Restraints to competition organized by the State Prevent, control, assess, suppress? Bruno Lasserre, Chairman, Conseil de la concurrence American Bar Association, 2006 Antitrust Spring Conference Washington D.C., March 29, 2006

Contents 1.A tentative typology of State restraints to competition 2.Prevent: Preventing State restraints to competition 3.Control: Comprehensive controls 4.Assess, Suppress: Trade offs between competition efficiencies and other concerns

1. State measures with economic objectives Price regulation (price regulated sectors) Laws and measures organizing economic sectors (granting exclusive rights/ opening to competition) State aids and subsidies 2. State measures without economic objectives but affecting the market Public procurement rules State Land use measures (« occupation du domaine public ») Administrative police measures (Bilboarding regulation) Professional services regulations Sector-wide labor agreements (« conventions collectives ») Taxation and budgetary measures (potential equivalent to « State Aids ») Golden shares kept by States in recently Privatized Firms 1. A tentative typology of State restraints to competition

3. State enterprises behaviors restricting competition (functional definition of the « enterprise » allowing equal treatment to private and public firms) Abusive extension of a monopoly Cross subsidization and predatory pricing «Automatic abuse» theory 1. A tentative typology of State restraints to competition

Preventive actions must be enforced both at the EU-wide level and at the national level. 2. Preventing State restraints to competition  Competitive screening  Impact assessment including an economic analysis in terms of competition  Advocacy

3. Comprehensive controls  A need to ensure comprehensive controls over public restraints Control of the State as a regulator and norms producer:  EU level: Commission to protect free movement of goods, persons and services (EU Treaty)  National level: Administrative Courts and the Competition Council (including legislative control with a competition screening) Control of the State as a funder (subsidies, state aids) and as investor (Golden shares) Control of the State as « operator » (the statal and para statal sectors)  A need to have independant authorities to enforce the controls  The EU experience in terms of Approximation of New Members suggests that National Competition Authorities may not be best placed to control State Aids; the task should be left to EU Commission.

 A Balance between prohibition and exemptions: EU Treaty objectives and purposes (integration) General interest  Principles for an appropriate balance (ECJ Case-Law): Necessity Transparency Proportionality 4. Trade offs between competition efficiencies and other concerns

Conclusion: Toward a leaner State?