10.3 Third Party as a Source of Remuneration 367In Rosengren and others,^169 the ECJ held that the Swedish retail monopoly operated by
Systembolaget was not consistent with Community law to the extent that private individu-
als were prohibited from importing alcoholic beverages, because such a restriction could
not be regarded as being justified under Article 30 of the EC Treaty on grounds of protec-
tion of the health and life of humans.
As Systembolaget has a special social and public policy task, it is not for sale. However,
the Swedish government sold Vin & Sprit, owner of the Absolut vodka brand, to Pernod for
€5.6 billion after an auction process in 2008. The Swedish government also decided to sell
the pharmacy monopoly Apoteket.
Dual roles and competition law. State monopolies or former state monopolies of-
ten have dual roles. First, an existing state monopoly might both act as a supervi-
sory authority and provide services itself. Second, state monopolies or former state
monopolies might both provide services and control infrastructure. The dual roles
of state monopolies or former state monopolies can put existing competitors and
new entrants in the services market at a disadvantage.
Generally, Article 82 of the EC Treaty prohibits the abuse of a dominant posi-
tion. Furthermore, Article 86 of the EC Treaty provides that (1) EU competition
law applies even to public undertakings and undertakings to which Member States
grant special or exclusive rights and that (2) undertakings entrusted with “the op-
eration of services of general economic interest or having the character of a reve-
nue-producing monopoly” are subject to the rules on competition “in so far as the
application of such rules does not obstruct the performance, in law or in fact, of
the particular tasks assigned to them”.^170
In France v Commission^171 and RTT v GB-Inno-BM,^172 the ECJ held that a
Member State may not entrust a public body with regulatory powers if that body
simultaneously operates in the field it seeks to regulate and competes in that field
with other undertakings.^173
As a result, a structural separation of supervision from operations as well as op-
erations from infrastructure can be necessary. This can lead to the privatisation of
operations, infrastructure, or both.
Public procurement, the Maastricht criteria. Other factors which may give an
incentive to privatise public undertakings include the regulation of public pro-
curement (for dealing with government entities, see Volume II) and the Maastricht
criteria for government deficits.
State-aid. Article 87(1) prohibits “any aid granted by a Member State or
through State resources in any form whatsoever which distorts or threatens to dis-
tort competition by favouring certain undertakings or the production of certain
(^169) Case C-170/04 Rosengren and others [2007] ECR I-4071.
(^170) See Hou L, Uncovering the Veil of Article 86(2) EC. Available at SSRN.
(^171) Case C-202/88 France v Commission [1991] ECR I-1223, paragraph 51.
(^172) Case C-18/88 Régie des télégraphes et des téléphones v GB-Inno-BM SA [1991] ECR I-
5941, paragraph 25.
(^173) See Verhoeven A, Privatisation and EC Law: Is the European Commission “Neutral”
with Respect to Public versus Private Ownership of Companies? ICLQ 45 (1996) p 865.