetuates the dominant position of former monopolies and/or twarts the effectiveness of liberalisation measures. Hence, it should be welcome. In my view, this case can trigger much stronger enforcement in areas such as public procurement, where the continued award of contracts to a former monopoly on the basis of pre-existing rights surely ressembles the factual background of Commission v DEI.