By Markus Kern
Situated between the market and the state, the notion, concept and characteristics of public services are often multifaceted and difficult to grasp. The EU layer of public service regulation further adds to this complexity as it interacts in many different ways with the national legal frameworks in this field: EU law may structure national legal norms, coordinate the provision of services between the Member States, bring about minimal or maximal standards (e.g. pertaining to quality, ubiquity or affordability of the services provided), comprise detailed regulation or even set prices for the provision of public services as in the case of mobile roaming tariffs. At the same time the law on public services is under the influence of a whole range of EU law provisions and regimes: namely the rules on free movement, competition law and state aid, general and sector-specific primary law provisions, horizontal rules of secondary law, as well as a large body of sector-specific secondary EU law, which has increased substantially over the past few years. With his book Public Services in EU Law Wolf Sauter undertakes a challenging attempt to elucidate the complexity of EU law in the field of public services.
As a preliminary observation, one may say that Sauter’s approach is remarkable for (at least) three reasons. First, for its scope, as it takes into account not only services of general economic interest (such as electronic communications, postal services, electricity, gas, rail and road transport as well as maritime transport), but also social services of general interest such as social security, education and healthcare. With this broader focus the work mirrors the more general take on public services developing at the EU level, which is also reflected by Protocol No 26 to the Treaty of Lisbon on services of general interest. Second, the study is instructive due to its comprehensiveness with regard to the fields it covers, which range from free movement, citizenship, competition and state aid law to the directives on Services, Public Procurement and Transparency as well as to the sector-specific regulatory regimes. The obvious downside of this wide horizontal approach is of course that the author only addresses a limited number of issues with regard to all the relevant topics covered in the study. In addition to describing and analysing the applicable provisions of primary and secondary EU law, the book also gives an overview of recent scholarly work as well as of the relevant case law. Third, Sauter’s approach is remarkable for its didactic way of analysing and presenting the issues at stake. This makes the book a useful and accessible resource for an introduction or overview of the topic, not only for lawyers and EU law specialists, but also for readers from other fields, given that the author also manages to get across the main ideas of the relevant core EU law concepts. Yet, unfortunately, this didactic style renders the text at times a bit repetitive, somewhat slowing down the progress of the argument.
Generally speaking, Sauter’s book purports to analyse how EU law in the field of public services is designed and structured, in which (primary) EU law framework it operates and which leeway (primary and secondary) EU law leave for national legislation. Additionally, the study conducts an analysis of the concept of services of general (economic) interest, its evolution and possible future developments, and tries to clarify its relation with neighbouring concepts such as universal service obligations, consumer protection and citizenship.
Besides a comprehensive overview of the current legal framework of public services, the main conclusions of the book may be summarized in the following points:
- The analysis shows how services of general (economic) interest constitute one of the linchpins of the mixed economic ‘constitution’ of the European Union, as they allow for a liberalized and competitive market environment while making sure that further economic and equity oriented considerations are also taken into account in the design of public policy. They may therefore be seen as one of the ‘building blocks’ of a ‘highly competitive social market economy’, as envisaged by Art. 3(3) TEU.
- Furthermore, the author argues that, even though the regulatory framework relating to services of general social interest (such as social security, healthcare and education) differs substantially from the one applicable to services of general economic interest both types of services show some similarities, starting from the fact that under pure market conditions, they would not be offered or not be offered at the same level of quality or the same scope. The disparity concerning the legal framework is, amongst others, illustrated by the fact, that with regard to the latter group of services, competition and state aid questions play a prominent role, whereas with regard to the former, concerns relating to fundamental liberties and questions pertaining to citizenship are more prominent. Sauter however believes that this divergence may decrease in the future, assuming that social services will be increasingly provided by private undertakings or provided in a more competitive setting and as they will be financed by charges or prices rather than by taxes.
- Moreover, the study arrives at a series of interesting and more general conclusions with regard to the development and the future evolution of public services in the EU law context: The author observes that there is a tendency to provide public services in a competitive mode rather than by a single undertaking or that the designation of the provider at least (and increasingly) has to occur through competitive tendering. Globally, efficiency has become a mounting concern, which may be addressed by increasing the competition in the area of public services. An interesting way to allow for competition at the retail level while nevertheless taking equity considerations into account is the provision of public services at the wholesale level as recommended by the Broadband Guidelines of the Commission in the field of electronic communication. In this constellation the direct beneficiaries of the public services are thus the undertakings providing retail services, while the customers gain indirectly due to a higher number of competitors and ideally through lower prices or higher quality.
- Finally, the author raises the question whether the European Commission should propose some kind of framework legislation on public services based on Art. 14 TFEU, which was introduced by the Treaty of Lisbon and which states that the European Parliament and the Council shall establish the principles and set the conditions according to which such services operate. Even though this may seem to be a good idea prima facie, it is unclear what issues are actually to be addressed in such an overarching framework. Moreover, there is the concern that such horizontal rules, encompassing all the different sectors and a wide range of relevant issues would have the consequence of taking away regulatory flexibility and reduce the leeway to adopt and design diverging rules adapted to the specific needs of the different sectors. Hence, at the end of the day, the question remains whether the multiplicity of rules and regimes, which Wolf Sauter describes in such a systematic and eloquent way in his work, is in reality not indispensable to ensure adequate and tailor-made solutions for the different domains of public services, particularly given the fact, that the additional horizontal rules (e.g. on state aid or competition) would not vanish under these circumstances and regulatory complexity is therefore likely to remain in any case.