What is a service of general economic interest?

Abstract

The definition of the concept a ''service of general economic interest'' (SGEI) known from Article 106(2) treaty of the functioning of the European Union is clarified. When a service is determined to be an SGEI, Member States may enact measures and undertakings entrusted with the provision of the SGEI may engage in behaviour which would otherwise be contrary to the rules of the Treaties, notably the competition rules. Member States retain a wide discretion to define, provide and finance SGEIs; i.e. to use the entrustment of an SGEI as a tool to intervene in the market. This discretion is subject only to a test for manifest error of assessment by the Commission. To increase legal certainty, ensure effective intervention in markets and prevent their use in industrial policy, it is highly relevant to clarify what SGEIs are. The various definitions published by the Commission and in the literature are examined, and a new definition of an SGEI based on economic theory (networks and network effects) is formed. This definition is consistent with the case law of the Court of Justice of the European Union and the General Court. On the basis of the definition, implications for efficiency in dealing with SGEIs are made.

Questioning territorial cohesion: (Un)equal access to services of general interest

“…The concept of SGI is derived from the more specific term services of general economic interest (SGEI), which is focused on market services. Almunia (), cited in Ølykke and Møllgaard (, p. 206) argues that “services of general economic interest are activities that would not be produced by market forces alone or at least not in a form that would be available to all”. In general, SGI is a broader concept that includes services provided by governmental or public administration bodies (e.g., education systems, social protection, healthcare) and services that are partially provided by the private sector and are profitable, that is, SGEI (e.g., cultural facilities, postal services, waste management, telecommunications or transport infrastructure).…”

Voluntary Additional Health Insurance in the European Union: Free Market or Regulation?

“…This discretion is subject only to a test for manifest error of assessment. 58 The closest attempt at clarifying the 'manifest error of assessment' test was made in BUPA where the European Court of Justice (ECJ) noted that the minimum criteria all SGEIs must fulfil are the presence of an act of the public authority entrusting the operators in question with an SGEI mission and the universal and compulsory nature of that mission. 59 In BUPA, the ECJ deferred to the principal prerogative of the Member States to define their services of general economic interest.…”